rick santelli out at the cme with more on rates including results of the seven year top of this hour. rick >> yes let's start out with the seven year quick gave it a b-plus mainly because it had a bit of a tail unissued market a bit lower than actual yield came out but not much all other metrics very good. above average. one outstanding. it's the buffet table metric dealers only took 14.5% of the auction which means investors took the rest. smallest number since jan of 2018 and the like golf, smaller is better. go to the markets. kelly is absolutely right. not only one maturity they has a yield higher than yesterday's close. that's a two-year note three, five, seven, ten, 30, higher in price, lower in yield. see what i'm talking about giving up ground, but holding on better than the other maturities look moving down the curve two day of ten left side, right side. look at two day of 30s how much lower right side is curve flattening in action, and right now tens to twos hovering about 61.5-ish probably the flattest right knew going all the way back to -- october of 2020 and you could se

inflation down by raising rates they may slow down the economy near or at recession levels. >> rick santellieresting comment there. remember that point. oil closing for the day, for the week, pippa stevens, she is still open at the commodities desk. >> oil in the red again today managing to close off the worst levels of the session and still in the green for the week for a fifth week of gains. wti down .6% at 85.05. brent crude at 8$87.80 for down .5% and energian stanley is the latest firm calling for triple digit prices they see brent hitting $100 in the third quarter thanks to what they call the triple deficit of low inventories, low spare capacity, and low investment the call comes after goldman sachs said earlier this week they also think brent will hit $100 by the third quarter. maybe guys, fill up your tank now. >> seriously and then some. >>> the last time our next guest was on "power lunch," which was a couple weeks ago he named goldman sachs as a stock to avoid. since then, goldmanman is off more than 9%, one of the worst performing stocks this week. now he says it is time to fade

joined by rick santelli.elcome, gentlemen michael, can the fed arrest inflation without tanking the economy? >> very difficult to do, tyler the head waited quite a long time to tighten and now we have got inflation in services, goods, commodities, all over the place. it is going to be a really really difficult act for the fed to pull off. >> what do you think, rick fed chair powell given wide acclaim for his response to the pandemic and to the crisis there. he did what i guess you would say he had to do in this case, how far behind the curve do you think he is, if you think he is, and can he thread that needle and bring inflation down without bringing the economy down >> i think he's behind the curve from the standpoint that they overstayed with respect to the help they gave us to get over the quid hump when it hit originally in march of 2020. but i think it's very tough to put all the blame on him but because i think the legislative part of the government also was trying to push a lot of stimulus into the ec

five-year notes up for auction rick santelli with the results >> yes a very strong auction. the second one in a row. this is 55 billion five-year notes. the yield at the auction 1.5333. it was definitely below the 15.54 issue market gets a good mark for pricing all the metrics were solid a little below on the direct bidders at 16.5. just like yesterday's. it seems as though the primary dealers mutual funds are gun shy. like yesterday as well, indirect bidders, foreign interests off the charts as a matter of fact, it's 68.5 on indirects i have a 21-year track record. it's the highest that i've seen. i can't find a higher one in my 21 years of history. so a very solid a for this auction. and probably similar to yesterday, this could set the table to take a little of the pressure off stocks. why? less nervousness potentially stepping up to the plate here. kelly, back to you >> thank you very much, rick santelli my next guest is here to discuss what to expect and listen for from jay powell tomorrow we have a chief financial economist at oxford economics. you are expecting four h

economy grew 5.7% last year the biggest annual expansion in nearly three decades as rick santelli put morning. >> that is a good number and if you look at the annualized q over q at 6.9 versus last look at 2.3, boy, we're cooking in grease. cooking in grease. >> the strong pace, as he put it, led by a hot fourth quarter. consumer spending increasing as the delta spike subsided and more americans shopped and dined out, acted normal and such >> north carolina, from kitty hawk to supersonic jets. the aviation start-up called boom is bringing the fast flyers to greensboro. with them, a $500 million production facility to get ultra high speed commercial flights back off the ground. boom's passenger jet set to carry up to 88 people, set to travel at more than 1300 miles an hour. twice the speed of today's fastest airliners. the project set to take off in 2024 >>> and a robot named optmous. prime to be tesla's most important product in development this year. more than electric vehicles. that's according to elon musk himself. the ceo tells investors the tesla bot's first application would hel

