>> good morning everybody. >> welcome to squawk box right here on cnbc. >> we're live. >> from the nasdaq. >> market site in times square. i'm becky quick. >> along. with joe. >> kernan and andrew. >> ross sorkin. on this friday morning right now it looks like the us. equity futures are mixed. that's the way they ended the session yesterday. you did have the s&p 500. >> and the nasdaq. >> up for the third session in a row. the dow was. >> off by about a quarter percentage point. >> right now it looks like the dow has. >> indicated up by 11. >> nasdaq is off. >> by 18. >> the s&p. >> is down by two. but guys we are up. >> for the week. even though you. started the week. >> with so many. >> concerns about what was going to happen. >> with the tariffs. at one point. >> the futures. >> down. by about 1000 points on the dow. we'll continue to. >> watch and see where things head. but we. >> are in. >> positive territory for the week. >> treasury. >> treasury yields right now. >> the. >> ten year is at 443. the two years at 423. so again the ten

year is well off the 4.5%. >> and above. >> that we. >> had seen. >> last week. we do have some big jobs report. numbers coming up today. and that's something the. treasury market. >> and the equity. >> markets will be watching closely. >> meantime. >> a federal judge. pausing a whole bunch of things. they're pausing right now because of those buyout offers for federal workers. that is pause now, officially less than 11 hours before the deadline to accept the deal. the judge saying his injunction. pausing the plan would. continue until at least. >> monday. >> when he will consider arguments by employee unions challenging the legality of the buyout and by a lawyer from the trump administration defending the plan. now, as of yesterday, more than 60,000 people had accepted the offer. a spokesperson for the office of personnel management telling nbc news that they interpret the order as allowing federal agencies to continue processing resignations. now, that means employees who have already accepted what is known as a deferred resignation package can begin their paid leave. but again, there's about a million questions about what happens if

you accept or if you don't accept, and then they fire you later. i mean, there's a lot. >> and there's even questions. >> as to whether they can pay you out over that time, whether. >> congress has to be the. >> one that. >> authorizes these things, and it is going. >> to. >> get. caught up. >> in the we have the weather. we saw. >> mark warner. >> senator, saying that there's we. don't know where the money's coming. from to do the pass. >> it's tough. i mean, it's not a huge number. >> i mean. >> a percentage of federal workers. yeah. >> that accepted it. >> it's still a small number. and i think everybody would like. >> to streamline things. and you would think that maybe a buyout. >> is better than. >> an outright. >> firing, but. >> right. i mean. >> i think it gets back to the question. that we had yesterday. from ro khanna, the congressman. >> in california. >> who just said. >> look, i'm. >> in favor of a lot of these things, but. >> really they need to be brought. >> to congress. we have to sign off on. >> approve on it. >> it's this is. >> where the judiciary. >> system is going to decide. is this the power of the executive? is this the power of congress. >> to be able to do.

>> these things? >> yeah. >> meantime, treasury secretary scott bessant speaking yesterday about the doge team and the doge team, in particular, their access to federal payment systems and the data. in an interview with bloomberg, he described it as a, quote, operational review, not an ideological review. he said the team's access is quote, read only. that's something that we've heard from president trump before, and that there's been no, quote, tinkering with the department's payment systems. besson said he personally vetted the treasury employees on musk's team, who have the access that became relevant yesterday when one of the two doge staffers authorized by a judge to access the data resigned 26 year old marco leis stepping down from his role. this after the wall street journal linked him to a deleted or now deleted, i should say, social media account that advocated racism and eugenics. that account posted in july, quote, just for the record, i was racist before it was cool. i don't know what you make of that. i will say i was happy to hear besson's comments about not

just the read only, but really sort of getting granular. if you saw it into the details of, you know, what they can actually do when they can't do, i would love to see more transparency around the process. i think it's great that they're obviously creating transparency around the spending. so on the on the main front, you want to know that. but i think for the credibility of the whole exercise, you want to feel and know that however it's being done, it's not being siphoned off into some crazy place or that's going i know i think the new worry, which i'm actually less worried about, but i think one of the worries is that a lot of this is being fed into various ai systems to analyze, and then therefore, those ai systems now have access to that data. i just think it would be better if everybody knew almost on a daily basis, frankly, what's going on, given the speed and rapidity of it all. >> besson was. >> pretty reassuring. >> yesterday with some of the things he said. by the way, adding that you can't even do that from treasury that. >> resists that. >> the ability. >> to change those things, like the federal reserve is the one that does it. >> not at the treasury. >> i remember when we first had

him on a. >> couple of times. he was so. frank in just the. >> way he. >> does sort of inspire. yeah, he does. >> sort of inspire. at least you know what you're getting. >> this person that had to resign. i saw some hoopla yesterday on a funny chyron about. >> i saw that too. >> is this a different guy? >> i don't. >> know, i was. >> wondering the same thing. >> you see that i did, i don't know, yeah. >> is that guy still still there? >> i don't. >> know. >> i and i. >> didn't honestly, i. >> didn't hear the interview. i just saw the chyron. i it. >> was on. >> the and. >> the ones i saw just had the faces of the three people that. >> they were just very. >> unhappy with. but someone said, can you believe that someone. >> at cameron. >> or at cnn really had to type that that chyron? people don't know what we're talking about. you can look it up. yeah, i'm sure we probably can't even want to say it. i know, and neither word of the two words. >> well. >> you're allowed to say big. you're allowed to say balls. you just really can't say them together. i don't think so. and

i didn't, did i? >> there wasn't much of a pause. >> there was. there was a i think there was enough. there was a pause that refreshes positive refresh. several stock movers to watch. shares of a firm are sharply higher. the buy now, pay later company reported earnings of $0.23 a share versus an expected loss of $0.15. revenue and gross merchandise volume also beat estimates in. the cfo of the company said earnings were boosted by a $60 million gain from a deal back in december, in which the company repurchased some of its convertible debt at a discount. and pinterest shares are sharply higher this morning. fourth quarter revenue was above estimates, and the guidance range for the current quarter for sales, mostly above expectations and monthly active users grew 11% all the way to 553. a million global revenue revenue per user came in at $2.12, and that was $0.03 above estimates. company ceo is going to be at squawk on the street at 10:45 a.m. in a cnbc exclusive

interview. >> shares of. >> elf beauty. >> are plummeting. >> the company. >> cut its full year guidance. after seeing. >> a 36% drop in. >> profits and. >> softer than expected sales trends. >> for the. >> month. >> of january. >> revenue for the holiday quarter did beat estimates, but earnings of $0.74 a share missed by. a penny. the company's ceo. >> spoke to. >> jim cramer on mad. >> money last night. >> there's two. >> things that happened. one is the. >> december period. >> was highly promotional. sometimes you have like this consumer hangover after they loaded up on a lot of product in december. now we're not promotional. the industry was and you sometimes have a trough. after that. >> you. >> the ceo. >> also said that promotion. >> on social media. >> dropped by about 20%. >> in january because of the uncertainty over. tiktok and the sensitivity of wildfires in los angeles. you can see that. >> stock down. >> by more than 27%. shares of expedia, though, are rising, with earnings coming in at $2.39 a share. that beat the street's expectations of $2.04. revenue also beat, and gross bookings

came in at. $24.4 billion. that was better than the 23.3 billion. >> the company. >> had been expected to. >> hit. >> by wall street. stock right now up by about 10%. also announcing that it's reinstating a quarterly dividend of $0.40 a share starting in march. and again, that's shares of expedia up by about 1,010%. >> and coming up amazon passing walmart. revenue for the first time. but the stock down a little bit falling after guidance for short of estimates. we're gonna dig into that story next. and later president trump outlining his tax priorities in a meeting with gop lawmakers. thought about you, andrew. you finally carried interest might happen for you. >> he tried to do it the first time. >> yeah. >> couldn't get it done. >> biden couldn't get it done. >> no i'm saying trump tried, but biden could do. >> try this. >> last time. >> did he try. >> by. >> you remember because krysten sinema. >> oh yeah. yeah. that's right. >> great person. sinema, right. >> robert frank's going to bring the highlights for hot button

issues like carried interest and the salt cap. squawk box will be right back. >> in the. >> world of investing. >> a beast lurks. >> between the numbers. some watch. >> from the. >> safety of the sidelines. but others saddle. >> up and ride that. >> one ton rowdy ribeye for all. >> he's got. if that's. >> you, join us on tastytrade named best online broker for options trading. genius loves company. >> at interactive brokers independent rias. >> work with the best research. >> and trading tools designed.

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full. >> grasa for the chef in all of us. >> we just told you amazon shares under a little bit of pressure this morning, but paring losses from last night. company provided disappointing guidance. cloud revenue missed estimates, big investments in ai. joining us now with more on amazon and the overall market and economy i want to talk about

that. stephanie link hightower chief investment officer i think we spoke to you maybe before amazon. and you, i think either way you would buy the dip in amazon. we'll talk about amazon in a second, but you point out about the economy and you had to actually take a double take at what gdp might be running some ism numbers. suddenly manufacturing is hard. we got a jobs report today, so things are too hot or just right. is it good? >> things are. things are really good. and it's really good to see you, joe. welcome back. >> thanks. >> the economy look, the atlanta fed tracker which we know is very volatile. it came in at 3.9% this week. and so maybe it's. >> more. >> like three. maybe it's two and a half. whatever it is the economy is doing quite well and it's led by the consumer. if you look at personal spending and income, even savings. and then yeah, you mentioned the ism ism

services has been an expansion for over two years. so that's no surprise. that continues. but it's the manufacturing piece that's now also doing better. if we got an expansion read this week, which was the, the first time in 26 months. and i think that ties back to what you and i have been talking about for a couple of years now, which is onshoring reshoring data center build out grid repair. i mean, i also think it might have something to do with boeing and them getting their act together as well as we know that they were able to produce more planes, 737 max planes in january than people expected, and that's going to increase throughout this year. so really good things across the board. and we care because that impacts earnings. earnings are running about up 12% which is really nice too. and what i'm encouraged about, and i know a lot of people are starting to talk about it is so far we are seeing a broadening out. we have financials, healthcare materials all up more than technology year

to date. and so that's encouraging as well. >> the what you mentioned about boeing that it's a lot of stars aligning their stuff. so 33 of the max in january. and you think you can get up to 38 eventually. so you're buying that stock still pretty cheap on on a historic basis. so 184 as a result, boeing is your favorite stock at the beginning of the year. >> yeah it is. it's a it's a turnaround story for sure with the new ceo who has a really good proven track record and them just yet getting their act together and not having as much in terms of supply constraints. and that's actually what they talked about on their conference call. they can get to 38 planes per month because they can get the pieces for the planes. and that has been a big problem over the last couple of years as well. by the way, ge said the same thing about supply constraints getting better. so and they're the engine maker. so yeah, i like both those stories. >> and you love you like amazon still this is a what if you talk

about amazon. you could talk cloud. you could talk. they're going to spend a lot of money on ai. they want to be a major player on ai. there's competition for what. you know one of their core businesses between with temu and sheehan. and then there's the whole the whole tariff issue. you would think that that would help amazon, but they're not immune to it either. but with all those things taken together, if it's down $7, you would buy it and you own it. >> i was hoping it was going to be down more, to be honest with you, joe. so i get it even cheaper. but it's not down more than than two and a half, 3% because the quarter itself was very good. i mean, they beat on earnings. operating income was really very encouraging. and retail margins at 8% were the best since 2004, and the growth rate was 10% and the expectations were for nine. so they're doing really well in the us. international margins grew on the retail side, 400 basis

points. and of course aws, which everyone's focused on, rightfully so. it still put up a 19% growth. i know whispers were like about 20, but 19% growth is steady. and that compares to declines seen from their peers. so and they talked about capacity constraints actually so did alphabet. so it would have grown more without those issues. and i just think that there's so many tailwinds for the next several years in terms of aws. and i think they're they're the capex at 100 billion. okay. so maybe that lowers your free cash flow to 55 billion for the year. but that's still really quite impressive. i mean that was going to be my question, steph. >> the capex really stepping. >> up more than. >> 100 billion. >> after what was it 75 billion. >> last year. and that. >> idea. >> our investors. >> saying. >> yeah. >> we're still behind. >> that. we're okay with going after. >> it and spending. >> as much. >> as you can to capture this demand. we're not worried. >> about anything we've heard

from deep sea along the rest. this is money that that you and. >> other. >> investors want spent. >> absolutely. this is going to be more than $1 trillion total addressable market between now and 2030. and, you know, ibm had an analyst day this week. and they said that 98% of enterprises are working on ai, but only 26% of those companies have processes in place to actually do something. so think about that tailwind for a minute. and they also believe that the capex spend of something like 300 billion this year will go to 850 billion by 2028. so a lot of a lot of companies are behind this and behind this. a lot of us are and i think we're in early innings. >> yeah. and we're in that weird. i don't know what you call the first hundred days. it's the old administration. it's the new administration. whose jobs number is this? this is the biden administration's

jobs number. but there are animal spirits with the trump administration. it's i don't know, we just got to go with it and not try and figure out exactly. well. >> there's all kinds. >> of weird things who's to blame or who's to credit. >> provisions that are. >> going. >> to be in this. yeah, it's going to be messy. >> it's going. >> to be a mess. >> i don't know. >> because this. >> is always the month when the labor department. >> goes back and revises everything. >> they take that. that jobs number. >> and they add. in everything. >> they've seen from the county numbers. >> that are a little more accurate and try and revise everything. going back to march of last year and then the census bureau. >> in december. >> really threw things off with what you can expect from. >> the unemployment. >> rate when they sharply revised the. >> number of. >> working people. >> in this. >> country based. >> on immigration. >> that started in full. >> force back in 2021. >> so a lot of moving pieces that. >> you're going to see. >> in this, is there anything that could that could hurt the market or help the market with the jobs numbers? could it be too hot? are we still counting on rate cuts? >> yeah. well, the average hourly earnings is something that we always look at. so that's going to be something

that that's top of mind. but honestly you know the non-farm payroll jobs it's backward looking joe. you know that it's initial claims that's more forward looking. and initial claims are just fine. right. they're running at about 220 225,000 jobs. initial claims in the last four weeks on on an average basis, we're nowhere near a recession. as we talked about with the gdp at 3.9. recession for initial claims is something like 350 to 3 75,000. so we're nowhere near that. and i think we're going to see a solid number today. and should the market sell off, i think we're getting earnings. and that's what we watch to figure out where we want to, where we want to buy. and i think you do want to buy if you see a pullback. >> okay, steph stephanie link hightower chief investment strategist we'll see you soon. >> thanks, jeff. >> okay okay. coming up right here on squawk box. the winklevoss twins. they are reportedly considering an ipo now for their crypto exchange gemini. we're going to talk about all of that after this.

plus we're counting down to the january jobs report. it's happening this morning. set your timer, your watch, your alarm, whatever. we're going to bring you the numbers at 8:30 a.m. eastern time, followed by reaction from minneapolis fed president neel kashkari. he's going to take us inside the fed and how they're thinking about all of this squawk box returning after this. >> this cnbc program is >> this cnbc program is sponsored by b knock, knock. #1 broker here for the #1 hit maker. thanks for swingin' by, carl. no problem. so, what are all of those for? ah, this one lets me adjust the bass. add more guitar. maybe some drums. wow, so many choices. yeah. like schwab. i can get full-service wealth management, advice, invest on my own, and trade on thinkorswim. you know carl is the only frontman you need... oh i gotta take this carl, it's schwab. ♪ schwaaaab! ♪ have a choice in how you invest with schwab. (vo) weight loss. in how you invest for so long, i felt stuck.

