friday, february 21st, 2025. and squawk box begins right now. i think so. >> good morning. >> and welcome to squawk box right here on cnbc. we're live at the nasdaq market site in times square. i'm andrew ross sorkin along with joe kernen. becky is off today. it's a friday and we've got some futures in the green this morning. >> we've actually. >> we have not had a morning. >> where we. >> started in. >> the green. >> but we've. >> also seemed to end. >> almost in the opposite direction. >> almost. >> except for. >> yesterday that walmart. >> threw us the other way. people were looking for something. you think. >> they were. >> looking for something? i think they're looking for something. and i think. walmart gave it to them. yeah, i think in the details there you can overreact to what. walmart said. but. it they try to keep prices

low. they try to keep. >> sales increasing. >> and a lot of it is groceries. >> and if inflation is still. around it's going to be tougher and tougher for them to keep prices low and tougher and tougher to keep beating revenue numbers. and they said. >> as much yesterday. >> and i don't think the market took that well not just for walmart. but overall don't you think. >> that was it. >> i do think. >> that wal-mart was it. but tariffs would just make it worse. so that i think that combined i still think. >> the prospect. >> of tariffs is definitely was a part of it. yeah. but let's not overstate. 450 points from basically everything else at an. >> all time high. the day the close the night before. >> the s&p and the nasdaq. >> all time highs. so we pulled back. you know what is that. it's too early to figure out percentages, but it's not. much 450 points. >> let's tell. >> you a little bit. >> about where we are right now. >> treasury yields the. >> ten year note sitting just at about if we. >> flip it around 4.492. >> the two year at 4.262. and

overseas in asia, we should tell you that japan's nikkei inched higher as the inflation rate there climbed to a. >> two year high. >> of 4% in january, supporting a rate hike calls from members of the bank of japan. meantime, hong. >> kong shares. >> hitting a three year high and lifted in part by a 14.5% jump in alibaba. this after what were some pretty stellar quarterly results. we talked about them a little bit yesterday, and we'll have a lot more on that story in a couple. >> of minutes. and some executives. >> at meta. >> are going to get bigger. >> bonuses this year. >> and a. >> new filing. the company said it had approved an increase in the. >> target bonus percentage. >> for its. >> annual bonus. >> plan for. >> executives named. executive officers. >> could earn a bonus of 200% of their. >> base salary. >> under the new plan. >> up from the. >> 75% they earned previously. the updated. plan does not apply to mark zuckerberg, the ceo. >> the board. >> committee said. >> it. >> approved the change because the target compensation for its executives was at or below the 15th percentile. of executives.

>> compensation at some of its. >> peers. >> though some of its. >> peer companies. >> the disclosure. >> of the. >> bonuses comes a week after. >> meta began. >> laying off 5%. >> of its overall workforce. and according to an ft report. >> meta also slashed its annual distribution. >> of stock options by about 10%. >> for thousands of employees. >> but companies do, you know, 510% companies do that occasionally. you remember jack welch used to be if you're in the bottom 10% of performers, you know, start looking. >> around for things. and that's. >> why i think we're going to. >> it's very weird. you know, we're talking about the irs. we'll talk about that a little. >> bit later. and we talk. >> about. >> these these government. >> layoffs and the violins and the crocodile tears are out. but private the private sector does this all the time. and the private. sector is under different constraints. >> obviously, they don't have the. >> taxpayer backing. >> everything they do. >> so it's. >> much more difficult for. >> a private. >> sector company to get totally. bloated and wasteful.

>> so you should. really assume. that there's at. >> least 10% that could go. >> and a lot of. >> these agencies. >> to start with, if it was the private sector, it'd probably be a much a much bigger number. and it's no one is happy to see anyone lose their. >> job, obviously. >> but the world is a place where low performers or people. >> that you know, that. >> really aren't coming in with the same type. >> of energy and enthusiasm and i don't want. >> to call them slackers, but you need you need to. >> cull the herd every. >> now and then. >> you do. and i'm glad you agree with me a little bit. i think you do. i know how much you wanted to expand the irs a lot. there's 100,000 irs employees. this is going to be 6%. it's going to be. >> about 6000. >> i just think that that is. >> a doable number without bringing out the violins. >> look, my only thing. >> about the irs, you want compliance because that one compliance, you don't even have to raise taxes. if you don't have to raise taxes, you get compliance. >> compliance. >> and.

>> it's like. >> the one place. >> in every business that you do not. cut is the guy. >> and that is that is what they're cutting. compliance brings. >> in. >> the revenue. right? right. >> when like. >> if there's. >> a revenue office. >> you that's the office you invest in. >> because. >> you want the revenue. >> i hear you on that. i just don't know whether the i don't know whether the compliance, you know, you've got that maybe we need more people because some things are slipping through the cracks. i think that maybe there's. >> there's plenty of waste there already. and you could do just as good a job with fewer employees. >> so you think that the state. >> is doing a bad job? >> no. i think that the irs is probably like everything else. >> it's probably. >> got a lot of. >> bloat, waste and sure. >> but then. >> you have. >> to then invest in the technology. >> maybe you. >> do that. you have to do it. >> there's a lot of things, you. >> know, that's a lot cheaper. that's a one shot deal. >> that's not, you know.

>> people that you. have for year. >> after year after year. >> but then part of it is unfortunately for. >> compliance. >> especially among the most sophisticated. >> folks, it's not. >> compliance is like lawyers. >> yeah. >> it's people who actually. >> are going to go in. >> and be able to look at some of these, these. >> tax returns. >> where people are doing all sorts of funny. >> business, you know, all. >> about that stuff. >> you know, as a. >> w2 person. >> no, i mean, you know, about the llcs and you know how people. >> and it's and that's where that's where. >> the i'm stuck. the money is i'm. stuck i tell my. >> you know. >> my the guy that does my taxes. they do something and he, he says i can't do anything. this is what you have. this is what you you're deductions. >> are. >> here and it's impossible. it's impossible. i'm happy to pay. i don't use that line at the bottom where i can voluntarily pay more. has anyone? i think that they should just remove that, don't you think? >> just a waste of ink. waste of paper? >> you save some money, i think. >> save some. >> no one has ever said. >> let me pay more. >> oh. >> apple ceo tim cook reportedly met with president trump at the

white house yesterday. i think tiger was. >> there, too. adam scott and the pga commissioner. they're all there. >> the topics discussed, we don't know. but apple is at risk of being. >> a victim. >> in president. >> trump's fight with china. >> china said it's. >> considering a probe into apple's. policies and developer. >> fees during trump's first term, apple won a tariff carve outs for its iphone. this time, trump has said he's looking. >> to avoid exemptions. >> i think that. >> we're going to. much to the chagrin of the china hawks, i think you're going to see trump cozy up. i think we're going to be it's important to both countries. >> that. >> we're going to be friends with china. >> yes. don't you think? are we. >> going to be with. >> zelensky then. i think. >> when he pushed, you know, besson was there. yeah. gave him the paper. >> we've given him. how many? >> 200 i hear 200 billion. 8 billion? i hear 350, i hear 200. 350. >> you have this stuff. you owe. us a.

>> just sign this. let us have some of this stuff that is recompense. because i think that we're still remember what happened. >> with iraq. >> where we got none of the oil. remember, we did all that and all that money. was spent, and there was no deal for. >> any of the. >> you know. >> to be. >> paid back. >> and so i think that's it. and i think. >> when zelensky. >> said, no, i'm not. >> saying i think that made. >> everyone mad. >> oh, i think it was worse than that, because i think what happened in the meeting was. >> he said, according. >> to rubio. >> i'm going to go back to the legislature, my legislator. >> to. >> get something approved. and that. >> in the room. >> seemed like a maybe. >> reasonable thing. >> to do. and then when they left. >> the. >> room a day later, he was out there telling the public that he rejected. >> the proposal. >> so i think that it's the. >> dynamic, it's that. >> dynamic which. >> is even more frustrating. >> you saw waltz. >> yesterday on an interview. >> he was he has unequivocally said that putin. >> is basically the devil. and now. >> he's saying, do you think. and he's he. >> wouldn't even answer. >> so they're all they all got a

serve at the. >> you know, at the feet of, of. >> the president. >> and the. >> president is mad that zelensky. >> didn't sign that. >> right. >> do you think? >> i bet you we did eventually signs. >> it though. >> maybe a smaller percentage. what do. >> we want. how much. >> now do we want? 500 billion. >> that's a lot. >> i don't know, i think if. >> you get to get to even, you'd be happy to be honest. >> with you. and that's fair, isn't it? >> it may be. it may be. i don't know how. >> i don't know how you divvy it up. meantime, you can take a trip there if. >> you'd like. because booking. holding shares, they're higher this morning. >> i don't think so. you don't think you ukraine. no. maybe. maybe. >> earnings of. >> 4155 per share. that beat. >> estimates of 3603. >> i'm just. >> saying the bookings folks. >> would probably like to help you organize that trip. if you want. >> to do it. >> 36 point my guess revenue. the key metric of room nights booked also beating estimates. company ceo glenn fogel is going to join us. >> in the. >> 7:00 hour where joe is going. >> to book his big. >> trip. >> the big trip to kyiv. no, i'm

afraid to go to china. i'm afraid to go to any of the, you know, maybe go to florida. how's florida? seems friendlier for me. you'll go all those places, right? would you go to russia? would i go to russia. >> right now? >> yeah. >> for an interview with putin. >> i'd go to. >> russia right now. otherwise probably not. >> okay. you. >> by the. >> way, one. >> of the things i do worry about, i. >> do i want to put this. >> on the record. >> i worry. >> actually about our ability, us citizens. to travel. to countries of places that historically were our allies, where i think it's going. >> to. >> become. >> more and. >> more. >> complicated because they're mad at trump, because they're mad at us. yes, because of trump. well. >> either because of things that. >> the administration is doing. >> or whatever. >> sure. >> i mean, think about. >> all they need to. they need to man up. they need to person up. >> i'm just saying, think about all the country folks who go to south. africa in the. past. or other places that. >> you would have historically. >> thought would be. >> very, very. >> friendly to americans. i think that's actually a thing. >> i mean, that's that's another that's another way to. >> true one percenter thing.

>> by the way. >> no, it is, but that's another orange man bad. that's another thing in your quiver for orange. no, no no. >> it's not orange man. bad. it's just. >> how do. >> we approach the rest of the world? and you. i think you want. them to love us. >> we're not. >> patsies, okay? >> they do, but. >> we're not patsies either. >> so they got to, you know, they got. >> to be happy that that we're. >> you know. >> we help them. >> a lot. coming up alibaba shares jumped 14.5% overnight in hong kong after revenue for ai related products. soared for. >> a sixth straight quarter. >> up next we're going. to talk to analyst dan ives. live from hong kong, about the stock and why the ceo of gamestop just raised his stake in the company to $1 billion. i wish i had a stake in a company like that. squawk box will be up. >> on this. cnbc program is >> on this. cnbc program is sponsored by carl: what's up, carl nation! it's your #1 broker with the best full-service wealth management skills in the biz. tech asst: actually i'm seeing something from schwab.

(uh-oh) producer : yeah, schwab lets you invest and trade on your own. and if you want they can even manage it for you. not to mention, schwab has a team of specialists for taxes, insurance, and estate planning. both producers: all with low fees. carl: we're experiencing technical difficulties... uh, carl... schwab! schwab. a modern approach to wealth management. quickly, anyone can. that's how quickly, anyone can. that's how i help people gold bond believes touch says everything. it says... i see you. i feel you. and...i know you. gold bond. get in touch with irresistibly touchable skin.

are a wonderful set of partners for companies coming in who then want to grow in the rest of southeast asia. at the real deal. >> over 10,000 new. >> arrivals dropped every day. so you. >> can shop. >> all this from right here. the best part? it's up to 90% off the real deal. authenticated the real deal. authenticated when emergency strikes, first responders are the first ones in... but on outdated networks, the crucial technology they depend on, is limited. that's why t-mobile created t-priority... ...the only solution built for the 5g era, that can dynamically dedicate up to 10 times the capacity for first responders. t-priority. built for tomorrow's emergencies. ready today. (♪♪)

in retirement. >> jim cramer. >> is the. >> benefit you get that you can't get. >> anywhere else. >> it's a great value. >> jim cramer gives you much more than you would ever get from any advisor. >> he teaches. >> how to invest. >> versus just what trades. >> to make. >> return on. investment for the. >> club pays for itself. >> join the club new member savings and soon. your

home. >> birx get my body, i'm. gonna sweat. >> you've worked. >> hard, hard, hard work. hong kong listed shares of alibaba surged 14.5%. overnight after quarterly results. >> beat estimates on. >> nearly every metric. >> driven by big jump in. >> ai related products. and yesterday. >> afternoon, the wall street journal reported that ryan. >> cohen, the gamestop ceo. >> increased his personal stake in. alibaba to roughly 7 million. >> shares, worth about $1 billion. for insight on this. let's bring in dan ives. >> global head. >> of technology research. >> and a. >> senior equity. >> analyst at. wedbush securities. dan, it's good to see you. even before i think the

news about ryan cohen, you were looking at those numbers from. >> alibaba. >> and you think. >> that's the leading. >> could be end up being the big winner in china in terms of ai. and maybe ryan cohen is seeing the same thing. >> yeah, i mean i think they're. >> they're going. >> to be the big winner. >> when it comes to ai in china. and i think especially. >> you know our view. >> apple and alibaba they're going. to partner up. i mean. >> that's going to be cupertino's. >> partner in china. >> probably in may. >> so they're really in a position of strength. you look at cohen's. >> bet i. >> think. >> it's the right bet because. >> as we're starting to see sort of china tech. >> awaken. >> baba is really. leading this. >> and i can tell you. >> i'm here in hong kong and there's just. >> huge bullishness. >> for baba as well as just what's happening from an ai perspective. >> it's going. >> to be across the board. with the cloud operations, e-commerce, customer focused ai. >> they're spending more. in the

next. >> three years than. they did in the last ten. so everything that that and it's all based on on. not necessarily china's economy. >> or relations with the united states. >> just based. >> on the momentum of artificial intelligence. >> yeah. i mean, look. >> clearly. >> i mean. >> deep tech was the first shot across the bow. but i think what you're seeing with alibaba, it's really about the platform. i mean, it's no different than microsoft. what we see with alphabet, amazon i mean bob is a massive position of strength. i mean you'll see others, you know. >> baidu. >> tencent and others. but i mean this is a huge inflection point quarter. and i think more. >> and more. >> you know, whether it's a decoupling or ultimately some sort of. >> more, you know. >> globalization of ai, there's going to be winners in china, just like there's winners in the us, but we are seeing just a massive spending wave take place in china in alibaba. you know, they're really the ones. the trophy case right now. >> do you think ryan. >> cohen and.

>> his involvement has. >> anything to do with. >> the. 15% move today. can he move. can he do it. >> to alibaba like. >> he does it with some of the. >> meme stocks. yeah i mean look. look it's. >> obviously him sort of doubling down on baba is a good thing because i think it does just speak to just broader. you know i think what we're seeing in terms of the swirls from an investor perspective. and i think what cohen sees, it used to be activism, right? in terms of, you know, what he was looking for. but i think now it's just this if you're going to play the china ai story, baba continues to be the best way to play. i mean, we. think 500. >> billion. >> could be the sort of base case valuation as this plays on. and then obviously there'll be questions about, you know, what does it even mean for gamestop. do they try to make some bet, you know, when it comes to, you know, the broader view, especially with apple and baba definitely walking down the aisle when it comes to ai.

