"squawk box" begins right now. ♪ good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. it's just the boys i'm andrew ross sorkin with joe kernen becky is on assignment in omaha where the berkshire hathaway meeting is set to begin this weekend. let's show you the latest. the dow would open up 146 points higher nasdaq up 160 points higher. s&p 500 is up 30 points. that would be after this because stocks sky rocketed higher after jay powell's comments yesterday. the market gave back the gains

later on in the session. will have more on what jay powell's comments mean treasury yields here with ten-year yield at 4.16%. >> let's go to lindsey and talk at the same time fed chair jay powell said bringing down inflation will take longer than previously expected he cast doubt at the next policy move could be a hike. >> it's unlikely that the next policy rate move would be a hike i say unlikely you know, our policy focus is what i mentioned which is how long to keep policy restrictive. >> that's all fine and good. joining us is stifel chief economist lindsay pietza

do you remember the days of mike and drexel, lindsey? do you remember when someone would have a high degree of confidence and when you could arrange financing? do you have a high degree of confidence we know exactly where we are in terms of inflation and rates right now? >> no, i think it is telling that the fed chairman conceded it will likely take longer to gain the confidence and inflation is back on the disinflationary trend and at the same time, taking the rate hike off the table. the concern is the conversation really stops short the committee may be willing to remain indefinitely on the sideline, what is the threshold for reengagement should inflation continue to rise at what point is the fed not going to be patient for rate cuts, but seek further policy

should inflation continue on the meaningful and persistent trend away from the 2% target? the conversation really stops short and i'm concerned that the fed is not only failing to han handicap, but feeling under prepared for that scenario that inflation does move in an opposite direction of what the fed is anticipating. >> they are already doing easing light. they are proceeding with that. we went from the fed giving the markets the idea of six or seven rate cuts. we went from that to three and then i don't know, we're closer and it is definitely coming. now it is, we feel like we're restrictive and this is going to work, but we're not really sure. we don't think we need any hikes. on the way in, if you mis

misundermisunder dmisunderestimated, george bush term, why not see that they are under estimating the chances? >> i think it is clear they already are. if you look the summary of economic projections we didn't get one yesterday, but we have one from march the fed anticipated a more benign level of inflation than we're seeing than what's been realized the expectation for the reduced forecast of three rate cuts in 2024 is out ddated at this poin. the fed continuing to perpetuate the patience, but a rate cut as the next move underscores the ability to handicap the scenarios should inflation evolve in a manner of what is opposite of what the fed is anticipating as we have seen since january,

price pressures have stabilized, but metrics have pushed higher away from the 2% target. the fed is optimistic that the next move will be a rate cut and seemingly ignoring the scenario they may be forced to reengage if the second part of the mandate is failed to be met. >> i don't know how you can say with certainty you hit the terminal rate of 5% to 5.5% on federal funds. that's just right to rein in what we need i'm back to worrying and first i thought it was spending too much money and too much stimulus. staying at zero. then i thought it was supply chain and transitory it would be transitory in the end. we saw a soft landing. now i'm back to thinking there are too many dollars out there

sloshing around and fiscally still priming the pump -- it was not a crisis when we were priming the pump now i think this could be something engrained and not run out. >> that is the situation if the fed remains on the sideline and allows pressures to remain above the level, the more evngrained they continue in the economy. the intention is to slow the consumer, which by extension, slows the economy and results in more benign inflation. when you look at the consumer numbers, it is clear the consumer has not been meaningful slowed or has the fed done enough to kill the consumer to result in that slower demand side inflation the vast majority has been on the supply side. from the variables outside of the fed purview. when we look forward and talk

about have we reached the terminal level, historically, the fed has needed to raise rates above the previous peak in inflation. raise it significantly in many cases above the previous peak with the core pce at 5.6%, the notion of reaching that bound of 5.5% would be enough to quell price pressures speaks against where we should have been. >> we are running out of time. we need to get to the jobs number the gdp. i don't know it is good in terms of inflation. if we do see some moderation in some of the metrics in the jobs market, can we just assume that it will have a positive effect on inflation expectations? inflation could stay where it is or we could have unemployment rising that may not be linked to lower

inflation. then we're really screwed. >> that's the biggest scenario that's the worst-case scenario the fed could case is stagflation scenario where the economy continues to lose momentum. we have gone from 5% to 3% down to 2% at the first quarter if we continue to lose momentum from here, but the fed continues to tolerate above target inflation, now you have this double whammy for the american public suffering both effects of the slower economy and pressure of above target inflation that stagflation scenario is the worst case suggesting the fed has a small and limited window to tackle inflation against the solid and positively growing economy. >> do you think, i'm asking andrew this, do you think if you had to put all of your money on this and -- lindsey, all this would be a lot.

>> gun to the head decision. >> you would still bet the next move is down and not up in rates? i don't know at this point >> i would flip a coin >> lindsey, you would bet. mortgage the house you have to make a move. the next move is down. he told us yesterday the bar is higher for raising >> i think the fed should raise rates further to ensure return to price stability this is a economy committee deso maintain relief and economic conditions i think fed powell is likely to give us a rate cut as the next move. >> maybe we're not getting anything if you believe that powell wants to raise rates, this stays >> we are okay at 2.5% or 3% for inflation? it is like, okay, we'll accept

that >> if the fed gives us 25 or 50 basis points in relief, that is not an implication of the downward trend in rates. i suggest after a minimal retreat, the fed goes back to thesidelines for an extended second round period of maintaining the current level. the fed is desperate to give us relief, but after that, the fed's hands may be tied if they don't show meaningful improvement. >> lindsey, thank you. coming up, amazon's ceo andy jassy is in hot water. we will talk about what that is all about and it has something to do with comments he made here on "squawk box" and at the deal book conference. we'll explain what that's about. sales of the popular weight-loss drug wegovy doubled in the first quarter we will show you how shares of

novo nordisk are reacting. i'll tell you all about the andy jassy thing. i think is unfair. we'll talk about it after this >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. (♪♪) (♪♪) 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.

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cigna saying the sale of the medical business to ensure healthcare corp is on track to close in the first quarter of 2025 that deal was announced back in january. a qualcomm shares are up this morning which was above wall street estimates of $2.32. revenue above and the current quarter guidance range was higher than analysts expected. strong demand for premium tier of smartphones which require the most advanced a.i. chips jon fortt spoke to the ceo last night. >> we are looking at the ability for you to watch something and put in sub subtitles. that is related to language and a lot of apps and systems becoming much more useful.

also things with image photo editing for an example you saw use cases you can summarize the documents. we're just at the beginning. novo nordisk reported a 28% jump in net profit beating expectations sales of the popular weight-loss drug wegovy has doubled in the first quarter. now has 130,000 weekly subscriptions in the u.s the company raised outlook for 2024 you do it. you think you will some day? >> i think we all will some version of it. >> fat is bad. it causes everything everything sleep apnea. there is a reason to lose weight i'm stuck with wanting to do it the way you are supposed to do it i saw someone yesterday who i know did the wegovy thing and it

looks like the guy was 40 pounds lighter than a month or two months ago i just want to know whether the shock of me looking at the way he looked in that face and everything -- is it just because of how quickly it happened that i was n't expecting it or do you really think you look like you're dying when you take this stuff? the sallow. >> can i tell you what's going on >> yes. >> two problems with people on the drugs. because they're on the drugs, they don't exercise as much. >> they don't have the energy. >> they think to themselves, i'm thin, i don't need to exercise as much as i used to do. they are not building muscle that's the first part. a lot of the facial issues you are talking about is muscles lost in the face because people stop doing any exercise. the other thing is and this has

to do with the muscle tpiece. they stop eating protein because of the drug. you need to -- people on these drugs need to force feed themselves protein on a percentage basis, a big part what have you eat every day has to be protein to begin with. in this case, it has to be a massive piece because you are not having that many calories to begin with >> i will follow you around and grab that thing and not let you. if you were to do that -- >> you would be jealous. >> you do not need it. i can't imagine. >> i'm not saying i would do it now. >> me -- >> it would make it easier for everybody. >> i could make some strides go ahead >> this is a fascinating story we are involved in this to so degree. i disagree with the judge. what am i supposed to say? national labor relations board

judge saying andy jassy violated federal labor law in comments he made in 2022 on this program and bloomberg tv and at the deal book conference. here is one comment he made on "squawk box" that raised red flags for the nlrb and you can decide >> in a place like amazon and employees, if they see something they can do better for customers or for themselves, then go meet in a room and change it. that type of empowerment doesn't happen with unions it is bureaucratic and slower. >> we continued that conversation at the conference andy jassy made comments being slow and bureaucratic with the union. the remarks violated the labor law because they went on beyond commenting on the employer/employee relationship he is required to post a notice

about the order to employees nationwide amazon spokesperson said they disagree with the ruling and intend to appeal that is not intimidating employees to say these things. >> i welcome pushback. you are being too guarded sgrguarded. >> cguarded? >> ridiculous. nlrb is totally political depending who is in the white house. sometimes two republicans and other times. you can see depending who is on it -- the judge appointed which a democrat is that how this works >> i don't know the history of the judge. i would imagine -- >> is this one of the nlrb judges how many are there

>> that's gay qa good question. that's ridiculous. >> stop the presses. how about around here? around here in new york city, if you want to do something, we talked about it many times if you want to do construction or putting a mic out we're not supposed to touch a mic. let's not get into that. there are times where some of the rules seem absolutely insane broadway you can't do anything on broadway that's why it costs so much. you need someone brought in to move a chair. >> i don't want to hurt myself for saying this. you wanted subways fixed in new york city. the city is paying for our five times than they should be paying than other places in the world >> because >> i'll keep that unspoken the construction business is

more complicated than the broadway folks. >> probably. other people we need to worry about with these businesses. coming up, several major stories in the auto industry including 30% jump in carvana and reports that tesla -- that's not fair interns? why do you have to rescind internship offers? rea reality. that's next. later, we will talk about jay powell's comments with richard clarida. that's next. "squawk box" will be right back.

