ted decker spoke to becky about the growth plans and inflation and something we all try to do combating shrinkage. it is tuesday, june 13th, 2023 and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. waiting for news this morning. let's look at what is happening with the u.s. equities at this hour you will see right now there are green arrows across the board. modest with the dow and s&p. dow up 10. s&p up 8.5 the nasdaq is the big winner

up 70 points if you add it up with the gains yesterday across the board, s&p is at a 52-week high up 13% year to date. the nasdaq is at a 52-week high. it is up 36% for the year to date and the dow up from the 52-week high you see major activity the nasdaq is the green line at the top of the screen which has taken off. if you have been watching treasury yields, you are keeping a close eye on this ahead of th fed data and the fed decision on wednesday. the to10-year treasury is 3.73 andrew. let's talk about the squawk planner. inflation is in focus. may cpi due out at 8:30 a.m. the increase of .1% from the prior month.

that is equal to the .4% rate year to date that could determine if central bankers decide to hike rates or pause rates or skip in jeune. also on the genagenda, janet yen is testifying about the international financial system this morning at 10:00 a.m. we will monitor that, joe. all right. shares of oracle -- this is a beast beast. $1.67 a share. e e that is a good-looking chart for 2023 oracle is up 4.3% on the session. >> it is an a.i. play.

a.i. computing that is what helped out. power of the cloud every one of the strong stories with the nasdaq up sharply strong stories are tied to a.i >> 314 oracle i guess he is getting up there larry is not a geezer. andrew, does he still have a big baby >> a yacht >> with a heliport good living. even on a big cruise ship, you can feel that thing moving when you get off it and you are walk around. i don't know you get to move your luxury accomm accommodations that's cool. >> you are just guessing this? >> i've been on one.

>> the luxury yacht? >> on a cruise ship many times >> really? >> i did the mexican riviera with my parents. greece >> you said you wouldn't do it >> that's when i went to malta lobbying for the ambassador ship of malta there is nothing to do it's beautiful just parties, i think. small enough -- >> wow i didn't know. i thought you had never been on a cruise. >> hawaii of great way to go to hawaii. you know what i say about hawaii of t hawaii >> how am i just finding this out? >> cruise. lobster. all you get is lobster lobster in your room pieces of lobster and constant alcohol. shares of manchester united are soaring after the media

report in qatar that the son of the primary e minister is annou to be the highest bidder the purchase offer was $6.3 billion. you would think -- >> you say it all the time >> when i went, there hadn't been outbreaks of legionnaires' or any of that stuff of i didn't know the water was recirculated >> the comments you made recently, i didn't think you would ever go. >> it is not that way. there are a lot of people. andrew, it might not be good to do it now. you are trapped. everybody would know you andrew ross sorkin >> i thought you were talking being on the yacht with larry

ellison. >> that would be good. and leo. who else lloyd. all those guys oprah. hanging out. >> yup yup. let me tell you about news home depot is holding the investor conference today at the new york stock exchange. the company is just out with the guidance ahead of that reaffirming the guidance they issued a few weeks ago when the company came out with the earnings where they talked about sales and comp sales both expected to decline 2% to 5% come pafrpared to last year that is in line with the street expecting. if you look at the earns ings pr share, the street is looking for 10%. they talk about the operating margin rate at 14.3% to 14%. the ceo ted decker said when

they released earnings that they were seeing a little bit of softness with the consumer and projects not that the number of projects were down, but the size of the projects were down pros or do it yourselfers. you see huge sales growth. they increased sales by $47 billion over the three-year period they are expecting things to shrink this year however, when it comes to what happens beyond that, when it comes to what happens when the market stabilizes, they see a very different picture i got to speak to the company ceo ted decker ahead of the conference about the expectation for the coming quarters. here is what he had to say. >> we're going to go out and talk about the future of home depot and future of the consumer and marketplace which remains strong and the home depot will continue to focus on growth. we think in a stabilized base

case, we grow the top line 3% to 4% and grow eps mid to high single digits. as some of our investments come online, the pro purchase and taking the friction out of the shopping journey we can grow faster than the 3% to 4%. >> the big question is when do things stabilize in the home improvement market he said tell me what the fed is going to do and he could give you an answer. he said it could happen by the end of the year. >> interesting you don't need new housing you are fixing the house professional market. does it want a great housing market or not? >> they give a roundabout answer with that. the other huge question is the

pull forward during the pandemic the dollars have gone to services and traveling you see it with the other retailers. gains in spikes and that activity has dropped off that's what they are talking about when people are getting back to things when you face higher interest rates, people refuse to move maybe that means you spend more on projects on the home. they are counting on market share gains once they get back to normalization >> it is not the rainy hangout, andrew there are big sales. >> home depot will be replaced >> i can pick a duvet out. >> decor is bigger at home depot and lowe's i bought an umbrella for the backyard it was on sale >> could you work a jackhammer all of those things in there and

i think people know how to use that >> you know what is new? all of the electric powered, not just the power tools, which is a big deal that's 90% of what they sell is the cordless electric stuff. even professionals the lawn mowers and leaf blowers. those are going electric it is quieter. it is almost 50% >> 30 different models industrial strength. i walked out >> you couldn't figure out the right one? >> nope. can i ask one thing? did you know this was $290 million? >> the settlement? >> yes yesterday when we talked about it, we didn't know this. did you have any idea? >> we did not know the number. do you want to explain what you are referencing? >> it is right here. they follow me

jpmorgan chase we did it yesterday of i figured it was nothing $290 million that adds up after a while to make that go away, that seems like a big number. did you talk to anyone, cnnsorkn >> it is a quarter of a billion dollars. more than. >> that is to make it go away, is it not? >> yeah. >> that's exactly what it is that's what they are trying to do make it go away. >> i think it was the victims. >> the victims >> unlikely to fully go away that's the thing the jes staley part of the story is not going away. you will hear about other people who were connected one way or another or had a meeting >> jes staley was responsible because he was in charge >> i know. the idea that this will get out

of the headlines and you pay $290 million and never hear about it again is a fallacy, i think. we will see. >> all right lead story i didn't realize $290 million. that is unbelievable we are still talking about this guy than he has been dead a couple years >> at least. >> the home depot stuff with ted decker will happening at 7:30. >> did people walk in and walk out? >> we will show you. they have a lot of things locked up >> drive a lawn mower out. >> they come in and take the power tools. this is organized crime hitting these things it is not just a random shoplifter this is organized crime happening lots and lots and more than 400 times a year. they come in and case the joint.

they know what they are doing. power tools and batteries. in some areas in the bay area, they are looking up more lower ticket itemitems stores in new york are locking up deodorant it is a problem because they can fence it online marketplaces of the. >> walgreens is expensive. >> razor blades. deodorant was locked up. >> that's weird. >> yeah. we'll talk about that and so much more and the big story about the ftc filing to block the microsoft activision deal. the merger prospects after the break. later, a new survey data out on what it takes for people to feel wealthy. you want to hear the answer to isar u e watching "squawk box" on cnbc (vo) while you may not be running an architectural firm,

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welcome back to "squawk box. the ftc filed for a temporary restraining order for the microsoft-activision deal. we have steve kovach with more >> let's start with microsoft like you were talking about. ftc dialifiling the injunction o block the purchase of

activision the ftc says based on media reports, microsoft could move forward and close the transaction before the lawsuit against the deal which was filed last year, can work through the courts microsoft's date to close the deal is over a month away. if the judge approves the injunction request, it stops the deal before it can play out. the first hearing is not happening until august it puts the ftc in a precarious situation. if the judge rejects the question, microsoft has a slam dunk argument and will likely pr prevail. that is why brad smith is sounding positive in the action yesterday saying we believe accelerating the legal process in the u.s. will bring more choice and competition in the market microsoft in middle of the appeal of the competition market authority in the uk.

the court rejected that deal let's say overseas for a bit because google is facing anti-trust complaint in the eu related to the advertising technology which comes from bloom aboutberberg yesterday this sounds similar to the doj in january it alleges the dominance to control the bidding, selling and data collection on their online ads. eu's complaints against google is expected tomorrow >> steve, i'm super confused i don't understand and i read brad smith's comments. i don't know why he is so positive >> when i talked to folks on the microsoft and activision side, they perceive the federal judge will be more favorable in the case than administrative law

judge in august after the close date they believe they can convince the judge to not go forward with the injunction and then use that as an argument moving forward. we have a federal judge saying they approve of the deal or in theory could approve and that gives them more ammunition in arguing the case in the u.s. >> i asked the same question, andrew it doesn't make sense. if you look at the stock yesterday, you didn't see -- >> microsoft ticked up >> activision did not. >> or they are looking at the cma and saying they cannot work through the appeals process. >> the other piece of this, steve, if you look at a calendar, at some point you will need agreement and you have to pay for the privilege of that agreement. >> that's right. >> how does that factor in the timing here? >> the ftc is worried they don't

want to go that route and instead, the ftc is afraid they will close the transaction that is why they filed this yesterday. you are right, becky may know more than me of how much it would cost >> it didn't say anything. money is not free. you would have to pay if you want to do that. you will not get shareholders to say we will sit around for free. andrew, the other thing is we talked yesterday about francis desouza having to leave. he was dealing with the same set of issues where it was european regulators and u.s. regulators both opposed to that that is when carl icahn jumped in and said what are you doing >> and bobby kodak is likely to leave it in the hands since day one. he would have skytay on

he said they are in great cash position they can last through it >> you are not suggesting that satia or brad, the comparison to illumina would be that >> i'm not saying they would step down. i'm saying francis desouza thought he could fight reg regulators in the u.s. and eu and the deal would be okay i'm not comparing one of them to step down. this is a much smaller deal for microsoft relative to everything else i just think it is a difficult road to try to fight regulators on both sides of the pond. >> one major difference, by the way, between illumina and this, desouza did not see this

meaning the regulators were not in place at the time when microsoft and activision did the deal, they did it wide open >> with the regulators saying you can't do it, they went ahead with it. >> yes all right. >> thank you >> that's it great. >> anything else >> no. not until next year. i know you are dying to try them >> i thought your security did you looked like you would mess with anyone getting if n here they are heavy things. when we come back, we talk about commercial real estate milestone in the city. we have the details next. right now, as we head to break, let's look at the biggest pre-market winners and losers in the s&p 500.