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it's time to prioritize our retirement savings. learn more at help us retire dot org. help us retire is sponsored by the investment company institute, representing asset managers serving individual investors. >> after a strong jobs report in december, will the january jobs report continue the trend? what it signals for the economy and interest rates, employment numbers and analysis. squawk box today, 8:30 a.m. eastern. cnbc. >> welcome back to squawk box. the crypto firm gemini, backed by the winklevoss twins, considering an ipo as soon as this year. that's according to bloomberg. and they're saying

that the crypto exchange is now in talks with potential advisers on a listing. the report says no final decisions have been made, but we'll talk about i don't know if they're going to have the last laugh, but, you know, when you start to think about the history of the winklevoss twins and the economics of facebook and the movie and hanging out with larry summers. i had. >> a. >> very tumultuous. >> and high flying and successful run. i mean, that's the thing. what a journey. >> what a journey. probably bitcoin bulls when it was under $1,000. i think it was like $12. >> remember we used to have them on the broadcast i would say back in 2011 and 12. >> i mean. >> not that long ago. >> yeah. you got to hand it to him. >> so they were they were super early. >> you got to hand it to him. and if you are super early, i don't even want to venture. yeah, i don't even want to venture a guess. at least they're not tall, handsome and athletic. >> oh, wait.

>> yeah, they're only like when they do the movie. i mean, it's not going to be armie hammer. >> larry ellison has even said he felt a little. bad about. >> how summers. >> yeah. >> larry summers. >> said he felt a little bad about that. that scene in the. movie when they. >> came. >> in, and. >> he. >> kind of bawled them out. and he said he felt a little bad. >> i wonder if that was. yeah, but to totally shift gears and go right into crypto from there. and all in all in and from the very beginning, they said people that would argue or, you know, pick your bear, your crypto bear. that's it. don't argue. it's mathematics. don't argue with me. it's mathematics. >> what was their idea about something that was happening in space? i don't remember bitcoin. oh yeah. they had some wild idea. i mean, if you go back, i got to go back now. and look there was some i mean there were a couple of sort of very wild ideas about the rationale. tell me what was going on. >> the what you can either do what a winklevoss is worth or what the winklevoss are worth. you got a number, you got a number. does it begin with a b?

definitely. right. >> i you. >> know, i just haven't followed. >> it. >> closely enough. i guarantee i think they're both i mean assuming well into into. yeah, yeah. >> yeah. >> we'll have to keep looking for it. anyway, separately, meta's ceo, mark zuckerberg, visited the white house yesterday. the company said that he was there to discuss the company's role in helping. >> the trump. >> administration with america's international tech leadership. it's unclear whether zuckerberg. >> met with president trump. >> who spent much. >> of yesterday meeting with republican lawmakers. >> on his legislative priorities. when we come back, we're going to dig into some hot button tax issues that matter. for your money, robert frank will take a closer look. >> at president trump's tax priorities. >> that's next. >> i got the. >> what do. >> you have. >> i got 2.7 opinion. it even added it up for me 2.7 apiece, giving them a combined net worth of 5.45.4. i don't know if you can trust the numbers, but okay. but it's interesting. it's on an eye. it's on, you know, i looked it up on. it must be true. as we head.

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offices. how the wealthy become ultra wealthy robert frank's high net worth

granger for the ones who get it done. >> good morning and welcome back to squawk box live from the nasdaq market site in times square. checking the futures this morning pre jobs report. not a whole lot happening mixed with the nasdaq off a little. dow up s&p down. it is jobs friday and pulled. forecasters expect an increase of 169,000 nonfarm jobs in january. down from 256. remember that surprise number back in december? the unemployment rate expected to hold steady at 4.1%. >> president trump outlined his tax priorities in a meeting with gop lawmakers yesterday. everything from the salt cap to carried interest. robert frank joins us right now with more on what they're kind of hashing out at. >> this point. hey. >> robert. >> a lot of things talked about yesterday, becky. the biggest one was president trump telling

republicans in that meeting that he would eliminate the carried interest loophole that allows private equity, venture capital and hedge fund managers to pay a lower rate on part of their earnings. now that carry is the 20% they make on their fund profits, the profits are currently taxed at a capital gains rate of 23.8%. now, many argue that the carry, in fact, is a fee for service and should be subject to ordinary income tax rates of 37%. now, trump made the same promise back in 2016 as did biden in 2020. it has largely survived thanks to lobbying from private equity and hedge funds. now, the 2017 tax cuts did make it slightly less lucrative. it extended the time that firms had to hold the assets from one year to three years. now, the cbo estimates that getting rid of this loophole would raise about 1.4 billion a year. mckinsey says it's about 1.2 billion a year. so not nothing, but not much. it's about a 10th of the price, in fact, of trump's plan to exempt tips from income tax that

he also talked about yesterday. this is still going to face a big fight, as andrew knows, and we've talked about a lot on this show. the american investment council, they represent private equity saying quote, we encourage the trump administration and congress to keep this sound tax policy in place that supports jobs, workers, small business and local communities. so any of those things, well, any of those things? well, they would argue that the private equity guys are incentivized through sweat equity. so therefore they're taking some risks with this capital and that it helps all the small businesses that they support by make better and then sell off. so that's what they argue. but this has been a pet cause of the democrats for 20 years about being a democrat or republican. and because i think you can talk to lots of people on both sides who would say it's obscene. and the reason i want to i just want to put it out there on the incentive. it doesn't actually. so if you are a private equity fund, the executives don't need to. the question is we've decided that we are incentivizing the

executives, right. that doesn't change how much money they're going to put to work or not. it's not their money. that's right. it's the limited partner money. no, i know, but i just want to be 100% clear about that, because when they say that they need to, they need to incentivize the executives. it makes no sense. the other piece is that it's pension fund money. yeah. in large part, which, by the way, is a lot of not for profits and others like that, which means that part is tax free for them. yeah. so there's not the incentive piece makes. the whole thing is just absolutely bonkers. the surprising thing to me andrew. no, i agree with that. the surprising thing to me is the estimates for what it would raise. very tiny, very tiny, which is irrelevant given. >> that. >> the top. >> three hedge fund managers each made more than $2 billion. so? so either it's been exaggerated in terms of the benefits or this is just not you know, it's not going to be what everyone hopes it. or perhaps they're finding ways around it. >> that's what i wonder too. >> because elon musk says. he can. >> save $2 billion a day,

basically in what they're doing with doge. this is. 1.4 billion over the course of a year by the better. >> estimate number. by the way, nobody that i know thinks that this loophole should be closed for revenue purposes. just a fairness. >> issue argument. >> if you believe that the tax policy in america is some kind of manifestation at all of our democracy, of some level of fairness, that you should be a special person over you, this is. well, then then we should also talk about tips and overtime and all the things that are, you know, would cost ten times what this is going to cost. >> you want everyone participating in the democracy. you got to. >> have everybody. >> have some skin. >> in the game and they don't. >> but the other interesting thing trump mentioned yesterday, what i want to eliminate the benefits for billionaire sports team owners, which is a presumably that depreciation. they can write off the value of a team or much of it over 15 years. he's going to the super bowl after just saying i want to get rid of those benefits. so it'll be interesting to see whether they follow through. i

don't think it's going to raise much revenue. to andrew's point as well. but this has been something that a lot of people have said. it's unfair. you buy a, you know, a sports team, an nfl team for $6 billion. you write off the value even though it appreciates massively, as we've seen over the past ten years. so that's something he wants to get rid of as well. not touching what's called the 1031 exchange in real estate land, though, by the way, i don't nearly i don't have nearly the same questions about it. i know a lot of people do, but they eliminated it for almost every other category. for instance, in the art market that was thriving for years because of 1031 exchanges, and it killed off a large section of that people. well, why would you preserve real estate? so but i don't i don't think i can actually make an argument to you. why why i would actually do real estate. because the impact on the sort of magnification impact of developing new real estate, selling new real estate, changing hands of real estate is actually helpful to the economy insofar as when you build a building, it creates an enormous amount of jobs. it can create, it can develop and create entire areas. i mean, there's i'm not

saying you have to do it. i'm not saying it's the right benefit. but i'm saying when you start to think through like what incentives actually have an impact that are helpful, like the private equity one has literally has no impact on anything. the real estate one on the margins, it actually might. yeah, they've got to they've got to show some papers here. these aren't going to raise much, but at least it shows they're trying to find some papers for this $4 trillion. it's going to cost you. >> you're going to have to. >> strip out a lot of incentives. >> like using the tax. >> code as an incentive for behavior. >> is expensive. >> yes. if you want to get to those things to. >> strip out taxes. >> you're going to have to get out. get rid of a lot of the incentives. >> pete, you guys make the case that, you know, this is one of the great industries of the united states, and it's very helpful in saving companies that are sick. and even some of the i mean, i know people on the left side of the aisle that are that virtue signal nonstop and but they will come on here and pitch carried interest. you know, some of the people i'm talking about

right to your face and you even ask them, well, what are you talking about? why does it make sense? they don't even have a good reason. >> except reason except none. there is none. >> i mean, they redo the washington monument, but they come on here. >> i know it, it's. >> and it's like. >> it's gross. it's gross. >> they're dancing at the obama terrible dancer. but. >> you see all this you're good at you're going to attack a democrat over this. that's interesting. which is fine because he. >> yeah, that is who i'm. >> you're going after david rubenstein. let's call a spade a spade. >> i wasn't no, i'm the warren buffett. i never buy by name. >> oh, never by. >> name, never by name. oh, did the washington monument give it away? no, but but and he will unabashedly. >> yeah, he. >> will pitch that this is an important thing and i. does he ever convince you? does he give you any good points? >> he'd say the same thing. >> and this is neither does steve schwarzman or anybody else. >> so this is. >> being proposed by. >> a republican president, right. >> it is so. >> but he's a disrupter. >> one of the disruptor 50. >> one of the disruptor 50. >> okay. we got a (vo) what does it mean to be rich? maybe rich is less about reaching a magic number...

and more about discovering magic. >> most power players. >> on wall. >> street rate. >> nvidia a. >> strong buy today. yet why, then, are so many. legendary investors quietly ignoring that advice. >> and instead selling the stock. >> hand. >> over fist? every billionaire on your. screen has recently. >> sold nvidia. >> some have offloaded millions. >> of shares. >> and mark my. >> words. this is bigger than nvidia. hedge funds are quietly selling all of their tech. >> stocks at. >> the. >> fastest rate we've seen since 2016. >> it begs the question what do they know that you don't? >> my name is mark chaikin. >> i help build three indices for. >> the. >> nasdaq during. >> my. >> 50 years on wall street. that means. >> i know how to recognize these