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welcome back to "squawk box. shares of carvana soaring after

23 cents per share reported. analysts expected a loss of 74 cents. the ceo saying the strong performance was driven by efficiency gains in the operations and reconditioning of vehicles for sale and cutting expenses the stock rebounding after the crater in 2022 and bankruptcy concerns it is focused on profitability rather than growth it was on the crazy growth train. look at that stock and then it went on a tear in the pandemic and then fell down here we are. >> still$120 hong kong shares of chinese ev maker nio jumped 20% overnight. the company delivered more than 15,000 vehicles in april an increase of 135%. now, there's a company called --

this is like the nvidia problem. is it xpeng or xpeng that would make it nvidia. you can't do xpeng or do nvidia. byd reported month over month gains in deliveries in april while li auto deliveries fell in march. all up in hong kong trading overnight. we were talking about this ear earlier. tesla interns have been receiving calls that their internship offers have been rescinded. this is the latest round of cost cutting. this cites linkedin posts that their offers have been revoked three weeks before the start date this comes amid the layoffs this week and reports that say two

high profile executives in the 500-person super charger division which last been cut a lot of issues with the super chargers they are opening super chargers all over the country and some of them with construction projects being stopped. what does it mean for ev ado adoption i give elon musk credit for the super charger network for all evs. all this seems to be up in the air at the moment. >> if you had an internship and you thought -- >> summer internship >> i'm going to tesla to be an intern that would be disappointing. i guess there must be some pay involved for internships >> one of the things that happened over the last decade is we moved toward paying interns

look, i grew up and i was able to do it because my parents were able to subsidize me i showed up and getting coffee for people and was happy to do it for free. i could afford to do it. a lot of people couldn't. it was unfair. it was putting people in the position to do it and others not. then you had to pay all of the interns. then the other side, like tesla, when you can't afford to do it, and it is a different story. >> starbucks. >> you think it is over for starbucks. >> latte venti no foam latte. i don't want it now. >> really? your latte. >> don't you just like black

co coffee >> i'm a black drip coffee i'm not trying to have milk and all the stuff. >> why >> so i'm not taking ozempic when we come back after this, closing arguments begin today in google's anti-trust trial. and new york mayor eric adams will be on the program and we will talk about the college protests as we head to break, here is our look at the s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business next level moments need the next level network. to start you need an idea. it's a pillow with a speaker in it! that's right craig. a team that's highly competent. i'm just here for the internets. at&t it's super-fast. reliable. you locked us out?!

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good morning welcome back to "squawk box" here on cnbc we are live at the nasdaq market site in times square it is just past 6:30 we have three hours before the markets open maybe on the back of the news from jay powell which is something we will discuss in a

moment nasdaq is up 163 points. s&p 500 up as well news across the wire. moderna earnings a loss of $3.07 a share. smaller than the loss of $3.58 that ain nalysts were innanticig we will talk to ceo stephane bancel in a moment we will talk about the fundamentals and the new stuff and the platform and what it can be used for and a.i. and what it means for drug discovery. we won't focus on how things have fallen off a cliff for pfizer and moderna since the

pandemic ended >> that is true. meantime, closing arguments today in the government's anti-trust case against google let's get to eamon javers in washington with the latest on that case, eamon >> reporter: good morning, andrew this is the last chance for both sets of lawyers to make the case to the u.s. districts judge metta before he writes up his decision the ten-week trial featured testimony from the cast of tech industry players, including apple's eddie qu and satya nadella among others court opens at 9:00 this morning. i think you can expect the google attorneys to argue they operate in a fiercely competitive space despite what the department of justice says and the true landscape includes companies as diverse as amazon and expedia and yelp and tiktok. they will say that customers

choose to use google thebecause they have the best search engine and not strangle thing the competition. that is what eddie said during trial. the department of justice should argue that google maintained the monopoly by paying billions with apple and others to be the default search engine. satya nadella said during the trial that such default settings are the only things that matter to consumers you can expect the department of justice lawyers to raise questions. if this product is so much better, why do they pay apple tens of billions to be the default choice the decision from the judge is not expected until over the summer observers say the ruling could change the tech giant's business in years to come one potential beneficiary could

be apple which could see an opening to offer a search product of its own the irony is that apple is subject to its own anti-trust lawsuit from the department of justice. >> eamon, do you say the government's fighting an old war and not the next war given a.i. you are talking about search and it seems in the next year or two, search is going to turn into a.i. and we are talking about a new cast of characters >> reporter: that's the criticism. you are talking about display advertising and search engines and things from the very early 2000s in terms of technology it really is a to tal tran transformation based on a.i. that is what google would say. the government would say in response to that is we need to focus on the business practices that allow this dominance to happen in the first place. the idea of paying to have

market access and suppressing is what the government is interested in suppressing. they say that has the application for the a.i. world they don't want that to be replicated you can compete and win and have a great product, but can't bribe your way into dominance which is the allegation they're making here >> eamon javers, great to see you. thank you for all of that information. when we come back, more on "squawk box. we will talk about a new book by writer frank bruni on why americans are so oonangry. that takes us to a lot of conversations around the table here is a look at the currency the yen falling 1% against the dollar after suspected vemervention by the japanese gornnt

we're coming back with frank right after this >> announcer: currency check is sponsored by interactive brokers. the best informed investors choose interactive brokers

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welcome back to "squawk box. why are americans so angry that is the question our next guest tries to get at the root of in his book frank bruni is the author of the book "the age of grievance." we have a lot of folks come to the table with grievances. >> everybody >> the question, which i think you get at in this book, do we have more grievances today >> i think people are having them more that are cidiscriminae

i think it makes a lot of people tune out in a way that is politically destructive. >> do we have more to complain about? people complain about the economy and state of their finances and people, obviously, lots of grievances on campus right now, which i want to get into there are grievances around s i >> look at corporate america for corporate culture. corporations are navigating the grievance like never before. grievance has come for bud light and m & ms i know a lot of people who the frequency with which they use amazon is entirely tied to how they feel it treats its workers. when you run a business today,

you are worrying about the efficiency of the operations, but the signals you are sending to consumers and how it affects their feelings about you. >> is this an effect of social media? >> social media and internet, generally, is the enormous part of it. this gets setoff and it cannot be said enough each of us is able to curate our set of facts. >> we watch what we want to watch and hear what we want to hear my twitter account over the years has that much overlap. >> that is probably true my corporate question. more grievance than ever around business >> absolutely. >> people always grumbled at their desks and went to the watercooler and complained about the boss that is a function of corporate america until the end of time.

what is different? they all have slack and can go on social media and then you and i are now thinking about it? you are thinking about the employees. by the way, we will talk about starbucks which is suffering greatly, i would argue, because there are people who either are supporting the union or not supporting the union by the way, some of the issues around the middle east, are impacting the company which never has been before. >> talk about marginalized people plenty of people who do have just causes for grievances at the same time, most people or many people at least, this is greatest time to have ever been alive on this planet in terms of food and shelter and all the necessary things it gives you enough time to gripe about things -- >> higher class grievances >> you were talking about just causes a moment ago. this is what is important.

when you press your grievances indiscriminately and you find defense, you undermine those causes people tune you out. they think it is indiscriminate complaint. we have theaters for grievance a lot of this is performative. the monetization of social they want to own the libs by owning a piece of trump. you can turn grievance into money by saying do business with me that is the way of getting back at the enemies and you are flaunting your principals. >> we have people watching what is happening at columbia and other universities play out. i would not want to be the head of the university today. the question is what you think

the answer is around both justified grievance, if you will, and performative grievance and how you are supposed to handle those things in 2024 and how that may be different from how you handle the them in potentially 1968 >> it is more delicate now than it has been in a long time i don't know it is more delicate than '68 i don't think we really know i think this is getting written right now. university leaders have been inconsistent to this point you establish rules and ask people to follow the rules along the way, you make clear you want to protect free speech. you make clear when people are intimidated and threatened and feeling unsafe, you cannot ignore it. if you can't ignore it with one group, up can't with another group. >> frank bruni "the age of grievance. thank you for coming in.

joe. >> '68 chicago? there's a robert kennedy running for president? there was. i was just checking. june 5th, 1968 rfk. i don't know just talking about the car company named nio. i think we're all living in a matrix frank, you need to factor that in the addendum in the book. coming up, the fanatics are buying games for game six to prevent knicks fans from taking over the stadium in philly that's next. (music playing)

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the owners of the philadelphia 76ers, alongside of fanatics ceo michael rubin, who used to be the nordy owner of

the 76ers are buying and distributing more than 2,000 tickets for tonight's game six against the new york knicks, according to a tweet from michael rubin, who said we absolutely cannot let knicks fans take over our arena again he said the tickets would be given -- kind of cool -- to first responders, healthcare professionals and other philly-based organizations as long as you can prove you're not like a plant, not really a 76ers fan. this is after a large contingent of knicks fans showed up for games three and game four. this has been an unbelievable series tonight's game, given what happened at the end of the last game -- >> what doyou think? how many games does this go? >> i want it to go -- >> all the way >> i do. and i've never been a -- when larry bird came and magic, you know, i was living in boston, i kind of have an affinity for the

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it's a beautiful... ...day to fly. wooooo! you're watching the shares of moderna, the company reported results moments ago, smaller than expected loss revenue was above forecasts, though down from a year ago, as covid vaccine sales fell joining us now, stephane bancel, moderna ceo.

and, i don't know if that really summarizes the daunting task that you've been facing, stephane there is worse things in the world. you have a great company, doing amazing things i didn't compare the results -- the revenue of this quarter to 2023 or -- i'm sorry, to -- yeah, 2023, but for the first quarter, $167 million versus $1.9 billion in the same period. and i just wanted to encapsulate how difficult a post pandemic, you know, when you had such an incredible run, because of the vaccines, this is just, you know, a fact of living in this world that you got to try to replace those revenues >> correct good morning, joe. so, thank you so much for having me i'm actually very pleased with this quarter we are above our plans.