>> so just. >> to just look at. >> it. >> you know, more. >> in depth. >> what is the app. >> make the case. that that partnership. >> is. >> going to happen. >> and why is it going to have what does it do the apple. alibaba partnership. what's it do. for apple. >> what's it. >> do for baba. >> yeah i think. >> it's going to be groundbreaking. >> because right now apple doesn't have ai in china. they need a partner. cook 10% politician 9% ceo. i think baba is going to be the partner and that's the one that makes the most sense. very similar is open ai in the us because of the platform, because of the data. and that's that's going to be signed off from beijing. and that's very important because you have 300 million iphones that haven't upgraded in four plus years or, you know, around the world. in china, we only have 100 million that haven't upgraded. this could be a huge catalyst for apple in china. start to see growth here. and for baba. when you get cupertino

basically beating their ai strategy in china, that's huge for both companies. and i think that's why they're going to bet on the winner. and that's what we expect by may. >> i said earlier. >> that i think. >> china needs us. >> we need china. do you think. >> there will. >> be a thaw? even though trump has been pretty? i don't know. he's he campaigns. on on things and then governs. maybe in a different way. but as trading partners we're important to each other. >> yeah. i mean. >> look, you guys need china, chinese, us. i can tell you in dc three weeks ago, i felt that here in hong kong and throughout asia, it's feeling like that as well. they more investors are making that bet. you know, that this is going to be more of a thawing. >> yeah i. >> think. >> so too. all right. >> dan ives. you're interesting. >> shot there. >> you're okay. >> right. this isn't. >> a you're not being hostage held held. >> against your will. >> or anything. this is i'm smiling here. it's kind of a

fake smile. >> him and mayor. >> adams, who's watch him get reelected, watch him get. >> very interesting. >> watch it. because he's not he's not getting rid of him. i'm a big fan. >> i'm a big fan. >> you know that? i know you. >> are, by the way. >> for a long time, ever since. >> thank you. dan, when we come back, layoffs have begun at the irs. we're going to tell you what it could. >> mean for your. filing this coming tax season, plus new. >> reports about the trump. >> administration's plans for the united states postal service. a lot. >> of. >> news. >> coming. >> up after this. >> at ihg. >> hotels and resorts, you can simply. arrive or make an entrance. stick to the agenda. >> or experience. >> something unexpected. with ihg 19 hotel brands, you can guest how you guest. >> when you're the official vehicles. >> of winter. >> you can. embrace everything. >> the cold has to offer. >> leave fresh. >> tracks with.

>> the safe and secure jeep grand. >> cherokee melt limitations with our most capable. jeep wrangler ever, or battle. >> the elements. >> and win in the jeep gladiator, hurry into the jeep. >> president's day sales. >> event before these incredible offers. >> slip away. during the jeep. >> president's day. >> sales event, get. >> $7,500 total bonus cash. allowance on 2024 jeep. grand cherokee, overland. >> and. >> summit models. see your local jeep brand. >> dealer today. >> 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. >> climate. >> across every major asset class. to seize each possibility class. to seize each possibility at precisely the right this is steve. steve takes voquezna. this is steve's stomach, where voquezna can kick some acid, heal erosive esophagitis, also known as erosive gerd, and relieve related heartburn.

voquezna is the first and only fda-approved treatment of its kind. 93% of adults were healed by 2 months. of those healed, 79% stayed healed. plus, voquezna can provide heartburn-free days and nights, and is also approved to relieve heartburn related to non-erosive gerd. other serious stomach conditions may exist. don't take if allergic to voquezna or while on rilpivirine. serious allergic reactions include trouble breathing, rash, itching, and swelling of face, lips, tongue, or throat. serious side effects may include kidney problems, intestinal infection, fractures, life-threatening skin reactions, low b-12 or magnesium levels, and stomach growths. tell your doctor about your medical conditions, medications, and if you have diarrhea, persistent stomach pain or fever, decreased or bloody urine, seizures, dizziness, irregular heartbeat, jitteriness, chills, shortness of breath, muscle aches or weakness, spasms of hands, feet, or voice. voquezna can help kick some acid,

and so can you. ask your doctor about voquezna. do you know how much your broker charges? fidelity and schwab charge over one and a half times as much. e-trade is even higher. move your account to interactive brokers and save at least $1,200 or much more. if you're trading big bucks. >> the cnbc change makers returns. >> 50 women innovating and driving change across industries. >> find out who has made this year's list. meet the new icons. the cnbc changemakers revealed monday on squawk box. >> welcome back to squawk box. >> this morning, layoffs. >> underway at the internal. >> revenue service is filing.

>> season approaches, and robert. >> frank is at the table this morning to explain what this all means. >> as tax season is. >> about to get. >> tax season is underway. >> heard us talking. i said. >> i put this together so quickly over. he put this together so quick. did you rush down here. >> i did, i did i said these. >> guys need some numbers behind the story. so let's give you the numbers. the irs firing between 6000 and 7500 staff yesterday. now many of them work in compliance. that, of course, deals with audits and collections. under the biden administration, the irs received $80 billion in new funding to help improve service to everyday taxpayers and, of course, to crack down on tax evasion by the wealthy and by corporations. the aim was to hire about 20,000 to 30,000 new people to bring staffing back to where it was at the irs. a decade ago. the irs estimated that millionaires and billionaires evade over $100 billion in taxes every year, mainly through complex partnerships and passthroughs. now those efforts are likely to

stall, or maybe even get rolled back. right now, the audit rate for those making more than 10 million a year has fallen by half since 2010, now at about 11%. training auditors to handle those complex returns takes at least 3 to 5 years, and many of those fired were just starting that training. so collections, especially from the wealthy, could fall in the coming years, especially since the most experienced agents are also taking buyouts. now, the tax gap, that's the amount of taxes owed but not collected. that has grown to about $600 billion a year. andrew is right that we have a lot of taxes that go in. you're also right in that technology could help improve. >> i can't believe that i was. >> the one talking tech to. >> don't i get you? >> do you get credit? no. because there's no way we need. >> to go back to where. >> we were 15. >> years ago. given all the new technology. >> and ai and everything else, so that that's. >> an anachronistic comparison. i don't know about these numbers, whether they're, you know. >> they sound i don't know, they

sound estimated. >> how do you know it's $600 billion. oh, right. >> no it is it. >> is. >> totally estimated. but but you. >> also know that between crypto and between the payment services where people are sending each other all this income through, you know, that there's a lot that is missing right now that they're not. if you can't do it andrew's way or my way with. >> with. >> technology, i'm sure. >> there's at least. >> six, 6. >> to 7.5% bloat at the i'm sure. >> of it. >> of course, the question. >> is it's not that. are there too many people? is that do you have the right people doing the right thing? >> do that. >> and so a lot of these people getting fired were in customer service. so typically it took a half hour when you called us to get a response last year that wait, the average wait time went from 28 minutes to 3 minutes. a lot of the reason is because we have all these people answering the phones. they're going to go away. people are going to get very frustrated. >> you can't do it. it's a flawed decision because the money that. trump the administration. >> is going to save from. >> getting rid of these guys is not going to be the same amount, not going to be anywhere close to the money that you're not

getting from doing these audits. >> we'll have to see. >> we'll have. >> to. >> see. >> if they can improve. >> this unless they can improve. and why would they do that? then the only thing you could say is he's trying to help his wealthy friends not get audited. and i don't believe that's. >> the motivation. but it's another giveaway to, as you said. >> with 100,000. >> but if it doesn't, net net out to. >> where you're getting more. >> if you. >> get more. by having having these. >> people stay. >> then you do by rationalizing. >> the 6%. >> of the workforce. >> and it makes no sense to. do it. >> to andrew's point earlier, a lot of the tax gap are these very complex partnerships. >> the worst part about it is you need lawyers. it's illegal. it's a legal game because what's happening is people aren't filing their tax returns properly and then they're challenging effectively what the audit even is. that's right. and then they have to go to court. and so the only way you can actually get the money is to go through the court process. >> and the irs right now is so outgunned and outmanned by, you know, the lawyers, the accountants that are like rocket

science scientists of the tax code. they are so much smarter and better and better paid than the irs agents that they're they're winning the game right now. >> so simple answer, andrew. what's the answer? >> get rid of every. possible deduction in. >> the world. >> know what. >> get rid. >> of the income tax and. do tariffs. oh oh. >> the external revenue service. >> internal revenue service exactly. >> what we need okay. >> robert. >> hang around because i'm actually curious what you think of this one okay. because we're going to go from the irs to the post office. now reports saying president trump planning to dissolve the leadership of the. usps and take control of the independent mail agency itself. frank holland joins us with more on that story right now. >> hey, good morning andrew. so this morning we're watching shares of fedex, ups and amazon. those are three companies that could be directly impacted. the white house takes control of the post office, a move that could also impact the flow of trillions of dollars of e-commerce. according to reports, the president is considering firing the postal board and placing the post

office under the commerce department. the post office is an independent agency with six bipartisan board members who are picked by the president and then confirmed by the senate. the postmaster general announced his plans to resign after leading the agency since 2020 through the pandemic and, of course, through two elections where we saw a big jump in voting by mail. president trump has been highly critical of the post office before and after his election win, and had these comments about postal privatization. at a december 16th press conference. >> there is talk about the postal service being taken private. you do know that not the worst idea i've ever heard really isn't. you know, it's a lot different today with between amazon and ups and fedex and all the things that you didn't have. >> and it is quite a bit different these days. so just for some context, ups, fedex and amazon, they've historically used the post office supply chain along with other companies out there to once again send trillions of dollars in packages through the post office. so a bit more context. u.p.s. signed

a five year deal with the post office for air delivery last year. at the same time, the company said it would no longer use the post office for its sure post economy shipping service. that air contract. it was previously held by fedex. on its most recent earnings call, ceo raj subramanian he addressed post office privatization, saying it's important that parcel delivery is not subsidized by taxpayers parcel carriers. overall, they rushed to expand, leading to excess capacity in the market according to ship matrix. so more context here. in 2024, e-commerce capacity was about 120 million packages per day, while at during the holiday peak, we saw volumes top out at right around 106 million packages per day. back over to you. >> we lose our. we do. >> but the question. >> is, what is the right answer? is there is there something? is there some middle ground here? >> i mean, in the uk they privatize the royal mail. that didn't work well in the beginning, but now it's working. it's a process. and the question is, you know, if you look at the prices for fedex and ups right

now, it's extremely expensive to send stuff over there. >> frank, you. >> know what this. >> segment is called, right? frank. >> frank and. >> frank, frankly speaking. >> or frankly speaking. >> frankly better. frankly speaking. >> by the way, i didn't tell frank this. i already filed the trademarks and everything. so that's coming at some point. >> robert harland or frank. >> frank. >> if we will. >> have a. graphic built for the next time we do this. >> gentlemen. >> on a serious. >> note, other places have really. >> cool. >> really cool animation. two years ago. >> the post office started a turnaround plan. so during this most recent holiday quarter, it did turn a profit of about $144 million. just for comparison, the year before and the 2023 holiday quarter it lost about $2 billion. so that's some of the arguments that the president and other critics are making. but the post office is very actively in a turnaround plan. they've ramped up capacity. but they've also warned that expansion by fedex, ups and amazon that could also lead them to lose market share. the other part of this story that we might not have time to really get into, is that the post office is the only carrier that delivers to every

address, and if there's some significant changes to that service, it could hurt a lot of small businesses and also rural customers. >> yeah, okay. >> frankly speaking. >> frank and. >> frank, thank you both. >> frank, good to see you. >> any talk about taking the new jersey dmv? >> thanks for being so frank. >> i'm always. >> can we do that? take that. >> the dmv. >> the new jersey dmv. >> i mean, so. >> well now. >> it's unbelievable. that was eric, and it's. >> coming up. rivian. you know, rivian report. >> have you been. >> oh, you have. >> a driver. never mind. >> it's first ever. >> do you have a driver's license. have you tried to do anything. license. yes. not a driver. >> i have a. >> driver's license though. gross quarterly profit ls after the break. oh. no details. sorry. reading the prompter right now, quite frankly. here's a look at. yesterday's s&p 500 winners and losers.

>> this is the emirates premium >> this is the emirates premium economy seat. you founded your kayak company because you love the ocean. not spreadsheets... you need to hire. i need indeed. indeed you do. our matching platform lets you spend less time searching and more time connecting with candidates. visit indeed.com/hire part of everything we do, from helping us attract new customers to facilitating deliveries through websites. >> and apps. i'm really. >> excited about what. >> artificial intelligence. >> can do for small businesses like ours. this game changing. >> technology can make us smarter and. >> more efficient. advancing open source ai will make our economy. >> and main streets stronger. our leaders in washington need

to protect our competitive edge. >> when we talk about the trades, it's always i need a plumber and electrician, a good hvac guy, singular as if it's just one person fielding the call. realistically, what you're getting are entire teams expertly coordinated to keep the lights on, not just at your home or business, but every home in business. and the same way you depend on them, they depend on service titan, the leading software for contractors, the operating system that powers the trades service titan, empowering those who power the nation. >> get invested. join the club. >> as a woman, i wanted to experience financial. >> independence and become financially. >> independent in my retirement. >> join the club, new member savings and soon

get started at wonder ads.com. >> good morning and welcome back to. >> squawk box live from the nasdaq. market site in. >> times square. >> checking the futures this morning. a little bit of a

bounce back from a weak session. yesterday that did. yesterday the. >> averages closed. >> well. off their lows. but it was a pullback. we're watching. shares of rivian. >> the ev. >> maker. reported a smaller than. expected loss. >> per share in the fourth quarter and achieved. >> its first. >> gross quarterly. >> profit. >> but the company is forecasting. >> lower sales in 2025. >> it has not said. >> when it expects to be profitable on a bottom line basis. here's ceo rj scaringe on closing. >> bell overtime. >> the impact of large tariffs on those is going ultimately translate to higher costs for us, which translate into pricing. and in a similar way, as we think about consumer facing tax credits, it effectively makes the vehicles more affordable for consumers. >> scaringe said. the company will launch its more affordable suv, the. >> r two model. >> r2-d2. r2-d2 yeah, early. >> next year. >> meantime, shares of energy

drink. >> maker celsius, they are soaring, the company paying $1.8 billion to buy rival alani nu. that's a low calorie fitness aid promoted online by social media influencers. it's a cash and stock deal. both celsius and alani new. is that how we pronounce it? alani nu. do you think that's right? marketed as fitness aids, both have a strong following among young women. yeah, that's why i don't know enough. >> about it. i think that's probably right. >> coming up, i know a lot about celsius. i don't know about alani nu. the senate passing the skinny budget resolution overnight. we're going to talk to punchbowl's jake sherman about what it could mean for the house's bill next. maybe we'll drink a celsius on a friday morning to keep us rocking. a reminder you get the best of squawk box and our daily podcast, squawk pod, on your favorite podcast app. and listen anytime we're coming right back.

>> 10,000 by. >> next month. >> i don't see, hey, we won't know unless we try, right? how long have we waited. >> for something like this? we'll have to alert. >> suppliers. >> coordinate shipments. >> already alerted. >> already coordinated. every supplier sees. >> changes as. >> they happen. >> since when can we. >> just scale up mid-cycle? since we brought. >> in. >> people who know. know b.d.o. if you know luxury, it's not just award winning, it's rewarding. saatva mattresses supports all types of sleepers. luxury is handcrafted and assembled in american factories and brought directly to you with our complimentary in-home delivery and set up service, which is why over 90% of customers would recommend saatva to friends and family. saatva luxury mattresses made affordable.

>> crypto needs speed. solana executes transactions 28 times faster. >> than the theorem and at a. >> fraction of the cost, whether it's fueling meme coin mania or building infrastructure for high frequency trading networks on wall street, developers are choosing the solana network. and now. >> osprey. >> brings you a. >> tradable ticker for solana. >> don't let solana fly by. you can start investing in it right. >> from your brokerage. account >> from your brokerage. account or (luke) so why can't we say we're the best home shopping site? (lawyer) because while true, you just can't say that legally. (luke) so i can't say... “homes-dot-com is the best!” (lawyer) no. (marci) what if we jumbled up the words? (luke) homes best is com dot the. (lawyer) no. (luke) what if we said it in spanish? (marci) homes-punto-com es el mejor. (lawyer) no. (marci) what if we whispered it? (luke) homes-dot-com is the best. (lawyer) no. (luke) fine! what if he said it? (morgan) homes-dot-com. it's the best. (lawyer) mr. freeman, i'm sorry, but we can't say that. (morgan) say what? (lawyer) homes-dot-com is the best. (morgan) ah-ha! (luke) homes-dot-com. (morgan) it's the best. your shipping manager left to "find themself." leaving you lost. you need to hire.

i need indeed. indeed you do. sponsored jobs on indeed are two and a half times faster to first hire. visit indeed.com/hire >> cnbc live. >> ambitiously get invested. join the club. >> the cnbc. >> investing club. >> is for everybody. >> i joined to. achieve financial freedom in retirement. >> jim cramer. >> is the benefit you get. >> that. >> you. >> can't get. >> anywhere else. it's a great value. >> jim cramer gives you much more than you would ever get from any advisor. >> he teaches. >> how. >> to invest versus just what traits to make. >> return on. >> investment for the club pays for itself. >> join the club new member savings and soon go to cnbc.com.

join jim now. terms and restrictions apply. >> the senate passed its skinny. budget resolution overnight. joining us right now on what it means for the big beautiful bill in the house that may or may not come next. punchbowl news co-founder jake sherman is here. he's also an nbc news and msnbc contributor. good morning to you. so what does it mean for the big beautiful bill? is that is that in the offing here and what's going to be in it? >> so andrew. >> this is. >> a you have to think of. >> this a. >> few ways. number one, donald trump endorsed the house bill. >> the house. >> bill is one big beautiful bill. as trump says, it includes a huge number of a huge. >> spending reduction. >> number, a tax number, 4.5 trillion. >> that's way lower than donald trump needs. and he wants the house to pass this bill, which they're going to try. >> to do. >> next week. >> the senate. >> bill is a hedge. john thune understands that the house might not be able to get this bill

through. i don't have. >> a. >> view on that yet. i'm waiting. >> to hear from. >> people next week. but let me just put this out. there. >> you are, a house. >> republican from a. moderate district, and you are looking at a bill. >> that is going. >> to cut $880 billion from energy, the energy. >> and commerce. >> committee, which could include and will most likely include medicaid trims. there's the political incentive for you to pass that bill. >> that resolution. >> is relatively low. >> it you are going. >> to get. >> hammered, rightly or wrongly, from. democrats for the next. >> 6 to 8 months. >> to a year. so my. >> listen, my. >> view is that a. >> tax and. >> reconciliation deal. >> will get done. but if you're a moderate republican, you're. >> much better off with the senate's. >> bill, which is a two. >> step process. and i want to say one more. >> thing, andrew, and. i'm just i'm waiting for joe to. >> tell me why i'm wrong on. >> all of these things. but i think this. >> is a. summer fall december story. the tax cuts. >> i don't think you're going.