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>> a wild hour of earnings. >> earnings, season, special coverage all this month on cnbc. >> welcome back to squawk box. the super bowl one of the biggest days of the year for advertising. and this year it's expected to generate a record $700 million in revenue, with some ads costing more than $8 million. our next guests favorite ads are hellman's nerds, google, taco bell, and lay's. marcus collins is a marketing professor at the university of michigan, the author of for the culture. and i'm shocked that duncan is not on your list, marcus, because that's so far is my favorite. >> you know, it did. >> really well. >> last year, but. >> i'm not a big. >> sequels guy. >> so i. >> like to see fresh ideas. >> so tell us. tell us about your favorites. why? and i'm also, is there an ad that's not your favorite? i mean, is there an ad you think that's just a total bust? >> listen, i'm not here to throw shade. no strays this morning. you know, the ones that are

great. but i tell you, the one that i'm most excited. >> about at. >> the moment. >> is the. >> google pixel ai ad. and i like it because it does a few things. one, it has a point of view on what's happening in the social commentary with regards to what it means to be a man. manliness. masculinity, right? here's a story about a gentleman who's entering the workforce again, having been sort of a stay at home dad, which is not what we normally see. so i like that. very interesting. it's a it's a good social commentary. secondly, it provides a really meaningful role for the product. the product isn't the hero like, the character is still the hero, but the product plays a really meaningful role to push the story forward. and there is a there's space for the brand. the brand has a reason to exist in this, and it ties to what the google pixel brand is all about progress and everything about this spot, from the product to technology, as well as sort of the social framing of it all. it's all about progress, which i think is just a perfect, perfect

framing. >> i'm surprised they have so many written post-it notes, though i will say that was very analog to me. >> is that the life. >> we live? >> it's a little. >> bit of. >> digital, a little bit of analog, a little. >> bit of rock n roll. >> a little bit of country. it's kind of how it works. >> oh, you like lay's? tell me about why you like that. >> i think it was really rich storytelling. you know, typically we've seen potato chips sort of be a companion to some party companion to some social gathering, always sort of the sidekick. and i think in this story we kind of get an origin story, if you will, sort of the marvel cinematic universe, if you will sort of the role that humanity, the role of communities, the role that farmers play in this mass produced, consumer packaged good. and we typically don't see that sort of look. so for a brand like lay's, i think it gives it a touch of humanity beyond the value propositions, beyond the functional benefits, the reasons to believe with regards to the products performance, to speaks more to

the heart. and it's a really challenging thing to do for a cpg company. i thought it did a really, really, really powerful job. >> in terms of just dollar for dollar. we're talking about $8 million a pop in some cases. is it worth it? >> depends on how you define worth it. i think for a marketer we understand that reach matters. we understand that cognitive real estate matters, and there's no bigger media moment than the super bowl. full stop. like a third of the country watched the super bowl. you rarely get that level of congruence where people are watching a thing shoulder to shoulder. so with regards to cognitive availability, with regards to media audience size, it doesn't get any bigger than this. the question you have to ask yourself is what do you want out of it? if the idea is that people will see the ad and go buy something next, that's not what super bowl spots are for. that's not the role that they play. that's not how they work. rather, they work by catalyzing discourse in such a way that the

brand becomes front of mind in the minds of people who probably weren't thinking about it beforehand and perhaps awakened sort of dormant consumption for those who have sort of forgotten about the brand, if you will. >> marcus, i want to thank you. we'll all be watching on sunday. >> you left taco bell. >> i know, i'm sorry. taco bell. >> no, i don't know. i questioned. why taco bell has to have a commercial at all. it's just the demand. i mean, it's hard to satisfy the demand as is. it's just different than i like. i like the is it devante who's got the taco bell on his in his house? i like that one. and the. is it different than that? devante is. >> what i like about the taco bell spot is that they reprise doja cat from an ad that they did before, but in a new setting, it wasn't sort of repeating the story or like part two, but they actually sort of diminished the role of the celebrity. in this case, the celebrity is just trying to get in on a normal conversation or a normal experience, which i think sort of subverts how celebrity has been used in the super bowl

as far as ads are concerned. over the years, i thought it was pretty clever. >> yeah, i don't know about taco bell in my life anymore. as you know, with the. >> look on. >> after this recent the gobbler. yeah. do you need a gallbladder? do you know marcus? you need a gallbladder to eat taco bell? it helps, i think. does it not? >> you guys are a tough crowd this morning. i mean, everyone's catching strays. the badass, the taco bell's of the world. >> good night. no, i. >> love taco bell. i just had an offer. i'm saying that i'm not sure it's part of my life anymore. i want it to be. but it would be part of my life currently. >> you know who? >> we do? everything in moderation. >> yeah. >> doctor scott. >> gottlieb. >> we do. i can ask him. >> you can ask him. >> about all the. >> medical questions. >> oh, yeah, that'll be good tv. >> let's talk about. >> over the breakfast table. >> yeah, exactly. >> thanks, marcus. >> what happens after. >> joe. >> eats a taco? >> you know, i just don't eat anything before i come in. i just don't want any any issues. >> and we appreciate it. >> you do? >> all right. when we come back. >> much. more on the super bowl, we're going to talk about. >> the competition.

>> for gambling. >> dollars with the ceo of fanduel. >> that's coming up in the next hour. >> but up next, an update on the long awaited release of the grand theft auto six. >> video game. >> squawk box will be right back. >> this cnbc program is sponsored by baird. visit baird. >> difference.com opportunities. >> can be hard. >> to find. like. >> catching lightning in a bottle. >> in uncertain times. >> it's tempting. >> to retreat or simply wait and see. at cme group, we empower. >> those who act. >> we deliver tools. >> to. >> help manage risk and capture opportunities. >> in every. market and across. every major. >> asset class. >> to seize each possibility. >> to seize each possibility. >> at. precisely the right a little over a year ago, during a routine mammogram and ultrasound, i was diagnosed with triple positive breast cancer. luckily, my cancer was found early and hadn't spread. i finished my treatment and now, i'm cancer free.

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theft auto six is on track for the fall of this year. as a result, the stock is up by about 5.8%. the ceo, strauss zelnick, will join us on monday in the 8:00 hour. it'll be good to see him. >> it's been a while since we've seen him. >> well. >> up next, doctor scott gottlieb joins us on the opportunities. >> and dangers of artificial. intelligence in the medical field. that's next. we'll be field. that's next. we'll be right it all started with a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow! (shower water runs) (♪♪) (orange is peeled) (♪♪)

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gottlieb. he's former fda commissioner, a cnbc contributor. >> and he's on the. >> boards of both pfizer and illumina. and, scott, i am so curious about this because to me, this is the greatest promise. >> of ai. >> the idea that we can. >> work it into. >> our medical system. and get way smarter about all the research that's out there and maybe have better end results for patients. how close are we on that front and what happens or what is happening right now on. >> the regulatory front? >> well, i think we've largely achieved that front. i think. >> i can. >> be incorporated into electronic medical. >> records. >> and that's really what's at. >> issue here. the ai tools that would sit inside an. >> emr. >> an electronic. >> medical record, and actually cull information from different streams of data. so clinical notes that a physician may write radiology reports, lab reports, and. >> try. >> to do interpretation and provide some guidance to the physician about what a diagnosis can be, what a differential diagnosis is, what some potential treatment recommendations are. the physicians still in the loop, so they're still making the decision the ai would be assisting the physician. what

fda is saying right now is that any ai tool that sits inside an emr that culls information from different streams of data, so different sources like, you know, laboratory records and imaging results and also provides the information in a time critical fashion or is so comprehensive that the physician is unlikely to form their own judgment, they're likely to take the results of the ai tool at face value. that would be a medical device, and that's antithetical to a law that was passed in 2016, the 21st century cures act, which created this category of clinical decision support software. that was software that really provided interpretation and recommendations to the physician. but the physician was still in the loop. we put out guidance in 2018 that interpreted that law that basically kind of expanded on those definitions. but then in 2022, fda issued new guidance that basically upended the old interpretation and came out with this new one that basically stipulates that ai tools that would sit inside an emr probably

fall within the domain of being a medical device, subject to fda's regulation. >> here's my concern with it. we hear about the ai that's being used in some insurance companies, and that as a result, the doctors do get cut out of the loop. and, you know, again, artificial intelligence is still only as good as garbage in, garbage out. if you are an insurance company and you are trying to make sure you are getting the most out of medicare payments or some other place that you're billing things, there's an incentive to force that ai or make that. i look for decisions that are not necessarily best for the patient's care. how do you make sure that the patient's care is what is first and foremost, if you're dealing with ai decisions that may be supplant what the doctor sees with his or her own eyes? >> yeah, i mean, it's a question of who's developing the ai tool and for what purpose. you're talking about ai tools inside

healthcare companies that are making automated decisions about denials of claims by looking at medical records and medical information. i'm talking about tools that would be sitting inside the electronic medical record. so they're basically designed by the emr providers that are in the business of trying to provide tools to assist clinical decision making. so the insurance companies aren't on the back end of the design of these ai tools. and the bottom line is that the physicians still ultimately is in the loop. the ai tool isn't automated. it's not making a decision on behalf of the physician. but you can think of an ai tool, for example, that interprets all the medical information that's available in the emr and offers a physician a list of differential diagnoses. so a list of potential options on what could be ailing the patient. if you go into chatgpt right now and you put in clinical information and i've done this, i've taken these vignettes out of the new england journal of medicine and put it into chatgpt to generate differential diagnoses, to test the aptitude of those tools. it generates a more comprehensive differential diagnosis and

thinks of things that i think a lot of physicians probably would miss. so these tools do have the basis, do have the ability to provide a more comprehensive set of options to physicians. ultimately, the physicians in the loop. and your recommendation would. be that this regulation. >> may take. >> things too far and may stifle innovation. >> well, i think if you create regulations that prevent the ai tools from being incorporated and embedded in the emr, basically you're taking away the highest value use of ai functionality in the medical system. you know, trying to use an ai tool to look across very diverse clinical data that's available in the emr in a very efficient way, seems to be one of the most high value uses of the ai tools, and is actually data. there was a study in the new england journal of medicine about six weeks ago that showed that looked at doctors using ai tools, and it showed when the ai tools sat outside the emr, even though the ai tool had a high aptitude, it was able to make decisions that actually were better than the physicians. the physicians didn't use it

effectively because it sat outside the electronic medical record, so it was very inefficient for them. so these tools really need to be embedded, i think, in the electronic health record to maximize their functionality. and this new guidance, which i think is doesn't embed the spirit of the law that congress passed this new guidance by fda really prevents that functionality. >> how frequently is this being used, this ai being used in a doctor's office? i would imagine there are some places that are cutting edge, other places that are not. >> yeah, i mean, it's a good question because, you know, a lot of these ai tools aren't hipaa compliant. i think that medical systems are just starting to get instances of open ai on their platforms that are that you can put information into in a hipaa compliant fashion, where it's a local, a local instance of the ai tool, like a lot of other companies are doing. but still, these ai chatbots, for example, are sitting outside the emr, so they're not very efficient for

doctors to use. you are seeing ai tools used on some of the telehealth platforms to facilitate an interaction through telehealth. but a lot of times what they're doing is just helping to condense and collate the patient's information for the physician who is ultimately going to have a patient, an interaction with the patient, they're not really assisting in clinical decision making right now. people are worried about crossing that rubicon of embedding the ai in clinical decision making to really assist the physician for fear that they will become a regulated medical device. so they're purposely limiting the capabilities of these tools in clinical practice right now. and that's unfortunate. >> doctor gottlieb, thank you. we appreciate it. >> thanks a lot. >> it is just after 7 a.m. right now on the east coast. you're watching squawk box on this friday morning right here on cnbc. i'm andrew ross sorkin along with joe kernen and becky quick. today's top stories. it is jobs friday officially pulled to the forecasters, expecting an increase of 169,000 nonfarm jobs in january. that is the number to beat. that would be down,

though, from a gain of about 256,000 back in december. the unemployment rate expected to hold steady at 4.1%, and a federal judge extending the trump administration's buyout deadline for federal workers. yesterday, the judge now saying his injunction would continue until at least monday, when he'll consider arguments by employee unions challenging the legality of the buyout and by a lawyer from the trump administration defending the plan. we're going to hear from the head of the largest federal workers union later this hour about all of it, and meta's ceo, mark zuckerberg, visiting the white house yesterday to discuss the company's role in helping the trump administration with america's international tech leadership. it's unclear whether zuckerberg met with president trump, who spent much of yesterday meeting with republican lawmakers on his legislative priorities. >> we're watching shares of tesla this morning. some new data. >> from the. >> china passenger car. association showed that sales of tesla's evs made in china fell by 11.5%.

>> in. >> january, year over year. deliveries of model three and model y vehicles made in. china were down 32.6% from december. that stock right now off by about 1.25%. >> and checking the futures, which could all change at 830. when we do get the jobs report, it's about what we saw earlier. the s&p is now in the green just barely. nasdaq not doing much. dow up a little. let's get to dom chu with a look at this morning's pre-market movers. hey dom. all right. so good morning joe. >> becky andrew things are calm for the broader markets. but here are some bigger earnings movers in play right now. >> one of. >> them is e.l.f. beauty or elf as it's known, plunging down by more than now, almost 27%. after reporting quarterly. >> results and cutting. >> its full year guidance. now, the cosmetics company said the forecast reflects a 36% drop in profits after softer than expected sales trends in the month of january. morgan stanley analyst ubs davidson, amongst others, all downgrading the stock this morning. so elf elf

down about 27%. another big retail name though getting downgraded has to do with an analyst move. >> nike shares down by just about. >> a half a percent right now. >> after. >> citigroup lowered its rating from a buy to a neutral and cut its target price from $102 down to 72. citi said that after attending an event with the company's new ceo, elliott hill, and discussing plans to achieve the turnaround plans there, those analysts no longer believe that fiscal year 2026 will inflect in the way that they had hoped, so by goes to neutral. nike shares dow component down one half of 1%. and by the way, for more on that and other calls of the day, just head over to cnbc.com. slash pro subscribers get full access to all the details. and we'll end with the big stock story of course of the morning. and that's amazon. those shares are still in the red down by about 3%. that's way better than what we saw at some of the lows last night. the tech giant reported better than expected earnings and revenues for the quarter, but its guidance disappointed some investors. amazon expects revenue to grow between 5 and 9% in the first quarter, with the low end of that range now

marking the slowest growth on record for amazon since the company went public back in 1997. amazon's blaming the weak guidance on other things, amongst other things, foreign exchange headwinds. so it kind of gives you an idea, joe. some of these mega cap tech companies reliant on overseas income, we'll see the effects of the strengthening dollar. i'll send things back over to you guys. >> key things to watch on sunday. what saquon the chiefs defense i mean what about the eagles defense. the eagles yeah and the eagles defense. eagles have had i mean when they're clicking on offense i don't know if kansas city has has seen that. but then the kansas city mahomes pulls things out of his thin air that that you just don't see that happen. it's almost like he has a horseshoe. i mean horseshoes like the cufflinks. >> i have on right now, right. i mean, these horseshoes. but here's the thing. >> what's the key to watch you tell me what's going to determine the ultimate outcome. >> i think. for the eagles, it

has to be you got to put points up on the board fast and keep it there. because i think what was the stat. the chiefs have now won 17 or something straight games that have been determined by one score or less. right. so what you got to do is get beyond one score and then hopefully keep it there. you know, mahomes has a way of in the fourth quarter putting those tight games to bed. and you just got to got to get a get a lead get a two touchdown lead and try to hold it there. so it should be. >> a i mean it shouldn't be a crappy game. there have been some bad super bowls. this should be really a great super bowl. maybe that's too much to expect. >> i don't know. i mean, i've said it in the past, as a diehard niners fan, i'm kind of indifferent right now. on who wins. they're nowhere. >> to be seen this time around. i'm sorry, but no one's thinking about the 49. i don't even know where you came up with that joe burrow. >> i really don't care who wins. >> this game. >> joe burrow has got some stuff i can buy over here at this pawn shop. did you see that? oh, yeah. the robbers. well, they got they got arrested. yeah.

