>> good morning and welcome. >> to squawk box. >> right here on cnbc. we are live from the nasdaq market site in times square. >> i'm becky. >> quick along. >> with mike santoli and robert frank. gentlemen good morning. >> good morning. >> good to see you guys. >> joe and andrew. >> are. >> both off today. it's friday and we're going to take a look at what's been happening with the us equity futures at this hour. you see some modest declines. dow futures off by about 70 points. nasdaq down by 30. the s&p futures off by nine. but you were talking about quite a week that we have had the s&p 500 at a record high once again. and just about every day the dow has climbed higher. yesterday was up i think more than 400 points. yes at the end of the session. >> dow outperforming yesterday. >> so s&p hit a new high. the dow is within 1 or 1.5% maybe of

a new all time high. >> same with the. >> nasdaq and the nasdaq too. >> yeah i was lucky enough to be on the air with you monday to cover the inauguration. and today it's friday. and it feels like this week it feels like that was a month ago in terms of headlines. i mean, i'm going to have to start drinking coffee to get through four years of this because it was an incredible week. even within the day, there would be like five headlines that affect markets, that affect currencies, that affect the outlook for certain companies. >> so and you can't turn away during the market day. i mean, that's what is amazing to me. it's this is not where you set your agenda. you know what's coming. you kind of go for it. changes come up pretty fast. >> what's interesting to me is that that reveals what the market either wants or fears or kind of is able to shrug off. and, you know, the s&p is up 2% this week. it's up 4% year to date. we had 57 record highs last year. so we got our first one of this year. i think it's kept on trend even while it's seizing on the individual little policy hints and priorities that

are being revealed. i think that the binary is big across the board. tariffs bad every day we go without that being threatened or coming into into reality is okay. >> also yesterday trump basically said i don't want to put big heavy tariffs, at least. on china, you know, on china. for those aspects he'd rather not do it. basically admitting it's a negotiation to see where you can get better, fairer trade across places. >> and to your point, mike, what the market has shrugged off, i think when we're looking at trump 2.0, the market has matured in its reaction to what he says. and so that that comment yesterday about interest rates and the federal reserve, i think in the first time around probably would have gotten more attention in the bond market, certainly in the stock market. and yesterday it was a bit i was a little bit pleasantly surprised at how the markets just saw that and say, yeah, that's him. and we really probably won't see any action. >> so or that it was so thoroughly previewed that we sort of knew that that was going to be his stance. that's going

to be the pressure point. the two year note yield did immediately go down like a couple. >> of basis points. >> and stayed there for the. >> rest of the day. >> but that's just marginal little around the edges type of moves. >> yeah. it's been fascinating to watch. and i know we talked about it earlier this week. just the wall street journal story that came out that said he's inheriting the most expensive stock market that any president has ever inherited. if you're looking at some of the metrics on how you measure these things, you would think it would be harder for the market to rise under those conditions. but that has not been the case. and i wonder if that's the counterintuitive. >> yeah. >> not yet. i mean, i mean, george w bush pretty much inherited a similarly expensive market, but that one had already started to fall. and we are kind of at risk in the year 2000. but i think that what that tells you is most of why the market is where it is, is because of all the other stuff that's been going on. >> earnings. earnings. >> i and the fact that we came in, we seem to have come into 2025 at a 3% real gdp growth pace if you believe the atlanta

fed. so in other words, the market is saying, you know we don't really need a whole lot of help. we can probably use it. we will be glad to seize upon it. if you want to give us fewer regulations and a little bit less of a tax burden, but it's not as if there's something absolutely broken that needs to be fixed. >> mike and i were having a slightly market nerdy conversation earlier about the. >> you guys know. >> the equity risk. the equity risk. >> i didn't even i didn't even initiate it. >> the equity risk premium, which the ft has an interesting article. basically, it's the compensation you get as a stock investor versus the bond market is either low or even negative, and it hasn't been there in over 20 years. and so it's. >> basically the earnings yield of the s&p, which is the opposite of the price earnings. >> ratio, the ten year. >> the ten year treasury yield. >> and the implication is that you're not getting paid right now for the risk of owning stocks. therefore they're very expensive. and i asked mike, you know, there are a lot of debate about whether this is an interesting or indicative measure or whether we should just discount it. yeah. >> i think it's it mostly tells us what the interest rate

environment is. in other words, i don't know that it gives you that much more information. >> except that. >> we know that the s&p is at 2122 times earnings. right. we know the ten year is at 4.6 or thereabouts. and so if you there's no magic precise relationship where they should be so to speak. for much of the 80s and 90s, it was negative because rates were higher in the 2000, it looked like you were getting paid a lot to own stocks because rates were lower. and so i think there are a lot of critiques of this as a, as an idea that it tells you where the. >> market should be. it just goes back to buffett's saying, warren buffett's saying that the interest rates act as gravity on stock prices. yes. >> there's no doubt. and if it's a restraint on the economy, if it does give you a little bit more of compensation to own safer bonds versus take the risk in stocks, maybe that makes decisions at the margin. but the reason equity valuations are high is because people are excited about growth prospects. >> yeah they are. everyone says these stocks are really expensive and i want more of them. right. so that's not going

to change. >> so we mentioned that president trump said yesterday he would like to see the rest of the globe take up what the us federal reserve has done in lower interest rates. well, this morning the bank of japan said no thanks. they raised interest rates by a quarter point overnight, bringing its policy rate to the highest level they've seen since 2008. the bank is seeking to normalize the country's monetary policy amid signs of sustained inflation and rising wages. following that decision, the yen strengthened slightly against the dollar. but we all know the dollar has been so strong, it's risen so rapidly in the last quarter, and that's been an issue for some of these big multinational companies as they've been reporting earnings. they say it's a big headwind. they're trying to find ways operating to work their way around it. >> yeah i do think a lot of the earnings guidance and conference calls is probably going to have a lot of fx talk. how is this going to change our guidance? historically, the market doesn't usually get too alarmed about these things, but it's definitely. >> well, we had the ceo of procter and gamble, john mueller, was on because jamie dimon had been on and asked him

about the strong dollar. he said, oh yeah, it's not a big deal. john mueller said, yeah, easy for jamie to say, right? if you're not somebody who's having to deal. >> with this right. >> you have so much of your earnings that are overseas bringing those earnings back, they're less valuable on our balance sheet. >> jpmorgan sells dollars. it doesn't sell things priced in dollars. >> right. >> so it's a little bit different. yeah. we are watching crypto prices this morning as well. president trump signed a sweeping executive order yesterday aimed at reshaping america's digital asset strategy. it paves the way for the potential development of a crypto stockpile by the government. the order provides few details, though. on the campaign trail, trump said he would make it his policy to stockpile crypto that was lawfully seized by the federal government instead of auctioning it off. i think that's where this discussion is happening. in other words, the stockpile would just be a residual of, you know, asset seizures. >> we're just going to hold on to it instead of auctioning it, because we think it's going to be worth more down the road. >> yeah. which is, you know, about $20 billion that they've confiscated right now in terms

of market value. but what's ironic about this is that the one of the base cases for crypto was always, look, we're not part of the government. and now the excitement is we might be part of the government, they might have a stockpile. >> so it's absolutely been. >> a massive shift. >> yeah. i mean there were the purists for crypto were like etfs are bad. you should just own the actual thing. and i do think it is interesting though, because if it's not the government going out and building a reserve, it shouldn't matter for bitcoin price. right? >> right right. we also i was just checking the price of dollar trump the trump token. so that's now got a market cap of around $7 billion. so it's fallen by half since becky and i you and i were talking about it on monday. so that's a market cap. there's only 200 million of the 1 billion supply out there now. so the market cap of that 200 200 million is 7 billion. the melania coin is down to a half billion dollars. still not bad for a coin that was just launched on sunday. >> so there's no right or. >> wrong price. >> for any of. >> these things. the thing. all right. another political news. president trump speaking virtually to the world economic

forum in davos yesterday. among the highlights, trump told companies if you don't make your product in america, you're going to have to pay a tariff on rates, on rates, he said. demand that the federal reserve drop interest rates immediately, and he said they should be dropping all over the world. he later told reporters that he knows interest rates much better than, quote, the one who's primarily in charge of making that decision, apparently referring to fed chair jay powell. trump says if he disagrees with the central bank, he will, quote, let it be known, which he certainly did yesterday at davos. >> as always, i think. >> it reminds us at davos. trump yesterday also said he would ask saudi arabia and opec to lower the price of oil crude right now. what is crude doing around 75. so down a little bit but not much movement there. trump also accusing several banks of refusing service to conservatives. we're going to dig into those comments a lot later in the hour. >> all right. shares of novo

nordisk are jumping in the premarket trading. the danish drug maker announcing successful early stage trial results for a new experimental weight loss drug that's administered by subcutaneous injection that actually achieved a 22% weight loss after just 36 weeks. novo nordisk, of course, is the company behind the popular weight loss drug wegovy. and shares of the company up almost 10%. if you're looking at the week up by about 13%. and we're going. mike mentioned that the top half of the company said it expects a $4 billion loss for the. >> fourth quarter, though. >> joins us right now with more on this. and phil, i hadn't realized how long it had been since boeing had actually reported a profit. >> six years. >> this is. >> the sixth straight year. >> or 2024 will be the sixth straight year with an annual loss. in fact, it's. going to be a record annual loss. the previous record was 11.9 billion lost in 2020. we haven't got the final numbers yet. looks like

when you add in the 4 billion from the fourth quarter, with the 8 billion from the previous three quarters somewhere in that 12, maybe $12.2 billion range is what you're looking at for an annual loss. here are the numbers in a per share basis. they pre-announced yesterday a loss of 546 on a gaap basis. now analysts don't do all of not all the analysts do a gap estimate. roughly speaking, they were expecting a loss of a buck 36, about $4 worse than what wall street was expecting. quarterly revenue will be a billion shy of expectations, coming in at 15.2 billion, and q4 charges will total $2.8 billion. basically breaks down into two buckets here. there is the commercial airplane side a loss or a charge, i should say, of $1.1 billion. almost all of that is tied to the machinist strike. the implications of the machinist strike, especially on the development of the 777x, the seven, six, seven, and then on the defense and space side, there's a charge of $1.7 billion that is tied to five defense and

space programs. we're not going to list all of them and how much each of the charges were. it's the usual cast of characters here, the money losing programs at boeing. we're talking about tanker. we're talking about air force one, the crude cabin starliner program. all of those are in those defense and space program charges there. in terms of the commercial side, we knew how bad things were going to be in the fourth quarter because the machinists strike lasted seven weeks. it was all basically all of october, a little bit of november. and because of that, the q4 operating cash flow was -$3.5 billion. remember, after they came out of that strike, kelly ortberg and his team raised $24 billion, and they knew that they would need that because there was going to be a massive loss in the fourth quarter. they end the year with $26.3 billion in cash. they believe that they have enough liquidity right now. there's no discussion about another capital raise at this point. but this is the sixth straight year with a net loss at

boeing. hey, becky, it's trivia time. add up the net losses over the last six years. how much do you think the net loss has been? >> i honestly was trying to figure that out when you said 6,000,000,008 billion. and i don't know. i'm going to take a wild guess and just say 27 billion. >> 36 billion. >> 36 billion. >> net loss over the last. >> six years. it's funny because that's exactly what i was trying to figure out as you started adding up what we've seen in recent years, to have that for six years running, that is a lot of patience that you're asking for investors. and phil, i'll ask you one more. yesterday you had robert isom from american on and the street was surprised at the cost of the labor contract in the first quarter. is boeing going to have a similar situation because the numbers were so bad for the fourth quarter because the workers were on strike? they've settled the strike. has the street figured out exactly what the new wages are costing, and will we have a

similar situation with that the next time they report? >> i think that's the reason we haven't seen a bigger sell off. becky. i think the street has generally factored in what the loss would be in the fourth quarter for the most part. and there were no surprises yesterday. in other words, i talked to a couple of analysts. there was nobody who said, oh lord, what happened at boeing? the reaction was, okay. we knew it was going to be bad. we knew it would be, you know, a terrible fourth quarter. and these are the numbers. we'll get the official numbers next week when they release their results. but that's the reason, i think, that shares of boeing are not dramatically lower. i think we're at the point now where that most of this has been factored in. and now the question becomes, this is the real question. can they continue increasing production on the 737 max, which is really the cash deliverer for the company? and then by extension, you've got to figure out how to increase your production on the 787 dreamliner, because there have been some issues there, not to

the same degree that we saw with the 737 max space and defense. kelly really has his work cut out there because those fixed price contracts, i mean, that's that's killed this company over the last six years. >> yeah, yeah. we'll see what happens as they're getting into a doge government. it's looking to be more efficient. phil thank you. >> yeah. you bet. >> all right, coming up. get ready for the trading day ahead. the squawk planner is next. and later, we'll talk to the head of the consumer financial protection bureau, an appointee of president biden, who is, perhaps surprisingly, still employed under president trump. squawk box will be right back. >> gaggenau creates luxury. >> kitchen appliances for. >> those who. >> appreciate the extraordinary. >> we are. >> dedicated to the. >> idea of less for.