>> to see tax cuts in. >> the spring. i think this. >> is going to take longer than. everybody imagines. >> what are the okay, let me ask you a separate question. we were having a conversation yesterday about doge. yeah. and this idea that americans could get a dividend or almost a refund check, call it a stimulus check back. this is something that elon musk has floated the idea of. and then president trump floated the idea of do you think that is in the offing. >> in the. reconciliation bill? >> i don't. >> know. >> i was talking about. >> this yesterday with my colleagues. it would be difficult. and let me put it this way, if trump wants to get it done, it will get done. he has. >> a congress. >> that's on his. >> side, period. now, will it come in this reconciliation bill? >> i don't know. and remember, andrew. >> anything out the door hurts because you're trying to exact savings. so if you're. >> trying to exact savings. >> and then you. give the money away back. >> to people, that's. not going to be a saving. and i don't know from a technical. >> perspective how they would do that. >> but if donald trump wants.

>> to send $5,000. >> rebate checks to everybody. >> in america, congress is. >> probably going to have something to say, meaning it should be means tested, it should be limited, but it will get done. >> i don't know if. >> it will get done in this reconciliation bill. and remember one other thing, and this is my obsession. people need to understand this. just because. doge says something. >> is cut. >> doesn't mean it's cut. congress has appropriated this money. it has. >> been. >> spent now. >> maybe it hasn't been put into it hasn't. >> been. cut in checks. >> but congress. >> needs to. >> follow up doge. with then. reducing the appropriations that. >> it. >> sends to these agencies. so if you cut 6000. employees from the irs. congress then needs to in this next funding bill, which is due on march 14th. congress needs to. >> reduce the number. >> the amount. >> of. >> money that. >> it. spends on the irs, for example. >> and you're saying they're not going to do that or they will. >> i don't know, it's going to be very difficult. >> because to. >> take. >> this a layer deeper, all. >> spending bills. >> in the house.

>> and the senate. >> with this government. >> configuration are going to need democrats to support them. >> so are democrats. >> going to agree to that? i don't know the answer to that. >> but doesn't that put the i mean, it seems to me that the democrats are in a very difficult spot here. yes, because at some level, i think it's very popular among the american public for good reason to try to find these efficiencies. right? i mean, that is i think we all look at the government and think it's bloated. i don't think anyone doesn't think it's bloated. i think then there's a sort of this other question. but the question is, is it a side question, or is it the central question about how folks go about this process, not just in terms of finding the efficiencies, identifying these things, highlighting them, but then you know who is either unilaterally or not from a legal perspective, deciding on what payments are going through and what payments are not. >> the government spends. >> way too much. >> money on a lot of nonsense. there's no question about that. i was. >> having this conversation with. >> someone, andrew, that if you

there is. >> a conversation, first of all, democrats are in a horrible position. >> because there is. >> no political. >> win in defending government bloat period. >> the end. >> that's number one. number two, there is like for example, the usaid cuts. no one. >> is going. >> to. >> defend the amount. of or the particulars. >> of. certain foreign. >> aid expenditures that we make. >> there's a lot. >> of people who. >> are serious policy. >> people who have for years said that usaid, for example, should be put in the state department. it should be slimmed down fine. but just going. >> in and. >> doing that when congress needs. >> to be. bought into. it is not great. and that gives democrats an out to say that we've got this unelected. >> guy. elon musk, running. >> around cutting things, but i have not found any democrat. >> that i could. >> find, and that is defending government bloat. there is a ton of it. and on top. >> of. >> that, democrats are just listless right now, andrew. just completely listless and. >> have no leader, have no real message. so this comes at a particularly. >> difficult time for democrats.

>> see, i fact. >> checked, you. >> i you know, that's like. >> the mainstream media's. >> new thing. >> with trump. it's fact. >> fact check. anyone else with you for years. yeah yeah. oh yeah. right. we saw a lot of that. with with biden. no. so i'm with you i'm fact and i didn't really hear anything today jake. so i'm going to let probably. >> let it slide. >> i mean i'd only say that i think we elected. trump and vance and then of course, we know the. >> but but. >> nobody else in the administration is elected. i just don't know why. >> we single out. >> elon musk every. >> time we say his name. >> or democrats do. as someone. who's because. >> joe unelected, everybody who serves at the request of. >> the. >> president, all of his advisers, all those. >> people we. >> elected trump, then he picks the people to. >> do things so none of. >> them are elected. >> that doesn't mean he doesn't. >> have missed you might have missed what i said. >> so let me let me. >> definitely possible because i'm thinking i'm listening to all the other facts that you're saying. you're making sure those are correct as a lie fact

checker as a lie fact checker. i don't i don't know what i would do without you in my life is what i know. listen, because we have. what i said was, nobody. >> is arguing. >> the particulars of what doge is cutting. no one but we have laws in the country. no, i know, i know which says if you are going. >> to fold. >> up an agency. >> congress needs. >> to be a part of that. that's all i'm saying. and you don't see. scott bessent i always get that. >> pronunciation wrong. >> running around. >> and closing things up. it just we. >> have laws. >> that require and by. >> the way, the irony of this whole thing is congress would probably do all of the things that elon musk is suggesting. i don't think it would be a problem, but there. >> is no. >> question, zero question, that what that cuts to federal spending are incredibly popular in broad terms. >> and what. >> elon musk is doing.

>> i mean. >> the dude's the greatest businessman ever to walk the face of the earth. so betting against him is an. incredibly bad bet. but all i'm saying, as somebody who believes in congress with all of my heart, joe, is that congress should have a say in some of this. >> but what do you believe in. >> congress with all your heart? that's nice, that's nice. i love i loved it so much i created a company about covering it. so i'm a glutton for punishment, that the. constitution is rock solid in our forefathers. >> i don't know. >> how they did it. it's almost like, you know, i know we can't talk about god. we can't say that anymore. but it was almost i. love heaven, almost heaven sent. i don't know where those guys came from, but. >> what they gave. >> us, it's so lasting and. >> so, so amazing. >> and, you know, nothing else has come close over the, the course of human history. so we love that together. >> we love. >> that together. better than you, joe. there you go. there you go. thank you. thanks. thanks. yeah. that's why i was quiet. you said the only thing

i'd say, it's a. >> skinny bill. >> reminds me of a skinny margarita, which i don't like. that's what my wife. always gets. i need the fattening part, don't you? the quantro. >> and the. >> this cnbc program is >> this cnbc program is sponsored by baird. got eyelid itching, crusties and swelling that won't go away? it could be... demodex blepharitis! and we're demodex mites. we're very common and super irritating to your eyelids... but we love making ourselves comfortable here! oh, yeah...steam time! if demodex mites are partying it up on your eyelids... it's time to eliminate the root of the problem with xdemvy. with one drop in each eye twice a day... you can kill the mites in just six weeks. xdemvy is the first and only fda-approved treatment that kills the mites that cause demodex blepharitis, a common eyelid disease. avoid touching the tip of the bottle to your eye or other surfaces to minimize contamination.

wait 15 minutes before inserting contact lenses. in clinical trials, the most common side effects were stinging and burning in one out of ten patients. party's over folks.... it's not you, it's demodex mites. talk to your eye doctor today. seamless and simplify access to product information for customers. we build enterprise websites like this all the time through a fully integrated digital transformation. wagner datacom is now a fast, mobile optimized website with an engaging user experience. for complete website and digital solutions, go to americaneagle.com. >> thank you for calling. please hold. >> when you talk to your custodian, does it feel like you're not being heard? >> thank you for calling. please hold. >> now that's better. trey palmer didn't have a massive.

>> call center. instead, your calls are answered by real people who know you by name and are empowered to help. like me. hey, chuck. how are you? what can i do for you? >> get vested. join the club. >> the value you're going to. >> get. >> from making better. >> investments more than outweighs whatever the cost of the membership is. >> join the club, new member savings. and soon. go donkey.

>> you mean a smart? >> find an advisor at smart asset com. >> pepsico and citigroup. >> joining the growing list of companies walking. >> back diversity, equity and inclusion programs. >> pepsi ceo. >> saying it will. >> abandon workforce representation. targets and remove its chief dei officer. >> to. >> in its words. ensure it's aligned with long term business

strategy. >> citigroup, meanwhile. following suit, ending. >> its workplace. representation goals. >> and removing. >> requirements to. >> interview job candidates. >> from diverse backgrounds. >> ceo jane frazier said in a staff memo that it will. >> rename its diversity. >> equity and inclusion and talent management team to. >> talent management and engagement. coming up. companies have been looking to frontload. their imports ahead of the tariffs. >> president trump. >> has threatened on a wide range of products and countries. >> we're going to. >> talk to the head of the port of los angeles next. >> executive edge is sponsored by at&t business. next level by at&t business. next level moments. need the next 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! cidp is no walk in the park. that's true. but i take vyvgart hytrulo. same! it's the first major innovation in cidp treatment in over 30 years. vyvgart hytrulo has been proven to significantly reduce the risk of symptoms getting worse. and my cidp can be treated with once-weekly injections that take about 30 to 90 seconds. do not use vyvgart hytrulo if you have a serious allergy to any of its ingredients. serious allergic reactions, like trouble breathing and decrease in blood pressure leading to fainting, and allergic reactions such as rashes, swelling under the skin, shortness of breath, and hives have been reported. the most common side effects are respiratory and urinary tract infections, headache, and injection site reactions. it may increase the risk of infusion-related reactions and infection. tell your doctor if you have a history of infections or symptoms of an infection.

i'm hittin' fairways with the fellas. i'm hittin' the road with my number 1. ♪♪ that's how we live vyvidly with vyvgart hytrulo. visit livevyvidly.com or talk to your neurologist. ♪♪ later turns. >> into never. >> now your books are behind. >> but they don't. >> but they don't. >> have to be calls. and this is steve. steve takes voquezna. this is steve's stomach, where voquezna can kick some acid, heal erosive esophagitis, also known as erosive gerd, and relieve related heartburn. voquezna is the first and only fda-approved treatment of its kind. 93% of adults were healed by 2 months. of those healed, 79% stayed healed. plus, voquezna can provide heartburn-free days and nights, and is also approved to relieve heartburn related

to non-erosive gerd. other serious stomach conditions may exist. don't take if allergic to voquezna or while on rilpivirine. serious allergic reactions include trouble breathing, rash, itching, and swelling of face, lips, tongue, or throat. serious side effects may include kidney problems, intestinal infection, fractures, life-threatening skin reactions, low b-12 or magnesium levels, and stomach growths. tell your doctor about your medical conditions, medications, and if you have diarrhea, persistent stomach pain or fever, decreased or bloody urine, seizures, dizziness, irregular heartbeat, jitteriness, chills, shortness of breath, muscle aches or weakness, spasms of hands, feet, or voice. voquezna can help kick some acid, and so can you. ask your doctor about voquezna. buy or sell before he does it. >> join the club, new member savings and soon go to cnbc.com.

jim. now terms and restrictions apply. >> companies have been looking to front load imports as president trump escalates his plans for tariffs on a wide range of products and companies. i guess we'll see countries. >> joining us now. >> gene seroka, port of. >> los angeles. executive director. >> it must be hard to do that. i guess that you. >> just maybe. skew some of your ordering. >> plans in anticipation of. >> things that may. >> or may not. >> ever come. >> to pass. yeah. good morning joe. and that's exactly right. so from the. campaign trail last summer, folks started. >> hearing about tariffs. >> how do i plan for this? what does. >> it. mean to me and when do. >> i react? we've had about. seven consecutive months of peak season volume, much of that in anticipation of what tariffs. >> could mean. >> and could i leverage. >> my price down. >> before they hit. >> and in. >> what areas? >> what? tell us where you're seeing the concentration of. of companies doing that.

>> mostly we deal in the. >> transpacific theater. so the cargo. >> coming. >> in from asia, but particularly china, because that was discussed a lot in. >> the board. >> and that's the thing, because what. >> we heard was maybe a 60% tariff. levied on all goods. from china, 10% on all. >> $3 trillion. >> worth of imports. so coming from china, furniture, toys, electronics, household appliances, the gamut. and it's usually the big guys that try to do that. >> it's the small to middle. >> folks that have to be a lot more nimble. >> so the big guys that. >> are doing this is it. increase the demand for these things near term. >> it's increased. >> the flow of. >> goods coming in and moving through the supply chain. warehousing vacancies have shrunk a little. >> bit, meaning that the warehouses are pretty full but still manageable. >> the trains running. >> to the midwest. >> are full. how that inventory then moves out. >> to. >> the american consumer. >> remains to be the question, because where i'm going with that is, is something.

>> that andrew. >> and i have disagreed on. if the if the demand for these things. >> disagree on anything. >> not anymore. >> he's turned. 48 earlier. >> this week. i don't know if you were watching. it's coming, coming along, coming along. and we've been together. >> how long? longer than many marriages. but where i'm going. >> with this is this. >> i'm asking about increased demand. >> has this caused any increase. >> in prices of the things you're talking about? his point is that we may. >> already be seeing. >> some inflationary pressure from anticipated tariffs. you know, when we had. >> less than a month. >> of the trump presidency, we had a hot cpi number. >> and people said. >> this is trump's fault. eggs are trump. you know bird flu is trump's fault. and that's. >> kind of hard to do. >> when it was a basically it was only president for 11. days of that january report andrew. come on. so but if but if. tariff anticipation is everywhere. >> then maybe there could. >> be something to it. is there. >> any inflation that. >> we saw in recent.

>> numbers that are. >> tariff anticipation? >> i don't think so. >> it's not one lever that you pull that says, okay, suddenly this is the way it is now. okay. if opec. >> brings down production, suddenly. >> your local gas station raises the price before that product actually hits the street corner. different discussion. right? you don't believe folks. >> are getting you don't believe that there's parts and supply hoarding that's taking place. i mean, we've heard from the ceo of ford, and i keep hearing from others anecdotally that they're racing back and forth between the mexico border right now to try to, you know, hoard as much stuff in the country in anticipation of something. and that's got to have a cost. yeah. >> the amount of cargo that's. >> come through again, more than 900,000 container units, seven consecutive months means there's more inventory. >> in the country. >> can i buy. >> it. >> at a better cost? now, in anticipation. of that. >> potential tariff? sure. is that. >> added inventory right now in additional cost? in some ways, yes. because you've got. >> a. >> higher cost of. borrowing. depending on your terms of sale

with the manufacturer. can i. >> buy that product. on my books after it's out the warehouse. >> door, or do. >> i. >> have to. >> buy. >> it once it. >> leaves the factory in asia? >> so each company is different. i don't know that the elevated inventories right now. are adding to inflation. when i. >> go to the store today. >> oh, i don't think they are, because i think part of the other problem is that, you know, who's going to have to eat this cost most of these companies, which is then going to hit profits. see, that's where i think. and this goes to what we saw yesterday with walmart. so it may not be inflationary per se that that the cost gets passed on to the customer. but if the cost gets passed on to the cost gets passed on, it's going to it's going to hit somebody. that's that's all i'm saying. >> and that's the conversation that's happening today. andrew, what does it mean for me? how do i react? and when there are negotiations happening. >> between procurement executives today and their manufacturers. >> in asia? okay. with the. >> tariff now can i get a little discount. do i have to move from this location. >> to support my sourcing from another location?