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welcome back to "squawk box. new york city occupancy reaching a 50% threshold according to data castle systems based on key card swipes. one piece of numbers and things of being relative, it is not out of 100%, really. on average, typically, even pre-pandemic numbers were 70% on

any given day. >> speaking of san francisco, mall operator westfield is giving up control of the centrel it pointed to the decision of challenging operating conditions in downtown san francisco which led to the decline in sales and okayccupancy and foot travel nordstrom and banana republic all pulled out a westfield spokesperson said it was an unsafe conditions for customers. >> a big hotel walked away >> when i was there, there are the beautiful townhouses that you see around that you saw on

what was the name of the sitcom? >> "full house." >> beautiful >> we still watch it >> 30 tents in front of them you walk out of your multimillion dollar townhouse into a real rio slump. something needs to be done what are we doing? that is the most beautiful city. the city by the bay. i just can't believe gavin newsom was on tv yesterday bragging about how great things are. bizarre. he has great hair. >> home depot said if you read some of the articles about home depot and where they are locking up things and had serious problems the bay area is a big part of it >> lawless

i think the broken window thing. we have to figure this out there's no crime crisis. >> andrew had something to say >> no, no. i agree. a huge crisis. san francisco, seattle, chicago. a lot of cities. >> the top three cities when we talked about one of the hotels >> we have it elsewhere of t the thement -- elsewhere i don't understand why people don't step in. >> no bail coming up, jay powell and company have new inflation data to consider. we have cpi data for may at 8:30 a.m. predictions are straight ahead as we head to break, here is yesterday's s&p 500 winners and losers

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good morning welcome back to "squawk box. we are live from the nasdaq market site in times square. if you look at the markets, the futures are higher dow futures up 5.5 so are the s&p futures you have the nasdaq futures indicated up 60. this comes after gains for all three of the major averages yesterday. joe. in a couple hours, we get the latest reading on the consumer level the fed is set to begi two-day policy meeting for more, let's bring in kumar sri. it is interesting in the comments no one is envious of the difficult track the fed is trying to move through here. you point out you either stay firm in the resolve to conquer

inflation or admit you are worried about breaking something again. when we talk about the powell put, we are talking about if next good down there is a powell put where you worry about the financial system your efforts to tame inflation and you might have to keep that in mind. >> absolutely, joe you are spot-on. the powell put refers to equities and what happened to the overall economy and credit event. do you have the banking crisis do you have a problem with the commercial real estate and credit crunch. all of that is the powell put concept. the other side is needing to control inflation. i have been writing for a while that at some point the fed will say we want inflation at 4% and

we declare victory and move on and cut interest rates or you keep on raising interest rates and have a credit crunch and credit event and then use that to bring down the inflation rate neither option is very attractive that, unfortunately, is where the fed finds itself why does it find itself there? early 2021 and 2022, they maintained inflation was temporary. it wasn't. people like me who kept writing it was going to surge simply were not listened to and we have the problem right now, joe >> sri, i don't think we need to tell anyone this is an important cpi number you mentioned that you expect it to be or show progress then your point is you have to look at the core that is what everybody has been

saying recently. we have seen lower inflation numbers every time we see them, but the core has stayed stubbornly hot you expect that again? >> exactly let's look at why. if you go back one year and look at may of 2022 and june of 2022, june was where we hit a 40-year high of 9.1% on the headline inflation rate both these funds were so high, joe, when you look at may of this year and june of this year, the headline number will look benign by comparison it is the base effect. secondly, the reason why the inflation was so high during those two months was because of energy costs which have come down quite significantly since the question is are there areas where people depend on other than food and energy which have not done well? that is why the fed still have a problem with the core inflation

rate month over month and year over year will belevels. will they come down? yes, they woill. i expect them to come down in the second half of the year, but not without breaking something that is the problem. >> sri, you don't think we are out of the woods if the fed skips and then gets data that causes it to be more than a skip, a double skip or they're done, do you still think something breaks or something only breaks in they continue and i'm talking about another svb or first republic is that in the cards now or does the fed go too far >> the rate increases and 500 basis points of rate hikes in the last 15 months is suggest to break something. whether the fed pauses or

doesn't pause. the lesson i take from the 1970s which is what powell said he would not follow, which is the stop and go policies, means he is causing inflation to stay high and go higher because when you do stop and go, you cause a rally in equities and you cause a rally in commodities that, in turn, sets you up for a fall look back at the first half of 2008 oil prices were surging. they went to $150 a barrel in may of 2008. european central bank thinks the global economy is booming and increases rates and the world came crashing down by september. that is the risk you run if you follow a stop and go, you are giving a big push up for inflation by those policies. >> so, tell me about the ten-year, sri. we have seen the highs or we get new highs on the yield

>> 75 is where we are. i can see it going up to 4% which is no different from what i have been saying on the program in the past. by the time it hits 4% and if you have more rate increases by the fed, something would have broken in the next three months. that's why i expect 4% to be the peak, not that the fed does well with inflation, but because the 10-year incorporates inflation picking up by year end, i can see the 10-year going to 3% or below because you will then be in the depth of the recession and that in turn, will pull the10-year down i like it at 3.75 if you can withstand. >> some say the fed will hike up to 6%. you think that is not going to happen >> it can happen, becky. it can happen with a skip or a

pause. i like the semantics i like we don't know what is happening so we use new words. whether it is skip or pause and increase again in july or later, they are eventually going to have to go higher up because inflation is going to rise the question is they don't go to 6% if we break within two months and they go to 6% if things are still looking normal that is very much a matter of fine timing and not attempt it >> sri, we don't come to you for advice on the stock market or s&p. up another 40 points yesterday what are stocks sniffing out most people think the stocks were ready to go when it was clear the fed wasn't headed higher or already going into a slowdown economic jslowdown is that what is happening? what do you think this is? >> stocks are a poor predictor

of recession i reference to october 9th, 2007 s&p reached a record high and everybody thought it was a great time and great recession began two months later, joe. >> okay. >> that's where we are >> hopefully not sri, thank you >> thank you, joe. >> okay. coming up, we have new survey data to bring you on what it takes for people to feel wealthy. that's an interesting figure. and don't miss the inter high with julie sweet and that conversation with a.i. follow our "squawk pod" on your favorite podcast apps of the we - apps we're coming right back. a fund that gives me access to...

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quwelcome back to "squawk wt don't follow it with the dollars and cents. we have sharon epperson with more >> how mauch money does it take to be wealthy? the survey is $2.2 million to be considered wealthy that is how much it takes for

other people what about your yourself the 48% of americans who feel wealthy today, the health is $560,000 it is not about dollars and cents or stocks and bonds. when asked what it means to be wealthy, well being more than money and assets 1,000 adults polled and 2/3 say being able to enjoy healthy relationships with loved ones describes what wealth means than money. 70% say wealth is not having to stress over money. 30% say it is having more of it. who is most likely to say they feel wealthy millennials over gen z or older adults the average net worth is $530,000 andrew. >> sharon, this is the greatest

feel good story of the moment. almost counterintuitive. i would have guessed the opposite i thought the millennial generation is fixated on billionaire class and you go to tiktok, everybody is obsessed with money a wealth -- i would have thought the money was the thing. i'm happy to know, aren't you, that it is not the case? >> i always had the philosophy i think people are realizing it is about experiences and so many people are looking at social media to figure out what to do with everything in their life, including their money. they are looking at experiences and they are looking at relationships with people. i think that is really important for many americans today it is encouraging a lot of millennials are thinking that way. >> sharon, how much of this is a reflection of people reassessing things post-covid and lockdowns

and years lost and feeling like what do i want anecdotally people reassess their lives after that >> absolutely. when you look at the survey, people thought what it means to be wealthy, it was $2.6 million. $2.2 million now even then, people said what does it take to be financially comfortable, that numbers is far less than that $2.2 million also or $2.6 million when the question was asked it is interesting. i think people have absolutely reassessed where they and they had the time and what matters most. >> it is always about experiences. you don't see -- what do you do? sit in your house and say look at my zeros in my savings account? it is about what you can do comfortably and not run out of money. >> that stress question was a really great one

people just don't want to stress over money if i'm not stressed over money, i feel wealthy if you live above your means an you have several million dollars, you may not feel wealthy. >> and you have health 1,000% of things try being wealthy with a horrible disease every day, you are dealing with it >> terrible. the health is most important we'll talk about these things on thursday join me when i talk to top advisers and investors at the cnbc summit. financial adviser summit go to cnbc.com/financialadviser. hope to see you there. >> thank you, sharon we will talk about more merger stuff in a moment. >> that's right, andrew. we talk to a specialist on what

yesterday's legal move by the ftc means for microsoft's purchase of activision. we also talk to ted decker ahead of the investor conference today. "squawk box" will be right back. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! ♪ (upbeat music) ♪ ( ♪♪ ) constant contact's advanced automation lets you send the right message at the right time, every time. ( ♪♪ ) constant contact. helping the small stand tall.