the teams are very busy prep preparing of a new formula and on the opex side of the company we made great progress we were looking at cost structure, cost structure manufacturing, to right size it, because you see demand changing drastically. i'm pleased to report that compared to q1 of last year to q1 of this year we have saved around $800 million of opex across manufacturing i think we have done a great job within the company what i'm more excited about is the future, which is we have an amazing vaccine platform we are -- the launch very soon this spring. we're going to get the combo, the vaccine with covid and flu

in the single dose, we should get the data very soon, potentially as of this spring. and then you have the fall, we recently have new data on the evb being positive so i think the vaccine platform is coming together very nicely and in '24, '25, '26, '27, every year you'll see multiple vaccine launches which will help tremendously and all going from different opportunities. we'll be presenting the survival data which we have top line in december >> i guess you called on oncology because there are cancer vaccines. you talk about the vaccine program, there are myriad things besides covid, obviously rsv, other things that can

bridge or have a bridge for you. between that, do you view that as a bridge to when the cancer vaccines are finally developed, assuming that you're successful and that they, you know, that it is actually a viable way to treat such a horrific disease? when do you see that being the lion's share of revenue? late 2020s >> a few years because we have a lot of vaccines that we're going to be launching. if you think about the numbers between the covid sales and then rsv and flu plus covid, flu is three times the size of covid market in term of number of doses. so if we are the only player with flu plus covid, that will help tremendously, we believe. and at the same time we believe the duration data that we shared could allow us to file for accelerated approval so the oncology opportunity is

really large and if you think about how the technology is working, we have new data for head and neck cancer, and lung cancer. we believe there is a lot of data demonstrating the fplatform of our vaccine treatment is working across many. we're going to go higher response rate because of technology works by leveraging the immune system of a patient to go and attack the cancer. >> stephane, the structure of the show is we got, i don't know, i want to talk to you about your openai partnership, and how that can help, but this -- today, you reported results and that's what we really needed to talk about. but, in between when you're reporting results, let's talk -- come on and tell us how that's going to work and exactly what -- i don't know if you know exactly how it is going to work, but the potential is going to be incredible for what you do, your

platform combined with a.i. and we want to talk about that but i don't know, we got to do something at the top of the hour so we'll have you back soon. >> thank you a pleasure. >> okay, good, thanks. >> just past 7:00 a.m. on the east coast you're watching "squawk box" right here on cnbc i'm andrew ross sorkin with joe kernen becky is on assignment we're going to talk to her tomorrow from omaha, nebraska, with berkshire's annual meeting getting set to begin. >> wow >> yeah. a biggie among today's -- >> if you had to go somewhere, might not be -- to see buffett. >> to see buffett. >> i know to see buffett, but too bad buffett is not down in the turks and caicos or something. >> maybe next time. >> among today's top stories, andrew whitney estimating that data from one-third of americans could have been compromised in the change healthcare cyberattack. the investigation could take months fed chair jay powell noting the ongoing challenges of getting inflation to a 2% target in the

post meeting news conference, saying, quote, it is unlikely that the next move will be a hike we'll have a lot more on the fed and the markets in a bit and universal music and tiktok striking a new licensing deal to restore artists like taylor swift to the app tiktok paid much less than what artists get from other major platforms. we're seeing what we gave back yesterday at the end of the session. a little bit back today. 180 points on the dow. the dow did close higher, but the s&p 500 ended down yesterday, up 33 today to contessa brewer with a look at this morning's premarket movers contessa >> hi, joe carvana is putting the pedal to the metal. look at the shares, up 38% in the pretrade the used car retailer reported record first quarter results and turned a profit, beat street expectations this morning, jpmorgan is also upgrading carvana to overweight from neutral, raising the price target to $130 from $70.

jpm says there is a lot of wiggle room here for more accelerated growth and expanding margins. watch the shares ebay shares slipping in the premarket despite a beat on the top and bottom line. its current quarter guidance is weighing on the stock. revenue guidance fell short of what the street expected and that's overshadowing here other positive results those shares off 3.3%. novo nordisk is getting fat on weight loss drugs. it beat profit expectations on the popularity of ozempic and wegovy and wegovy sales more than doubled its net profits rose more than 28% year on year shares are up almost 60% over the last year. so why are they off this morning by a percent and a half? well, i heard an analyst this morning in europe say, there is a little bit of wobble in the results. it may just be here expectations were super high for this company. >> okay.

contessa, we discussed whether we're all going to be taking this stuff eventually. >> i don't like needles anyway. >> you're going to wait for the pill the ceo of eli lilly said a couple of years from now, we'll have it. >> i want to do it the way you're supposed to do it exercise and good diet, healthy diet. >> gym abs are made in the kitchen, they say. >> the abs >> the abs are made in the kitchen or not going into the kitchen, ever. >> how about a kegger? not a six pack that's a problem the fed holding rates steady despite a few signs of inflation easing but chairman jay powell ruling out the chances of a rate hike want to get over to steve liesman who has more from washington this morning. his insights and thoughts about what he heard yesterday from the chairman >> yeah, hey, good morning, andrew the fed keeping rates on hold, that range of 5.25, 5.5 again. and fed chair jay powell said further rate hikes were unlikely

at the same time he omitted a prior comment that rates were at the peak and rate cuts were appropriate at some point this year the statement mentioned stalled progress on inflation, powell said he still expects inflation to come down with rates where they are >> my expectation is that we will over the course of this year see inflation move back down, that's my forecast i think my confidence in that is lower than it was because of the data that we have seen >> and the fed surprised markets with a more aggressive reduction in the balance sheet runoff than expected it had been reducing its treasury holding by $60 billion monthly, but next month that goes down to 25 billion. most thought 30 was the number they kept mortgage-backed security runoff the same at 35 billion, not necessarily achieving that powell rejected the idea that that number isn't easing, but others disagree. david zervos write, that's an easing no matter what powell says about rates being the

primary tool for adjusting monetary policy. no hikes really built into the future structure right now july down 28%. september 54%. pretty much holding steady, though, after this meeting and you can see the odds on bet, just like our fed survey, by the way, december, 83% so the market matching what most economists think all this ends up being net dovish because markets were braced for more hawkish outcome where the fed introduced the possibility of additional rate hikes. that didn't happen powell and the fed are willing to give inflation and the economy a bit more time at the current rate to resume heading to 2% inflation. only then will cuts be back on the table. guys, you remember, i don't know, joe or andrew, how morgan freeman described geology and the shaw shank redemption? >> i don't remember. tell us. one of the great films >> well, one of the great lines in the film, to my mind, i've only seen it like 14 times, geology is the study of pressure

and time and that's what i think powell is thinking about monetary policy, you give the existing amount of pressure a little more time, you can get where you need to go to. >> a lot of assumptions there. and some of them might be right, but i'm in a -- i'm in a world now where it is a total probabilities world, i don't have a high probability or high conviction of what i believe at this point i can paint two totally polar opposite -- that's redundant i can paint opposite scenarios for what might happen. i can see us having to go higher that would be scary. and he may not know yet because the data is going to tell him whether they have to go higher again. i'm not convinced the next move is down, but it might be might be down. i'm not convinced we're restrictive right now. we had that discussion again and again and again. a lot of what he said yesterday was dependent on us being in

restrictive territory right now. >> i think that there is two ways to go about it, joe and, first of all, i think you're right to be uncertain i think there is two ways to think about it the first is the kind of theoretical construct of what is a neutral rate do you think the neutral rate is where we are right now, 5.38 it is hard to argue that the neutral rate has gone up from something that used to be around 2% to something over 5%. that there is that much going on that has changed about the economy. and the other way to look at it is the more practical way, well, we have this rate at 5.38% or what do we want to call it 5.25%, 5.5%, but the economy has inflation higher than expectations or higher than the fed wants and you have better economic growth than you thought you might have the reality is that it doesn't seem restrictive the theory is that it should be restrictive and really what powell is saying is we're going to ride the theory a little bit longer we think we can give it a little

more time and also thinking about the last three months as more of a blip, that ultimately we're going to get down to the inflation target if they want. >> a lot of assumptions, and i just -- i remember don't want to keep harping on how long they stay at zero and trancetositoryd all that stuff, but they are better than we are at figuring everything out, but not perfect. >> not necessarily, joe. i don't know that they're better. >> maybe they're not better. maybe they're not. but if you can be so wrong once about inflation, you can be wrong this time about how bad it might be built in to the system. and whether a slight uptick in unemployment, we might slow the economy and still not handle inflation and that's the worst of both worlds. >> the theory is that the fed should be able to pick the inflation rate, right? think about it this way, if the fed tomorrow raised rates to 10%, do you have any doubt at all they could bring inflation down to -- or create deflation in the economy

if they went to zero, do you have any doubt they could create more inflation than they want? it does work the question is -- the unknown here is time and in all of the discussion about monetary policy, they always talk about the long and they don't have a theory on it powell is going to ride this pressure and time. >> okay. okay, morgan morgan freeman. >> thank you >> great voice we got some breaking news to bring you. this time from peloton ceo barry mccarthy is stepping down, also departing his position as director on the company's board. the fitness equipmentmaker launching a search for a new ceo. in the meantime, peloton's chair karen boone will serve as interim co-ceos and cost cutting measures will involve a work reduction of 400,000 jobs. peloton was a pandemic darling that stock, which trades right now at about 3 bucks, $3.22, $3.41 there, if you remember

back in -- end of '20, this stock was over $160 a share. i think $162 might have been the high on this stock barry was brought in, formerly from spotify, has an amazing track record over his career, decided to take a -- i don't want to say a flyer on this, but a little bit of a flyer to see if this company could be turned around that stock, i think he got in when it was probably -- ceo in the 20s or 30s, where the stock was in '22. >> at the height of the story, stock. at the height of it, did anyone say, okay, it is an exercise bike and you stick a computer screen on it and suddenly that's going to -- >> i think the issue was both the hardware part, but everyone -- there was a view that people would never go back to the gym again that if you were going to go to equinox or one of these -- that the gyms were -- by the way --

