a strike at major u.s. ports which is not good and very costly. it's thursday, september 19th, 2024 and "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen. andrew is off today. let's check things out right now because u.s. equity futures are really on the move. dow futures indicated up by 450 points right now. the nasdaq looking up by close to 400 points. a gain of 389. you have the s&p indicated up by close to 85 points. if you are looking at this on a percentage basis, the biggest gainer is the nasdaq up 2%.

1.5% for the s&p. another 1.1% for the dow futures. this comes after the markets soared following that fed decision yesterday. the dow was up as much as 375 points at one moment in the trading session, but gave back to close lower. the nasdaq and s&p were lower. you know there will be reactions and this is great and thinking why are they cutting rates so drastically and people panic about that back and forth. this morning, a decidedly positive tone to the futures. let's take a look at the treasury market. that's another place you see big moves. t ten-year back above 3.4%. you have gold hitting a new record as well. $2,615 an ounce. up close to $17.

>> bitcoin immediately surged over $60,000. now above $62,000. we talked already. >> tin the makeup room. >> instead of us shooting the breeze, let's get to roger. the fed cut interest rates by 50 points. calling it a good start to the shift in policy. >> with an appropriate recalibration of the policy stance, strength in the labor market can be maintained. this recalibration will help the labor market. if you look at the s&p, you will see that it's a process of recalibrating our policy stance away from where we had it a year ago. we know it is time to recalibrate our policy to something that is more appropriate. the sense of this is we're recalibrating our policy down over time to a more neutral

level, we believe, with an appropriate recalibration of our policy to see the economy growing. our plan is to begin to recalibrate. we think it's time to begin the process of recalibrating it to a level that's more neutral than restrictive. the sense of the change in stance is we're recalibrating our policy over time to a stance that will be more neutral. >> wow, if that wasn't the what's the show before us? that wasn't the word of the day -- >> liesman said he used recalibrate nine times. >> for his reaction as many times as i heard it in recent days. let's bring in roger ferguson, former vice chairman and cnbc contributor. let me put something to you, roger. the only way i can figure is the

fed definitely thinks the one risk in the dual mandate is more important at this.t point than e other. they feel like mission accomplished with inflation and on the other side, they either figure, hey, why not try to keep the labor market really solid and get a lot of americans working if we don't have to worry about inflation or they're overly concerned that there will already be a lag in the labor market and they already do see cracks in the labor market. which do you think it is? >> i think, frankly, more the former, if i'm listening closely to what jay powell has to say which is while they say the risks are balanced, i think you're correct. 50 strikes me as acting as they are putting more weight on the unemployment side of things. i do not think yet they're in panic mode. i don't think this was an

emergency 50. he said something else that was really important. it was a very strong start and very much was clear that quote he didn't want to fall behind. i believe this one is a little bit more in the camp of okay, we say the risks are balanced, but it's really the labor market we're looking at. so far, so good. let's jump ahead of this. that is the main issue of recalibrating and what do we recalibrate so they don't fall behind. they fell behind on this and they had to scramble to get ahead of inflation. >> there were in past fed statements, there were single words that became famous. conundrum was one. that might have been greenspan. >> irrational exuberance. >> that was one. he said recalibrate. we did that on purpose, i guess, to show you how many times he actually said recalibrate. for you, roger, this had to be

surprising and somewhat -- i don't know if i would say go as far as to say disconcerting. i don't know if you would have been one of the 11 of 12 voting for a .50. >> you said you wouldn't. >> let me be clear. to be fair, in the reality, as vice chairman, unlikely i would have dissented. however, i think the minutes will show a lively discussion as chair powell said. i recall also there are a number of folks who had wanted to move at the last meeting, so that may have been another group that he really had to think about in terms of had he not delivered what they wanted, they would have had dissenting at 25 over 50. this was cleearly a lively discussion. i wasn't totally surprised. not shocked and not totally

surprised. what i did find interesting is the analysis he gave in 50 basis points is the economy is strong and the inflation is elevated. all of that analysis could have supported 25 basis points. i think it was not economic analysis that drove 25 versus 50, but the market and market expectations and internal committee dynamics. >> you're right. maybe we can say you're right. for those that wanted 25 last time, we got that 25 and really just an additional 25. i guess you could look at it -- i guess you could look at it that way. what was weird, roger, we saw the fed futures -- it was hard to explain the jump to a favoring 50 basis points. we couldn't really point to anything. then we got a retail sales number that seemed to go against the move for 50. then they still did it anyway.

it almost looks like -- was it the body language to market participants that it was 50 and then it happened. people asked me at the gym. i said it was going to be 25. it still was, we said again and again, if it's 50, don't think it means something. they did it. it might mean something. i can't help myself. >> right. i think in the press conference, chair powell really went out of his way to say the economy is strong, labor market is strong. phrases with things are going well. >> why not leave it in the bank, roger? sorry to interrupt. if all that's true, why not leave it in the bank? why do it now? >> well, well, as i said, i think there was, you know, a

little sense the risks are not fully balanced. i think they learned from the last time that if you start late, you have to move quickly which is disconcerting. the other thing, i'll use the word gave them permission to go 50 this time. if you don't want to surprise the market, the market for whatever reason, opened up the possibility for 50. take it and put it in the bank now annuald you'll have a reall good strong start. personally, i think the analysis suggested 25. i'm not stunned at 50. >> roger, it was almost chairman powell also thought 25 was warranted. he spent the whole time talking about how the economy was good. i was watching him writing things down. this is strong. he laid out that basis case. maybe i'm just old. that was not an explains for why you cut 50 basis points.

he was trying to reassure at the time he was doing it. bill dudley said that was the explanation. you do 50 basis points. you are doing it because you have to. a panic situation. >> roger, we'll all money of the easy money cult. the 15-year easy money cult. we've all signed on. we don't think there's anything wrong with trying to get back to zero. >> then i think like an old codger. >> hold on. a major point. we don't know how restrictive to be clear. the 25 versus 50 is a good start. it should not be a signal we are now in the off and running into easy money. the thing i found also very interesting and technical if you look to the dot points on where you think they are going to end

is a wide dispersion there. there is a lot of uncertainty of exactly where we are. we know we're in restrictive. moving out of restrictive with one sharp move to make sure you're ahead of the game. i would give them a little bit of room. i would not say we're going back to zero because we're clearly not. they want to make sure they're not behind the curve as they were starting off the last time. >> that's a good explanation. would you caution the market to think we got these 50 basis points, you better expect 25 basis points unless there really is a problem from here? >> yes, i'm very much in that mode. one of the things that we have been talking about almost every time i show up here is how the market is in a disconnect with the fed expecting more and more than the fed can deliver. i fear that we're going to see that again whether they are expecting a series of 50s and the fed thinking a series of 25s

unless something goes wrong. i believe there will be quite a bit of conversation back and forth and maybe on the show as we try to get as markets try to understand what the fed is going. i think the market is somewhat disappointed because they will be expecting a series of 50s as a new norm and chairman powell is saying 50 is not the new norm. this is a fast start. they want to make sure they're ahead of the game. expect 25s going forward. it depends very much, again, sadly, to say on the data. that will guide. you know, here we are again as we were on the upside. not so sure. disconnect with the fed and markets on the down side. again, not so sure. disconnect with the fed and markets. where the market is leading and expecting more and maybe the fed can deliver consistently. >> the markets go to the terminal point really quickly. maybe the fed just figures why not? if you're right and we're in

restrictive territory and there's a certain number they're thinking where we should be, i guess the market will go there quickly. maybe the fed just figured let's go along with the market. roger, thank you. you're very tactful. >> that makes sense to me. >> roger did not want 50. very tactful. >> if this was 50 and you expect 25 basis points from here, that i can get my head around. thank you, roger. >> we bimuilt up all that nice y powder. and now blowing it. >> i appreciate it. >> he is defending the position. >> he did say ahead of time it could go either way. 25 or 50. he preferred 25. if they do this way and it's 25 from here, it makes sense to take the bigger cut now when you don't know how much more room you have to go.

i don't know. >> we're all crack addicts. i didn't want to be part of the cult. >> you want to be like the old guys like me. >> get off my lawn. did you ever think that? >> no, that's what i'm stunned by. years and years of watching this. >> believe me, it's going to get worse. >> awe soochlt. when we come back, we will show you what former president trump said about the s.a.l.t. deduction. he was on long island. the s.a.l.t. tax deduction he signed into law. we'll have more on that coming up. plus, more on the market rally. take a look at the pre-market. nasdaq 100 gainers with big moves across the board including asml holdings. arm holdings up 4.3%. marvell technology up by 3.8%. advanced micro.

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we are learning more about president biden's speech at the economic club of washington this morning. he will use the speech to hit on the new milestone for the economy and employment and wages and gdp are rising. david rubenstein will inn tervi him at the washington club. republicans voted down speaker mike johnson's short-term funding bill to avert a government shutdown at the end of the month. the vote was 202-220. two voting members present. >> three voting present. >> some of them would never vote for any cr. other ones, the same thing, no spending cuts, so they won't do

it. three democrats voted for it. here's what the speaker said yesterday about the prospects of the bill on "squawk box." >> i'm the quarterback on the field. we have a big playbook. we have to do the right thing. this is on principle and on the constitutional the exact right thing. >> we talked about that in makeup. he told us the truth. he said there was no plan b. as far as we can tell, there is really no plan b. he didn't really pretend it was going to pass, either. >> he said he thought it was going to pass. >> well, he knew massey and others. last night, speaker johnson told fox news, not familiar with that entity. fox news. he would go back to his playbook and he didn't think the government would shutdown.

focus now shifts to the senate where leaders in both parties have said a shutdown would be disa disastrous, blah, blah, blah. in this case, prior to the election, too. it's never a good thing. really, deja vu doesn't work as a description of the feeling we have over this. it's been so many times. >> so many times. by the way, that very tight margin between the republicans and democrats in the house is the reason for this. you don't have enough room, really, to play. you need everybody in the party to be there for this. no matter what happens, they are expecting a fairly tight difference in what happens after the election, too. ten votes, i think we were talking to somebody the other day -- yesterday, we spoke to a strategist looking at it and said ten votes either way. that's why you get this really impossible situation to get things passed through. >> in any fantasy, i thought you could get a few democrats --

>> they did. they got a few. >> they did. more than enough. >> you can't get your own party. >> i have no problem with voter i.d.s. just recently, oh, i tweeted out i got carded buying a bottle of wine. i got carded last week. i was hugging him. i loved him so much. >> please card me. >> i needed my i.d. they won't take it. now democrats say -- i think they say it's already against the law to vote if you're not a citizen. there's no evidence it's abused. what is the harm of proving your a citizens? >> why in the word would you tie this to the budget? we will shut down the entire government. there is always a talk. >> does it always have to be

clean? it is before the election. it would be nice if there wasn't a single person who wasn't supposed to vote voting. >> sure, we can say that about anything. i'll shut down the government if something doesn't work? >> they can close the border stuff in it. >> they could have passed an immigration bill. this is the problem when you can't -- pass an immigration -- how many years have we sat here talking about we need to fix it. >> the number in the immigration bill is double what obama said was acceptable. >> again, how many years have we had to fix it and haven't been able to pull it together? >> that was throwing the baby out with the bath water. coming up, we will talk about the ongoing trying at

boeing and looming strike at ports and later, jwharton school's jeremy siegel will be with us. it's up 461 right now. "squawk box" will be right back.

