pandemic why? i don't know it is thursday, june 15th, 2023. "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 alongside joe kernen and andrew ross sorkin. this was interesting watching the markets with the fed decision yesterday the markets drop instantaneously and then picked up as jay powell was speaking we don't know what will happen it could go either way in july they paused this time around and expecting additional rate hikes.

anything could happen in july. all of this was mixed for stocks the dow was down with shares of united health after seniors are getting elective surgery again s&p was flat up 4 points the nasdaq gained .40% treasury yields on s o moved ba forth. the two-year is 2.79 >> it goes up every day. for the month, it is way up. three months, it is up six months, it is up >> 30% from the lows >> 53 points that is .40% >> at 2:00, you could see it >> it was odd. the s&p was flat lining after 2:00

ended with a gain which is weird. almost at 4,400. >> still reviewing it all. >> let's get to steve liesman on the surprise planned rate hike steve liesman joins us with more you were sitting there what did you think >> i was surprised, andrew not what i expected. i thought it was august. the good thing is they answered the question for days. delivering a skip and not what they consider to be a pause. officials did not hike rates for the first time in 11 meetings. they forecasted not one, but two hikes. it is a forecast not ol policy they raised to 5.6 still looking for cuts next year, but less in the way of cuts because they will be higher and maybe one day we get back to

the long-run rate of 2.5%. jay powell saying behind the move was dissatisfaction with the pace of inflation decline and the core and the commitment to bringing down finflation to the 2% target. >> i still think and my colleagues agree that the inflation is to the upside we don't think we are there with the inflation. we are looking at the data if you look at the full range of inflation, particularly the core data, you are not seeing a lot of progress. headline we look at core as a better indicator of where inflation overall is going >> the striking thing about the forecast yesterday was the commitment widespread support for the hikes on the committee i want to show you the numbers four members support one more hike nine, half of the committee, are in favor the two more hikes. three members supporting three hikes or more. 2/3 of the committee in the hike

camp the market doesn't believe they will raise 70% of the july hike andrew, chris called it a soft commitment to the second hike. >> if we can get under 3% on inflation, it seems they could just hang around for a very long time what do you think the -- we talk about the goal of 2% it seems to me 3% is the real threshold. am i wrong in how they are thinking about it? >> well, first of all, i want to redirect everybody's attention i try to do this with the cpi number i guess i was not shouting it down, but overwhelmed by the possibility. the headline number was down

i said do you know what? the core will concern the fed. that's the thing to watch. >> that's why they raised the number of hikes. >> exactly >> that struck me, too >> that is right, becky. the core is not coming down as fast as they hoped that is where the focus is if you watch the headline number, you will be head faked by it. that number is coming down with the food and energy costs o they are following the core. it is not coming down as fast as they like. andrew, i am answering your question by saying you are not asking the right question. that headline number could come down to 3 and change very likely because of the base effects we talked about yesterday the core number is not going to

p com come down as much. >> they did not raise. that means they want to see whether there is lag effects they are not taking into account. probably no cuts this year what i think is interesting, steve, everybody says inflation is moderating because of energy prices yeah energy prices had a lot to do with why we got in the pickle in the first place. it is weird we discount if they can't keep oil above 70 and more supply coming on that can filter through and hit all of the stuff in core it seems like it is a positive i think it was a hawkish skip. that is what it looked like to me you remember recently, steve, no, we're t80%. now we're back to 10%. the numbers du jour.

i don't know if i believe 70 july is a long way off. >> it is we could get positive numbers, joe. the issue is not -- you are right. oil is a big part of it. the thing that concerned the fed is not what has happened with oil prices, but how it bled into other parts and caused the expectation numbers on the one-year basis to go up. that's what they want to see under control. >> the biggest travel day in history, steve why? it's a three-day weekend this is weird this is the day that is busiest air travel day since before the pandemic. people still want to go out. i still think this is not, steve, the '70s. we had the pandemic. we reopened. supply chain i don't know everybody has the ghost of volcker in their head. >> i don't know if everybody

wants to be paul volcker they want to be right. >> volcker is seen as a folk hero for curing everything >> at the time, he wasn't as popular. >> these times may not call for the same thing for a paul volcker. some people think -- that scares me something would have to break if we got cuts. >> some people are seeing the silver lining around this work and saying why is the fed saying two more hikes the economy is stronger. they did raise gdp forecast. they did bring down unemployment rate which tells you they are not getting the response they expected from their rate hikes in the economy right now i agree with you, joe. i have been on this train for a long time.

non of the analogs work well. this is a very new experience. i agree. we may not need volcker. what the fed officials are saying what we have done is not enough i'll have a chart next time. do the 3/the -- 3/9 minus the 5/6 in terms of the real rate. that is higher than they expected that is the rate they think is needed to bring inflation back down to the 2% target. if you come away with anything, you have to come away with the idea that powell is serious about the 2% target. it is not a 3. it is not 2.5. >> i wish he was less serious about putting people out of work we have been serious we will keep trying until we can cause more unemployment. >> i don't know if that is fair,

joe. i don't think he wants that to happen i think he sees that as a -- >> you know what somebody heard it immaculate disinflation. can you bring down inflation without messing up the jobs market and economy too much? >> steve, would they stop if it was still in the 3s? unemployment they won't it's sad they want 4.5 or 5 >> let's be fair to powell the record is clear. he was the first guy to talk and i would say it was received with skepticism in the community about the idea of reducing job openings and not raising unemployment rate. that was received skeptically. he has been saying that for a long time. other folks have come on to the idea that you could bring down the job openings and not raise the unemployment rate.

that is what he hopes. he believes the economy or job market is extraordinarily or historically tight and it requires a bit of loosening to bring down wage gains and stop the inflation we are seeing in the core service sector. that is the theory of his case of tcase if it means more employment. >> that is like nadia comeneci >> if we end up at 4% unemployment, that is a win. >> did you see the lies-maniac shirt the guy had? >> no. >> it had a picture of you hard core lies-maniac. they spelled your name wrong

i want one it's the beginning >> of something big. coming up, disappointing day from china overnight 18%. not really we probably would love the numbers that they are disappointed with. we will have that after the break. we have tech picks for your portfolio as the nasdaisq climbing you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by truist wealth. where meaningful relationships matter most.

new overnight, china's central bank lowering a key interest rate. the first time china made a move like that in ten months. cut rates on $33 billion of loans to financial institutions by ten basis points. that lending facility is a funding channel that china introduced to the banking system and influenced interest rates for certain loans. separately, new data from china overnight. the country's youth unemployment rose to 20.8% in may beating the high set in april. the jobless rate for people of all ages in cities was 5.2%. retail sales the good news is it rose by 12.76% in may. it missed expectations industrial production fell short

of what the economists were expecting. time for squawk p piicks he with our next guest is pauk l meeks. paul, i have to chara character your stance as the fed is going too far and too fast i think one of the reasons was because you thought interest rates were going to continue to rise and that might impact earnings you want to buy dips at this point, you have been too bearish? you could end up being right >> one of the things you said in the previous segment, joe, as yesterday's action by the fed as

a hawkish skip i concur what i think we will see is at long last, maybe some aggressive growth stocks. in the meantime, as a tech fund manager, i own the entire cast of characters that everybody talks about. i just beef them up on a dip and maybe take chips off the table when they rally. i actually think the fed's action yesterday might give us a chance to finally see that dip and you can see from the futures this morning nvidia opens up down stock will be at 423 a couple of weeks ago it was 3765 i own nvidia another big factor is adobe results. adobe could be a real tell for specifically a.i. and all things

tech i think this hawkish posture from the fed will give me a chance to go from a neutral position on tech to aggressive position >> it didn't happen yesterday. your chance should have happened yesterday. it still closed up 53 points it is down today, i know who knows by the end of the session. that looked like a stilt that six-month nasdaq chart. there was nothing to indicate what you think is about to happen is already starting to happen nothing indicates that will be the case you still are hoping >> yeah. i'm hoping for that dip. i am pretty much fully invested and have been since earlier this year i tried to play some d not by having a cash flow, but having a defensive name in the

sector sometimes smaller cap names, not necessarily the mega cap faang names. adobe will be quite a tell tonight. particularly how they spin all things a.i >> and across the board and did you mention some amd and uber? meta oracle this is our stock picking segment. people can agree or not. they can buy some now or later average in >> i own adobe i'll be watching tonight i love to own more oracle showed a lot with their report the other day with the a.i. specific cloud business up 75% in the quarter i think amd is going to be maybe not a big of a play. a.i. chips with nvidia will do well i have a couple of smaller cap

stocks like extreme networks which is taking share from cisco which is interesting to me a company called harmonic. this is a company that supplies gear for the cable companies at the premises to offer broadband to customers all of those are some very interesting plays. >> that harmonic has doubled in the past -- near a high. sometimes they make new highs. stocks that make lows a lot of times. they can't go lower than zero. some will get there if you buy stocks on new lowlows >> one of the things with the smaller cap stocks, they start with such depressed valuations relative to the faang and mega caps means there is still upside the last time i talked about harmonic was on this program a year ago we have benefitted

>> paul meeks. thanks there are episodes when you come on i don't know when you are on next, but we will get your updates. >> thanks, joe coming up when we return, data out from just capital on paternity leave and which companies offer the most time off for secondary care givers of the th-- givers. that's next. we'll talk about that and more >> announcer: squawk picks is sponsored by wisdom tree the modern alpha pioneer the not-so-secret to our success? earn and keep trust. build and maintain financial strength and stability. deliver solutions that meet complex needs. do right by customers, clients,

and policyholders, always. repeat daily for over one hundred and seventy years. massmutual. partnering with financial professionals, benefits brokers, and institutions. ♪ this is cynthia suarez, cfo of go-go foodco., an online food delivery service. business was steady, until... gogo-foodco. go check it out. whaatt?! overnight, users tripled. which meant hiring 20 new employees —

and buying 20 new laptops. so she used her american express business card, which gives her more membership rewards points on her business purchases. somebody ordered some laptops? cynthia suarez. cfo. mvp. built for cynthia's business. built for your business. amex business.

we're here today to set the record straight about dupuytren's contracture. surgery is not your only treatment option. people may think their contracture has to be severe to be treated, but it doesn't. visit findahandspecialist.com today to get started. welcome back to "squawk box. father's day is this sunday.