>> exercise bike with a computer screen. >> i know. but the whole -- you saw the story. i know this. we all saw the story and -- >> great for hanging clothes on. that's what mine became. it is gone >> it is gone. >> you can barely move it. it is so heavy i did get some exercise moving it. >> the sad part is we have the bike, i don't think we have clothes on it. ngloi have not used it in a lo, ng time, unfortunately "squawk box" coming right back with a lot more news this morning after this >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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welcome back to starbucks. welcome back to starbucks? welcome back to "squawk box. we're talking about starbucks. >> let's hope that never happens. >> it happens to me, that i -- >> would you like working at starbucks? >> i would be happy to wear the green. >> would you like a happy meal with that? that's not in your future. "squawk box. not that there is anything wrong with -- >> welcome back to starbucks the shares getting crushed just hammered this week after the company announced its worst quarterly performance since the pandemic i think probably the worst ever announced in their history joining us to discuss the management issues at play for the company's ceo, let's talk to adjunct economics lecturer at

williams & mary, peter atwater, a behavioral economist and author of "the confidence map. good morning to you. peter, i mean, this is going to be a challenge for this company to get back on its feet in a meaningful way, and i think the question is, can they do it and, frankly, how much time do they have to do it before an activist shows up on the doorstep >> yeah, so steve liesman was talking about time and pressure and i would say that he has very little time and enormous pressure he comes in after a cultish boomerang ceo, which is a difficult challenge to begin with, and more than that, he is an accelerator, not a turn around guy and the challenge with that is he's arriving into an organization that looks like diana ross and the supremes, with all due respect to the folks on the leadership team, they have been backup singers to

mr. schultz. and so the challenge for the company in this is that they have uncertainty and powerlessness up and down the organization and now with shareholders, customers, suppliers, and so what he has to do is to go back to the basics and it is not clear to me that he is a -- a crisis leader in the context of the -- those that have the skills to navigate an environment of powerlessness and uncertainty effectively. >> okay, the flip side is, do you think an activist could actually show up and the question is what would an activist do. this is not a traditional financial engineering proposition. i could see people deciding they want to spin off the china operations, sort of yum style or something, but that's just rearranging the deck chairs, i think. this is actually an operations story. i think unfortunately too many customers have gone to the various stores, especially in

new york, where the experience is not what it needs to be and that's going to cost the company money. >> yeah. the company has to decide are they an experienced brand or a product brand. and right now they look like panera all merged together they're trying to do two things that are in conflict with each other. so, i agree with you, this is an operations, this is a down in the ground kind of turn around that has to start with the basics, not from the top down. this is a bottoms up return. i do think this would be an ideal candidate for a turn around activist, somebody like bill ackman who is all about the operations the question is, is this at a point that is yet attractive i don't think -- >> and then who is your magician who -- who is the magician who is going to run this company and there is something to be said about the fact that for some reason this company seems to only work really well when howard schultz is running it >> yeah, and that's the problem.

it is a problem with the board, who have been complicit in that now, bringing him back over and over i think if you're going to look internally, you want to find the leader who has the greatest social capital for whom people will rally around, who is open to news, who knows the organization from the bottom up, who has been on the ground from the beginning. now, having said that, if it is me, i'm looking at somebody who is at chipotle, who has demonstrated how to do food logistics extraordinarily well, and who has navigated this tension between to go and dine-in. >> what do you think starbucks should be? i think that is also part of the question, because the experience has fundamentally changed. used to be, and howard used to talk about it being this third place, you would go and you -- it would be experiential, you would talk to the baristas behind the counter, there was this remarkable interaction at

its peak when starbucks was at its best today, for the most part for me, you're going through a drive through or ordering on the app, walking in, unfortunately sometimes still waiting in line, and then you're picking up the food, oftentimes with very little physical interaction or conversation with anybody, and then the lines are long, the stores aren't always as clean as they should be and, you know, there is obviously a product mix question but i think it is about something even else and people talk about the soul, the core of this company, what is it supposed to be >> yeah, i think they have to choose are they an experience brand is their job to serve or is their job to produce and you pick up? it is a question of control. it is a question of who has got it it is a question of certainty. and, andrew, i wouldn't underestimate their challenges, confidence falls, we become naturally more impatient so, those lines really matter

because they now feel endless and that is a problem for that brand. >> would you bring howard back >> no. absolutely not no the problem with the boomerang ceo is you keep bringing them backand it is like bringing back a star musician they were great for a time but culture changes. and you need to have a leader who is for the future, not bringing the past. i see the same issue with disney these boomerang ceos who never leave the stage is creating a -- an intense fragility inside their organizations. >> peter, it is a longer conversation i'm sure we're going to have it because i think it is going to take a long time to get everything back in order and hopefully they will, but, peter, we appreciate your time this morning. thank you. >> thank you very much >> still to come this morning, apple in focus, we'll talk about the tech giant, getting ready to

report results after the bell and what those numbers may look like meantime, frontier airlines ceo barry biffle will join us, talk to phil lebeau in just a moment. "squawk box" coming right back as we go to the skies. >> announcer: time now for today's aflac trivia question. in 1928, dr. alexander fleming discovered what groundbreaking substance that revolutionized medicine e answer when "squawk box" returns. umm... first word. - tonsillitis! - nostril! uh-uh... bill! uh-huh... - hip-hop! - limping! mmhmm! medical bills! uh-huh! - pancakes! - cash! who pays you cash when you have medical bills? grrr! no idea. [tapping] gap! the gap left by health insurance? who pays cash to help close that gap? aflac! oh, aflac! get help with expenses health insurance doesn't cover at aflac.com pictionary?!

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>> announcer: now the answer to today's aflac trivia question. in 1928, dr. alexander flemming discovered what groundbreaking substance that revolutionized medicine the answer, penicillin welcome back to "squawk box. i'm phil lebeau. we have a special earnings report we're going to talk about frontier airlines, which just reported q1 smaller than expected loss, better than expected revenue let's bring in barry biffle, ceo of frontier. when you look at the first quarter, there is a lot of concern about the consumer, especially on the lower end, pulling back are you seeing that at all >> no, we have not seen that, phil thanks for having us we have not seen a change in the consumer behavior at all it is very strong. >> so when you look at all of this, and the fact that you're trying to attract more business customers, you've introduced biz

fares, the question i get about frontier is how much of this is leisure, how much of this can be business what are you noticing in terms of the take rate with biz fares? >> so, historically we have been about 4% to 5% business travel, which is primarily small and we would like to get that to, you know, closer to double that, high single digits, 10%, but we're seeing great take rate with the biz fares, exceeding expectations i think with the other premium products we launched like up front plus, like a european business class, and premium economy seating, we're seeing pretty good take rate. there is a lot of small businesses that are really excited about the new product. >> you're trying to basically become more than just a low cost carrier. can you walk that bridge a lot of people look at frontier and say, it will always be low cost, it is going to be tough for them to move beyond that, whether it is the business, whether it is to more premium offerings. >> look, we are the leaders in

low cost in fact, we actually lowered our cost in the first quarter. i think we're one of the only ones the industry is up mid to high single digits in cost. but we think that, you know, we're not going to go after the big corporates, but we think the small business and those like meeting and conventions, some of the large corporations, can benefit from our low fares >> do you have any concerns about having an all airbus fleet? there is no issues with airbus, nothing compared to what boeing is going through, but you're tied in. whether it is the a-320 or any other airbus aircraft, and as we have seen with companies tied into an all boeing fleet, that can come back and bite you do you have any of those concerns >> no, we are really proud to be an all airbus airline. it has been fantastic for us we love our relationship with airbus and we feel very excited about it they had some of their own supply chain challenges, but they build a great product and we're excited to be part of it

>> barry, it is a busy morning coming off a fed meeting we appreciate you joining us early this morning from denver, colorado, where the company is based. barry biffle, ceo of frontier airlines andrew and joe, back to you. >> phil lebeau, thank you for that good to see you. later in the program, senator ted cruz will join us to discuss his airline automatic refund bill and so much more, causing controversy on both sides of this issue. coming up, though, new york city mayor eric adams is going to be our special guest, talk about what's going on at columbia on campus and throughout the city and throughout the country let's check on crypto prices this morning take a look at where bitcoin sits, just about now, we're at $58,267, moved up a little bit, but, of course, come down a lot just in the past week there. "squawk bo cinrit ck x"omg ghba power e*trade's easy to-use tools make complex trading less complicated.

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apple set to report results this afternoon after it has been left out of the tech rally so far this year. will a.i. announcements today or later this year finally reignite the stock? jon fortt is here to weigh in. >> artificial intelligence news will get apple stock above, but not today. they have an unwritten rule about making product news during earnings reports

expect the first wave of new a.i. features at the worldwide developers conference next month. if apple is true to form, there will be two basic flavors. one, a.i. features built into the software for apple device like smarter chatgpt siri, and suggestions and summaries for documents. two, generative a.i. and developer tools will help build apps faster. a later wave of a.i. features will come when apple unveils the newest iphones in the fall and the upgraded custom chips inside are sure to drive a.i. features that apple boasts will work more safely because it will do the bulk of the computation on the device instead of sucking your information into the cloud first. that's how the stock gets a bounce, joe. >> investors believe that this -- the artificial features will drive sales >> well, joe, on the other hand, it won't make much difference

what a.i. magic apple announces. investors won't believe this year and that's because they're in skeptic mode it is a version of what happened to meta in the beginning of 2022, one big thing went wrong so people jumped to conclude the whole business model was broken. same thing with a.i. and the cloud giants microsoft was first to partner with openai, so people assumed google and amazon were way behind apple will unveil the new features and tools and critics will jeer that it is evolutionary and not revolutionary, apple is late to a.i. and not as good, blah, blah, blah but a couple of new features will catch on in the new phones and max and start driving an upgrade cycle. in 2026, it will be clear that a.i. features that create stories with our photos, videos and text are doing what 5g was supposed to do, tempt people to upgrade to the latest phone and apple's control of hardware, software and services on its platform will once again push it ahead. in 2026. >> okay. so, a couple years once again, it is going to be