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the federal trade commission filing an injunction for more on this we want to bring in the aurb trust specialist the company, microsoft said it's

more likely to proceed under these conditions what do you think? >> it's definitely a positive development, and i think what this definitively does is provide certainty around timing, and it's a complicated process, and it seems to be a long shot that activision and microsoft got through the process, and the ftc could have filed then, and this stream lines the two processes. that should give the activision board more confidence. >> what do you think that extension looks like, the terms of the deal for that >> it's a great question there's a couple ways this could go i think investors are looking for some type of prepayment, an

early special dividend or a monthly payment dividend that is funded by microsoft, and the reason is there's a low degree of confidence microsoft can overcome the lower block, and the language in the injunction filed by the ftc is adding hope that perhaps there's more happening behind the scenes. >> what do you mean? what is the language >> they said -- they actually said that microsoft represented to them that they may, quote, unquote, may con saw mate the deal, and we don't know why june 15th is so significant

there's a lot of unknowns here, but it indicates that perhaps there's a path forward in the uk >> what would the path forward be you have to contpeupbs the cma to reverse its own decision, right? >> theoretically -- the cma could, instead of stopping the merger on a global basis, they could stop it just in the uk so microsoft would have to hold separate the assets of activat activation and if there's not an early payment, investors will

want clarity around this point >> thank you we appreciate it in december on "squawk box" you said you thought there would be a challenge on this. the lease man is assembl with data analysis we have the latest fed survey ta ahead of all this and expectations for tomorrow. "squawk box" will be right back. what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible] wow! yeah! it's time to take control of your investing education. cut through the noise with best-in-class education resources that match your preferred style of learning. learn your way. not theirs. td ameritrade. where smart investors get smarter℠.

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good morning markets gearing up for inflation data we will find out what it could mean for the fed's next rate meeting. ceo's ted decker talks about what the company is doing to prevent theft ahead of the investors conference and the ftc drops a move on the microsoft deal the second hour of "squawk box" begins right now

good morning welcome back to "squawk box" here on cnbc i am andrew ross sorkin along with becky quick and joe kernen. the futures has green on the screen, pretty much across the board. the s&p, dow and nasdaq all looking up take a look at treasuries. look at the two-year and ten-year, and ten-year, interesting, 4.57. we'll keep our eye on that >> inflation data. lots coming. >> let's get over to dom chu with the premarket movers. let's kick things off with an analyst call this morning that is arguably the most important stock in the entire market and that's apple.

roughly 200,000 shares of premarket trading volume this is in part of ups downgrading their stock. it was 180 they cited things like softening growth for iphone and services as a near ten-year high in terms of valuation, so apple shares down and then big headlines yesterday with regard to the merger between microsoft and activation blizzard, and the preliminary junction was filed to block the tech giant's purchase. they cited less competition and withholding gaming content from competitors, and microsoft and

activision said they welcome the opportunity to try this case in federal court, and microsoft is up a half of 1%. we will end on a check of shares of intel, and nearly 100,000 shares of volume the chip maker is in talks to become an anchor primary investor for armed holdings, and that's according to multiple talks. it would make it the biggest ipo of the year. intel, one of the lesser companies talked about could be making waves >> yeah, maybe trying to maybe do something >> make up for loss ground yes. >> i think we dissed canada a

little bit yesterday >> did you recognize that? did you get the same amount of social media grief for not mentioning the putt? >> i watched it live i don't know, this makes me think that there's something -- there might be a higher power. weird things happen. he's canadian and it has been 70 years and all the guys are waiting, and mike weir is there, and it was classy when he looked over like that and he said wholly -- >> yes >> stuff like that doesn't happen, you know what i mean 72 feet eagle! >> you had a lot of the uk-based golfers rallying around tommy fleetwood, and then you had the canadians and everybody sees the

photos of adam getting tackled when he's trying to shower champagne on -- >> there was an apology about that tackle. >> and then there's a debate on whether hoodies are the appropriate golfing attire, and maybe that's why he was being tackled -- >> it's becoming more and more commonplace in golf. >> they had jeans on i saw that that's not going to fly at my club >> your club is very high up there, so i understand why >> shorts, finally shorts. but we digress thanks hopefully some of our neighbors up to the north feel a little bit -- we are a day late and a dollar looney short, i guess the fed kicking off its

meeting -- they want me to say today after i just saw today does the market expect a pause or a skip? in my view, a skip is once, and a pause is like a series of skips. can we settle on that? a pause would be, you pause, but you can't pause for just one meeting, do you think, steve a pause is a couple skips, serial skips, right? >> i like that, joe. so a pause is more than one skip, and a skip is just one time >> yes >> okay. maybe we should just tell powell that, to just get the semantics down right, and maybe you just did and he could be watching, joe? you don't know >> i heard he does yes, a nice man. >> and we have surprising results from the survey, it

shows the forecast is the fed's forecast is none and done, and that's no rate hike now and no more this cycle. 91% of the respondents say this. it's a bit higher than the current rate because some of the respondants see it 71% forecast no change in december, and a 26% minority, they are penciling in a cut. all the white is no change on the board. the chief investment officer of

the bleak lee financial says this decelerating housing inflation will keep the fed on hold. one factor that could make the difference between the rerespondents and the markets say they reduce their forecast the average reduction was 0.3% points, and that's a big number if you are talking about some of the low forecasts out there. still, there are many that think the fed should keep raising rates, and among them john ryding from brean capital. he was among those that asked this question, if the fed is so sure it needs to hike in july, why wouldn't it just hike now? the answer may well be, i think, anyway, the fed is not sure and wants to see more data before figuring out if it's one and

done or none or one and two? >> did we forget about when we said this is a moment in time with the claims? >> no, i haven't forgotten >> i have not either did you see oil today? people say it's things coming online here and there, and it's always both. 67 let's see where it is. 68 it's up today, but saudis can't keep it above 70 >> yeah. yeah joe, i mean, i was thinking about it when you were having the conversation in the last half hour, and i don't know, maybe powell gets this one right? it would be a coup here if he ends up saying this is the time to pause and because there's all this lagged affect of 500 basis points, i think even if

inflation does tick high and stay high, maybe this is the place to pause he's done an awful lot i am knocking on wood and marking my woods, but nothing is obviously dramatically broken at this point, right? the bank lending, it's not great but it's not terrible. the deposits are not terrible. right now the money is not fleeing the banks. unemployment ticked up a little bit, relatively low. maybe we do have easing. it's possible this is the moment to pause and you pause at a real funds rate, and it's north of 1%, and there's certain restrictions in it, and i have a lot of sympathy, and guys who we have had on are smart and they think the fed needs to go higher, and there's an argument here and i think powell may make a choice that says let's not break anything, if we have to we can come back and raise rates.

right now would be a good moment to take stock. >> if they dependant over shoot, it would mean they didn't use the rear view mirror and they assessed things they looked down the pike >> who was it that said if you are going to raise rates you need to do it quickly -- >> why do half a dose of antibiotic if you don't know if you need -- you don't want to add to the antibiotic resistance by taking something if the infection is already over it would be great if they did not over shoot, steve. >> it would be something it also -- what would be really amazing about it, given the data and how confusing things are and this current time in the economy, there's no good analog for the recovery from a pandemic

and all the money that has been put into the system, and that is seen running out and the consumer is eventually not going to have the savings they had from the pandemic. if we can get along, and i don't know, if we get away from a 4, 4.5% interest rate, that would be a win >> it would figure, powell would nail it and he's not an economists, so he probably will get it right >> could be. could be, joe. i'm not going to defend the economics profession right here. >> it's a dismal science >> navigating this has been really something >> it has. seriously, maybe -- >> i will say -- >> experts -- you know about experts. >> i am not in the anti-expert camp, joe, where knowing something about something is a bad thing, and i won't agree with that at all and one of the researchers that

has been around for years and years, he said he answered almost all of the answers don't know because he doesn't know, and i thought that was an interesting development and descriptive illustrate of the situation. >> thanks, steve when we come back, we will have a censure making a big investment in a.i. and then home depot ceo, ted decker, will talk about business strategy and theft prevention ahead of the analyst convention. -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go. the network more businesses choose.