are you ready? >> u.s. open >> yeah. >> honestly, father's day is a stretch. >> it's not. >> there was a real mother's day for a reason people said you need a father's day. >> that's not true i have to tell you my dad -- my husband. my dad has been my nanny for years. >> you like the cards? they are a.i. cards. those are perfect for a.i. >> we have a story here. what is on your wish list? >> what do you give someone? >> time at the u.s. open >> i have everything. >> moms want their kids around dads want the kids to be away. >> i like to eat whatever i want whenever i want. i can't get that. >> no one can give you that. about 6 in 10 men in the u.s.

are fathers. 93% of dads part of the work force. wall street leads corporate america with offering paternal benefits goldman sachs and bank of america and intuit offer 16 or more weeks of paid paternal leave for non-birthing parents 41% of america's biggest companies offer some form of paid paternity leave on average, dads receive three weeks less than moms when companies offer generous paid paternity leave, 70% of fathers take ten days off or less i must say i feel that was the greatest mistake of my life. if i could go back in time -- no, no i remember when sydney was born, i was off three days when the boys were born, i was back within five days?

quick. i really actually think it was a mistake. i really do. >> can they give it to you when they're 3? >> we all think that the first period is the most important. >> not just for the kids it is bonding with the kids, but saving the mom. >> i do. >> i like it here. >> of course, you do it's easier. >> okay. thanks it's a nice thought. i'm good you go ahead you know, to my employer, you can -- can i put it in the bank? >> i would say -- >> for later changing poopy diaperdiapers. you hear the crying. >> 16 weeks is a lot of time it is expensive. it is interesting. >> more time than i took off with my kids. >> it is an expensive benefit to provide. you are seeing the shift

it is moving more like europe. >> that is more time than i got off for maternity leave. now we offer six months. that happened a few months after i had kaylee three months is what we offered for mothers back then. >> you know that >> it is hard. i'm telling you. >> 16 weeks. that's insane. i'm good take it away, penelope she is so much better. all the details. >> loads the dishwasher badly. >> i didn't have a dishwasher growing up the plate i used when i was single, that's all i had. one plate. >> she saved your life. when we come back, former vice chair roger ferguson joins us next of the fed's decision to

skip let's look at the s&p 500 winners and losers as we head to break. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -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. transplant received. at&t business.

fresh, warm hot dogs! when i'm not selling hot dogs, i invest in a fund that advances innovations like robotics. fresh, warm hot dogs, straight out of my torso! one for you, one for you. oh, you're a messy one. cool, right? so cool. anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. hot dogs! fresh, warm hot dogs! before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

good morning welcome back to "squawk box. we're live at the nasdaq market site in times square let's show you where things stand. dow off 18 points. this is after the fed is pausing, but hawkish where they go next. we have a developing story the collapse of ftx and investors are withdrawing charges of against sam bankman-fried. he argued that prosecutors should not have been allowed to

charge him with additional crimes those crimes were add the to the docket this was after the extradition when he left the bahamas, it was bahamas which granted a waiver and said you can be charged for the counts you are telling us about. >> he did not fight it >> he said, okay you want to charge me with those? great great. he got to the united states and then he was charged with five other things what has happened since, the government is now recognizing they went too far. >> it is not they don't think he did these things, they can't >> that was the deal they made interestingly, i believe two charges they are trying to stick in the list were not there originally these were the charges around not bribely of government officials outside the u.s.

the foreign bribery count which is off the docket. some of the lobbying and political money in the u.s they are still trying to keep that in the case how they are able to keep that in the case or whether they are able to keep that in the case and they effectively knowledge they cannot keep the others in the case it is an interesting letter that came out at midnight last night. >> this is interesting remember at the time, why don't they go after him? why don't they do something? it is taking too long. this is the explanation for why you move slowly with these like this and methodically before you do these things. at the time, why aren't they moving >> they wanted to move fast and get him to the united states >> they did it before he was supposed to testify before congress >> the other thing is that cost. >> can we talk about bitcoin the worst performing of everything yesterday

it went like this. if we had a 24-hour chart. it went like that tat 5:00 p.m. they are putting the printing press away >> we were talking about ftx and john wray came out and said this is a disaster. you went from zero dollars or $1 billion or now up to $8 billion. i don't think it necessarily changes the outcome of the criminal case, but in terms of holders made whole and how big a conspiracy or scam this was, i think when all of the numbers come, there are questions. >> the good news is people can

be made hwhole or closer to whole. 80 cents on the dollar instead of zero is a good thing. you are right. i don't think it changes any of the charges they will bring against him. federal reserve deciding to leave interest rates unchanged that was expected by the street. despite the pause, jay powell struck a hawkish tone saying two more hikes are likely and cuts are two years out. joining us to breakdown the fed's move is roger ferguson ro roger, not only powell's comments, but the dot plot is two more rate hikes this year. the market is not buying that. you saw a temporary drop in futures and assets as people thought this is much more hawkish than we thought. as powell talked, a lot of that

recovered. what do you think? are they telling the truth >> i think they are telling the truth. you may recall i was on monday i thought i could see the possibility of two more hikes. that seems to be what they think as well. i think the expectation they have two more hikes is driven by the statement powell made several times. core inflation is very sticky. you saw the mark expectation for core inflation that is the basis for the expectation for two more hikes they feel they have more work to do >> and in terms of what they see with the core inflation, all of them seeing higher rates and the question becomes how set are they in getting this down to 2% immediately? >> they are set to get it down to 2% eventually you saw that in their forecast the 2% is not to be questioned

at this stage. i think you heard powell refer to the 2% target several times he wants to put away the hesecrt desire of a different number you saw the firm and convincing evidence that inflation is on the path toward that 2%. i think the market should not get itself in the expectation of core inflation around 3% is going to be okay i think the fed is quite intent on seeing a path toward 2% core inflation over a period of a couple of years. that may be the place of a give. what's the times fframe and noth ultimate goal? >> roger, it's thursday. u.s. open is starting.

it's father's day. it is june we have come a long way from a series of 75 basis point hikes now we had a pause and now we may get two more 25. on top of that, core is down 50% from the highs can we just agree that we can have a good weekend? this is two more hikes -- that's not three more 75. core is not 9 or 10% core. am i wrong >> you are right there is great progress. one might want to celebrate that the reason to take the pause is because there has been progress to see where we are. great progress toward the target is not success i hate to break it to you, but the central bank is not a place to look for happy faces. >> roger, i think the biggest

question is the risk of inflation versus the risk of breaking something in the financial markets. that's where people come down on this two more rate hikes and leaving rates higher for longer have a serious impact on the banks or have an impact on commercial real estate? how do we see this playing out >> look, i think you put your finger on the dif dilemma here. jay powell was asked that question yesterday his response is we will be as nimble andhee can be they need to develop a set of tools to deal with the bank issues they attempted to do that with a new facility becky, you are in the target of the tradeoff they are making having said that, he was explicit that the mandate of the fed is the see it is inflation

they would like to avoid breaking something the forecast is actually for the economy to do reasonably well. i think they gave a nod to watching credit conditions as well as something that might effect how fast they move and whether or not they need to execute the plan i think they are trying to walk that tightrope i share your concern it may not be doable. they need to develop new tools to do that and they have to be careful to assess the credit market going forward with the plan of executing two more moves. >> powell had this in his favor. he won the idea of buying time and got optionality for the july meeting. that is a win for him. roger, thank you great to see you >> thank you >> by the way, a programming note you can catch roger ferguson and other investors and experts and

more at the virtual financial adviser summit today scan the qr code on the screen if you want to register or visit cnbcevents.com before we head to break, a market flash retailer target raising dividend by 1.9% to $1.10 that is payable on september 10th yesterday, they had the annual meeting with investors it was closed to the public. from what i hear, a lot of questions about what is happening with the drop in sales and especially because of problems they had related to transgender clothing and how it kicked up. it is front and center for the culture wars between both sides attacking and taking stuff off the shelves and having it there in the first place. you see the stock up 51 cents. >> i thought it was a mistake.

scott cohn again. >> look over your shoulder. >> a year? top states for business. was north carolina number one >> yes >> i heard that. >> come on over. >> top states for business scott cohen is here to tell us more i was right. it was north carolina. it happened last week. >> i know. >> we'll be right back >> announcer: currency check is sponsored by interactive broke s. the best informed brokers choose interactive brokers.

i'm andrea, founder of a boutique handbag brand - andi - and this is why i switched to shopify. it's the challenges that we don't expect, like a site going down or the checkout wouldn't work.

what's nice about shopify is when i'm with my family, when i'm taking time off, knowing that i have a site up and running and our business is moving forward because we have a platform that we can rely on. that is gold to us. start your free trial at shopify today.

you heard it already we are less than one month away from the new exclusive america top states for business report each year, we score all 50 states for competitiveness by us, i mean scott. scott is here to tell us what to expect what's going on? are you changing the way you measure this year? >> a lot of things stay the same that is by design. we started this in 2007. all along, we have done this through booms and busts and

shifting priorities. we crafted to sort out whatever the economy can throw at the states this year, that is a lot the economy is uncertain >> this is a very weird number >> despite billions from washington. >> increase research and development funding to ensure the united states leads the world. >> companies are desperately seeking talent in a ranging culture war. >> the woke mind virus represents a war on the truth so we will wage a war on the woke >> what does it all mean our top state study is sorting it out we start with the work force. >> companies are looking at where people are going because that's the best kindicator of where they will go >> which state is attracting the best workers and which states have the best infrastructure for companies to expand? where is the best economy? the best quality of life, health

and inclusion? >> you might not have a uterus >> we look at the cost of doing business, technology and i innovation and business friendliness and innovation and the access to capital and cost of living. you can read more about the study and state business competitiveness for the next month and beyond on cnbc.com we will have more ahead. i will be in the winning state to reveal the top state in the state in july on cnbc. >> do you know the winner? >> i do know the winner. >> is a lot of that video raised more social issues than business issues it is about business wading into social >> right. >> how are you measuring those things >> it is tough the tension of getting people to

a state and attracting workers versus the culture war is something we are grappling with. we have always looked at quality of life issues and also protections against discrimination this year, we are looking at reproductive rights because the dal shows that is a factor but we're also in the workforce category looking at migration, which is huge. as you heard tom stringer say in the piece, site selection consultant, companies are going to where the people are and that's what they need. >> sometimes people go to where the taxes are lower, businesses go to -- but on top of that, that would normally be a pretty good -- put a lot of weight on the tax environment. now you got to put more weight on where is the chips act, where is that money going, where is the i.r.a. ev money going? all of a sudden the government is a much bigger part in terms of subsidies and trying to, you know, it is a great thing as we talked about it a lot, that maybe is as important as the tax structure. >> especially this year.

