dani: loretta mester says she would have gone 50 bips last meeting.ames bullard urging for more rate hikes. they are nonvoting members. that combined with a similar message is helping sink stocks in the u.s. this morning, and in asia. manus: it's a jolt. as you say, they are nonvoting members. esther reichelt is fx strategist at commerzbank. a jolt to the short end, 50 basis points, dollar's losses this year are gone, what scale of pandora's box has bullard and mester open for you? good morning, as there. esther: you've already mentioned quite a few times, they are both nonvoters. they are known to be more on the hawkish side of the spectrum. they are saying it is -- what they are saying is not a surprise. it is not evidence of where the fed or dollar is going. i would look more on the speakers today, which are more to the center and more reflecting the consensus in the fomc. but the focus right now is on higher fed rates. and that is supporting the u.s. dollar. dani: it is supporting dollar. what happens though, i guess it is the no landing scenario,

when you hear loretta mester and james bullard say we should have gone higher, do you believe that is a litmus test for the market? >> there are two narratives. they are backing the first narrative which inflation is sticky if that is sticky, the fed has to do more in order to battle inflation which would bring on a harsher recession. the markets are warring with that and the soft landing scenario those are opposite camps honestly, i'm landing in the soft landing scenario which is not always the prevailing view if you look at the data, it supports it. >> why what data are you seeing that makes you think we might come out of this okay >> a few things. if you look under the hood of cpi, all of the raw goods, goods prices and those prices are all falling. the only price sector that is rising in cpi is the services component. that is driven by wages, not oil. oil is falling today you see the difference between ppi and cpi. if ppi is the price of inputs and cpi is what you pass through to customers, then there is a gap there which is to suggest that companies are doing fine. passing prices

with cleveland fed president loretta mester that is an important conversation >> she is the one. she is starting to look smart for we don't know how long until the economy says no. probably 50 is not necessary i'm waiting for it it's going to bite >> yeah. >> eventually the increases will have an effect >> they have already we don't know. >> that's our problem with information that looks back a quarter with companies looking back a month with government releases and things. things can change quickly. >>> today is the first anniversary of russia's invasion of ukraine after a year of war, there are no signs that the conflict will end any time soon. the u.s. is getting ready for another $2 billion in aid. china is now calling for a cease-fire in the opening of peace talks. the 12-point proposal that president xi has to end the war. president xi is expected to visit moscow with a summit with vladimir putin we will have a live report with eunice yoon. we will talk about the growing relationship with russia and china. the leader story, andrew, if you read between the lines u.s. set to

this is after these two comments from loretta mester and james bullard.had the ecb for isabel schnabel saying that she thinks there could be a mispricing on the market of how much they will have to do in terms of interest rate hikes. very hawkish message. that is putting extra pressure on a light of stocks. the sectors on the move, we had earnings and a couple the banks came out better than expected. analysts and shareholders are looking at the forward guidance. auto parts, construction, healthcare not losing as much as some of the other ones. technology is down 1.8%. media also down one point 3%. next week will mark one-year since russia's invasion of ukraine, and action that upended global political relationships as well as financial markets and economies. bloomberg's's guy johnson has more on how the conflict has changed the world. >> war in ukraine has arguably provoked some the most profound change in the world order since world war ii. one in which vladimir putin has found himself in clear -- increasingly isolated. >> am taking robust action to make

we got a lot of it but it seemed the headline was cleveland fed president loretta mester. she brought price hikes back into the conversation. should the fed have gone 50 basis points in february? >> i don't think they should have gone 50. they are obviously having a dialogue now because of retail sales coming in stronger than expected and cpi and ppi showing expectations that inflation shifted a little bit. nothing moves in a straight line. when i look at the data longer-term, i think inflation has peaked but i think we will have pertiods where maybe that data backs up. maybe the equity market is handling this extremely well. if we had data like this over a month ago, markets would be down two or 3% area in one day and they are not doing that. i think the bond market is also handling this data well. yields are backing up but not aggressively. we haven't hit any new highs in the two year were on the 10 year. it is still possible we are in a peaking process for yields and that equities might have actually bottomed and we think they have. katie: the fact that we haven't seen