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welcome back to "squawk box. new this morning, censure ceo. it's great to see you. we have seen lots of folks investing in a.i. in different ways this is a big investment, $3 billion, and 80,000 workers you are planning to effectively rescale in the a.i. world, and tell us how you got here and what you think this will create? >> sure, thanks, andrew. great to see you we always start our investments with what our clients need and we are seeing our clients, both

companies and governments focused on how they embrace change and use tech data in a.i. to re-invent themselves, because you have a macro environment with uncertainty, geopolitical and economic, and at the same time, so this investment is all about accelerating our clients' ability to use a.i. to re-invent, and to do so responsibly. >> what does that mean, though let's talk about sort of the rescaling piece of this and how much of the money goes towards that versus engineers and the like building these large language models or parts of large language models, so what are you trying to do there >> three things we are doing first, we are doubling our talent to be 80,000 people in

data a.i., and that's a combination of upscaling, our current employees and highering more and acquisitions and that's because of the need of our clients to move fast and we need to expand our practice the second thing we are doing is building out the a.i. navigator, so think of it as an a.i. enabled platform that will help companies make business decisions because it's important to understand the cost of a.i. both from an energy and financial cost, and the best use cases and how to make decisions around architecture. it's still really early days, and how you build your data and what kind of models, all that our clients need a lot of help on we are building solutions to help our clients in a repeatable way to use it. if you think about what we are doing today in the spanish admin strae of justice, we are helping

them build cases and facts that they could not access before using degenerative a.i., and we're investing to create the solutions so that companies can -- and governments -- can use them faster and get the value better >> let's take that example because i think that's an interesting one. how does that work, meaning they have a database, and obviously -- i am imagining or maybe you are building a database for them of all the cases, kwi don't know how long,5 years, whatever it is, and are you working with open a.i., or is this a microsoft project? what models are you using to search and build on top of that? >> andrew, first of all, you are absolutely right it starts with the data companies and governments that already have access to accurate

data are in the best position to use a.i., so a lot of what we are doing with other clients where they are not as digitally mature is helping them with their data in this case we are working with microsoft to use their a.i., a large language model to be able to then access all of these cases. what is great about a.i., generative a.i., is you can literally know everything about a company or a government that ever has been known that can be put into language, so as you know, andrew, generative a.i. today is not good with math, and it's good with anything that can be put into language >> you have something like 740,000 employees around the world. i am curious, given what should be the productivity gains that a.i. would create, and when you think about head count at accenture over the next few years, what does that look like

to you >> in 2019 we introduced mandatory a.i. training for our over 700,000 people, because we think the skills, a.i., cloud, azzure, so five years ago there were thousands of people that were doing testing, which today we have automated and we continue to grow so we would expect that as we automate or use a.i. to do tasks that our employees are doing today, those tasks will up skill people to do other things, and overall will need less people with those tasks but they will have other tasks to do >> fascinating we hope you will come back and tell us about your progress and what it all looks like thank you very much. >> absolutely. thanks so much >> you bet

talk to you soon becky? still to come this morning -- >> one of the biggest trends in home improvement is the transition from corded powerto battery power and outdoor power equipment from the gas engine to cordless battery power, so you figure if you can have a truck that is cordless, you can have a lawn mower >> home depot ready to outline its strategy, and we caught up with the ceo to talk about theft. that's straight ahead. "squawk box" straight ahead.

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♪ ♪ still to come, our exclusive interview with home depot ceo, ted decker goldman sachs lowering its crude oil price forecast for the year marking its third downward rescission in six months, and we will talk to jeff curry for the

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home depot holds its investor conference today at the new york city stock exchange, and they are reaffirming its guidance for 2023, and this is lower guidance than when the company reported earnings last

month, and earnings per share expected to drop 7 to 13%. i spoke to the company's ceo, ted decker, about his plan for the business including how to grow when consumers are shifting from buying things during the pandemic to spending on experiences. we spoke at a home depot store in new jersey. >> we had explosive growth as you know, during covid, just a spectacular performance. we grew our eps 60%. we always knew this year would be a bit of moderation for the home improvement market and the consumer is still in good shape, but there was a shift in spend from services to goods and particularly home improvement goods over the prior three years. we knew there would be a period that spending was going to shift from goods into services and we will go out and talk about the

future of home depot and the future of the consumer and the marketplace that remains super strong and how home depot will continue to focus on growth, and we think in a stabilized base case we grow the top line 3% to 4%, and some our investments go online satisfying the larger pro purchase and continuing to take friction out of our consumer shopping journey, and we can grow faster than the 3 to 4% >> you are talking about a stabilizing home improvement market, and that's not what we have right now >> the short answer is, yes, we don't know and as we went into 2023 we thought the market would be down low single digits, and we would fight for share and get to a flat calm we knew there would be pressure in lumber, and unfor ttunately

had a tough spring through most of the country, and watching the shift from goods to services continuing, we said this is going to last, certainly, through 2023, and we updated our guidance and said our comp sales will be in the range of minus 2 to minus 5%. the difference in those two ranges is how much that pce shifts it's an imperfect science because we are talking about $18 trillion of consumer spend, and we are looking at basis points, and we purposely said at the investor and analyst conference, you know, that we are not going to call when this moderates, and you tell me what the fed is going to do on wednesday, and how much they are going to do and are we going to have a recession or not we want to focus on the

long-term investments in the company, and we went out and talked about a stabilized case, which could it go into '24 certainly. would it go much longer than that as we sit here today? we wouldn't think so >> a few weeks ago you said it was not consumer weakness but project size that dropped. is that a trend you are seeing in the stores? >> yes it's hard to put your finger on it, how much is pulled forward and how much of it is inflation sensitivity, and how much of it is concern that you are just pulling back larger discretionary items that are not a need, and we are sitting in patio, and it's beautiful but it's a discretionary business, and maybe i can get through one more year with my grill and maybe i bought a grill two years ago during covid, and there's a fix

or recycle in appliances, so we are seeing more of the break fix replaced other than an upgrade >> you mentioned earlier to tell you what the fed is going to do, and the fed is meeting this week if they pause as expected and then raise once or twice, what does that mean what is your outlook for the housing industry >> we are super bullish. the principle reason is there's a fundamental shortage of houses in the united states when you think back to the great financial crisis in our recession in 2007, '08 and '09, there was no dock loans and et cetera people tend to have fixed-rate

mortgages, and most of those are under 5%, and -- >> yeah, nobody wants to sell. >> yeah, some have 2.5% 30-year mortgages. you can have higher mortgage rates, and that will have more of an impact on new home construction in sales. we look at a fundamental shortage in housing between 2 and 4 million units, and you are looking at ten plus years in the best case example to get the supply and demand in balance >> higher rates are good for you? >> i don't know if i would say good, but it plays out to the dynamic of people staying in place and remodeling another thing this shortage of housing has done is increased the value. when you think of the customer

base again, and that's somebody with a good job, and the customer's household income tends to be 35% higher than the ugs as a whole, and home ownership at 86% is higher than 65% in the country as a whole, and the income of our customers is well above the national average, and they have seen the asset for most customers, it's their single biggest asset, and in the last few years, it has gone up $13 trillion in the asset class just in the last three years. >> right let's talk a little bit about shrinkage of the stores. you came out early a few years ago and talked about what a problem this is. in some areas, i know you have had to lock up lots and lots of your merchandise, not just the

big-ticket items like they used to be, but what items do you have to lock up as a result? >> as you said, it's a big problem for retail and it goes across retail, and just to take a minute at the root cause, and this is not the random shoplifter anymore, and it's based on market places, and one of the things we are doing is working with local, state and federal government to really educate them as to what is going on we are super happy with the success in things like the inforeman where the online market places are going to have to vet -- >> are you frustrated with facebook and amazon that they are selling stolen items, because ifyou were selling stolen items, you would be in big trouble. >> yeah, the format, it will be

their sellings, and to your point we have had to lock up a lot of high value items, and they are not all power tools and generators, and you could have a circuit breaker, 50, 60, $80, and those are high-theft items >> this is a problem in some geographic areas more than others where you would have to shutdown >> yeah, a number of retailers have had to shutdown stores in certain tough cities we are fortunate that we have not, but we are increasingly concerned with the life safety of our associates and customer base -- >> you have had two employees who have been killed >> yes, very sad and very unfortunate. we are having to invest in more security guards, and lighting, you know, increase lighting in

parking lots and recording towers it's not a place that many of us in retail thought we would have to be. >> how big of a problem is it? can you quantify it? >> we know what our number is, obviously. we don't talk about it, but it has been pressure on our gross margin as with many other retailers. >> to the point where it's material >> it's -- it's something we are having to manage >> let's talk about digital and e-commerce, because that's a big part of the plan you have, too, to make sure there's more of a seamless transition between the two. how do you do that >> we are a project-based business, and people research and get inspiration and go online and come into the store and buy something and take with them and go back home and order something and have it delivered, something installed. it's truly an interconnected journey between the physical and digital worlds i think we have done a nice job in retail in that, and our

e-commerce site alone is the fifth largest e-commerce site, but there's still a lot of friction when we think of millennials and gen z that grew up in a truly digital world, they are not going to tolerate the sort of friction i might to me it's all still very new and helpful, but to my daughters, it's, hey, dad, more penetration of digital is between 14 and 15%$14 and 15%, a 20-odd billion digital business, and it's the journey if you order, how is the communication? how is the return of an item you bought online? are we truly taking friction out of that process? our view is the home depot being one of the great brands, i think, certainly one of the most valuable brands in the world, our customers don't judge us

with a home improvement lens and don't judge us with a retail lens, and we are the 25th most valuable brand in the world, and i think we are kind of in that rare afraid air that people judge the experience with home depot the same they might with what am i doing with the streaming service or the rideshare service, and how easy is it to add bags to an international airline flight if we are not offering the level of the seamless interconnected journey, it's a potential markdown on the brand, and we are trying to win a share of this generation and the next generation >> ted decker will speak to investors and analysts starting at 9:00 eastern time this morning to explain his plan, and two parts of the vision has to be pro business, how will he win the market share, the bigger

customers and contractors out there, and the e-commerce making it a more seamless experience, and he has a couple hobbies, too, gardening and the concerts. >> swiftie >> no. >> no? >> nope. but he does have two daughters that make him hipper in terms of his musical tastes coming up, we will get a check -- >> not that he doesn't like her, but that was not one of the most two recent concerts he went to >> right up next, jeff curie cutting

his oil prices r anybody has their fingeon the oil spigot, it's him "squawk box" will be right back. jeff currie. we're talking about a.i. when we talk about generative and conversational a.i., this is not about chatgpt helping kids with their homework. we can go from text to code. that transforms the speed at which we can help enterprise

unlock value so it's going to change absolutely everything and nobody can afford to sit on the sidelines. >> is this a new way of business here to stay >> the technology is going to keep evolving very quickly, but this is not a fad. we are working with our clients to help them challenge absolutely every aspect of the business, from sales to marketing to e-commerce to supply chain to packaging. everything has an opportunity to evolve with the value of a.i >> what is it that companies really need to keep top of mind? >> they need to keep top of mind that data can help find their customers more effectively and tell stories better and optimize decisions and grow revenue >> thank you for sharing your insights >> thank you box.

take a look at the futures we have green up on the board. an update this morning to the energy sector, and goldman sachs upgrading devon energy we have a lot more coming up here on "squawk box. goldman sachs cutting its forecast for oil we wspeak to jeff currie, next we areomg ghba cinrit ck dad, we got this.