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make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley boeing is furloughing tens of thousands of white collar employees in an heeffort to cut costs amid the strike from the union. kelly ortberg said they would be

furloughed one week out of year year. now the analyst estimates the strike could cost boeing $500 million per week. ortberg and his team will take a pay cut during the strike. the looming port strike is more likely. the long shoremen warned they will strike. the union is seeking a 77% wage increase over six years. 77%. port employers haven't met at the bargaining table yet and no negotiations have been scheduled. in the meantime, u.s. importers are rushing to bring goods in the country. in august, imports were up 21% from a year ago. when we come back. >> grand trophy, grand event.

>> john mcenroe with team europe in berlin. and look at yesterday's s&p 500 winners d seanlors. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. but all you did was plug it in, you didn't do anything neither did you exactly exactly exactly exactly impressed? honestly, a little exactly (slurp)

good morning. welcome back to "squawk box." we're live from the nasdaq market site in times inquire. futures are showing big gains early this morning almost 500 points on the dow after it was up almost that much after the decision yesterday, but then it closed down 100 points. it is giving that back plus another whatever if you take off the 300. that's about where it was on the highs yesterday. we're really back to where the initial knee-jerk reaction yesterday. >> it's bad, it's good. it's bad. >> i love easy money. >> why are they givesing us eas cell phone. >> money. the laver cup is kicking off

in berlin on friday. it is matching up the top players in europe and around the world. it was co-founded by roger federer and his partner. andrew spoke with laver cup chairman and ceo tony godsik and john mack en mcenroe this week. >> your team did great and almost great at the u.s. open. what do we have in store here? >> this is my last year as captain. i want to go out in style. let's remember, nine of the top ten are still european. the first four years, andrew, we lost. i compare the harlem globetrotters to the washington generals. this is the generals.

we are finally making our move right now. shelton could do big things. tiafoe is getting closer. you will see a breakthrough in the next year or two. >> how much is the sponsorships and the media rights and the tennis channel and others? >> so, i think we look at the tickets and the sponsorship are the two major drivers. it was very important for us when we started to build the laver cup that we got a lot of eyeballs on the event. we didn't look for sort of the big deals. we looked for a blanket around the world. sponsorship, we do very well and text sales, we do very well in. media, we do very well. in terms of blanket broadcast, we do great. in terms of market money, we will continue to work on it. as you see streaming is where it will be in the future.

just watching the olympics on your channel and the amazing job you did on nbc and having the opportunity on peacock and watch the sports you wanted to see and pick what you want to see. that is what we like to be with tennis. i wouldn't be surprised in the future if you see this living exclusively potentially on one of the streaming platforms. >> john, what do you think, by the way, of the business of tennis? every day, you read a different article of tennis is struggling or the business of tennisrevamp? >> i have a tennis academy. the game not accessible or afford affordable. my long goal is to get the game to more people that can't normally afford it. my dream would be someone from

harlem or bronx or queens where i grew up to come and win a u.s. open and final. at some point, the players have to be in partner with the events. i totally disagree with the business side of that right now. we aregetting bamboozled right now even though there is more money. there is a partnership with the nba and nhl. >> andrew, i think the business of tennis is doing very well. u.s. open just had 1 million people go through the gates. they had a report of $2 billion over a long-term deal. you see all of the new brands coming into tennis to compete with nike and adidas. you have on that's killing it. you have hugo boss coming into the business. the fashion world is really loving tennis. then, you look at the stars. taylor s taylor swift out at the u.s. open.

clearly, if she is coming to it, it's an exciting event. >> john, i like how you set it up. the players need a deal with the majors. you have to have the majors together with an overall effective league? does this need to be more like the pga? what would the model be? >> well, that's a good question and i'm not sure i have the exact answer, but the pga has its own problems right now with the whole liv thing. they're trying to figure it out as well. >> yeah. >> there needs to be -- even in the other events, we are partnering up with the tournament directors. why the hell are we partnering up with the tournament directors? tony, don't get upset. we need a union. because the sport is worldwide, players are all over the world. it is tough for us to agree on a lot of things. in order really get what we really want and i'm speaking for

myself, we have been trying this for 40 years. i'm not speaking for alvarez or federer. you need to boycott an event or two. i don't know if the players would be willing to do that. >> tony, you got clients. are you telling them to boycott? >> no, no, i haven't told any clients to boycott. certainly sitting down at the tables. the grand slam, they make 40% of the revenues in tennis. obviously, they are doing very well. the players need to -- they need to be compensated very hard. no events, no players, no players, no events. everyone needs to sit down at the table and figure out how we move the sport forward. >> what do you think of the patches? sometimes you see the team and coaches and families wearing patches. >> obviously, you don't watch

car racing. if you did, there are patches on every part of their body. >> we didn't have this in tennis before. >> i'm going to agree with you having the people watching like the coaches and girlfriends with patches pushing the nenvelope. i will say that. >> andrew, once they allowed coaching to be legal, there was more focus on showing the box. i think each player needs to manage their box the way they want it. if they are happy seeing the coaches wearing the patches and not sewn on and wearing different hats, that's fine. i throughink there is an opport for the coaches to make money and it needs to be done in a class classy way. i know in the u.s. open, there were boxes where they looked like nascar drivers like john said. >> for more coverage of the intersection of sports and business, go to cnbc.com/sport.

when we come back, wharton school professor jeremy siegel will weigh in on the market rally. as we head to break, here's a look amat jor currencies. dollar was under pressure yesterday after that fed decision. "squawk box" will be right back. >> announcer: currency check is sponsored by interactive brokers. the best informed investors choose interactive brokers. at aes, our energy solutions have powered the world forward for more than 40 years. and as demand continues to scale, so do our solutions. introducing maximo -

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all right. take a look, everybody. futures at this hour going strong. dow futures now up by 470 points. s&p futures up by 90. the nasdaq is up more than 400 points this morning. our next guest says he was pleasantly surprised by the fed's decision to cut interest rates by 50 basis points. jeremy siegel is with wharton school of business and chief economist at wisdom tree. what's your reaction this morning? >> this was the best news i've heard from the fed in years. by the way, let me guarantee you an all-time high for the stock market today. there will not be a back and forth like yesterday. the word recalibration is extremely significant. i think what they did was

listen, we're 100% toward our target on employment. we've got that back to normal. we're 80% to 100%, depending on what data you use on inflation and we haven't moved at all until yesterday on the fed funds. we say the neutral fed funds is 2.9% and why aren't we closer? we're now thinking about that gap which is exactly what i talked about a month ago. not the baby steps. think about the gap and now what i think -- i mean, it is remarkable. in the june meeting, they thought there was going to be one cut by year end. now the september meeting -- by the way, the data hasn't been all that much different. now four cuts. one at each of the other meetings. by the way, i have been looking at the market and figuring in what i see and they expect one cut at every meeting over the

next six meetings that we're going to have through june of next year. that will bring the fed funds rate down 200 basis points to 3.33% which is where i think it should be. so, this is -- this is fantastic news for the market and great news for the economy. >> jeremy, i can't help but think what our first guest had to say this morning, roger ferguson. he wanted 25. his point is somebody who has been in the roomfor a long time, uh-oh, now they think this is the norm and the cuts will come fast and continuously and that may not be the case. you said the market wealcomed a big cut and wants more. what if the big cuts aren't to come and we front-end load it

and we will go sloslowly? is this a disappointment? >> no, patnot really. right now, the fed dot plot is in sync once you make the correction with 25 basis points, not 50. clearly, if the data gets really bad over the next, you know, few months, we will get some 50s, but right now they will be happy 25 at the november and 25 at december and each of the first four meetings of next year, do another 25 at each of those. that's all you need to get 200 basis points. that brings you down to 3.3% which is pretty much where i think -- the fed says 2.9% is the long run. i think it's a little higher. i think it's closer to 3.5. you know, they don't need 50. they say at this point with these new commitments.