>> and if i'm getting pushback to push this. >> down. >> whether i'm a parts. supplier or i'm selling directly. to the american. >> public. >> do. >> i have to take. >> a little hit. >> myself to your point about the margin play? so all of. >> this is. >> tabletop discussion. today with everybody we're dealing with. okay, jean, thanks. what do you in town for? >> we had an industry event. >> yesterday with the new york traffic club. saw a lot of our transportation partners. >> in town. >> during this week. >> i'll head back to la. >> tonight, okay? okay. >> jean. thank you. nice to see you. it is just past 7 a.m. it's actually about 704. if you're keeping score on the east coast, you're watching squawk box on cnbc. i'm andrew ross sorkin along with joe kernan. on this friday morning, becky is off among our top stories executives at meta stand to get bigger bonuses this year in a corporate filing, meta saying that named executive officers could earn a bonus of 200% of their base salary under the new plan. that's up from 75% previously. the updated bonus plan doesn't apply to meta ceo mark zuckerberg. meantime, apple ceo

tim cook reportedly meeting with president trump at the white house yesterday. no word on what exactly was discussed, but apple is, of course, at risk being a victim in president trump's trade fight with china. china has said it is considering a probe into apple's policies and developer fees. and gamestop ceo ryan cohen has reportedly raised his personal stake, now in alibaba, to about 7 million shares, worth roughly $1 billion. the wall street journal saying the move is a bet by cohen on the future of china's economy. cohen wasn't immediately available for comment to cnbc. >> i checked the futures a. >> little bit of a bounce. >> back from the week. >> now the dow is. >> actually down. >> that's interesting. down 120 points. let's get to dom chu. >> with a look at. >> this morning's. pre-market movers. hey dom. >> all right happy friday. >> morning joe. happy friday morning andrew. we're going to start things off with a check on the shares of taiwan semiconductor. right now. they're up the u.s. listed shares by about a half a percent premarket. this is being held by morgan stanley which named the

company a catalyst driven idea short term tactical trade. that stock, of course, is going to be very much in focus next wednesday after the closing bell when nvidia reports its quarterly results. remember, taiwan semi is the sole supplier maker of nvidia's gpus, so you might expect a possible surge in taiwan semi if nvidia's guidance were to beat expectations. so they're very closely tied to each other right now. keep an eye on tsm. meanwhile, dropbox shares are plummeting after the cloud storage company said its number of paying users would fall by 1.5% in 2025. the company attributed the drop to a reduction in sales representatives and lower estimates in its document service form, swift. the company did also post a beat on the top and bottom lines, but it was not enough to boost those shares. it's up about 20% over the last year, but down 10% in the pre market. and we'll end with shares of block. they are down on earnings and revenues. that both fell short of analysts consensus. gross payment volumes also came in below expectations.

the company also said it expects to deliver gross profit growth of 15% this year. so this payment company is down 8% right now. it operates the square, remember and cash app. and it has been facing a lot more competition from companies like toast and fiserv's clover unit. so joe block down 8% on earnings i'll send things back over to you guys. >> all right. thanks. i don't know. >> if you noticed. but i was in this shot and i didn't notice. and it was like an. >> action shot. >> because i was trying to figure. >> out why. >> the. >> dow was down. i knew that. >> the dow was down because. >> of the story. >> you're about to. >> read, which i. >> was looking. >> at united healthcare just and it's a it's a look at. >> the. >> doozy. >> the doozy. and look. >> at the. >> bid and ask. >> on united healthcare. >> the dow component. so just do the math on on what a. >> point loss of 28 points on a dow component does to the average justice department. >> launching an investigation. this just crossed the severn into united healthcare's. >> medicare billing practices

in. >> recent months. >> this is people familiar with the matter telling the wall street journal. >> it's a. >> civil fraud investigation, and it's examining the company's. practices for. recording diagnoses that trigger extra payments to those medicare advantage plans, including at physician groups that the insurance giant owns. >> so there's a. >> lot of interesting. >> a lot of component parts. >> a lot of people don't like those those medicare advantage programs and thinks that that's rife for abuse. >> but if you're wondering what happened to the dow, that's it. we'll have. >> more on this. >> it's somewhat complicated. >> as all healthcare is. >> at this point, especially when, you. >> know, united healthcare. >> has done so. >> how does it do. so well with. >> a. >> government program? >> with medicare? it makes you wonder. >> we'll discuss all that and more. i'm sure we'll bring you a lot more on that stock and that

story in just a moment. we come back though the future of travel and i booking holdings ceo glenn fogel is going to be with us to talk about how the technology could be game changing for that company and also the customer experience when it comes to travel. and then later, pfizer and illumina board member doctor scott gottlieb joins us to talk a number of healthcare headlines, including this one. we're going to get into all of this. also talk a little bit about bird flu, the halting of some vaccines, and our message to the public. we're coming to the public. we're coming right back. (♪♪) car, this isn't the way home. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is.

car, were you in on this? nothing gets by you james. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com no fda approved treatment for this disease. now, okiyo pharma is racing to become the first biotech ever with a drug to treat ncp. ocho, the first to initiate a phase two clinical trial for this disease. lead clinical site is tufts medical center. okiyo pharma's drug, if approved by the fda, would be approved by the fda, would be the first ever for ncp. ♪♪ [inner monologue] this is going to sound crazy. but i know these attack vectors. oh, had a little upgrade have we? ♪♪

okay, so that's how you want to play. ♪♪

dave's been very excited about saving big with the comcast business 5-year price lock guarantee. five years? -five years. and he's not alone. -high five. it's five years of reliable gig speed internet. five years of advanced securit. five years of a great rate that won't change. it's back. but only for a limited time. high five. five years? -nope. comcast business 5-year price lock guarantee. powering five years of savings. powering possibilities. comcast business. to three vetted fiduciary financial advisors at smartasset. com. >> take a. >> quick look at. >> futures this morning. we are looking at a little bit of a down picture here. the dow off about 152 points. this comes on

the back of some news. the department of justice has launched a criminal probe. >> now civil civil. >> i don't know if it's civil. it's a civil probe, i should say, into unitedhealthcare. and whether they were pushing either doctors to add these sort of extra diagnoses where they'd get additional payments. >> they'd get a lump sum for medicare advantage. >> that stock down about 7%. >> that's a lot. >> so we're going to talk about that in just. >> a moment. pending on the diagnoses you can ask. for more. from medicare. >> and the question is whether they were doing that knowing knowing that they were effectively overdiagnosing. meantime, for more on the markets on retail trading, i want to bring in jj kinahan, ceo of ig north america. good morning to you. you know, we've seen the markets have have have been you know i would say i don't know if a tear is the right word but i mean doing quite well. we see these confidence numbers from ceos and you know confidence surveys and the like. and the question is whether all of it collectively

is warranted, given all of the other uncertainty that still hangs over us, whether it be tariffs, taxes or other things. >> well. >> i think. >> a lot of it. >> is. >> you know, although, you know, as. >> you guys. >> report a few minutes ago. you do see some other areas or some other areas of the world, particularly china at the moment, doing well. the bottom line is the us. >> stock market. >> is still the best game in town until proven otherwise. you know, again, there are areas of the world that have outperformed so far this year. but i think one of the reasons that continues to make it so attractive is for exactly some of the reasons you're talking about, and that is the uncertainty that surrounds things right now. let's face it, the tariff. i found it really interesting. >> that in. >> the fed minutes even, they said, well, we're really not. sure what the effect of tariffs will be. it's such an interesting thing for them to say, because i think it actually made a lot of particularly retail investors feel better, because it's the exact question they're asking right now. what will the effects of some of this be? what will be the effects on inflation. and then you combine

that what with what could be, you know, some larger unemployment because of some of the actions that are going on by the government. so again, because of things like that, there still is quite a bit of uncertainty out there right now. but people continue to look at where do they still feel stability and they still do feel stability. in not just the mag seven, but i'll call it the top 25 to 50 u.s. stocks right now, the s&p 500. >> how do you see the crypto trade and its relationship right now to the retail world and the rest of the stock market? >> well, i. >> think. >> the crypto trade to me was like many stocks are before earnings. what i mean by. >> that is. >> before the president came in as the president comes in, you know, the news is out there. we see this incredible up move. amazing. and so we start to see with that perhaps some clarity

going to come in terms of how we can better trade crypto, expand that market. et cetera. we haven't had that full clarity yet. so i think there's become this moment of okay what's next? what will be it? that is the catapult to take crypto convincingly over that $100,000 mark. we've kind of you know, we've bounced off over it a few times. it looked like we might head above 110. couldn't quite really pick up that momentum very well back down to the low 90s. so it's really in a trading range right now until we. >> have enough. >> news to continue to bounce it higher. but i do think that we will get some sort of clarity overall that makes it easier to trade. just the fact that the regulators aren't as i don't want to say the word anti-crypto, but not in many would say purposely not giving clarity on crypto because they didn't want it to be as heavily traded. there was, you know, a rule, sb 121 that affected many firms. et cetera. and so with

that, some of the some of the regulatory punishments, if you will, coming off, i think will continue to help crypto going forward. i just think that just like any news cycle, it's waiting for something that can get people excited and get right back in there and buying again. >> what do you make of what happened with walmart yesterday in terms of just what sounds like margin compression? >> yeah. >> and i. >> think that you may continue to see that overall. you know, i look out at some of the stocks that i'll relate. that to stock. that's one of. >> the. >> stocks that our clients have been a bit bearish on over the last few days. and that being disney. and the reason i'm drawing that parallel right here, andrew, is because inflation continues to be a concern for people. so walmart looking to continue to draw clients in the door. and in order to do that having to give up margin, give up some prices here and there to continue to get people in the door. you know, as we saw with it, stocks like costco going down too. so it'll be interesting to see what

they have to say about it. interestingly, on the other side of that, you know, the journal had that big article a few weeks ago, and now we're starting to see it in real life. people looking at disney and saying, hold on, are these prices too high? can a family of four continue to still go there? and as i said, disney isn't one. we normally see a lot of bearish activity in, but over the last seven days we've certainly started to see. so as disney has had a bit of a rally, those who are long starting to sell it, and on the option side, some people starting to, you know, buy buy puts on the stock overall. so that's one i certainly want to keep my eye on. but i draw a lot of parallels between those and what we may have to see going forward in terms of price compression for retail. and as we continue to hear from those stores overall. and then where does that continue to go in terms of technology also, i think will be the next question. >> okay. we're going to leave it there. we appreciate your time this morning on a friday morning. >> always a pleasure, andrew. >> you bet. >> up next. booking holdings. >> higher in the premarket.

>> the company. >> reported strong travel demand. >> in its. latest report, ceo. >> glenn fogel. >> saying i could be a game changer. >> for the company. >> he'll join us after the break. >> squawk box. >> coming right back. >> time now for today's aflac trivia question. on this day in 1972, president nixon became the first president to visit this country while in office. the country while in office. the answer when ♪ (action music) ♪ woah! i can't do it! agh! cut! this gap! it's just too big. bring on the double! aflac! after my hospital stay, aflac helped close the gap by paying me cash for expenses health insurance didn't cover. nothing covers gaps better than the aflac duck. aflaaaaac! aflac. get help with expenses health insurance doesn't cover. find an agent, get a quote at aflac.com. you do look like me. mhmm! ruri: ichi, ni, san, shi... (1,2,3,4...) hina: ichi, ni, san, shi... (1,2,3,4...)

akari: ichi, ni, san, shi... (1,2,3,4...) others: ichi, ni, san, shi... (1,2,3,4) ♪♪ ♪♪ you were made to chase your passions. we were made to put them in a package. only the servicenow platform connects every corner of your business, putting ai agents to work for people. like secret agents? no, more like autonomous minions that you control. to do what? well, jim's agents resolve simple customer issues. and patty's agents flag network problems. - proactively. - yup. i'm lovin' my agents. wait, you all have agents? oh yeah. and on the servicenow platform, everyone's agents work together so everything works better. can i have agents? maybe. ♪♪ got eyelid itching, crusties and swelling that won't go away? it could be...

demodex blepharitis! and we're demodex mites. we're very common and super irritating to your eyelids... but we love making ourselves comfortable here! oh, yeah...steam time! if demodex mites are partying it up on your eyelids... it's time to eliminate the root of the problem with xdemvy. with one drop in each eye twice a day... you can kill the mites in just six weeks. xdemvy is the first and only fda-approved treatment that kills the mites that cause demodex blepharitis, a common eyelid disease. avoid touching the tip of the bottle to your eye or other surfaces to minimize contamination. wait 15 minutes before inserting contact lenses. in clinical trials, the most common side effects were stinging and burning in one out of ten patients. party's over folks.... it's not you, it's demodex mites. talk to your eye doctor today.

the investing club is very much. >> worth it. join the club, new member savings and soon go to cnbc.com. join jim now. terms and restrictions apply. and now the answer to today's aflac trivia question. on this day in 1972, president nixon became the first president to visit this country while in office. the answer? china. >> that's right. >> welcome back to squawk box. shares of booking holdings. moving higher this morning, the online travel agency reported better than expected profits and sales. also announcing integrating generative ai across its travel products. joining us right now is glenn fogel. he's bookings holdings ceo. good morning to you, glenn. before we get into the ai of it all, just want to really get a sense of what you think is going on in this global economy, where you think the customer and the consumer really lie. because we saw some of this walmart news. there's obviously pressures on

margins. there's all sorts of things going on. what do you what are you seeing right now. not just in the last quarter but what are you seeing ahead. >> well. >> good morning, andrew. >> and thanks for having me. yeah. it's something i do have to say though. >> last quarter, just. >> a phenomenal quarter for us. really wonderful numbers 30%. >> increase in eps. it was. >> just a very. good across the board. all the metrics are great. it shows that there's demand for travel. >> and that's. >> something that we talked about in terms of the first quarter. there's still. >> healthy demand. >> for travel. >> this is a global event. >> there's no. >> area where i'm seeing really concern about travel. and look, there is uncertainty all the time. >> about the future. >> and the economy. >> and certainly there are a lot of geopolitical things happening. >> that could. >> be negative. >> or some. >> could be very positive, especially. >> for travel. >> by the way. >> you know. >> peace is a very. >> positive thing for travel. we'll see what happens though. >> and i. >> always. say look. >> look to the. >> long term. >> don't think about just the short term this quarter. think about what's going to happen over the next few years. >> so now talking about the next

few years, what do you see as it relates to how you're going to be integrating ai, and how is it really actually going to change the way i, i genuinely travel. >> you know, it's a great segue because it's so exciting what's happening right now. we really believe that generative ai is a. transformational type of transformational technological. >> change. >> and we are really. >> enjoying the benefits. >> of being a. >> very, very large player in the space. look, we have. >> the number. >> of people working on ai. we have the capital. >> and the most. >> important thing we. >> have the data. and your. >> question is how is it. >> going to make. >> it easier for you to travel? and i know. >> you, you many. >> many times. >> talk about your. >> frustrations in travel. and that's a lot. >> of people have a. >> lot of. >> frustrations from. >> the. >> very beginning, trying to. >> figure out. >> what is. the ideal way. >> to put together your trip. then am. >> i getting. >> the most value? and then do i trust that it's actually. >> going to. >> happen the way it is? and if something goes wrong, is someone going to fix it? >> well, ai. that generative ai.

>> technology is something that's enabling us to. do it. >> so much better. i won't go through. >> all the. >> details of it. i really. >> believe that people have. >> the ability to transform. using ai. >> is going to make. >> a much better business. >> and how much. >> of it though, is it going to be in the sort of planning stages? for me, the sort of instance of it, and then how much of it is going to be in the fixing stages so when things go wrong. so for example, the other day i happened to be traveling back to new york and plane got delayed. i then noticed that the plane that was supposed to be coming was no longer coming from where it said it was coming. and so like the united app was all wrong, and i was thinking, do i need to rebook this myself? should i call? i mean, when is this all just going to get fixed, frankly? >> right, exactly. >> and that example of. the frustration. >> is something that many. >> many people have had. and that is. >> really what. >> we are building. >> and it's not. >> just generative ai. it's, you know, our whole connected trip vision. the idea is that. your phone. is a travel.