so many things are on hold right now because of rising interest rates, because of recession fears, whatever else but that chips act money is huge spent some time last week in syracuse, where micron is going to build their $100 billion factory and they're obviously over the moon there. >> in new york in. >> i spent some time there i spent some time in a lot of states. >> what other states have you been to? >> what other states have i been to >> where have you spent the most time >> these days i live in california so -- >> that's not going to win >> you measured job creation >> we measured job creation and job growth it is part of the economy category and we're also this year looking at new business formation as part of the economy. we want to look at the entrepreneurial aspect of things the interesting thing about all of this is, like, you know, we kept those ten categories from the very beginning but the way that we weight them and what we put into them has changed. so many priorities have changed.

and this year it is just -- there are so many cross currents this year. >> are there any states if you go back and look at where they were, i don't know, five, ten years ago, you first started doing this, that either you wouldn't put on the list anymore, you think that would lose today because of either the shifts, the political shifts or because it just wasn't what you anticipated happening? >> you know, there's a lot of -- i guess one state that has been really interesting, this is not giving you any hints one way or the other, but michigan, which i think was our most improved state last year, which is, you know, there is a huge amount of tech talent in michigan that people don't think about, all the auto engineers. >> think detroit >> well, there is a lot. obviously a lot of issues. >> what about big city crime there is a lot of big cities and a lot of crime. >> there is a lot of big city crime and rural crime. there is -- i think the top -- the highest crime rate is new mexico, i want to say? don't people like to move where it is warm doesn't that always skew the results? >> we don't look at the weather,

but we are -- we started as a couple of years ago looking at sustainability >> like a happiness quotient that relates back to the weather some of the times. >> it is tough we look at things like -- we look at quality of life, we try and do it in ways you can measure, that are not subjective that's tough in a category -- >> category of life, business friendliness >> we think we kind of hit on a decent formula over the years. >> immigration, illegal immigration, porous borders, any of those things go into it >> i guess probably the effects of it, the effects are both ways we have a worker shortage. >> we have a worker shortage >> crime rate, we look at the -- what is happening with state economies and things like that so it is more looking at the effects of it as opposed to where people are coming in and things like that >> scott, thank you for the tease. >> you bet i'll keep teasing you.

1 in 50 chance, not bad odds. >> not puerto rico >> only states >> not yet. >> when we come back, we'll talk cava, set to debut on the new york stock exchange today. we'll talk about the company's valuation after the break. meet gold bond healing. a powerhouse lotion that moisturizes, heals, and smooths dry skin. with 7 moisturizers and 3 vitamins, you can pay more but you can't get more. gold bond. champion your skin. ♪♪ i don't accept this. i can't do this anymore.

impossible odds, save the world. i'm done. what do you have for me? a new way to transform our agency. strategy to execution. oh, looks my laces have come undone. a business card? yes, for ey. tech expertise? $2.5 billion invested. impressive. okay, you've convinced me, i'm back. just gonna... get this...

welcome back to "squawk box. fast casual restaurant chain cava going public today, pricing above the original range at $22 a share. joining us now is kind founder daniel la vetsky, we all eat lots of kind bars, so we know daniel for a very long time. before we start, he now has a new -- you like chips, right >> certainly do. >> forget about tostitos,

forever. these things, i'm not allowed to do ads on television -- >> what are they made of >> daniel could tell you i don't know i don't know but they are the best chips i've had in a very, very, very long time, no joke. >> not corn, daniel? >> they are corn, but it is a process that takes a little bit longer they're very thick i'll send you some. >> very hearty and great for dip. but we have to talk about -- >> starting from the corn, then you're winning me over >> i'll get you a bag. i'll get you a bag daniel, congratulations on the chips. the company somos. >> i'll be sending you some. it is called somos. >> you invested in this company in 2021. >> 2019 was our first investment, we invested with swan and then again in 2021. >> the question i ask you, especially for investors looking

at this morning and thinking should i be investing in this, this is a company that still doesn't make money it is not profitable yet what do you think about the path to profitability and going public now in this environment >> i mean, cava is one of the companies i'm most excited, very long about we invested twice. they have not gone to -- that was my hope. we invested again. it reminds me of kind. products that very high quality, premium quality, combining both delicious and nutritionally dense zbingredients, convenient and wholesome. and i think this is the first thing. they're profitable in unit economics and just the beginning, they -- they're taking the mediterranean diet known for decades to be the best diet for longevity and they made it popular and mainstream. it is very, very hard to come up with something so good that

appeals to everyone. not just in cities, but in suburbs, like 45% of their eating locations are during dinner, which is very rare for a platform like cava for fast casual platform and they can go suburban like crazy. my family, i don't know if you tried it, but my family, when the kids are out of the soccer meets or any events or basketball, they stop by a cava, that's dinner for us and mom feels good about it because it is a really good meal and the kids love it they always ask for it it is a great -- it is just the beginning and we're very, very excited. >> as a investor, we have a screen up of chipotle. how do you -- what do you think -- is that a fair comp is chipotle a fair comp? when they went public, they were profitable enterprise and i know they're profitable on a unit basis. but thinking about the balance between growth and profits, how you see that playing itself out. >> it is actually a very good --

when we looked at it in '19 and '21, we see the trajectory and we think it is even more premium and more beloved and it has got that trajectory going forward this and future. and if you go to chipotle, a great place, and you go to cava, you continue going to cava more. it is just -- for me, that's my personal experience. >> do you think it is actually going to do -- if we were to look at market cap of chipotle, you think it will be bigger than chipotle >> debating what we should do, i said, guys, we're not touching this we're going to continue here as far as i'm concerned, for decades, certainly for many, many years i think it is just the very beginning. you know better than i, how many restaurants they might have, but they have proven the model, they have proven they work in cities, in suburbs, they work

beautifully in suburbs ed me it is like kind, you try one and you recommend to friends and keep going once you deliver a product like they do with such high quality, just execution and it is very, very good. >> daniel lubetzky, thank you very much. we have to talk yogurt at some point. we used to talk about how the yogurt is doing. >> camino partners, the investment platform, we look forward to doing more and giving you some somos chips some day. >> thank you so much we'll talk to you soon, daniel. >> thank you >> we should tell you the ceo of cava will be on with "squawk on the street" at 9:30 eastern time right before the bell. it is just after 7:00 a.m. on the east coast. you are watching "squawk box" on

cnbc live from the nasdaq market site in times square i'm becky quick with joe kernen and andrew ross sorkin the futures this morning, you can see some red arrows across the board. dow down by about 75 points, the dow futures. s&p futures down by 16 nasdaq off by close to 90. >> and as we kind of -- the fed pressed the pause button, but not as expected, chairman powell indicates that more hikes at this point are on the horizon. steve liesman joins us now to break it all down. i still feel like data dependent might still be something that we'll be hearing about, steve, hopefully. >> i think we are. i think for sure and, joe, can i add that andrew is 100% right about the chips. >> i'm telling you, eat somos. i cannot even get over these chips. >> what does hearty mean >> they're thicker. >> are they not fried? >> they're whatever they are i know this is not what i came

to talk about, but i can -- >> they're outrageous. >> there were reasons to fly delta rather than american airlines from washington because the cava is in the delta terminal >> you're kidding? >> yeah. anyway, i got the one minute thing. let me do this, because i want to talk about considerable criticism this morning that is out there of the fed's pause but the forecast for two more rate hikes the fed is once again getting inflation wrong says miller tabak. ian sherrod son says the shifts in the forecasts and dots are more hawkish than we expected. and over at mufg, the fed runs the risk of solving one policy error being too easy for too long with another policy error as they ignore the growing credit contraction and persistent losses from higher rates. the new forecast from the fed, a forecast, not a policy, it went up by half a point to 5.6.

two more rate hikes are planned there. the long one at 2.5. you know what happens in the long run markets don't believe the fed when it comes to the second hike nobody is really forecasting that second hike for now quite a bit of talk that maybe what happened here as fed chair powell, he's no dove, but more dovish in his committee. he played for time, got a unanimous decision on the skip, more hikes ahead, but didn't commit to them joe, of course, just the beginning of the fun we have the ecb at 8:15 today and you know what happens at 8:30, your favorite number coming out >> should we -- yeah, exactly. should we have any -- are there any reasons in the world that we should sort of look for signals of what we're going to do, like europe that probably doesn't apply since they're already in a recession. >> and they're a bit behind this too, though, right the other folks -- we did start early, we went hard when it came to the rate hikes and so that's helped us get a little bit

further along than where we need to be. that's kind of miller tabak's argument they say the fed is underestimating the power of the lag defects of monetary policy and, you know, to powell's credit, that's what he wants to see. i gave you a list yesterday of all the things that powell wants to go through and see the effects of the argument there is, you know what, a month is not enough time to figure it all out, that it may be that you want more time than that, if you wanted to hike, hike yesterday, and then go on summer vacation. >> all right, steve. thanks, we'll see you again. need to talk about this again. i'm sure in the 8:00 hour. >> markets close monday for juneteenth and it is the third year as a federal holiday. it is quickly becoming a major travel weekend for transportation, transportation secretary pete buttigieg tweeting today expected to be the busiest day for air travel since before the pandemic. airport traffic on memorial day weekend topping 2019 pre-covid

levels this weekend expected to be even busier we'll talk more about this in the 8:00 hour with former united airlines ceo oscar munoz. when we come back, we have much more on the fed's decision to pause but signal more rate hikes to come this year we'll talk to former dallas fed at sait earichard fisher th'strghahd. man, i feel good. could be the food i'm eating. 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. ♪ old school wisdom, with a passion for what's possible. that's what you get from the morgan stanley client experience. you get listening more than talking,

and a personalized plan built on insights and innovative technology. you get grit, vision, and the creativity to guide you through a changing world. ♪ my name is joshua florence, and one thing i learned being a firefighter is plan ahead. you don't know what you're getting into, but at the end of the day, you know you have a team behind you that can help you. not having to worry about the future makes it possible to make the present as best as it can be for everybody.

welcome back to "squawk

box. i'm tdominic chu. we start with china, the markets there generally positive, tilting positive and closing that way, given the fact that china's central bank cut a key medium term benchmark rate for the first time in nearly a year in an effort to boost its economy, starting to lose some steam giving the emergence from its strict covid lockdowns over the last few years but the u.s.-listed china-based stocks, alibaba, up 1.5% pdd, jd.com, debutay bay due shg signs of life here keep an eye on the china-listed stocks here in the united states also watch what is happening on the analyst front. shares of domino's pizza up 2% on the premarket, $312 per share, due in part to analysts at stifel financial who upgraded it to a buy rating it was neutral before. they think there is going to be

some stabilization in sales and sales growth for its delivery operations and near record approach toward its carry out business domino's pizza a bid there in the premarket trade. and elsewhere in the analyst front, we're watching a duel develop in sofi. they're down 5% right now after getting a nice decent bid yesterday. this morning, analysts at oppenheimer downgraded that stock to a market perform rating from more outperform before that they're citing the valuation because just over the course of the last couple of months, it has doubled in value you see there. they're saying it is a valuation call it is at the upper end of the range now. just yesterday, analysts of btig initiated that stock with an outperform, they think it is one of their top picks, so that duel developing there keep it here we have more "squawk box" after this commercial break. more movers, more everything else we'll see you.