>> we're not at 2%. if inflation shows any signs of picking up and the fed says hold off, we're not going to do anything else anymore. >> that's correct. i don't see any sign of inflation picking up. i looked at the oil markets. all those markets going ahead and jeff gundlach was on afterwards. his model shows a year over year inflation next year when the shelter numbers come in. it's going to fall below 2%. now, i don't know if that's going to be the case, but that certainly is not a situation where we're off to the races again. the commodity markets and sensitive markets tell you when you're off to the races. they told me in 2020-2021. it's a totally different picture today. >> okay, professor, doctor,

emeritus, wharton loves my plan and you have the other side saying i went to wharton. wharton likes my plan. pick your poison. let's see. you got across the board tariffs and no taxes -- both say that. on the other side, you have price controls and taxing unrealized gains, raising the corporate tax rate and raising the capital gains rate. pick your poison which one of the blockbuster economic candidates does wharton stand behind? >> i think all of them are extreme and none of them will be implemented. it will be a divided government. >> mr. gridlock. >> it's going to be a gridlock. that's exactly what the market wants. >> great. >> you know, harris may be ahead now. if i had to come down on it, she would win.

i think the senate is going to be republican. the house is close. you can't get either with trump or harris. you know, it's going to be blocked, thank goodness. >> thank goodness. that's funny that thank goodness neither of the plans has a chance of seeing light of day. that's the cynical. >> except for the renegotiation at the end of next year. that is the big time renego renegotiation. there must be a renegotiation of a lot of taxes by the end of next year. with the divided government, a lot going on. that's going to be important. >> should we get rid of them or keep them? >> well, you know, i'm pretty shocked. this s.a.l.t. deduction, the democrats were screaming when trump put it in and then biden kept it when he controlled both houses of congress and now the

republicans who signed it are saying they don't want it. you go figure it out, joe. >> being in new jersey, if we're going to blow money on everything under the sun, i want my s.a.l.t. cap removed. i want some. >> i would like it, too. i live in pennsylvania. >> give i live in pennsylvania. >> give me mine. >> oh, my lord. professor siegel, thank you. good to see you. tnk y>>haou, becky, joe. >> okay, thanks. coming up, news on apple. the eu telling the company what it needs to do to comply with new regulations. details are next.

it's odd how in an instant things can transform. slipping out of balance into freefall. (the stock market is now down 23%). this is happening people. where there are so few certainties... (laughing) look around you. you deserve to know. as we navigate a future unknown. i'm glad i found stability amidst it all. gold. standing the test of time.

last hour. stocks up, though, eu antitrust regulators, eu antitrust regulators telling apple what it must do to comply with landmark rules that require it to open its closed ecosystem to rivals. it must ensure that those rivals can function with its ios operating system and respond to interoperability requests from developers and third parties. and continuing efforts by the eu to try to level the playing field. if you can't beat the americans in innovation, let's regulate them into lower -- it is like income equality, let's bring the top down to where we are instead of us trying to get up to where they are. >> the fines are so massive too. >> can't beat them, regulate them. tiefatn ag up, the an-damioleue joining a discrimination lawsuit against

intel adl national director jonathan greenblatt will join us. "squawk box" coming right back. ♪ ♪ ♪ ♪

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the anti-defamation league is joining a lawsuit against intel in employee discrimination complaint allegations that the company did nothing in response to public antisemitism from an employee. joining us now with more, jonathan greenblatt, ceo and national director of the adl. most people probably need to be, i guess, filled in on exactly what happened at intel. >> yeah, well, look, let's just, you know, set the stage, folks, right? we're dealing with an increasingly intensifying environment for antisemitism. we know that things have

exploded since 10/7. i can tell you stories about, like, last weekend at the university of michigan, ann arbor, a jewish student was jumped and beaten and brutalized by a group of kids after they identified him as jewish. it is being investigated as a hate crime. we had a public regions meeting in seattle, chaired by the governor where anti-israel protesters shouted down the jewish commentators to the point where they had to stop the meeting altogether. we have seen jewish journalists targeted and menaced at their homes. and we have seen, again, bigotry in board rooms and in businesses. so this is the first time in adl's 100 plus year history where we're taking a bold step like this, and as you know, intel is almost -- it is like number 53 on the fortune 500, a $90 billion company, but we're suing them because of how of how a jewish israeli employee was

not just discriminated against, he was targeted, victimized. after 10/7, this man who moved from tel aviv to new york, his company was acquired by intel, his manager, after 10/7, started -- sorry, a manager in the company started liking memes and social media posts displaying, you know, israeli soldiers being bombed, being burned, like, images of israeli soldiers where palestinians had the feet on the neck, ugly, hideous, grotesque stuff. and then actually that employee found himself reporting to that new vice president, who then in a series of moves over times began harassing him, cut his bonus, killed it, reassigned him, and, again, repeatedly used the kind of inflammatory language and practices that wouldn't be acceptable at any employer with anyone. but for some reason, it is open season on jews. >> he must report to someone,

the person who was perpetrated. what did he do? >> his requests for reassignment were ignored, calling out what was happening again was denied. >> but he told people above -- >> he told people above. >> above the person, that's right. that's right. >> two months later -- >> we're living in this wonderland now where it seems to be open season on jews. somehow, some way, people think it is just political speech. if you target and harass people, because of their jewish identity or faith, and that's wrong. even in a corporate environment like intel. >> this -- if the facts of this case are as laid out, they're pretty egregious. we heaom employers. if you talk to ceos, maybe not on open mikcs. they'll say it is problematic. they have people who are jewish, israeli, palestinian, egyptian, all working together and that things can get pretty heated and it is difficult to kind of figure out and sort out how you

deal with your entire employee base. what would you tell them? >> they have my sympathies. i have hundreds and hundreds of people who work for me at adl. >> probably not any antisemites. >> not so much like that, but i have people of different political views, different ethnic views, if you can't show up and just do your job and create shareholder value, then maybe you don't belong. i mean, look, i think we have got to recognize that this is an intense environment, but we need to keep our people focused. >> what does that mean? can that mean no one can say they are standing in support of israelis too? you can't bring it into the workplace at all, if you have diametrically opposed views? >> there is a big debate, i think we talked about this, the merit of institutional neutrality at, like, universities. i get that, but, becky, i prefer moral clarity. moral clarity. and i don't think you should allow people to be harassed because of their national origin. in this case, the guy was israeli. i don't think you should be able

to reassign someone who had great reviews to a lower paying job. i don't think you should zero out -- >> you're also saying you can bring the politics into the workplace. >> people certainly have their views. but they don't belong sort of in the cubicle or in the meeting room, where you're focused on satisfying customers. >> school restarted. >> yeah. >> who -- why aren't we -- is the mainstream media get bored and it is still happening on college campuses or it's they actually did a good job of -- >> i'm so glad you asked. schools, we're a couple of weeks in, and it is literally like nothing has changed. so it is still bad. >> it is still bad. still terrible. >> they bottogot bored. >> i think it is true that some schools like nyu had a change in policy. columbia is talking about doing something. but talking and doing is

different. and enforcement is what matters i'm not seeing this in much of the media. >> do you not have the organized camps -- the organized camps were -- >> they haven't been started back up yet. >> you're saying this has moved to the student population actually. >> yeah. i mean, we're seeing -- >> before we were saying it was a lot of -- >> again, we had the assault at michigan, university of michigan last weekend. we have seen a lot of harassment. we have seen vandalism, like jewish paternities. >> are all the students that probably should have been expelled, are they all back at school like nothing happened? >> at cornell, that professor who -- >> he's back? >> not only is he back, he's back with all of his privileges. can you imagine -- >> i'm sorry -- >> the professor at cornell who saturday 10/7 was cheering on hamas, exalting it as a glorious day, he was previous suspended and now he's back. can you imagine any ceo at any fortune 500 with an employee like that so derelict of duty,

not focused on what they're supposed to do saying no problem, you're back? it is bizarro how things seem to work. >> ten years is one of the worst attributes of exacerbating all this. they can basically do whatever they want. >> i appreciate the utility of allowing a scholar to be able to do research, and yet you're right, the ten-year limit needs to be -- the tenure system needs to be re-examined. >> it is the only position in the world that is no longer, like, a meritocracy or something that you have to earn. >> meritocracy, think about what we talked about intel. i remember reading high output management, andy groves landmark book, he's a holocaust survivor. >> intel. >> what did i say? >> you did, but -- now we're back to intel. >> we're back to intel. >> full circle. >> in "high output management," he writes about fairness,

meritocracy, talent the number one determinant of success at a company and now we're talking about intel's new management screwing it up. this is trashing andy groves' legacy. that's why adl filed this case. >> jonathan, thank you. >> thaunk you, guys. it is just after 7:00 a.m. on the east coast. you are watching "squawk box" right here on cnbc. i'm becky quick with joe kernen. andrew is on assignment this morning. the markets are in rally mode. check it out. futures this morning, dow is up 450 points above fair value. s&p futures up by 87 points. the nasdaq up by 390. major wins across the board. but in terms of percentages, it is actually the russell futures that are the big winner right now. russell 2000, up by 3% this morning. in the meantime, the bank of england holding rates steady. that move was expected. joe? >> fed making its move to recalibrate monetary policy with

a half point cut in interest rates. our senior economics reporter steve liesman joins us now with more. we actually -- i thought -- i thought it was a.i. or that we put it on a loop how many times jay powell said recalibrate yesterday. but it was real. we just happened to put it together. if we showed probably 9 or 10 times that he said that, it was, like, weird, wasn't it? i shouldn't say weird. >> well, our official count is nine. >> nine. you did count. >> of course we did. what else would we do? that's what we do. >> right. >> but, hey, the fed choosing the more aggressive of two paths in front of it yesterday cut by 50, down to 4.75% to 5%, but insisting most is not a signal of economic weakness, but a recalibration of policy, a word the fed chair did use nine times. >> you'll see that it is a process of recalibrating our

policy stance, away from where we had it a year ago when inflation was high and unemployment low, to a place that is more appropriate, given where we are now and where we expect to be. and that process will take place over time. >> let's talk about that process over time. here's where the average fed official projects rates are going, 4.4% by year end or 100 basis points. 2025, 3.4%, another 100 next year, and then settling down that long run rate, which did rise by a tick to 2.9% in 2026 and beyond. powell had two objectives. first to ensure the rate cut wasn't seen as a signal of weakness and the fed statement and the chair's press conference, both took time to emphasize economic strength. in the statement, they said the economy is growing at a solid pace, inflation is closer to 2%, they had more confidence it is heading down to the target. the labor market, they said, is still solid, even though powell said recently the market data had suggested some weakening and was part of the reason for doing