>> agent. >> essentially, and. you're carrying. >> it everywhere. >> and it is. >> aware it's. aware of the problem that you're going to have. >> really what we want to. >> have is it to know about that. travel problem you just mentioned and fix the travel right there beforehand? >> that's what. >> we need to do and it's what it is. it's complicated. >> because. >> you're bringing together so. many different. >> systems. >> so much different information. >> from all. >> different areas. and putting together and then coming up with what is the. >> optimal solution to the. >> problem that you are having? >> that's one that we're working on now. how quick is it going to happen? look, it's going to take time, but we're already seeing some. >> parts of it. >> and part of it is for example in customer service. one of the things the reason you probably didn't want to call customer service. because how long were you going to be on hold? well, generative. >> ai is enabling. >> us to put our customer service systems together in. >> a. way that you won't have to wait. online at all, because. >> you're being answered. >> by a. >> generative ai. >> question for you that i'm going to make it more complicated, i'm going to give you my own personal example, but it's actually instructive because i was thinking about this in the context of ai. you

need the right data. and so if you're scraping, for example, glenn, the united app to figure out what united is saying about the flight. and sometimes, i mean, in my example, they they had a takeoff at four or something in the afternoon. and yet the flight of the plane that was supposed to you were supposed to be on wasn't arriving till something like five in the afternoon, right. so you would see that, but i'm not sure you would. would you catch that distinction? and then at some point along the line, they flipped the plane that was coming and decided to use a different plane from somewhere else. so the question is whether you would have made a mistake. it was it is possible that a computer system would have made a mistake and said, okay, we need to get andrew on a different plane now because that plane is on. the is not coming when they say it's coming, but you wouldn't have known that united was about to change the plane again from somewhere else, so that the delay would have been marginally less than what

the larger delay would have been. do you see what i'm saying? i mean, this is why this is super complicated stuff. >> exactly. >> and essentially what you what you described is one of those issues of. you're not sure what's going to happen. >> and then. >> it comes all down to probabilities. >> now we. >> are tied to all the different major systems, all of our partners. >> trying to make sure. >> that we're. >> able to. >> come. up with what is the. >> highest probable solution for the. >> problem that you're experiencing. and that's something that is why it is complicated, as you said, and it's going to take time to get it all set together. but i believe by using science, using data. and being the biggest player in the. space with the largest travel company in the. >> world, we just did $166 billion. we have a better chance of solving the problem you're talking about. >> than anybody else. and that's what i'm looking forward to doing for you. and i'll let scott kirby, the ceo of united, know that. >> you had a problem. >> maybe he'll reach out to you. >> okay, glenn, my question to you. let me ask you a separate question. and this was something that came up at dinner last night, and it's something that's

come up at a whole bunch of dinners across the country in the past couple of weeks, which is what is going on in the skies. and are we supposed to be worried when we see what took place in toronto at that airport, when we see obviously what happened in washington just a couple of weeks ago with, with with the delta plane and the helicopter. is there something that we should be worried about when it comes to the faa? >> yeah, tragedy, real tragic thing happening. really unfortunate about this. the thing is, though, when you look statistically, flying is safer than it's ever, ever been. and i've seen the numbers. and certainly you can have a cluster of problems that we've just seen. and it really is disturbing to see this. and everybody wants to have zero errors. this is not a case where you can have a small mistake. mistakes are not permitted in. >> flying. >> but it happens sometimes it happens. they're going to keep trying to make it better and better. i have no problem getting on a plane. i have no lack of confidence. i don't think it's any. i think it's safer than it's ever been. now,

can we improve further? sure. of course. is there understaffing at the faa? absolutely. knows that. and they want to put more people in. is there a need to improve the systems, the ai that will help bring even better, safer systems together? >> sure. >> but i have no problem at all. i'm extremely confident, but it is very sad when a bad event happens like we just seen. >> and are you concerned, though, about what's happening at the faa in terms of the staffing changes? i know they say they want to hire more people. they also want to change the technology. i don't know if you're supportive of the idea of elon musk and doge going in there, or i don't know if it's the doge team, but maybe elon's team working with the faa to improve the technology. some people say it needs to be improved on one end. some people also say elon has a tendency to try to go very fast with things. and in a system where, as you said, the error rate has to be zero. you know, how is that going to work? >> but it was antiquated for the last four years. we ignored. >> it for the last, at least minimum upgrades.

>> in the systems that we had. >> nothing to. do with what's happened since. >> january 20th? nothing. >> yeah, joe. >> joe is right that there has been a lack of investment in the area and things could be improved greatly, and they will be improved greatly. one of the things that's very, very helpful to thinking about this, everybody's involved in the. system does fly. so everybody has a. personal interest in making sure it's. safe to fly. so i have confidence in the people who are doing the improvements, who are working on this, that they will continue to improve it. and as i said, flying is safer than it's ever been. >> glenn, want to thank you for joining us this morning. >> thank you very much. >> appreciate it. thanks. >> coming up, a check on unitedhealth and some of the hmos and insurance stocks after a wall street. journal report that the department of justice has. opened an investigation. into medicare billing practices at the company. >> that story, pulling. >> down united. >> healthcare. >> which is pulling down the dow

this morning. pfizer and illumina. board member. doctor scott gottlieb is going to join us to talk about that and much more. squawk box will be right back. >> nothing stands still. not technology, not the market, and not franklin templeton. we've been. a firm in motion for over 75 years, always innovating. >> today, we're a. >> leader in public and private. >> markets, digital. >> assets and custom tax management, empowering advisors. >> with solutions. >> to build the. >> portfolios of the future >> portfolios of the future today. when i started walton goggins goggle glasses,

i had no idea what i was doing. but godaddy airo does. using ai to build a logo, website and social content. so i can let the world know, if your goggles ain't goggins, they don't belong on your noggins! at interactive brokers. >> independent rias. >> work with. >> the best. >> research and trading tools designed to help them. >> outperform the markets. meet them at interactive brokers. investors marketplace for advisors. >> advisors at interactive brokers. >> keep all. >> they earn on our low cost platform with no ticket. >> fees. >> or custody charges, low margin rates. >> and high interest. >> earned on. >> idle cash. >> to get better results. get a better platform. >> the best informed. >> investors choose interactive

brokers. >> the cnbc change makers returns. >> 50 women innovating and driving change across industries. >> find out who has made this year's list. meet the new icons, year's list. meet the new icons, the - people couldn't see my potential. so i had to show them. - i've run this place for 20 years, but i still need to prove that i'm more than what you see on paper. - today i'm the ceo of my own company.

- it's the way my mind works. i have a very mechanical brain. - why are we not rethinking this? - i am more... - i'm more... ...than who i am on paper. amazing and is something that we get to use every day. >> i. >> the d.o.j. >> has launched an. investigation into unitedhealth's. medicare billing practices. this is. >> according to the wall street journal report. it's a civil fraud investigation. focused on the. >> company's practices. >> for recording diagnoses that trigger some extra. >> payments to medicare advantage plans. >> join us now for more on this and other topics. doctor scott gottlieb. former fda commissioner. and a cnbc contributor. he's also a board

member at pfizer and illumina. >> you know. >> this all these things inside out, doctor, and there. >> have. >> been myriad complaints about some of these medicare advantage plans. >> reading about. >> how this works. >> it could. >> certainly be. rife for abuse. i'm wondering whether you have anecdotal evidence of things like this occurring. do you understand what they're saying, that you get a lump. sum from medicare for these advantage plans? if you find some additional. >> diagnoses. >> you're able to go back to medicare and say, you owe us more money. >> and in. >> this investigation. >> they seem to. >> have identified people that said there. >> was. >> pressure from united health care to push some of these obscure diagnoses that people didn't really have just to. get the additional payments from medicare. >> do you know whether that. goes on?

>> well. >> look. >> this. >> relates to the. story that ran in december in the wall street journal. it looks like where there was a story that showed that medicare systematically uploaded the sickness scores of patients as they transition from fee for service medicare into medicare advantage. so they showed a 55% increase in the sickness scores of patients as they transition from fee for service medicare into medicare advantage, versus an industry average of about 30% for patients who transitioned into medicare advantage plans, versus if you look at patients who just remained in fee for service medicare, their sickness scores went up 7% year over year. so it looked like united health care was an outlier in terms of how they were aggressively upcoding patients as they transitioned into medicare. now, it is the case that medicare advantage plans do do a better job on the whole of identifying comorbidities and do a better job of systematically coding for them than patients who remain in fee for service medicare, because there's a financial advantage to do that. and there's also a financial incentive to try to more aggressively manage the overall health of that population. but

united healthcare, being an outlier in this regard, attracted a lot of attention when that article hit. i will say that this is a industry wide practice. a lot of health insurers medicare advantage plans adopt different tools to try to incentivize and prompt physicians to code for things like hypertension and obesity, things that might not be noticed in the chart and not necessarily billed for. so if the doj goes after this with respect to united health care, i think it's going to send a chill across the entire industry. a lot of different medicare advantage plans and health care services providers are going to have to relook at their practices. if, in fact, this becomes something that is a target of the investigation. and united. >> health care says, hey. >> you know, preventing chronic diseases early. is what we want to do. so they've got a ready made sort of an answer to why they might find more things than

usual. >> but then again. >> you've got some individual cases where someone was. >> told there's something, i. >> don't even know what this is, doctor. >> hyper aldosterone, which is. >> a secondary hormonal condition. you don't even need a blood test. so someone could go in and say, you've got this, you could build medicare for it, whether they. >> have it or not. it just seems. rife for abuse. >> but then again, the company probably has an answer for that. >> well, look, a lot of this. >> relates to the byzantine way people are forced to build medicare. and i think the solution for this is to move towards more capitated models of reimbursement, where provider systems are given lump sums of money to take care of an overall population, rather than billing for individual patients, or getting these sort of upcharges or, you know, additional revenue if they can diagnose patients with more illnesses. and so we used to describe work that medicare and medicaid, we used to describe working there as a

game of whack a mole, trying to keep up with what the health care industry did to try to, you know, frankly, game the different billing systems that medicare rolled out. so i think trying to pay for overall the overall health of populations rather than individual patients, and looking at these kinds of sickness scores that allow medicare advantage plans to get additional revenue, ultimately, that's where the solution is going to lie, different kinds of mechanisms. but as i said, this is an industry wide practice. united health care does look like an outlier. based on the wall street journal's reporting. you never want to be an outlier in these regards, but there's an incentive in the program to get patients diagnosed and manage the health care patients more aggressively, and they're paid for doing that. and so, you know, health insurers have responded to that by implementing these systems that prompt physicians to look for these diagnoses, code for them, and then bill for them. >> doctor, just real quick, you know, obviously, a lot of people are going to relate this in their mind to the murder of by mangione. and, and what that's all about. how do you how do you think about that in terms of

this investigation as it relates to that? and i don't even know where to go with this. >> yeah, i don't think about it. i think that was a violent crime. it has no bearing on this by someone who seems to be deranged, quite frankly. you know, this is completely separate, this these are billing practices that result from the policies that medicare has put into place. and that's not to absolve united health care of potentially gaming these systems. but we need to look at the way, you know, we ultimately ask people to build medicare. >> i look at it a different way. >> i look at it, you have got something for everyone. you've got potentially a predatory for. profit company. >> gaming the system at this fat. >> bloated government. >> agency that wouldn't. >> know if it was getting stolen from if its life depended on this bloated medicare system. what do you think? at this point? the fraud and waste at medicare and medicaid is doctor is at 30%. >> i mean, this. >> is why we have a problem. >> yeah. i don't think we could

put an estimate on that. i'm sure people have tried to do it. i haven't seen them. but look, like i said, if you're going to be building medicare for individual diagnoses like this and you're going to get incentives for trying to turn over different illnesses that patients may have, so you can upcode for the care of a population of patients. people are going to implement systems to try to turn over those diagnoses, and sometimes they're going to go too far. and maybe that's what happened in this case. but united healthcare was doing it more systematically. did medicare have any idea? i don't know did is there anyone minding. >> the store. >> of the tax of the taxpayers? very retrospective. yeah. look, it's very retrospective. and that's why i said it felt like a game of whack a mole. when i worked there, where you were always trying to play catch up to what the systems were doing to try to, you know, frankly, find ways to legally game the system. we can move towards different reimbursement models. i think that could help resolve some of this where we just pay lump sums for population and then you don't turn. anyone down because then then you're. >> back to your your question. >> when. >> you, you. >> know, talking about when you were there. i just want to go

back. actually, this is a separate topic and i want to also get to eggs and everything else that's going on. but did you see there was an interview that doctor deborah birx, who you worked with during the trump administration, just did with piers morgan, where she said very explicitly that the covid vaccine was, quote, not designed to prevent against infection and effectively said that it was mismarketed by not just the companies but effectively the government. and i'm so curious what your reaction to that is. yeah. >> well, i wasn't in the government at that time. i was in the private sector and pfizer, as you know. so i didn't overlap with debbie. deborah birx, look, when the vaccine was first rolled out, if you remember on this show, we talked about it many times. we were very careful to say that the vaccine, we didn't know if it prevented infection because the original data showed that it prevented severe illness and hospitalization and death in patients. we presumed that if you were reducing infection rates over the over a population, that it would prevent infection. but we didn't

know that, and we were very careful to say that. we didn't know that when the data came out from israel showing that dramatically reduced infection across populations, that's when that information started to get into the label. the vaccine was initially very effective at preventing infection across populations. as the virus mutated, it became far less effective. and now it's more like the flu vaccine, where it reduces the severity of illness in a lot of patients. but it doesn't dramatically reduce their ability to transmit the infection across the population. initially, it was against that original wuhan strain. it was when the virus mutated that the vaccines became less effective. and i think that's the reality that we're gonna have to deal with going forward. this is going to be much more like the flu vaccine, where, yes, it probably prevents infection on the margin and transmission because it's reducing the number of infections in the population. but the bulk of the benefit that you get through vaccination for things like covid and flu is reduced severity of illness if you do in fact become infected. >> and doctor, i do want to get to eggs, but i have one. one more thing back to this medicare

conversation. are we talking about are we talking about medicare? are we really talking about medicare advantage, which i think is talking about medicare advantage? you're talking. yeah, because they are. >> but but but writ large medicare. no but but leviathan. >> but it's medicare advantage. that is the concept that is the actual problem in this instance. right. and this what happens is the insurance companies get the medicare dollars and then they deny the care and they get to keep the money. i mean, isn't that what's happening here? but that's a medicare advantage problem. i'm not sure that's a then. >> they get. >> more. >> money. >> if problem writ large. the issue here is patients. >> who transition from regular fee for service medicare into these medicare advantage plans. and in the first year that they were in these medicare advantage plans, they, you know, were suddenly diagnosed with a lot more illnesses. now that there is some reality to that, that they're going to be more aggressively managed. so they're going to turn over more diagnoses as they transition to these plans. and that's probably a good thing, because these plans are more aggressively managing the health of individual patients and populations. the question is the magnitude. and unitedhealthcare does appear based on that wall street journal reporting, which i think is a subject of this

investigation, does appear to be more aggressive in additional coding on these patients. >> yeah, medicare advantage is the united thing. >> it's not medicare. >> it's that's the but that's what i said. so i said there's something for everyone. you got the predatory. theoretically the predatory. >> medicare advantage company with this clueless. >> leviathan with. >> it has so much. >> money and. no. >> but look, we can we can complain about medicare. but i think the problem is the whole concept of the medicare advantage. >> no. >> i disagree, that's one. >> way of getting. >> then there's ten other ways of screwing medicare. >> where they don't have a clue, aren't there? there's a lot of benefits for medicare. there's a lot of benefits from these medicare advantage plans, because they do have an incentive, and they're paid to try to more aggressively manage the health of patients. there are studies showing improved outcomes. now, you know, it can go too far. and i think medicare needs to be vigilant around these things. ultimately are going to have to change the way they pay for these, because as long as they have systems that give incentives for financial incentives to, you know, get

more diagnoses on a chart, people are going to look for diagnoses. and if you don't like that and you don't want to have to pay for that, we need to move to different kinds of billing systems and like medicaid. medicaid chasing. >> how much waste is in medicaid right now. >> and there's no. >> governor on it. there's no. >> talk about medicaid. >> is. >> going to be the whole idea. >> eggs are still cheap. >> no no no no no. i want 10s from the doctor on on eggs. should we worry about them giving the birds vaccines so we can get more eggs into the population, or should we just effectively kill the birds? >> yeah. >> look. >> i. >> i think the administration is going to roll out some new policies next week to try to increase egg supply in this country, reduce culling of flocks, potentially vaccination. it's going to be difficult. this virus has become endemic in the poultry flocks in this country, and i'm not sure we're going to be able to extinguish it. and once it gets into a poultry flock, it's 100% fatal, largely in the chickens, and spreads very quickly. so just reduce culling may not be able to contain this. and, you know, we may be in a protracted situation where you have reduced supplies.