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add recipes with overripe bananas to my “dessert ideas” note. that's what you chose to ask it? i had other things planned. ask how to get up to one thousand dollars off the new samsung galaxy s25 ultra with xfinity mobile. that's. >> into the community. >> the chef is in. >> on today's squawk planner earnings are in focus. we're going to be hearing from american express and verizon before the opening bell. in fact, verizon ceo hans vestberg is going to be joining us in a first on cnbc interview. and we can't wait for that. >> all right. joining us now on the markets sylvia jablonski, defiance etfs ceo sylvia good morning. you know, we've just been sort of taking a little assessment of how the market has been so far year to date, year to date being about three weeks. and it's interesting because so much talk about is it going to be a tech driven market. is it going to be a broader market?

it's kind of all of the above so far. i mean, you have the s&p, the nasdaq and the russell 2000 all up between 3.8 and 4% so far in january. how do you think it makes sense to think about what the what the market's been doing so far. >> good morning mike. well i agree i think it's kind of all of the above. you know on one hand you have the broadening trade. so you have the x-mag that's that's doing well. if you look at the top performers of s&p 500 last year they were companies like vistra exon. exon they're companies like united airlines. you know broadcom kind of x the mach seven. but then tech is winning. but tech specifically in ai infrastructure and quantum computing. so you know you've seen a lot of growth in companies like oracle particularly around this stargate announcement recently. you've seen a lot of movement in nvidia, which has been there for a long time. and then also some of these like ionq, oslo fisher for ai infrastructure. so kind of all of it has been working this year. but i'd say it's a little bit more nuanced than

just mag seven, which it was the year before. >> right. and i do know that x-mag is you have an etf that's essentially the what the s&p outside of those seven stocks or thereabouts. i guess the other question is what's the backdrop we're operating in right now. because there was we've gone through a couple of cycles here even since the election of saying, okay, let's buy cyclicals and financial stocks because that's the textbook trump trade from 2016 that we had an unwind of that in december. and now it's maybe maybe wading back into it. so do you think the economy mostly explains where we are in the market here. and what do you think is going to be the key catalyst going ahead? we do have a fed meeting next week. we have already some rhetorical pressure on jay powell from the president. >> yeah. so i think a couple of things are going to come to fruition this year. and a lot of those are going to be the hot button topics for trump. right. like now we got this talk about the crypto policy. and so maybe you see the price of bitcoin the different different cryptocurrencies stocks like

microstrategy move around that. when we kind of see what comes out from this committee. number two again the ai quantum you know investments in stargate government funding in that space you get you get some girl out there. it's not the typical trump ticket that we're used to. i do like some bank stocks, though, and particularly sofi, which i guess is also kind of a tech stock. and they have this kind of land and expand policy. the younger generation is investing and, you know, getting mortgages, loans and then investing, buying crypto, their trillions of wealth will filter down there. so that could be something interesting in financials. but i just think, you know, to answer your question, i think broadly the market's in good shape. gdp is between 2 and 3%. inflation is the same. we hope it stays that way. right. and productivity is good. when you have gdp positive usually you know 90% of the time equities rally and are also positive in those years. and so deregulation tax cuts bring it back to america. investors are just liking what they're hearing right now. and that's making for broad based performance. >> there's no doubt about that. although i wonder what your read is on some of the more

speculative type activity. and it's not necessarily to say that it's bad or it's dangerous, but this idea that, like the leveraged etfs, a lot of volume from retail in options trading. and you mentioned the quantum theme i know you have an etf. i mean some of those stocks were basically penny stocks a few months ago. and now they're some of the most actively traded on, you know, on the board. and so is that something that we have to be aware of in terms of overheating potentially of that type of activity. >> yeah. >> so we always kind of see we always see this in markets. you know, there's always some part of the market that that ends up being quite risky and pans out. and then there are different parts of markets that investors might pour into. like some of the crypto coins you were talking about before that just don't really mean anything. and are bubbles, right. so i would say, you know, just in terms of portfolio allocation and investing, you have your broad based investments that are that are, you know, s&p 500, nasdaq, some of the stocks you like, these quantum ai themes. and a small slice of your portfolio can be to kind of gamble on some

of these riskier types of plays. but i think in terms of, you know, things like quantum and ai, right. like these are real themes and you havectl companies that have balance sheets, like google and microsoft that are involved in quantum computing, too. right? so it's not just the small cap stocks. so some of your small caps will be winners. some of them will be big m&a, m&a targets and others will flop. right. so you want that balance of all of them in the mix i think that's just it. you know balance and diversify. and sure take take some risks on a couple of stocks that you might like. but just you know know that it could also go the other way on you. >> yeah. obviously a little bit of a you know a play money side pocket or something in your account. all right. so thanks a lot. good to talk to you. >> thank you. you too. have a great day. >> all right. coming up shares of burberry or burberry are soaring in london. we're going to show you what the company reported. this is part of a huge luxury rally we've seen recently that's coming up straight ahead. plus, costco shareholders voting down an anti die proposal. down an anti die proposal. details next. squawk box will (grandpa) i'm the richest guy in the world.

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to sources, and doing my own reporting to share insights, information, and all of the details that you need to be able to make money. >> shares of burberry rising in london. the company reported a smaller than expected dip in sales in its most recent quarter. comp sales declined just 4% in the holiday quarter. that was versus expectations of a 12% decline. sales fell in most regions, including asia and europe, but they rose by 4% in the americas. that's because i bought a scarf there. that's what happened. company says it's now, quote, more likely than its second half results will offset the losses earlier from last year. now remember last year burberry was one of the biggest losers in luxury. they were down 30%. they've gone through this big shift where they basically revamped their entire line. they

lost a lot of the burberry checkers and things that were their icons, and they doubled or tripled prices, and there was a lot of resistance from consumers. so the company said, look, this will take a while to take hold. stay with us. so, so maybe it's starting to work, but the whole luxury sector. >> scarf have the checks. >> it doesn't. it's a plain gray scarf, but it does have my initials on it, so that was special. all right. meanwhile. >> many american companies, many american companies have been rolling back dni policies. but costco has been a notable holdout. the executive team fought off a proxy proposal yesterday from a conservative group that had asked costco to detail the risks of a dni efforts. more than 98% of shareholders sided with management in voting down that proposal, and it will be an interesting one to watch, especially as one of the trump executive orders very specifically ordered them to look for cases in corporations, in universities, in philanthropy, foundations that have more than $500 million for

places where they were being discriminatory. so we'll see how this kind of carries out, too. >> this shows you, though, what faith costco shareholder base has in that. >> and that's management. >> they're true believers. >> the same thing i said. >> in the in the company in its in its policies. and costco came by this kind of before the wave. let's put it that way. they've always paid their people more than kind of market rate. they actually capped their own profits. they essentially say we give the savings to customers. so there's a mission surrounding costco that i think people are just like, if management says this is good for business somehow, then we're back at it. >> that's a crazy, overwhelming vote, no doubt. when we come back, softbank's amazon funding the white house's announcement of the massive ai infrastructure investment this week. but his backing was the subject of controversy after elon musk tweeted that he didn't have the funding. we'll talk to the author of a new book about amazon later this hour. and even later than that, mario gabelli will be joining us on where he's

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that we get to use every day. >> good morning, everybody, and welcome back to squawk box. we're live at the nasdaq market site in times square. the futures this morning down just a little bit. dow futures off by 54 points s&p futures down by about ten. the nasdaq off by 40. president trump addressing the world economic forum in davos, switzerland, yesterday, his first appearance at a major global event since returning to the white house, and a question and answer session he responded to bank of america ceo brian moynihan with an accusation that the bank, along with jp morgan and others, was refusing to serve conservatives. >> by the way, speaking of you and you've done a fantastic job,

but i hope you start opening your bank to conservatives, because many conservatives complain that the banks are not allowing them to do business within the bank. and that included a place called bank of america, this conservative. they don't take conservative business. and i don't know if the regulators mandated that because of biden or what, but you and jamie and everybody, i hope you're going to open your banks to conservatives because what you're doing is wrong. >> mr. president, i will say that your friend johnny said hello, told me to tell you hello. and we look forward to. sponsoring the world cup when it comes. >> as you can see, moynihan didn't respond immediately. there were some questions raised about whether he heard the question, what the what the feedback was in the room. if you could actually hear any of the audio. bank of america and jp morgan chase have denied any refusal of service on political grounds. a bank of america official told cnbc. we serve more than 70 million clients. we welcome conservatives and have no political litmus test. a

statement from jp morgan said we have never and would never close an account for political reasons, full stop. we follow the law and guidance from our regulators and have long said that there are problems with the current framework we must address. we welcome the opportunity to work with the new administration and congress on ways to remove regulatory ambiguity, while maintaining our country's ability to address financial crime. now what i will say, speaking to people about the situation is that there are regulations that basically require the banks to be responsible for anybody, their banking. they are the police, the cops that are on board with this. if you have any questionable behavior, if you have anything that's maybe not completely legal, maybe that's crypto or something else, maybe that has put you in a position where you've had to say, no, we can't do this because otherwise we could be liable for big fees, fines. it could be very expensive for us. so maybe it's not conservatives, just anybody who has something that regulators are going to say is a

problem. >> yeah. and you know, the banks don't like to talk about specific clients. but they said like in one case it was somebody doing business in cuba. so that's a sanctioned country. in another case it was somebody doing debt collection in africa. debt collection is an industry as one of the ones you noted. banks can't bank, right. >> i also think that there was after jan six, 2021, there was the banks were supposed to look for potential suspicious activity that maybe, maybe somebody bought a gun or whatever it might have been and that could have been you could have used a filter for certain keywords or something that might have seemed like you were targeting people with certain politics. so, i mean, it became a real big talking point. well, in excess probably of any actual, you know, move to bank people because it doesn't seem like it was not much to it. >> just this morning, though, a senate aide told cnbc that senator tim scott plans to hold the committee hearing in the near future on this banking issue. but, you know, again, this is doing what you're told and kind of following the law or your regulators and what they're asking you to do. and this is

kind of similar to tiktok that there's been a situation where companies like an apple or a google have not put tiktok back. they've banned it basically from the app following the law. oracle has not. it's choosing to still host the company, but it's a pretty lucrative. bloomberg points out it's a lucrative hosting contract for them to the tune of about $1 billion a year. so it's you could be a company that's in a big, in big trouble. even if the current administration is not enforcing the law. if another one does down. >> the line and it's a lose lose for the banks, because let's say you have a hearing where you have, you know, ten people who are debanked the bank can't give specifics on any one client, so they can't say the reason we banked this person is because of concerns of money laundering. for instance, they can't say that, whereas the person that was debanked won't mention the money laundering piece, but they will say, i'm a conservative and that's why i was debanked. >> all right, when we come back, we are going to talk to the head of the consumer financial protection bureau, an appointee of president biden, who is surprisingly still employed

under president trump. he says his bags are packed, but he hasn't been asked to leave. he will join us next. >> in a world. >> of uncertainty and disruption, how will your investments stay resilient? we've been navigating change for 125 years, always looking forward, anticipating risks and trusted to manage over $1 trillion in assets worldwide. solving for the needs of investors today and tomorrow. that's the power of nuveen. >> in the all new infiniti qx80. >> the party. >> in the. >> back doesn't stop. >> hi, frank. >> hey, goldie. >> i'm looking. >> for those reports. >> from yesterday. >> they're already. >> on your desk, frank, for the business in the front experience more in the. >> all new three. >> row infiniti qx80. individually, each of us is

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and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity. e*trade from morgan stanley (vo) explore the world the viking way from the quiet comfort of elegant small shipstunity. with no children and no casinos. we actually have reinvented ocean voyages, designing all-inclusive experiences for the thinking person. viking - voted world's best by both travel + leisure and condé nast traveler. learn more at viking.com. cnbc. the trump presidency begins. >> what do you think we can expect from this second trump administration? >> i think. >> radical change. >> i think tiktok will be allowed to continue. >> in this country. but there will. >> be a.

>> shift in ownership. >> the main. >> thing is not just cutting. >> costs. >> but getting rid of all the regulations. >> i will. >> very simply put america first. >> the trump impact on business and the economy for the first 100 days and beyond. cnbc. >> welcome back everybody. biden appointed cfpb director rohit chopra is still at the helm of the consumer financial protection bureau. five days after president trump took office. the wall street journal editorial board has a piece this morning titled why is rohit chopra still employed at the cfpb? the cfp director himself joins us this morning to discuss both his and the agency's future. and, rohit, thank you for being here. a lot of questions raised, and i know that you've had your bags packed and kind of been waiting to see what happens with all this. have you been anticipating a phone call? >> well, you know, i. >> understand and i recognize. >> that the president. >> has the. >> right to.