50. objective two, keep the mark fret thinking ing 50 is the ne norm. the committee seems split on the pace of cuts for the remainder of the year. here is the breakdown of the dot plots. two fed officials see no more cuts this year. seven see only one more or a total of 50 for the year. so 9 of 19 forecast just one more 25-point basis cut or less. nine officials see two more cuts or another 50 basis points and one forecasts three. over at td securities, they said the bar for another single 50 basis point rate cut seems to be high as the most dovish fed officials appears to be willing to accommodate an additional marginal deterioration in the labor market. the question whether powell and the fed could control market enthusiasm for more cuts. the markets are already priced more aggressively than the average fed forecast, and futures markets, they built in another 50 in december. and i guess we could talk about

what that word recalibrate might mean. >> well, you'll be back and they said, i'm supposed to keep it short. i don't know what that means. >> we know. >> how many times have we talked about how quickly the markets get to the terminal rate? i can see the fed saying, hey, look, it is going to happen anyway, let's do it. but then on the flip side, we paid dearly to build up this dry powder for the next time that there is an actual situation where you need to cut rates. why blow it. why not leave it in the tank when you actually need it with everything going so well or at least it appears things are going well, which makes you think maybe they're not going as well as we think. >> well, joe, there is a reason why you would do that. you're recalibrating policy, right? >> i was born in the middle class home. i don't know if you knew that. i was born in -- did i mention that to you? i'm going to answer every

question with born in a middle class. i don't know if you knew that. but i was born -- that's a whole different issue, steve. you'll be back, we'll talk, and we'll get -- did you like the 50 basis point or not? you didn't like it? >> i could have gone either way. i thought 25 -- i thought 25 was the more likely outcome becasedn the data. i was surprised that some fed officials voted for the 50 because in prior talk i thought they were more in the 25 camp. but, you know. >> old and cranky. >> we have been talking about it this morning, all of us who remember previous regimes of rate cuts, you do 50 if you're a little panicked. to come out and say the economy looks great, job market looks great, we're cutting 50 is hard for us to get our heads around. >> it used to be 50 from 9, not 50 from 5, steve. >> i think they took him away. >> they did. they had to. >> because we don't listen.

when we come back, the state of small business according to bank of america and what yesterday's rate cut means for mom and pop shops across the country. and later, transportation secretary pete buttigieg joins us to preview today's economic speech that president biden will deliver at the economic club of washington. much more on that. we'll be right back. (♪♪) something amazing is happening here. productivity is growing exponentially. that's because cdw configuration specialists are deploying fleets of microsoft surface devices. built in security, simplified management and flexibility help streamline busy work, which means everyone can get more done. make amazing happen. microsoft and cdw. meet kandi technologies, where innovative, eco friendly design meets exceptional performance. our diverse portfolio

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after the fed decided to cut interest rates by 50 basis points, we want to take a look at the state of small businesses according to bank of america's small business survey. that survey found that payroll growth increased 2% year over year in august, but has basically remained flat over the last six months. joining us right now is liz

everett chrisburg, the head of bank of america institute. and, liz, looking through some of the numbers, what jumped out to me is that maybe if the fed is looking for reasons to cut 50 basis points, small businesses are the places they should be looking, because business optimism has really lagged there versus what you see with big companies. >> absolutely. and good morning, and great to be here. i think that you're right, we have seen optimism diverge between smaller and larger businesses, but i think the other thing that the fed is looking at and we heard this yesterday is looking at the labor market. and what we're seeing in the small business data from our 11 million plus small business clients is that payroll payments, so, what they're contributing to the labor market, was up 2% in august, but that was actually down from july when it was up 3.3%. but overall, over a longer period of time, that payroll payment growth has been relatively stable throughout all of 2024, it went from a low of

about .9 to about 3.3%. >> maybe there is not some weakness there that would indicate it. >> the way i would characterize it, we're seeing signs of softness, but not accelerating weakness. stabilization, normalization is how i would look at it. >> so do you look at this and think this is really weird to have the chairman jay powell explaining the economy is great, the job market looks really good, and oh, by the way, we're cutting 50 basis points. how do you square up those -- >> i think, you know, what was the other thing he said, the economy is basically fine. >> right. >> i think that's what our data is showing is that it is basically fine, but it is softer. and it is normalized. >> does that warrant a 50 basis point cut? >> well, they obviously thought that it did. but when we look at other areas of what our business data -- small business data is showing, look at job openings, right, jolts, everybody looks at jolts, we developed an analysis that looks at small business payments to hiring companies, okay. and that essentially aligns with

what we're seeing when the jolts survey, but it gives us an indicator -- an indication about a month beforehand and what that is showing is through the year, through this year, it has been declining, but it is really normalizing to 2019 job opening levels. so -- >> doesn't sound bad. >> doesn't sound bad. we're still at the rate in august we were, 17% before we where we were in 2019, so basically fine. >> what do you see with the consumer? you had some numbers out last week. your latest survey on how consumers are feeling about things and how they're spending. >> yeah, so consumer spending, again, continues very similarly in that it continues to be bankly fine. spending growth did move up year over year. i think what is important to understand is what is driving that and it is services. almost all the growth was services. and bringing that back to small business, when we look at the payroll payments and which industries are seeing payroll

payments growth, surprise, surprise, it is the services. it is leisure, it is lodging, it is educational and healthcare services. >> we were talking earlier this morning about how you could have a port strike at this point too. and how imports are up 21% in the month of august or were up 21% in the month of august as retailers and others try to get all the christmas goods in the holiday shopping goods in ahead of time. >> that could be a little deja vu from a couple of years ago, right? and i think what is interesting to think about and we have to, you know, think about how this is going to go through, but we have seen some relief from the inflation caused by supply chain issues. so, while we have seen some relief on that, the inflation has come down, it will be interesting to see how that -- >> that's a really interesting point. the fed is doing this because they think they're getting inflation under control. that would be a potential place where you could see some big problems rising up again. >> yeah. inflation in the supply chain. >> certainly paying attention to

that. >> if the supply chain issue -- if that's what caused it, why aren't we back -- we're still up 21%. we're -- the prices are rising 2%, 2.5% now. but the 21% is still there. if it was just supply chain, why hasn't it reversed? >> i don't think it is just supply chain. >> it hasn't -- it will never rev reverse. >> i think -- >> will never go back down 20% on pricing? >> i don't think it will and why won't it? one reason why it won't is because of the labor market, right? and we talked about there are consumer data and consumer spending, but when we look at the consumer income, looking at money coming into consumers' cont accounts, we're seeing wage growth there, highest for lower income households, but accelerating the most for the highest income households. so highest income households last year were flat to negative, and in august, they were up almost 2%. so, you are seeing continuing to

see labor growth, small business data, we're seeing it in the consumer data in terms of what the consumers are bringing to their account. the labor market is softening, but it is still positive, right? it is not the double digit gains that we had during the pandemic. but it is still growing. so, brings us back to basically fine. >> liz, thank you. >> thanks. >> up next, a look at this morning's premarket movers. then transportation secretary pete buttigieg is going to join us ahead of president biden's speech on the economy. as we head to break, here is a look at crypto this morning. let's open the spigots. print some more money. it is up almost over 4%. we'll be right back. >> announcer: time now for today's aflac trivia question. on this day in 14,99 what drama debuted on nbc, launching the career of actor george clooney? the answer when "squawk box" returns. ng i had aflac. (aflac duck) hmmm the cash i got from aflac helped pay for medical expenses, groceries, rent.

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welcome back. there is a market rally under way if you're just waking up. check it out. dow futures up by 450 points after the fed's decision to cut interest rates by 50 basis points. you can see s&p futures up by close to 90 points. and the nasdaq indicated up by almost 400 points as well. let's get over to frank holland with a look at this morning's premarket movers. what's driving things today? >> good morning, joe and becky. right now we're watching shares of apple ahead of the iphone 16 release tomorrow. shares are up over 1.5%. the fed cutting rates also likely a factor for the iphonemaker. shares up 1.5%. morgan stanley out with a very optimistic note on iphone sales and they're apparently watching cnbc. they cited t-mobile ceo mike siebert who talked to cramer and said apple sales are up year over year, probably due to subsidiesy s subsidies. apple shipments up over 1.5%. we're looking at darden

restaurants, those shares higher despite misses on the top and the bottom line. you can see shares up are almost 10%. so the parent company of olive garden and ruth chris steak house, they missed on sales as well. restaurant traffic slowed in july but trends have improved since then. they announced a new partnership with uber, olive garden the first restaurant in the group to pilot those deliveries are expected to start later this year with other brands expected to be included in 2025. shares of darden restaurants now up over 10.5% right now. we're looking ahead to fedex shares. they're moving higher in the premarket ahead of earnings after the bell. revenues after the bell, their forecast increased by 1%. the margin for express, that's the signature air delivery business, where fedex gets half of its revenue, the estimate just over 9.5% compared to the actual of 2.5% a year ago. meeting that number or exceeding it would show progress.

also comments on the plan to have express and ground trucks deliver the same packages. part of a reorganization of the overall company. shares of fedex are up. actually up over half a percent, now up almost 1.5%. >> thank you, see you a little later. coming up, the white house says president biden is going to use his speech at the economic club of washington to talk about what he's calling a new milestone for the economy. where inflation and rates are falling at the same time. that's not unusual. it is just -- if you're not getting a concurrent rise in unemployment. there have been plenty of times we go into a sharp slowdown where rates and inflation both fall but usually because the unemployment rate is, like, 6, 7, 8, 9% and that may be a new milestone. we're going to talk to transportation secretary pete buttigieg about it. and then later, palantir

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some news out from target this morning. the company hired jim lee as its chief financial officer. he most recently served as deputy cfo at pepsico and he succeeds michael fiddleki. you see that stock this morning up along with just about every other stock, up by 1.25%. up next, transportation secretary pete buttigieg is going to join us. we're coming right back.

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you got the s&p futures up by more than 90 points. and the nasdaq indicated up by more than 400 points. you can check out what's leading the dow higher this morning. intel at the top of the charts, up by 2%. close gains by amazon.com, home depot and caterpillar, up by about 1.8%. over at the nasdaq, it is a lot of the chip stocks leading the way earlier thisholdings, super marvel and doordash are leading the way now. joining us right now with a preview of comments and much more is transportation secretary pete buttigieg. thank you for being here today. >> thank you, good morning. thank you for having me on. >> strong morning for the markets. reaction to the fed cutting interest rates by 50 basis points, but chairman powell also saying at the same time that the economy is doing well, as is the job market. what can we expect to hear from president biden today?