because of -- it is just going to expand our ecosystem? >> yeah. apple -- in these ecosystems now, in a.i., having influence over software and hardware is a key advantage. that's part of what gives nvidia its special position with kuda and that's been in apple's wheel house for a long time. so they're going to be able to accelerate that much more quickly when they put the right front end on it. >> okay. >> all right got to plug that on the other hand newsletter, of course, so you can let this argument sink in let's put the qr code up on the screen there it is. you can also type in cnbc.com/otoh and get the full text of both arguments and you can share. >> this is good. this is going to be hard to do. >> yeah. who is going to be becky >> i'm getting -- i'm getting the newsletter >> you're getting the -- >> can you put the -- put it back on the screen, guys

so we can -- i missed it >> can i ask, we get requests, right? is starbucks saveable? >> yes, that's a good one. >> that's a good one >> i'll put that in. couple of weeks, caitlin clark one was a request. >> oh, yeah? >> he takes requests like a deejay. >> yeah, exactly >> coming up, the fed's message of the markets and then the new york city mayor eric adams is our special guest, he'll update us on the protests at columbia university and much more "squawk box" coming right back

coming up, new york city mayor eric adams is going to join us. we'll talk about what's happening on campus and throughout the country as we head to a break, check out the futures right now, ahead of the open, dow up 196 points, nasdaq up 156 points. we're coming right back with the mayor after this we put our heart into celebrating moms. we are local farmers, bakers, florists and makers who grow and create with a passion. 1-800 flowers. for mom, with love.

talk more fed and interest rates. joining us now, kelsey barrow, for jpmorgan and thinking about how to start this, but we are used to head fakes in both the economy and in inflation, in the metrics that we get the minute we think something is a certainty, it seems like our faith is always shaken and

anything becomes a consensus view at this point, is the current interest rate regimen, a, it is efficient to slow the economy, and, b, will that continue the decline in inflation that we saw? >> so we think that the current interest rate environment is going to be sufficient over time to slow the economy. so when i think about the fed meeting yesterday, i learned three things one, the bar to hike rates for the fed is still very high they prefer if inflation is not cooperating with them to keep rates on hold for longer and ultimately the next move that is most likely is a cut so with that known, the second thing that i took away is what does it mean for interest rates? well, if the next move is ultimately going to be a cut, it may be further away, but ultimately the next move is lower, that means there is a

limit to how high yields can go. at least in the near term. and then the third, to bring it back to what you're saying on growth and inflation, ultimately almost doesn't even matter what chair powell is saying because what is really going to dictate the appropriate path is going to be growth and inflation. and i know that the concern is the fed is underestimating inflation right now, but i do want to highlight how different the environment is now from when the fed was talking transitory when they were talking about transitory inflation, the fed was at zero, zero, doing qe and the government was handing checks to people that's not the environment we're in now money is expensive now fiscal is still a positive impulse for the economy, it is less so than it was back then. certainly i think we can all agree on that. and ultimately when i look at data like the jobs report, the jolts report yesterday, it shows that job openings are falling,

people are not voluntarily quitting their job, because there isn't another job out there to find with a higher wage and as a result wages are declining as you would expect them to, looking at the more traditional -- >> you're just describing an environment where no one in their right mind could have thought inflation was going to be transitory. they couldn't have been more wrong. the fed. but you also just took the fed at its word, now, that the next -- now we know the next move is going to be a cut. why trust their judgment on this how do they know the next move is going to be a cut at this point and why should we put faith -- i guess we're counting on a lag the lag will work. >> we are counting on a lag and -- >> they are too, the fed. >> that is absolutely correct. they still believe that their traditional economic models will work over time but i think we all have to be humble about the fact that there are a multitude of scenarios

that could occur but from my perspective, as a bond investor, i want to know are the yields that i'm currently -- that i can currently get in that portfolio -- >> the next move -- >> are they compensating me for the risk both the risk in terms of treasury yields, and also the risk in terms of the credit. and everything we hear from companies on the balance sheet side is that they have been preparing for a recession for a year that didn't come, and now their balance sheet health is quite healthy. so, when i look at yields, fixed income portfolio, fairly high quality portfolio, 6%, 7%, that's a couple percent above cash, that's a fairly good risk/reward for investors here. >> a lot would have to go wrong for that not to be a good place probably still possible, but probably not. kelsey, thanks. >> okay. meantime, hundreds of people arrested at college campuses in new york city. the nypd was called in on

tuesday night after protesters occupied hamilton hall on columbia's campus and for the remainder of the semester, all classes and final exams will be fully remote at columbia mayor eric adams joins us this morning. thank you for joining us before we get into from where we go from here, what is the state of play in the city and around the universities we have been talking about in your mind >> the state of the city is stable we continue to thrive as i say over and over again. we have the finest police department on the globe. and we see that every day when they execute ways of allowing people the right of a democracy to protest, send a clear message that if you break the law, there will be actions taken. >> when you look at what has happened at columbia and you think about to the extent there are leadership lessons, there is a lot of folks who say this needed to be nipped in the bud much earlier others say -- talk about freedom

of speech and the like, that this should have been allowed to continue where do you stand and if you were to look back, over the last several weeks, and you could rewind time, what do you think should have happened >> well, i clearly have fallen on the side of the importance of protesting i protested as youth i even protested as a police officer after taking off my uniform. i joined those issues that were important to me. but when protests cross the line and goes into an area of violence, destruction of property, that is no longer protest. that's not what democracy is about. that is okachaos and we're not going to accept that in the city that's what we saw on columbia when you do a reflection, clearly i stated over and over again, you have to -- you must have zero tolerance. when the first tent went up, we should have removed it and hats off to the fordham university president, that was the mindset she took, she did not allow this

to go several days, she took decisive action and the police department collaborated with them >> do you think the president of columbia should remain the president of columbia? >> that's up to the board. i think that she's handling the academics achievements of the institution, the board would have to evaluate -- i don't think any of these presidents knew something like this could evolve at this level now it is time to look at it as a teaching moment. the experts can understand how to maintain disorder should be advisers and they should take the input from them and that's what i believe you're seeing more and more now. >> now that you've made these arrests, i imagine there is investigations going on, how much of this do you think is organic, meaning that students on their own have taken to these protests and how much do you think this is outside agitators, if you will, professional protesters, that are trying to create these moments >> and that's such an important question that you are asking because that's the question that

we have been asking every day now. i use the analogy of that, if you have a group of students who have the energy to see change, but you have one professor, or one teacher who is giving them the misappropriate -- misinformation on how to do th entire classroom, that entire moment of energy that is what we're seeing here people are asking, is it 55% outsiders? doesn't matter percentage. we know based on intel students are instructed to do bad things and participating in illegal actions. that's what we're focuses on what are the persons involved, her husband arrested for tafr ori terrorism. we cannot downplaying this protest using terrible ways to move this agenda forward. >> what do you think is

happening? on a very personal level what is happening on these campuses? i ask and commend you one of the things you did at columbia a great moment if people haven't seen it, where you took down one of the palestinian flags and you put up an american flag and you said, you take it, you know -- this was personal for you. what do you think is happening underneath all of this on these campuses >> the actual person who took it down was commissioner, and i commend, communicating with him, we have to send the right signal not only passing budgets but it's symbolic. i am concerned from what i've seen and what i'm reading and talking to colleagues, i'm concerned about a real targeted approach to radicalize our young people using despair that came out of covid, using loneliness, isolation. what radicalization can do, and i believe some of the steps we're seeing across america is

similar to some of the things we saw in other countries, and we need to pay attention. anytime you see a poll that states only 18% of 18 to 34-year-olds do not feel this is extremely, is extremely about this country and loves this country that should be a wake-up call to us what is our aaa team looking at using a sports analogy is? who is coming up in the ranks and how do they feel about this country? >> you have been outspoken about this but a number in the democratic party that have, we've not really heard directly from president biden, at least to be nearly as you have a fascinating article in the "wall street journal." biden needs to learn from the democrats disaster in '68, that tumultuous summer was clear. fireworks on the party's left but votes needed for victory are

on the right what do you say to president biden and to other members of the party that haven't been as outspoken as you >> you know, these guys have political strategists that are quite smarter than i am. i don't understand all of the strategies that would go into a national election. i can communicate on what people are feeling here in the city, because i'm among them i'm on the subways, walking the streets, talking to people and i hear how concerned they are about the future of their children, future of their families and we need to address those issue as in a very real way. i'm a blue collar mayor, said it over and over again and i have a blue collar approach to life. >> you made the point, mayor, that you don't just pass budgets. you're the symbolic leader as well you know, just new york city these are occurring everywhere now. it just seems really important for president biden to

symbolically calm everyone down, maybe, or give everyone a pep talk or whatever you want to look at. he looks held hostage by the same strategists that you said are smarter than you about doing things i'm not so sure, but those strategists, you know, we're not sureexactly how to handle, you know, prime minister netanyahu we're not sure about a lot of this, and a lot of it seems to be based on worries about either getting votes or losing votes in november with certain parts of the population, but that's not what we need right now. >> i think our country is at a very pivotal important place we are resilient as a country and as a city, and we're going to display that resiliency, but you can get through a war, but the casualties and devastation could be a long-term impact. i think we're in a place to really focus on our children and families and not allow people to

take them off the course of what this great country hats to offer and this great city has to hopper. >> a pivot one of the businesses in new york, frankly business leaders around the country focused on the border and immigration illegal immigration, of course, being the key here. where do things stand in the city, and where do things stand between your relationship, frankly, and the biden administration on this issue >> you're seeing here, we're still managing i think in the area of 194,000 migrants in asylum city that entered new york city, and we put in place a very real, real ways of managing these crisis, and because of the programs we put in place, over 65% of them have continued on with their journey. many people who are entered through the borders are paroled in illegally i think we have to address the aspect of this to control this

crisis and turn it into opportunities. there are many municipalities decreased, looking for workers assign them where they're going and tell them, here's where america needs you, and stay there three years. be part of the society then travel throughout the country and live wherever you want the way we're doing it now, allowing the crisis to control us and not that we should be controlling the crisis and turning it into opportunities. >> mr. mayor, thank you for joining us, as always. look forward to talking to you again very, very soon. >> thank you. coming up next, market historian professor jeremy siegel and later, senator cruz talking about airline refund bill and much more. we're coming right back.