>> really put into. place a new nominee, a new director of the cfpb. but until that time, i am discharging my oath to serve my term. and we are very, very busy. i know that it is also a tough decision to choose a new cfpb director. it is a job where you face constant attacks and opposition from a well-funded lobby and group of big banks. we saw the president call out some of those banks directly by name for some of their business practices, and the list goes really on and on about the obstacles we face in this job. but until that time, we're going to keep doing our work. we have a busy docket, really looking at some of the big issues on credit cards. just this past weekend, a small bank failed. there was a major system issue with capital

one, so the work continues. but of course i am ready to pass the baton whenever someone is identified and i'm working hard to set them up for success. >> rohit, i just want to go back to this. you just mentioned the president calling some of the big banks out on their behavior. he was calling them out for refusing to bank conservatives in his kind of accusation on that. the banks have said that that they're only following the rules that their regulators place on them. you think the banks are doing the wrong thing and that they're not banking conservatives. do you agree with that? >> well. >> well. >> here's what's interesting. when the cfpb put into place a policy view that banks should not be banking based on certain characteristics. you know, they sued us for that a just a few weeks ago. we put into place a proposed rule that would prevent

d banking people based on political speech or religious views. so i really think that we have to make sure that what these banks are saying is actually what they're doing. the president has also raised questions about exorbitant interest rates on credit cards. and of course, he mentioned brian and jamie, a bank of america, jp morgan chase. they have a lot of power in the credit card market and have been raising interest rates mightily, much more so than the fed has. so i really do think that whoever the president chooses as my successor, they are going to have really some issues with the banks they oversee. but, you know, that is part of the job. >> rohit, you just mentioned that, you know, you had taken the position that banks were unrightfully d banking a lot of these conservative groups. what

evidence? >> no, no, no, what. >> what. >> i'm saying what i'm saying is that they should not be using those types of criteria when it comes to closing people's accounts. the banks say they say. >> they don't. >> but i will tell you, every bank says they do not do that. you're you're. >> saying why would that. no, why why have they been so resistant then to some of the rules that make that absolutely clear? we know that there's lots of reasons why banks close accounts. i heard your discussion earlier when it was about money laundering and terrorism finance. there's a whole host of other issues, and our analysis of this is that many of them use complex algorithms to determine who gets continues or does not continue. i would certainly hope that they are not using any of those criteria at all, but it is important that the regulators make sure of that. and you are seeing our proposed rule that we announced a few weeks ago would

really make sure that that is crystal clear. and do. >> you think you see eye to eye with, with president trump, or is this almost a way that you two see? are you simpatico with him on this issue? >> well. >> i think it's totally inappropriate for people to lose their account access for something that is not related to any law or any meaningful indicia of risk. becky, i think i came on with you two years ago to talk about when paypal was unveiled, a policy that said they could find people or freeze their accounts based on certain types of speech that wasn't even related to their account activity. so look, a bank account is so critical for a consumer or a business to be able to operate. and if they are doing so in a law abiding way, they should not lose their account access. and it is true. we have been.

>> do you think that. i'm sorry we have to go. but i do have to ask you, do you think the cfpb is going to survive? the last time president trump was in office, he put mick mulvaney there and mick mulvaney, his job was basically to take the place apart. >> well, that's really for the president to decide. my view is that the work of the cfpb is extremely popular everywhere in the country, except for lobbyists in washington, and maybe some of the banks that they represent. we do need an agency to hold them accountable when they break the law. and that's exactly what we've been doing. and i think that's what people will expect. and based on the president's comments yesterday, it doesn't seem that the big banks will get a lapdog. i think they need a watchdog. >> rohit thank you. rohit chopra. great to see you becky. >> you too. >> all right. coming up texas instruments reported last night it is the first of the big chip makers to report numbers from

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now only $1 per tablet at wrexham.com. slash 30. >> texas instruments shares are falling. the company reported earnings of $1.30 per share. that beat estimates of $1.21. revenue also beat in the midpoint of the current quarter. guidance is slightly above consensus estimates, but earnings guidance came in a bit below estimates. beyond that, texas instruments, of course, sells the basic chips that go into products in nearly every sector of the economy. a lot of industrial and auto applications executives on the earnings call said they continue to see weakness in auto in europe, japan and the us. texas instruments is the first major chip company to report results for its december quarter. you see the shares down 4.5%.

obviously over the last couple of years lagged the broader semiconductor group, which has been driven by ai. >> yeah, absolutely. speaking of ai coming up, softbank's masa son attended the white house announcement of a massive ai infrastructure investment. this week, we're going to talk to the author of a new book about masa son next, about the man, the company, the controversy this week stirred up by elon musk on x squawk box. it's going to be right back. >> nothing stands still. not technology, not the market, and not franklin templeton. we've been a firm in motion for over 75 years, always innovating. today, we're a leader in public and private markets, digital assets and custom tax management, empowering advisors with solutions to build the with solutions to build the portfolios of the future. today. (vo) what does it mean to be rich? maybe rich is less about reaching a magic number... and more about discovering magic.

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perfectly timed details amazon's rags to riches story and dives into the tech billionaires quest for success. let's bring in that author lionel barber, author of gambling man the secret story of the world's greatest disruptor, masayoshi son. lionel is also former editor of the financial times and a terrific reporter editor writer. lionel, thank you so much for being here and what incredible timing. well done. >> well, i. >> think i need to thank softbank. >> don't i? i mean, i did actually send an email. you can't beat it. i mean. >> did you get. >> $1 billion. >> i did i got some. >> smileys from from mastercard. >> no i thought it would be best to go through an intermediary. >> got it. so i want to get to the musk piece as well. but what was it like to work with masa son in this process? interviewing him? was it was he easy to work with? accessible. was it tough to do this book? >> hard to. >> penetrate the. >> layers in japan? also, covid

was. >> a big problem. >> and i did go twice to japan and was told he was too busy. and i think actually he was cooking up what we've seen this week with the big ai projects. everybody had written him off. you know, he'd lost billions on options trading. softbank vision funds were underwater. >> sea of red ink. >> so i think. >> they thought. >> that i was going to sort of say he's a loser right. and some of his closest associates were saying you need to get this book done because he's going to go bankrupt. >> and i. >> never thought that. so overall, i'd say they were they were cooperative. >> yeah. >> so where do you stand on this whole debate? musk saying on x that he doesn't have the money, basically casting doubt on this whole project. what do you think about the financing for stargate, whether it's surreal and where is the money going to come from? >> well. >> jamie dimon described elon musk as einstein. so am i going to, on this show disagree with jamie dimon or even but. >> you know. >> elon is wrong on this.

>> i think they. >> do have the money. softbank has $40 billion of cash on its balance sheet. they've got stakes in t-mobile. he's got 90% of arm this really this is going to be the foundation of this new project. the advanced semiconductor designer. and they've. >> also going to get. >> lending from the. >> japanese banks. >> that are no. longer very important. point now no longer using real estate just as the collateral. >> so i think. >> the world has changed. and elon needs to catch. >> up on this. >> a bit. lionel. that's been part of the question, though. do you think they will sell maybe part of their arm holdings to finance some of this? do you think they borrow against it? there have been a lot of questions of shareholders of some of these other companies too, like t-mobile, trying to figure out if there's going to be a big sale of stock that they need to worry about. >> i think that masa really. >> would like. >> to keep his. >> 90% stake. >> in arm. i think it's much more likely to borrow against. and i don't want to speak about t-mobile. but you know, if you

think about what he did during the teens on alibaba, he had that big stake and he just did it in dribbles and also did very complicated financial arrangements where he could buy back the stock. so actually i've talked to people around him and they are confident, really confident that he can get to, you know, 80, 90 billion. >> but not 500 billion necessarily. >> know that's going to be over four years. remember. so i think it's one check that you're right. yeah. exactly. it's the big mo. you get sort of 80 billion. >> he's also. >> got partners by the way. i mean sam altman is raising money and he's got larry ellison who's good for what, 200 billion. >> yeah. yeah. and when we look back broadly at amazon's role in tech history, he's one of these sort of zelig of the tech world where we don't hear a lot about him in the us on a regular basis, but he shows up at key moments with key people. and what should we know about his life? what should we know about his character? >> i like zelig, i like forrest gump as well. i mean.

>> yeah. >> you start, you know, on the microchip, you go through the internet, mobile. he's been there. he's either wanted to buy the company or buy a piece of it. what we really should know about masa is that he is an outsider. he's korean. japanese. he grew up on the edges of a chanty town. his father was a loan shark and then was in pachinko gambling. but he was the king of pachinko in western japan, and so he's always been viewed as something of an outsider, viewed with suspicion in the japanese corporate establishment, partly because he's korean and also because he doesn't make anything. he doesn't make cars, he doesn't make steel. he's a bit of a gambler. >> and how was that? oh. >> i was going to say. and so what is the unifying talent or approach? is it just having a nose for the next big thing and trying to ride it? well, he's been consistent on this huge wave of technology that's transformed our societies. and he's also he stayed with it. he didn't, by the way. he didn't

get out of alibaba like goldman did in 2000. he stuck with it. i think also he's a brilliant negotiator and he's a brilliant at fomo. you know, he when he was bargaining with the crown prince in saudi arabia, mohammed bin salman, there was a great convergence of interests. mbs wanted to get into the eco tech ecosystem and masa needed well, 45 billion, right? not chump change. >> and it's incredible. given that the vision fund, vision one hasn't been an incredible performer of vision two, i guess, according to some reports, has lost money and yet he still seems to get capital from the middle east. >> yeah. >> because he's. >> been a you know, his bets have paid off. i mean alibaba yahoo and look aam here i am a brit on this show. he bought britain's best technology company arm holdings for 30 billion. and it's now worth 140 billion. and it's the foundation for what we're going to see. >> he also sold nvidia which if

he hadn't sold. >> would be. >> worth about. >> $100 billion. yeah he look that was 2019. and you know it was a 5% stake. so he knows that he lost out there. >> well lionel brilliantly timed book i got it i can't wait to read it. thank you so much for the book and for joining us this morning. >> great to be on the show. good to see. >> you, lionel. great to see you. all right. it is 7 a.m. on the east coast and you're watching squawk box right here on cnbc. i'm becky quick along with mike santoli and robert frank. earnings just in from financial services giant american express. that company matching the street's forecast with quarterly profit of $3.04 a share. revenue came in very slightly above consensus for 2025. american express expects quarterly earnings of $15 to $15.50 a share. the current consensus estimate is right in the middle of that range of $5.23. the company says it expects revenue to grow 8 to 10% for the full year. the street had been looking for revenue at

the low revenue growth. at the low side of that guidance, 8.1%. amex says it's also increasing its quarterly dividend to $0.82 a share from the prior $0.70. i spoke with christoph kayak, who is the cfo at american express, and he had some interesting things to really pull out from this very strong consumer spending that came in through the fourth quarter. he said it was across all geographies, across all components of what they were seeing, all types of different spending. so it kind of matches in with this 3% gdp or so growth that we're seeing coming into this. they said definitely watching this. and the strong dollar is something they're keeping an eye on. it was about a 1% headwind in the first quarter. they definitely part of the dynamic moving forward for this. but when you look at where they are in terms of this spend for the fourth quarter, for example, airlines spend was particularly strong. it was up 13%. and for the front of the cabin up 19%. and that was globally that was consumers, it was small businesses. it was

large and global and international businesses too. so that kind of fits in with what we've heard from united and american this week, too. people are spending on everything, but especially on travel. >> well, and their clientele is a front of the cabin clientele. and so that helps them relative to what we're seeing in this case, shaped economy, where a lot of the spending is being supported by the affluent and those at the top, whereas those at the bottom are really still struggling with inflation. and at the top it's really about experiences and luxury coming back as well. but experiences, and i've heard from the luxury and the experience side that the high end spending really popped in a big way in december and january. so i think the first quarter for luxury companies and amex is going to be very strong. >> the challenge is that stock's been so strong. it's been up 75% in the last 12 months. american express has and the valuation is about as high as it's been since the late 90s early 2000. so basically the market gets it. it loves this is the place to be. and this is the exact kind of

customer you want to be. >> which is. why its stock is doing what it's doing right now. >> yeah. just sort. >> of it's down slightly, but it is up 20% over the last three months. there were questions right around the last earnings call when they came out with things. christoph says these are good signs. we see the momentum and we and things are working well right now. they did also add 13 million new cards to the franchise in 2024. i think that's to a base of about 80 or 90 million cards, most of which are paid for 70% of what you're paid for, competing against companies that give away cards that you don't have to pay for. so that's interesting too. all right. let's switch gears right now verizon earnings just out as well. quarterly profit came in at $1.10 a share. that met the street's expectations. revenue of 35.7 billion was above the consensus figure of $35.3 billion. and joining us right now is hans vestberg. he is verizon's chairman and ceo. hans, thank you for. >> thank you for. >> having me. >> good morning. >> so tell us what you think the quarter looked like, how things

shaped up, what you're seeing in the economy. >> i was a really good quarter. we have had sequential improvements right now for six consecutive quarters. we added. >> 1 million. >> new postpaid subscribers on broadband and wireless, which is the best quarter in in a decade. so and then on top of that, we had a strong earnings, $11.9 billion in ebitda, growing bottom line 3% this year. and so it was a good and strong quarter cash flow almost for the year, almost 20 billion, $19.8 billion in cash flow. so we are doing well. our new products are working well in the market. we're gaining a lot of share in broadband. i mean, 409,000 broadband subscribers in the quarter. i mean, we are taking share from everyone. so we feel good about our, our our performance and also about the, the stability in our on our base of customers. i mean, we have high quality customers. we understand that. and then i think our product, mobility and broadband is just essential for everyone. i mean, you cannot