(swords clashing) -had enough? -no... arthritis. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.

lenner delivering more than 1,000 homes than predicted the latest sign that there is elevated demand. it is a stark contrast to the sales of existing homes which continue to fall

mortgage rates are forcing home owners to sit on the sidelines joining us to talk more is danielle health, chief economist. square the circle between the lennar numbers and what we're seeing in terms of existing homes. >> yeah, so, lennar's numbers are good we have seen new home sales actually pick up in the recent data, so not terribly surprising to see a good number from a builder. but what we haven't seen is existing home sales follow the same trajectory. one of the big reasons for that is that supply pressures are really different for the two sides of the housing market. existing homeowners, many were able to refinance over the last couple of years or mortgage rates were at record lows, are sitting on a really good situation right now. their payments are low, their mortgage rates are low, there is not as much incentive as there normally would be for them to get out and to decide to make a move, which means they're not putting their homes up for sale, there aren't very many existing homes for sale.

>> what do you see as the tipping point in that scenario is this just a wait because you think that rates will continue to rise and at some point those folks who have five or seven-year arm will get hit and will have to sale or what? >> i don't think there are enough of those folks with the arm that we're going to see a hit. i think instead it is going to be a bit of a gradual return the further we get from those refinancing points, the more time home owners have to build up equity and more life can change to create the kind of situation where their current housing isn't a good fit for their needs and the two factors will work together i think, you know, to your point about five and seven-year arms, it is probably going to be around the five to seven-year mark, when we see home owners tend to have enough situation change that they're looking at making a move, except for people who are having life changes now or job changes now there are still a good number of those, we're looking at more than 4 million home sales throughout the course of the year, much lower than we saw during the pandemic. people are still moving, just

not nearly at the rate that we saw before >> we're showing the various home builders on the screen, lennar, pultegroup, kb home, et cetera would you be bullish i know you're not picking individual stocks, but would you be bullish on that group at this point of the ball game >> you know, our data show that we're in a shortage situation when it comes to the housing market look at vacancy rates, they're close to long-term lows. and by our estimates we are underbuilt to the tune of 2 million to 6 million homes depending on the assumptions you make when doing the analysis we're not alone in noticing that the housing market is short millions of homes. so home builders have a lot of opportunity. the question is can they build profitably in this environment i think that's a difficult question there is no shortage of a need for housing in this country. >> how original is this in terms of where you're seeing real growth and where you're seeing maybe things reversing in the wrong direction?

>> it is interestingly the most expensive areas of the country, the coastal markets, the west in particular, we have seen some softness in home pricing, and in competition if you look at measures of how quickly homes are selling. and in contrast to at affordable areas, parts of the northeast, outside the biggest cities and the midwest, where we're still seeing real estate activity relatively elevated, competition among home shoppers, and home selling very quickly and that's -- we think that's because of affordability you can still find it in the midwest, especially if you're coming from major market and bringing your big city salary with you and that's helping to keep the real estate markets in those regions relatively active. >> is your expectation is that the economy is tougher over the next year or gets better that would underlie a lot of these -- your thesis here. >> the economic growth is going to continue to slow, but i think we're not far away from the end of the fed's tightening cycle. they threw a bit of an

unexpected turn with the increase in the forecast for the short-term fed funds rate, but i think it is clear we're getting closer to the end, we need to see inflation come down a bit further. we made some progress on headline, but once we see that happen, as we move into the second half of 2023 and into 2024 i think things are going to look better. >> danielle, thank you appreciate it very, very much. >> absolutely. programming note for you, lennar executive chairman stuart miller will be on at 10:00 a.m. on "squawk on the street." we have a breakdown of the fed's decision to hold off on a rate hike with richard fisher. right now, as we head to a break, let's look at the biggest winners and losers in the premarket on the nasdaq. "squawk box" will be right back. time now for today's aflac trivia question. what was the first film to be

commercially produced in color thanerhee sw wn cnbc's "squawk box" continues now there's a hole in your defense; look at the size of that- gaaaaaaaaaaaap!!! is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!! i think this goat is saying “gap.” must be talking about the expenses health insurance doesn't cover. so who's talking about the money aflac pays to help close that gap? gaaaaaaaaaaaap!!! aflac! aflac! gaaaaaaaaaaaap!!! it's about to go down, baby! aflac! aflac! stop that goat! get help with expenses health insurance doesn't cover at aflac.com this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

narrator: the man with the troublesome hemorrhoid enters the room. phil: excuse me? hillary: that wasn't me. narrator: said hillary, who's only taken 347 steps today. hillary: i cycled here. narrator: speaking of cycles, mary's period is due to start in three days. mary: how do they know so much about us? narrator: your all sharing health data without realizing it. that's how i know about kevin's rash. who's next? wait... what's that in your hand? no, no, stop! oh you're no fun. [lock clicks shut]

now the answer to today's aflac trivia question. what was the first film to be commercially produced in color the answer, "a visit to the seaside" in 1908 if the fed and ecb are all

about hawkish tones, the people's bank of china is not only just the opposite, it is the exact opposite cutting key interest rates overnight after yet another string of disappointing consumer and industrial data, that's painting a gloomy picture of its economic recovery. another pet peeve of mine, eunice, that's why i said that good day to you. >> reporter: thanks, joe it is really good to see you guys you know, the may data was really suggesting to many people here that the bounceback that they were hoping to see becomes sustainable after the reopening because of -- after zero covid, would be sustainable, but it really looks as though it could be potentially short-lived all of the data pretty much disappointed, retail sales were up 12.7%, of course, this is

compared to when a lot of people were locked in their homes, so it also disappointed people were expecting much higher numbers industrial output, so manufacturing not much of a relief, up 3.5%, but disappointed again, missed fixed asset investment also missed private fixed asset investment contracted so that suggests that the private sector is not doing very well as we know from various regulatory crackdowns and uncertainty within the business regulations. now, in terms of the property sector, that is a traditional growth driver here not lending a helping hand at all. all the numbers were suggesting further weakness, investment, sales by floor area, new construction starts, funds raised by developers, and the number that people have been talking about a lot today outside of the state media is the youth unemployment figure. that hit another record to 20.8%

and it really suggests that the economy is hurting here. now, the policymakers, as you said, joe, had decided to cut a medium-term lending rate this is after they cut two short-term lending rates earlier this week, and it looks as though most people expect that we're going to see even more stimulus, which could start as early as next week, on tuesday there is another loan prime rate, a benchmark lending rate for households and businesses and most people are expecting it to be cut by 10 basis points, similar to what we saw today and possibly the one that is linked to mortgages, which is the five-year lpr, that could be cut by 15 basis points to try to get more people here to take out mortgages. but it is going to be hard to overcome given all the pessimism right now about the outlook for the economy here joe? >> supposed to be reopened took a wrong turn somewhere,

eunice i don't know what's the problem. more kids maybe. >> reporter: the problem i think is -- well, there has been three years of lost income i mean, a lot of people feel pretty poor here even though the economy bounced back, you know, they're worried about the lack of savings that they have in their bank accounts, and then on top of that, you do have industries which are traditional growth drivers and you think would bounce back and start hiring like crazy as they have done in other places, such as education or i.t., but there are so many different industries here that have kind of come under regulatory scrutiny or generally businesses are or the private sector are worried about where things are going and are not hiring, which is a huge problem for future growth. >> amazing kind of surprising all right, eunice, thanks for that still to come, former dallas fed president richard fisher joins us to talk about yesterday's fed decision, give his reaction to chair jay

powell's comments next. plus, mediterranean fast casual chain cava producing -- pricing its ipo at $23 a share, expected to debut later today. we'll hear from one of the company's earliest investors, aol co-founder and revolution ceo steve case stay tuned you're watching "squawk. this is cnbc angel city football club is a women's professional soccer team in l.a., which is building a team differently every month is pride month, we know it is not the case everywhere until we reach a point where there is no longer discrimination against the lgbtq community, we need to celebrate pride and make our community feel welcome, make them feel brought in and we do that at every angel city football match but making sure there is an experience for everyone.

♪ my middle school didn't have a girls team. they told me to go play with dolls. i wanted to prove them wrong. i had a flier and i asked as many girls to just sign up. and i would take care of the rest. i'd like to thank the guy who told me to go play with dolls. that experience changed who i am as a person. no one can tell you who you can't and can't be. [anncr: “what a play by ionescu!”] ♪ ♪ (dr. king) if you have diabetes, getting on dexcom is ♪ the single most important thing you can do. and it's covered by medicare. before using the dexcom g7, i was really frustrated. my a1c was stuck.