>> well, i think the president is going to take the opportunity to offer a declaration of progress. not the same as a declaration of victory. work is never done when it comes to supporting the american economy. but i do think it is important to have that before and after picture. not just what our economy was going through during covid, but also economists really credible economistes saying there was basically a 100% chance of a recession coming and instead what we have is economic growth, low unemployment, and maybe most importantly for american families we made such enormous progress at getting inflation back down. every developed country in the world experienced a rise in prices, the u.s. was not immune to that. but what was different in the u.s. is how quickly it has been fought back down through a number of different measures, including, of course, investing in american supply chains. and that focus on everyday cost and prices for americans on

everything from big picture industrial strategy to things like fighting junk fees in the transportation sector where i work or across our economy, that's part of what you're going to continue to see a focus on for the rest of the president's term in office. >> yeah, that's one of the things we have been talking about this morning is this potential strike of the longshoreman's union taking a look at what would happen october 1st is the deadline. these are unions that represent half of the ocean imports to this country. and president biden has said he will not invoke a national law to prevent them from going on strike. if they do, we have already been talking this morning about what that could mean to inflation in the supply chain. what do you think can and should be done if there is no resolution between the two sides on this? >> yeah, it certainly is something we're monitoring very closely. my department has been engaged with shippers and ports up and down the east coast. you know, couple of years ago

there were things coming to a head on the west coast. it resulted in workers getting a historic contract, much deserved raise, and a number of other provisions that were also compatible with the company succeeding and with any labor negotiation, the outcome you're looking for is one that is workable for the business end and delivers the kinds of things that workers need and deserve. especially when you think about workers like dock workers. none of them got a day off because of covid. they were working through that period, they're one of the reasons why just a few months after everybody said christmas is canceled and our supply chains were a disaster is what they were saying in 2021, we wound up having record high retail sales in this country because those workers were there. so very important for that to result in a contract, as is the case with a number of important labor negotiations.

>> we can talk more about that, but let's stick with this negotiation at the point. you're right, the west coast negotiation that was reached was kind of looked at as what we thought was going to be the template for what would come next. by the way, those workers did work right through. there wasn't a strike that they shut things down while they were negotiating, they continued to work through that. that is what president biden has said he would not force their hand on this, this time around. that west coast port strike wound up in a 32% increase for the workers over the life of the contract. in this case, the east coast and gulf coast workers are seeking a 77% increase. does that sound like a reasonable situation to you? >> well, we heard different numbers put out there, but ultimately this is going to have to be worked out at the table. and that's been the case for a number of contracts we have seen in the sector, i spent a lot of time and energy earlier this year in the american airlines flight attendants negotiation, very intense negotiation.

the result was a historic contract, those flight attendants getting much deserved raises. i think also something that sets up a good future for american, which is the most unionized of the major u.s. airlines. again, we're going to engage with everybody, we're going to watch this closely. and very important to make sure there is a good outcome here. >> you mentioned other strikes that are potentially taking place and some that are. one that is right now is the boeing strikes. 33,000 machinists on strike there at this point. the company now saying that it may need to issue furloughs. what would the impact be or what will the impact be to, let's say, airline carriers and beyond in this nation, based on what is happening right now. >> there is already a large and immediate impact for, of course, all of the workers who are directly involved. and while airplane orders play out over longer time scales than some other manufacturing processes, of course, that's

something that the airlines are watching closely and so are we. the agreement is something that did not fly, overwhelming vote against it with members, but i do believe that both parties want to get to a resolution here. and hoping to see one that makes sense for the workers and it works for a company that really needs to find its way forward on so many fronts. >> yeah, cash on hand is a huge issue at boeing right now. it looks like. can you imagine america without boeing? >> look, it is critically important that we have strong aerospace manufacturing in the united states. boeing is an important -- very important part of that, which is why we have stressed the importance of them meeting the highest standards of quality and safety and, you know, the way you engage your workforce is part of that story. but, yeah, of course, aerospace manufacturing, very important, especially in the pacific northwest. and manufacturing more broadly. a major focus in this administration, something i really appreciate having grown up in the industrial midwest and

looking at the level of factory investment going on right now, i think it is breaking some records. it certainly is where i come from. st. joe county, indiana, where i grew up, seeing the biggest investments in facilities there since i think before the studebaker company stopped making cars in the 1960s. i was in lansing, meeting with building trades, they're racing to keep up with the demand. by the way, a lot of this related to evs. ev batteries and facilities being retooled to make evs, as well as things like data centers. there is an enormous manufacturing boom going on in this country. and every sector has a part to play, from transportation, automotive, aerospace, to sectors that doesn't exist when i was growing up in indiana, what is going on with the data centers and the a.i.-related facilities. >> i wouldn't have brought it up, but since you brought it, what about u.s. steel and nippon? this has been a very interesting

perspective where, you know, not only this administration but the -- former president trump said he would be opposed to it as well, allowing nippon to come in. but nippon offered to make massive investments in these steel plants, not only in indiana, but also outside of pittsburgh. and at this point, you talk to some of the locals, they will say, they're very concerned if the deal doesn't go through that maybe they get shuttered. u.s. steel has said it is going to move out of pittsburgh. and there is some big concerns among what would happen if you don't see those investments in the plants. what do you think about it? >> well, it is pretty rare to see two sides politically that don't agree on much agreeing on this. and -- >> except an election cycle when you're trying to -- except when you're in an election cycle and you're trying to sway voters. >> yeah. i think it is still pretty unusual -- no, i would say in the middle of this election cycle there are lots of massive disagreements on economic policy. >> there is some weird

agreements too where everybody wants to say -- >> obviously i can't comment on the election side, but -- >> okay. >> what i will say it is really important for u.s. economic security to make sure that we have an america forward approach on our industries. this is another example of an approach that president biden has taken, that is very pro strong worker. and the conventional wisdom was, if you're that pro labor, that pro worker, you're not going to see that much growth. and, of course, instead what we have is the biden/harris economy defying what was basically a universal consensus that by now we would be in a recession. inflation below 3%. unemployment around 4%. and a level of industrial production, manufacturing growth, building and construction trades growth, both public sector driven in terms of the infrastructure bill and private sector driven, all happening at the same time. a lot of those old assumptions have been broken, just as president biden's industrial

strategy married with climate strategy has broken that whole false choice we used to see between climate and jobs. if you think about it, i remember that the term of art used to be green jobs and green jobs evoke somebody -- i don't know, in some kind of esoteric or futuristic, you know, thing we're working on, i don't know, engineering and solar panels, there is a lot of that going on, but some of the green jobs today are carpenters and electrical workers and other building trades. back where i come from, working on good old-fashioned factory building, except what is going to be developed and manufactured in that factory is components for evs. >> mr. secretary, we heard the word recalibrate like ten times -- nine times from jay powell. i'm wondering, is it to say that our designs on electrification of the auto industry, have we recalibrated there, and i'll just give you one item and you

can -- maybe you can explain why. under the inflation reduction act, 7.5 billion for building the charging stations. the latest information, eight have been built with the 7.5 billion that had been allocated. you're supposed to get to 500,000 of these charging stations by 2030. what is really the problem with -- have you looked at that and figured out why? >> yeah, that's on track. so, we're at about 190,000 publicly available charging stations in the u.s. that's approximately double what the level was when president biden came in. the issue, though, is that there are some gaps in the market. ones that are just not going to be built by the private sector that is building the construction of those chargers to date. that's why the legislation provided for funding to do federally supported chargers that are intended to be online before 2030. now the bulk of that

construction will happen in '27, '28, quite a bit by 2026, i expect. a handful are already up and running. but what you're going to see is more the second decade. it is important to have the federally supported chargers because you have stretches of road or in the middle of the cities, pormt apartment buildin. even though about 80% of ev charging happens at home, the reality is that the new ev kind of landscape where we're working toward where the president's goal is about half of sales to be evs by the end of this decade requires us by the end of this decade to have a lot of charging apparatus that just isn't there as we're sitting here in 2024. >> secretary buttigieg, thank you very much for being with us today. we appreciate it. >> thank you. great to be with you. coming up, eight vc founding partner and palantir co-founder

joe lonsdale will join us to talk tech investing, the election and much more. we're coming right back.

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big tech executives from mike soft, google and meta testified before the senate intelligence committee about foreign attempts from russia and china to disrupt and influence the u.s. presidential election. joining us now is the palontir co-founder and founding partner, when efficient you're on, i can think of ten different ways to take this. i will say, just in terms of free speech, which you've been a big advocate for, and the slippery slope that maybe we find ourselves on. in the uk, can you go to jail for tweeting something that -- is that really -- >> this is very scary. i love that you're asking about this, because it's crazy our press isn't talking about it

more, the birth place of liberty in the west, you can go to jail for complaining about muslim culture or terrorists. it's crazy. >> hate crimes. >> who gets to decide what hate crimes are? the government. that's what tim walz and kamala harris said they want to decide here. that's against the first amendment. >> it's a movement -- i saw hillary clinton yesterday talking about it. in her -- i think she was claiming that russia is once again selling a lot of misinformation that's not factual. maybe it is, i don't know. she said they will never be held to account in russia, and we need to hold them to account here. for some reason i thought steele

dossiers. is she going to turn herself in? that was interference she funded. is she going to turn herself in? >> iran has clearly working against trump. they've broken into his campaign. they're sending information to "the new york times" and the harris campaign. there's different state actors that want different people to win. california this week, gavin newsom just signed into law that says these parody ai videos are illegal. it's funny way. >> i do have concerns when it gets to ai and what might be used to sway the electorate right before an election. i don't know which state actors are coming after it, but let's take this to the next level. what do you think about tiktok and the idea that they are using first amendment as a reason that you should have foreign ownership. judges asked some probing questions, including if that's the case, why should we be allowed to say a foreign entity

can't own a broadcast company here. >> i agree you don't want a foreign entity that has a platform with hundreds of millions of americans on it. there's no reason to give them that. >> it doesn't seem like a first amendment issue. >> for tiktok to be able to make certain things go viral, to say we need america to be dysfunction, there's no reason to give foreign actors that access. it's a different question than whether or not the government gets to decide what american citizens can say. >> that's a fair distinction. >> is there a -- is the target on the back of tech -- big tech gotten -- is it worse than it was a year or two ago? i can see how it could get even worse. we had senator elizabeth warren talking about -- it was margins in the grocery industry she was

saying we need price controls on. i didn't want to throw tech under the bus, but what is a decent margin -- what's nvidia's margins? is it 70%? is that okay? >> tech does have a lot higher margins than groceries. i think you need to do build these things. but listen, i get it. there's some basic monopolies that you have all the numbers. $3 billioner, $3 trillion companies here. those are where the biggest margins are in the world. these companies have a lot of power. it's okay to have that power. but that's the place to look, obviously. >> the eu is looking there. i'm just wondering what finally -- >> yeah, the problem is, you have to be careful. again, i like to teach people, i'm not a big tech guy. we start and build companies and big tech likes to crush new companies. but that said, if you make lots of crazy rules, you're going to