live, you cannot work, you cannot play if you don't have it. so we probably have moved up in the ranking. so our bad debt basically hasn't moved. it's very muted. so no i you know, not too sort of optimistic about my quarter but and the year. but i have to say the team has done an excellent execution hans. >> the stock this morning is up by about 1.2%. >> it's very early. >> the street is kind of liking what they're seeing here. but i will tell you there was a headline that crossed i think it was from reuters. just saying that verizon forecasts downbeat free cash flow and profit on heavy 5g spending. >> that's probably wrong. if you look at our guidance for cash flow, it's between 17.5 and $18.5 billion. that equal or better than last year or 24. yeah. so and we continue with the growth bottom bottom line, we're expecting to grow between 2 to 3.5%. midpoint of that is another billion more bottom line. so we added $1 billion

more in bottom line in 2024. and we're expecting, i would say in the guidance at least a billion as well. so very solid business as you know, but very large. i mean last year our our ebitda was 49 billion, almost a billion a week. enormous machine. we're running 147 million wireless connections now and 12.3 billion broadband. so very strong, very solid base that we're moving on from. >> you say you're taking market share. who are you taking it from? >> yeah, i think that our product we have two products in broadband. we have fios, which is of course the number one fiber product in the united states. we're taking everything we're building with pfizer. we're taking a high market share. then on fixed wireless access, we take mainly, i would say, from the cable companies, because our product is so differentiated, it's so much easier to install a self-install. we added almost 360,000 again this quarter. fixed wireless access customers. so i think we have two products that appeal our customers because some want files and some

want fiber and some want the fixed wireless access. so really good portfolio of products. but we have invested in network as well. i mean last year over 17,000,000,000in network again i mean the last six seven years, 200 billion in investment in the united states in networks and spectrum. so of course we invested as well. so that is paying off right now. we have a leveraged model. that's why we grow with over 3%. bottom line. >> with the investments that you put into the country, i wonder what you're anticipating, what you're expecting, what you're hoping to see from the new administration. a few days into this, the president is talking about how if you manufacturing manufacturing things here, you get a 15% tax rate. that's what he's kind of projecting and hoping to do. what do you think he should get if you are investing and putting money into the ground in the united states? >> i think, yeah. first of all, i don't think that many companies are investing as much as we are doing in the united states. and i. >> can think of about 3 or 4 companies that spend.

>> yeah, i think the tax reform they are talking about is very important. meaning you can the capital or the capital expenditures can be expended directly against taxes which went away. i think that's very important because that's going to unleash even more money to invest. >> so you're talking about bonus depreciation. >> exactly. the bonus depreciation. and that's no difference in the difference in the two different administrations. that was our number one thing with the previous administration. it's going to be with this one. >> did you get a sense that from what you're hearing in the capital that they're going to pass bonus depreciation as part. >> of this. no. there are so many people out there, but i get the sense that they think it's important because it's going to drive gdp and it's going to drive that. i invest more, it's going to drive that. we get more employment. so i think the right thing to do for the economy, for the us at the moment. and the other thing we're driving biden administration is spectrum. i mean, there's no necessity of spectrum tomorrow, but, you know, it's a long journey to get spectrum out to the market and sell it in order to be competitive for the united states, for enterprises, cloud players, you need more spectrum in the market. and that's

something. and that's also brings in money for the government. so i think those two has been my two important thing for the government, the previous government and this government. both of them are driving the gdp and the economy. >> i was wondering, given the network that you operate, if you're able to observe the usage intensity related to tiktok, whether the pause has mattered, is this something you can actually detect? >> we can see what type of different applications are used in the network. i mean, on the wireless network, even, i would say 80% of everything on the network is some sort of streaming service or upload. yeah, yeah. i mean, i would say that we built the wireless network for calling and sending texts. that's the smallest thing on my wireless network. it's like this taking this capacity. it's all the streamers, i mean, and of course, all this uploading from from this type of service like tiktok taking much, didn't see much of a downturn, maybe a little bit uptick when it came back after 12 hours or whatever it was. but but our network is so resilient, so it wouldn't be a problem.

>> well, that gets us to the net neutrality laws, which have been around and argued back and forth for all this time. you've built the network again. you didn't build it for all the streaming services like the netflix and beyond, but they're the ones who are using it and getting maybe a better deal than you might like on some of these things. where do you come down with this? where is the administration with this? >> i think that first of all, w, we serve our customers with connectivity. they are using this application and that's why they like our service. so i think we have a healthy relationship with many of these companies and partnership with every hyperscaler whatever you talk about, we have a really good relationship. they buy from us and we buy from them and we have partnerships. so i think we're this is the uniqueness with the united states, where we have the biggest companies in this country, where the biggest telcos in the world, we have the biggest hyperscalers. we can build the best cloud infrastructure in the world, digital infrastructure in the world. that's why we can create these competitive advantages. i mean, for me, the 21st century is infrastructure, is mobility, broadband and cloud. and we're number one on all of them. and

we just need to preserve that. that's going to drive the economy, that's going to drive all the enterprises. >> i want to thank you for joining us on this day with your earnings. we really appreciate it, and it's great to see you in person. >> thank you. thank you guys. >> hans vestberg. >> all right. coming up, how should bank of america and jp morgan respond after being accused by president trump of refusing to serve conservatives? we're bringing in a. crisis management expert next plus, gamco investors chairman and ceo mario gabelli joins us to talk dealmaking in 2020. five stocks on his radar and much more. squawk box will be right back. >> i'm susan. >> how's the. >> quarter coming along? kate. >> he thinks your name is kate and hates when people correct him. >> pretty great. >> define pretty great.

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beat on the. >> top and bottom line, but. >> it wasn't enough for investors. >> that stock is down almost. >> 4%. >> but check out on semi analog devices and nxp semi. >> the whole. >> ecosystem of. >> chips in general. >> may be. >> moving lower on that. >> also check out shares of novo nordisk. they're climbing just around. >> maybe 12% or so. >> right now, after the danish pharmaceutical giant. >> posted positive early trial results for a new experimental weight loss drug. >> it showed that patients. >> on the highest dosage lost 22% of their body weight after 36 weeks. that would make it more effective than novo's. current blockbuster obesity drugs ozempic and wegovy. so keep an eye on novo shares up 12%. >> and we'll finish with a check. >> on bitcoin. it's up above 105,000 mark. after president trump signed an executive order to promote the advancement of. crypto cryptocurrencies and then work towards potentially developing a national digital asset stockpile. bitcoin, of course, has been on a record run going up into trump's election, and then even after that, it's up about 50% or so since president trump got elected.

we're also seeing a bump, by the way, in crypto aligned stocks like microstrategy, coinbase, merrill holdings, riot and others. so keep an eye on bitcoin. overall, not all cryptocurrencies, but bitcoin specifically right now is in focus. becky i'll send things back over to you guys okay. >> don, thank you very much. up next, are banks refusing to do business with conservatives. president trump seems to think so. what he said at the world economic forum yesterday and where the accusations stem from. >> time now for today's aflac trivia question. when was the last time washington faced philadelphia in the nfl philadelphia in the nfl playoffs? the answer wins. ♪ (action music) ♪ woah! i can't do it! agh! cut! this gap! it's just too big. bring on the double! aflac! after my hospital stay, aflac helped close the gap by paying me cash for expenses health insurance didn't cover. nothing covers gaps better than the aflac duck. aflaaaaac!

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>> when you. >> found it. >> then of course i did. >> good boy. >> inside wealth an exclusive newsletter for a select audience inside family offices. how the wealthy become ultra wealthy robert frank's high net worth perspective. join the list at cnbc.com. slash inside wealth. and now the answer to today's aflac trivia question when was the last time washington faced philadelphia in the nfl playoffs? the answer 1990. it was the only time the two teams met in the playoffs, with washington winning the wild card round. >> bank of america ceo brian moynihan caught off guard at the world economic forum when president trump criticized the executive and the bank, saying it discriminates against conservatives. by the way.

speaking of you and you've done a fantastic job, but i hope you start opening your bank to conservatives, because many conservatives complain that the banks are not allowing them to do business within the bank, and that included a place called bank of america, this conservative. they don't take conservative business. and i don't know if the regulators mandated that because of biden or what, but you and jamie and everybody, i hope you're going to open your banks to conservatives because what you're doing is wrong. >> mr. president, i will say. >> that your friend johnny, who said hello, told me to tell you hello. and we look forward to sponsoring the world cup when it comes. >> both bank of america and jp morgan later denying those claims. joining us now, eric dezenhall. dezenhall resources chair and the author of wiseguys and the white house. eric, thanks so much for joining us. so first of all, you know, when you look back at trump's first term, he criticized in some way publicly, 21 companies, from

amazon to gm to merck. in most or all of those cases, there wasn't a real business impact on those companies. but this time around, at least on this comment, he's got a very strong voice and we're already seeing this comment go quite viral, especially among conservatives. do you think we saw the stock down basically not reacting much yesterday? do you think there will be any kind of business impact, or should investors be at all concerned about what this this whole debate right now? >> well. >> there's an old farmer saying that you don't wrestle with a pig because you get. dirty and the pig likes it. and i. >> don't think that. >> this is a situation where you want to engage. >> in a verbal. >> war with the. president of the united states, who's really, really good at trolling. i mean, the thing about this particular story is it's not as sexy as something like the bud light fiasco, and it will move in and out of the news very quickly. and the worst thing that you can do is engage to keep it in the

news. >> and i. >> think that the. >> companies have responded in a measured way. now, like a lot of things with donald trump, he's wrong about a lot of things, but he's not wrong about everything. and a corporation is not a monolith. and you do. have cohorts within corporations who do. prosecute their own agenda, even if that agenda is not necessarily from the top down. and i have seen situations where there is an ethic within a company that when progressives are assertive, it's passion. when conservatives are assertive, it's mean and things then flow from that. is it a big corporate policy? no, i don't think so. but is it a phenomenon that does exist? >> yes it does. >> yeah. and from your point of view, i won't pin you down on who the pig is in this analogy, but basically, it was a little surprising yesterday that brian moynihan didn't react or seem to react at all to the comment,

just went on to say, congratulations on the world cup, mr. president. what what could or should he have said or to your point is saying nothing. was that the best strategy? >> well, in terms in terms of the wrestling with pig analogy, it's a saying. and i think that what it what it refers to is if somebody has a bully. >> pulpit. >> you don't want to pick a fight with them. you don't want to pick a fight with the president. >> of the united. >> states, no matter who that president is. i think less is more. i mean, i think that in this particular forum, it did not pay for moynihan to go back at the president. but subsequently, i think you did hear comments that essentially said we don't share that view. i mean, this is not a situation. it's kind of the opposite of pr, where your your aim is to be interesting. your goal in a situation like this is not to be interesting, is not to ratchet this up. >> and i think that's. >> what moynihan did, and i think that this will probably die down pending a revelation

that there is a string of things like this. >> eric. i mean, obviously, if your bank of america, you have to be aware of what your regulators might think about this and what might be the next move, but also what your customers, whether this is going to take any flight within the public. and all of a sudden you have to be be kind of trying to get your message through on that front. it's hard to know. you know, he the president also mentioned jp morgan. so he wasn't saying this is unique to bank of america, essentially saying it might be systemic among the large banks. to the extent there's anything really going on here at all. so, you know, how much do you think this is going to be a customer relations issue as well? >> well, you know, it's a good point because not all communications has to come from the ceo to the whole world. a lot of this in banking happens at a local and regional level. and i do think that in something like this, you do have to make employees and bank managers aware that there is concern

about it, and you have to arm them with examples to show that something like this isn't true. so i wouldn't be looking for a national response in the form of a ceo speaking or an ad campaign. i think that there are certain things that you work out on a quieter, more individual, more regional level. and i think that's the smarter move here because it's not incendiary. >> i will say, though, eric, we've already reached out and heard back from chairman scott, the chairman of the senate banking committee, senator scott, who says that the chairman is planning to hold a committee hearing in the near future to examine the banking issue. so the hope that's going to go away is, is it doesn't look like it's going to hold at this point. how do they behave when they're called before? >> i think that once it's called before congress, it's a different story. that doesn't mean that the ceo needs to inflame it on a consumer level. i mean, when you're called before congress, it does it does get nasty and you have to respond to it. but that doesn't

mean that there's a correlation between how much the company talks about it on, on a mass media level and whether the problem goes away. congressional hearings happen all the time, and the objective of a congressional hearing is to get out of the mugging alive, not to get out with all your money and everything else. >> all right. eric dezenhall, thanks so much for joining us this morning. we appreciate it. >> thank you. >> all right. coming up, the president hitting on a laundry list of topics from fed policy to tariffs and his speech to the leaders at the world economic forum. we'll discuss all of that after the break. and then gamco mario gabelli joins us to talk markets, the trump economy and where he's putting his money to work and his clients. >> at interactive brokers. independent rias work with the best research. >> and trading tools designed to help. >> them outperform. >> the markets. >> meet them. >> at interactive. brokers investors marketplace for advisors advisors.