(female announcer) dexcom g7 sends your glucose numbers to your phone or receiver without painful fingersticks so you can make better decisions in the moment. so easy to use, and my a1c has never been lower. (female announcer) now, more people than ever are covered by medicare. call now to get started.

welcome back to "squawk box. the futures right now, as you can see, are across the board and in fact the nasdaq is the weaker of the three. after closing higher yesterday, along with the s&p after fed chair jay powell held rates steady, ten straight hikes over 15 months, but signaled a more rate hikes are likely this year for more on this, let's bring in former dallas fed president richard fisher, now a senior adviser to barclays and cnbc contributor. richard, thanks for joining us

kind of having to take -- it was a -- it was an overused expression, but something for everyone, there was a pause after ten straight so there is -- there is a potential for sitting back and letting things play out, if there is a lag but then again, for those people that think we need firm resolve in fighting inflation, there were the commentary about two more additional hikes. is it good to try to be everything that -- to all people at the same time >> first of all, i agree with the decision that was made, there is no surprise there whatsoever the key thing, ben bernanke used to say, it is not just what you do here, fomc, it is what you say. and i think you said all the right things especially important was reaffirming the sanctity of the 2% target. and unless they feel they're getting there, they're going to continue to hold tight monetary

policy and if it gets possibly worse, then they have plotted out on the dot plot that they might raise two more times but, joe, i'm a retire d -- it s not a forecast, it is how you feel at the time and i wouldn't put too much weight on that i know the markets did immediately after they were released but the key thing is what powell said, and let me add too, he -- i watched his body language. he didn't look at his notes once he is very confident in what he's saying. and i think that's an important signal to the marketplace. they're going to wait, they're going to see we have a lot of refinancing coming up here we also have been getting some statements like morgan stanley yesterday saying they're not going to do any more commercial real estate, new transactions. i think that's what they said.

so, we have to see what comes due, what matures, rates are higher, obviously. the thing that i also would comment on, the ten-year is beginning to move. all the way down in april to 3.3% and now it is back up over 3.8%. i wouldn't be surprised to see a rate increase move out the yield curve. implications for mortgages, and for a lot of other things. so i think they have done the right thing. i would have advocated, could argue either side, i would advocate for a pause and then for him to say what he said, answering the questions especially, none of the questions by the way were surprising he was firm. he said the right things and they are totally devoted to getting back to that 2% target to me that was the most important part of the press conference >> we're down 50% in the core. pretty good.

tell me if i'm wrong about this, richard, it is weird because, you know, everything is political and i just -- i think it is weird that a lot of people on what i consider the other side of -- the left side of the aisle are very strident about further rate increases, which almost makes me think that they're arguing that we did spend too much money, and that this is a result of debasing the currency when i'm looking at it and i'm not blaming that i think it was -- i think it was the pandemic and that when we reopened all these things are happening now, and the job market and the supply chain, but things are coming back to normal and how long did we have those permanently low inflation rates. how long did japan have it how did we know we were not headed back to what used to be normal and 5% was plenty high and normalized for rates how do we know that?

why do all these people think that, like, the same people that wanted to spend all the money now think we got a huge inflation problem because they have engendered all this inflation. >> i don't hear that coming from that side of the aisle but i don't care. >> what do you hear? >> well, basically if you listen to elizabeth warren -- >> jason furman, i mean, i can -- roger ferguson, everybody wants to -- thinks inflation is much worse and don't know where they think it is coming from. >> roger is a serious person and he's a former vice chair. >> serious people. i'm not saying he's not serious. i'm serious. but i have my opinion. >> doesn't matter what these people think the fed has a duty it was reiterated firmly yesterday. and as far as the politics are concerned, there is no political sensitivity at the fomc, period. i never heard any discussion of that but here's the -- >> you don't want to derail the economy if we're headed back to

2% anyway. if we're headed back to normal -- you don't deliberately want to put people out of work to get to 4.5 or 5%? >> we have high employment, the highest employment ever. this is not derailing the economy or going into a deep recession. if we're going to go into recession, it is way, way out there, and, again, that was reiterated yesterday look at the employment numbers take african american women, for example, highest employment in at least 20 years and probably in history highest employment, not unemployment so every demographic category is fully employed that gives the fed a lot of room to sit here, hold, and very importantly, this was addressed in the press conference, they're going to continue to reduce the balance sheet at a time when the treasury is issuing over a trillion dollars in debt to build up the capital account to me that doesn't indicate in any way, shape or form that they're assisting this process it is the congress and fiscal policy that has to be corrected

and i hope they start getting that done. >> richard, let me ask you a question, a political question here you are, you said it, you thought the economy is doing gangbusters, right everything is fabulous i would think that you would be applauding all the things happening in washington. >> i'm not involved in politics. i'm just saying that our private sector, even though there are stresses in transportation, i'm talking about trucks in particular, and ships, and there also is a stress in the goods sector and the manufacturing sector is in recession, but our consumption continues to barrel along. it is slowing down, but we have people fully employed. we still have more jobs open than people are willing to take them and that indicates to me that we're still in pretty good shape. small business sector in particular is measured by the nfib, federation of independent businesses, there is some stress but they're still proceeding and this is a healthy economy, although it is getting weaker.

and that's -- there is plenty of room for monetary policy to stay tight and see what the consequences are i think the economy is doing the work, the banks are doing the work of slowing things down. >> the reason i raised the question is you started -- i said to -- i thought to myself, you know, whatever side of the aisle you're on, i think you're on the republican side of the aisle. >> a democrat, always been a democrat texas democrat. >> well, i would think he would be unhappy with -- >> it is anoxymoron, joe >> he would be praising this remarkable economy. >> it is an oxymoron i'm an oxymoron. i was a conservative democrat, there is no room for -- >> a moron, what did you say >> oxymoron. >> oh, i'm sorry it broke up. my ifb we don't really -- >> the party left me some time

ago. i'm neither a republican nor a democrat i'm a central banker or i was and i kept that. >> central banker. that's good. central banker i just -- >> what's the question >> the question is, what do you think the core -- you think the core root of the inflation is that the fed printed too much and we spent too much? >> i think we significant historical mistake was made. we warned ben bernanke about this repeatedly. take rates to zero, expanding the balance sheet, keep doing that for a long period -- therefore it is leading you down a path which -- >> are you pointing out bernanke now or powell staying at the -- >> i'm not putting it on bernanke i'm putting it on the fomc we made a mistake. we kept rates too low for too

long we only -- and then the urgency thanks to covid and it got bigger and bigger but they kept rates too long that was one mistake the other mistake is describing to the transitory inflation. so those are -- term to correct for that and make sure they get rid of that error, correct for it and don't conduct a policy that creates inflationary pressure >> but engendering higher unemployment in a slowdown is not good for the presidential election, right? >> no. >> that's why here i am arguing -- >> that's not the job of the -- >> if i were him, i would care and be telling these guys -- i'm urging them to stop. but, you know, that, you know, it is a lot of strange fed -- >> i hope the viewers undersndta there is no politics at the fed, period >> all right you're an oxymoron hey!

like your workplace benefits... and retirement savings. with voya, considering all your financial choices together... can help you be better prepared for unexpected events. for a brighter financial future. thanks. ahh, pretzel and mustard... another great combo. voya. well planned. well invested. well protected. [office sounds] ♪upbeat music♪ ♪♪ ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day (lovely day)♪ ♪(lovely day) (lovely day)♪ ♪(lovely day)♪ a bank that knows your business grows your business. bmo.

coming up, what investors can expect when cava starts trading today and the health of the ipo market get the best of "squawk box" on our daily podcast, follow squawk pod on your favorite podcast app and listen anytime we're coming right back. ere are asking. is it possible? with comcast business...it is. is it possible to use predictive monitoring to address operations issues? we can help with that. can we provide health care virtually anywhere? we can help with that, too. is it possible to survey foot traffic

across all of our locations? yeah! absolutely. with global secure networking from comcast business. it's not just possible. it's happening. father's day is almost here, and dick's sporting goods has gifts for every dad. like golf clubs from taylormade, callaway, titleist, and ping. and coolers and drinkware from yeti. get him the latest styles from nike, vrst, and the north face. plus, the hottest footwear from nike, on, hoka, and new balance. get it fast with one-hour pick up. and with our best price guarantee, if you find a lower price, we'll match it. this father's day, find the perfect gift for every dad at dick's and dicks.com. (sirens) [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -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. transplant received. at&t business. bridgett is here. she has no clue that i'm here. she has no clue who's in the helmet. are you ready? -i'm ready! alright.

xfinity rewards creates experiences big and small, and once-in-a-lifetime. mediterranean fast casual restaurant chain cava priced its ipo at $22 a share, above the range it raised earlier this week leslie picker joins us now with more on what is driving investor interest and how things really feel with this deal. what do you think, leslie? >> hey, becky. so behind the scenes i'm told that cava's ipo was marketed as the next chipotle, and it is clear that had investors craving the stock. chipotle is up 10,000% since itsism po.

the 12-year-old self-described mediterranean chain is $2 above the range it boosted earlier in the week i'm told it was approaching 30 times over subscribed meaning there was nearly 30 times as much nonbinding interest as there was stock available. at the $22 price, cava raises $318 million at a 2.5 billion market cap, jpmorgan leading the deal here along with jeffries. profitability still front and center for ipo investors, cava earned more in adjusted ebitda during the first 3 1/2 months of the year than in all 2022. the overall new issue market is at play. three mutual funds indicated they'll purchase $100 million worth of the offering at the ipo price and then i'm told some preipo crossover investors were bulking up as well it will list under the symbol

cava and start trading later today. we'll see if some of that demand that took place during the road trip this week crosses over into the after market, guys. >> leslie, thanks. we'll see you soon joining us right now is one of cava's early investors, steve case is the chairman and ceo of revolution, which has been investing in the company since 2015 revolution's rise of the seed fund invests in startups outside of silicon valley, and, steve, you have been in cava for a very long time. >> yeah, nearly a decade we believe there is going to be a transition in the food industry, really transformation that fast food would give away to fast casual healthier options would make sense, more customization, more convenience, using technology to enable all of that. that's what cava has done so well over the past decade. and i'm really proud of the team there, led by brett shulman and they have been on point on this. and it is a great example of the kind of company we would love to back at revolution and including the fact that it is

headquartered in washington, d.c., not known as a startup hub or culinary hub, but birthed cava, and also sweet tree, which we also invested in nearly a decade ago. >> how do you find it or who found it >> we found it partly because of the area, partly because of ted leone is part of the greek mafia and was watching what was happening in the mediterranean segment and knew some of the founders of the original cava restaurant and brett shulman, terrific career in banking decided to take the lead in turning it into a more of a fast casual concept we were in the early days, belief in the vision and it emerged as the leader in the mediterranean category all around the country, but still half the states haven't yet centered so there is a lot of runway and so very excited about what has happened in the last decade, excited for the team today and really looking forward to the next just texting with the ceo a few minutes ago and he was talking about the fact they have done a good job of the first decade, but now the next decade is when things really start to accelerate. >> you must have made a huge return to this point, but