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goldman sachs cutting its oil forecast by nearly 10%, lowering its out look for december, and went from $86 a barrel we have had you on many times. part of your commodity super cycle thesis had to do with oil.

things changed you have sharply adjusted your opinion and your outlook on things what happened? >> no, we haven't changed the longer term super cycle thesis at all if anything, it has gotten stronger with the pullback in prices, and under pervasive, particularly oil, just look at u.s. drilling. why did we cut our near term price targets? it's the response to the high prices last year and it's three fold one, you had the spr, and they are still taking barrels out of the spr and have not started putting them back in until next month. two, you have the monetary response to the inflationary pressures and that's creating a massive amount of restocking, and there's a more discerning approach towards sanction oil,

and russia, venezuela, iran, all producing substantially more than what we would have expected we can think about the higher interest rates driving this because you are desocking sanctioned destocking sanctioned iranian barrels out of floating storage. they're looking for places to get new oil and that's one of them and you have the infrastructure available. but does that change the longer-term story? absolutely not you're not getting anymore out of russia, because of the lack of investment. iran hits infrastructure constraints and in venezuelans, they're talking about years of investment to get more capacity out of it. and a lot of people worried about oil. they go, well, we cut back production in opec that creates fair capacity but i want to remind everyone, we're likely to draw 2 million barrels per day during the third

qua quarter, with that reduction and supply the bullish thesis is very much in tact. a lot of people were texting me yesterday laughing, going, why is the oil selling off to $70 a barrel, when you lowered your target 12 months out $32 a barrel below where your target is. i want to emphasize everyone to, we're still very bullish, still believe in the longer-term thesis it's just that the near-term upside has been taken out. >> everything that you talked about, you didn't really -- you're to the talking about demand can we tie this to any type of global slowdown or a slowdown in this country does it indicate anything for the fed, jeff? >> you know, when you look at oil demand and here's a fact i like to keep emphasizing. the iea has raised its demand for cash every single month since november of last year. you know, we've downgrade, but

it was a very small amount and you look at how much we've raised it over the course of the last six months, it really emphasizes, the demand picture is not part of this. which everybody likes to blame the speculators leaving this market because of demand con concerns sing it more has to do with destocking the higher interest rates making it too expensive the hold the position. oil is a liability to hold right now and until it becomes an asset, nobody wants to hold it >> and you said, look at this country. i mean, everything's political, but a lot of people say, you know, when we say, there's been too much regulation, you know, the biden administration has tried to curtail exploration, the democrats always come pack and say, we're producing more barrels a year now than anytime under the trump administration

which is it? is there under investment? are we producing less? are we producing more than we've ever produced? i thought that the high prices would have spurred, regardless of -- but that's what politicians do i thought that would have spurred investment >> by the way, that misses the point that production was massively curtailed through covid. but i think the key message here is that when we look at the capital activity, the ability of companies to deploy capital to drilling, given fact that they destroyed so much wealth over the previous decade, that they're wanting to return, you know, returns to shareholder value. dividends, share buybacks. otherwise, you're going to lose your investor. that's part of what's going on you're getting more of a normalization in capex than the aggressive growth that was characterized the previous decade >> all right, jeff yeah, i notice that.

it didn't remind me quite of what an analyst -- i like when they do that like netflix, it's trading at like 350 and raise their target from 200 to 210. you know what i mean you're cutting your targets, but they're still way above where we are right now. still indicating sharp increases over the next -- >> by the way, i want to remind you, it was six to seven weeks ago, we were above our end of year target. and how many times have we seen this market cycle between 73 and 88 since the beginning of the year it will be three times and a lot of that's driven by money coming in and out, in and out. it's unclear what the new money is that's going to come into this market. but one thing is very clear, they won't buy it until it's an asset. you need to have inventories draw, a positive carry, and a trendy market. >> very good all right, thanks a lot, jeff. appreciate the update. >> thanks for having me. >> see you again soon.

i don't know what to think of this next story >> this is news, we've got to talk about the entertainment industry and specifically "wheel of fortune." pat sajak, who hosted "wheel of fortune" for more than 40 years says he plans to retire next year say jack is 76 he says the coming season will be his last. he didn't say who will succeed him. i don't know where vanna white is in all of this, but i'm putting our own david faber up to the job, given his great success during the "jeopardy!" trials >> i think he should be the "jeopardy!" guy. >> i love ken. it's really difficult to watch when ken's not there he's not going to do "wheel of fortune. although it pays, that's for sure >> why not >> i think faber with the big wheel could be unbelievable. >> i don't know. it's like hangman. it's not like "jeopardy!" where you've got to be a genius. >> it's hard >> oh, it's very hard.

>> you know that >> i can't do "wheel of fortune. but "wheel of fortune" is when i really realize -- >> faber's the brain this is -- and it's a different type of, it's a spatial sort of -- >> it makes it difficult if you need all the answers to get the answer, i can't play the -- i can't. >> but you play wordle every day? >> i do. >> and he's got at that. >> sajak's amazing >> hold on maybe i missed it, do you want the job? >> no, no, i can't do it myself pip need all the letters to be there. if they offered me -- what are we talking >> i could try -- you know, i know some people, i could make some phone calls >> that would be -- >> i think pat does okay i think pat does okay. but he's hilarious, we're going to miss him. he's never -- stuff happens and

he's always nice because sometimes stuff happens where you're only missing one letter and it's a common word and they don't get it. >> what is wrong with you? >> i don't know, joe, actually, i don't think this job is your calling. i think you might struggle with that >> it's like, we were talking the other day, can you imagine me being a waiter. i said, i could never a waiter i could never a waiter one nasty comment, and i would go, shut up! and throw the food i couldn't >> don't have the temperament. >> smiling, yeah, anything else? no >> coming up, the big number of the morning, the may cpi is out in just a half hour the futures ahead of those numbers look like, modest advances. uh by about three points for the dow, the nasdaq. "squawk" will be right back. at 87 years old, we still see the world

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good morning we are now 30 minutes and counting to the number of the morning. we'll bring you the breaking inflation data that the markets are waiting for. and the fed, waiting for that data, too it's the latest meeting and it kicks off today. you can bet this hour's big

number will be top of mind for central bankers. and megacap mania. milestones for two of the biggest stocks in the world. we're going to bring you all the details as the final hour of "squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. this is the hour we're going to get the cpi data u.s. equity futures at this hour, we have a little red now and the dow down three points, but the nasdaq continues to be in positive and the s&p, as well, which closed at 3348 treasury yields could change as

well 458 now on the two-year. 372 on the ten-year. >> among today's top business stories, intel is speaking with soft bank owned computer chip designer arm to be a major investor in arm's ipo. that's according to multiple published reports. soft bank shares rallying on this news. that stock up by about 5.25% also rallying are manchester united shares of the soccer club popping after media in qatar announced that a son was likely to accomplish his takeover bid and bunge will merge with vi terra to create a agricultural giant. among other things, the merger is expected to bolster bunge's oil processing business in the u.s. bunge shares down by about 1.9%. andrew >> let's get over to dom chu at

hq with the big top movers of the morning, my friend >> from hq, our 8:00 a.m. eastern movers has a tech theme to it. we'll start with asoracle, the earnings headliner of the day. over a quarter million shares of trading volume the business software in cloud commuting giant driven in large part by strong demand for its oci or oracle cloud infrastructure division. oracle gave current quarter revenue guidance that was above estimates. on a side note, this move here has now pushed founder larry ell ellison's net worth to above $145 billion according to the latest data from forbes, which makes him the fourth richest perp in the world. keep an eye on oracle shares certainly the tech talk of the morning. we've got eyes on apple, which is down fractionally on just around 400,000 shares of volume. the most valuable company in both the sk&p and the nasdaq is

just shy of record intraday levels today's downside so far fractionally is due to analysts over at ub graded that stock from a neutral to a buy they did cite amongst other things, slowing iphone and services growth there. apple shares backing off a record close level and let's end with electric vehicle giant, tesla, which is up again pre-market, fractionally, about three quarters of 1% 900,000 shares of volume i say again, because if it were to close positive again today, it would mark the 13th up day in a row. tesla is already on a record-winning streak, which is at a roughly $207 billion to it market value that's, by the way, for context, andrew, the equivalent of adding an entire salesforce.com to its value. big move for tesla big move for elon musk i'll send things back over to you. >> thanks, dom we're now less than half an hour away to the may cpi inflation report tomorrow we get the producer