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use. learn more. >> at jones. >> road, beauty.com. >> president trump spoke to the world economic forum in davos yesterday, where he warned that tariffs are coming. >> my message to every business

in the world is very simple. come make your product in america and we will give you among the lowest taxes of any nation on earth. we're bringing them down very substantially, even from the original trump tax cuts. but if you don't make your product in america, which is your prerogative, then very simply you will have to pay a tariff. >> joining us now to discuss the budget, taxes and more is committee for a responsible federal budget president, maya macguineas. maya, it's good to have you on. thanks very much for joining us this morning. the president, of course, also did start off by mentioning all of the federal debt that had built up over the past few years under his predecessor. but of course, that's kind of the glide path we're on in terms of deficits, a lot of talk of narrowing the fiscal deficit relative to the size of the economy. but what are you picking up in terms of policy priorities out of all this noise that might actually be pointed in that direction? >> i think we're actually

picking up two. >> different messages. >> so one. >> is the president. >> is. >> absolutely right, as is. >> his likely. >> secretary of treasury, to point out that the deficit situation. >> is out. >> of control. that just structurally, even. >> if nothing else happens, we're. >> on course to. >> borrow. >> another $22 trillion over the. >> coming decade, right? >> this is a problem that is widening. within four years, we'll hit the record of. >> debt. >> as a share of gdp. the last time we were that high. was just after world war two. every warning signal that there could be is warning us that the structural fiscal situation is unsustainable and starting to become an immediate threat. on the other hand. if you look at all the promises that have been made out of the president during the election, what the president has been talking about, the real risk here is that the policies that are adopted by congress will make the situation worse, not better. president trump made a number of promises on the campaign, both in terms of spending increases and tax cuts. and congress is really out of the habit of paying for things. so if i were betting, i would

say the next four years, the fiscal. well, i expect growth to be strong. i think the fiscal situation will continue to deteriorate in terms of the policies we're passing. that's what's going to have to change, right? >> so you have the promises, as you say, of not really touching the very largest budget items out there in any material way. at the same time, there's this department of government efficiency that is getting a lot of attention and maybe throwing out a lot of proposals, but it seems as if it's operating really around the edges of the federal budget. >> yeah. >> i mean, i think. >> there's an incredible promis. for what what doge could do. it is definitely shifting now so that it's going to focus more on technological innovation and improving the efficiencies and the agencies, how the bureaucracy functions. all of those things are desperately needed. but what is also desperately needed is actual budgetary savings. and as you just pointed out, we have basically every politician tripping over themselves to promise not to fix the two biggest problems in our budget

social security and medicare, both of which have trust funds that will be insolvent in roughly a decade. and if that happens, that puts the seniors who depend on those programs massively at risk. it leaves them incredibly vulnerable. but nobody talking about how to fix them. even if you don't look at that, there's still very significant budgetary savings to be had. and i wish that that were part of the doge agenda. initially, i thought it was going to be. so. i think the part they're focusing on tremendous for growth, but there's a lot of savings to be found in the budget. we should be focusing on that as well, using that to offset every piece of legislation. lawmakers right now should be in agreement that no matter what the legislation they're passing, should not increase the debt. and that goes for when they. yeah. >> but we haven't heard any real offsets yet in extending these tax cuts will be around a $4 trillion addition to the deficit. do you think when you look at how they're going to perhaps use the magic of washington accounting to this, is it possible they say, well,

because it's not a change in current tax policy, therefore it's not additional to the deficit and the debt. or could they do something like extend it only for 6 or 8 years and therefore decrease the nominal cost of it to the deficit? so what do you see on the accounting side that they could use instead of real offsets? >> i see a whole lot of potential budgetary gimmicks, most of which many of which you just mentioned. so there are there are a number of members of congress who are talking about real offsets, and those are actual policy choices, the kinds of trade offs we haven't dealt with in decades, basically because we don't budget anymore. but with every offset that comes to light changes you could make in medicaid and medicare executive orders that we could alter, you will have a strong constituency fighting against it. so i definitely worry that the real risk is that the cost of that tax bill will be bid up and that the offsets will be bid down. they should have a reconciliation number that is

zero, adding zero to the debt, preferably something that would reduce the deficit, but they are likely to do what you're talking about, which is switching from a current law baseline, which recognizes that the tax cuts are supposed to expire and it just pretends they're extended and that there's no cost. but even if you pretend that you still have to borrow the money, they will have heroic economic growth assumptions, which will be much higher than likely to be like that will actually materialize. and i think where you where you mentioned last may be while they're where they will land, which is i worry and i think it's possible those tax cuts will be temporary. the reason i worry about that is that's now no way to make tax policy permanent is really important for planning. >> what they it's what they did the last time. >> yes it is. that's why we're here. >> yeah. no. yeah. you sort of work backwards to, to make the math fit and then you, you have to make a decision down the road. all right. maya, you mentioned all the warning signs are sounding, but i'm not sure if, like 4.5% or so on the ten year yield is, is necessarily

showing that there's panic just yet about this debt level. but i guess we'll have to see if that develops. otherwise. we got to go. maya, thanks so much. >> thank you. >> all right. we've been talking a lot this week about the phenomenon of meme coins. one example was president trump and first lady melania trump launching their own digital tokens in the days leading up to monday's inauguration. yesterday on squawk box, andrew asked blackrock ceo larry fink this question. >> are you planning. >> on issuing. >> any either. >> meme coin. >> etfs or anything like that, now that the animal spirits seem to. >> be very much alive? >> i think. the sorkin. coin should. >> sorkin coin, we got to do a squawk coin. we've talked. becky and i, we've talked about a squawk coin. >> yeah. >> i don't know. >> well, from larry's ears to or from larry's lips to somebody else's ears in the hours following that exchange in davos, someone actually did launch a sorkin coin. it was not authorized by andrew. he didn't

know anything about this. andrew joins us on the squawk news line this morning. andrew, this must have come as a shock. such a shock that andrew can't respond. i think we're having trouble with the audio here. >> no, no, you got it. here we are. okay. >> greetings from switzerland. i was going to say, strangely flattering, but completely unauthorized. we don't know who created it. it's a very strange thing to watch this thing go. it's now apparently had something. some kind of volume of 167, $170 million with, you know, an. >> implied market. >> cap at one point, i think, of $45 million. it's now down to 2.7 million. so it's losing value. but i. >> just. >> i think i just want to. >> tell. >> all of. >> the viewers, this is not me. i have no affiliation with it. cnbc has no affiliation with it. blackrock has no. this is this is some folks out there who hopefully are. >> great viewers. >> of ours who.

>> enjoy what. >> we do, but. >> we have absolutely. >> nothing to do with this. so please understand all of the risks associated with that. and but it's fascinating, becky, just to see the phenomenon of it and to actually watch what's happened online, watching twitter, recognizing that what you see happening is people going onto telegram and creating these telegram channels where they're talking about it and pushing it up and down. and, you. >> know. >> obviously after a couple hours, i didn't even know it existed. someone sent me a tweet. and then i started to look into it. and you really can understand how, i mean, how these things happen. it's quite it's quite interesting. there are some people, by the way, i should i should mention who i think were buying into it, thinking that we would then pump it on tv. so i just want to be clear, we are not pumping this on tv right now at all. in fact, we're doing the opposite. we're making it clear that this is 100% unauthorized, and this is not anything that we're engaged in, but i imagine that there are some people who would just be happy to see us talking about this. so i that unto itself, in

a weird way, makes me a little anxious. yeah. andrew, it's great to hear you today. we miss you. when did you hear about this? yesterday. and what did you first? did you first think it was a joke or tell us about how you heard about it and where you were, what you were doing, what you thought? i think. >> i. >> got a text from a friend of mine who said, you're a coin. and i wrote back, what do you mean? and then. and then they sent a link to, you know, when it went out very early, there was a period of time it seemed to. just rocket like a it was crazy. and then, of course, you know, they have a picture of me on the thing. so i'm then looking at it to try to understand what's going on and who these people are and how they're doing it. and then then there were people on twitter sending me notes saying, you know, you know, you should talk about it on twitter. and, you know, here's do you do you have a solana account so that we can a wallet so that we can send you some of this? i, i do not own

any of this, by the way, at all. i have nothing to do with it again. but yeah, it was that's that's what's going on. >> and that's. >> what's so interesting. >> is that anybody. >> can create it. there were there were 82 transactions before we started talking about it. the transactions have been climbing. it's now 169 and climbing since we've been on tv. talking about this. we should probably be clear just to everybody out there, this is not you. this is not authorized. you're right in us talking about it. i think we're we're boosting it a bit. but this is not something you had anything to do with any knowledge of. you don't own. >> all correct. i have nothing to do with this. zero it. we're just watching it like everybody else. and it's interesting to understand the phenomenon of how these things get going. and also recognizing how many other fake coins seem to be emerging under other people's names. you know, ivanka trump just had the same situation happen earlier in the week. you know, obviously, her father, the president, actually issued a coin under his own name. others apparently issued

an ivanka coin that had nothing to do with her. and that also went, you know, wild for a period of time. and it's unclear from a legal perspective, you know, how there's nobody to call to say, take this down. it's not it's not like a some centralized company where you can say, this can't be happening. >> this is a very instructive illustration, though, about sometimes what's happening at the edges of this market. right. somebody owned 100% of this thing and sponsored it and put it out there. other people buy it and they're, you know, obviously whoever owned it initially has to be selling into it. and there's not even a pretense of there being anything behind it. right. fundamentally. >> there's no there's nothing fundamental about it. there's no obviously. so yeah. no, this is what it is. it's the wild west and it's. >> it's it is really. instructive to see how this works. yeah. it is really instructive to see how this works. it's fascinating. i'm sitting here looking at all the numbers on the volume, the by volume sell volume, the buys, the sells on it. yeah. and

robert's been checking all this out to running the numbers on it. andrew. phenomenal week of coverage at davos. get back here safely. get back here quickly. we miss you. >> we'll see you on monday. thanks guys okay. >> thanks andrew. >> all right. coming up gamco investors ceo mario gabelli joins us right after the break. and later former kansas city fed president esther george previews what could be a very big week for the fed as they get ready for a meeting on interest rates. squawk box will be right back. >> bitcoin is the best performing asset, but. >> its volatility. >> has kept many on the sidelines until now. introducing the world's first 100% downside protected bitcoin etf capture bitcoin's upside potential while staying protected asset management in a time of management in a time of disruptive change. calamos (vo) sail through the heart of historic cities

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great to see you here this morning, mary. >> it's terrific. >> let's talk how things have changed. i think the last time i talked to you was in may. mike was there to we're talking about some of these issues, but what has changed since the new administration came in? how are you thinking about things? >> well, first. >> of all, you have to bottom up. >> but yeah, you had a good market. >> you had. >> a good market top. >> how do we grow the economy globally? the imf says it's 116 trillion. the united states. is the leader. >> so we. >> need to help. >> productivity and. population growth. >> but productivity will take they. >> become the summa. >> laude. >> and what. >> happens in productivity is an important. >> ingredient for. >> the growth. >> in real gdp. >> then the. >> problem i have. is always the same. it's debt and deficit okay. >> we spent. >> 7 trillion. we took in five. the government has to grow revenues and. >> they do it by growing gdp. >> obviously getting a more. >> practical tax.

>> dynamic. >> for example. >> certain things. and then you look at the stock market. which is. >> a. >> function of earnings. >> for companies. >> the revenue growth, gross. >> margins. >> g&a taxes. >> and the most important. >> thing. >> which is. >> the multiple. >> the multiple is. >> a function of interest. >> rates, which are a function of debt. >> and deficit. >> that's a function. >> of confidence. and confidence is terrific. >> the thing. >> that has happened. >> that from the businesses i talked to, the. >> confidence factor is. >> materially different in terms of how. do they work. >> financial engineering. >> larry culp, for example, at ge, look. >> what he. >> did by spinning off companies. look what max did. at mitchell. >> did at crane. >> the stock was 70. it's a 210 equivalent today. so we're going to see a. lot more of that dry powder. among the private equity firms. they're going to have to monetize some of their holdings. the question about some of their lps is liquidity. so this is a minor change. and then strategics corporate lovemaking. >> it's back on m&a.