doesn't sound like you're going to take the money and run anytime soon you see this as being a -- >> no. we're definitely big believers in cava and big believers in the megatrends and when we're backing companies, whether focused on a place, we're focused on cava $3 are going into the economy. that's going to create a lot of momentum for innovative companies. so place and policy of the two areas really focused on. when we back companies, we take a long-term view and are in it for the long run >> we were talking about the states in america with the best economic return, he does that for cnbc of year, he's been doing it since 2007. one of the things joe brought up

with him is you have to look at things a little different, look at where the money is going, where is it coming from. do you do the same thing when you look at companies that you're going to invest, you follow that same money route >> we've been doing this about a decade we did our first bus tour about a decade ago and we're now invested in 200 companies in a hundred cities so we've been trying to identify promising companies in places that don't get much venture capital and as they scale, bring in capital from the coast. we've seen that accelerate over the last few years the pandemic has been a little bit of a tipping point in terms of dispersion of talent and capital. it is a bigger deal than most people realize investors should be paying attention to this because the investment going into the economy from the government is quite significant. there is a site just launched

last week called invest.gov which shows private capital going into things like infrastructure and you'll see dots all over the country. venture capital has been limited to the coast, 75% of venture capital going to california, new york and massachusetts, just three states if you look at what's happening with this government investing and what's happening with venture investing, 1,400 new venture firms have started over the last decade. i think we're seeing a transformation of the innovation economies, not just companies in san francisco, new york and boston so it bodes well for those communities and also bodes well for the country. but investors not paying attention to this broader opportunity all around the country are going to miss out in some of the great investments over the next decade >> so lots of places you guys have been early investors on, what are some of the most investments you're most excited

about that you think will be big five, ten years down the road? >> we invested in a company in arkansas called acre trader, it allows you to invest in farmland and building a mach engine, a company called freight waves, like bloomberg for the trucking industries in the a.i. faith, we invested in carbon robotics to identify on farm weeds. tempest in chicago is using a.i. by thoughtfully diagnosing disease. we see a lot of potential, not just in terms of the a.i. software platforms which are getting a lot of attention but

some of the specific applications that are really bringing innovation to industries that need it using a.i. and other kind of technologies some of that for sure is happening in places like silicon valley but a lot of it is happening all over the country that bodes well with what we're trying to do at revolution and rise of the rest >> talking about all of these places outside of silicon valley and the tech areas, when you see san francisco right now, you see whole foods and nordstrom walking away, mall properties even i read an analysis that said it could cost san francisco a couple hundred million a year in revenue over the next couple of years. i'm sure you don't look at that and think i told you so or anything but what do you think when you see this happening? >> i think it's sad. i think san francisco has been a congratulate city. when we talk about it we're

trying to level the playing field, not an anti-silicon valley thing, it's a pro the rest of america thing. i've been sad to see what's happening in san francisco it's what some call a doom loop. there are a lot of challenges, crimes because people aren't there, hotels shutting down and stores shutting down and so forth. i believe in san francisco and silicon valley i believe it will continue to be strong i suspect a rebound coming but for sure right now it's challenging. it does create some opportunities. certainly some people have left san francisco to go to other places that helps strengthen the startup communities in those other place, which if you take the long view, it is good for the country. we want a more dispersed econoeco economy, don't want our eggs all in one basket. having flow is important even worked on legislation like the jobs act a decade ago. but certainly the challenges in

san francisco i think a wake-up call that cities and mayors and business leaders in those cities need to recognize that something fundamental has happened and how do you get people back to these downtown areas and create vibrant, safe communities. >> you think that's possible >> of course it's possible of course it's possible. >> we just talked about how new york city i think last week finally got above 50% occupancy. granted it was never at 100% before, it was closer to 70% but for the first time since the pandemic in the last week or two that it got to 50.5% >> we're in a different world. it's a grand social experiment people thought they would be in the office five days a week and everybody's at home and now they're reversing the policy and

want people back in the office people realize it can be more convenient to work remotely and there are some things you can be very productive on specific tasks, creativity and collaboration does really have value. i think the momentum is towards that i think you will see people in offices more but they will still have some kind of new normal where there's a hybrid and it will benefit some of these cities as these companies grew, they weren't able to access some of the tall than the had experience with hyper growth. now they can by having some of those people be remote i think we're in a new world and we're all adjusting to it. >> steve, congratulations to you and ted and the rest of the crew for seeing cava so early and thanks for coming on with us today. >> thank you all great to be with you >> he can rattle off those investments. did he look down at his notes? >> no, he knows it

>> i love that ted leon with the cava thing, the middle eastern connection >> wasn't it the inflation causation act? >> the inflation reduction -- i had tnk auttohibo it for a second different ways i should be trading. look! 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℠.

learn your way. not theirs. td ameritrade. girls... the chess club has gained an edge on our bake sales. we need more ways of connecting with customers, fast. i know some consultants with great ideas. can they help us improve our digital experience? absolutely. they've invested over $2 billion in tech. that could really help us manage inventory. and save us a ton of dough. then let's take back our market share. checkmate, chess heads. girls, i said “bedtime”!

good morning you can call it a skip or a pause. regardless the federal reserve ending its streak of interest rate hikes at ten. we'll talk about the biggest investor takeaways and five more breaking economic data points on the way in just 30 minutes retail sales, jobless claims and more and the government expecting today to be the busiest day for air travel since before the pandemic we're going to go inside the travel rebound with the former ceo of united airlines 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 i'm joe kernen along with becky quick and andrew ross sorkin it's gotten a little bit better in terms of the averages we still are in the green. the equities this morning, not as interesting as united health care the nasdaq was strong but giving back some today, you would think technology is affected by higher rates and we do have two more hikes coming, then the nasdaq has been doing pretty well maybe there is a retrenchment coming treasuries and richard fisher talking about the 10-year pushing its way higher in yield and closing in on 4% again among today's top business stories, a tentative deal reached to end two weeks of work slowdowns and stoppages that crippled west coast ports. a new contract will cover 22,000 workers at 29 ports.

ship congestion is expected to take several days to clear out >> and federal prosecutors say they'll at least temporarily withdraw several of the charges against sam bankman faried government lawyers say they'll try him later this year without several charges added to his indictment after he was extra died to the united states from the bahamas. but prosecutors are asking the judge to hold a separate trial next year focusing on those counts >> and bill gates is set to meet with chinese president xi jinping. this is a reuters report it's unclear what's on the agenda for the two men but the meeting with mark xi's first with a foreign private entrepreneur in recent years let's get over to our very own dom chu. good morning what you looking at?

>> good morning. we're starting off with an earnings mover getting a lot of attention and that's home bui builder lennar it reported better quarterly pro profits after yesterday's closing bell as home buyers continue demand for housing. stuart says people have come to accept a new price >> and t.d. cowen has upgraded from outperform to market

perform. they cited and revised product mix, better execution, and better physical store layouts and kohl's shares getting a bid on that. and a record 13 straight gains worth of gains for the electric vehicle giant did fall in yesterday's session, down about 3%, over 2 million shares of volume whether you're a tesla bull or bear, andrew, you'll see fewer streak headlines for at least the next week or so but tesla did add a lot of market value in that 13-day stretch. >> thank you for that. after ten straight interest rate hikes, the federal reserve deciding against another hike in the interest rates fed chair jay powell wouldn't tip his hand about next month. >> we didn't make any decision about going forward, including what would happen at the next

meeting, including we did not decide or really discuss anything about going to an every other meeting kind of approach or really any other kind of approach one, the decision hasn't been made, two, i do expect it to be a live meeting here with us fixed income portfolio manager how long do you expect it to last >> we do think they are at a period where they can pause for perhaps longer than the fed is currently projecting within the dot plot we saw the fed was fair live hawkish and i think there are three reasons why they chose to have a very hawkish tone one, they don't want to be the bank of canada or the reserve bank of australia. those are central banks that went out and said i think we

could be done now and then they had to turn around and ike more. they want to avoid that situation. the second is they don't want financial conditions to ease too quickly. prem prematurely that will be counterproductive to their goal. and most importantly, they have a forecast that inflation will come down but they don't trust their forecast powell said we've been wrong for the last two and a half years. so, yeah, i do see inflation coming down, i do think the pieces of the puzzle arein place to get more disinflation but we cannot believe it until we see it. so the difference from the view in the dot plot is we will see the disinflation and will allow the fed to ultimately end this hiking cycle around this rate. >> so this summer, there's july.

sounds like nothing in july. august getting to like the wyoming situation. >> yeah. >> you use that as an opportunity? the wyoming piece of it always becomes a thing. what would you -- would you do anything before that or do you think it will get pushed all the way to september in. >> so jackson mole is something that the fed use structural, thematic questions they have one of the questions is will the fed give up on the 2% inflation target what we've been saying is even if the fed stops hiking now, that doesn't mean they're giving up on the inflation fight. it's all about real yields i think you talked about that earlier on in the show so as inflation comes down, the policy rate, the real policy rate, actually on its own naturally pushes policy to be more restrictive and that's even with the fed just keeping policy rates at

these high levels, not necessarily increasing them. >> what are the disinflation sources that you think a pandemic changes it significantly near term, but does it change everything? and some people think so richard fisher said they stayed at zero for so long, we spent so much fiscally that it is different. can they stop here are there factors in place to get us down there anyway >> there are factors in place to move inflation lower i think it will be hard to get all the way back to 2 without more pain in the labor market. but i think if you look deeper at the inflation data, it's actually been coming in a little bit better even the past two months for example, used autos has been surging, it's 36%.