they did. brought it. >> brought it. >> up to new york. yeah. it's in a pawn shop here. so joe burrow stuff to. all right. thanks, tom. >> when we come back, lawmakers pushing to ban deep sea from government devices. congressman josh gottheimer and darren lahood introducing a bill amid concerns that that app. allows china to see user data. they will join us after the break. and later, the ceo of fanduel joins us ahead of this weekend's big game in the big easy. squawk box will be right back. >> this cnbc program is sponsored by baird. visit baird difference.com. >> nothing stands still. not

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asset. com. >> bipartisan legislation has been introduced by democrat congressman josh gottheimer and republican congressman darin lahood to ban deep seat from government devices like tiktok. national security and espionage risks are their major concerns here. congressman gottheimer and congressman lahood, join us this morning. >> and gentlemen. >> thank you. >> for being here. >> this kind of follows the playbook of what we originally saw with tiktok, tiktok. what are your concerns here? what are you thinking? and. >> congressman gottheimer, we'll start with you. >> thanks, becky. >> i think darren and i are concerned with. >> what. >> most americans should. >> be concerned. >> about with. >> deep seek. >> and the chinese. >> government literally. >> putting into their. >> code an ability to capture. >> data on. >> americans, on their. >> searches. >> on their. >> private and. >> on either private. >> documents that they're. using deep. >> seek for. >> it's now. >> the number one. >> downloaded app. >> on apple. so we think not only should all. >> americans know.

>> about what the. >> chinese government is. >> doing here. >> and using the way. >> they're using deep seek, but also make. >> sure from a national. >> security perspective, and dan and i are on. the intelligence committee making sure that. no government employee is using deep seek on their. >> phones and their. >> devices to. >> do any kind of searching that could. >> help the. chinese government. >> congressman lahood, we should make the distinction between using the model itself and downloading the app using the model itself. you can change things. you can put protections and build security into it. i think there have been questions that have been raised about whether some of that information on the app is going back to, to china telecom and some other issues along this way. do you know anything or do you just feel like this is a situation where there's the potential for security to be compromised? >> well, we come. >> from this. >> from the national security aspect, both serving on the intelligence committee. i also serve on our select committee on china. if you start with the predicate that china has a plan

to replace the united states, they're working at it every single day. they want to beat us technologically, militarily, economically, diplomatically. and you've seen pattern after pattern of ccp related companies that steal data, steal information, steal our intellectual property, abide by a different set of rules and standards than every other industrialized country in the world. this is another example of that. deep seek has been banned in lots of other countries already australia, south korea, italy. it's long overdue that we really question what they're doing and we protect american citizens. >> how do you feel about where things stand with tiktok right now? i mean, that was a process that started a while ago. how do you feel with tiktok versus deep seek and the process to try and ban it? where it stands right now? i guess we're in the 75 day waiting period to see if there's a deal that can be had. >> well, if. >> you look. >> at the overwhelming bipartisan support to ban tiktok, i think that speaks for

itself. but also look at the national security team that president trump has put together, from john ratcliffe to elise stefanik to jd vance to marco rubio. you know, rubio, vance, stefanik all supported the tiktok ban. so did mike waltz this morning. president trump, it's been reported he's putting jd vance in charge of that. and mike waltz i think we'll get to a resolution on this. and it won't be good for tiktok. >> congressman lahood, i'll ask both of you. we had ro khanna on the broadcast. well, we had him just a couple of days ago, but a couple of weeks ago, he effectively said that. and i don't want to put words in his mouth. but the conversation you're having right now about tiktok is a lie. that's what he basically said. he basically said that that, that, that he's seen the intelligence and that it is a lie that there's with the with to the extent that tiktok is actually taking that information, giving it to the chinese government or the chinese government is using tiktok in some kind of nefarious way today, that's not to say that prospectively, in the future it couldn't. and that's a clearly a possibility. and if we

want to say that that's a threat, that that will always be a threat, but that the idea that that the american public has been told repeatedly that tiktok is doing something nefarious in this moment is not true. what do you say to that? >> listen, i didn't. >> i didn't see. >> roe's comments. >> but i'll tell. >> you, in both. serving on the intelligence committee. >> and the. >> fact that you saw an overwhelming number of congressmen. >> and women. >> overwhelmingly and ban it. >> because he basically said was part of it. >> he said it was an election campaign. he said it was a campaign, meaning there's a lot of people that just gone along with this, arguably because i don't know what to say. xenophobia. there's been a lot of different sort of arguments that have been made about this issue, but almost no detail has been suggested publicly about nefarious behavior today. and i'm not here to defend tiktok. i'm just saying, you know, show us the receipts. >> i was going. >> to. >> say, andrew. >> yeah. no, i was going to say that. >> that overwhelmingly. >> after getting. intelligence briefings. >> and. >> obviously we can't discuss all of what we've. seen on the

intelligence committee. but i'll tell you this, there's a reason why it was so overwhelming. and, you know, it's not easy to get a huge, immediate bipartisan vote on something. and i believe that's why, based on the information we've seen, that people acted so quickly. listen. and as darren pointed out, which i think is spot on, the ccp, the chinese communist party has one intention. there are a number one adversary, and their intention is to spew disinformation and. >> to. >> ensure that our democracy is best. days are behind us, not ahead of us. obviously, we believe we've got to do everything we can to protect our country, and especially to ensure that the chinese communist party is not using disinformation or collecting data on americans to try to undermine our country. both, in the case of deep seek, is where we see concerns. i think we both saw that in the case of tiktok, and i think it's overwhelming and clear. >> i would just make one point, the same argument that roe is making and that you alluded to. it is the same thing they said about huawei a number of years ago. we found out that was false and not true. huawei blatantly is involved with the ccp stealing our intellectual

property, stealing our privacy rights. that's why you've seen almost a complete ban of huawei. it's the same argument there is. there is no evidence to trust ccp related entities, whether it's tiktok, whether it's deep tech, whether it's huawei. >> i'll ask, is anyone on your staff using deep seek? have they checked it out? and by the way, gentlemen, do either of you allow your kids to use tiktok? >> i have i have three teenage boys. i do not allow them to use tiktok. >> and there's. >> certainly no one in my office using deep seek. i'll tell you that much. >> what's the plan? do you think that you have a lot of support, bipartisan support in congress for this? >> i absolutely, you know, we just introduced this legislation. we already have 20 original co-sponsors. i think similar to what you saw with tiktok bill, you know, there's going to be a lot of people interested in this. our select committee on china is going to hold a hearing on this also. and i think we're going to continue to build support for it.

>> and the more information that comes out on this, i think you're going to see more members of congress jump on. right, just like they did with tiktok. >> one other point i want to say it's interesting on deep sea, i want to mention one thing on deep sea. you're not going to find any criticism of xi jinping, the communist chinese party, any anything related to taiwan and china. so again, it's screening the content of what goes on there. that should tell you everything. >> and gentlemen, very quickly on tiktok, i know you think that this will be resolved quickly. how do you think it ends with the purchase of an american company or the us government taking ownership of some part of the stake, or do you think that this is something where it's no longer allowed to operate in the united states? >> well, as i mentioned earlier, the president has put j.d. vance in charge of this with mike waltz. obviously, jd vance comes from that world with a prior tech background. you know, i think, you know, we'll see what they come up with over the next month or so here. but i think it will be resolved. >> and it has to i think it has to be resolved. right. this is

nothing that this can't hang out there as we've talked about. we know what their intentions are. >> congressman gottheimer, congressman lahood, thank you both for joining us this morning. >> thank you. thank you. >> coming up next, betting the big game. well, the ceo of fanduel is going to join us after the break to talk gambling expectations, the expansion of betting and so much more. in the meantime take a look at the futures on this friday morning ahead of the big jobs number, which we'll get at 8:30 a.m. this morning. dow up about 36 points s&p 500. call it a hunch but marginally up. nasdaq looking open about a point and a half higher. squawk box coming back after this. >> time now for today's aflac trivia question. the new england patriots have appeared in 11 super bowls. which four teams hold second place with eight appearances? the answer when appearances? the answer when squawk box prime, it's me. i mean, you. wake up, come on man! you gotta tell employers to take another look at all the benefits they're offering. everybody wants to build the best team and offering aflac can help attract

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competition for the wagers at the super bowl. contessa brewer joins us now from new orleans with a special guest. good morning contessa. >> hi there joe. it's great to see you. so $1.4 billion is the estimate that americans will wager on the super bowl. and you know what? fanduel is hoping much of that will be wagered on their platform. ceo amy howe joins me now. so amy fanduel comes into this as the market leader for sportsbooks in terms of gross gaming revenue and net gaming revenue. you've invested all this money. you've got the mannings kick of destiny. you've got billboards blanketing buildings in new orleans. how do you get a return on that investment? >> i mean. >> listen. >> it's first of all, thank you for being here. it's so fun to be in new orleans. you know, it's core to our strategy, right? we're the leading sports book, and we want to be known as one of the most iconic and trusted. brands in all of sports and entertainment. and in order to do that, you got to show up on the big stage, which is super bowl. you know, this year we try to up our game every year. our

product is better than ever. we have over 600 ways to bet the super bowl this year. but as you said, we have. we brought back kick of destiny, which has become it's really become part of the game. and this year we have a twist on it. so we've got the manning brothers. eli and peyton will be competing in a live kicking competition at 3:00 eastern time on sunday. so you can go into the fanduel app and pick who you think is going to win, and you get a share of $10 million of bonus bets. >> and they get multiple chances to do it. unlike gronk, unlike in prior years. okay, so you said multiple ways to bet on this parlay. your way is a new offering. parlays have come under a lot of public attention because often the players don't win. it's very profitable for the sportsbooks. but when players win they win big. so that's one reason why it's so popular. talk a little bit, if you will, about the new offerings and why it's important to keep innovating on the platform. >> so your way is actually now available for the super bowl in every market that that we're legal in, the team has done a

phenomenal job effectively. what your way is, is we're putting control into the consumer's hands, right. so you have almost an infinite number of choices that you can bet on. so if you go into the fanduel app, you know you're going to find hundreds of player props that are predetermined by the house. but you can go in and say, you know, travis kelce is in there for 60 receiving yards. you can toggle it and say, well, i think he's going to have 80 yards or 20 yards. so we're putting control into the consumers. >> you told me something really interesting now, which is about your customers going on to the platform and opting in to responsible gaming tools. >> yeah, yeah, it has been a great year for us. i mean, listen, i've talked very publicly about this. the tone from the top matters at flutter. we spent $100 million this year on responsible gaming. but during the nfl season this year, almost 50% of fanduel customers were using our mike pence tool, which gives you very detailed analysis on your betting behavior. and the reason that's so important, it's 3.5 million

users, right, that we're using that tool. and it means that, you know, they're doing exactly what they should, which is setting a budget and staying within that budget. >> 3.5 million people are using those tools. like, what's that as a percentage of your overall. >> it's almost 50% of our users. >> so almost half the people who are logging on are using responsible gaming. during the nfl season. this year, we had almost 50% of our users in. just this morning, we launched a new product to add to our portfolio of tools. it's a deposit alert, so if you can go in and set daily, monthly, weekly targets and if you exceed that, you're going to get an alert on your phone. so it's an important part of building a sustainable sector. >> i want to talk about some of the headwinds you're facing. bipartisan letter that got sent to the doj, asking the doj to look at whether fanduel and draftkings, the two dominant market players, are participating in anti-competitive practices. that's one. >> yeah. i mean, listen, i can't comment on the letter

specifically, but here's what i would say. we are we feel very confident in how we're complying with antitrust laws. i think the important thing you have to remember in our sector is we have to coordinate with the top competitors in order to safely open up the market. but we also choose to, with things like responsible online gaming association. but what's not getting enough scrutiny? contessa is the black market. so i think it's great to shine a light on the regulated market. but there's still a half $1 trillion black market with offshore operators that aren't paying any taxes, that aren't protecting consumers. and so i think it's important that actually there's a focus on all segments of the gaming market. >> and it's not just offshore, but and last year, the aiga, the american gaming association, said $23 billion was anticipated to be wagered on the super bowl, but much of that belonged to offshore operators. but now you're also dealing with a big explosion in sweepstakes style gambling, a big explosion in

fantasy plus that offer pick'em. it looks very much like sports betting. and then the predictions markets with cash and crypto.com offering trades on the super bowl. can a licensed operator effectively compete and be profitable with all of that competition in the bigger sphere? >> i mean, listen, at the end of the day, competition is a great thing for the sector. it's great for consumers. it's great for all of us. it forces us to up our game, but we think it should be on a level playing field. you know, the rga has called on state regulators to actually look at some of these operators. and if they if you're betting against the house, then you should be held to the same rules. go get a license, pay taxes, protect for underage gambling, and protect from predatory consumer practices. >> you have a long day ahead of you, culminating in a big fanduel bash tonight. anyhow, thank you for getting up early and starting your day on squawk box with us. >> thank you contessa. >> guys, i'll send it back to you. everybody can make their own bets now. in new york, it used to be when i would do a live shot for you, i'd say, oh,

like, you know, i'm here. i'm going to make a bet in las vegas. but now you can just do it yourself. that's excellent. >> i don't have as much experience with it as some others on the set. but, contessa, thank you for getting up early with us, too. >> sure. >> it's good to see you. we'll see you later in the day when we come back. a temporary win for labor unions suing to stop the trump administration's proposed buyouts for federal workers. the president of the largest federal union joins us shortly. plus, street reaction to amazon's quarterly results. squawk box will be right back. it looks will be right back. it looks like amazon shares are down by (traffic noises) (♪♪) the road to opportunity. is often the road overlooked. (♪♪) at enterprise mobility, we guide companies to unique solutions, from our team of mobility experts. because we believe the more ways we all have to move forward. the further we'll all go.