take six months to hatch a chick before it can start laying eggs. >> okay, doctor, this is i'm trying to be on a high protein diet right now. your eggs are a very important part of the. >> your cholesterol will be so much better after six months from now. >> a doctor, can we hold on? doctor, help us with this because people talk about it. cholesterol and eggs, connected or not, of course. well. >> i missed the question. >> cholesterol and eggs connected. >> genetic. it's genetic to. (marci) what is going on? (luke) people love how the new homes-dot-com helps them get quick answers about any property by connecting them to the actual listing agent. (agent) oh! so, i'm done? (luke) oh, no, no, no! we're still not sure everyone knows that we're the only site that always connects you to the listing agent rather than selling off your contact info. so, we're gonna keep you up there a little while longer. (agent) okay, ya! i'm getting great exposure. (marci) speaking of exposure, could we get him a hat? (luke) ooo, what about a beret? (vo) homes-dot-com. we've done your home work.

you checked 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 prescription and show your single care coupon at the cidp is no walk in the park. that's true. but i take vyvgart hytrulo. same! it's the first major innovation in cidp treatment in over 30 years. vyvgart hytrulo has been proven to significantly reduce the risk of symptoms getting worse. and my cidp can be treated with once-weekly injections that take about 30 to 90 seconds. do not use vyvgart hytrulo if you have a serious allergy to any of its ingredients. serious allergic reactions, like trouble breathing and decrease in blood pressure leading to fainting, and allergic reactions such as rashes, swelling under the skin,

shortness of breath, and hives have been reported. the most common side effects are respiratory and urinary tract infections, headache, and injection site reactions. it may increase the risk of infusion-related reactions and infection. tell your doctor if you have a history of infections or symptoms of an infection. i'm hittin' fairways with the fellas. i'm hittin' the road with my number 1. ♪♪ that's how we live vyvidly with vyvgart hytrulo. visit livevyvidly.com or talk to your neurologist. ♪♪ no fda approved treatment for this disease. now, octapharma is racing to become the first biotech ever with a drug to treat ncp. ocho, the first to initiate a phase two clinical trial for this disease. lead clinical site is tufts medical center. okiyo pharma's drug, if approved by the fda, would be the first ever for ncp. okiyo

pharma symbol on the nasdaq. >> get invested. join the club. >> he makes the complex simple and not to make irrational decisions. the return on investment for the club pays for itself. >> join the club. new member savings ends soon. go to cnbc.com. now. terms and restrictions apply. >> next week we reveal the cnbc change. >> makers 2025 list are. julia boorstin caught up with change makers from our inaugural. list who have been making some waves this year. >> julia good morning joe. well one of the change makers from last year's list, metas head of business ai claire. she is at the center of the ai revolution after driving innovation around how companies connect with consumers via social media and then leading ai at salesforce. now she's taking on the big role of running. meta's new business ai division. one of the things

that drew me to meta is how committed the company is to investing in this area of trust and safety, not just for meta. >> but in an. >> open way. you know. >> a. >> llama guard is a great example of a set of technologies that we've open sourced to developers to make sure that everything from proprietary data to sensitive data to bias data, that we're correcting for it, we're checking for it, and we're getting better and better over time. >> i just. >> think that's so incredibly rare and also so incredibly, incredibly important. >> that we. >> have. >> people from. different backgrounds and. >> experiences creating these technologies and also using these technologies. she noted how unusual meta is in the tech space to have three women leading its key ai divisions, including her. you have the research lab, the head of. its research lab, and also the head of its ai for consumers division. you can find my full interview with shy. we talk about a whole range of things about meta ai and leadership on cnbc on wednesday, and tune in on monday when we reveal the

cnbc changemakers 2025 list online and right here on squawk box. joe. >> okay. >> we'll do it. thank you. julia. >> okay. coming up, we'll bring you some street reaction to this united health and d.o.j. investigation to their medicare investigation to their medicare advantage plans. we'll (♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com (grandpa) i'm the richest guy in the world. investment objectives, ri(man 1)arges, expenses i have time to give. (man 2) i have people i can count on. (grandma) and a million stories to share. (vo) the key to being rich is knowing what counts.

>> we can't calculate our total taxes. >> sales tax, real estate credits, solar. >> incentives. >> and we have no. >> way to. >> integrate all that. >> integrate all that. >> no. when i started walton goggins goggle glasses, i had no idea what i was doing. but godaddy airo does. using ai to build a logo, website and social content. so i can let the world know, if your goggles ain't goggins, they don't belong on your noggins! enhance learning, even help you work smarter. and you can unlock it with one. simple thing better sleep. >> saatva provides that. >> with our luxury. mattresses. with premium. >> materials in our american factories. >> we even deliver to.

>> any room. >> in. your home. >> for free. saatva you deserve the comfort of a great night's sleep. >> this is the emirates premium economy seat. i. economy for all those making it big out there... ...shouldn't your mobile service be able to keep up with you? get wifi speeds up to a gig at home and on the go. introducing powerboost, only from xfinity mobile. now that's big. xfinity internet customers, cut your mobile bill in half vs. t-mobile, verizon, and at&t for your first year. plus, ask how to get the new samsung galaxy s25+ on us.

amazing and is something that we get to use every day. >> you can you can see it's. >> spreading a little bit and getting worse. >> for united health. other insurers. >> along with unh. >> getting hit this morning after the. >> d.o.j. in wall street. >> journal report. >> revealed it's investigating some medicare billing. practices at united healthcare. we're going to speak to an analyst. >> next as we head to break. >> here's a check on. >> bitcoin this morning. it's back over 98,000 for the first time since about the 10th of february. a couple of weeks. >> squawk box will be. >> right back. >> you make good choices.

>> always planning ahead. >> like to not just. >> chase a career. >> but one day. >> follow your heart. with ambition like that, you need someone who elevates advice to a craft. at ubs, we match your vision with insight and expertise to shape a unique outcome for you. advice is our craft. >> within two. >> two and a half weeks, i noticed immediately a difference in my wellness and my. >> gut. >> especially for perimenopausal and menopausal women who are trying to figure out what supplement to take. this is a key part of it for me. >> i'm tony. >> steen, digital. strategist at americaneagle.com. >> after kansas city. >> steaks experienced declining. >> traffic and conversion. >> rates, they came to us primed for online growth. >> we solved. >> digital challenges. >> like this. >> all the time. by leveraging an. >> omnichannel digital marketing strategy. kansas city. attracted

new customers and. significantly increased roi for complete website and. digital marketing website and. digital marketing solutions, go to. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job on indeed, it's easier for talented candidates to find it. which makes it easier for you to hire them. visit indeed.com/hire horizon that could dramatically prolong the lives of those with liver cancer. meat can fight biopharma on the nyse stock symbol canf can fight biopharma is now in a pivotal phase three clinical trial with its innovative new drug for advanced stage liver cancer, secured fast track and orphan drug track and orphan drug designation from the fda and the way i approach work post fatherhood, has really trying to understand the generation that we're building devices for.

here in the comcast family, we're building an integrated in-home wifi solution for millions of families like my own. in the average household, there are dozens of connected devices. connectivity is a big part of my boys' lives. it brings people together in meaningful ways. >> get invested. join the club. >> as a woman, i wanted to experience financial. >> independence and become financially. >> independent in my retirement. >> join the club, new member savings and soon go to cnbc.com. join jim now terms and restrictions apply. >> it's 8 a.m. >> now almost on the east coast. >> you're watching squawk. >> box on cnbc. i'm joe kernen along with andrew ross sorkin. becky is. off today. among some of the stories that we're watching the top stories the senate. adopting a $340 billion

budget blueprint early this morning. >> that's designed to boost. >> funding for. >> president trump's immigration. >> enforcement efforts, energy production. >> and the military. >> the vote was 52 to 48. >> after an all night session. >> with kentucky. >> senator rand. paul voting in the minority. >> with democrats. otherwise, it would have been 53, i guess. >> attention now moves to. >> the house lawmakers, their plan. >> to. >> take up a competing. >> budget resolution. >> next week that will. >> also include trillions of dollars in. tax cuts, extending the ones from 2017. >> reports say president. >> trump is planning. >> to fire the board that oversees the us postal service and absorbed the agency into the commerce department. the president. >> has spoken. >> about potentially privatizing the mail carrier is expected to fight any such move. in the wall street journal, says billionaire investor ryan cohen has increased his stake. >> in chinese. >> e-commerce giant alibaba to

about $1 billion a year. it's a relatively small stake. >> when compared to the size of the. >> company, but cohen is known for sometimes drawing retail investors. >> and interest in what he invests in. in the. >> wake of what he does. >> me time. futures right now on the dow down about 200 points on the dow in large part on the back of this investigation into unitedhealth. we're going to talk about that in just a moment again. but let's show you where things stand now. stock up about 87 points s&p 500 up about six points. treasuries right now if you look at the ten year note and the two year note you're looking at 4.488. the two year at 4.264. and want to get straight over to mike santoli, who is down at the new york stock exchange. mike. >> yeah. andrew. of course unh is the second largest component of the dow since it's price weighted. it's the second highest priced stock. so that is the downside influence there. otherwise s&p 500 kind of holding in there. we had an intraday recovery partial recovery yesterday down almost 1% early on. you had a real

unwind in some of the high momentum parts of this market as well as of course that pullback in walmart after subdued outlook also had a bit of a rethink on some of the consumer. cyclical stocks in the end didn't really amount to a whole lot of downside. in fact we settled very close to the former all time highs from a few weeks ago before we got just the prior couple of days. so what you really see is this market has been kind of trying to get over what had been that ceiling from back in december, going sideways, digesting a lot of the froth, very selective and split market under the surface. it's not been a very emphatic run to a new high, but it is resilient relative to a lot of things that are bombarding this market. take a look at the banks. that was also downside leadership yesterday been one of the stronger groups. this is the s&p bank etf. and it's taken us down to what basically is the post-election day gap. this is a one day jump after election day on november 6th. it went from like under 55 to like 61. so

it's kind of hanging on to much of those gains. it's been probably the clearest and most consensus deregulation play in the market. so a little bit of a pullback. goldman sachs and jp morgan. some of the quality names crowded ones were on the downside. now some of those retail momentum favorites have had a little bit of a bumpy ride recently. and i just wanted to look at two. this is microstrategy by the way. peaked right after november. massively outperformed the entire market as well as bitcoin itself. it is obviously a leveraged bitcoin play and has been kind of grinding lower even as robinhood, which is a play on some similar kind of energy in the market, has had this massive surge and then a gut check following its decent earnings. but then some again, these this unwind of them, some of these retail trades like a palantir like a robinhood like applovin. so we'll see if this is just kind of a wobble along the way. it seems like the market so far has been handling it. andrew. >> how by the way, in terms of just market pricing in all of these proposed policy moves

being thrown out at the same time, how do you think that's actually manifesting itself? >> if the market is essentially reserving judgment? i mean, there's obviously it's a headline rich environment. there's a lot of stuff out there in terms of what could be big changes, whether it is in, you know, obviously budgets talking about 8% decline by year end. the budget market's not rushing to price that all in. but it's wary of it and it's aware of it. i think that the market has this way of going line by line and saying, what precisely should i be repricing based on, on this particular news? it's very much a wait and see. you've definitely seen some tariff insulated retailers do better than those that might be more vulnerable. obviously home building has much more, you know, has suffered a bit, but that's mostly a rate move. so i feel like the market is very much kind of on balanced footing and waiting to see actual tangible policy and not rushing to sort of chase the headlines. >> okay. mike, want to thank you. appreciate it. >> the doj. >> launching an investigation.

we've been talking. >> about it in the united health medicare billing practices. >> this is. >> a wall. >> street journal report came right at seven that says that the civil fraud investigation. is focused on the. >> company's practices. >> for recording some diagnoses that. trigger extra payments to its medicare advantage plans. and you. >> can. >> see 52 points of downward pressure in united health care is reflected in in the dow jones average. insurance stocks are down as well. joining us now jared holt, healthcare sector strategist at mizuho. we didn't know we were going to need you again so soon. when were you on jared. deja vu. is that this week? >> great to see you too. yeah, you're. sitting right there. you're sitting. that's right. i remember sitting right there. i remember yeah. >> we've talked. >> about the interplay. >> you got. >> medicare. >> you got medicare advantage. these plans, united health care in this case. both sides can say we're just doing what we're supposed to do.

>> both sides. >> could could some i mean, there could be improvements probably from both. >> sides as united. >> health care gaming the system with its advantage plan and telling people that they have things they don't have so they can bill medicare for more for more reimbursements. >> i mean, i guess that's what this wall street journal article is alleging this morning is that the provider. network that the company owns and operates, right. united is a different animal than all the other stocks that you have listed up there, because they they have a provider or a. >> doctor business. as well as an. >> insurance business, whereas most of. >> the other companies. >> do not. so the allegations. >> here basically pertain. >> to that doctor. network overcharging. patients for various procedures they may or may not need. >> and that's enabling the company to go out there and get more money for the government. >> for those procedures. whatever they may be, various

diagnostics, etcetera. >> so a little bit of a circular reference here. >> i'm not. >> really sure. that the contagion. >> is really warranted across the board for, you know, cvs, cigna. >> et cetera. >> but we'll see as more details. emerge here. >> the oldest game in. >> the book. >> do you remember. that that hospital out in. california read. >> something or other that that was they did more heart. bypass surgeries. they would do that. >> to people. >> that that. had that. >> had no need. >> for any open heart surgery. and they. >> did thousands. >> and build. i guess they built the government for those or insurance company. >> yeah, that was my first. that wa my first reaction this morning actually, that i thought the risk and the streets view of this. situation would potentially be worse. >> for hospitals. because we know. >> that so many of these. cases that happen are, are probably or

you could argue, unnecessary or different provider networks, hospital. >> networks are. are coding. >> for either diagnostics. >> or treatments. >> that might. >> be a little bit. liberal on. >> the margin and therefore getting better payment. so when i looked at this. >> initially. >> i thought that the. weakness could actually be. >> across the hospital stocks more so than insurance, but so far not the case. we'll see how the day goes. >> jared. what's the answer? united healthcare. >> says look, this is what we're supposed to do to prevent chronic conditions from from getting worse. we want to identify these things early because of the advantage program we're able to give more comprehensive. >> health care. >> health care and diagnoses than you can get. so they're going to argue. that point. >> is medicare staffed enough. >> to be able to go in and investigate whether these are legitimate charges. >> coming from all these different insurance companies. it just. >> seems like. >> both sides. >> of the system are rife. for

abuse. >> and that's why we have such. exorbitant health care. >> costs compared to the rest of the world. >> i agree. i mean. >> the. sector really. >> can't catch a break, right? you had the shooting. last year. you've got pbm. investigation as far as. >> you know, how. >> much profit those. >> businesses are making. >> obviously united healthcare is a big player there. now you have this in. terms of. >> overcharging patients and potentially. >> defrauding. >> you know, medicare and medicaid out of different funds. so i mean, the risk really run the gamut here. >> it's tough to say because here united healthcare. >> is saying. >> you need more. >> they're not turning down because they're saying, no, you need you got a hormonal. imbalance we found and you were going to get medicare to pay for it. it's the. opposite of what? of turning. >> down necessarily. and then they're denying claims on the other end. so the claims on the other end. >> for what you. >> really might need. >> all right. we got to end it there. we got some breaking news jared from. >> what's up. >> we've got some new news this

morning. coinbase just announcing the sec has now agreed to dismiss its enforcement case against the company. these are the charges that were filed back in 2023, when the sec sued coinbase for operating as an unregistered securities exchange, broker and clearing agency, and for failing to register that offer and sale of its staking as a service program. you're looking at the stock moving higher, about 5%. it's actually continued to move higher as we've been discussing all of this, and we're going to bring you a lot more on this big decision, really. by i mean, this is this is, you know, this is not gary gensler's sec anymore. and clearly, they are making a stand here saying that they are ending this enforcement action. >> that's all coinbase needed at $270. now what's the low in the last. >> two years? i don't want to know. >> you can look at it right there. >> you need to go back a little bit further. >> it was. >> down. >> even lower. >> yeah, yeah. >> back in 23.

>> who? >> luckily we can't invest. >> in anything. coming up, former. >> cleveland fed. president loretta mester. >> going to join us on the state of. >> the. >> economy and top issues for the fed. >> a month. >> into the second trump administration. stay tuned. you're watching squawk box. >> on cnbc. >> this cnbc program is >> this cnbc program is sponsored by at morgan stanley, old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real.

>> my clients deserve someone. >> who. >> understands their world. >> someone who listens. >> who has their best financial. interests at the center of every decision. >> our business is built around being responsive to. >> our. >> client's ever. >> changing needs. >> as an advisor. >> as their are a custody. services provider. >> i see my client's. success as my. >> own because when they grow, we grow with them. >> for over 25. >> years. >> we've been committed. >> to rias. >> and that's why i chose tradepmr. hey small. >> business owners. >> pickleball is kind of. >> like bookkeeping and accounting, right? >> lots of strategy, lots of effort. and if you don't have the right partner. >> you just. >> won't win. >> it's time. >> to team up with. >> a winning partner. >> call zando. >> and let's. >> get. >> that win today. zando, the official bookkeeper and accountant for small businesses.