rick santelli here with the results. how did it go? >> it went extremely well.ind of shocking for the 21st 20-year auction, brought back mid 2020, the yield at the auction 2.21%, lower than the one issue yield which means lower yield, higher price. i gave it an "a" as in apple demand was very good, but we all need to realize 20-year bonds have the highest yield on the curve, higher than a 30-year bond why? because of the liquidity factor. 30 years, more liquid, and a premium associated with less liquid 20 year let's go through it. 20 billion the bid to cover, well, 2.48 so almost $2.50 chasing every dollar available that's a solid number. 6.2% indirect is a very big number, the second largest in the 21 auctions of 20-year and it is the best since july of 2020 it represents foreign interest direct bidders was the only metric that was just a smidge light. dealers take much less than the 20% ten auction average at 16.8. remember, you want dealers to take less. they're the people cleaning the top of the buffet after the investors are done eating their lunch, which i

. >>> let's move to the bopped market the ten-year got to 1.9 earlier in the session rick santelli ischicago for us hi, rick >> yes, 1.9% around 3:20 a.m. eastern. you see it on the 24-hour chart. but we really have been drifting south with respect to yields and north with respect to prices we had a 20-year bond auction. the 21st 20-year bond auction. it was quite aggressive. i gave it an . the reason i bring it up is investors seem willing at these levels to step up to the plate and dip their toe into the buying category. look at a two-day of tens. yesterday's low yield was 1.80%. and we are making low yields and high prices as i speak if we close below 1.80 we would lose momentum. looking at a year to date chart we closed last year at 1751. we are up nearly 40 basis poimgts on the year. finally, bunds everybody was looking forward to a close in positive territory. i have tony in the pool. but even those you see on the intraday chart, at the exact same time, 3:20 a.m., it hit its highest yield in 32 months at .022% positive .022% it still closed in negative territory. >> the over/und

rick santelli is following it for us as always. > yes, tyler, many suspected that when the arrows turned bright green today on the dow, the s&p and the nasdaq that you would see selling pushing yields higher considering the inverse when there is anxiety in equities everyone runs to buy treasuries not the case lets look at midnight at the ten-year this was their high yield, 1.86%. if you make it a two-day chart we are basically holding yesterday's low yield, 1.82. cross the curve, they are all holding against yesterday's low yield trade. and that is forming a congestion here which is very important if you want the see stabilization and potentially higher rates now if you look at bunds, once again the far left of the chart. they traded in positive territory again. two-day chart, they traded positive territory two days in a row for the first time in 32 plus months but they haven't closed in positive tear terry since may of 2019. all sovereigns globally have been moving higher guilt yields, the uk tens closed at a nearly three year high

i agree with rick santelli the fed needs more action and less words. >> how far behind the curve they are, number one? >> how much harsher do you think they will have to be going forward to catch up to where you think they ought to be is four quarter points going to do it? >> no. the fed funds rate should be right now around 2%. long term interest rates should reflect the high inflation at the present time and they are nowhere near there because the federal reserve is stimulating the market by buying mortgage backed securities which is hardly needed when housing prices are going through the roof in double digits. >> i take your point that the system has been flooded with money. not just by this fed but by prior feds as they enage in quantitative easing which is basically the buying for cash of government and mortgage backed securities. >> during 2020 and 2021 money soared 25% a year. never mind the virus but where does the productive capacity come from to deal with that enormous increase in demand such an increase in the money supply generates and well reflected in inflation data. fir

rick santelli has results. how did it go? >> similar to yesterday's ten year slightly below average, the grade i gave it. demand 1:00 eastern, c minus, charlie minus, mostly a pricing issue, meaning where the auction was yield-wise and where the end result was had a difference, higher yield lower price one issue mark hovering around 2.072. yield at the dutch auction, 2.075. so tailed a bit and all metrics, well, basically near or slightly below average of ten auctions. i think the real key here is the 30 year has been a problem child over the last several auctions so last several have been ds, d-minuses. in a way, a bit of improvement but goes a long way to demonstrate investors seem to be staying away from selling aggressively in treasuries the last several sessions. yields moved down. despite hot year over year cpi and toad's ppi but not stepping up and being aggressive coming to buying at the treasury auction. one more thing we want to point out. dollar index continues to be on the soft side. i would continue to monitor th