he's not a voter but clearly that's where the conversation has gone loretta mester of cleveland alsobasis height bitcoin is holding on to gains today despite the late day sell-off now 13% this week hitting its highest level since august and crypto-related stocks are having a strong week as well kate rooney, is there a reason >> sara, it does really go back to what you and mike were talking about, the high beta tech names some of these stocks are on the extreme side of that higher beta tech play, also some of the most shorted names of the sector. you've seen short squeezes play out, part of the dynamic for coin base, and it's really seen low institutional interest i'm told a lot of this has been driven by record retail trading so there's a lot of risk going into some of these names and, like i said, really on the opposite side of the spectrum. for bitcoin in particular, ironic this is coming in the face of what has been, i'm told, objectively bad headline news for the industry a consensus i'm hearing the worst may be over in terms of some of the incremental regulation we've seen from

so you come into this year, and everything is based on the fact that loretta mester does not have to fulfill that promise of higher interest rate hikes. there's about three more 25 basis point hikes priced in, we would agree with that. a lot has happened this month. as long as interest rate volatility comes down, i think a well diversified portfolio does very well this year. last time stocks and bonds both went down the in the same year, 1974. you don't position for things that happen once every 50 years. liz: okay. so you're saying this is the time to get in on both ends who? both ends, stocks and bonds. we're neutral on stocks, stopping short of saying we're overweight, but on the bond side i think, you know, starting from these level and if the fed fulfills only three more hikes, you're going to be the fine on the bond side. liz: okay. let's remember -- [laughter] that phil said that. paul, if we look right now at the fed funds futures, and this gives people an indication of how the market is betting, the probability by june that we will see rates at 5.25-5.5%, that is more than w

i think it was the fed's loretta mester, came out in a speech this morning in an effort to spook the market. it is working. i will ask ed yardeni if he is confident about the stock market. the consumer are resilient but are they on borrowed time is this the 21st century or not. jerone mart tis will help unconfuse it. bitcoin shifted in overdrive since the scandal began. charlie monger is not with us. he said something you don't want to hear. put it this way he is not too happy about america. bitcoin's big move. have you wondered the legitimacy of government economic data. i know you. you're not alone. more experts are calling it garbage. don luskin will give us his take. more on "making money". ♪. charles: all right, folks, you're looking at the white house right now. we're expecting president biden at any moment to discuss, do we have two minute warning yet? president biden will be out any moment. we got it covered for you. he is going to discuss those flying objects. we shot several down. of course it all began when a surveillance balloon launched in china crossed over alaska and t

we had more hawkish fed speak this week whether it was loretta mester, jim bullard, susan coleman. the pce numbers, the dollar surging to the highest in a year or so. all of this reflected across markets. oil prices now, a little gain in the asian session. it has been muted training for oil as well. range bound around $10 the entire year coming at a time when the rebound in demand coming from china has not really lived up to expectations. haidi: yeah, well, shery we continue to follow geopolitical headlines. top finance chiefs failed to agree to a consensus statement at the g20 meeting with russia and china disagreeing over language used in russia's were in ukraine. let's bring in tony czuczka and our china editor john liu. it seems like there is an impossibility to find a consensus at these gatherings. at the un security council they cannot even agree to a moment of silence. it is perhaps not surprising they cannot make headway on the drafting of this communique. tony: no. it is what you would expect at this point. it was actually russia and china which turned away from language t

loretta mester is appearing at 1:45. later in the day, james bullard will be talking in tennessee. coming up, american consumers, retail sales jumped 3% in january, the most in almost two years. recent arguments from fed officials that rates may have to go higher for longer. how will we position for that? on bloomberg. ♪ introducing the new sleep number climate360 smart bed. only smart bed in the world that actively cools, warms, and effortlessly responds to both of you. our smart sleepers get 28 minutes more restful sleep per night. proven quality sleep. only from sleep number. manus:manus: what's the swirling around jp morgan, saying explosive rise in short dated option is creating risk on a scale that the markets have not seen since 2018. the senior portfolio manager, issue word about that fact? good morning, good to see you, stephanie mark -- the equity market is like this, it's refusing to listen to the bond market. do you think there is an awkward moment between the bond market and the equity market? good morning. >> good morning. i think the equity market is exhausted and is

paramount and shake shack and more a fresh batch of fed speak on tap from cleveland fed president loretta mesterames bullard and lisa cook. >>> europe's out performance is showing no signs of slowing down following the ftse 100 lead a few days ago the cac 40 in france hit an all-time high. 11%. let's talk about this with kari firestone. kari, a lot of people look at this and say europe is the worst performing economy as a whole in western world and the stocks are outperforming ours what is behind it? >> think about what is going on with europe in the background with ten years of under underpe underperformance as a whole, the european economy underperformed and it has been abysmal to the u.s. market it got to the point were they were oversold. think about this year. everyone predicted europe would be in recession because they would have no energy to run the economy because of the russian oil imports. in fact, this is a mild summer -- sorry, mild winter you didn't have any problem with energy supplies to the continent. also, you had a very oversold condition with price to earnings multiples in the