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feel amazing and is something that we get to use every day. >> welcome back to squawk box. the futures this morning are mixed with the nasdaq in the red, along with the s&p dow up a little bit prior to the 830 employment report. we've got the ten year this morning trading with a yield of 4.44. and bitcoin has last i looked about 95 9697 almost 98,000. so a

little bit of a move higher today. in fact almost over 1%. >> coming up we're going to bring you the january jobs report in just about an hour from now. we'll bring you the numbers and market reaction. plus minneapolis fed president neel kashkari is going to join us for an exclusive interview following the release of that data as we head to a break. take a look at the pre-market winners in the s&p 500 and the nasdaq. squawk box coming right back after this. >> bitcoin is the best. >> performing asset, but its volatility has kept many on the sidelines until now. introducing the world's first suite of downside protected bitcoin etfs capture bitcoin's upside potential with downside protection with 190 or 80% protection levels over the one year outcome period. asset management in a time of disruptive change. calamos toda.

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extraordinary at high point university. >> this is my. >> legacy. >> a federal judge has paused the trump administration's buyout offer to federal employees. a court hearing is set for monday to hear arguments from both the white house and unions. joining us now is everett kelly, president of the american federation of government employees, the largest federal union. everett, it's good to see you this morning. >> good to see you. and thank you. >> good morning. is there a way i know that that you're not a big fan of the whole process here? i we're all kind of grappling with with on the one hand, what we feel maybe is some bloat in the federal government that we'd like to somehow deal

with. and then i think, at least as far as intentions go, a buyout seems to be preferable to just outright layoffs. what? just summarize the thinking of your thinking and of the union on the. because it's been tried before this law was passed during the clinton administration for buyouts. so it has been something that different administrations have thought about trying to do to streamline things. >> okay. >> you know, and again, thank you for having me. >> but from. >> where we sit. >> our position is not. >> that it shouldn't be done or that it couldn't be done. our position is that it should be. >> done correctly. >> or appropriately. okay. because there are rules and regulations that governs these. >> type of actions. >> we're just. >> saying follow those rules and regulations. >> it gets it gets a little

weird because the maximum is 25 grand. the average federal worker is making about 8800 a month. so you can't get to september. you would use up that 25. so they're going to call it administrative leave. and no one knows where the money's coming from. what would be the proper way to do it in your view. and some people think it's a pretty good deal. i guess 50,000 have or whatever have accepted it. everett, are they being hoodwinked or fooled? >> i try to believe that myself and those i've spoken to, several of those individuals that have. taken this option and what they said is, you know, we're just tired of the rat race. >> you know, i was going to. >> be retiring anyway in the next few months. >> so i'm going. >> to go ahead and take this, this offer here now. i certainly believe. that they're being hoodwinked. i think they're being fooled. >> you know.

>> because just like you said. >> there is no. >> guarantee that they'll ever receive any pay for this offer. you know, they say it's a fork in the road. i say it's a knife in their back because, you know, there's just no continuity to. >> what's going on. >> okay. >> yeah, that's a good one. not a fork of the road. i'm going to use that. what? what would is there any way that that everyone could be concerns on both sides could be somehow satisfied. and could it be worked out in court on on a are you optimistic about what happens on monday when both sides get to air their sides of the of the argument? >> i'm very optimistic about what will happen on monday. first of all, you know, i think that the judge has made a correct ruling so far. he decided that he's going to look at the case and not just say, you know, because this is the administration making these moves. that is correct, because

we believe that it is not correct. i am hopeful that we can sit down and work through this, you know, and i say again, you know, if you really want to know, you know how to deal with these issues, talk to the people that's actually doing it. you know, i mean, just just be honest. who would run a company this way, right? i mean, you know, just think about it. if you start cutting the food service workers, right, the inspectors, you know, that's going to affect the bottom line. you know, at the retail and grocery market, if you start cutting tsa workers, that's going to affect the airline industries and these type of things. and when you look at va, it's going to affect the health care industry, you know. so who would run a company that way? no one would. right. you would want someone that's experienced, right, that know exactly what they're doing. the individual that's making these suggestions have never worked in the

government, don't know anything about what federal workers do, you know. and i suggest once again, that they sit down and talk to the federal workers in that union and work through these issues. and i think we can get to where we need to get to. >> is there any notion, an idea, everett, that layoffs are coming one way or another? and this would certainly soften the blow if i could, you know, if i if i knew i was going to get paid till till september of 2025 and the whole agency could be shut down. i mean, there are some, you know, there are some reasons. yeah, there's some reasons why people are have gone along with the, with the idea of 50 or 60,000 of them. >> you know, 50, 60,000 is a drop in the bucket as to, you know, what was you know, what was believed. you know, who would take that offer. but these are people that was ready to retire anyway. and there is no the point is, there is no

guarantee that these individuals will ever get paid, you know, because it is the congress that, you know, authorize payments. and so far, we are under a continuing resolution that's only guaranteed to march 14th. now, congress had to come back together and decide the appropriate spending for these agencies for the rest of the year. so there's no guarantee, even when you look at the memorandum, you know, it points to that. >> so do the people continue to show up at the office, or how much of this is people who didn't want to go back to the office to. >> no, i don't i don't think that, you know, it's people that didn't want to go back to the office. you know, i really don't. people want to do their job. what they want to do, though, is honor the negotiation that that's taking place between these various agencies and the workers. and that's all that afge is saying. honor the negotiated agreements. right. that's all we're saying. >> all right. everett. we we'd

like some clarity, too, and i maybe we'll get that on monday. but we appreciate hearing your side of things this morning. thanks. >> thank you. you have a great day. >> okay. >> you too. >> still to come this morning. amazon's first quarter sales outlook disappointing some investors that stock down in the pre market. we're going to talk about the quarter. what they're saying about its cloud business and what they're saying about the strong dollar as well. the strong dollar as well. squawk box will be right back. ♪♪ well would you look at that? jerry, you've got to see this. i've seen it. trust me, after 15 walks, it gets a little old. ugh. i really should be retired by now. wish i'd invested when i had the chance... to the moon! unbelievable. stop waiting. start investing. e*trade ® from morgan stanley.

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take-two interactive. revenue in the most recent quarter came in below estimates. guidance for net bookings in the current quarter was also on the low side of estimates, and the company said that a strong performance, though by basketball video game nba two k, did help offset weaker performances in several of its mobile franchises. take-two interactive, confirming that the much anticipated release of grand theft auto six is on track for the fall of this year. that's probably a big part of the reason that you see that stock at this point up by better than 9%. it had been up by about 5.6% earlier. now it's up by 9.25%. and the ceo, strauss zelnick, is going to be joining us on monday in the 8:00 hour to discuss. >> coming up, the january jobs report, the numbers in the market reaction at 8:30 a.m. eastern time this morning. then an exclusive interview with minneapolis fed president neel kashkari. squawk box coming right back. >> neuropathic corneal pain is caused by damage to ocular nerves. the pain can be

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>> single care? >> whenever my customers ask how to get a better price on their meds, i tell them about single care. it's a free app accepted at pharmacies nationwide. >> before i pick up my prescription, i always check the single care price. >> it's quick. >> easy. >> and totally free to use. >> single care can literally. >> beat my insurance copay. >> you just search for your prescription and show your single care coupon at the pharmacy. >> so i just show. >> the coupon and get this price. >> that's right. go to single care.com and start saving today. >> after a strong jobs report in december, will the january jobs report continue the trend? what it signals for the economy and interest rates. employment numbers and analysis. squawk box today, 8:30 a.m. eastern. >> cnbc welcome back to squawk box. amazon shares they are lower this morning. the tech giant provided weak guidance for the current quarter. this after cloud revenue missed expectations. for a closer look at amazon and more. want to bring in brad erickson. he's rbc capital markets internet services senior analyst. i want to thank you for joining us. so the numbers are down. i think the other big headline, though,

is just how much they are planning to spend it. it sort of ends, i think, a little bit of the debate around deep seek, and whether these models are so efficient that we were going to see sort of a precipitous decline in capex spending on infrastructure and chips and the like. so how do you look at this, brad? >> yeah. good to see you, andrew. thanks for having me. yeah, i mean, meta started us out. what was it, 60. >> to 65 billion. >> google. google got us going earlier in the week 75 billion. and now we're looking at 100 plus with amazon. these are ginormous numbers. no one had any sort of expectations that the capex guide probably wasn't going up last night. but with that said, you know, the story remains the same for, frankly, all these companies. but amazon included, is people need to feel comfortable that there's a pipeline of demand, there's visibility to demand that they can that they can generate to pay for all this stuff. and i think, you know, andy jassy did

a good job on the call last night. he basically said, we have line of sight. we don't make these investments without having line of sight. we're there. so i think, i think you can still be comfortable, despite the just sticker shock of how high the numbers are. >> okay. so you look at the stock right now. we're going to flip the board around and show folks where amazon stands. what is your price target on this company? call it 12 months out from now. >> yeah i mean i mean, we took our target up last night to, to $250. and i think, you know the stock's trading i think this morning it's indicating a little bit below 30 times on a on a pe basis on a gaap earnings per share. i think this is a situation where that's that's a high multiple obviously for a stock. but they just grew operating income 82% in the last year. and we think that can at least go up by 20 to 30% for the next few years. and so that's kind of earnings growth we call growing into this valuation could certainly be higher over time. >> so you say 250 where. 232. what do you think the downside is at this point?

>> oh, i mean i think fairly limited. a lot of a lot of people obviously own this stock. so there is some crowding aspect of that. but i think, you know, this is such a it's a very large moving ship obviously. and it's not going to course correct, i would say on a dime or anything. so i don't, i don't worry about some like big shock to numbers upcoming. it's just a matter of whether they can continue to hit those ebit expectations, maintain that cloud growth. that's actually another piece i should mention is they grew 19% in the quarter. we think they're actually probably maybe going to decelerate a little bit here in the near term. but they have to keep that growth rate, call it high teens to continue to give confidence in that. again, those ai investments are warranted. >> so brad, there's sort of three pillars to this business right now. and i think a fourth pillar that's coming. there's obviously the retail business. there's aws which we've been talking a lot about. obviously there's the media advertising search business. i don't know what you want to describe that as, but there's this fourth one

that's not they're not here yet called kuiper, which is the satellite business, but is coming, or at least we think is coming in the next year. how is that factor, if it does at all into your valuation? >> yeah, i mean, at this point it's hard from a revenue perspective. i think from our perspective we're thinking about expenses. there something and call it the low single digits two, three, maybe $4 billion of expenses this year related to rockets that are going to start going up in march, as you said. so yeah, i mean, again, clearly they wouldn't be making those investments if the revenue opportunity wasn't wasn't there. we don't really have anything, frankly, penciled into our model as of yet. do you. >> think you should though. because honestly you look at like spacex and it's just i mean, it's killing it. it's. and if they can get anywhere even near that, you're going to create an enormous amount of value out of i don't want to say nothing, but out of all of these investments. but that's not reflected in the stock at all. >> i think it's still a little bit too soon to be able to sort

of put that into things. and again, we try and we try and measure these things out. right. we know the expenses, which is nice. and so i feel like we're able to sort of set a conservative bar if and as that revenue comes in, yes. clearly that would be upside in the stock. >> what do you think about the retail business? i mean that that that is a huge driver of this whole enterprise. >> yeah. yeah i mean i think there's a lot of good stuff going on there. obviously. i think one of the things that we keyed on last night was for their fulfillment efficiency. right. so how do they how do they raise those margins on retail? they are working on they're focusing more in 2025 on same day sales. right. so faster delivery times. again i think that actually has a circular effect of holding up more demand. they talk about and it's not it's not a secret delivery. elasticity right. just means when you look at a product and you see you can get it faster, you're probably going to order it. it's favoring their first party business over their third party. so that's actually, we think a little bit why they missed on third party last night. but the overall business

will tend to hold up better, i think such that they continue to improve those delivery times. and they're they're expected to reduce costs of service cost to serve i should say this year as well. so all of that helps. >> brad, i want to thank you for joining us. we will see whether the stock hits the $250 price target you've got for them. and i'm sure thanks for having me. thank you. >> the crypto firm gemini, backed by the winklevoss the winklevoss twins, is considering an ipo as soon as this year. that's according to a bloomberg report that said, the crypto exchange is in talks with potential advisers on a listing. the report says no final decisions have been made at this point. >> shares of pinterest are sharply higher this morning. fourth quarter revenue came in above estimates, and the guidance range for current quarter sales is mostly above expectations. monthly active users grew by 11% to 553 million people, and global revenue per user came in at $2.12. that was $0.03 better than expected. the