welcome back to qb "squawk box. on cnbc. i'm joe kernen along with andrew ross sorkin and becky is on assignment among the day's top stories, apple set to close out this week's big tech earnings burst with fiscal second quarter results. that's after the bell. in focus for investors lagging sales in china, and anything that company mentions concerning its a.i. ambitions. peloton says kceo mccarthy steps down and the company laying off employees to bring spending in line with revenue. once a pandemic darling, peloton

share prices closed more than 97% from its all-time high year end of 2020. and being told the federal trade commission will approve exxon mobil's roughly $60 billion purchase of pioneer natural resources. biggest acquisition exxon's made in a long time source says the consent agreement including a provision to bar pioneer's former ceo from joining exxon's board. meantime, futures right now ahead of the market open, an hour and a half until now, dow up nasdaq up. s&p up 30 points treasurys quick. looking at their, 10.6 two year 4.937 under 5 straight to contessa brewer with more on the pre-market news. >> andrew, cigna shares a bit of a shock announcing revenues beat expectations raising full year

guidance up 1 p.6% pre-market evermore and sigma health care especially contributing to the beat and lost thes 300 million first quarter, this company managed to beat analyst expectations. chinese ev maker nio junk in the truck. up 20% here in the u.s., up 5% pre-trade. ev competition, of course, heating up in china as companies there look to undercut tesla. move on to carvana shares exceeding the speed limit. up 35% almost. clearly results that beat the street this morning. jpmorgan upgraded carvana to overweight from neutral, raised price target to 130 from 70. jpmorgan expect the strategy to

accelerate growth, and expand markets. andrew >> okay. thank you. for more on the markets in pre-market, prompt emeritus pennsylvania's school of business heard what jay powell said yesterday. i don't know if you're a believer the next time he even touches rate he's lowering them or he's maybe raising them >> i don't think he's raising them odds overwhelming against that i thought a very good news conference the other thing i quibbled with, still trying to blame inflation three years ago on supply side when i think it was a, you know, an excessive burst of money in the stimulus nonetheless, i think he got it absolutely right i think, in fact, there will be three cuts not as many, certainly, as we thought six months ago, but when i look at the factors that have

made this inflation sticky over the last three, four months, namely rentals, car insurance. we saw a break in commodity prices this week, first time in two months that's a good sign. so forward-looking, i do think there are very favorable signs inflation will calm down. >> what is your sense of, when you think about the stock market, and you think about stocks in particular we've seen tech companies are big winners. that's been clear. talked earlier about starbuck. talked about mcdonald's. we talked about even andy jassy. they've had great success in large part, talked about trade down he's seeing among consumers. how worried are you about that >> i'm not too worried the sensitive indicators i see are not yet turning downward you know, you do see some

caution and resistance to higher prices i think that's one of the things that's going to keep that inflation under control. you know starbucks prices, great quality but it's high and people aren't saying, hey, you know. i'm not necessarily going to go for that i think that, that is one of the factors that is going to keep inflation lower listen, i mean, consumers are going to be thrifty, but i don't see a downturn the sensitive indicators obviously, friday we get the employment report, i think actually, what in a half hour, less than half an hour, unemployment claims i like to look at that as a weekly indicator the spending weekly indicators i see do not see a decisive weakening. i still think this economy is moving along 2%, 3% real gdp rate. >> you think about the stock market, walking into an election cycle. we're already in it, obviously

given the volatility some people are projecting, i don't know where you think we end the year. >> i think we end the year up. i don't think it's going to be as good as last year i mean, we're getting spoiled. have to realize long term the market's up around 7% a year on average. you know, we get 20 and people keep thinking, boy, less than that i'm going to be disappointed 7, 8%, return with even a dividend 1 and 2 is still definitely better than bonds at this point so i still think stock, going to be the winner. >> jeremy, what you brought up again and again, how long the fed stayed at zero you'll never forgive him for that. >> no. nover forgive him. >> a miscalculation on inflation, and the point you just made. you're convinced, always thought it was demand engendered, not supply engendered, but the stimulus is still there. none of these programs are

finished, and, you know, we keep getting new ones keep, you know -- some art school that people had to borrow, pay off that $6 billion. there's a lot we're still doing. why don't you think the fed could be, once again, wron about the threat of inflation, because the demand push is -- that you talk about, is still present? how do you know for sure that it's under control >> it's not at the degree, joe, is what we have. we had 9-plus trillion dollars of stimulus within what? two years of the onset of the covid crisis now, the first package we could say, no one no what would happen okay second trump pack amp. not really then huge biden packages as the economy was roaring back and the fed just printed money and gave it right to the government to spend on all that. that's over. >> but it's --

>> the infrastructure is a long-term and that is still going on and still a lot of spending on all the other things that we have ongoing the big bulk of the splurge of spending is gone that's what -- and i look at the money supply and that's been very stable over the last two years. we're not in that situation that we were in in 2020, 2021, which, of course, i think was the real cause of the burst of inflation we had. >> thank you as always for joining us a lot of optimism this morning >> aptly so. always overdo it when -- >> uh-huh. coming up, california congressman ro khanna joining us on a new round of you sanctions against china. hoping to stop from helping

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u.s. taking aim at chinese companies over suspected support for russia in its war against ukraine. these include new rounds of sanctions. washington is repeatedly warning china about supporting russia's foreign forces joining us to talk about this and the latest on the potential fate of tiktok in this country congressman ro khanna of california, whose district is in the heart of silicon valley. he serves as member of the select committee on the -- on what to do with the chinese communist party. good to have you with us today, congressman. >> great to see you, joe always a pleasure to be on. >> is this a red line moment and i just saw an editorial about that, that the president was very strident about saying that this is unacceptable, if china were to help russia in

terms of articlements. has the line been crossed and can we really do anything? >> it is a red line, joe it's important to realize that as you know these are not just sanctions on some of the goods in china includes turkey, slovakia, belgium and a ub in of other countries and very targeted they say you can't supply putin with weapons to kill civilians in ukraine, and, look, the united states needs to be concerned about the growing relationship between russia and china, xi jinping and putin visited each other about 30 times and why it's so important and speaker johnson allowed a vote on the aid to ukraine that many, many, all democrats and many republicans supported because if we allow putin to invade ukraine we're sending a message to china that they can go into taiwan and we need to prevent it. >> and i guess there's a lot of conjecture swirling around we do have an election coming

up, and in an interview, i guess, former president trump said that he would definitely be more -- i guess make a commitment to taiwan to help defend taiwan. something china really doesn't want do you think china is either hoping for president biden to be re-elected or even trying in certain ways to make that happen? do you believe any of those stories? >> well, joe, you know i'm a huge supporter of president biden's, but the one issue that we really should try to keep out of politics is to make sure china doesn't go into taiwan i've worked with mike gallagher, in a bipartisan way, making sure we're supporting having naval superiority in the pacific, that we supply taiwan with long-range weapons for deterrence and there should be a unified message here that china militarily will not

be able to go into taiwan. i think that should be regardless whose in congress and who's president. >> does that include keeping a lot of tariffs on which we've seen a lot of these things that we thought would be reversed have not been reversed because of the realities of the situation. >> i support it. some of the strategic tariffs. not one who says because a previous republican president did it by definition it has to be wrong reality, china was eating our lunch. manufacturing go over to china, steal aluminum, textiles of course, we need to rebalance our trade deficit. i think a goal not to have this trade deficit with china by end

of the decade. >> talked tiktok before. i can't remember whether you're a ban if not divest or free speech a lot of people, it doesn't matter which side of the aisle you're on. people have differing opinions on this. what should we be doing and andrew can get involved. andrew you think it's a future threat not a present-day security threat. can you weigh in on that as well >> i agree it may be a future threat but i'm a free speech person and you can't ban the speech of 170 million americans or their livelihoods based on future possible harm i think there should have been more narrowly tailored legislation. three specifics. we should have said that any transference of american data to china is illegal you can uphold ticktock and oracle executives accountable because they're managing it. and illegal, algorithm

held american investors accountable you don't have to ban 170 million americans off of that. >> what is your sense, though? obviously many, many of your colleagues don't just -- i talk about this as a perspective threat meaning i don't know if i have sympathy but i understand the argument it's unclear to me whether it is, there's direct evidence, kids would say, receipts today of genuine ieuine nefarious beh tiktok is involved with on behalf of the chinese government i don't think it's great for kid and all that, we can debate, all that what do you say to colleagues, particularly we're going to talk to ted cruz that stuff is happening right now and they suggest, again, can't tell us, that they've been in, you know, meetings inaccessible to us

because of security clearance and the like that they're actually, there are nefarious things going on behind the scenes as a result of the chinese government >> i like what they're saying. in the same briefings. let me say based on public reporting had there been a few instances of public reports there's been leakage of data to china, yes there has. but the solution to that is, then, to ban that, and to hold tiktok executives or people managing that accountable. it's not to say, okay, you're going to take 170 million americans and shut down their speech by the way, a lot of the federal judges that have looked at this so far have agreed with me we have a first amendment in this country that is very, very broad, and protective. people realized with the campus protests you can disagree with the first amendment. say you protect free speech too much in this country i tend to like the first amendment and should be very

careful before we're having broad-based description talks. >> switching gears state of the house of representatives right now. it's a "seinfeld" episode in a bizarro world. i can't see a lot of this happening if the shoe were on the other foot you'd vote to keep speaker johnson as speaker >> i would look, i think he did the right thing. i think you put bills on the floor. he had us vote separately on ukraine, on taiwan, on israel. a novel concept to vote on a particular subject and not try to lump it all together, and i think some someone does the right thing then they shouldn't lose their job and i don't think we should be transactional about it what will we get how about just he did the right thing so we shouldn't let extreme folks take him out. >> right so you don't think that the there's -- you think that this strengthens his speakership?

or do you think that -- if you're, you know, dealing with the "enemy" there must be some type of secret deal? i can't see a republican ever voting for any democrat house speaker, ever. >> well, joe, that's because you're not in the house yet. i know if you were in the house, using voting. >> that's too much work. going right -- going right to the top. except i only want the second spot. you know what i mean you think it helps them or hurts them overall >> hurts them politically and why he's showed some courage he's hurt amongst his own caucus you need your caucus to continue in leadership usually. it's probably going to make it harder for him to stay as the leader after this term. you know what? i mean, for all our dysfunction in this country's political process, and i know we can debate whether we spent too much or not, the reality is that

america of all the nationsin the world under two very different presidents had the best economically response t invented, discovered the vaccine. and the single biggest reason a lot of things we're still working on in this country. >> all right got to get the college stuff under control. do you think president biden ought to, you know, get out there and lead us morally on this it's ard, i guess, but -- we don't have time. >> yes, a conversation in wisconsin with jewish students and arab students. very civil get people talking do more of that. >> what we do. congressman khanna thank you. >> thank you. coming up, texas senator ted cruz joins us. efforts to curb kids' screen time on social media. u' wstay tuned yoreatching "squawk box" and this is cnbc.