. >> kim forest was concerned about that last week we don't have rick santelli this week, jason, i am going to ask you, now that the ten-year has gone above 1.7%, where does it go from here >> if financial markets aren't already difficult enough to predict -- we are five or sixis base points away from the cycle high so far, 1.75. i think there is a historical argument that oftentimes the cycle high in the ten-year happens right after the recession ends and the recovery begins in earnest. if that plays out again there is an argument to be made that we are at or near the highs for this cycle unless we see a reacceleration of economic growth or pickup in inflation, not just going sideways or disinflation, but rekpael rags we might see another rise on the ten-year >> steve, anything you would add here. >> yeah, i was reading a little bit more here. i am seeing more support than i initially saw when i was reading what i think was a generic session of the discussion. the last section i was reading is who about the back and forth. i am reading what i want to say is more support for a faster

rick santelli tracking the action that is about 39 years ago. >> the personal spending data for decemberear over year core deflator. highest in 38 years. but despite that as you look at 2-year note yields they have dropped. right now at 1.17. down 2 on the day and up 17 basis points on the week for 10s it was nothing but dropping yields after the 8:30 eastern data 1.83 where the market was on the data now 1.77 barely up on the week. up 1 so you can see how much movement there's been in those spreads. as a matter of fact if you look at a week of 10s to 2s it settled last week at 75. hovering right now at 60 down 15 basis points i can't express how big of a flattening that is for a week. dollar index on pace to close at the highest level since july of 2020 let's call it 18 months. >> have a good weekend. >>> oil is closing higher. pippa stevens is all over it. >> a sixth straight week of gains for oil. today the third day in a row at the highest level since october 2014 brent advancing to $89.89. it hit $90 this week and not able to close above that level we heard from chevron this morning

rick santelli is tracking the action rick >> absolutely tyler.k at the 24-hour chart of tens drifting lower remember, we had a 30-year bond auction that capped the penny remunding of $110 billion from treasury and remember, it is thursday, which means in a few hours we will learn the size of the fed's balance sheet as it quickly approaches $9 trillion, and the topic is reducing the balance sheet. many times we all forget that they have purchased so many treasuries it makes it really difficult to get that selling pressure to leverage to move rates. will it be this way forever? no but when it's going to change is tough to predict look at a week to date of tens and you can see how we have slid we are sliding at a time where cpi yesterday and ppi today, two out of the three year over years were new records, the third one equaled a record and yet the market seems somewhat oblivious to that look at a one-year chart of tense. what is interesting about this is as a technician it looks like it is rolling over a bit if you look at bunds week to date, the o

let's get right to the man, rick santelli >> thank you very much, tyler. it's very interesting especially as you watch the momentum building in treasury yields. we talked friday about how a new fresh high yield close anything above 1.76%, which was the high yield close the first friday of 2022 and we did indeed close above that level and the momentum built as you see on this three-day chart. as you look towards january of 2020, yes, these are 24-month, two-year fresh highs, but the real key here is what's the encore performance if the fed tightens, obviously we see the effects on equity markets and we see that the curve, well, it's steepened a ri little bit, but mostly was flattening because two-year yields were more to the upside if the fed's going to tighten this much, most likely the curve's going to tighten or invert and the best hedge will be long dated treasuries and that's going to present the fed with a problem bund yields are winning now. they came within one basis point of zero. they haven't closed above zero since may of 2019 and basically, that