price's numbers, as well as the fed's latest interest rate decision our next guest thinks that the central bank is a long way from easing joining us right now is jason trennert, nice to see you, jason. you say it's a long way. so give us your expectation for tomorrow, then >> well, listen, i think -- i wouldn't quibble with the idea that inflation has peaked. but i also think that we're a long way away from the fed's target of 2% i'm not sure the fed has like theed is pact with 2%. they may stop sooner than that but clearly, inflation is much higher than the target and i think it's going to have to stay there for a while. after today, there's only going to be four meetings left and andrew, as you know, probably about a month ago, one of the main reasons for people to be bullish on the market was the expectation that the fed was easy my view is the fed will have to

see inflation closer to 3 for several months before they can start thinking about easing. so i think they're going to pause, but i think as we saw with staustralia and canada, a pause doesn't mean you're finished tightening, both of those central banks pause and they have to raise rates later on >> let me ask you this, it's the same question i asked the treasury secretary last week to get the rate down, what do you think unemployment has to look like in the united states i think that that actually is both becomes a policy and almost a political question >> it's -- andrew, i think you're absolutely right. i think the fed, too much, is very much of a phillips curve organization, which means that it's spending at of time looking at the labor markets a thousand phds there. it's very model driven, which in my opinion can be a weakness, just to the exent that you might be better off talking to regular people more often. but i think generally speaking,

there's something called -- i don't want to get to -- you basically need to get employment rate up a half a percent before you start actually thinking about a recession. and i would imagine that the unemployment rate would have to be well over 4 at a minimum for the fed to really feel comfortable in starting to ease. >> so jason, you know, for your thesis to play out properly, are you looking at this stock market and saying, this doesn't make any sense, that this rally is sort of a head fake? >> a little bit. i have to say, we've been on the wrong side of it and just to the extent to which our clients are compared to the s&p 500, not the 500 equal weighted that would be easier to defend, but there's no way that i can claim we expect seven stocks to propel the market to be up 12% year-to-date

and what's hard, of course, is that this is a very difficult thing to argue against, because most of these stocks have something to do with ai or an expectation of much greater productivity and we're in such early stages, it's a difficult thing to argue against. so i could see this getting worse before -- i mean, from the standpoint of an equal-weighted perspective. >> if you look at that chart, it's got to give you kind of a sick feeling >> yeah, we got there last march. we saw -- >> since october >> the nasdaq is up 30 to 40%. >> i'm with you. but, you know, there's also our clients -- >> how do you ever get in? >> it's actually risk versus reward >> how do you ever get in at this point >> i think it's hard to get in at this point. >> what if it keeps going? >> it could. it certainly couldn't. but it's probably too late, too late to buy. and too early to sell. i do think -- >> so what do you do

you're just sitting on your hands, jason >> what's that >> you said too late to buy, too early to sell. so what do you do? >> i think as far as those stocks are concerned, in my opinion, i think for the average person to jump in now, i think you're taking a lot of risk. the risk/reward is not there i'm still very much of the view that recession is likely in the next year. and i've never seen a recession in which the market bottoms before the recession began so the adds favor that i could be wrong obviously, there could be other things that happen, but generally speaking, it's pretty hard to avoid a recession. >> we've talked politics with you a lot over the years and i'm curious, when you start to think about what happens in an election year to the stock market if you go back and look, it stork sto historically has been a complicated little dance there's been a split in terms of

where the year is and what you think is going to happen but if you think there's a not obvious outcome, that's typically bad for the market >> so the presidential election cycle is very real, right? so which generally means the third year of a president's term tends to be the best this would be this year. and the worst is the first and that's generally because presidents do the hard things first in terms of physical discipline or raising taxes or anything they might do and then they kind of let things run. they let her rip in the second two years of the term, after the midterms the issue this time for president biden is that they did, because of the end of covid, they did a lot of stimulus first you might remember, you started off with a $2.3 trillion fiscal stimulus package in march of 2021 the hard part now is it's going to be hard to stimulate the economy, it seems to me, going into the elections in 2024

the other, i would say, binding constraint on both the federal government and the fed is that interest expense as a percentage of federal spending is set to explode because the fed largely subsidized interest rates for the federal government so a long way of saying, interest rates are going to, in my opinion, there's doing to be a lot of issuance and the bias will be higher >> real quick, do you think that -- i know you said that yoyo think that there's going to be a pause. do do you think that's a mistake? >> i think it's appropriate. you know, listen, the monetary policy has a lag and the lags are long and variable. whatever the fed did a month ago, we're not going to know the impact of that for another year. it would be wise probably for them to stop altogether. by the same token, this is a very imperfect science

and i think unfortunately, the fed is fighting the federal government in terms of their spending, which complicates things >> okay. jason trennert, thanks we'll see where it goes, appreciate it. when we come back, breaking inflation data coming on the first day of the fed meeting, but next, we will speak with the democratic lawmaker trying to overhaul the debt ceiling following the recent default scare. stay tuned your watching "squawk box" and this is cnbc the first time your sales reached 100k with godaddy was also the first time your profits left you speechless. at the counter or on the go, save 20% with the lowest transaction fees

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the u.s. came close to a debt default just a few weeks ago before a last-minute deal between lawmakers and the biden administration our next guest wants to change the way the country deals with the debt ceiling he helped to introduce the debt ceiling reform act last week joining us right now, pennsylvania democratic congressman, brendan boyle, ranking member of the budget committee. we're going to definitely talk about that in just a second, but sometimes the real world interseeds and you have some other things i saw you down at the site of the tanker fire and the collapse in philly. if you could just update us on that and it is staggering how much east coast commerce goes through philadelphia on the way

south. it would be good to get this done quickly by coincidence, there's a piece in the journal, how to rebuild fast it was done in california in 26 days after a similar tanker fire episode other places where it's taken six months or longer based on how you approach it what do you expect to happen here >> well, first, thank for bringing this up, as it's just an awful event that happens to be right in my district, which is basically, as you mentioned, smack dab in the middle of the northeast corridor more people live within a 50-mile radius of this accident than any other similar 50-mile radius in the country. so we need this repaired, not just for philadelphia and southeastern pennsylvania, but really from as far north as new york and beyond and as far south as washington, d.c i am confident, though, in speaking to the white house and secretary buttigieg and our state's governor and others from early sunday morning on that every sort of resource will be brought to bear in order to solve this as quickly as

possible in atlanta, when they lost part of their interest rate, they were able to solve it within a couple of months i'm hoping that in philadelphia, we'll be able to actually beat that >> and it's in the op-ed pages of the "wall street journal," from john fund and i'll admit that to you, and i know you're a democrat you mentioned secretary buttigieg, but when it happened in california, protracted public hearings, environmental impact report, procedural hurdles, all suspended while president clinton refused to spend the davis bacon act, and you know what that is governor pete wilson went ahead and suspended that and then added incentives to get it done. do you expect that something similar here or will there be all the red tape and all of the things that caused delays. what would you urge to happen in this case, congressman >> well, so there are two things about this the first is, this isn't --

sincerely, this is not a time for ideology or partisanship i want whatever will get it done as quickly as possible excuse me, let me finish my answer, joe. there's already legislation on the books for a situation just like this that expedites matters. the second point is, i-95 is a series of bridges throughout philadelphia it is already being reconstructed in different parts. ironically, there was already a contractor on site so when i went yesterday to tour it, the contractor, who happens to be working just further up on i-95 is the one who was doing the demolition work right now. so i am confident that we will not see any unnecessary delays and if there are, i will be pushing to remove them i am one of the people who takes this almost daily. i understand that for my constituents and for people in my area, we need this rebuilt as soon as possible

>> very good. let's get back to what we were talking about. and it's you and it is senator durbin on the senate side. no republicans, but it's an idea that's been proposed by leader mcconnell. can you go into the mechanism and why you would want to do it. >> the basic mechanism is how the 21 impasse -- the 2011 impasse was resolved and that is allow the treasury secretary to initiate the raising of the debt ceiling. congress would have to vote to disapprove it in order to stop it absent any congressional action, some say congress is pretty good at doing nothing, so if congress were to do nothing, the increase in the debt ceiling would take effect what i'm attempting to do is to take it out of the normal political food fight, still reserve a certain power for congress, but make sure that we avoid any possibility of an

accidental default in the future, which frankly we came a lot closer this time around than people realized. >> and people wonder what the point is in the first place of a debt ceiling i can argue either side, i think, but once you know, you go through elections, one of the other party wins a majority. they legislate the way that they see fit. and then, you know, depending on what happens, you have to pay those bills. i can understand why you wouldn't even want this. on the other hand, sometimes as a last resort, it's the only way, maybe, to put a governor on what one of the other party is doing, unilaterally. and do you -- after it's all said and done, do you wish there hadn't been any of the things that president biden pushed so hard for, in the bipartisan agreement? do you wish none of that was there? do you still wish it was a clean debt raise with none of the stuff that --