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welcome back to "squawk box. qualcomm shares gaining after second quarter results jon fortt is at the table spoke with the ceo about a.i and so much more joining us again. >> right after the analyst call yesterday, qualcomm beat on top and bottom lines raised guidance. showed strength in automotive business, which had been a disappointment for rivals for qualcomm it was up third quarter in a row in the core business of phone chips premium android smartphones in china did well. good for snapdragon. told me a.i. is starting to drive premium phone adoption, because of these features. >> we started to see, for example, things like life translate or ability for to you watch something and put in subtitles. related to language,

communication. a lot more things about you're talking to apps and systems becoming much more useful, but also things with image photo editing as an example. and you saw use cases you actually can summarize, circle a document we're just at the beginning. cpu busy, gpu busy, a job to do adding a new engine. the a.i. engine. battery life has to still last all day. you won't compromise 9 magic qualcomm is doing with our a.i. accelerator for phones. >> the potential setup, guys 3g, remember that happened people streamed video to phone suddenly need add stronger wireless connection. had to upgrade your plan, got all you needed to stream video and whatnot. things like that if a.i. is like that it potentially drives an upcycle

benefits likes of qualcomm we're just starting to see the apps that would drive that effect talking about language translation, automatic captioning through generative a.i. being one of those things they're seeing in china. >> talking about the meta glasses. that does that right? >> qualcomm, in those as well. very happy about that. if that thing catches on both in the glasses and elsewhere, you know, battery life there especially the glasses not carrying around a big battery pack on the side of your head, i hope. >> you hope. jon, appreciate it. la> coming up, jobless cims and productivity data. don't go anywhere. "squawk box," coming right back.

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welcome back to "squawk box" on cnbc. we are approaching the initial jobless claims data. also get productively numbers and a look at the trade deficit. the futures ahead of all of that data continue to be strong this morning with the dow adding 183 points you can see the numbers there. nasdaq particularly strong as well treasurys, worst-case scenario

didn't happen yesterday. stuck still around 461 two year moderated in yield. now down below 5%, and a lot of reversals across the board also we had bitcoin coming back after a real grubs we've seen in the past week or so. i think back somewhere in the 58,000 range rick santelli is at the cme with the numbers. rick >> yes on initial jobless claims expecting a number in the vicinity of 210,000. a little light but very close. 208,000. interesting about that, of course, it follows 207,000 that was the smallest amount going back to the second week in february when it was 200,000 we just revised that to 208,000. so back-to-back 208,000. on continuing claims expecting a number around 1.79 million end up with 1 million 174,000. a little lighter than expectations that would actually be the

lightest level going back to -- the second week in january second week in january. so now that we've had a couple of readings below.8 million, we continue to look at the labor market 1.8 million. through continuing claims awfully well behaved turn to the trade balance. shall we expecting a number around minus 70 billion a trade deficit. 69.4 million close to expectations. subtle revision higher in the rearview mirror. non-farm productivity. special sauce of the u.s. economy. this is the first quarter preliminary read we're expecting it to be up half of 1%. a little light up 0.3%. up 0.3% and in the rearview mirror, the whopper 3.3% moves up a bit to 3.5 making up for the lack of making up the number, closer to the survey o what many people have thought.

now, if you look at the, up 0.3 on productivity, that's the lightest productivity since the first quarter last year when it was minus 0.4% and unit labor costs, of course, moving up. 4.7. that's definitely hotter than the 3.9, 4% we expected. 4.7 is the hottest unit labor court going back to the first quarter of last year, and if we look at the revisions. the revisions are from 0.4 last time to unchanged. so we did see a little bit of a drop there, but 4.7 a whopper of a number yields moving a bit higher two year, joe pointed out, hovering three basis points 493. it's now 494 plus. almost 495 ten year note yield down a couple basis points at 461 well, now it's at 462. down about 1 basis point

obviously yesterday's fed meeting had a lot of moving parts. what i found very interesting, of course, is that we learned in the treasury announcement buybacks are back and larger than expected. while that going on, balance sheet still in the $7 trillion-plus camp any emergencies down the road we're starting off from a much higher level than we have in recent "past" emergencies. joe, back to you. >> rick, i don't know if you heard jeremy siegel. if we assume that the reason we got to the 40-year high inflation, was demand, the demand -- whatever because of all the spending, can we assume, then, it's under control now? inflation? because all of that spending is being used up? i felt siegel, half of that stuff hasn't even been spent yet. why so sure that inflation was going to behave like we think it's going to behave do you think powell's right?

>> i like these high fastballs, joe. thank you. long as government spending continues to be rampant throughout the system, i think you're going to see large pockets of inflation that become structural in nature a a lot of them indirect and direct offshoots of policy coming from d.c. in addition to that, there's areas of the economy where service issued related, of course, are sticky with regard to inflation and i think the only salve the federal reserve seems to be able to apply just doesn't help no a good ointment for the structural issues keeping prices high once again, joe, i continue to go to some of these green issues the subsidies. evs, the energy transition embedded in all of those are higher prices, half in, half out on multiple standards. none of this will go away. it's going to get worse.

we've given dictates to many industries the government's going to change the future, whether in transportation or energy so corporate america's made adjustments. but those adjustments are sort of half-hearted, because the future doesn't look like it's going to comply with some of the mandates of the government so everything is going to stay or get more expensive in those areas, and i just don't see them coming down. i think the chairman is right over time. i do think some of these stickier patches will moderate a bit, but i think the notion of seeing 2% inflation again, don't see it in my cards. >> thank you, rick steve liesman has been listening patiently. joins us now with more i don't think you're open to just about anything as well at this point, steve? would anything surprise you at this point >> no. i mean, i wish that the -- i kind of think some of the programs that the biden administration has launched make a lot of sense i don't know that it made a lot of sense to do them all at once.

the idea of onshoring, chip manufacturing. we learned in the pandemic we don't want to be beholding to imports in that regard that made sense. we do desperately -- we needed an ininfrastructure plan made a lot of sense to build a lot of roads and bridges made sense at the time the trouble is not really government spending per se but the amount of government spending over a period of time government will spend, build roads and bridges do things society needs done the question is whether or not they really put too much down the esophagus of the economy at one time and i think, by the way, sort of bipartisan support, whether all should have happened at once in addition to the stimulus provided beginning of this i do think this discussion, which rick has been on top of the entire time about the role of fiscal spending and inflation, is an important one i don't think it's the whole

game it's a piece of the game through the data quickly, joe, if you don't mind. jobless claims numbers well behaved suggesting the jobs market remains relatively strong and challenger numbers better behaved this morning in terms of layoffs. so that is telling us we're not seeing weakness in the job market that some people, perhaps, hoped for, to see the economy cooling. productivity numbers 9 ones to watch. three strong quarters. this one expected comedown could not maintain rates on annualized basis, up 3 to 4%. watch. we saw pandemic down stock a lot of people thought. or really beginning of a lower trend on productivity? >> all right, steve. we'll continue along this discussion with what we saw yesterday. the fed holding rates steady at the latest policy meeting, and fed chair jay powell also provided a bit of relief to

investors worried about potentially higher interest rates. >> it's unlikely that the next policy rate move will be a hike. i'd say it's unlikely. you know, our policy focus really what i just mentioned, which is how long to keep policy restrictive. >> bring in former vice chairman of the federal reserve now a global economic advisor at pimco. i can paint the most beautiful picture, richard, of the world we are living in three, four months ago soft landing it's in the bag. inflation, definitely going in the right direction. you know a matter of time until it gets down to the target of 2% jobs better than they've ever been in history. yet, not overheating anywhere in terms of the economy but now seems like we're questioning all of those narratives should we be or are we just, we like the word we like to worry

>> joe, thanks for having me on. no i -- i think the basic, the bake story of the economy coming into the year is still the baseline case inflation coming down. you know the chair and others used the bumpy road analogy to me still looks like a bumpy road and not yet a u-turn. also the committee, and all show be, dreaded word data dependent last three months inflation data hasn't been good again, i think it is important as you did, joe, to emphasize. look, this is an economy with a lot of job creation. a real wage gain the chair made the point not targeting wage inflation but want to get inflation into the 2s and on a path of target i'm in the bumpier road camp looking at data. >> so you would be -- asked this earlier. you would mortgage a house and bet the next move is definitely down in rates?