rick santelli joining us from chicago on a day where the ten-year rate is now back around 175. >> yesl tell you what, he did say all the right things and the investors, well, they listen and they acted on what they heard how do we know that? because we had a very aggressive three-year note auction today. i graded it an a for demand. i picked two-year notes. if you look at a short maturity, you can see two things clearly right after around 10:00 eastern as jay powell was talking and answering questions, you could see the yields dip they came back a bit then got whalloped again that was a result of the three-year note auction. dealers took the smallest amount, meaning investors took the most my recordkeeping goes back 20 years for a three-year note auction. if you look at a year-to-date of ten-year, this is all intraday charts it is so telling because obviously we moved up almost every session. we have lateral moves today and now we're slipping toward the high closing yield from march of 1.74% with cpi tomorrow, if we close below that level, that really changes the dynamics. tens to two

. >> yeah, let's go back and the last two days, you have been there with rick santelli at about 1:20 or so or 1:10 when he comes on with these bond reports that show that the auctions so far, despite what the fed is about to do, have been pretty well bid here and that has been at least somewhat responsible for a rebound in the market. certainly today we saw that in spades and so i don't think that with these bond markets being well bid, the market, look, it's off 10%, depends upon how and when you ganluge it from. it's not enough to dissuade the fed from the job it has to do, which is it should be raising and tightening in any event because gdp is where it is, but you layer on top of that, the 7% inflation rate and i think you've got two reasons for the fed to do what it's about to do and i don't think the market is enough to dissuade it. >> thank you very much steve liesman reporting. we'll be hearing from steve throughout the day and all day tomorrow meantime, let's bring in a fed watcher who steve knows well david, senior fellow in economic studies. long-term editor and reporter a

rick santelli is here with the results and the affects on yields >> this is a strange auction first, i'm going to give it an a minus. that's a good grade. 54 billion two-year notes. the auction yield.99%. it was a bit lower than the market was trading one issued market yield, lower price nature that helps the grade let's go through the highlights. 2 .81 bid the cover. that's the best since april of 2020 but here's the metric that really caught my eye indirect bidders, foreign entities, the ones we really should be paying very close attention to, 66%. that's the best since the summer of '09 the one fly in the ointment, direct bidders at 9.4 %. that's the weakest since march of 2020. but it's well below 10 auction average. look at 24.6% for dealers, that's really solid. several extraordinarily good metrics. a minus. it's telling us wednesday last week the 20-year, aggressive bidders. the two-year, you talk about the biggest dagger falling from the sky, short maturities, most likely tied to the fed, and everybody is talking about the fed oh, my god they haven't really done anything yet

think it's off base to compare this to a taper tantrum, at least in the bond market, which as rick santelli points out, is behaving very well despite what's going on in stocks >> i didn't finish my thought on this i think the biggest difference between this taper tantrum, if you're allow me to call it that, and the previous three is that this one, there's no backing off on the inflation problem, that is a problem. i mean, they can't do what they did in may of 2013, early 2016 and 2018 okay, we're going to talk more dovish now this time around, they have to continue to talk hawkish but with what the market's doing, i think they're going to have to take it a little easier on the hawkish talk, especially since the market definitely freaked out over qt and clearly in the press conference, you and the other reporters are going to be asking what the deal with qt aren't you concerned you've overdone it, that you're about to make a policy mistake >> owejoe, i'm looking at a headline from morgan stanley's mike wilson who says what we're witnessing here in the market is winter that winter is finally

in the dollar that we're watching play out here, below 95 rick, really appreciate it as always, rick santelli>> coming up, the high cost of making evs my next guest says if automakers don't find a way to bring down cost they could face a credit crunch we will look at what makes it so expensive and who it could impact the most. >>> plus higher mortgage rates there's one under the radar that could be well positioned to benefit. the name and the reason ahead. >>> take a look at the dow heat map as we head to break. salesforce, microsoft, nike leading the index while goldman and j&j are weighing on it we're back in a moment ♪ >>> this is "the exchange" on cnbc today, business is a balancing act. you want your data to be protected and secured. and your customers want seamless and easy. with ibm, you can do both. your company can monitor threats across your clouds, address all those regulations, and still create all new experiences. trustworthy ai powered security. that's why so many businesses work with ibm. what does a foster kid need from you? to be brave. to show up. for staying connected. the