>> at ihg hotels and resorts. you can unplug for the day. >> or plunge. >> into a long weekend. savor the moment. >> or savor. >> the details. earn points for free nights with ihg one rewards. >> every day. >> i'm reading extensively. >> i'm checking the markets throughout the trading session, working the phones, talking to sources, and doing my own reporting to share insights, info

>> new this morning coinbase saying the sec has agreed to dismiss its enforcement case now against the company. these are the charges that were filed back in 2023, by the way. the stock up about 5% on the back of this news. that investigation and the effort started in 2023, when the

sec sued coinbase for operating as an unregistered securities exchange broker and clearing agency for failing at the time to register the offer and sale of its staking as a service program. now, i spoke to coinbase co-founder and ceo brian armstrong about how all of this happened. >> first of all, just. >> this is a huge day. >> for. us and also for. >> the 50 million. >> americans who hold crypto. >> the whole crypto industry and the world. i think it's a really important signal. >> that this small. >> group of. >> activists in this prior administration who tried to unlawfully attack this industry. >> were going. >> to be able to turn the page on that and finally get some regulatory clarity in america. but to answer your question, how this all happened? i mean, yeah, in 2023, they. >> they came to us and said, we think you're. >> trading securities on your platform. but the problem with that is if you go back. >> to just. >> a few years prior, we had gone public. we explained everything about our business to the sec. they asked us a million questions. they knew exactly what our listing process was and how we. took a very conservative approach. and then a few years later, the political climate

changed and they suddenly changed their mind. but that's not how it works. if you're a regulator, you can't. >> just make up new rules. if you don't. >> like the existing ones, they have to follow the law, and they have to publish clear rules that the industry can then adhere to. and so this case was was bogus. and we were right on the facts. if we hadn't stood up for our customers rights and actually pushed back against this, it could have been the end of the crypto industry in america. so i'm incredibly proud of this outcome and what we did to defend our customers rights. >> can you, though, take us behind the scenes, though, about how how the sec and this administration ultimately decided to end the enforcement action and what kind of conversations you had with them? >> yeah, well, this was. >> a long process. and, you know, i think what they realized is that they were going to lose badly. and i have to give a lot of credit actually, to this new administration that's come in. and paul atkins, some of the existing commissioners like ada and paris, i think they're in the process of reforming the sec and trying to clean up some of

these actions where the sec really painted outside the bounds of the law in the past. that was clear to some of the folks in the in the sec at the time. and i think it's clear to the folks that are in charge now. and so i got to give them a lot of credit. they're coming in, i think, i hope that they'll dismiss all the bogus cases, frankly, and it will be a domino effect for the rest of the industry. >> in terms of how this is all going to work in practice, what's the next step in the process? so do the commissioners have to vote? >> yeah. what we're told is that next week the commissioners will vote on it. it seems to be a formality at this point, but the staff are they're telling us they're recommending to the commissioners that this be fully withdrawn. and i want to be clear, this this is not a settlement where we pay some fine and admit some wrongdoing. this is just they're fully withdrawing the case. and so we don't we're not changing anything about the business. we're not paying a single dollar as a fine, which i believe is quite unprecedented in sec history. >> how much is this legal battle cost the company? >> yeah. you know, i don't mind

telling you. actually, we went and tallied it back up because i asked that exact same question. and just on external legal fees, i believe we spent about $50 million. that does not include, by the way, the cost of internal employees that we spent on this. so it was in excess of $50 million. >> at this point. given this, this cloud may be moving away. how do you see the regulatory regime moving forward? what do you what do you seeking? what are you asking for and what do you think is going to happen? >> this legal precedent is very important to make sure that, you know, we can't revisit this issue again, or a future sec administration can't revisit it again. but what we really need to do in the united states to get regulatory clarity is to have congress pass legislation, and that's going to have a couple of key components to it. there's already some stablecoin draft legislation being discussed in the in congress. that's an important piece. so we can have a digital dollar that preserves america's reserve currency status. we also need to get token classification or

market structure, some people call it, which is essentially just clarifying which of these crypto assets are commodity securities, payment tokens, artwork or something else so that we know how it should be regulated. and if we can get those, the third one, i would say would be a strategic bitcoin reserve. i think that would be an important asset for the united states. >> you reported quarterly results last week and the trading volume was up, you know, 185% year over year. you also talked about the world of stablecoins and trying to diversify outside of trading. what do you think that looks like? what does that product look like over time? >> yeah. >> well, thanks for. >> mentioning that. we did. >> have. >> a great q4 in 2024. you know, we hit 6.6 billion in revenue. we were able to grow substantially year over year. and just really proud of the outcome there for the team. so one thing you are seeing is we're diversifying increasingly out of just trading fees and adding other products. so some of those have been around for some time on coinbase's platform, custody fees, you know, staking fees, coinbase,

coinbase card. but you mentioned one of them, which is around payments, which is, i believe, an important area for crypto stablecoin payments if for people who haven't followed this is has grown enormously over the last few years. in 2024, there was about $30 trillion of payments that went over stablecoins and that grew three x year over year. and so we expect that trend to continue. what we're doing about it is we're building payment features into all coinbase products to make sure that we can help update the financial system there. >> you know, the other thing i was going to mention is i was listening to your the q&a that you had done on your quarterly call, which i know you broadcast on x, and you talked about prediction markets being a being another opportunity. you know, we saw robinhood ended up removing contracts for the super bowl. i don't know if you if you saw that ahead of the big game. and i'm just curious how you're thinking about prediction markets and just how much scrutiny that area or that product may turn out to have in

this in this environment. >> yeah. well, i am excited about prediction markets. and i think the new cftc chair, brian quintenz, is certainly very thoughtful on this topic. and he's going to have to figure out how to create a trusted environment where these things can be built in the united states so americans can use them, but also make sure that consumers are protected. so as an example, you know, you'd want to make sure that you don't have any sort of prediction market where someone might be incentivized to harm another person. right. just sort of basic rules like that. but overall, i think that people are going to use prediction markets to figure out what's actually happening in the world. i actually think of it, it's less of a trading product, and it's more of like an alternative to the new york times or something. if i if i can say that on your program, you know, i know you work with both companies, but i think people are trying to figure out what's happening in the world. they're increasingly worried about misinformation, and they want a source of truth and prediction. markets are emerging as an important source of truth, where people have real skin in the game. and that's an exciting development where crypto can help.

>> where do you land these days on meme coins? i don't know if you saw, by the way, there happened to be for a hot minute a coin with my name attached to it. i was not involved in it, it just came out of nowhere and i watched. i it was actually sort of fascinating to watch the development of what was happening and to see people on x and on some of these telegram accounts and other things, really trying to push it up. and then of course, questioning whether, you know, when they were going to sell and what they're going to do. and i, i will admit i found it fascinating, but i was also sort of uneasy about it. it still exists to this day. what do you think about the phenomenon? >> yeah, well, i mean, coins in the broadest sense. i think we should find a way for people, artists, to get paid. you know, anybody should put artwork. they should get paid for it. and i do think, you know, meme coins are a canary in the coal mine that more and more of the world is going to get tokenized and put on chain, you know, every asset class, every vote, every identity, every song, every, you

know, instagram post, whatever. in the future, i think more and more these things are going to be tokenized. now, we also need to make sure people are following the law and not doing pump and dump schemes or insider trading, and there probably has been a little bit of that in the meme coin space, which is not helping anybody. and so in every crypto cycle, there seems to be people who rush in and they forget these lessons of the past. but, you know, insider trading should obviously be prosecuted and people should avoid doing that unless they want to go to prison. >> do you think that the same insider trading laws that exist today for stocks, for example, should apply to the crypto world? >> it's an interesting question, actually. i think brian quintenz and others are thinking about this through the prediction market lens. i mean, in the broadest sense, yes. i think that most of the same rules should apply. it should be a level playing field around insider trading. there's an interesting question for prediction markets of like do you want to let insiders trade? you know, in the commodities world it's sometimes a different question than in the securities world, right. like if something

is truly decentralized and anybody could have information on it, you know, it may be a different lens, but i'll leave that to the regulators to think about. i don't haven't formed my opinion on that fully yet. >> right. >> i'm fascinated by all of it because i'm watching, for example, i don't know if you watched the whole argentina president, president malay, you know, apparently post about libra and then he took down the post and there's all sorts of controversy about whether he was pumping this up. i mean, that's the thing that just seems so different about this world than maybe and maybe the stock market is more mature today than, than than what we've seen before. >> yeah. well, i do think we're in a early stages of this industry. so a lot it's the wild west, a little bit like with meme coins right now. and there's, there's good that comes with that, which is a lot of innovation is happening. there's some bad happening as well. where from what i understand, it sounds like president accidentally shared that information without understanding exactly what he was sharing. if you believe his his comments. so yeah, my hope is that this gets cleaned up

and, you know, people continue to think long term about how are we going to create real value for the billions of people in the world who who need an updated financial system? >> i wanted to ask you one little little thing comment. i was curious, i don't know if you saw tyler winklevoss tweeted the following. as long as mit has any association with gary gensler, who of course was a tormentor of yours to some degree, gemini will not hire any graduates from this school, not even interns for our summer intern program. did you see this? >> i did see this. yeah. do you want me to comment on what i think? i'm happy to share my thoughts. well, okay, so i. i don't think mit should have hired gary gensler. i think that was a mistake on their part. and, you know, i don't believe in canceling people. i think he should be able to go find his next career and try to create value in the world. but, you know, his actions at the sec were a real anomaly. and i don't

think, you know, that should be taken lightly. there was some unethical behavior on my part. so they should look, i think mit should look into that. now to tyler's comment specifically, i don't think they need to punish the students who are attending mit. maybe they've never. hopefully they don't even take gary gensler's class. but, you know, i'll i'll leave it to mit to figure that out. obviously, that's not something i need to be directly involved in. >> big move clearly by the sec and its big switch in terms of how the trump administration is going to be reacting to all of this. you could also argue, i mean, part of one of the reasons either trump got elected was because of his take on crypto. the flip side of it is critics would say that the crypto industry gave the trump administration an extraordinary amount of money during. yeah. >> but didn't. >> we have as well? >> we were involved with interviewing him back when this was all happening. and yes, at the time, it seemed. like it was meritless. >> well, the big issue is we

just haven't had actual laws. >> i know. >> but legislation. but, you know, to figure all this stuff out. >> i know, but even. >> without any gensler, gensler still seemed like he just. >> he. would shoot first and the laws could come later. you know what i mean? >> he was. after these. he was after these. >> the big issue was that the sec was approaching its enforcement, enforcement by legislation or enforcement. bye bye. that's what i mean, action as opposed to legislation. >> and i don't and i don't think this. is i. >> think this is vindication from a more i mean, a better. sec that doesn't have a conflict of i don't think it's because people paid off. you know. >> i'm just saying, look, there's two sides to this, which is some people will say that this is exactly the way you suggested and others will say the industry. >> is mature. >> by the way, had the industry not supported trump, if the industry decided to support the other side, it. >> still would have happened. >> who knows? >> probably in the industry. >> has matured and. >> there's less. i don't know. it doesn't have quite the target

it had. >> on its. >> back when it was more unknown. and, you. >> know, i. think you see you see the institutionalization. >> of. >> all crypto. >> all of the different. right. all i'm saying is, for example, this president has his own meme coins. >> it's possible. >> talking about, but. >> it's possible. >> that the. >> biden. >> administration and whoever was in gensler's ear was dead wrong about all these things and out of line and out of line, and it cost well, how did they get to. >> $50 million? >> very well may have been. >> how do they. >> get to $50. >> million back? it's like, oh, sorry. >> we sucked. at our. >> job regulating this industry. we didn't regulate it, in fact, because we didn't know how to. >> and well. >> and you're. >> you're collateral damage. >> i'm just saying that. >> the collateral. >> damage of our misguided. >> either side. i'm just saying that there's a lot of sides to this. >> you're collateral damage. >> of our misguided efforts, and it cost you 50 million. sorry. >> coming up. >> we're going to get more reaction to. coinbase's announcement that. >> the sec. >> is dismissing its enforcement

case against the company. next. >> though. >> tiktok in focus countdown. >> is on once again. >> to a. >> possible ban. >> cnbc spoke with senator tom. >> cotton about this. >> and we're going to hear from him after a break. stay tuned. squawk box will be right back. >> it's not if the markets will turn, it's when it howard capital. >> management. >> our proprietary family of funds, actively. >> navigates complex market landscapes while seeking to safeguard your tomorrow. >> we aim to. >> empower investors, delivering. opportunities with a tactical mathematical approach. >> start investing with confidence today. >> contact your. >> financial advisor. >> and see how howard capital. management can. management can. >> redef what if you could invest in a future where skin cancer treatment is noninvasive and relatively painless? medicus pharma's groundbreaking solution delivers chemotherapy directly to the tumor site, offering a mostly painless alternative to invasive surgeries. with the skin cancer treatment market expected to exceed $20 billion by 2030.

medicus is poised to meet the demand for cost effective non-surgical options. now advancing phase two studies. medicus pharma, leading the charge in skin cancer innovation. >> 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. pharmacy. >> so i just show. ♪ ("born to be wild" by steppenwolf) ♪ ♪ get your motor runnin'! ♪ ♪♪ ♪ head out on the highway! ♪ come on! ♪ looking for adventure! ♪ ♪♪ ♪ and whatever comes our way ♪ ♪♪

♪ yeah, darlin', go make it happen ♪ [spray paint] [semi truck horn] [tires squeal] ♪♪ ♪ explode into space ♪ hey! hey! hey! b-12 bingo! [buttons snap] [inhaling furiously] [explosion] ♪ i never wanna die ♪ [cheering and laughter] ♪ born to be wild ♪ don't worry, girls! i've got weathertech. ♪ born to be wild ♪ [photo strobe flashes] for whatever comes your way, there's weathertech. ♪♪ cnbc. >> investing club is for everybody. >> i joined. >> to achieve. >> financial freedom in retirement. >> jim cramer.

>> is the benefit you get that you can't get anywhere else. it's a great value. >> jim cramer gives you much more than you would ever get from any advisor. >> he teaches. >> how to invest versus just what trades to make. >> return on investment. >> for the club pays for itself. >> join the club new member savings and soon go to cnbc.com. join jim now terms and restrictions apply. >> tiktok back. in apple. >> and google in their. >> app stores. >> but maybe only temporarily. when he took office, president trump. >> directed the. >> justice department not to enforce a ban on the app for 75 days. it's unclear if that directive is legal, but in the meantime, one of the biggest china skeptics in congress is speaking out. >> eamon javers. >> no, no, you're joining us now about that. you're not the person because you're not in congress. correct me if i'm wrong. >> i'm not. yet i'm not the guy yet. >> i talked to. >> the guy. you did very good.

>> what did he say? >> look, joe, with just a bit. >> over 40 days left. before the deadline. >> to finalize the sale of tiktok, the. >> new chairman of the senate. intelligence committee, tom cotton, tells cnbc that. >> if xi jinping. >> doesn't agree to sell the social media company, that would prove that tiktok was in fact a. >> tool of chinese statecraft. >> in a. conversation last night, i asked him if. xi jinping would even agree to sell tiktok, given. >> that it has the potential. >> to be so useful for china. >> well, i think that's one question that the administration and the buyers are exploring right now is whether its parent company, bytedance, and these final, you know, 45 days or so now are willing to actually sell it, or whether they prefer just to shut it down if they don't sell it. i think that's a pretty strong indication that it was, in fact, a tool of chinese communist statecraft. >> now, cotton is a china hardliner who recently. took the top job on the senate intelligence. >> committee, replacing. >> now secretary of state marco rubio on. >> the republican side.

>> his new book is out this week. >> it's seven things. >> you can't say about china. i asked him. what his message is to american ceos, and he said this. >> my message to wall street and investors be very wary of china. you know, the only reason that xi jinping has not done to american ceos and american investors that he did what he did to jack ma, the chinese billionaire, is that he hasn't been able to get his hands on you yet. >> cotton there, referencing. chinese billionaire jack ma, once the richest man in china who vanished from public view several years. ago and has since relinquished. >> control of his conglomerate. >> i also asked him about china's leverage over elon musk, and cotton said that tesla is one of many american companies that he wished had a bigger presence here in the united states, and less or no presence over in china. so that is a. >> big talking. >> point as well. guys, back over to you. >> all right. >> it's interesting to.