watch out for fed speak from loretta mester and then james bullard and susan collins and christopherl be here on "squawk b box. >>> and s&p down 1.5% this month. putting money to work in the s&p tracking etf may be warren buffett's best advice. it may turn the idea on its head the treasury trading the highest since november, but the shortened of the curve is looking at returns the yield is now 5%. even one-month bills are yielding 1.4%. and offering a 3.1% dividend yield and now is primetime to look at short-term opportunities. let's bring in john stoltzfus. >> thank you, frank. good to be with you on "wex. >> do you think that is the best place to put your money? >> it looks like a good idea right now. on the other hand, equities look like a good deal in the sense that equities recently have come back under pressure. bears moving in here on the uncertainty. concerns about the uptick we have seen in inflation questions to how long the fed has to raise our opinion has been no pause. no pivot from the fed until they get the job done in the meantime, there is opportunity for equity inve

cleveland's loretta mester says it could raise up to 25 basis points both support a hike at the meeting this month the cpi suggested more inflation pressure up the pipeline that could make its way to the consumer and joining the cpi on tuesday and showing inflation not coming down as fast as expected that with the retail sales re reports, the markets are expecting the fed would be done in may fed funds future is a 53% of th rate hike. that is pointing to a rethink about how weak the first quarter gdp would be in january, cnbc forecasters saw a 0.2% outlook that number is now 1.5% and some at 2%. a 50 basis point hike is a possible response, officials seem likely to use quarter point hikes from here on out to allow them to move more slowly in response to the data and take a count of the risk of overtightening and the policy lags to the economy. steve liesman, cnbc business news. >>> tesla is reporting 362,000 vehicles across the u.s. and musk refer they did not use that word regulators say flaws in the self-driving software could cause crashes. the model s and model y vehicles in 2023. t

that to him before the show tonight thank you all for coming >>> don't miss the interview with loretta mesterorrow on "squawk box" tomorrow. >>> coming up, natural gas prices have plunged since september. what's driving the decline and will relief show up in heating bills? >>> plus, whether you're buying a car online, watching your favorite show, making a payment, we have you covered. >>> here is a look at markets heading towards session lows the dow is down almost 200 points points back in a moment lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund t

louis, esther george of kansas city, loretta mester of cleveland and boston's susan collins.collins are considered hawkish. coming in, the new president of the chicago fed, austin goolsb y, patrick harker, minneapolis president and all are considered dovish or somewhat centrist. there is little difference between the views. 17 of the 19 members saw the fed's target rate reaching over 5% by the end of this year. and nine c rate cuts in 2023. the voters change, but the policy remains the same. francine: that was michael mckee on who's in and he was out of the fomc. we have a great decision day guide on our website. we will push that out on our social media channels. the federal reserve likely pushing back against any suggestion it will halt interest rate increases. that is the view of jeffrey gundlach. we had a lot of time with him yesterday, interesting to see how he sees traders positioning in terms of dollar until the end of the year. the other big story is the budget in india. prime minister narendra modi has been commenting on the full year 2024 budget. this is what stocks

and real gdp to round out the week with personal income and home sales and then fed speak from loretta mesterchase says investors may set up for disappointment the bank says stocks don't bottom before the fed hikes rates and it is too early to say if recession is off the table. jpmorgan chase says the first quarter will mark the high point for the year pointing to warning signs from the inverted yield curve. let's talk more about this now with sylvia jablonski and greg branch sylvia and greg, great to have you here >> good morning. thank you. >> what do you see in the market, sylvia the dow and s&p off a two and three-week slide and now futures in the red >> we started the year strong. january was a great month for markets. part of that is the investors had a bit of appetite to come back into the market to take on risk and started thinking the fed may be closer to being finished than starting to look through and see how it holds up. earnings are okay. they are stable. some inflation reads are coming in hot you had cpi and ppi hotter i think that now brings us back to reality that the fed may

neil: we're learning more about cleveland fed president loretta mester certainly sounded more hawkisher the wholesale inflation report came out. she would have preferred the fed to be more aggressive a couple weeks ago where they raised rates a quarter point. she would have preferred a half point. we have to be very vigilant about this, paraphrasing here. that is a voting member, more or less saying don't expect me to soften on this inflation fight. what did you think. >> a lot of jawboning out there from the fed governors. you mentioned she is a voting member, ha is important. gosh, neil, market knows fed ask on its path. knows what the fed wants to do. a lot of folks federal reserve besides jay powell should keep their mouths shut. there is no need to come out on a day like today we had hotter than expected ppi, jam the markets with talk of another 50 basis point rate hike. for me i think they can get the job done with a little list talk and little less action tan the market wants them to have. neil: we still have a 10-year note teasing 3.9% earlier this morning, now into the low 3.