rick santelli here live with breaking news, initial jobless claim for the week while they move down 26,000ims, continuing claims a week in arrears january 15th, 1,675,000. and definitely higher than the last week of last year when it was 1.55 million, and that was, of course, post-covid low. if we look at durable good orders down 0.9% transportation it jumps up 0.4, a little more than expected. unchanged but revised up 0.3 from 0, and durable goods transportation last month also upgraded along with the headline, so it's more of a balancing act over a couple of months and finally, gdp first look at fourth quarter is 6.9%, much, much better than the 5.5 and it harkens back to pre-thoughts before omicron hit at the end of the year obviously they overstated the effects in the economy that is a good number. and if you look at the annualized q over q at 6.9 versus last look at 2.3 we're probably the best annual year over year gdp since 1984 if you look at consumption 3.3 versus 2.0 last time here's the biggy, the gdp price index up 6.9%. we're expecting 6.0. 6.1 is the current high. that's the h

we have some optimism about the fed today, with the s&p with almost a 2% gain rick santelli has new home business surprise on the december read on new home sales. remember, november was a strong number, ds super-strong, 811,000, well surpassing the expectations of 760,000, and 811,000 adjusted, it's the best level metropolitan over month for this particular metric since march of last year there's probably several good reasons. one, thank the fed here. interest rates are reportedly moving higher over the next several years, many that may be sitting on the fence to purchase a home may be more mott rated. completions are up close to 5%, and there may be an inventory thaw no matter how you sliceit, a powerful number. let's aim east and see what diana olick thinking >> rick, like you said, it is a strong number, well above expectations i would note, though, that november's was revised lower you know i'm always looking at prices median, 377,700, that's just up 3% year over year. in november, the price gain was over 18% so maybe a bit of mix on the pricing, maybe it's a mixed shift to lower-pri

. >>> welcome back to squawk on the street rick santelli here some of the first pmis of 2022 and they'renuary preliminary market pmi manufacturing 55.0 that's the weakest going all the way back into october of last year essentially following 57.7. on the services side, 50.9 50 pnlt .9 that's the weakest since june of last year. and essentially following 57.6 and, finally, the trifecta of weakness composite pmi at 50.8 the weakest since june of last year following 57.0 we see interest rates are slipping a bit they probably will now slip a bit more "squawk on the street" will return in two minutes. e they revolutionized immunotherapy. i am here because they saw how cancer adapts to different oxygen levels and starved it. i am here because they switched off egfr gene mutation and stopped the growth of tumor cells. there's a place that's making one advanced cancer discovery after another for 75 years. i am here... i am here.... because of dana-farber. what we do here changes lives everywhere. i am here. wondering what actually goes into your multivitamin? at new chapter, its' innovation, org

nasdaq up by 8 rick santelli is standing by at the cme. rick. >> yes, becky. numbers for the year let's start out, though, with initial jobless claims 230,000. much higher than the estimate. we all know it takes a while statement for the post-gps of holidays this most likely is more of an omicron event. last month, of course, 207,000 so we jumped 23,000. revisions i am sure may be forthcoming. here is the big news, finally continuing claims get to pre-pandemic levels. okay we were looking at numbers in the low 1.7 million area those were march 2020. we're now 1 million, 559,000 let's put it this way. we haven't been under 1.7 million since what january so these are really numbers on continuing claims. now let's go to the inflation numbers, shall we? for the december readout producer price index headline number half of expectations up .2. the high watermark here was january of last year at 1.2. if we look at x food and energy as expected up half a 1% the high watermark their was april of '21 at 1.1, finally, if we look at x food energy and trade, it is up .4 ca