company's ceo will be on squawk on the street, coming up at 10:45 a.m. and a cnbc exclusive interview. and by the way, that stock up by better than 20% this morning. >> meantime shares of expedia they are rising. earnings of $2.39 per share beat estimates of 204. and revenue also beat gross bookings, coming in at $24.4 billion. and that unto itself beat estimates at $23.3 billion. the company also announcing that it is reinstating a quarterly dividend of $0.40 per share. and that's going to start in march. >> it is just before 8 a.m. on the east coast, and you're watching squawk box right here on cnbc. i'm becky quick along with joe kernan and andrew ross sorkin. among today's top stories, a 25 year old staffer at elon musk's department of government efficiency resigning after the wall street journal asked the white house about his connection to a social media account that advocated for racism. that news, coming just hours after treasury secretary scott bessent dismissed concerns

over those workers looking into sensitive government payment systems. the senate voting to confirm russell vogt as the next head of the white house office of management and budget. the vote for vogt was 53 to 47. democrats have criticized vogt, who helped author the conservative project 2025 policy agenda that president trump distanced himself from during the campaign. and uk security officials are pressing apple to create a new way for them to gain access to any user's cloud storage data. the washington post reports that that includes british citizens, but also any other apple user worldwide. sources told the paper that apple would probably stop offering encrypted storage in the uk in response, but that wouldn't necessarily protect users in other countries. >> meantime, tesla shares or i should say, sales. but shares falling in china last month despite recent price cuts. the company sold about 63,000 cars in january, down 11% from last

year's more than 71,000. tesla has been facing increasing ev competition in china. local rivals byd, selling close to 300,000 electric and plug in hybrid cars last month. and that number was up 47% year over year. what do you make of that? it's unbelievable. >> i don't know. yeah. i'm not sure what's happening in china, but it's a similar concerns that they've had about other american brands. >> but it's also ford was. >> that number blew me away. yeah. ford to 5.2 billion in losses i don't know what the future holds at this point. >> yeah i think ford is also in the position of importing or bringing things back and forth across the mexican border, more than any other of the big three automakers. >> right. look at the futures. we're going to get a jobs report in right around a half hour. not much happening so far. up ten. nothing happening in fact. mixed treasuries. maybe more importantly, 440 on the ten year 444 right now let's get to mike

santoli at the new york stock exchange. good morning mike. >> morning joe. >> good to see. >> you back. yeah the market just kind of hanging on to. >> that january gain actually. >> on the s&p 500 building this week. >> slightly on. >> that almost. >> entirely due. >> to the rebounding nvidia meta. >> palantir a. handful of the. >> big kind of well loved names. >> on the whole. >> though you. mentioned treasury yields. >> they've come down below that four and one half on the ten year bond market. seems a little bit sensitive to a stutter step in. >> the economic data. >> we'll see. >> how the. >> jobs number. >> fits into that. >> but broadly. speaking we've. >> sort of been. >> around this you know plus and. -6000 level for quite a while since. >> the day after. >> the election. it's basically. >> 3% up. >> 3% down has. >> been the range. >> as we. >> wait and see, some of this. policy implications. >> here is discretionary relative to staples. >> i mean, you really. >> have no big market based concern about the state of us consumers. if you look at this. >> chart. >> it's been, you know, sort of sideways for discretionary for. just this last little while. and this is equal weighted. so it's not. influenced by the very large amazon tesla type names.

but staples have been really for sale. and it's equal weighted. >> which means you. >> don't get the benefit. >> of the. >> outsized gains in. >> walmart and costco, which are. >> in that sector. and so you see obviously lack of. pricing power. nobody wants the pure traditional defensive stocks. food especially been really weak now. >> take a look at the. >> volatility index. because for. >> as much. >> as it seems like this kind of headline rich environment where the market is kind of twitchy and responding. >> to different. >> policy developments and such, it's not really. >> showing up. >> in the index level anticipated volatility. that's because the index itself. >> has been kind. >> of trapped in these opposing currents. there's a lot of divergence among different sectors. banks really strong i mentioned staples and other areas. very weak. industrials have actually given up a little bit. semis not so great outside of nvidia. and yet we're down around 15. vix means we're not really geared up for any kind of a shock that might come along. but it does show you that the market is actually in this sort of calm, if not relaxed state. guys. >> i call it too quiet actually.

and the ten year has ten year has me scratching my head, mike, because okay, we put off tariffs. but you know march 1st is not that far away. i don't know what happens. but yeah, it was such a major concern when it was first announced over the weekend. and the atlanta fed at 3.9 or something. so why did rates come down on the ten year with continuing inflation worries and what looks like a strong consumer you just showed and a strong economy. well it's hard to understand. >> it's. >> well i think the. >> one interpretation is that the long term, you know, the long end of the treasury curve is a little bit more sensitive to growth risks in the short term from whether it's from tariffs or elsewhere, than they than it is to some kind of long term increase in inflation expectations. you did also have some relief in the bond market when the treasury secretary set out the schedule for debt

issuance, and it was not very skewed toward the long end. some of the market was kind of bracing for that. he's basically keeping more or less the mix that that janet yellen was, was going for. and as i mentioned, i mean housing has has struggled a little bit. and global yields have have really come down. so i think all that stuff together i mean let's be honest, we're in this kind of range here. it's not as if it's been dramatic moves. the high was like 4.8. you know four and a quarter used to be considered to be a little bit elevated. so i think all that in the short term is what we're dealing with. >> okay. okay. very good mike. stay tuned. >> 830. >> yep okay. >> all right. still to come this morning that january jobs report they were discussing that is coming up at 830 eastern time, which is less than 26 minutes away. plus an exclusive interview with minneapolis fed president neel kashkari. but next, oklahoma gop representative kevin hern will join us. he was in the room yesterday when president trump and house leaders worked to try

and hash out key spending and tax priorities. stay tuned. you're watching squawk box and you're watching squawk box and this is cnbc. (grunting) at morgan stanley, old school hard work meets bold new thinking. ( ♪♪ ) partnering to unlock new ideas, to create new legacies, to transform a company, industry, economy, generation. because grit and vision working in lockstep puts you on the path to your full potential. old school grit. new world ideas. morgan stanley.

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>> elevated design for thoughtful. living thuma. >> welcome back to squawk box, president trump and vice president jd vance meeting with republican leaders at the white house for an extended meeting focused on the president's biggest priorities and how to pass them. joining us right now is someone who was at that meeting yesterday, oklahoma gop congressman kevin hern. he's the republican policy committee chairman. good morning to you. we've heard a whole bunch of things coming out of that meeting. but maybe since you were in the room, you can tell us what you think the president's top priority actually is, given the sort of laundry list that we've been reading about. >> i'd first like to say thanks for having. >> me, but. >> it was probably the most productive day i've had in my six years in congress. five hours at the white house, another three hours, a little over three hours. last night, re gathering together in the speaker's office to finalize a lot of the conversation that we'd had earlier in the day. there's no question this

president ran on national security and financial security for the american people. that's what we talked about yesterday. that's what these policies are going to be about, making permanent the tax code and making sure we're cutting spending. i just read where the vice president said there's a lot of ridiculous spending in government. and then when i read who said it, it was al gore. you know, some 30 years ago, president clinton cut 273,000 employees. president trump has given the same opportunity to government employees to continue to work on shrinking the size of government. >> congressman, there's lots of questions about the math of the taxes, not just extending the current tax cuts, but adding to them in so far as you know, no taxes on tips, for example, ridding. ridding the code of carried interest, which i think was not on everybody's bingo card at least this time around. how do you extending salt or at least raising the capital salt? how much of that you think is going to still be a negotiation?

and where do you think you're going to net out? >> well, i'm not going to give you numbers right now. we've got a couple of boxes we're going to check today, but i still believe that we'll get to a budget markup in the committee next week and get that committee approval to start the budgeting process to get this done. as you know, senators are meeting with the president tonight in mar-a-lago, and senator graham has put forward a two bill approach only because they believe we can't do a one bill approach. and we're moving forward very quickly. that's what the american people want, and that's what we're going to deliver for them. >> where do you land on that issue? the one bill versus two bill versus, you know, a hodgepodge of bills? >> well, first and foremost, i'm for what president trump ran on and won on and had a mandate in his winning, which is all the policies you've listed and making the tax policy permanent, securing our southern border and making sure we unleash the energy in this country so that we have global dominance on the energy production. when you look at that, i also understand the politics of the house and the policy chair. you know, i

understand great policy as i just described, but the politics of the house are is we need to move them all together so that everybody gets a little bit of something that they can vote on, because no one's going to get everything. >> i've got two other sort of larger, almost philosophical questions for you. one is there's a almost a constitutional question about money that has been appropriated by congress for certain items that we know about. and whether you think that the president and the administration can unilaterally spend less, whether they have the choice to freeze those funds, if they so choose. where do you land on that particular issue? >> well, where i land on, yes, we appropriate them to an agency, and it's gotten out of control over the last 40 years. but certainly what the president and the vice president and his team is doing is seeing. are we using those efficiently? are they going out and they're not being fraudulently spent? that's that's what you've been seeing happen. he hasn't said he's going to make it permanently stop. he's going to redirect. he's going to consolidate

programs so that we make sure we're using the taxpayers of the american, the taxpayer money for the american people in an appropriate way. i don't think you're going to find any american person that's going to say that, you know, duplicative spending is okay, this place is out of control on the spending. we're seeing it in the bond markets. the bond buyers are saying, we've got to get our future obligations met, and we can't keep doing what we're doing. it's literally out of control. exponential deficits and deficits and debts in this country. >> by the way, you're not going to get me to disagree with you. i think we need to actually get our handle on on all of these things. and you want it to be more efficient. there's no question about that. i think the reason i say it's a philosophical question to some degree, or maybe it's a constitutional question, is, let's say, and i'll use it as an example, that the republicans decided they wanted to spend x amount on the border, for example. right. and let's say there was a democratic president in office who decided that for whatever reason, they didn't want to, i don't know. and they said, you know what? we're going to spend half of what congress has appropriated to do that

because we think it's being done inefficiently or inappropriately or incorrectly. that i think, is that's and maybe that's the construct of a way to think about this, which is what would you say then? >> well, what i'd say is, is that's happened with every presidency. i mean, i think joe biden was, you know, spending upwards of $1 trillion forgiving federal debt that wasn't appropriated. so this goes back and forth. that's why we have the three branches of government to adjudicate these issues when they come about. if there's government overreach and any one of the particular branches of government, our founders are brilliant in knowing that we can't have a monarchy. and so when we're doing this, we're going to look and see if the court challenges this and said it can't be done, then president trump will redirect and do things that are differently than that. >> hey congressman, back to the buyout that's been offered to these federal employees. we did have a member or the head of the union from one of those unions that came on earlier and said that he doubted whether this could actually be true, that he's warned his union members

that they may not get paid out in this way, because congress would have to appropriate that money. would congress appropriate it to make sure that the people who have who have said, yes, we'd like to take the buyout offer, get paid as promised. >> what congress would do. they'd meet the appropriation requests that have been put forth by the respective agencies. they always have, and they always will. and then the agencies will do what they said that they were going to do with those dollars. and that's what you're seeing right now. as i mentioned, president clinton did this in 94, when then it was a bipartisan idea to shrink the size of government. it needs to be a bipartisan idea. now, the american people are demanding it. that's why you saw overwhelmingly, almost 80 million people support president trump for being a president, because he's going to shrink the size of government. he's going to make it more efficient. there's more of a right now, they're thinking of somewhere around $1 billion a day that's being inefficiently spent. and so we're going to look at these. i mean, there are 5 or 6 different agencies that have 5 or 6 different food programs, all because politicians couldn't agree on this, consolidate those

together over the years, and he's going to clean it up in his time in office. >> congressman, there's no question that i think the american, for the most part, the american public would support something like that. one question, though, is about efficiency and how money is used. and i was talking to becky earlier. we were talking about the ppe loans during the during the pandemic. and the truth is that it was very helpful in that moment, of course. and steven mnuchin, who was the treasury secretary at the time, said, you know what? there's going to be some waste, fraud and abuse in that moment. but given the speed with which we're moving, we're willing to accept that inefficiency, if you will, meaning we're going to overspend in some cases. how do you think about that in the in the construct or context of these, these buyouts, which is to say there are going to be and potentially many people who are near retirement age or whatnot that were planning to leave, that were planning to retire, or others that were thinking about leaving anyway, that effectively are going to get paid out to leave, and whether that's an efficient way to use the money. or do you say to yourself,

that's a cost of doing business, which, by the way, may be a fair trade off, but i'm very curious how you think about it. >> well, the alternative is, is you have no way of letting people go to shrink the size of government. if you're going to consolidate agencies, you can't have duplicative employees in those same agencies. the only other option you've got under the current way, the government labor unions are written, is to give them this offer of a buyout. i mean, president trump came forward and said, we're going to give you six months of payout. you don't have to do anything. you can spend all of that time looking for a job, and you're still going to get your government pay. i know that there's conversations about those folks that are near retirement, that they can accelerate their retirement so that they don't lose that opportunity. and so i think you're going to see some of these now that the unions realize that he's serious, meaning president trump, you're going to see them come together and find a solution to some of these, these nuances that you just described. >> congressman, i want to thank you for joining us. we hope you have your back. as all of this continues to progress. thank you. >> have a great day. >> you too. coming up, an exclusive interview with minneapolis fed president neel

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red ink across the board now on the markets, but it all could change at 830. the ten year was about 444. last time we looked in crypto just under 98,004 for bitcoin about where it is right now as well. news that pga tour commissioner jay monahan met with president trump earlier this week. the tour saying that it's now closer to reaching a deal with the saudi arabian backers of liv golf. that could help reunify the sport. a couple

of years after some high profile players left the pga tour for the liv league. in a statement, monahan and player directors adam scott and tiger woods said that the tour asked trump to get involved in solving the dispute for the good of the game and for the good of the country. the pga tour and saudi arabia's public investment fund announced an agreement in 2023 to house their commercial operations in a single entity, but a final deal has remained elusive. d.c. lawmakers and victims of september 11th. and the families or the families or the victims families have also been wary about a potential deal with the saudis because of the country's human rights record and the alleged country's alleged complicity in those september 11th attacks. let's get to dom chu with a look at this morning's pre market movers. hey, dom. >> all right. so joe, let's check on some of the big earnings stories of the day so far. amazon shares still right now in the red down by just about maybe 3% or so. paring losses though from last night.