>> corporate lovemaking. >> yeah m&a activity back on. there's been a freeze on that for quite a while. >> well yeah. >> because you didn't know the rules. >> and you know if somebody worries about shoes you're going to say you know what's all that about the destruction of value like irobot by not having a deal approved? i hope. >> that's behind us. >> and i think it is. so the notion of company a, and then you're going to get these activists that want some visibility coming off the companies. okay. for example, in the paper today, ed gordon, who spun off from trian, was knocking on the door of middlebury, a company that is okay. but, you know, some financial engineering is going to be helpful. so we're going to see a lot more of that. >> what are you doing differently? what have you changed in terms of your positions? i didn't see paramount global listed anywhere in your time. >> well, you looked at my top 100. yeah. bottom line, the notion of like netflix, what's the benefit of netflix? i made a movie, okay. it's a wins an academy award. i get the box

office domestic. i then have to make another movie. by having streaming, you get recurring revenues, and that has a greater economic value to the stakeholders in terms of what they're doing. so you want to get into that mode and then, you know, you've got new people at the fcc, okay, brendan carr is going to do things. what is he going to do with regards to traditional television? is he going to raise the cap that right now it's 39.5% plus or minus and. >> cap for. >> the amount of tv station coverage you can have of the us population in the united states. so you're going to see some activity there. does that mean that cbs can take their stations, but keep the network and spin them off and do something creative? does that mean that nexstar will be able to buy someone? does it mean that tegna, which has tv stations that were turned down by some challenging dynamic that i've never witnessed in 60 years of following the industry? so those are the things that we look for. >> what do you think of spinco at comcast with spinning off

cnbc? >> okay, well. >> if you're going. >> to stay in the entertainment world, obviously i like certain other things right now. what is the most important thing that streaming wants? what is the most important thing that anyone wants? >> business news. >> sports. >> yeah. >> sports and live news. so what you're doing is live news and that's very important. so take a look at financial engineering. there was a rule that was passed nfl. you can buy 10% of it. all the other sports teams the nba, the nfl, nfl and so on. you can buy 30% and they lay out a dynamic of who can do it. they'll create a gp, and there's a certain number of gps that are allowed. that's why, as much as i'm a yankee fan, because of my bronx background and because of my passion for the team, i'm a big owner of the atlanta braves. for clients, i have probably 900 clients that own a piece of it. everyone should own a piece of a baseball team without paying any fees and total liquidity, and can get passionate about the

braves. so the stock is 40. there's 62 million shares. john malone owns 1 million plus or minus, and he owns 48% of the vote. terry mcguirk has done a great job. then in addition to that, right here, right here in new york, you've got the knicks and the rangers, and the stock is selling at 220. there's 24 million shares. you multiply that out. you're getting the knicks at a discount and the rangers for free. by the way. >> what what msg you're talking about that. >> yeah. oh i'm sorry msg is the symbol msg s. >> madison square garden. >> okay. so thank you robert. good catch. and so that's what we're looking at. but you take what i would like to see in taxes corporate level. no reason to drop the 21%. but you should have a minimum tax on a cash basis. book taxes are all in the 20% plus plus state, but you got to have a minimum tax. the second part is give back 100% bonus depreciation. so if i'm a

farmer and i'm cutting down working my fanny off fence to fence planting, i would like to get new equipment that has technologically efficient. so john deere is having a bad earnings. earnings went $35 a share two three fiscal years ago. they're down to 19 or 20 this year. how bad is bad. how long is it going to be bad. but if you give the farmer 100% write off right now, it's dropped to 40% in 2025. bonus depreciation, 20%. next year they're going to buy equipment because it's going to help them. they're going to go along the farm and find the weed before it grows. >> and well, hans vestberg was here this morning saying he would like to see something similar for all of the capex that they spend putting back into the cable business, into. >> so i form a corporation. i normally would get a tax deduction for capex, but it's a longer period of time here. i'm just getting it a little earlier. meanwhile, revenues from the corporate world are over $500 billion anyway, out of the 4 or 5 trillion that we're

billing in, that number is at an all time high. so those are the things then from the individual, obviously, i'd like to get rid of carried interest. okay. i'd like to change the salt tax state and local taxes. i'd like. >> to see what you mean. >> well, it's the individual living in the state of new jersey, new york, connecticut and some other states like on the west coast. basically, they pay higher taxes than they did pre-trump because you can't deduct. >> it, which is why you see the negotiations that are taking place right now. i hear 20,000 instead of the $10,000 cap. >> now, what they should do is fairly uncomplicated. you're making less than 400,000, let you take 100% salt deduction at your option versus a higher rate. raise the rate. >> yeah. and they're talking about a 500,000 cap on income. so they'll get away with that. you you talked to a lot of ceos and companies directly. and that's one of the things we love about you really have that on the ground feel. you mentioned that you've seen a burst in optimism. what are you hearing from ceos about the potential threat of tariffs and the impact on immigration, on labor? >> i the notion of a farmer

finding labor. he's got 20,000 acres. he can buy a piece of equipment in the future. the notion of what alex karp is book, which is coming out shortly on the technological republic, that is going to be a game changer in the way companies value y is how bad is bad for john deere? how long will it be bad? and then when it's good, it's going to get a technology multiple. so that's why the stock. >> analogy replaces workers and so. >> well they don't want to replace workers. they can't find workers. right. so but that's the point is that we will have immigration and you'll have immigration done the right way. okay. and then you watch who's coming in at your borders tariffs i'm you know, let's see what happens. i love to negotiate okay. the notion of getting rid of fentanyl that kills a lot of people. and making guards at that in both canada and the united states. why not start that way? but the notion of reshoring and locating

business businesses in the united states, we learned a lot in the last five years in terms of transportation costs, the timing of it, the old japanese theory of kenzan or whatever that's called of just in time manufacturing. we just want to have just in time and the right place in the inventory at the right cost. so cost is taking a substitute for time. good question. >> in the industrial area, first of all, in aggregate the group has done well. but a lot of the subthemes, whether it's power, anything adjacent to ai, you have this, this wave, is it played out, is it early? are you finding new stuff or is it just the obvious? >> well, that's a great question. and obviously we think about the data centers okay. how much energy do they consume if there's a blackout? cybersecurity. how do we deal with all of that related issues. so from our end, you know, you have some disruption from the wildfires, like a edison international dropped from 80 to

55. so you still have that challenge. but what companies will do s'mores like today rolls-royce announced they're getting a contract for nuclear on submarines. that's an smr. and so small modular reactor. and so how do we get that technology to reduce the cost, increase the availability and have it on a constant basis? so one of the companies that i'm recommending, because of the notion of 40% of the us's nat gas and will remain that way, is a company in buffalo, new york called national fuel and gas symbol and 92 million shares, $2.06 dividend. they raised the dividend for like 50 years. about 100 years ago they bought 1 million acres, 1 million acres between west virginia and up to the new york border. unfortunately, they can't drill in new york. no comment. but basically they will. david bauer, who's the ceo, will do financial engineering. he'll take the net gas business, the land and maybe the midstream

business and spin it off and have and then make acquisitions of gas utilities. so you're going to see a lot more of that and they'll be able to do it. >> mary, let me ask you about american express. that's in your top ten holdings at gamco. earnings are out today. what do you think of steve squeri at the job. he's been doing that stock i don't know where it is. this morning it was up. >> it's about three months. that's. >> i guess. >> so steve squeri came on board. continued to do what his predecessor was doing, but did it and became a summa laude ceo. okay. and that is going after a certain customer and getting that spending. at what price does it discount the upside? and that's what you have to be practical about. >> and your thought is. >> we're okay with the stock. obviously we're not incrementally buying it. if one of our 1400 clients gets over 7%, we trim it back, assuming particularly if they're tax free or they're an institution that doesn't like an endowment. so we

match the hatch so we don't buy an etf. we are looking at with a precision idea on a stock, but also for a client that we make mistakes. but that's what we do. >> and mario it is always a pleasure talking to you, getting your thoughts on this stuff. we really appreciate your coming to the show. >> this morning. this is the most delightful morning that i've had in a while though. in dallas, last week, seeing flowserve and companies, that's also something we like. thank you very much. >> good to see. >> you, sir. >> come on. >> and we can bet on our gambling stocks. >> mario gabelli mario, thank you very much. we'll see you soon folks. it is 8 a.m. on the east coast and you're watching squawk box right here on cnbc. i'm becky quick along with robert frank and mike santoli joe and andrew are off today. let's check out the check out the futures this morning. you'll see right now dow futures are down by 100 points. the s&p futures are down by seven. the nasdaq indicated off by 12. mike has been digging deeper into the markets as he always does. and

mike as we wrap up the week what's been catching your eye. >> well we got the first new record high in the s&p 500 yesterday of 2025. remember we had 57 of them last year. and how did it happen. well december was really bad for the average stock. the majority of stocks were down hard coming into the last couple of weeks. that has now rebounded and you've had breadth re-expand again. here's the s&p 500 over the last six months versus the equal weighted version of it. you see obviously the market cap weighted s&p still got an advantage. it sort of built that up with the mag seven dominance in december. but both of them a very similar shape and actually performing pretty similarly since last july. so a bit more of an inclusive market. the question is whether you have the oomph to really have a breakout above this record level, around 6100, which a lot of folks were thinking might act as a range ceiling for a little while. cyclical parts of this market continue to act pretty well. industrials financials, they've been these kind of beacons of whether the market is okay with the general macro economy. it seems to be the case. very

similar charts there. s&p industrials and financials over two years. although you do see both of them slightly below their former highs. so there's still a little bit to prove in that part of the market over the next several weeks let's say volatility index. kind of interesting. it's also been retreating. it's an ebb tide. it's back down to about 15. you saw those spikes when you had the minor corrections. it doesn't seem to be very susceptible to a lot of the policy headlines in the news flow. that might seem like it's whipping the market in different directions. it's actually pretty placid. with the market at new high, you would expect the volatility expectations embedded in the vix to be coming down, although whether they have a lot of downside from here is a is an interesting question given that we do have the policy uncertainty ahead of us. >> yeah the vix up 14 or you know up 14% over the one year. but just looking at where we stand right now that's been a pretty interesting take. what was happening just a month ago where the vix spiked i'm trying to remember back to what that was. >> yeah i mean that was when we had, you know the sell off in

the average stock. and you had a 5% pullback in the s&p 500. >> oh. and it lasted like an hour. >> and you had treasury yields. >> breaking out. yeah you missed your opportunity if you didn't jump. >> that's right. and that's been the case. i mean the market has found its footing yet again 5% pullback in the s&p. more like a 10% in the average stock. so i think you had a pretty good flush. i was saying earlier in the week that there was this kind of wall street cutesy construction after the election that said, oh, you want to buy the election and sell the inauguration? well, the market just front ran that and they sort of like we bought the election. and then we had a bit of a rethink about whether valuations were justified and whether the economy can handle four and a half, 5% treasury yields. >> and by the way, earnings have been pretty strong, very strong. all of this too. so it's supporting the valuations. >> that's exactly right. and that's what you have to see come through in the next few weeks. >> thanks mike. >> all right. >> all right. coming up next we're going to speak to the analyst about quarterly results from american express. check out those shares. those shares up a little bit this morning. they were down initially but now

they're up 0.11%. shares of verizon also moving this morning. those are also about a third of a percent after reporting quarterly results earlier in the hour. squawk box earlier in the hour. squawk box will be right back. this is steve. steve takes voquezna. this is steve's stomach, where voquezna can kick some acid, heal erosive esophagitis, also known as erosive gerd, and relieve related heartburn. voquezna is the first and only fda-approved treatment of its kind. 93% of adults were healed by 2 months. of those healed, 79% stayed healed. plus, voquezna can provide heartburn-free days and nights. and is also approved to relieve heartburn related to non-erosive gerd. other serious stomach conditions may exist. don't take if allergic to voquezna or while on rilpivirine. serious allergic reactions include trouble breathing, rash, itching, and swelling of face, lips, tongue, or throat. serious side effects may include kidney problems, intestinal infection, fractures,

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share, with revenue slightly above consensus. joining us now erika najarian head of us banks and consumer finance equity research at ubs. erika, thanks so much for joining us. so what do you make of the earnings. what do you think of the stock price this morning. >> yeah. so in terms of the earnings i think they were largely in line. i think everybody was worried about the revenue. growth outlook for 2025. >> thinking the. >> us high end consumer was slowing. now american express is now. thinking that revenue growth is going to go up 8 to 10%, which is exactly in line with investors were thinking and actually build business, which is how much spend is going through. the american express network was better than expected, up 8% versus 6% for consensus. and really, why the results were largely in line is because they spent more on marketing, on engaging their customers this quarter to get that spend. >> yeah. i mean, when i talk to luxury retailers, stores, car dealers, it looks like there was this huge boost in spending

among the wealthy and the affluent in december, continuing on january. do you think there's a possibility of even beating that forecast? i know there was a range that amex gave this morning, but what do you think on the possibility of even on the upside of that forecast? >> yeah, you know, it's interesting. so the young people are going to save us the young the old business for millennials. and gen z was up 16% versus up seven for gen x and up four for boomers. i thought that was a very interesting stat for the quarter. right. that is and also. >> surprising too. >> yeah. and i think the t&e spend was even bigger than, you know, goods and services. so that actually quite tracks in terms of, you know, that younger cohort. but what's interesting as we think about this animal spirits economy and the new administration is sme or small business growth continues to be quite slow at up 3%. so in terms of what could actually drive a

beat, i'm not sure if it's going to be an even more turbocharged consumer, but it's possibly it's possibly that sme or that small business really sort of picking up and, you know, starting to expand their businesses in 2025. >> yeah. and they've been fairly disciplined about knowing what their core business is, knowing who their core clients are. but they did just by talk. that's the restaurant booking company. how's that? how's that doing? do you see any other acquisitions this year and what sort of sector might they do a bolt on if they do? >> look, i think talk is actually quite in line with what they're thinking for your audience. like talk is essentially guaranteeing a table at a hot restaurant by prepaying a spend. and that's totally in line with a company where, you know, t&e spend was up 10% for the quarter. so i think what amex is going to continue to do is look at deals where you're just so hooked on their

ecosystem. so an american express platinum card requires you to spend on day one, like 695 bucks before you even get up and, you know, buy your expensive starbucks or your, you know, you know, your expensive thousand dollar plane ticket, right? so they have to hook you and make sure that you're happy in the ecosystem. and so as long as they're doing those kinds of deals that keep you sticky, right, then you're not going to go to capital one venture x or your chase sapphire reserve. so i'm not sure what those deals necessarily are, but i think they're going to continue to look at those types of acquisitions that will prevent you or at least make you, you know, want to pay that 695 before you even spend $1 for yourself? >> yeah. although that platinum card doesn't get you into a delta lounge like it used to. erica, thanks so much for joining us. we appreciate it. >> absolutely. >> all right. for more on how the wealthy consumers are spending their money and what they're buying with their centurion cards, a reminder you can subscribe to my new inside

wealth newsletter. you scan the code on the screen to get started. talks about all family offices, how the wealthy are investing, spending and giving away their fortunes. >> all right, coming up, house minority whip congresswoman katherine clark of massachusetts will join us on the democrats priorities as the trump administration gets going. stay tuned. you're watching squawk box on cnbc. >> nothing stands still. not technology, not the market, and not franklin templeton. we've been a firm in motion for over 75 years, always innovating. today, we are a leader in public and private markets, digital assets and custom tax management, empowering advisors