we are a few second say way if new housing starts we have been awaiting rick santelli has been standing be interesting numbers, as the ten year has climbed. the 30-ier picking up yesterday as well. >> yes, it's going to have to compete against several other very large scale variables to really leverage which is going to be most important we know there is an inventory issue with regard to housing we know there is a pricing issue. prices are awful lofty we know that home equivalent rent has been zooming, even though it's a smaller dynamic in many way as housing prices, yes, the correlation between interest rates and mortgages, seven years the life of a mortgage, if you look where seven-year rates are right now, they're right around 180 up dramatically just like all other interest rates many just kind of lazily look at the ten year as the major benchmark on the real estate market i think that ultimately with regard to housing, history is still being read relatively kind when you look back to the early '80s we're comping inflation mortgage rates were back in the 'teens, here we go, december

rick santelli here live at cme, hg with breaking news fourth quarter up 1% that's eased back a bit.sonal income for december, up 0.3, and we were expecting up 0.5. sequentially that's following unrevised up 0.4 down for spending down 0.6 and not a good number. if you look in the rearview mirror we were up 0.6 down last time and the month of october we were up 0.7 it was one of the best numbers going back to, well, about 14, 15 years and we look at the deflater here's the important data now, the deflater month over month up as expect. the year over year number up 5.8. so that takes out 5.7, and 5.8 per, well that is the highest since 1982 and if we look at month over month pce core deflater up as expected, up over 0.5. so the personal consump up 4.9%. 4.9%, and that indeed is hotter than expected. it follows 4.7 the last time we were up at 4.9%, well, to find a higher number you have to go back to september 1983 as the way back machine just showed me so we continue to see that the pressures build with regard to many of the year over year comparisons. yesterday's gdp was a powerful nu

rick santelli here with the first big inflation-breaking news of 2022, our december read on the consumer hotter up .5 him that's cooler than the high water mark which has been up .9 that was the highest in 30th years in october x food and energy up .6. currently .6 isn't the high water mark we have come down a bit. the high water mark was .9 in april and june those were 40-year highs so we have come down a bit now here's the big numbers, year over year, headline is up 7% 7% that is the highest since 19io, june to be specific when it was up 7.1 if we look at year over year core, of course, that's not with including food and energy, it's up 5.5%. to find a higher number, we go all the way back to valentine's day of 1991. it was up 5.6% we'll call that 30 years so these are definitely hotter than expected numbers and, of course, we probably should have expected this, when you consider what inflation has done and you think, wow, we're at 7%. 5.5% on core there is the ten-area note zealand around 1 and three-quarters very interesting as you look at real average weekly earnings year over year,

. >>> welcome back to "squawk box" rick santelli live with breaking news, our first 2022 on how retailail sales. the monthly numbers are out minus 1.9% that's about minus 1.8%. more than we were expecting. if you look at x it's under pressure strip out auto sales and gas sales,py fuss 2.5. these are big numbers down and if you look at the retail sales control group plugged into higher economic data points. that's mynous 3.1. that is huge now i do warn, okay, these are big year-ending negative numbers, but for the year, it's not necessarily about how december was, it's how many shoppers, of course, spent.earlier in the year. if you look at march, for example, of last year, big strong gain. so, yes, we ended with a wimper, but overall, it was really how they spaced out sales and how many consumers, of course, heeded supply chain issues and shopped early. now, if we consider that retail sales is not adjusted for inflation, that really makes these eye-opening numbers for december now let's switch gears, import, export prices, we're expecting up .2 once again, exact opposite down .2, but in

. >> from santoli to santelli, from stocks to bonds rick, take it away. >> tyler, it has been an interestingany were scratching their heads why interest were moving a bit lower this week considering some of the data and inflation numbers we have seen well, the counter-intuitive trade seems to have ended. look at a 24-hour chart of tens. we keep touching the 170 level right now we have not only touched it we are taking off from it. the high yield close for the year was last friday at 1.76%, actually the highest yield close in two years let's go back to december 1st. look at the way the markets moved higher and the way it came back and touched the 170 mark. if you open the chart up to last may you will see this is not unique we bumped up against that level several times as we came back down they call that the kiss. here's the point if you want to look at the chart precovid as you see on long-term chart there is a lot of room if you are a technician you are thinking if we make a move above 1.76 that's a fresh two-year tie, it is going to create momentum to test closer to 2%. if we close 170, lo