>> those were -- joe, those were two separate issues. ironically -- i voted, by the way, just to be clear, i was one of a large bipartisan majority of democrats and republicans who voted for the ultimate agreement. i think all we did in the end was risk default while passing what was ultimately a budget agreement that we probably would have reached by september 30th anyway i always said, i was willing to negotiate about future spending. that's what ended up happening but, you know, looking forward now, the question is, do we really want to keep playing fire in this way. do we really want to risk default year after year, we're going to be right back in this initiation in under two years from now, unless we change or reform the debt ceiling process. i just think that's nuts i think there is a way that we can have a sober conversation about what the size of our national debt should be, but we can do that without taking the full economy hostage

>> all right, congressman. we'll end it there we'll make some good points. what should i do to get around it can you send me like a gps thing on -- >> what's the latest thinking? >> i know every back road in northeast philadelphia i will sell those secrets and be doing an infomercial later on cnbc >> there's a couple of places in northern philadelphia, i wish you wouldn't i don't care if it's faster. i'll take the -- it may be better to take a more roundabout way than some of those places. >> for you, you'll be taking the jersey turnpike. >> that's right. all right, congressman, thanks appreciate your time today thank you. >> all right the latest cpi inflation reading from the labor department we'll be watching the market reactions very closely stay tuned you're watching "squawk box" and this is cnbc

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welcome back to "squawk box" right here on cnbc we are just a couple of minutes away from the may cpi inflation data the expectations for this for the month over month, up by 0.1% it's the year over year we'll be watching so closely. the expectation is up 4% you can see right now the futures ahead of that number, up by about 8.5 for the dow

s&p futures up by about 6. the nasdaq indicated up by about 57 and if you want to take a look at what's happening with the ten-year, that could be impacted pretty drastically, too. 3.761% for the ten-year. the two-year at 4.659% rick santelli is standing by at the cme in chicago rick, we have about one minute before we get these numbers. obviously, this is really important with the fed meeting today. first day of a two-day meeting >> yes, it's not only important for all of the obvious reasons, but as we look around the u.s., it's important for some of the outside reasons. like the uk, what's going on with regard to their earnings, their inflation scenario, their interest rates have moved higher their central bank most likely has more work to do. bank of canada comes back and altering the psychological landscape, as well all of these are big question marks. and cpi today could go a long way, becky, and erasing some of

these question marks one area i'm going to pay attention to, and obviously, everything's been so politicized, but when we look at the year over year on the cpi headline, since it peaked in june of last year, 9.1%, it's come down every month for ten consecutive months will this the 11th. no other sector can say that since it's a high water mark and we're only a couple of seconds away we're going into this with a 368 yield on 10s and the data starting to hit the wire. rates are moving up already. so somebody seems to have this number before. i've seen it on the wire services we're now up to 372. 373, up 1/10 of 1% on cpi headline, exactly as expected. up 4/10 if you're stripping out food and energy. that's exactly as expected as well year over year, 4%, year over

year, 4% we are expecting 4.1 our last look was 4.9. so indeed, this continues that streak this will be 11 consecutive months since 9.1% in june of last year, which was the highest level since 81 each successive month has been lower. and if we look at core, which many believe is the most important, 5.3%. we were expecting 5.2. so it's 1/10 higher. but it's 2/20 lower than the rearview mirror, which was 5.5 this series peaked in september of last year, becky, at 6.6. that was a 40-year high. however, we did have the month of march which moved from 5.5 up to 5.6 soit hasn't been continuous. this is lower. we do see that interest rates have been moving around quite a bit. we're now right back to this 368/369 level. and if you look at the intraday ten, we've had a lot of little

noise volatility here. but if i had to summarize, as i think the market is now, it's definitely a bit better than expected these are still sticky numbers year over year the we're up about 40 points in the pre-opening numbers. >> steve liesman joins us right now with his reaction to the numbers. steve, what do you think >> i'm still concerned about about this cord number it's the source of the fed's concern. and i think the market is trading in a logical way what i'm seeing is a firming up in the sense of a pause this month, but an increasing bet on, and i'll just double that check while i'm talking. sometimes there's a lot of volatility right around the number an increasing bet on the idea of a hike in july, which is now at

68%, or 66%, i guess, is the way to put it. and we're not dpgetting the help from housing one of the expectations of those, you would think if inflation is going to fall is the idea that housing inflation will cool off. i haven't had a chance to see many of the other details in there. you did get a negative number on real earnings. that will be something of a drag on the economy and then when i look at some of the other data here, it looks about, i would say, you know, a good enough -- you can tell whatever story you want out of it in terms of -- i'm not saying it's a dovish number or a hawkish number pretty much has expected a little bit hotter -- >> you see the nasdaq doubled. that's interest rate sensitive gold immediately moved dollar immediately moved bitcoin immediately moved. july is a long way off i'll hear you. but they have a lot of -- if they do skip, they'll have time to think and we saw how much this last one moved around

68 i wouldn't put any money on 68 maybe. maybe it's 80. maybe it goes up with the number but july's a long way off. and the knee-jerk within the dollar of gold and the nasdaq. sure, look, you have another chance for the inflation numbers to come down before the july meeting. maybe we'll get a little more cooperation from housing maybe a little bit better numbers in terms of declines in those core services thing that the fed share is looking at. but look, you're still at 5.3, still above 5% on that area that powell was looking at. so i think he's not going to feel like job is done unless you get a better number in july. >> and all of these, the nasdaq, everything could reverse by then but the knee-jerk. it certainly wasn't off the charts worse than people thought. >> no. and like i said before, like i said before, they would take, i think, a big number, a big miss to the upside, a big beat to the

upside to get the fed to not pause this meeting >> okay. steve, stay there. we're going to bring in two more voices to this conversation. kevin hassett, the former counsel of economic advisers chairman under president trump, and now a hoover institution distinguished visiting fellow. and wendy ed ldeddelberg is the director of the hamilton project. wendy, let's just start with you. you agree with steve's assessment here that this makes a pause more likely at this meeting, but a hike more likely at the next? >> i think they pretty much have to pause at this meeting, given how they have gone to market and what market expectations are for. but i'm guessing that we'll see in communications that they want to put more two more hikes on the table. and that's either maybe a 150 basis point hike at the july meeting. what i'm seeing in the economy, not just inflation, but also in the labor market and in consumer spending is a need for possibly

two more hikes i mean, today's report is not all that surprising, given that the pace of real goods spending, the stuff that we hold in our hands and put in our driveways, it is 5% above its pre-pandemic trend. and the labor market is, you know, we see hiring at about three times of the sustainable pace i think what we see here is that the fed just has more to do. >> kevin, let's talk a little bit about that 5.3% core inflation year over year is a problem, as steve points out what's the fed going to be watching most here what are they going to bed about the most >> i think the thing that jumps out at me is you've got a 4/10 core and we've been getting a 4/20 core for quite a while now. last year it was in the 9s, and now we're running at a pretty

steady pace. i think that the fed wanted to pause, not really pause they expected that the cpi was going to go below 0.4 in the core, but rather because there's some leading indicators like initial claims were above 250. the warnings of layoffs are starting to go up a little bit there have been leading indicators that the softening that will presage a reduction is beginning to happen. and they want to wait and see if that happens they probably would have had to lift rates now my guess is that we're going t not see a sharp change in the economy between now and the next meeting. and that the sort of two-thirds probability of at least getting a quarter point is about the right guess of what's going to happen at the next one >> did you get a chance to look through more of what those numbers? what the hot points on the core are, whether that's month over month or year over year. you mentioned hed housing not cn

down as had been expected. anything else that really stands out? >> this used car number stands out. i get all of my information from automobiles about phil lebeau. i think the last report he had that used car prices were declining. and we had this really anomalous and large 4.4% monthly increase in used car prices i'm not quite sure what's going on there you had a 1/10 decline in new car prices that was also interesting. you had a pretty big gain in transportation services. motor vehicle insurance up 2%. we can talk to contessa about that other than that, you have the big decline in gasoline prices, energy down 3.6. gasoline down 5.6% i'm not sure if that captures all of the decline we've seen. you may get another month of that, but i hate to say i told you so, becky. but i think for 20 years, i've been telling you why we want to

follow the core and not the headline the headline comes down and you can see that sticky core, the place where you want to base your policy and focus your policy on. that's why the fed is doing this and they're not really taking into account there is one theory out which is that if gasoline and food prices do come down, other prices will come down around it. we haven't seen that yet >> look, i will tell you on the insurance prices for cars, it takes the insurance companies a long time to go state by state and convince the regulators that they need increases in the rates that they are passing on >> this is lagging it's definitely lagging. they don't want to do that, but when you look at the increases that it's caused to repair cars when they get in an accident because of the time for getting the parts in, the increases in the parts, because of the supply chain issues, that is definitely something that is a lagged effect on all of these things. >> he thinks we're done. >> and steve, let me just say,

you were thinking that the 4.4% more used car prices looks anomalous, but we also had a 4.4% increase the prior month. this is the second 4.4% increase for two months in a row. >> i seem to remember phil saying that used car prices were falling, but i've got to get him on the phone >> rick, you think the fed's done, still? >> i still think the fed's done. here's my issue. i completely understand 5.3 is higher than we had like, but other than one month, we do see these things slowly working their way down longer -- higher for longer is the answer be an aggressive in the here and now, having the fed pause now to come back and raise rates is a possibility. but in my opinion, we were not looking at double digit inflation, we're looking at levels that are coming down slowly but they are coming down if these numbers started to go sideways or move higher in a more aggressive fashion, i would