the e-commerce giant reporting better than expected earnings and revenues for the fourth quarter. but its weaker guidance is dragging down the stock. amazon expects revenues to grow between 5 and 9% in the first quarter, with the low end of that range marking what could be the slowest growth on record since the company went public back in 1997. amazon is blaming some of that weaker guidance on foreign exchange headwinds. also, sales in its cloud division, amazon web services came in below some estimates, although revenues were higher this quarter than a year ago. that growth is still slowing down and slower than some of its bigger competitors out there as well, so keep an eye on that. meanwhile, shares of affirm jumping up around 12% following a top line beat for the second quarter. the provider of buy now, pay later services also saw loans a 35% jump in gross merchandise volume year over year, that number topping analyst estimates. the cfo said earnings were boosted by a $60 million gain from a deal back in december, in which the company repurchased some of its convertible debt at a discount price. so affirm shares are up about 14%. and then skechers

tumbling right now down by just about 11% or so after missing on earnings and revenues for its quarter. the company said it saw strong results in the u.s, but headwinds in china continued. the footwear company's first quarter guidance also came in below estimates. ubs analysts are lowering that stock's price target this morning as well. so skechers down 11% in the news right now joe. i'll send things back over to you guys. >> okay. >> very good dom. thank you. >> meantime, meta's ceo mark zuckerberg visiting the white house. yesterday, the company said that he was there to discuss the company's role in trying to help the trump administration with america's international tech leadership. it's unclear whether zuckerberg met with president trump himself, who spent much of yesterday meeting with republican lawmakers on his legislative priorities. meantime, meta we should mention on a 14 day winning streak. and you can look at that stock at $714. >> it's never done that before. i think yesterday it was shooting for 13 for the first time ever. two days ago it was 13 was the first time it's ever gone 13 days in a row. now, this

is the first time that they've ever seen this many. >> in a row. >> yeah. >> all right. it is just a few minutes remaining until that january employment report. we're going to get you prepped and ready with our jobs panel. squawk box will be back in just 30s. >> machine learning is. >> advancing. >> but businesses. >> wonder if some machines. >> can keep up. >> let's welcome. >> our. >> new coworker, jeff. >> copier has a. >> great idea. >> i wonder if it's the same. idea as yesterday. >> it's a performance issue. >> really. >> i know people push your buttons. >> but you still have to deliver. >> anything can change the world of work. adp assist is ai informed by workplace data and designed for the next anything. >> welcome back. i'm not sure how long till the jobs report.

oh, wait a minute. it's the january jobs report coming. let's bring in our about five minutes. let's bring in our jobs panel. saira malik, chief investment officer and head of equities and fixed income at nuveen. betsey stevenson, professor of economics at the university of michigan. ej. anthony, he's a research fellow and public finance economist at the heritage foundation. and i'm getting my first look close up to eastman's new new glasses, which they were different yesterday. >> no. same ones, i think. >> oh, those are the same ones. it's a good look, i. rick santelli will be with us. oh there he is. yeah. hey, rick i thought you wore reading glasses. what are these. >> i usually. >> do these are progressive. so i may not be able to. >> look. >> perfect fashionable. >> yeah. perfect for you. >> i may not be. >> able to. >> look at. >> the data quite as easy. >> apparently. >> it's something to get. >> used. >> called hard. >> core progressive. or no, far.

>> right progressive. >> i have my. >> reading. >> glasses here. >> just as a backup. because i haven't done this live with progressives. >> apparently this. >> is something to get used to it. >> i ended with you or rick. you're going to give us the actual numbers. what do you just give us a little bit of a prelude before we actually see them? what should we be watching for? >> well. >> of course, everybody's. >> talking about the both the establishment. and surveys, household revisions. >> i think that i'm going to shy away from that. >> i'll let liesman. >> and some of the others. >> look at that. i'm going to concentrate on this as. >> a standalone report. and in my opinion, i think the most. important issue here. >> is. going to continue to be average. >> hourly earnings, whether it's month over month or year over year. >> and the unemployment rate. i do suspect that. >> the unemployment rate will remain at 4.1. but should there be any. >> movement there. >> that will be key. and i also think that the threshold of earnings that we should pay attention to is whether it comes in at 0.3.

>> as expected. >> or moves back up towards 0.4. and the same could be true for the year over. year 3.9 in the rear view mirror. many of us think that's going to be a little bit less. if that does move the 3.8 versus staying at 3.9, all of that is going to be significant, especially in my opinion, considering how much flatter the yield curve has been since the last report was out, or how much lower interest rates are since the last reports out. and i think that's a combination of fed issues, probably less easing and questions about the longevity of the strong labor force and how much growth we should expect, even though we had a pretty decent first look at fourth quarter gdp. >> right. you are doing your pregame. >> yeah. >> i'm really interested in this idea that you've had the ten year yield has come down. but if you take a look. >> at the. >> probabilities of the fed, they. >> have also come. >> down for that second rate cut. i'm not exactly sure what's

happening here, but the market has dialed back its expectation for those december rate cuts. they were more confident at 60 plus for december. now they're down towards 50. what interests me here is first of all, i. >> think rick is right. this report. >> needs to stand on its on its own to give us a sense of what's happening. there are some areas where you're going to have some changes in terms of normal firings for january retail. you've had some fires out in california, strikes and other things. there's those probabilities right there just inching down. not a huge move, but a little less confidence in those rate cuts that are coming. could be tied to fiscal policy, could be tied to inevitability or possibility of tariffs, could be tied to all sorts of things. but maybe it's more the commentary from. >> fed. >> officials that they're in a very serious wait and see mode until they figure out how all this stuff shakes out. >> i think i have 30s apiece. sarah. what what what what's most important for you? >> i think most important is going to be average. hourly earnings. because the ten year peaked on january 14th, right after cpi came out and was

denied. so i think it's going to be important. what's the ten year going to do on this number? january tends to be a strong number for payrolls i'm above. i think we come in at 200 k. >> that's a. >> you know. >> i'm always looking at whether people have jobs and whether people are participating. >> in the labor force. so i'm looking at that labor force participation rate. >> e.j. well, it's going to be extremely. >> noisy. >> obviously. >> because of all the. >> revisions. >> which are going to be. >> much larger than normal. >> in both surveys. >> but one thing. >> i think. >> it's. >> important to look. >> at in terms. >> of those. >> revisions is where. >> do they occur? >> in other. >> words, are we losing all the jobs. >> on. >> the. >> front end. >> meaning the economy was. not actually as strong. as we thought it was? >> or are we losing them. >> on the back. >> end in the last few months of this benchmark, which would be the first quarter of last year, that would indicate that the economy might have been stronger previously. but began. >> turning down. >> that's especially important given the fact. >> that the business. >> employment dynamics. >> which was released from bls a few days ago, shows that in the

second quarter of last year, the economy actually likely shedded jobs. in other words, there was an overestimation of growth of roughly 800,000. >> not much to write home about on the markets, but they have moved a little bit into the negative more than they were given. that's good. that's what spec does, that sometimes you could do tv. it's time for that number rick santelli you got it. >> yes. >> the big. >> job job jobs report january data 143,000 143,000 is our gain in nonfarm payrolls. and a nice juicy revision to last month from 256 to 307,000. that would make last month one of the best months, going back to march of 24. given no big revisions to the data i'm still holding in my hand. now, if we look at the two month net revision, two month net revision was -8000 -8000. average hourly earnings on a

month over month basis. while we were expecting up 3/10. and boy i told you to look at this one up 5/10 up a half of 1% equals january of 24. you're going way, way way back to march of 22. to find a bigger number in the form of up 6/10, we not only didn't stay at 3.9 on year over year earnings, we moved up to 4.14.1, which would equal where we were in march. to find a bigger number, go to february of last year. now, if you look at the workweek, 34.1 34.1, this is very exciting because that smaller workweek, of course, has other ramifications for juicing some of the other numbers. we've been at 34.3 forever. you have to go in the wayback machine to find 34.1. i don't even have it going back 2 or 3 years. so that's a big move. finally, let's look at u3, u3, the

unemployment rate, 4%, 4%. it moved down. it didn't move up 4%. now 4% equals where we were in may to find a lower one. you're looking at 3.9 in april of 24. if we look at labor force participation, one of our panelists wanted to zero in on that. and that was smart. it increased. always a good thing. 62.6 to find a higher number. you're looking at september of last year at 62.7. and finally drum roll please. we're looking at u 60 underemployment rate. the underemployment rate moves to 7.5. actually that's where it was last month. that's the lowest level going back to 7.4 in june of last year. so that's back to back 7.5. interest rates really whipsawed. i saw tens briefly down at 438 ish. they're now back up to 447. we were at 443. a two year was at 223 and moved to 225. how do you know

the data is good? what did i tell you about the yield curve yesterday, joe? it steepened a couple of three basis points. that's a quick down and dirty easy way, in my opinion, to assess good news versus bad news, at least for the moment. back to the panel. >> okay, great. we will get to the panel. but steve start us off with with anything you didn't hear from rick caught your attention. >> it was very comprehensive, as usual for rick. i will tell you that the downward revisions to the payroll survey came in at substantially less than expected, 589,000. the preliminary number was 818,000. and i'm going to switch glasses because i couldn't i can't do this. >> weird. >> anyway, the household survey a little less than expected, 2.9 million additional on the population side. 2 million additional on the employment side. joe, this, in my opinion, does kind of raise the issue of what role immigration has played in the us economy. there are some economists that believe it

helped us paper over some real shocks to the economy, like the huge surge in interest rates from the federal reserve, and why there wasn't the recession that many people called for. other people point to the tax on social services created by the immigration. so there's a couple sides to this thing that need to be weighed in terms of employment. this immigration did happen with low unemployment rates for so-called native born and white unemployment and black unemployment both declined over this process. so it didn't appear as if they were taking jobs. it's something and i think even everybody would agree on this panel. we need to reform the legal immigration system in this country. and that would have a broad effect in terms of overall, i think it's a good number. i have to look at the retail trade and what happened there in terms of hirings and firings relative to january. there was a surge in hiring in december when it came to the retail side. i don't know how many of those folks were ended up losing their jobs on the backside. i'm going to i did i focused on the revisions. i'll delve into the details of this. >> sarah, what do stock people

don't want the stock market to go up? what did we want? do we do we want rate cuts and an economy that's not too hot? do we want we want an average economy with with tame inflation is that it allows for some rate cuts. what do we want? what did you want first? >> first i want to say to rick, i feel your pain because i've been wearing progressive contact lenses for years, and it doesn't get that much easier. i think, you know, the market, it's a challenge. i think you know what the market will like and what the fed will like is 143,000 on the payrolls. the fly in the ointment is average hourly earnings up half a percent. i think this makes it challenging for the fed to cut rates. there's also two other factors the market's been dealing with that's mixed tech earnings. we know tech's been the leader here. there's questions over ai spending and the monetization there. and tariffs. are these a negotiating tactic or are these going to be something that could also accelerate inflation for the economy. so what does the market see from here? i think we have the same two themes that we've had year to date so far.

first of all, market broadens out, moves away from tech. large cap tech will no longer be the only game in town. we're already seeing that with europe outperforming the us year to date. and second is retail buyers have been stepping in. tuesday was the third biggest day for retail buyers in the past three years in the market. i think these two themes continue and investors should be broadening out their portfolios globally and not just hanging on to us tech stocks. >> all right, professor betsy, what now that we have the number? >> well, you. >> know, i think. >> the revisions. >> including things like the. >> benchmark revisions and. >> the population. >> control, they bring some sort of. >> closure to the end. >> of the biden. >> administration in terms of telling. >> us, actually. >> how many jobs. >> were added. >> and what we saw was. >> it's been a pretty. good time. >> for job growth. even the benchmark revisions in. >> the. >> employer survey that we thought. >> were. >> going to. >> subtract, you know. >> over 800,000 jobs. >> as. steve mentioned. >> didn't subtract. >> as many. >> as we. >> we thought. >> and then. >> when we add. >> in the. population controls, it just turns out there was a

lot. >> more employed people. than we thought. and as. >> we look. >> at this month, what. >> we see. >> is a labor market. >> that's basically. >> operating at full employment. and so. >> i think the real. >> question going forward is can we sustain. >> full employment? and i think. >> that's the. unanswered question. >> and as you mentioned. >> with, you. >> know. >> there is some wage. pressure there. >> with that. wage pressure going on, you know, what's the fed going to have. >> to do. >> to ensure. that we can keep inflation under control? >> great. >> okay. e.j. you you can fill in a lot of the blanks of what you were wondering about as well from the. >> well, one of the things that i had said earlier was the fact that this is going to be an incredibly noisy report, not just because of that large benchmark revision, but also the fact that the household survey, which is being revised right now based on census data, unfortunately, is also really problematic. the census bureau has already said they've had a lot of problems with their

surveys recently, that the data is less reliable than usual. and so i have really very little faith, frankly, that these numbers are not going to see further revisions in the future. the other thing to keep in mind, since there was a comment about the biden administration and this bringing some kind of closure, you know, this benchmark only goes through march of last year. in other words, you still have a whole nother three quarters that are eventually going to get benchmarked. and again, if you look at the most recent data from the bureau of labor statistics, that points to a huge overestimation of job growth in the second quarter of last year. and the federal reserve bank of philadelphia is saying the same thing. their estimate for the benchmark is that you're going to lose about 800,000 jobs. and that's just for a quarter, not for a whole year. so this idea thatehow the numbers are in the books and they're never going to be revised again, i think we have to realize that that's just not going to be the case now going forward. you know, one of the things we have to consider is the fact that, unfortunately, the labor market is still facing a lot of headwinds, not the