block the development of ai and small tech. there's all sorts of terrible ai rules that i think meta just wrote to the european union saying you guys are crushing everything here. maybe they're waking up. it's a better direction to regulate this less versus more. >> do you think at this point that the goose that lays all these golden eggs is at risk, silicon valley? i don't know whether it's from unrealized capital gains. it's like willie sutton, there's a lot of money there the government would like to get at. >> it's very easy to break the innovation of the economy. when i was at paypal, spitzer tried to take it out. if he had succeeded, he would not have tesla or linkedin, spacex, we would not have so

many companies that came out of that. that's what happened in the eu. in eu, the regulators were a little more obnoxious and powerful, and there's dozens of companies that would have existed that don't. so the government people, give them a little more power, you can smash these things. there's one side trying to do that. >> what happens to a company like apple and you have to operate in these markets or do you pull out? you can't not operate in these markets given the revenue they're bringing in, but what they are asking you to do is rip apart your system, open it up. and apple's defense is they don't think that's secure. >> no, again, it's not really apple i'm worried about, because they're worth $3 trillion. so if the eu hurts them a little bit, they'll be fine, but with all these rules, the next company competing against apple is smashed. i don't feel badly for these giant tech companies. but i feel badly for the new

ones that would have existed that don't. >> twitter, at this point, i don't see a lot of -- or x, whatever it is, i see both sides. crazy stuff on both sides. i think we need it. is everything else been cleaned up, and i saw something the other day ask the question, why should i vote for trump? they gave me ten reasons why i shouldn't. why should i vote for kamala harris? it was pages after pages of why i should. is ai is going to be safe from the same type of -- i mean, let's just call it what it was, social media used to be skewed. any searches, anything that you did was skewed to, i guess, the mind-set of all these young people out in silicon valley. >> it's the university culture. >> is that what it is? >> you google on facebook and amazon, they hired everyone from these universities, which has gone way to one side. >> they left the protest for hamas.

>> that's the culture. they took over wikipedia and made it one direction. so when you're trading all this data -- >> is it fixed? >> it's hard to fix it. >> why won't ai head down that same path? >> well, exactly. it does have a slight bias in that direction. you have people running the companies that want to be neutral. no, it's not perfect. none of these platforms are perfect. iran has -- clearly has these anti-semitic networks attacking jews all over the world. these nasty things put out, you can trace it back to iranian agents, the same way they're attacking israel and jews here. it's a real problem. >> let me ask you, when elon musk -- and you talked to him -- it was not a good investment for him or the bankers in twitter.

is he still happy that he did that, and does he feel like he took one for the team? >> of course. >> and he's not -- he's getting a lot of backlash. i've seen it on tesla, a bumper sticker that says, elon, shut up. >> if elon musk hasn't bought twitter, our civilization works because we have free speech, because we have property rights. >> he doesn't care about the $40 billion? >> listen, x is up 5% year over year. the brand is down, because the brands are run by people -- >> that's not a free speech argument. if the brands don't want to support you they don't have to. >> but there are people being sued who did illegal coordination to try to attack it, which probably was illegal. >> is it illegal to say i'm not going to put my ads there

anymore? >> that's not illegal, but to do something as a cartel trying to crush something, that's not appropriate. we'll see what they did in the courts. >> so he's -- he's not thin skinned and insensitive i don't think at all. >> he's fighting to save western civilization. a lot of us are trying to do so, as well. >> i'm scared when i try to do it. i don't think he's scared. i'm thin skinned. >> it's been an exciting week. it's been kind of fun. >> there are people who are saying was palontir involved in that? >> if it was, we wouldn't be able to tell you. >> thank you very much. it's just after 8:00 a.m. on the east coast. you're watching "squawkbox" right here on cnbc. among today's top stories, the

house failing to pass a short-term funding bill with the government scheduled to run out of money. house speaker mike johnson's plan called for extending funding for six months and a proposal of a requirement to show citizenship when voting. but opposition doomed that effort. focus on a possible path forward now shifts to the senate. in the meantime, the teamsters union announcing it will not formally endorse a candidate in this year's election. the union has a history of backing democrats for president. and shares of the parent company of former president trump's truth social platform hovering around the lowest levels they've seen since they debuted on the nasdaq in march. trump and other insiders were not allowed to sell any shares they received before the ipo expires today. trump said he has, in his words,

no intention of selling any of his stake right now. that stock is off by 11 cents to $15.51. bank of england holding interest rates steady, following the fed's rate cut yesterday. and initial cut from the boe, banks, monetary policy committing voting 8-1 not to cut to keep rates where they are right now. there was one dissenting member who voted for a quarter point. now back over to frank hol l -- holland. >> starting off shares of ali baba. they're higher along with most asian equities following the fed rate cut, but also announcing news it's releasing over 100 new open source ai models. back to the models, they're designed for a wide range of sectors from autos to scientific research.

back to the tool that allows users to input a prompt and expected to be similar to openai. shares are up over 4%. to retail, shares of five below are lower following a downgrade to underweight. analysts maintain a price target of $95, a few dollars lower than the stock is trading at. the field work in the current quarter is pointing to same-sale stores falling. and dart moving higher. the parent company of olive garden missed on same restaurant sales. executives say restaurant traffic slowed in july but is recovering. shares are up 7.25%, and a partnership with uber appears to be moving the stock. we also have cracker barrel reporting their earnings. shares up just over 1%. cracker barrel missed on the top

and the bottom line. they're saying restaurant sales, they improved just about half a percent, but the retail sales fell by more than 4%. again, shares moving to the negative, down 1%. again, misses on the top and bottom line. becky, back to you. >> frank, thank you. when we come back, much more on the federal reserve's first interest cut in four years. we'll get reaction from dn tarullo. and gary conh and jay clayton will join us. as we head to a break, let's get a look at two more stock movers. av avis budget and hertz, an equal rating on avis and underrating on hertz. you're watching "squawkbox" and this is cnbc.

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as ennation has declined and the labor market schooled, up theside risks have diminished and the down side risk to employment have increased. we now see the risk to achieving our inflation goals roughly in balance and we see the risks to both sides of our dual mandate. >> that was fed chair jay powell yesterday after the central bank cut interest rates for the first time in four years. for more on what that cut and what could come next, we want to bring in dan tarullo. he's now a professor with harvard law school, and dan, welcome. you said you were surprised that anybody was surprised that they went 50 basis points yesterday. why is that? >> well, ten days ago, becky, i think quote a few people would have been surprised that the betting man was on a 25 basis

point cut. but after you have stories that were pretty cleary well back grounded, published by two top print journalists saying that 50 was in play, i think that was just the signal from the fed that we were headed towards 50, and that they had moved 25 yesterday rather than 50, i think there would have beensome negative reaction among people who had come to believe it was going to be 50. i think what that tells us was that there was a robust debate, even after jackson hole, as to whether they were going to go with 25 or 50 basis points. finally, when the chair concluded that he had the votes and the support to do it, i think that's probably then when they did some of the back grounding in order to get the markets prepared for the larger cut. >> dan, that's a little -- it's just an interesting narrative on how things happened, because we talk sometimes about how are -- or question whether the markets are leading the fed around by the nose.

but you make it sound like the fed is leading the market around by the nose, and maybe particularly the chairman. if he wants a 50 basis point cut, the way to do that is signal it ahead of time, even if there are people that disagree with it. it's the first time in 19 years that there's been a dissent. >> i think he was, in all probability, talking a lot with all the members, the voting members in particular. but all the members of the fomc. i don't think it's leading the market by the nose. i think fed generally, and chair powell certainly, i think likes to be able to move forward with relatively few surprises. >> so there's a calm reactk shu? >> exactly. let's do the counterfactual. if they had raised 50 yesterday without those stories in the financial times, there would have been a lot stronger reaction. >> right.

i think that's probably true. his comments yesterday were very measured and aimed at trying to prevent a strong selloff reaction, people saying what do they know that we don't? he talked about the strong economy, he talked about the strong jobs market. but it was a little disjointing to watch that, if you've been watching these things so long. if the job market is so great and you think things are okay, why are we cutting 50 basis points? it's not the script laid out over the last several decades. if things are going okay, but you're feeling restrictive, you move slowly, 25 basis points at a time, why go 50? >> i think here, becky, a couple of things. first, we saw yesterday the fed pivoting pretty obviously a more futuristic approach to monetary policy. over the past couple of years, they've been very data dependant, but the data is the data that's already come in, and that's what they've been looking at and emphasizing.

now, as chair powell said yesterday, they're trying to look forward and ito avoid a slowing labor market turning into a deteriorating market. number two, a lot of people, myself included, rather thought that a first cut in july, in my case in june, would have been appropriate, and so i think in some respects, the 50 basis points was an acknowledgement of that, and a bit of catching up. obviously, chair powell wasn't going to say we're behind the curve, but i think it was just a way of trying to get themselves on this path to a pre-emptive strategy of putting a floor under the changes in the economy. and one further thing to note, in his opening statement yesterday, remember, chair powell said that with this move, they were reducing the degree of

policy constraint. but that was emphasizing that rates are still restrictive relative to what you would expect in a steady state. >> the chairman was also clear yesterday that they are looking at the second of their mandates closely, shifting from inflation and looking at the labor market. i guess my question would be, they're not at 2% yet, and aren't expecting by their own projections to get to the target 2% inflation until 2026. there's a lot that could happen between now and then. i would point to the potential strike at the ports, october 1st, as being something that could quickly put inflation back through the supply chain. >> yeah. first, becky, this gets back to the theme of being forward looking and projecting the direction inflation is going and having a concern about the direction that the labor market would be going with this -- with

a monetary policy. obviously, as the chair said yesterday, they're not precommitted to anything. they're starting a path, and they will, meeting by meeting, assess economic conditions to see whether those are going pretty much as they expected. you know, with inflation generally, you have to distinguish between things that are kind of one-time hits to inflation. sometimes, one-time hits that get reversed. or things that begin to embed themselves in the economy and produce more inflation. and while one never knows in advance, things like strikes tend to be one time in supply side sense, you know, whether they end up being one time in demand side sense depends on how the strike is concluded. but i don't think that the prospect of things that might happen on inflation, or for that matter on jobs, is -- undermines

the position that powell took yesterday. they've got a path, but obviously, they're not going to slavishly adhere to that path. >> dan, thank you very much. >> sure. coming up, the iphone 16 officially hits stores tomorrow. will it spark what's known as a super cycle for the tech giant? that's after the break. it's thursday, so we may hear both sides of that. later this hour, we have a can't-miss interview with former national economic council director gary cohn and former s.e.c. chairman jay clayton there. quite a duo when they're together. as a reminder, as we head to break, get the best of "squawkbox" in our daily podcast. follow us on your favorite podcast app and listen any time. we're coming right back. all acr. millions of americans whocr. have medicare and medicaid but may be missing benefits they could really use. extra benefits they