if you strip that out, it was .27, that's the three handle, not the five level >> that's one of the reasons people were a little concerned housing and rent lodging didn't come down and i don't know what you think of the long-term trend toward globalization led to a lot of lower inflationary pressures now. >> but we didn't -- >> i don't think that's inexorable >> once they can get there, how quickly do you have think they need to get to two once they get to three, they can still say they will get to two but now all of a sudden time is on their side in a completely different way. >> time is on their side but i

think it will depend what is the labor market looking at by the time inflation gets down to 3% so the fed is really focused on payrolls, 283,000, that's tleet-month moving average that is just incredibly hot. at the same time every other labor market and data point that we look at says payroll growths should be moderating so rather than say payrolls and everything else is wrong, we're saying everything is probably right and payroll's close should be moderating. if it's above 4% when we get to 3% inflation, it's going to look a lot different from the fed's perspective in terms of the balance of risk. >> i think we take out used cars and we leave in energy and then we'd be at like 2% already. >> yeah, let's just look at the metrics we want. >> of course energy's down but that we don't care about

that's what causes all the inflation. >> the fed's official target is headline pce they focus on core pce because food and energy are volatile and if you want to look at where things are going in the future, historically core has been a bit better than that no one is denying of the average person, it's all about food and energy it's a huge part of the consumption basket >> kelsey, thank you appreciate it. >> you spend all your time thinking about this. that's what i gleaned from that. wow! you know a lot of stuff. thank you. >> coming up, we're going to bring and we're going to speak with connecticut gch ned lamont. connecticut's new budget includes the biggest income tax cut in state history talk about an oxymoron he's a democrat. you're watching "squawk box" on

cnbc you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

. european central bank out with its latest decision.

steve, what happened >> up as expected. 4%, that is the marginal lending facility, 3.75 is the benchmark rate everybody watches there it says ecb staff have revised up their projections for inflation, food, energy. that tells you they're not quite done there in europe, especially this year and next year. let's see what they did with growth slightly lowered their economic growth objectives. they expect 0.9 growth in 2023 i just want to show you fwies real quickly the difference between europe and the u.s. when it comes to inflation. so we've had a little bit br you can see inflation did tick down earlier and is lower by

about two percentage points. they have more work to do. i have not had a chance to read here there's some talk about whether the ecb pauses in july, but i haven't read the full statement. i'll come back with you at 8:30 on whether or not there's any talk about a pause in july more work to do in. >> meaning that they probably won't be able to take a pause next time around >> i don't think so. we'll see but there are one-mandate bank i imagine if you have what's happening to the dxy or the dollar, and/or the euro, i imagine it would be relatively unchanged because this is what was expected today >> thanks, steve

>> and our next guest just signed into law a two-year, $51 billion budget it includes the largest income tax cut in its history governor ned lamont, it's good to have you we all think taxes need to be raised both federally and a lot of states seem like their what's different about you in connecticut >> joe, we may be swimming against the tied i think we have the we've got a significant tax cut. when lowell weiker put it in place, it was a 4.5% fixed rate and this crept up, crept up every five years and now we've

brought it back to 4.5% for the majority of our taxpayers. it sends a message >> once again, i don't see how they're accomplishing that are there services not going to be available where it was really economic growth. we've been platt new families moving into the state of connecticut, young guys, not folk like you and me >> so when you see some of your compatriots, governor the from other states where our they argue that people don't flee well, if they flee, that's too

bad. i think phil murphy once said if you're looking for a low-tax state, don't come to new jersey. he actually said that. does it matter in terms of the business you bring in, the people you retain, if you have a more favorable tax requirement >> joe, that is definitely one factor and we had a reputation. that reputation is turning, we're getting our fiscal house in order and lowering taxes. but we also kept our schools open and got them open faster during the pan dem than most and a lot of people like a small town and a nice back yard. connecticut's back in vogue. >> governor, i don't want you to get in tloubl but do you have any advice for the federal government are you on board with everything that the biden administration has proposed or spent for lack

of a better term over the last would you mean of years? do you think it was all worthwhile can we not extrap la do you think that lessons can be learned by the federal government, connecticut? >> it depends where the federal government, like the state government is putting their resource, where they're spending we're an old state beep had a lot of hundred-year-old roads and bridges. i like that infrastructure bill. i think it's going to be tr transformative you'll be able to get from new haven to new york in half an hour's less time during the next seven, and i don't know if

you've ever got any national aspirations, but at 31 or 32 trillion in total debt, what would be your advice on how we get out of that? entitlement reform doey need to raise tax rates i know you focus on here in connecticut i have to be very conscious of the competitive environment in the greater new england area where we have some of the lowest tax rates in the area and that's great. but then we have to look nationally at what's going on. the federal government and that requires a little bit on the revenue side as well as on the spending side. i think we got to get closer to balance. >> do you foresee having to

reverse any of this in future years? how do you have to control spending a lot of times we see states suddenly they have a surplus and you look back two, three years of a that and it always seems to be gone. they always find a way to spend it you're not going to do that? >> no, two things. one, our legislation, we've got a volatility cap that means all those spikes goes into unfunded fund there and at least $3.5 billion or about 50% of our revenues are socked away in cash, just ready to make sure i don't have to raise taxes or i don't have to cut education spending >> we love holidays. has dan hurley had a holiday

yet? have you proposed that is that on a list of possibilities? can you believe that what happened? i watched the entire year. i did not pick that team >> i did y but i'm a gopher, too. >> all over the state and all over the world, he puts them together and i got to tell you, joe, for sleepy hartford, not a lot of people coming back to work to have a 40,000 plus people cheering their hearts out on main street made a big difference >> i think that helped you we got to go an update is coming. i think that helped the whole state anyway fiscally. >> thanks, governor. >> thanks, joe >> we'll be right back y time. ( ♪♪ ) constant contact. helping the small stand tall.

starting a new chapter can be the most thrilling thing in the world. constant contact. there's an abundance of reasons to get started. how far we take an idea is a question of willpower. because progress... is a matter of character.

power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley. with powerful, easy-to-use tools, power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity. e*trade from morgan stanley

coming up, breaking economic data we will bring you retail sales, jobless claims and more right after this quick break "squawk box" will be right back. y with viking. unpack once, and get closer to iconic landmarks, local life, and cultural treasures. because when you experience europe on a viking longship, you'll spend less time getting there and more time being there. viking. exploring the world in comfort. ♪

♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪

welcome back to "squawk box" right here on cnbc we have initial jobless claims, may import sales, retail prices. rick, take it away >> we have a list that's about that long indeed let's start with import prices down 0.6%. we expect it down half of 1% if you strip out petroleum, down 0.2 and year-over-year down 5.9, a big drop following down 4.8. let's switch to export prices. down 1.9%. that follows up .2

and export prices year over year down 0.1%. the rearview mirror. last weeks's 261,000 becomes 262,000 so it is unchanged however, the last time we had a number that high, you have to go back to the last week in october of 2021. and if you look at continuing claims, 1,775,000, very close to expectations once again, that's below 1.8 million psychological level. we haven't been above 1.8 million since the last week in april. retail sales up 3 tenths of 1% of course this is the advantaged

read it numbers still stays positive, up 1/10 as expected. you strip out auto ap gas and it jumps up to 0.4% of the expectations so when was the last time we had a number that strong in the rear view mirror six tens becomes five tens and the we're not because we still have empire manufacturing and empire is up 6.6% and that's pretty nice because we've had a run of some pretty large nug this is indeed a good number. philly fed minus 13.7. the bad news there is that is now the 10th, the 10eth

consecutive negative month that we've had on billie. as a matter of fact, it's the second smallest pif where we were down 8.9% if we summarize on what the market's doing, we're at 382 with that long list. now we're at about 381 474 before the number, 474 higher than yesterday. you want to play very wow, that's a lot of. >> the marvel of that. that was pretty unbelievable to wrangle all of those numbers, nobody does it better. thank you. >> steve liesman joins us but these are some pretty important

numbers, too i guess retail sales jump out since they were stronger than expected you've got the jobless claims ticking a little higher and as rick pointed out, the highest level we've seen since october 2021 and if i had to point out something else, maybe the philly fed. >> i'm going to echo the words of our cameraman, brian so no fatigue, becky you just sit up straight herself which is those claims numbers. maybe we have shifted to a higher rate of claims and, rick, tell me if i'm wrong here. woe don't have much in terms of the continues arl so we're going to watch that that in a strong

job market, people lose their job pe to see if there's real detear yag rick, am i right that the control group was 02 are you there, buddy >> yes, the grohl. >> a little weak last month we were at .7 >> fair enough >> recently. for example, the miscellaneous story tailers pun down to about and the april numbers, that's the beginning of the kwar what

you want to do so at least in these numbers and wek eed be but in these national numbers the consumers seems to keep on keeping on. >> and that probably will continue is these will be real gains, right 4 tenths was the up side on retail rather than some of the other numbers that we've that if i'll have to see whether or not people are going to upyour

convince yesterday was that the fed was not going to do it i was thinking if i had to come back as a different person, i would certainly like to come back with your conviction about the future on that one >> yes, i mean listen, we all make changes get and decide where things are going i believe it's july 12th the fed most lickly had its last. >> i've got one being. >> optionality i think july is open and i think everybody says the you temperature he did a great job, wrote a misarticle and the post

postem ten-year notes don't close out tomorrow and to close out a very wild week >> good job, gentlemen this has been a heck of a week you guys have covered it like total pros like you are. >> there's no data tomorrow, please >> i'm off i'm fishing tomorrow, becky. >> is there data tomorrow in. >> just light data tomorrow morning, yes nothing heavy. steve good luck fishing. i'll see you back here tomorrow. thank you, guys. >> coming up on the other side of this, we're going to talk about the state of the consumer nationwide, labor issues and the fed's decision to pause interest rate hikes with form are united airlines ceo oscar munoz and we'll go inside the market

and we'll go inside the market with saira dad, we got this. we got this. we got this. we got this. we got this. yay! we got this. we got this! life is for living. we got this! let's partner for all of it. edward jones

you founded your kayak compa because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

saira. welcome back to box. take a look at the futures we are in the red on this thursday morning, 107 points off on the dow, the nasdaq off 120 points check out kroger it was 5 cents better than analyst expected on revenue 45.17 billion

that was slightly below and it seemed to have rattled investors this morning >> yeah, i don't know if there was an outlook or what that's an important bellwether in terms of input cost and consumer and everything else huge supermarket change based the queen city in cincinnati delta airlines with a quarterly dividend and target upping its dividend by a little less than 2% to $1.10 per share. >> signs of life in the ipo market, cava pricing its ipo at $22 a share, above expectations. cava will be watched, perhaps as something of a bellwether. we'll see whether other companies might want to tap the public markets given everything that's happened. renaissance capital saying of the ipos that will price this