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agenda, including a possible multi-trillion dollar extension of trump's first term tax cuts. but the democrats are concerned about that. what they're hearing could hurt the economy and the business community. joining us right now to share where democrats stand is massachusetts congresswoman catherine clark. excuse me. she is the minority whip. excuse me, congresswoman, and let's talk a little bit about what you're seeing. we've spoken with a lot of business leaders who are pretty

optimistic about what they hope to have happen with this new administration. you have concerns about what it will mean for the middle class and the business class. why don't you lay them out? >> well, that's. exactly right, becky. what we heard strongly in this 2024 election is that. >> hardworking families in this. >> country are. >> finding it. >> hard to make ends meet. so we are going to meet republicans whenever they are serious about driving down costs for families, whether that's housing or construction or child care. but if they are going back to a tax code that only has rewards for the very, very wealthiest, that is something that we are going to look at what they are proposing for offsets, and frankly, they are jaw dropping. we have had republicans say that they will balance these tax cuts for the billionaire class by cutting social security,

medicare, medicaid, by doing away with the mortgage interest deduction. all of these things hit the middle class, and we are going to push for a tax code that celebrates success and celebrates innovation. but that is fair to taxpayers. so we don't have a teacher paying more than a billionaire. >> congressman, what would really hurt the middle class is if these tax cuts expire. so more than 60% of the american public would see a tax increase. and when you talk about the middle class, let me give you two points. one is the standard deduction which doubled, which helps most americans. and the other is the child tax credit which doubled. and many people appreciated. so are you advocating getting rid of those? are you advocating keeping those? and what else would you do in terms of changes or keeping of the 2017 tax cuts? >> yeah, let's look at the child

tax credit. what a success it is. and it not only helped us in a few months when it was at its peak under democrats have child poverty in this country. we know that that money is directly spent. that money is spent in our small businesses. it is sent on, spent on consumer purchases. it is great money for making sure that we are injecting into the economy, while we are helping parents. >> right? sorry to interrupt, but so. so you would keep those, i assume. what would you get rid of specifically? >> well, let's let's look at the tax code. let's look at where we put corporate rates. for one example. >> how would the corporate rates aren't there permanent. you can't touch the corporate rate. they're permanent. we're talking about the individual provisions that are expiring. >> well if we are going to look

at the wide range, are you saying that we can never look at corporate tax rates? we have a proposal from the president to drop it down to 15%. we don't know what their exact tax proposal is going to be. and we are looking for ways that we will protect and cut taxes, if we can, for those. but we for those people in the middle class, but we know in 2018, it was the first time that the middle class was at a higher rate than the billionaire class. that is unsustainable, and we are going to look across the rates in this country, the rates that are expiring and say, what can we do to make this more fair for people? that is how we build wealth in a robust economy. and so when we are looking at the offsets and the games that are being played with changing the baseline, we have to be very real. we have to look at what this did to our national debt in

2017. it drove it up by over seven. >> that was largely. due to spending, not i mean, the revenue in many segments is at at a record. you're in massachusetts, you have a lot of people that pay that, that have high incomes that are subject to the salt cap. what would you do to the salt cap, and what do you think is going to happen on the salt cap? >> you know, we have seen that that has been a the salt cap has been another lever that president trump used and took it away. and who is the salt cap important to? yes, very wealthy people benefit. but you know who benefits the most? firefighters, teachers. >> so what would you. >> do? i am for removing the cap on that. and how do we look at this? how do we balance our taxes? >> three quarters of those. benefits go to the top ten 5%. so you're in favor of something where almost all the benefits go

to the highest earners? >> well, when we are looking at a high cost of housing, state like massachusetts, when we have a $10,000 cap, the average cost here is 15,000. and so we are denying and continuing to rig this tax code. so we are the average. >> cost is 15,000. you'd like to see it go to salt. go to 15,000 or you'd like to remove the cap entirely. >> i think that we have to have a conversation about what is fair. and look at the salt cap withf this tax code. when you have 83% of the tax code changes that are expiring benefit the top 1%, you cannot tell me that is a balanced and fair way to have our tax code represent hard working people. how are we going to enable them if the way we are going to offset those tax

provisions for the top 1% with social security, medicare and medicaid, i am not the one proposing those offsets. that is what we are hearing from the gop. so let's look at president. >> trump has not let's not has not gone along with that. he's been saying the same thing that he would not like to tap in or touch those things. and we'll see how. >> this all, you know, he can be. he can be saying that. but that is exactly what the house gop is proposing. they've written it down in their documents as we go into the reconciliation process. so donald trump knows that is politically dangerous. but that is exactly what the gop is moving forward with. >> congresswoman clark, thank you for joining us this morning. >> thank you. >> coming up top friday pre market movers plus a deep dive on ai following a week of comments from business leaders at the world economic forum. and later this hour, former kansas

city fed president esther george will weigh in on what president trump saying he'll demand lower interest rates. stay tuned. you're watching squawk box on you're watching squawk box on cnbc. what's at stake when administrations change? ey understands the geopolitical, economic and regulatory impacts companies face. new president in the white house, new heads of agencies, new members of congress, all with their own policy priorities. the 2024 election will shape the future of business in unforeseen ways. now is the time for us to do modeling, assess legislation, and understand the impact on organizations. from election day to the first 100 days and beyond, ey brings you insights on the issues that matter: regulation of ai, the fate of billions in tax credits, global trade impacts on your supply chain and workforce stability and security. the congressional outcomes will matter a lot for what can happen when it comes to health policy. no matter the policy shifts, ey helps business and government leaders remain resilient

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>> continue in this country, but there will be. >> a shift in ownership. >> the main thing. >> is not. >> just cutting. >> costs. >> but getting. >> rid of all. >> the regulations. >> i will very simply put america first. >> the trump impact on business and the economy for the first 100 days and beyond. cnbc. >> all right. welcome back everybody. verizon out with fourth quarter results. the company beating the street's expectations when it came to revenue. earnings per share were in line at $1.10 a share adjusted. verizon ceo hans vestberg joins us on the show in the last hour and talked up the company's broadband business. >> we are doing well. our new products are working well in the market. we're gaining a lot of share in broadband. i mean, 409,000 broadband subscribers in the quarter. i mean, we are taking share from everyone. so we feel good about our, our our performance and also about the,

the stability in our on our base of customers. >> verizon also added close to 570,000 postpaid phone subscribers in the fourth quarter. that's its best growth in five years. you can see the stock this morning up by about 9/10 of a percent. >> meanwhile, the california wildfires have created another challenge for the struggling entertainment industry. julia boorstin joins us now with more. good morning julia. >> good morning robert. well the fires. >> wrought massive damage on communities with high concentrations of hollywood workers raising questions about what's next for the entertainment. >> industry, as. >> it has already been struggling with the ctrng box office down more than 23% last year from 2019. plus cord cutting, putting pressure on the tv business. and it comes after work stoppages from the pandemic and then from the writers and actors strikes. now a range of sources are telling me about. >> the long. >> costly road to rebuilding the palisades in altadena and are talking about how, with people

struggling to find long term rentals both above and below the line, workers could look to leave the. >> area. >> which could further accelerate production declines. last year, the amount of production in la declined nearly 6% from the prior year, giving last year the lowest amount of annual production in the la area ever, behind only 2020, when production slowed dramatically because of the pandemic. production has moved to georgia, new york and overseas to states and countries with more tax incentives now to battle that trend. california governor gavin newsom last year proposed more than doubling california's film incentive from 330 million to 750 million. that tax incentive is on track to go into effect july 1st. the head of california's film commission, colleen bell, telling me that this program is particularly meaningful because of the trickle down effect to the communities, such as those impacted by the fire. the l.a. county economic development

corporation estimates that every tax credit dollar going into production drives more than $24 of economic activity. so that push to draw production back to la seems more important now than ever. robert. >> i was talking to a filmmaker who's doing some films in new jersey, and those tax incentives have gotten so generous that you're almost guaranteed a profit. now if you make a film in bayonne, new jersey. i wonder at what point do you think the cost and the incentives could get so large in some of these states, especially california, which has a budget issue right now where there could be some political backlash or whether you're hearing any of that. >> well, look, i think. >> the real question is making sure to tie the incentives to the outcome, saying that keeping production here or drawing production back to california is going to be beneficial not just for the entertainment industry, but for the broader economy, not just for the costumers and editors, but will also drive more, more revenue for this. all of these small businesses like

caterers and florists. so i think that's really the argument. and one of the questions is sort of where is there a base of workers who can do these film industry jobs? a lot of these are very specialized. we know that in georgia, because of the film tax incentives there, there's a big base of film workers. we have tyler perry, who has his big studio there. and i think the question is not just are there tax incentives, but does it make sense for the studios to do production in these different states and countries? i think that right now, part of the question is, you know, where does it make sense financially when it comes not just to the tax incentives, but also where does the talent want to be? one reason we're seeing so many shows and films shoot here in, in the la area is because you have movie stars saying, i've got to be in la, i'm only going to shoot this tv show if it could be close to home. and i think that's part of it as well. but i think we're going to hear more and more about the financial advantages of these tax incentives that it's not a

loss. it actually ends up being a win for the state. and i think there's going to be a lot of argument over that. >> no. and also, you made a really good point about the labor pool and what's happening with rents in la and that rebuilding process and the fact that a lot of people may just move. we're already hearing people move from california to florida. so julia, thanks so much for the update. we appreciate it. >> when we come back, the message on ai from davos and some of the world's top business leaders, we'll hear what they had to say this week and talk about where things go in 2025. as we head to a break right now, though, check out the price of crude oil. it's on a five day losing streak and on pace for its worst week since late november. maybe surprise with the executive orders that president trump's been signing and his message to try and promote more drilling. we'll talk more about this a little later. right now, it looks like wti is trading just below $75.70 $4.96. stay tuned. you're watching squawk box. and this is cnbc.

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today@hims.com. >> welcome back to squawk box right here on cnbc. the futures this morning are a little bit weaker. dow futures are off by just over 120 points s&p futures down by ten. the nasdaq off by 32. let's check out the treasury market. yields had been yeah the

ten year is a little higher at 4.64. the two year at 427. >> well the world economic forum in davos wrapped up this morning with a panel moderated by cnbc's sara eisen. the outlook for europe was a major focus, with ecb president christine lagarde weighing in on the opportunities for the region versus the united states. >> there was this great incentive to go and invest in the united states because of the inflation reduction act and the significant subsidies that were going to be given to those who invested in the us. i think the ira has essentially been removed, and that any subsidies under the ira will not be paid out. so people are going to have to rethink, with the prism of confidence, with the prism of cost, as is often the case and the prism of opportunities. and there is no question that what is happening outside is a challenge. but it's also a big opportunity for revisiting and deciding whether or not europe wants to be a key player. but

i'm contending that it has the talent and it has the means, and it has the ambition. >> that's an interesting take. and, you know, kind of a verbal subtweet the. >> under the undercurrent there is. yeah. you take away the ira and you're going to take away why everyone's been investing. they're not going to pay out if you're a company that's been investing there. but what you're hearing from the new administration is, look, if you manufacture things here, we will take your tax rate down to 15%. if you don't, we're going to tear a few on other issues. >> yeah, exactly. it's a little more of a threat, but but just the idea that the ira was structured in such a way as to draw capital. well. >> that was the argument. we irritated all of our allies with that when it came out. there were some big problems that they came through. we'll see what happens with the ira. >> it's gonna be a lot. >> of fights. i think the european stock market has been ripping in the last banks and not just the luxury stocks. so maybe it's coming off a. >> low base. it's what larry fink said. he said he usually goes counter to whatever he hears in davos. and he joined us

yesterday. he said what he's hearing right now is that, you know, europe is not the place to be. so he's looking there thinking. >> it seems cheap and nobody, nobody has. >> and you're also hearing more people mirror the discussion. in the us you look at the us economy and europe saying we want some of that. so maybe we need to deregulate. there's a lot of discussion. >> deregulation is going to be a big issue. >> that that is starting to bleed over into europe and hopefully may even happen. we'll see under an hour until the opening bell on wall street. dominic chu joins us now with a look at some of the morning's top pre market movers. good morning don. >> good morning robert. good morning becky. good morning michael. so us listed shares right now of danish drug giant novo nordisk are climbing just about 11% after the company posted positive early trial results for a new experimental weight loss drug. now, it showed that patients on the highest dosage lost 22% of their body weight after just 36 weeks. that now that would make it more effective than novo's current obesity drugs, ozempic and wegovy. that's providing a much needed boost for novo shares, as you can see here, which were down about 23% on a year over year basis before today's big