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welcome back to "squawkbox," everybody. the futures this morning sharply higher after the fed cut by more than some on wall street were expecting. most were expecting 50 basis points but not everybody. that's why you see this upward posting today. also, the comments that came from the chairman fed very comforting what he sees in the economy. so maybe all the benefit without the downside in terms of rate cuts. dow futures up by 484 points. the nasdaq up by 420. apple's iphone 16 will be available in stores tomorrow. oh, my god! be still, my beating heart. and apple stock -- john i think his heart is beating faster. it's close to an all-time high. but is there hope for an iphone 16 supercycle? which are you doing first? yes, there's hope or no, there's not?

what are you doing first? >> i don't remember. apple watch might tell you if your heart starts -- >> that's right. >> a super cycle isn't happening this time. as a definition, a super cycle is when apple makes an unusual amount of money by a new model. that happened four times. there was a three-year cadence but missed 2024. there were three main factors. one, new network in ai features. two bigger screens and better cameras like in 2018's iphone 10. and 2021's iphone 12 pro-max. and three untapped markets like the 2015's iphone 6, which had a huge growth run in china. so here, in the 2024 into 2025 cycle, there's hype about ai. but so far, no signs of it panning out. there's no major network speed

upgrade and new apple intelligence ai features aren't available yet. the iphone screens aren't significantly bigger, and chinese consumer spending has been on shaky ground with premium buyers shifting towards domestic stands. add to that stats that show wait times to receive the i phone 16 models, that raises concerns about demand. so ai hype might be enjoying a super cycle, but the latest iphones will not. >> let's get to the other side. is there another side? >> joe, there's always another side. >> it's thursday. >> on the other hand, there's still a good chance the iphone 16 will be a big winner when the fiscal year clock stops 53 weeks from now. let's go back to those historical ingredients. network ai features, bigger screens and better cameras.

iphone's ai approach seems easier to grasp than other phones. second, bigger screens and better cameras and a jump in battery life that also fuels super cycles. and it will be english only in 2024, and some chinese consumers have drifted away from apple, but that means apple can launch apple intelligence in china and india. so there's the potential for iphone to deliver stronger sales during traditionally weaker sales quarters overall. so apple bulls have been pointing to this for a couple of years say thing's a big upgrade cycle coming up. but if you believe openai is worth north of $100 billion, apple with its loyal base of wealthy customers will get a super cycle right about now. >> is there any way that that -- the wait time which is much

less, could it be they have gotten better at satisfying demand? >> yes. they had a supply challenge in manufacturing them last year. it could just be they got better at supply this year, we don't know. >> okay. so it sounds like the 18 is going to be much smarter than the 16. people could wait. >> ios, it depends on if you need one. if you want to think through -- >> i need artificial intelligence. >> it's already up on the screen, the qr code, yeah, for the neleer.wstt >> john, thank you. we'll be right back. we have data coming up on the other side of this. you have... the fearless investor. the type a cpa. the bootstrapper. the bootmaker. yeehaw [narrator] but many do have something in common. we all trust schwab with our wealth. [narrator] thanks to our award-winning service, low costs and transparent advice. every day, over a million multi-millionares trust schwab with more than two trillion dollars of their wealth.

welcome back to "squawkbox." rick santelli here live with the breaking news of the morning. post fed rate cut. the current balance is going to be out shortly, but initial jobless claims is hitting the wires, 219,000, much less than we were expecting. that follows a 1,000 upward revision of last month to 231,000. 219,000 would be the smallest month over month initial jobless claims since the third week of

may, when it was 216,000. on continuing claims, we remain above 1.8 million. however, it's less than expected. 1,829,000. so sequentially last month was 1,843,000 is lower. 1,829,000 is the least since the first week in june. okay, now we see philly business outlook expected unchanged. comes out at 1.7, 1.7. once again, every number going all the way back to december -- all this year's positive. december of last year was the last negative number. so even though this is a little bit on the light side, it's still a positive number. it comps back towards the end of last year when they were negative. finally, the last current account balance, this is the second quarter number. wow, these numbers are big. minus 266 billion.

following minus 241 billion. keep in mind, the biggest, most negative current account was in march when it was minus 291. we're not that far away. so we want to pay attention to these numbers, and on the trade deficit numbers to give us an idea of not only demand but about what the condition of some of our trading partners are. we see interest rates have moved up. we're hitting close to 3.75 on a ten-year, and do keep in mind that the yield curve now should it close will be the steepest in about 27 months. we're trading around 14 basis points, which mean asten-year is 14 basis points higher than a two-year. it's not only that part of the curve that's steepening, you have threes to 30s, 2s to 5s and

even 3st to 5s. six-month average about 163,000 jobs. the unemployment rate at 4.2% doesn't sound that horrible to me. and i think that when you consider inflation hovering closer to 3 than 2, it's certainly explain why is the long end is kind of looking the way it is, short rates, of course, are tied to the fed. so two-year note yields right now are the only maturity whose yields right now are a bit lower. i'm only talking a tad lower than yesterday on their close. and finally, my last point, i know equities ardoing better today. you really need to monitor that. yesterday in the s&p and the dow jones industrial average, we came within a whisker of what is known as a key reversal. new all-time high prices, and almost closed below the previous day's low. i'm talking by little amounts that we did not do that. becky, back to you.

>> okay. something to watch for sure this morning. right now, dow up by 485. but as rick mentioned, we saw new levels, highs yesterday, and then a reversal during the course of the session. so we'll keep an eye on that, too. steve liesman joins us with more on what he's seeing in the data. steve, what jumps out at you? >> well, i really think it's interesting that rick has taken this new benchmark of 1.8 million for jobless claims, and he's right in that is sort of the high that we reached recently. but i went back and looked, we're so far from the bottom of other cycles here, where 1.9 was as low as it ever got, i'm talking about 1.9 million. i'm not saying rick is wrong, but it shows you how tight the job market does remain. also in the sense that -- i looked at 219,000 or 220,000 on the weekly jobless claims. the bottom of previous cycles,

i'll go back here, 2005, 300. the bottom of the cycle in 2000, 280. we are so far from approaching a point where there's weakness in the job market, i was surprised powell made as much as he did of the revisions, considering there's controversy about it. but the idea of why are we recalibrating, because there's more apparent possibility of weakness in the job market than there is apparent possibility of a further incross in inflation. and so we are recalibrating policy back to a place where risks are more balanced, i suppose, rather than weak. but it's hard again. every week these job numbers come through, rick uses the 1.8 benchmark which was the new high we hit, but 1.9 is the bottom of previous cycles, becky. >> yeah. maybe the rate cuts are working already.

>> yeah, a little soon for that. but it is true that we put a lot of stimulus into the system, right? >> right. >> it's pretty interesting, right? you look at what's happened with the two-year, the ten-year. also, the reinverse or disinversion of the curve. there's quite a bit of stimulus in there. and probably more to come in terms of obviously rate cuts to come, and what that means for the stock market, which, i guess, is rethinking this morning whether or not this is a good idea. it didn't seem to like it very much yesterday. it is interesting to see the ten-year and what the ten year's done as rick was pointing out. you would not expect a day when the fed would surprise the market with a 50 basis point rate cut to see the long end up. i believe diana olick is going to point out later today -- is that rick? >> yeah, rick. i snuck back in. i think the yield curve

steepening is -- traders have put a lot of eggs in that basket. steve, if you had no idea where fed fund futures or the overnight rate was yesterday, and you just described the initial continuing claims, we look at all the metrics, and you didn't know what the overnight rate was, would you think the fed needed to cut? >> 50. rick, i long-term -- >> would you think they needed to cut at all? >> i think it should come off of this idea of fighting inflation, that we don't need quite restrictive policy. i didn't think it needed to move in -- >> that's what i asked, though. i didn't ask about fighting inflation. >> yes, i would have cut. >> they're not demonstrating weakness. why? >> i'm hearing in your response, rick, that you don't think they should have.

i would have cut because inflation has come down a very long way. and we do not appear to need -- >> the stock market's making new highs. the labor market is not in a problematic situation. i'm just a bit baffled. i think when we left rates too long for too long, we did certain types of damage. there's a lot of things still floating around the economy -- >> i agree. >> i don't know. >> rick, just because -- rick, just because i think the fed ought to cut doesn't mean i think we ought to go back to cheap money. i think we're talking about a neutral rate that's quite bit higher and landing in a place that ends up being higher than we were previously. >> yeah, soft landing, 35, 36 trillion, almost a trillion in payments to service our credit cards. yeah, really soft landing. >> rick and steve. >> i don't know what one has to do with the other, but i'm with you. >> guys, thank you. >> it has everything to do with

it. >> bye. >> okay. we'll let that go. maybe the first cut is the deepest. ♪ the first cut is the deepest ♪ >> is that rod stewart? i saw him in a picture of a speedo the other day. >> thank you for that. coming up, we're going to talk about what's next for the fed after yesterday's half a percentage point rate cut, and the raft of economic proposals being promoted by donald trump and kamala harris on the campaign trail. gary cohn and former s.e.c. chairman jay clayton will injo us for that. stay tuned. you're watching "squawkbox" on cnbc.