and as james bullard and hover relate a the mester said yesterday, they've -- loretta mester said yesterdayat's a repeat of the '70s where inflation urges again. and the big problem here is, and they said this, they're going to have to cause some pain to do that. the only way you get inflation down is to cause a recession, unfortunately. charles: let's say we get that recession, it's this year. how much, i should say or ask, does that increase the chances of rate cuts this year? >> well, look, we're not going to get a rate cut until there's actually a recession that starts to cause deflation. so, look, we have to define something really quick. there's disinflation which is a slower pace of inflation, then there's deflation which is declining inflation. the fed's not going to start cutting rates until you get a deflationary environment because that's a problem they can't fix. it's a psychological problem with consumers not willing to buy anything at that point. so no rate cuts until they get, to that problem. and that's not going to be this year, likely, that's going to probably be early 202

talk about the economy, along with minutes from the february meeting cleveland fed president loretta mester and st. louis' jim bullard said they supported a half-point hike at the february meeting and wouldn't rule one out for the next one all of this effect in the fed fund futures market has moving the pricing for peak rate. to bring the year-end pricing almost directly now in line with the fed's own average forecast of 5.13. next week we have new york fed president williams on wednesday. collins from boston, mester from cleveland, and jefferson and fed governor waller. they'll be in new york city on friday we have the chicago -- university of chicago school's monetary policy coming up. the comments of mester and bullard show the fed is not unanimous in the apparent new regime of responding to economic data through quarter-point hikes as the data come in. at least some still want to front-end load rate hikes. the market continues to price in the quarter for march. i think that's the most likely bet to go with, at least for now. guys >> steve, why? because the last two major data points we

it is loretta mester, it is james bullard, who by the way don't vote this year although mester will votef austan goolsbee -- charles: what about the notion bullard is a mouthpiece for jay powell. >> i much don't buy into that. i think bullard speaks for himself. but i think he is well-respected in the fed and powell certainly listens to him. charles: you still sticking with six though? >> i'm still sticking with six. charles: we'll leave it there. >> fair enough. charles: oh, boy, tell you what, it is a tough go of it all. thanks a lot, chris. labor shortages one of the topics we'll discuss future of work, town hall special march 9th, 2:00 p.m. eastern. get your ticket. come in the studio. hang out with me. by the way this is how you do it. go to eventbrite.com, search charles paper for those tickets. >>> coming up here big tech and supreme court now, this is a major showdown that has been brewing for a decade. what it means for social media companies and then niles has been the hottest guy on the street last couple years. he actually owns one of these names at 2:30. biden delivering spe

loretta mester says she saw a case for a 50 basis point hike at the most recent meeting. that view was echoed by james bullard. president biden expects to speak to china's xi jinping soon about that balloon. the president says he hopes to get to the bottom of this. at the same time he said he makes no apologies for taking down the balloon. the dispute has highlighted how fragile relations are between the u.s. and china. ukraine's ammunition and weapons gap will dominate the munich security conference which began today. nato officials have called for an increase in arms production to address shortfalls. meanwhile the u.k. defense ministry estimates that up to 200,000 russian troops have been tilled or wounded since the start of the war almost a year ago. expectations are mounting the u.k. and eu will reach a deal on post-brexit trading arrangements in the coming days. prime minister rishi sunak traveled to belfast the top to the regions parties. u.k. and eu leaders are looking to resolve the dispute over the northern ireland protocols, the part of the brexit deal which set

the federal reserve's loretta mester and james bullard have signaled after producer prices reboundedmost since june. a georgia state jury investigating election interference by former u.s. president trump and his allies said it believes perjury was committed by one or more witnesses. in the final report jurors concluded there was no widespread fraud that would have led to overturning bidens win but a judge has said details about who the grand jury said should be charged will remain sealed for now. that is the first word news. yvonne: we are seeing some downside when it comes to bitcoin. it certainly has been a bumper week when it comes to cryptocurrencies. we are low by 3%. we reach around august highs just yesterday. once again still a lot of questions about the regulatory side of things. the latest is the sec suing the company behind tara usd. walk us through the case itself and what are the implications of the lawsuit? >> this is not terribly surprising. this was a meltdown that took down tens of billions of dollars the crypto ecosystem. the sec has been doing enforcement action a