>> i don't think i'd mortgage. i think there is a scenario the chair himself acknowledged, there are scenarios where that might be called for, but i really do think that -- sort of say what they think. in fact, the chair was very specific yesterday he said we judge policy, it's restrictive. we judge, if we keep it here at this current level, it will be sufficiently restrictive he said it's unlikely, indeed your sound had that. it's unlikely they hike. so i don't they this is about mortgaging the house but about pro probability. the base line next move, at some point a cut. >> will it require, to get down into the 2s, as you said, will it require unemployment to tick higher and if unemployment ticks higher, can you guarantee me that inflation will definitely moderate will that do the trick >> no. it's not a guarantee so far there's been, you know,

since 2022, there's been a big decline in inflation with a very, very hot, you know, and robust labor market. so it's not required now, there is some research. again, it's economic research, that indicates perhaps some modest rise in unemployment may be part of the adjustment, but, you know, joe and i, we go back long enough to remember periods unemployment and inflation goes up. >> what i'm worried about. you know, in the back of our minds. i guess what's we're all scared of >> yeah. >> i mean, misery index is t that -- people won't even believe such a thing could happen, and it has happened. i don't know how we did it last time must have really screwed up, and i don't know if we're in the middle of you know, quasi-screwing up right now. >> i don't think so. >> you don't think so? >> yeah. don't think so. >> and -- the -- all of the $34

trillion we've got to worry about and all the refinancing and everything that's going to happen, we can absorb that, and debt to gdp, that never comes home to roost, if it never goes below 100 again? >> no. on that topic i think that we have to acknowledge, you know, debt to gdp is north of 100% more concerning to me, joe, is not where it is today. that reflects past decisions and reflects the positive response to the financial crisis and the pandemic i think what's really concerning to me and at some point could be the markets is the trajectory. the cbo's trajectory is really sobering it basically shows 5% to 6% deficits to gdp as far as the eye can see. you know, when i used to be in my past job i said the u.s. is on on unsustainable fiscal path. it's none a more unsustainable

fiscal path now. so the bond market vigilantes have been in hibernation for the most part. i think it's hibernation i don't think they're dead, but, yeah i think that's 2kgot to be an ongoing factor thinking near term and longer term who's going to hold 30-plus trillion of treasurys that need rolled over and the like certainly something i'm paying attention to. >> are you on "fashion island" right now? what i'm looking at in that backdrop >> well, i am at pimco headquarters in lovely newport beach where it is 5:30 a.m. >> you dog you are! i know exactly where you are you're in that white building in newport beach at pimco. >> oh, yeah. >> you are -- >> send you a selfie. >> don't i don't even want to know that there are people that are out there. a drexel office is there almost went to work there.

well, no i want to be here with you for a minute -- richard, thank you. so beautiful a lot of republicans, you might know -- might not be perfect in orange county. coming up, talking about republicans. one of the great things about this, joe, all the different sides and right now texas senator ted cruz joins us after ro khanna was on the show and mayor of new york as well. a wide-ranging conversation with senator cruz talking about the key aviation bill causing a lot of controversy the airline refunds, and also kids online screen time and tiktok as a reminder heading into a break saturday, the berkshire who this -- berkshire hathaway meeting see it all here on cnbc. stream on cnbc.com

starts at 9:30 eastern time. we're coming right back. e '. (man 1 vo) i have people, people i can count on. (man 2 vo) i have time to give (grandma vo) and a million stories to share. (grandpa vo) if that's not rich, i don't know what is. (vo) the key to being rich is knowing what counts.

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welcome back to "squawk box. there sree newed bipartisan push on capitol hill to keep kids spending all their time on internet media senator cruz wants to set a minimum age for users restricting sites to schools and centers. i want to get into the critical faa authorization bill and the new biden administration rule requiring automatic refunds for airline customers, canceled or delayed causing a whole bunch of debate start with kids. senator, you and i have the same concern, i think, i have three kids and worry about them being on too much social media and try to do all the limits using apple phones and everything else and i'm not succeeding but i would also ask the question, of course, whether the government is supposed to intervene in this or the private

market is supposed to intervene in this? >> listen, every parent i know with teenage or adolescent kids is worried about social media, worried about all the garbage that is pulled in on our phones, and it is, you know, you give your kids phones and they're portals to just about every harmful influence in the world our girls are 13 and 16. it's a very difficult thing. it's a very tough time to be a teenager's they deal with challenges that, andrew, you and i didn't deal with at that age, and a of you it time to be parents. how you protect your kids is not easy i've joined with brian schatz. a democrat from hawaii we disagree on a lot of issues but on this issue we're both parents and teamed up together to pass common sense legislation that number one restricts that kids under 13 can't be on social media. there's no reason for a kid under 13 to be dealing with all of the pressure all of the peer pressure all thenegative messaging that comes from social

media and then number two what this bill does importantly for kids under 17, it prohibits big tech companies from using al ga rhythmic boosting to push messages to them, and if you look at, there's been a lot of testimony in the senate about how big tech deliberately targets our young people and pushes negative stories. pushing stories that push bad body image on them. bill includes a separate bill. a separate bill that provides that schools that are receiving federal funding have to block social media on campus so when your kids are in school, they ought to be listening to the teacher, doing their schoolwork, and not sitting there on

instagram, posting throughout the class. >> so, the question is how you would hold and who you would hold to make sure this is -- this somebody's held accountable for this you know, i remember, dare i say, i don't want to throw the sorkin boys under the bus, but i think they were under 13, and somehow they managed to get on to these services, i think, claiming that they were already 13 is -- do we ultimately hold meta responsible or youtube by the way, where does youtube or something like that lie in this social media is sort of a -- increasingly becoming an amorphous sort of category >> yeah, so, youtube is not covered, because social media is something where you're posting, where you're having comments, where you're having other people engaging with you, and much of what makes it so addictive, particularly for young people, is the quest for likes, and often, the negative comments that occur

look, there will always be a problem of kids trying to avoid it, and this puts -- it puts liabilities on the big tech companies, but it gives enforcement authority to the ftc, and one of the things we know is big tech knows everything about their users, and so if someone -- if someone is tweeting about, you know, about issues that are of interest to 10-year-olds, and they're claiming they're 25, big tech knows that. they know who their users are. there's a liability for if they knowingly allow someone to circumvent these age requirements, then they face liability, and this, i fully expect -- i think this bill is likely to pass we will very likely have a mark-up in the senate commerce committee next week, and i think the odds are high that it will pass out of the committee unanimously. we've got wide bipartisan support, and one of the interesting things is, the sponsors of this are almost all in their 40s and 50s they're parents who have

teenagers at home. it's interesting some of my colleagues in their 70s or 80s sort of scratch their heads, and they don't really understand what these challenges are, but if you're dealing with it at home, you know exactly >> you get it. yeah, if you're a parent, you get it i would tell you, by the way, i think that tiktok is not that different than youtube shorts these days, senator, so you might want to consider that as a separate issue i want to talk about airlines for a second, because the biden administration came out with what seemed like a very popular program, which would require airlines to provide refunds automatically so you wouldn't have to fight with them, call them on the phone, deal with the rigamarole of getting a refund when, in fact, you're due a refund, and it appears that you and three other lawmakers have come back and said, no, actually, the airlines should keep the cash, and you should have to get on the phone to get the refund why do you think this? >> well, andrew, i got to say,

this is one of the silliest stories i have ever seen the faa reauthorization bill is a bill that came out of the senate commerce committee unanimously. every republican, every democrat supported it it also came out of the house committee unanimously. we just had a vote yesterday on the senate floor the vote in favor of moving to the bill was 89-10, so you're saying, oh, there's a lot of controversy over this. you know what the controversy is one tweet by elizabeth warren. and elizabeth warren claimed, oh my goodness, this is stopping people from getting their refunds. that's a nice little tweet, except it's not actually true. what the bill says -- and by the way, this provision of the bill was written months ago, long before the biden administration issued this rule, it says you as a consumer have a right to get your refund if they cancel your flight and what it says is, in order to get your refund, you have to ask for it now, andrew, how many thousands of flights have you flown? most consumers, if a flight is canceled, don't want an immediate refund they want to book a new flight

if your flight is canceled, if you want to go to newport beach, to orange county, to check out where joe was just talking about, and your flight's canceled, almost all consumers say, put me on the next flight, and the rule saying, you got to give the money back automatically, no matter what the customer wants, that's a dumb idea. if the customer wants a refund, give the customer a refund, but the vast majority of customers with a canceled flight want to book the next flight this is a common sense provision, which is why it had unanimous bipartisan support in the committee. >> just so -- >> the only opposition, as i said, is an elizabeth warren tweet that some reporters are running around squawking about, and ignoring common sense. >> you would agree with me, though, i think, look, the perfect solution to this would be, they offeryou the opportunity for a flight you could take that, which we both agree is oftentimes what you have to do if you're trying to get somewhere >> sure. >> but if you don't take that, and this is the big issue, if you don't take that or for some reason you can't figure it out

on the app or whatever, then the question is, to get the refund, should it be automatic after that where they send to it you, and the department of transportation can fine them if they don't, or should it be that you are required, the impetus is on you, the consumer, to go to them and haggle with them to get money? >> what you just described is the perfect situation. what the bill provides is if they cancel your flight, they have to refund it if you ask for it and that is a common sense provision, which is why every senator, every democrat and every republican, agreed with it by the way, the biden rule also has real problems for anyone that books through a third-party travel agent like expedia or kayak in terms of putting the liability on the third-party agent when they haven't gotten the funds from the airline this provision was written as a common sense way to take care of consumers. i will mention, also, there are a lot of provisions in this faa bill that are really important that you didn't talk about at all, so for example, a mandate on the faa to hire substantially

more air traffic controllers, because we're seeing serious safety issues. >> no, and that is a very real issue. >> we don't have enough air traffic controllers. i'll give you another example of a really important provision in this bill. >> >> i would love to, but we're up against a very hard break this mniorng, senator. we appreciate your time and hope to talk to you very soon i apologize.

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futures are higher ahead of the opening bell nothing has knocked futures off rack this morning. we have a jobs number. >> tomorrow. big day. >> that could be a big number, and becky from omaha >> omaha, nebraska >> "squawk on the street" coming up next. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at post nine of the new york stock exchange premarket adds to weapons's post-fed rally as chair powell eases some concerns about a fed rate hike. oil still below $80 and the vix just below 15. our road map begins with the