least of which has to do with the fact that this nation is buried so deeply in debt. and much of the hiring that we have seen over the last several years has been based on taking on that debt. that debt, obviously is going to have to eventually get repaid. and if it's not repaid in terms of what you might call a nominal repayment, it will still be repaid in real terms. in other words, more inflation. a lot of the government debt that was issued over the last several years has already been paid for. it's been paid for by that hidden tax of inflation. >> all right. rick, yesterday you were and you referenced it again today. so you're looking for, for spreads to widen if explain and i don't think steve had an opportunity yesterday to respond to whether that's the most that's a harbinger of how some of these new policies are being interpreted by the market. so is it happening? >> yeah. >> i think it is. i mean, it's subtle. it's right now we're

almost back to close to unchanged on the yield curve. but i like looking at knee jerk reactions when everything first hit, the long end was more responsive to an upside and more volatility. and i think that's a good thing. i think the long end has to pay attention to the earnings number in a big way, because obviously earnings and inflation and wages, it's not all exactly highly correlated, but they all rhyme very closely. and i also think it's very, very significant that the unemployment rate moved in that direction. those are issues the fed's going to have to contend with. and it makes the longer runway, at least in the positive data on a healthy labor market. and i think all of that shows up in two year, ten year, 30 year rates. the long end is going to be growth and pricing pressures. the short end is going to be how the fed sees that, how they synthesize that, how they act on that. and central banks, well,

there's a bit of a divergence going on. you know, whether you look at the uk, whether you look at the ecb, japanese rates are going up, the chinese economy is leaking everywhere. they have huge debt, overcapacity. all that, in my opinion, is going to show up in the yield curve. if we see a 50 spread between twos and tens, i would think that the underlying economy would be much healthier than if we see the twos ten spread go back towards zero or inversion. >> i would only say that that little spiel by rick should be played in graduate level courses. play it with them, make them memorize it, and they're ready for the salomon brothers bond trading desk. oh wait, that doesn't exist anymore. but in any event, that is exactly the story. what the long end is concerned about being. prices and growth and the short end follows the fed and what we talk about and debate and yell and scream at each other is the gap between the two, you know, and why one affects the other and one doesn't. i'm curious, as i

said earlier, about the gap between how the ten year has eased in terms of its yield, but people are a little less confident in fed rate cuts. that, to me has spoken to concern about inflation and concern about some of the fiscal policies that are coming down the pike. i think president trump and scott bessent could ease the pain of the market by giving a sense that they are that these these issues matter to them in the policies they're crafting together with congress. >> i haven't got to mind the gap. i see that all. >> the time. mind the gap. >> i'm not going to mind the gap. that's it. sarah. betsy. yeah, i think sarah already left. she's like, i'm out of here. >> this is a technical problem. >> it was. yeah. she didn't she didn't blow us off. betsy. yeah. professor and the other professor, this professor e.j. and we got kashkari coming up. and we can kick this all around with him i. >> think okay. coming up, an exclusive interview about the jobs report and so much more with minneapolis fed president neel kashkari. he's going to be

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>> welcome back to squawk box, the january employment report showing 143,000 jobs added last month. that was below expectations. the unemployment rate ticking down to 4%. but by the way, the revisions on the other side, i don't know how much you think that that offsets things. take a look at the futures, though. right now you're looking at the dow up about two, three, four points moving around nasdaq though down about ten. the s&p 500 off about three. and then the treasuries right now the ten year and the two year. let's look at the ten year right now 4.468. the two year at 4.247. our own steve liesman is still here on set with us. and he's going to be welcoming a very special guest. >> thank you andrew. we are pleased to be welcomed this morning by neel kashkari, minneapolis federal reserve president, a longtime friend of squawk box. neil, thanks for being here. >> thanks, steve, for having me. >> great. listen, normally i'd ask you right away about the jobs report, but we were just

having a conversation about the gap between what the fed has been doing in terms of lowering interest rates and the behavior of the ten year. and i'm wondering, as a federal reserve policymaker, a guy used to work at goldman, used to save the country working at treasury or help save the country during the great financial crisis. what do you make of the behavior of the ten year? how worrisome is it to you as a policymaker? of course, now it's eased back a bit from where it's been. >> you know, it's. >> not worrisome, but it's. >> important to try to understand what's driving it. >> so i spend. >> and my colleagues spend a lot of time trying to dig into the details to understand the moves. as you know, since we. >> started cutting. >> rates in september, the ten year didn't go down. it went up. right now it's up about 80 or 83 basis points relative. to where it was when we started our cutting cycle, which is counterintuitive. when i dig into the data. >> around 40%. >> of that move is in inflation compensation, which ultimately we control. you might. >> interpret that. >> to. >> say markets saw a more. >> dovish than expected.

>> fed and then boosted inflation compensation a little bit. i'm not worried about that. we will get inflation down to 2%. >> we're committed to that. >> the balance. >> the other 60% of it is. >> really about real rates. >> and what's. >> driving long real rates. there are a couple explanations. >> that i'm. >> focused on. one is i think there's great uncertainty about where the neutral rate. >> is. >> and the. >> longer the economy continues. to exceed. >> expectations. on growth and. >> resilience, i think people and markets are taking. >> signal that the neutral rate. >> may be higher. and then you've. >> got the residual or. >> what we call. >> the term premium. >> that a lot. >> of things go into that. one possibility is fiscal deficits. >> larger deficits. >> all else equal would tend. >> to tick. >> up the term premium. and so where. >> does this all shake out. we're going to get. inflation back down. >> but then. ultimately what. >> the executive. >> branch and congress do on the. >> fiscal side. >> and ultimately what our growth. trajectory is. >> are we in a period of higher productivity and higher investment that would tend to push. >> up long rates? >> and so how that nets out, we're. >> just going to have to wait

and see. >> but we're going. >> to get inflation down. >> neil, i want to come back to the 35 questions i have over what you just said in a second. but people right now at this moment, are trying to make sense of some enormous numbers that were just laid on them, 300,000 plus in december. revision up 149 a touch below, but right around consensus for the january numbers. huge revisions on the household side, big down revisions on the on the establishment side. how do you make sense of all this? tell us where you think the job market is right now. since you have a mandate for low unemployment. >> yeah, i think of all. >> the data that we just looked at that you. >> just mentioned, and i. >> have to. >> go through the details. i think the most important. >> one is 4.0% unemployment rate. >> this is. >> still a good labor market. >> it's not as hot as. >> it was. >> a year or two ago. >> and i validate this data. by talking to businesses all around the region. >> and around the country. >> and overall, the. >> feedback that i'm getting is the economy is strong,

businesses are optimistic. it's a cooler. labor market than a year ago, but they're still having to work to find the workers that they need. and so i think the economy is in a good place. we want to keep it there while getting inflation all. >> the way back down to our target. >> you know, it's interesting you say what you said because a wise person told me once that you can look at all the data you want on employment, and maybe the one thing you really need is the unemployment rate. and that tells you exactly what's going on. so that really dovetails nicely with that. and neil before that, betsy, betsy, becky i'm doing it again. i'm sorry. >> we had a betsy. wow. >> i'm sorry. >> i heard about this. >> i heard. >> about it i. >> heard about. >> that. >> i wasn't. >> never mind never. >> mind before. oh i want to hear about. >> but he also has a producer named betsy. >> and i was emailing her at the time. not now. i gave myself up. jinxed. okay, becky, joe and andrew, real quick. we had a weekend full of drama. neil when it came to tariffs, how did you spend? what were you thinking over the weekend about the impact of potential tariffs?

they're delayed now for 30 days. how does that affect your thinking about where policy can and should be. >> it reinforces my view that we're in a good place. my colleagues and i basically have. >> said we need to wait. >> and see. >> we don't know. >> enough information about what's. >> going to be announced. >> we have a little more information now on that. we really don't have information about what will actually be implemented. >> and how other. >> countries are going to respond. and in that environment. we shouldn't guess. >> we should just wait and see. and then the good news is, as we just talked. >> about, the economy is. >> in. >> a good place. so we're in a very good place to just sit here until we get a lot more information on the tariff front, on the immigration front, on the tax front. et cetera. all of those are going to be important. >> so what's the next data point you're watching for? or is it watching the headlines and kind of seeing how it all plays out? >> well, setting aside the policy uncertainty that i just mentioned, the other big question is, you know, we've seen potentially residual seasonality in the inflation

data in the first quarter, the last couple of years. is that going to be repeated or are, you know, if you look at the last nine months of inflation data, it's very encouraging. but first quarter of 2024 was very hot. is that hot period going to be repeated or is that going to roll off if that rolls off and the recent inflation data continues, then we should see rapid disinflation in the numbers in the first half of this year. and so that for me is setting aside the policy questions. that for me is what's of paramount importance right now. the first few inflation prints that we get. >> so can you cut neil, if you get that inflation down where it needs to be, even with the uncertainty over policy. >> you know, it's a good question. i think we'll have to see where you know how what that uncertainty looks like. what are the what's the range of the negotiation that's taking place. and obviously tariffs are hard because it's not simply what we do in america. it's how other countries respond and the back and forth. and so i think the tariff one is particularly difficult. i think the other piece is tax policy. maybe we'll

have more clarity on what the outlook looks like on taxes and revenues and spending, and that may give us more comfort. ultimately, our job is maximum employment and stable prices. and if we are, if we see very good data on the inflation front while the labor market stays strong, then i think that would for me move me towards supporting easing further. i don't know why we'd have to keep rates where they were if we really saw inflation coming down quickly. >> you know, there are people who would complain and say, hey, were you this sensitive to fiscal policy under the biden administration, is there perhaps a double standard here? why are you holding your your your powder now with trump about to do a bunch of fiscal policies but didn't really seem to react to when biden passed these massive spending bills? >> well, it's a question of what's the underlying inflationary dynamics? you know, going into the obviously the huge inflation surge, we had about 1.5% inflation for five, six, almost a decade, years,

almost a decade. and the concern was could we get inflation up to 2%. then we were surprised we had this big inflation surge. inflation is still above our target. it's running at around a 2.5% rate right now. and we need to get it all the way back down. so i think the given the recent history and given everybody's and my belief in the paramount importance of keeping inflation expectations anchored, we have to finish the job. and so i do think our look at the fiscal policy is informed by our recent experience and where inflation has been running in the economy. >> it's like, yeah, we had no idea inflation was coming. and god, that was crazy. all that spending, since we had no idea inflation was coming, we didn't know all that spending was going to cause it. and now you're saying, well, now, you know, fool me once, my fault, now you know it can happen. i mean, things do have an effect right now. i mean, we can get i mean, what, are we still up? we're still up 30% in prices, are we not 22? >> yeah. i mean, overall, the price level is up a lot. and that's why americans are

frustrated and i share their frustration with that. but our job is to get inflation down as you understand. and you know supply chain. >> one it's just there are real effects to what we do. and we forgot it for 40 years. it's like we thought we could do anything. >> well, i think we were surprised by we had not seen the supply driven inflation in a long time. and given all of the geopolitical uncertainties in the world, you know, could there be supply shocks that hit us again? it's certainly possible. we're certainly much more aware of that risk than i was 5 or 6 years ago. and so we shouldn't forget that. >> yeah. you know, give us your best guess of how policy shakes out this year. do you think you end up the year lower than where you started? and will inflation be coming down and hitting target this year, or is it next year. >> you know i think inflation the underlying dynamics are coming down. we have a lot of confidence. housing is still a big piece of the inflation. we have a lot of confidence looking at the new leases and how many. it takes a couple of years for that to roll through the actual inflation data. so that should

be helping us bring inflation back down. barring something really surprising on the tariff front, immigration front or fiscal policy front. so taking off some extreme outcomes there, i think inflation will continue to come down over this year. so all things equal, i would expect the federal funds rate to be modestly lower this year at the end of this year relative to where we are right now. but of course, the data is going to drive that. and we may not get officially mathematically back to 2% this year, but hopefully we'll have a lot more confidence that we're almost there going into next year. >> you know, we're really grateful for you joining us on squawk box and hope you'll come back again and bring your expertise to the to the table. >> thank you for having me. >> great. thank you. >> you're welcome. coming up, we're going to check the futures and get you ready for the and get you ready for the trading day it all started with a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast!

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luxury resale shop, now with code tr20 for 20% off. terms apply. >> a final check on the markets following that softer than expected jobs report. but the us inflation or the unemployment number was also lower at 4%. so a lot of moving figures here. it looks like the markets digested it all with pretty much a bit of grace on this. we're now indicated up by about 38 points for the dow. up by two points for the s&p 500. up by three

points for the nasdaq. and we've watched treasuries i think moderate to some bit for 48. that's a little higher. and for 25 is where the two year stands on these things. it's been a wild week. it's been a lot of fun. and joe we're very glad to have you back. >> i know i'm glad to be back. i'm glad to be back. but i'm thinking five days next week i got to. >> it's going to be. >> a long week. i got to bone up. i got to bone up because i'm not totally back. >> join us. >> for that. hope you feel better over the weekend. right now it's time for squawk on the street. >> good friday morning. welcome to squawk on the street. i'm carl. quintanilla with david faber, sara eisen at post nine of the. >> new york. >> stock exchange. >> cramer has the. >> morning off. >> futures do lose some opening gains as. >> yields pop on this hotter than expected wage number in the jobs data. >> although we're back. >> in the green biggest year on year rise since last february 10th. >> year just south. >> of four. >> and a half. >> a roadmap begins with big tech's big. i spend. >> amazon calling. >> it a