>> watch ayman. >> and all. >> you got to do is move into the trump administration. and anything that you said in the past, and i mean, even tom cotton, if he were to go and i wonder if he'd still be the china hawk because they're disappearing when they go into the administration. it's bizarre to watch, isn't it? i guess that's politics, though. it's not the first time i. >> asked cotton about. >> i asked cotton about. >> you know, donald trump's. >> comments about tiktok. right? because trump. has said, on the one hand, you know. years ago he wanted to have a tiktok ban. now he. >> says, well, i kind of like. tiktok because. >> it helped me get elected and it's a. >> useful tool. >> i asked cotton about that and he said, you know, look like a lot. >> of americans. >> he enjoys. >> the tool, but you. >> have to bear in mind that. the chinese. >> communist party. >> and you wonder the degree to which. >> trump is concerned. >> about that. or recognizes that. i mean, he really. sees tiktok. >> as a tool that. >> helped. him get elected and win young voters. >> is this something that he's going to be focused on, or is his priority. >> now in preserving a tool that he felt was useful. to him? >> we'll see what he's all. he

may have had. his thinking may have evolved. i know a lot of people that aren't convinced. my friend right here, they aren't convinced that that the evidence is there of all the most horrific things that tiktok has been accused of, whether any of that, whether there's any evidence that any of that is true. that's. >> and then the question. >> is where i sit, joe. whether or. >> not xi jinping will sell it. >> right? >> why would xi jinping sell it? you know, if it's really a tool of chinese statecraft, why. >> wouldn't he. >> just say, hey. >> you. know what? we're going to let this. >> thing collapse. >> and the. >> american government can suffer the political. >> consequences of that in the us. >> and that's. >> just another way to. >> stir the pot here in the us for now. >> but all right, that was not a jibber jabber segment specifically, but it was good to see you on on a friday. friday. what time are you going to? what time will i see that today or are you doing that on on blue sky? >> throat's been killing. >> me all week. >> so i'm going as early as possible. >> when will you say weekend? is

that on blue sky now or are you still doing it on on x or both? i'm doing on both. >> so i serve a. >> vast constituency. joe. >> well, if you want to serve them all, you need to social. you need to social. then they're my friend. i want to see weekend on true social. okay, i'm i'll. >> work on it. >> okay. i doubt it. >> coming up, the cost of uncertainty in the economy. steve liesman joins us now in just a moment with that story. plus, we're going to speak with former cleveland fed president loretta mester. stay tuned. you're watching squawk box. and you're watching squawk box. and this is cnbc on a friday m ♪♪ 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. business. americaneagle.com optimized. >> our website, turning our proprietary data, content. >> and diagnostics into a. >> powerful platform that reaches more diyers, pros. >> and enterprise clients. >> than ever before. if you're looking for an agency who can. >> solve your. >> complex digital challenges. contact americaneagle.com today. >> the number. >> of. >> public companies is shrinking. while the number of. private companies is increasing. at franklin templeton, we're expanding access to the growing opportunity. >> in private markets, offering the potential for greater. diversification and enhanced returns. >> through our. world class specialist investment. >> managers. >> we. >> are empowering advisors with

solutions. >> to. >> build the portfolios of the future today. alternatives by franklin templeton. >> your trusted. >> partner for what's ahead. >> welcome to cnbc's. crypto world. >> cnbc's daily digital show has trading updates, the latest headlines, a global perspective and high profile interviews. scan to watchthenticated luxurye

shop, now with code tr20 for 20% off terms, apply. >> economic uncertainty. >> becoming an even more. >> preferred word. >> over at the federal reserve, steve liesman joins us now with how fed officials and economists tracked that level of uncertainty and the economy in the economy and its and its potential losses. how are you doing, steve? >> good morning joe. yeah. more and more fed officials are placing the unknowns about fiscal policy on equal footing with inflation and explaining why monetary policy is on hold, and it's going to stay there until policies become clear. fed governor adriana kugler late yesterday, echoing the sentiment

of several fed officials who spoke, saying the potential net effect of new economic policies also remains highly uncertain and will depend on the breadth, duration, reactions to, and importantly, specifics on the measures adopted. well, so far the effects of uncertainty haven't shown up in any hard data, but it is tracked in several indices watched by the fed. take a look at this one. the economic policy uncertainty index. it looks at newspaper articles, differences in economic forecasts and tax code changes. it shot up after the election calmed down and is now the highest it's been since the pandemic. well, in fact, it's higher than at any time during the biden or the first trump administrations. outside of the pandemic, and it's back 60% of the elevated pandemic level. there's another index, the trade policy uncertainty index. never been higher. far surpassing the levels from when president trump put tariffs in place in 2018. i talked to professor steven

davis. he created the economic policy uncertainty index. he's a professor at stanford. he tells me uncertainty tends to dampen economic activity, regardless of whether the prospective policy change is good, like tax cuts or bad like tariffs. his opinion, of course, for efficiency and profitability. of course, the good versus bad aspects of possible policy change also matter. davis says uncertainty can make businesses wait to hire or invest. sectors that are reliant on government spending or regulation. they're the most sensitive to these, to this policy uncertainty. the paradox for investors and for the fed. these high levels of uncertainty also come with elevated business optimism. raising the uncertainty over which is going to win out when it comes to the economy. joe. >> yeah. if the uncertainty leads to something bad and you were overly optimistic, then you got further to fall. >> i would think. >> i think that's i think that's right, i would you just got to let the political process play out on one level. joe, how many

businesses, joe, have you talked to that said, all right, look, i prefer like, for example, lower taxes and less regulation. but in the absence of that, i just want to know what the rules are so i can set my business up for that outcome. and that's, i think, where we're at right now, i haven't seen much deterioration in like the cfo surveys. they seem to be, again, pretty optimistic, but with high levels of uncertainty. the small business nfib uncertainty index is also elevated. there's a bunch of indices out there. i don't really correlate them so much with the stock market over a long period of time. but when things are really uncertain, you can get what we have kind of now, joe, which is this sideways in the stock market? >> well. >> we always heard that. we've seen, you know, how the economy before the pandemic, but we saw how it reacted to trump's first term. but things are different this this time around. and there's still some, you know, along with the uncertainty with tariffs, i still think there's some some unfinished business. we're going to talk to the fed

now. some of them used to be on the fed. there's some unfinished business as far as inflation goes at this point i think still steve don't you think. >> well that's that's those things are actually combined, joe. and i think that's a really good observation. what's interesting to me is how the fed has kind of raised it to this same level. right. it's like we got this inflation problem and we have this uncertainty problem. and both of those are together now alberto mussolini yesterday, he's the new saint louis fed president. he kind of joined the two. and he said, look, this is a really interesting time or difficult or or perilous time maybe to be messing around with tariffs because inflation is higher. and i think that gets back to the 2018 example. a lot of folks who have said, you know, tariffs were didn't didn't surge inflation in 2018. well guess what. we have much different inflation profile now than we had back then right. >> we just don't know whether there's really going to be a lot of tariffs or not at this point. thanks steve. joining us now to talk more about the state of the

economy and the fed's view of it. former cleveland fed president loretta mester. she's an adjunct finance professor at penn's wharton school and a cnbc contributor. and it's great to have you on, as it always is, president mester. but i guess i start with some of the recent inflation numbers that we've seen. i think that it was the third straight month where maybe you could make a case that that it stopped moderating. most people think it's still in a downward trajectory and it will resume, and maybe we can get some rate cuts. do you feel that that it's ready to start a downward trajectory again, or will we have a fourth straight month of hotter numbers? >> yeah. >> joe, i mean, i guess i'm concerned about the inflation progress. i think it has stalled. i think, you know, long term it's going to probably move back down. but i think the fed is right in being cautious here and not, you know, wanting to keep moving the interest rates down as they had planned to do. so i think they're right to be

cautious. we'll have to see. you know we saw a similar kind of stall out at the beginning of last year. and the fed was concerned about it. and then later on in the year it did become move back down again. so it could be seasonality, it could be concerns about tariffs. it could be a lot of things that are affecting the inflation numbers. we'll just have to wait and see. but i do think the fed is right in terms of like there's no compelling reason. even if you put aside fiscal policy, there's really no compelling reason right now to be moving rates down. there's, you know, a strong economy on the real side. growth is really, really above trend. and it's been above trend for two years. and labor markets yeah, they're in better balance now. but they're still pretty solid labor market statistics. so again there's no real reason for the fed to be moving rates down at this point. and then if you add to that it isn't clear to me at least. and i think to a lot of observers just how restrictive policy is at these levels, because i think the neutral rate

is moved up over time. so again, good reasons, aside from what you can imagine about what's going to happen with fiscal policy to be here, just pausing and waiting for things to clarify a little bit in terms of where the economy is going, both on the inflation side and the employment side. >> for inflation to get to the fed's target. and you don't think they're going to move the goalposts. it would be bad. i mean 3% is different than two two and a half is different than two. do we need weakness. do we need the unemployment rate to go higher to get inflation to where we want it to be? >> no, i. >> don't think you do, joe. i mean, maybe a little bit higher. if you look at the fed forecast and other private sector forecasts, it moves up a little bit. but it does stay solid. it's not like, you know, people thinking that, wow, we're going to have to crash the economy to get inflation down. and that's why the fed has been willing to tolerate the slow decline. if you look at the latest projections from the fed, it took an extra year to get back

to 2%. they're committed to doing it, but they're willing to let it go slowly because they are concerned about the labor market. they don't want to harm the labor market. so that's the fed's role is they have to balance those two goals, has to keep both in scope, and it has to manage that and keep its policy rate well calibrated to where the economy might go. they did some hard work of doing that calibration. we know we didn't move it up quickly enough, and therefore we had to go really quickly at the start of the tightening cycle. but but that recalibrated policy to high inflation. now with inflation having moved down not all the way to goal, they started to move the rate down. but this is a good place to pause while things play out. so you have a better view of where where policy needs to go. they're in a good position because they can pivot either way, but that's their job right now is they got to keep policy well positioned so that they can handle things as it plays out. >> if you can't sleep tonight, is it going to be because of

inflation being stickier or the economy maybe starting to weaken? or do the animal spirits that we're seeing from all this deregulation, will that keep us going? >> well. >> it certainly is true. when you talk to business people that, you know, coming into this year, they were very, very happy with where things were going. they expected deregulation to be really a. boost for growth over the longer run, allowing them to innovate faster. there's no doubt about that. i still talk to business people, and what i'm hearing is, is they're very cautious about the tariff situation. and i think in your earlier segment, you know, i think steve liesman said, you know, business people just want to know where the goalposts are. they want to know the rules of the game. and right now they don't feel they know it. and so they are pausing some of their longer term projects. and that can weigh on the economy over the long run. >> all right. thank you. and it's hard to talk over music i know. but i don't think it means something. i'm not sure what after 30 years, but i think it means something. but thank you.

great. great to have you on great. great to have you on dealing with business. it's not a nine-to-five proposition. it's all day and into the night. it's all the things that keep this world turning. it's the go-tos that keep us going. the places we cheer. trust. hang out. and check in. they all choose the advanced network solutions and round the clock partnership from comcast business. powering more businesses than anyone. powering possibilities. (birds chirping) medical discovery is like finding the right stone, and watching your discovery inspire further discoveries. dana-farber's momentum of discovery has changed cancer treatment everywhere. people aren't just living with cancer, they're living beyond it. (♪♪)

(♪♪) after last month's massive solar flare added a 25th hour to the day, businesses are wondering "what should we do with it?" i'm thinking company wide power nap. [ employees snoring ] anything can change the world of work. from hr to payroll, adp designs for the next anything. seconds matter. that's why the world's most trusted brands depend on reliaquest gray matter to contain threats in seconds. it's the only technology independent, ai driven platform built by security operators. for built by security operators. for security operators. it's odd how in an instant things can transform. slipping out of balance into freefall. (the stock market is now down 23%).

this is happening people. where there are so few certainties... (laughing) look around you. you deserve to know. as we navigate a future unknown. i'm glad i found stability amidst it all. gold. standing the test of time. economy. perhaps they need to call it something else. >> get vested. join the club. >> the value you're going to. >> get from. >> making better investments. >> more than outweighs whatever the cost of the membership is. >> join the club, new member savings and soon. go to cnbc.com. join now. terms and restrictions apply. >> the cnbc changemakers returns. >> 50 women innovating and driving change across industries. >> find out who has made this

year's list. meet the new icons. the cnbc changemakers revealed monday on squawk box. >> welcome back to squawk box. take a look at the futures. we are looking at a dow that's going to open down about 252 points plummeting we should say. hammered by a 12% drop in unitedhealth shares as the department of justice apparently now bringing a civil case against that company. we're going to keep our eyes on that story all day long. meantime, on the other end of news may be good in this instance for the world of crypto, and particularly coinbase announcing this hour that the sec has agreed to dismiss its enforcement case against that company, the sec declined to comment when contacted by cnbc. joining us right now with his reactions. oppenheimer senior analyst. good morning to you. what is the impact not just on coinbase, but maybe the larger crypto world when it comes to this larger issue of staking? >> yeah. >> first of all. >> thank you, andrew, and thank.

>> you for. >> having me. >> i saw your interview. >> with brian armstrong. >> i think that's. >> a good one. >> so you mentioned he. >> mentioned about the. >> $50 million legal lawsuit money. >> i think it's. >> way more than just about money. >> there is. >> a lot of chilling effect. >> on the whole industry. >> coinbase has. >> to stop. >> staking just like you mentioned. i think. >> it can. >> open up the door for not just. >> coinbase. but. >> other platforms. >> to. >> offer staking again, because it. has been one of. the more controversial services from from. >> the. >> crypto industry. >> for those who don't understand it or know it, can you just explain to the audience what staking is all about and what the controversy has been? >> yeah. >> so in simple. >> terms. >> i. >> think staking. >> is like to me. >> it's more like a cd. >> or deposit. like you stake or. >> you put. >> a token. >> like ethereum into a nook. >> just like. >> a bank. >> you use. >> that staking. >> mechanism to.

>> facilitate the transactions. >> within the blockchain network. >> so you. >> are. providing some. >> kind of services or. >> goods to. >> the network. in return you get some kind. >> of yield. so some people say. >> it's like a cd, it's. >> like a deposit. >> it's like. >> a. fixed income product no. >> matter how you want. >> to frame it. >> but at the end of the day, you. are providing. the token. to facilitate the operation of the network. so that's why you can get some return. so that's staking. >> when you think about what this means not just to coinbase but to the larger crypto world, how does it play out? and who are the who are the winners and maybe who are the losers? >> yeah. so i think the whole. >> industry wins. >> because because. >> first of. >> all. >> it may. >> signal this is the end of regulation by enforcement at large. more importantly. it also tells the world that us is determined. to set up the regulatory. regime because over the past four years, we are just

pushing this project and capital to. offshore to other jurisdictions, and they take advantage of that. and getting all this. capital and project. and right now we are coming back. so to me it benefits the whole industry. >> other jurisdictions also. >> follow the us regime. so to me that's i think it's good for the whole industry, not just for coinbase. >> okay. oh, and i want to thank you. appreciate your quick you. appreciate your quick perspective on this i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah. at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite,

backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today. finally improved. >> i have a question about a stock. just swipe down and ask alpha i for investors only at public.com. >> shopping online comes with digital threats. so turn on nordvpn and encrypt your online nordvpn and encrypt your online traffic. get 72% off nordvpn and (shower water runs) (♪♪) (♪♪)

is knowing where jim is going to buy or sell before he does it. >> join the club, new member savings and soon godo you.

>> first time consignors get. >> $100 extra terms apply. >> that final check on. >> the markets. as you can see that that 257 points in large part of downward pressure wasn't there earlier, but unitedhealth out or the wall street journal reported the news of the department of justice probe into the medicare advantage program at unitedhealth. and that stock at this point is down about wow, it's down more than 50 now. we should really look at that because it was 502 bidding 4.39. it's down 63 points now. so you just use the divisor and you can see why why the dow turned south so significantly after losing 450 points yesterday. take a look at treasuries. we're talking to loretta mester i

think it's people still feel okay. most fed heads feel okay about the prospect. they all think it's ready to turn back down. i don't know. finally oil take a quick look. oh. oh yeah. we got 10s got plenty of time, but we won't do it. make sure you join us next week, i think. are we in full force? full force with becky will be back. as for now, squawk on the street. coming right up. yep. >> good friday morning. welcome to squawk on the street. i'm carl quintanilla with jim cramer at post nine of the new york stock exchange david faber live at the priorities summit down in miami. futures are mixed. the dow is set to get pinched on this report regarding unh, which we will get to. overall, s&p is trying to eke out a positive week. we'll get some pmis and you mish within the hour. our roadmap begins with the doj investigating unitedhealth's medicare billing practices. shares are tumbling pre-market and dragging the d