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from preserving a cultural tradition to leaving a legacy, a raymond james financial advisor gets to know you, your passions, and the way you enrich your community. that's life well planned. joining us now on the fed's interest rate cut and what it means for the economy, just weeks before the presidential

election and the proposals from the candidates, gary cohn is here. he's vice chairman at ibm. ever going to get the top job? >> it's a good position. vice is good. >> and former s.e.c. chairman under president trump, jay clayton. he's now executive chairman at apollo and a cnbc chairman. do either one of you gentlemen agree with and understand the move yesterday, gary? >> let me start and say yes. i think we're in a unique position in terms of the fed. we have this 90-day or three-month window where the fed only meets once. so august was jackson hole. we meet in sent, and then there's no october meeting. so there's this large window where the fed sort of had to compress their activity and do one window.

>> nobody was -- >> maybe they should have done a quarter point a month ago. >> you can look at the jackson hole speech as a quarter point cut. clearly signaling there was a new direction. so in the most i would say benign way to look at this, look at the jackson hole speech as a quarter point cut and yesterday was catching up. that's a fair way to look at what's going on. >> but what rick just mentioned, new highs in the stock market. you're not really seeing a lot of signs of non-froth. i mean, nvidia's come down a little bit. but what's the unemployment rate? it's at historic lows. there are some people that think we worked really hard to get back up to having some dry powder for the next slowdown. why blow it now? why use some of your powder now when it doesn't seem like there's any reason. >> one thing that's going on -- well, two things. one thing is we have to

acknowledge that we've gotten through the prior four-year cycle. we've been sitting around talking, all of us, soft landing, hard landing, recession. i think that cycle where the fed was raising interest rates and raising interest rates dramatic from zero to 5.25, that's over. jackson hole signaled the end of that cycle. we're now into a new cycle where the fed's now on the other side of their dual mandate. i think we're now in also a cycle where we are renormalizing, we're going back to normal, what a normal economy, what a normal interest rate curve looks like in the united states. >> are you sure? it's not normal for me. >> it's normal in the last 100 years. if you look at what normal unemployment looks like, what a normal yield curve looks like, the zero interest rate part was the abnormal part. >> we're going back to normal dynamics, but to extend the soft

landing analogy, we're landing in a different airport. we are definitely landing this economy in a much different place. >> i think of what greenspan used to say. i have two mandates, but he ignored the job market and said if i care of inflation, the rest of it will take care of itself. i was watching it yesterday and thinking a lot different things. this is the kinder, gentler fed who looks at things and will make sure you don't have the downturns. >> maybe i didn't hear it right, but you -- powell did focus on the effect of migrant workers a little bit. do they see softening this the labor market? not at the skilled labor end. we have, you know, strikes, so labor must feel power at that end. but at the lower end of the labor market, there has to be some softening being seen. >> they do see something beneath the surface that concerns them.

>> that end of the labor market concerns me. >> i think it concerns powell. i think he actually talked about the migrant influx, and what it's doing to the lower end of the labor market, and we're seeing displaced workers in the lower end of the labor market and he's concerned about that part of labor. we all know that in the highly skilled labor market, it's still a very tight labor market. >> we all lived through 2008, obviously. if you were like a strict, i don't know, austrian economist and you worry about money not having a cost, and if you worry about not being -- where it's not being priced effectively, then you worry about zombie companies, you know, people putting money where it should. be going, and there's always a come upance. it seems like a weird time to be

open thing spicot. >> would you expect a cut and the bond market to go up? >> this is my view, we're going back to normalcy. normalcy is a positively sloped yield curve. so if we think the terminal rate and fed funds is 3%, and if you look at the dot plot, we're 3, 3.25 next year, where should ten years be if we're at 3%? we should be at least 100 to 150 basis points positively sloped. we're starting to price that in today. if you look at the steepness, we have added 17 points into the curve today. we're getting ten-year rates up to where they should be. i think 3% fed fund, we're going to be 4 to 4.5, and i think it's closer to 4.5% ten-year rates. that's norma alcy based on history. think of what the treasury needs to borrow today.

we're paying $3 billion a day to finance the deficit. >> you think they're lowering rates to service our debt? >> i don't, but there's a supply/demands function in the world. we have demand to borrow. so remember, the u.s. treasury issues debt. they are competing for dollars. someone has to buy the u.s. debt, someone has to buy every company that issues their debt to get someone to buy your debt, the attractive feature is the yield. >> when you said you don't agree with me and said why that is -- >> i said they're not lowering it because of that reason. they're lowering the front end yield because they're trying to manage the job market and trying to manage the less skilled labor market, but the yield curve has to steepen. so at the end of the day, they're not lowering longer dated interest rates. >> are we going to get mortgage relief out of this? maybe not. >> maybe not. other important point you

mentioned how much -- how tight a market it still is for the high skilled labor workers. that's why you see things like the strikes. is that something that could eventually lead to a problem with inflation again? >> i am -- i am worried about that. are going to have what i would say is, you know, labor cost induced inflation? >> when i introduced you two guys, i used the t-word twice, trump, so we've still got half our viewers left, maybe. if we're lucky. but earlier, i asked jeremy siegel to pick his poison, and he said it's going to be gridlock anyway, so i don't have to worry. do you really prefer one or the other? here's what i said. price controls, unrealized tax on capital gains, raising capital gains, raising corporate tax versus tariffs and -- both -- are you going to defend trump's policy?

>> you got to let him jump. >> is one better than the other? >> where do they agree? they agree on cheap energy. >> tax cuts for everybody. >> every area of agreement falls into one thing, which is middle class purchasing power. what have both campaigns focused on from different things in agreement? it's, how do we get purchasing power into our middle class? it's, you know, tax relief around tips. it's lower energy prices. and -- >> child care proposals. >> now, who's going to execute best on that? that's the real question. i mean, i have my view, but -- >> i can imagine. >> joe, look, i look at it like this. i don't think either of them has a fully baked plan at this point. i really don't. look, i know kamala has a plan because she told us she has a plan, and i know that the -- the trump plan keeps evolving, so i'm not going to -- >> on a daily basis. >> i understand where they're both coming from. what i do understand is they both have a track record to run off of, so if you look back at

the four years under trump, and you look at the economy, where we had, you know, 3% growth. we had 3% wage growth. we had 3% unemployment. that was a pretty good environment. we had a regulatory environment that was pretty accommodative. versus, you look at basically the four years that we have had under the harris/biden administration, we know what we have had. we had a lot of stimulus. they believed in stimulus. we know they believe in highly -- a highly regulatory environment. we know that they believe in a tougher environment. so, look, what i'm looking at, and i think what everyone should look at, because they're known factors, is we should look at what they actually did when they were in office. to me, that's much more telling. >> but if the pandemic hadn't hit, if supply chain issues hadn't arisen, if all you had to look at for biden/harris was gdp and unemployment, you'd think it was great. and maybe the inflation, which -- i mean, that rouined

everything. when it's up 21%, whatever it is, all those wage gains, there are no wage gains. >> how did they -- other than interest rate policy, how did they bring inflation down? by turning on the energy spigot, which was adopting the trump policies and rejecting the green new deal. i mean, you had secretary buttigieg -- >> jay powell didn't do anything? >> no, but you can ask all the fed watchers if this would have been possible with high energy prices, and they would tell you no. >> and a lot of probably the initial inflation, which was supply chain related, was due to higher energy prices. >> both sides of the aisle, pick any economist, and ask them, could this have been done without bringing energy prices down like we did? they will tell you, no. >> do you remember energy prices flow through everything we do. every product we buy was delivered to a store or was delivered to your house. it was delivered by something that consumes energy. every product we buy was manufactured by something that consumers energy. energy is the most important

single factor in the economy, so when the price of energy comes down, it flows through everything in the economy. so, going back to the policy of pumping oil, and we're up to 13 million barrels a day in this country, and fracking and producing natural gas, is the most important ingredient to driving down inflation and putting purchasing power back in consumers' pockets. >> what's going to happen to the thing that you were involved with? what's going to happen to the tax cuts? >> just to put it in perspective, the personal side of the taxes expires at the end of 2025. so, if it expires, we go back to the very ugly, very complicated, very high tax rates, personal tax rates, that we had in 2017. that could be the outcome, because you know, we may have a split congress, and they may not be able to agree on anything. i hope we don't end up there. i think the simplified plan that we have now, where we're not

dealing with personal exemptions, itemized deductions, standard deductions and then alternative minimum tax, we're in a lot simpler tax position. i think that's important, and i beg that they don't deal with the corporate tax. the corporate tax rate now leaves us in a very competitive position in a global place. we're 21%, right around the -- >> people don't think of the tax cuts the way you just described. they think of tax cuts for rich people. >> gary has a great way of describing the personal side of the taxes, which is, should the federal government really tax people substantially differently based on what state they live in? for federal funding, for funding national defense, for funding programs that are across the country, for funding health care, should we tax people totally differently in texas from new york? >> they say we got to go. i said that you guys are great together. not really the smothers brothers. i'm trying to think of who you

guys -- >> you're dating yourself. >> please stop thinking. >> i date myself constantly. >> half your crowd doesn't know who they are. >> who else is going to date me? i have to date myself. >> no one else. all right, when we come back, the taylor swift effect, lifting another company. we're going to tell you which one. the futures this morning, sharply higher after yesterday's rate cut announcement from the fed. you're going to see right now, dow futures up by 440-something points. i can't see the rest. s&p futures up by more than 80. nasdaq is up significantly too. stay tuned. you're watching "squawk box."

count united airlines as another big beneficiary of taylor swift's globe-hopping music tour. the airline sees at least a 25% bump in demand on its flights during the singer's weekend concerts with things reverting to normal afterwards. let's get a final check on the markets this morning. it has been quite a morning, watching these futures. dow futures, at this point, up by about 430 points. nasdaq is still indicated up more than 400 points. the s&p indicated up by about 85. of course, this all started

yesterday after the fed's decision and then chairman powell's comments talking about what he sees in the economy as a result and maybe where they're headed. ten-year is at 3.76%. the two-year is at 3.64%. as rick pointed out, very firmly out of inversion territory. >> yep. tomorrow's friday. >> it is friday. one more wake-up. that does it for us today. make sure you join us tomorrow. we'll see you later. "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber at post nine of the new york stock exchange. cramer's at one market in san francisco continuing his big week out west. futures come alive on what looks to be the biggest gap higher after a fed day in more than a decade. s&p should hit some all-time highs at the open, above 5,700. jobless claims, meantime, a four-month low. our road map begins, though, with that big fed rate cut, sending stocks soaring in the premarket,ne