understand but i will stick to my analogy that they've turned the thermostat way down in terms of bringing the temperatures inflation, but they need to understand that we're going to have to cover every degree on the way down we're not going to drop here, and i think that the fed wants to be tough pause they believe that there's a psychological edge to inflation, if they don't get ahead of it, it's going to metastasize in everybody's rain. i understand that. but if they raise rates to 20%, i don't think it's going to alter the general state of how this is going to come down if they want us to go in a recession, i get it. but it seems to me, if you look at the uk and you look at the u.s., there are different dynamics underpinning the inflation in various parts of the world. we could all lump them together post-covid and say, well, they all started because of covid, but i think at this point on the inflation understanding meter, the united states are different than other locations, and i

think the federal reserve ought to just hang pat and over time continue to watch how higher for longer will moderate inflation >> kevin, respond to that, asit's a good argument. >> rick always makes good arguments, but in this case, he's making a bad good argument. the bottom line is there are almost no signs of any progress. if you think about it, let's just go back i'm doing it for memory. but the core inflation numbers going back 0.4, 0.4, 0.5 -- >> five our six have been 0.4. >> was i don't think those are good signs and that's why i agree they're going to have to move again and probably signal they'll have to move past that the taylor rule right now is 7% and that might be a little bit high but i think that wii still down in the range where you're not going to take a big swing at inflation, and it's showing up in the kor, which isn't moving

at all it's the same place it was last fall >> all right let me ask -- >> go ahead, steve yeah >> so phil lebeau heard my call and he wrote to me what he said is that it's wholesale used car prices that are falling. i'll read you exactly what he says wholesale coming down, retail has not fallen in the same fashion. but still, it's a little bit weird. maybe that is -- >> working its way through the pipe rick, if the funds rate is 5.13% and core inflation is 5.3%, by definition, the fed by that equation is still stimulative to the economy. >> right, and it was 9.1% in june of last year and it was up 0.7% two months in a row towards the end of 2021. we have made progress.

inflation didn't just happen because of asituation. and i think that the fed doesn't have a good history of fighting inflation. it's not double digit. hang tough, don't raise more >> all right i want to thank our panel. rick, steve, kevin, and wendy. by the way, you saw the nasdaq was the big winner coming out of that number, at least knee-jerk reaction looking at the nasdaq indicated up by about 107 points andrew >> okay, after that, we've got an exclusive interview with the faa's former acting administrator, who just left the agency and we're going to hear why in addition to his thoughts on the state of the challenges of his former employer and all he's facing as we head to a break, take a look at shares of gamestop with a filing from roger cohen. more than 350,000 shares of gamestop that happened on friday. at the time, the purchase was

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welcome back to "squawk box. may cpi coming in as expected. that number, anyway, up 0.1% month over month and 4% year over year. the futures right now, the nasdaq making the biggest move, although the dow moved higher, as well. the nasdaq doubled its gains i don't know what that says. it's interest rate sensitive

also, if you looked at the dollar or gold or even bitcoin, all of those move what i think might be done and ready to reflate. and so there is -- that is a knee-jerk move that they were seeing, although cold has come back down after a spike. andrew >> we've got a very busy travel season, joe, getting underway. i want to get straight over to phil lebeau who joins us now with a special guest to talk about this and a lot more after, well, clearly doing some back channeling to our friend, mr. liesman this morning >> yeah! yeah the job never ends, andrew let's bring in billy nolan, the former acting administrator for the federal aviation administration, who has just been announced as new chief safety officer for archer aviation billy, we'll talk to you about archer in just a little bit. it hasn't been long since you left the faa a lot of people are saying, why

did you lead now and would you have stayed if the biden administration would have come to you and said, billy, we want to nominate you for the main position no acting administrator, full administrator. >> thanks for having me on this morning. let me say first and foremost, i was asked by the president, and by the secretary if i would stay on i sort of took a long look at that and decided really the best thing for my family at the time was to move on to this next exciting chapter i leave the faa in really good hands as the acting administrator and deputy administrator, so it's in great hands. but this is an exciting chapter for me and it's good to talk about it this morning. >> i want to clarify this, did they ask you to stay on and say, away want to keep you in the role of acting administrator, because we're not sure when we're going to nominate someone as a full administrator?

>> i was asked if i would be willing to be considered for the administrator. and of course you go through a very rigorous process throughout the summertime if more me, it felt, from a personal decision, that it was the moment to move on to another chapter. >> you've heard the traffic con. we talked to scott kirby at united who essentially said the changes being made in terms of bringing back traffic in the new york area, that might be potentially leading to some decisions in terms of -- or the changes in terms of delays and excessive delays could hurt the overall safety of what's happening with our air traffic around the country what's been the slowdown or the holdup in the faa over the years, adding more air traffic controllers? >> well, you know, the pandemic had its own impact in terms of our national aerospace system. you look at that the faa is on a very aggressive

schedule this year alone they're hiring 1,500 air traffic controllers. so far about 1,000 are on board. they're on track to have the next 500 by the next fiscal year 1,800 coming aboard next year. the role is to make sure to get air traffic controllers through the training and qualified by the facility that's normally a two-year process. they're working hard to find ways to shrink that down that's the biggest challenge i will say you've seen that the faa has proven it can work well with the industry as evidenced by the strategy for the summer in new york that is working well as evidenced again by the holiday travel over the memorial day weekend. so they'll continue to do that, but more needs to be done. >> billy, this sort of transitions into my next question which is about your job at archer. eventually, ev tolls expected to

be transporting people, basically air taxis in many airports we already have massive congestion, a lot of people concerned we're not going to have the infrastructure needed do airports need to be upgraded around the country in other words, are we pretty much close to max capacity in your opinion >> no, we're not this is one of the things that excites me about archer. we're de -- decongestion, if you will the ability to use air taxis, that ability to overfly traffic, if you will, it will start slowing first. this is exactly what wethink the future is. we've got a lot of capacity in the u.s. there are 5,000 airports there are a number -- equivalent number, if not more, of hell ports. that ability to use some of the existing infrastructure and then as we see more vert ports come online, we see this as a way of unlocking the future and decon

jesting some of our busiest cities. >> from what you've seen with archer -- i know you've been talking with them for sometimes, do you believe we'll have evtols in commercial service in late '25, early '2? >> i feel very confident in the timeline the faa put out there during my time there there was a lot of work around innovate 2028, can we get to scale by the time of the los angeles olympics so there is a very -- the faa has released its operation, released the blueprint for how you integrate into the national airspace when i think of archer, you've got the right amount of vision we've seen advances in electrical propulsion. there's a favorable regulatory framework around the world lastly is our push for this commercialization and to get there quickly, those are the things that drew me to archer. i'm a big believer in the

vision >> billy nolen, the new chief safety officer at archer, thank you for joining us becky, i'll send it back to you. >> all right, phil thank you. when we come back, more with an exclusive interview with home depot's ceo as the company gets ready for a big investor conference in new york they start in about six minutes' time you're watching "squawk box. this is cnbc no artificials. or these toys that get my mind right. ♪ or maybe it's petco, keeping me healthy for less money. wait, what's money? better quality pet care for less human money. [tweet] oh, a bird. it's what we'd want if we were pets. get $10 off $50 at petco, the health and wellness company.

affirming its 2023 guidance. the company is set to hold an investor conference at the new york stock exchange in a few minutes. i got the chance to speak with ceo ted decker yesterday he weighed in on potential slowing and consumer spending. >> it's hard to put your finger on it, how much is pulled forward, how much is inflationary sensitivity, how much is some concern that you're just pulling back, but what we're seeing on the consumer in that softness we saw in the first quarter was larger discretionary items that aren't really a need. >> that's the thing they've been pulling back on. joining us to talk about home depot is brian nagel, oppenheimer senior research

analyst. brian, what do you think of the message that home depot has this morning, what they're going to be telling analysts. >> good morning, becky i listened to a clip of your conversation with ted. he's framing it well there's a lot of crosscurrents out there now. it's hard for a well-run, data-driven company like home depot to understand the consumer perfectly. what home depot is saying, yes, we're in this squishy patch for consumer spending, dislocations here and there over any length of time, particularly as we look towards '24, '25, the underpinnings of consumer demand are still pretty good that's where companies like home depot and other operators should perform quite well. >> home depot saying once the home improvement market returns to stability, they expect sales to grow 3% to 4% the big question is when does that happen? when does stability return >> that's exactly what i expect him to say that's the normal growth algorithm for the home improvement sector

the timing is tough to peg specifically, i can say that, as we look into 2024 we start to see a much more normalized backdrop of the home improvement sp space. >> -- 2024 is not that far away. here we are in june. we're still talking six, maybe seven months i think that's when you really start to see the businesses solidify, potentially strengthen from these multiples -- i've talked about this a lot, home depot and particular lowe's are very cheap at these prices i think that's when these stocks really begin to work. >> brian, thank you. brian nagel. let's take a quick look at the marks after getting the cpi

data, you did see the numbers in line with expectations it was the year-over-year core at 5.3% that had been anticipated. markets took off, erckity futures took off on that nasdaq up by 130, s&p up by 23 that does it for us today. make sure to join us tomorrow. right now it's time for "squawk on the street. good tuesday morning i'm carl quinn nia along with jim cramer and david faber futures are steady marketing baking in no hike from the fed tomorrow roadmap begins with inflation's downward path, cut by more than half since last year's peak, still 4% what are the implications for the fed? cloud revenues giving oracle a big boost.