year, only 20 are for u.s. companies. we'll have an interview with the ceo of cava. ahead of monday's juneteenth holiday, transportation secretary pete buttigieg says he expects today to be the busiest travel day since the pandemic. joining us is oscar munoz, the former chairman and ceo of united airlines. oscar, it's a booming time for the airline industry and no slowdown yet in sight in terms of travel. what do you have say overall what do you think of the health of the economy when it comes to transportation right now >> well, you know, you're seeing the numbers. i just watched them briefly before i came on so things are not looking overly negative, which is a good thing. certainly in line with

expectations credit card folks say that continues to be row bust, consur stocks of course have hit some lows and are hopefully recovering soon. but from an industry perspective, the leisure travel, which had flattened for a little while is back and rolling. so things you just -- i mean, as leaders i tend to -- business people tend to be optimistic because we have to be but it's looking a little better. the rate -- the fed rate hike hawkish pause is the term i've heard most often still suggesting a higher rate which would impact some stocks overall it's feeling a little better from the vantage point that someone like me has with regards to consumer spending, at least at the airline level, it's still very fine. a resort in puerto rico, a large event i'm speaking at, a couple of thousand people from the firm that are here, so that's beginning to pick up a little bit. at least from the perspective

that we have in the airline space, it's looking okay >> that's what the union, the pilots union might use to bolster its argument to try and get more concessions out of united scott kirby, the ceo at united said they put a package on the table that they value at $8 billion, which would be more than the $7.2 billion deal delta signed with its pilots the pilots are pushing back and the union chairman saying they don't think it's worth $8 billion and they don't think it comes up to meeting delta in terms of what they see just for disabilities benefits, profit sharing. this is a pretty tricky negotiation to get through as somebody who knows united very well, what are your expectations >> listen, there are parts of my old job that i do not miss this would be one of them. you know, thevaluation of all the component pieces -- first of all, at united we love our pilots, they're valued, the growth plan that scott has put

into place is contingent upon that all of those things. it's just a matter of negotiation and i think both sides tend to look at things just a little differently. i think united has some of the best perks and benefits associated in addition to what's on the table with regards to wages. so i just think it is a matter of time before they converge on the right thing. you will hear a lot of contention and noise but other than that i think we've built a really good relationship over the years after many years of sourness and it will come to bare and the valuation, it will come together at the right time. >> the reason i ask on that, though, is the pilots are set to vote on whether to authorize a strike that doesn't mean a strike will necessarily take place, but if you're somebody who has bought airline tickets on united for the summer, you might be a little concerned about that. you think it will get to a strike >> you know, i don't have that much insight i'm not about to forecast that or put any kinks in the

conversations, the delicate conversations that i'm sure are being had out there. i think the threats of strike and the threat of holding to the wage benefits package that the organization has put forth is always again a delicate situation. i am really confident that this will come to a head and not, importantly, not impact you as a consumer that's a very important, you know, sort of focus for both parties. >> let's talk a little bit just about the limits on how many more people we can put in the air. i mean, there's questions about the economy of course but if the economy continues to chug along, the next question becomes what are the limitations? what are the things holding us back from being able to let's say double the number of flights that we see right now? >> well, there's -- i heard this from a doctor. there's functional limitations and there's physical limitations. and i think the official limitations are two-fold

o unless you put in orders for aircraft, there's nothing coming for that so you have a shortage of actual aircraft you have a pilot shortage, which gets back to the union conversation, that gives the pilots a little leverage in this space, but that will work through. and you've heard me talk about this repeatedly, air traffic control is still a big topic and with that in place, it's going to just limit, especially domestic flights so all of those things are going to sort of continue to just sort of keep capacity at a certain level of growth, and with an increased level of demand. that's the combination of things affecting the industry today >> oscar, do you think we need more competition in the airline business at this point to the extent there could be more capacity, would we be

better off with the current set of airlines having more capacity or would we be better off with a new entrant in the space trying to compete with those airlines >> you know, there's plenty of competitors today. too many -- i think the customer service level begins to degrade with too many players in too many places. i think the limitations, aircraft, wages and people wanting to work in the industry along with air traffic control are going to keep it at a moderate level i think the concept of adding more competitors might have an impact at some point in time but it's probably purely hypothetical at this point, andrew, because it's just not going to happen. >> hey, oscar, can you imagine cancelling a flight a week in advance because of mechanical issues this was just brought to my attention from someone how does that work >> asking for a friend what's happening >> i'm asking to are a friend,

yeah is that possible to know about a mechanical issue a week from when your flight is supposed to be i mean, we all worry about excuses when things get, you know, i've heard crazy it alway that you get for when something like this happens? >> so, let me put a constant sort of accusation, if you will, towards the industry, that we do this kind of stuff on purpose. if you know the logistics and planning and how aircraft turn and cycle over the course of time, stopping one aircraft from flying has a domino effect that lasts for hours, weeks -- days and weeks, possibly, so there is absolutely zero incentive for us to just cancel something to piss joe's friend off it's just not what we do what we have been trying to do as an industry is to let you

know as a customer as soon as we know there may be something going on in this particular case, is it possible yes, there's aircraft that goes down that's going to require additional maintenance some airlines don't have the capacity, the amount of airplanes for the kind of row they put forth, so it may be something they're anticipating ahead of time, and as awful as it is, you would rather know today for a week from now where you can make plans than get to the airport. >> oscar, real quick, related to that, in europe, as you know, there are all sorts of bill of rights and things that the consumer is entitled to that they're not in the united states there's been talk by the biden administration about trying to create a similar kind of bill of rights explain this i would have thought that airline tickets in europe would have had to be meaningfully higher to effectively adjust to pay for those things you would think, given all the lefts that are supposed to happen to the consumer in europe, the airline prices would be higher, but they're not

in fact, in many markets, they're actually lower than they are in the u.s why is that? >> the lovely benefits of economists and kent, demand curves it's competition, would be my guess. >> now you're bringing me back to why i asked whether we need more competition in the united states in fact, in europe, there is more competition >> right they also have a very different model across a different -- including lifetime, you know, lifetime employment. so, there are -- if you look at the factors across all these different things, i think you look at them, pegging it to one thing, just bring more entrants, i don't think has ever proven to be an actual benefit to the consumer what is a benefit to the consumer is getting airlines who have enough financial capacity to invest in their people, invest in the service, create flights everywhere you want to fly, create happy and engaged employees like pilots, and you,

as a customer, will have better service. the rules of the game, as you said, with regards to potential regulation, those are in the early stages we'll see where they end up, and i think it's important to certainly protect the customer as much as possible. but with regards to its effect on pricing, it's been minimal. >> oscar, thank you. good to see you. >> bye, guys "squawk box" will be right back what if buildings could tell you how they could be more efficient? i'm listening. well, with ibm, you can use software to help you connect and analyze data— from hvacs to elevators to lights. what if we use ai-driven insights to pinpoint inefficiency? yep. and act on it. saving energy, money... ... and emissions. yup. that's a big one. now you've built something better for everyone.

that's the sustainability solution ibm and a global real estate company created. what will you create? ibm. let's create. this is ge aerospace, advancing flight for future generations. ♪ welcome to a new era of flight. only at vanguard you're more than just an investor you're an owner. that means that your priorities are ours too. our interactive tools and advice can help you build a future for the ones you love. that's the value of ownership.

as the futures of the day after the day after the fed held interest rates steady with the hawkish skip joining us now on the markets is sara mallick, chief investment officer for nuveen is it a friendly investing environment right now for either stocks or bonds, sara, or diversity always helps >> well, investors got a reality check yesterday. the fed did deliver that long-awaited pause, but it came with two strings attached, and that was no scieigns of rate cu and probably another 50 basis points in rate hikes so what we're watching is three things one of those is broader index participation beyond technology. second is, can the economy continue to hold up?

third, will inflation continue to ease? with so much cash sitting on the sidelines with portfolios in t-bills, i think people buy on weakness because we are not seeing signs of a recession. >> did you expect to see the nasdaq perform this well in a rising interest rate environment? and can it continue? >> well, 35% on the nasdaq before we're even through the first half is very significant performance, but if you look at history, when we have strong first halfs for the nasdaq, it tends to perform positively in the second half. there are tailwinds beyond a.i., and that is yields starting to roll over, the fed pausing and only raising rates one or two more times these are stocks that benefit when the economy slows and when inflation slows, so these structural tailwinds are in place on top of the fact that it performed so poorly last year, so i think there is still more upside >> that thought occurred to me earlier, saira, when we looked at the history of rate cuts over the last however long we have been in this tightening cycle.

what are there, like three 75-basis-point hikes in a row? now, we're talking about maybe two more 25-basis-point hikes after a pause. so, things are definitely -- at least the second derivative, the rate hikes are slowing, and we must be getting close to a point where we may not see any more tightening >> we're definitely in the late innings of rate hikes at this point. you know, the bad news is we've not seen the fully lagged impact of tiger monetary policy on the economy, but the good news is if you look at historical trends, fixed income and equities both tend to outperform when the fed pauses if you're waiting for rate cuts to get into these rate cuts, you're going to miss a significant amount of performance. >> when you talk about -- i mean, no one did think about the nasdaq is it going to broaden, or are we still going to be talking

about those five or six, you know, generals or leaders, whatever you want to call them >> well, if you look at the s&p this year, it's basically the top ten technology stocks are responsible for all the markets' outperformance the next test for the s&p will be about 4,500 i think for it to get there, i would like to see cyclicals and small caps start to participate. we saw some of that in the last week or so, a market can climb higher if it's just driven by the nasdaq, but to see the market have a full bull market from here on out, you'd want to see more participation, and we'll see that if the economy holds up employment markets and the consumer are holding up the economy here, less from the manufacturing side, and as long as jobs stay strong, economies stay strong and small caps and cyclicals should catch up. >> you sound like you're describing a soft landing, saira, maybe we'll get that. that would all be good saira malik, thank you

i almost said, happy friday. is it not friday really not friday. >> lot of data this week, lot of stuff we've waded through. >> final check on the markets. so, you want jon rahm, but you think it will be sco scottie scheffler? victor hovland "squawk on the street" is next that is a live shot of the scene outside the new york stock exchange as restaurant chain cava makes its market debut today. >> happy cava day. >> thank you so, potentially major test of the ipo market and obviously, a very important day for that particular company. nice little thing going on out there. you can't see it a lot of plants, greenery. we're going to talk with the ceo later this hour. >> that's fantastic. >> yeah. good thursday