loretta mester saying we are, quote, in it to win it, regarding the fed's battle against inflation andve more work to do in that effort she said the fed needs to bring the rate above 5% and hold it there for some time. she supported, she revealed a 50 basis points hike at the last meeting with a hike at 25. meanwhile the producer price index, it came in hotter than expected, suggesting more pressure up the pipeline and joining the consumer price index which we got on tuesday and showing inflation not coming down as fast as the market hoped or expected. 6% year on year for that ppi there. all that means a hope for spring pause could be off for the federal reserve after a week of data that showed the data declining more slowly and the economy growing faster the fed may not hike until may and go away. it may play more in june and hike rates again markets have increasingly priced this in, the possibility of hikes in june, with a 54% probability of a june hike you can see that by adding up the two bars to the right and a 46% chance that the fed stops in may at 5.8 that's been going back and

loretta mester telling cnbc this month she thinks the funds rate needs to get up above the 5 and stayaw an economic case doing 50 because my view of the outlook hadn't changed and i believe we have to move our policy rate above 5% and a 50 at the last meeting would have brought the top of our target range to 5%. >> wrap it up in one bow, all the fed speak and data point in one direction, higher rates for longer, any pivot, guys, far off on the horizon >> and that is what market is telling us today stronger dollar, higher treasury yields, more inverted yield curve. it's all happening weaker stock market. market doing the work for the fed. steve, my biggest question what you're hearing from the fed members there about january and whether there's a chance it was a little bit of an anomaly because the data is not fully consist-point we're seeing the weakness in housing, for instance, which we'll talk about and manufacturing and yes, while the key things, retail sales, and inflation all look better for january, i wonder how they're thinking about that in terms of the inflation fight. >> yo

that was hotter than had been expected, also followed up by new hawkish comments from the fed's loretta mester. ryan, what do you think? does this mean maybe the fed has more work than the market had been anticipating for the last six weeks or so? >> yeah, thanks for having me. good morning, becky. it could most of the inflation data has been positive. yes, today's weak. i just want listeners to be aware, this is the third best start to the year ever for the s&p 500 as of valentine's day. the second half of february into early march is a weak seasonal time after that strong start, maybe we could have a pullback, and think about this like all the valentine's day indicator, looking at the ten years that were better than this year started as of valentine's day, the rest of the year, becky, higher nine times, up 11% on average, only down once so, you know, the whole, so goes january, so goes the year. there's a lot of momentum. we've been saying, we're avoiding a recession, look for upside, and we think any weakness, we would sure be buyers here, especially in a pre-election year. >> weakness, mea

for the future of the internet >>> and another reminder, don't miss an exclusive interview with loretta mesteray tuned we'll be right back. rivate bank we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why? ♪ >>> welcome back to "squawk box. the big earnings mover of the morning, alibaba the chinese e-commerce giants has scoring a big beat it beat profit estimates by more than 18% andrew >> now to a cnbc scoop google asking cloud employees and partners to share their -- is this a scoop of sort? to share their desks we share our desks they might even have to go alternative days citing real state efficiency, a new model apply to say google cloud's five largest u.s. locations, including kirkland, seattle, new york city, san francisco and sunnyvale. it's hopping to the company -- there would be overflow drop-in space for employees who want to work in office on unassigned days >>> coming up, breaking jobs and gdp cause, revised fourth quarter vote, all micong up next we'll bring them to you. don't go anywhere. the first time y

. >> february is a short month >> it is loretta mester >> she was on.now she says 25 it's hard to go back to 50 after 25 you freak everybody out. >> hard to go back to the farm >>> when we come back, a big pay day for blackstone's steve schwartzman. he brought in more than $1 billion last year. >>> and we will have peter kraus on why he doesn't see the economy heading for a soft landing. >>> a reminder, you can watch us any time on the cnbc app when you choos ast business internet, you choose the largest, fastest reliable network. you choose advanced security for total peace of mind. and you choose a next generation 10g network that's always improving, getting faster; more reliable; and more intelligent to keep you ready for today and tomorrow. the choice is clear: make your business future ready with the network from the most innovative company. comcast business. powering possibilities™. >>> blackstone's ceo steve schwartzman took home 1 p$1.27 billion last year. the 2022 haul topped the prior year earnings of $1.1 billion. >> extraordinary >> he's not