news. so keep an eye on novo. also, boeing shares down about 1.5% after the aerospace giant warned that it will likely post a loss of $4 billion for the fourth quarter. that was much worse than analyst estimates. the company attributed it to charges at its defense and commercial units, and ongoing effects from the big labor strike that boeing had, which has not posted, by the way, an annual profit since 2018. it's also scheduled to report earnings on tuesday morning. so boeing shares are off about 1.5%. and we'll finish with semiconductors, specifically analog chips. texas instrument shares are down just about 4.5% right now after it issued a weaker profit guidance number and said that the auto end market in the us, japan and europe continues to be weak. they did, though, beat on the top and bottom line for the quarter, but revenue still fell about 2% on a year over year basis. and mike, you and i both know this particular company is seen as somewhat of an economic bellwether, just given the fact that all of their chips go into just about everything in the market these days. so we'll keep

an eye on txn. i'll send things. >> back very linked to the real economy down. all right. thank you i. one of the major topics of course at the world economic forum in davos this week. heres a small sampling of what guests on squawk box had to say about it. >> i think. >> what i. >> does. >> quite frankly, is. >> simultaneously reduce the floor and raise. >> the. >> ceiling for. >> all of us. >> so that means. >> the expertise. >> level inside. >> of an organization. goes up. >> productivity goes up. >> at some point, we're. >> going to get to ai. >> systems that are better than almost all humans at almost. >> all tasks. the term i've. >> used for it in. >> an essay i. >> recently wrote, is a country. >> of geniuses in a data center. the biden administration. >> in the. >> last week put restrictions on. where we could give our advanced technologies to write. and it is my opinion, the country that we deny our advanced technology is the next phone call is to china. >> joining us now with more on the state of ai technology, the white house's big stargate announcement this week, and much more. former nvidia engineer

sasha ostoic, venture partner at deep tech venture firm playground global. he also sits on the board of d-matrix, a company that released its own ai chip in december. sasha, it's great to have you with us this morning. i'd love to hear your thoughts. initially just on stargate, what it represents for what phase we are in right now in terms of this ai build out. i mean, it feels as if the numbers are so large in terms of investment that we're still at this kind of blunt force phase of just building more capacity. >> no. >> that's exactly mike. we are at the phase of building out infrastructure, building out all. >> the enabling. >> technologies for the kinds of applications and the kind of world that, you know, the people at davos talked about, like satya dario and larry fink. we have to invest in all the tools, in all the. >> tooling. >> the infrastructure to enable those applications. and that's exactly what's happening. >> right now. >> and the stargate. is just the beginning. >> i think. >> of this renaissance of ai

technology in this. >> country, even. >> though we. >> seem like we've been in it. for we've. >> been. in it. >> for a few years. >> and, you know, reminds. >> me of the apollo. program from the 50s and 60s. in that case, it was a government run program that created a bunch of technology propelled, you know, the world forward, forward, created a bunch of companies and set us up for a. >> lot of prosperity in. >> the decades to follow. with stargate 500 billion or, you know, to say it a different way. half $1 trillion. is going to build a lot of economic activity. pulling a lot of other companies forward as well. >> yeah. i mean, and that half a trillion, i mean, over five years incremental. i mean, we already were hearing about, i think the largest, you know, platform company is this year, perhaps collectively doing a quarter of $1 trillion in capital spending. and the analogy to the space program is interesting in a sense, though, because the space program itself did not have to create a return on that investment. i know it

just kicked off a lot of ancillary technologies and growth opportunities, but are we getting to a point where you're starting to need to see the products flourish? >> i think we have. >> a lot. >> of early signs. >> that products will flourish. you know, like you have very smart people smarter than me talking about the opportunity and what ai will unlock. >> like satya nadella is. >> talking about lowering the floor and raising the ceiling for expertise. you know. >> what's not. >> shown in that clip? he further elaborated. >> on that. >> and talked about a world of a billion software developers. you know, that. >> that some. >> that ai will enable and you would think like. >> wow, a billion. >> software developers, what does that even look like? what does that mean? well, if you think back like 20, 30 years, being graphics designer was a high was a skill set that only a few people could do, using sophisticated tools to create images and digital output. well, right now everybody was smart with a smartphone is a graphics

designer, you know? so think of a world forward where ai will enable all of us to develop and create tools and apps. you know, that we take for granted right now just will not look like a software developer in the future. and that's the kind of those are the kinds of use cases. and then further health care, drug discovery, finance, weather modeling, material discovery, those are the kinds of things that that will be unlocked. and we already are seeing indications that that will happen. >> sasha, president trump rescinded that biden order on ai and ai safety and signed a new executive order. there are a lot of conflicting reports and confusing language about both the biden order and the new order. what's the what's the bottom line takeaway of what the policy is from the white house on ai and specifically on ai safety right now? >> yeah. you know, we're only five days into the trump administration. there has been so much activity. and, you know, with not enough clarity at this point to really say where this will go yet. yes, there is a lot

of focus on ai safety. as we talk about the upside. we have to really do a lot to ensure on the downside that consumers are protected, that we don't create dangerous technologies, dangerous outcomes. but i think the it's still a work in progress in terms of the current administration and how it's going to handle all that, you know, and let me also remind you, like, you know, the ai diffusion rule that happened just last week, you know, with the outgoing biden administration, that seemed like old news at this point. you know, given all the activities, you know, that and all the spotlight that stargate is taking. >> sasha, what about the idea that perhaps there are lower cost ways to approximate the gains that we're seeing in things like open ai? i know that the chinese deep seek ai applications seem like they might be able to get close, and maybe this is going to be somewhat commodified, at least in the in the early stages. >> yeah.

>> you know, i think both can be true. there will be a lot of capability unlocked at the lower end, but obviously very smart people like larry ellison. and sam altman and masazane from from softbank and elon musk, you know, with his own initiatives. they all think that building larger compute capability will, will, will lead to better outcomes. and on our path to, you know, what we call artificial superintelligence. but, you know, there is a lot of research happening on the low end as well. and i think the that playbook is still being written. >> you know, just in market terms. it's been striking that nvidia shares, they've been mostly sideways since the middle of last year, obviously after being up thousands of percent and having these massive moves higher in profitability. but is the market kind of questioning whether the value of nvidia's head start, in terms of the processing units is, is sustainable? how do you view that? >> yeah, it is interesting that

it kind of has been going sideways the last few months. i think we're just waiting for the next big trigger, you know, either down or up. i frankly hope it's up. and i think it, you know, this is not investment advice, but given the level of activity, you know, half $1 trillion with nvidia as a key partner in that endeavor speaks a lot. you know, i think, you know, at this point, nvidia is more supply constrained than being able to and is unable to actually serve all their customers at this point. when that will end, i don't know, but i personally am very bullish on the prospects of nvidia and all the other new entrants in this space because, you know, we should not all give up and think that the nvidia is going to take over the world. there's, you know, growing market in trillions of dollars being invested, huge opportunity for new entrants. you know you mentioned i'm on the board of d matrix. that is a company that's creating much more energy efficient high performance

inference accelerator for ai. there will be opportunities for companies like that to find their customer base. >> yeah, the pie certainly seems to be growing fast enough for everybody to get some. sasha, thanks so much. appreciate your thoughts this morning. >> my pleasure. thank you. >> all right. coming up, former kansas city fed president esther george joins us ahead of the central bank meeting next week. plus, she'll share her views on president trump, saying he's going to demand lower interest rates. stay tuned. squawk box will be right back. >> at capital group, we see. active etfs differently. >> we collaborate designing them to remain strong, preparing them to weather the ups and downs of the market. that's what sets our active. >> etfs apart. >> so they can. >> be rooted at the core of the portfolio. they're meticulously crafted to endure. capital

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in wasteful deficit spending and inflicted nation wrecking energy restrictions, crippling regulations and hidden taxes like never before. the result is the worst inflation crisis in modern history and sky high interest rates for our citizens. i will demand that interest rates drop immediately, and likewise they should be dropping all over the world. interest rates should follow us. >> joining us right now to talk about fed independence. and of course, next week's rate setting meeting is former kansas city fed president esther george. esther, what did you think of the president's comments about that, about thinking that interest rates should come down? and by the way, he said to reporters later, he knows better than the guy in charge. well, good morning, becky. i think this posture is not a new one and certainly not for the fed, that there is a prodding to move rates lower. and in fact, the fed, as you know, has been moving rates lower. there's been a significant drop in rates over

the last few months. but to. >> the. >> point of what an impact that has on the fed, as many others have noted on this program. the fed was designed to have some political insulation around this so that it can make its decisions consistent with the mandate that congress gave it. and as you often hear the chairman say, in service to the american public, you have said that you think it's time for the fed to be a little careful just in terms of where they go next with the rate policy. i don't know that you were in favor of the cut the last go round, were you? well. >> i probably. >> would not have been in favor of. >> making that cut. and again, because as. >> we look at the. disinflationary process that's been underway over the past months, it. >> has seemed to stall out. and so while you haven't seen a re-acceleration inflation, we also haven't seen the kind of movement down toward the fed's

target. i think that would really call for continued rate cuts. and of course, following that december meeting, the fed has acknowledged that and said they're going to be on on hold for a bit. they're going to look at the data again before they make decisions about where to move rates. >> well, that speech from president trump yesterday make any difference that he will demand that rates come down? no. how do you how can you be so sure? i mean, we have heard every president basically in some way, shape or form, kind of hint that they would like lower rates. it certainly helps the economy to have lower rates. how does the fed withstand the pressure? >> well, it is it is pressure in the sense, becky, that the public hears this, the desire for lower rates, obviously, as you've seen, has implications for borrowers. but the fed must

follow its its legislative mandate. congress has told it that it is to bring prices to a low and stable level. and i think the fed has defined that for itself as 2%. and so there is room to go. and i think in the long run, this institution has to think about those objectives rather than be swayed by outside commentary and political pressure that may come its way, as it has for its entire existence. >> yeah, esther, i mean, it's probably worth emphasizing that even within the committee, the fomc, it feels as if there's a pretty broad spectrum of views about whether the disinflation inflation is sustainable, and you can bank on it. governor waller last week seemed pretty confident that you still are going to have some of the kind of restraints on inflation coming through. some of the more recent rental data might be

helpful in that regard. so it seems as if there's a pretty healthy debate which would already exist no matter what was being said outside the fed, simply because we're at that point of maybe getting closer to the neutral rate and having some mixed data. >> yeah, it's a very good point. and i think when you look just at where the individual committee members have outlined their forecast and the dot plot, you see that variation coming through because the economy has seen disinflation, we have seen that rate of inflation come down. but of course, the test for this committee is to achieve its target. and we're now going into the fifth year where inflation has continued to run above that target. and i think the stakes become higher then for the committee to really try to assess their level of confidence in whether that disinflationary trend is going to continue and over what time frame. because at the end of the day, and you hear the committee say this often, they need long

term inflation expectations to be anchored. that has given them the space to be able to be patient here. so watching those carefully to make sure that continues to be the case is going to be important for them as they make decisions about their policy rate. >> and esther, really quickly, you know, economists have raised their expectations for inflation this year. how do you think the committee will talk about tariffs and immigration as potential drivers of inflation for the rest of the year, or do they just do they not factor them in until we actually see the policy? >> yeah. well, it's difficult to factor them in with any sense of confidence because we don't have clarity yet on how those will play out. i will tell you, though, just in the context that this committee is talking about these issues is quite different than the one i would have experienced in 2016 and 17, which is that was a time when growth was lower, inflation running below target. today they

face a very different environment. so as they judge the nature of upside and downside risk to this economy, that's where i think the discussion about tariffs will be relevant to them. >> esther, thank you so much. it's great to see you. squawk box will be right back. >> in a world of uncertainty and disruption, how will your investments stay resilient? we've been navigating change for 125 years, always looking forward, anticipating risks, and trusted to manage over $1 trillion in assets worldwide. solving for the needs of investors today and tomorrow. investors today and tomorrow. that's the power (♪♪) car, this isn't the way home. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!!

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>> a quick final check on the markets. you'll see the dow is off by about 100 points. the nasdaq down by 30. the s&p down by ten. i just want to thank both robert frank and mike santoli for being here today. you guys are awesome. i really appreciate you for such a double duty on a friday. >> fun. >> yeah we appreciate it. you guys have a great weekend and make sure you join us next week. it's right now. time for squawk on the street. >> good friday morning. welcome to. >> squawk on the street i'm carl quintanilla with jim cramer david. >> faber at post nine of the new york stock exchange. >> bulls look to build on. >> thursday's all time high. the first new. >> high of the year as. >> the tension also. >> turns to bank of japan. >> hiking rates. >> and the president now jawboning the fed. opec and the banks. a roadmap begins with the movers in the markets two dow stocks, amex. >> and. >> verizon, crossing. >> the. >> tape this morning. major averages. >> still on track. >> f