good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin. joe is off this week. let's lookat what is happening with the u.s. equities at this hour. there are some green arrows. these are modest advances. dow up 4 points. s&p indicated up 5 points. nasdaq indicated up by 30. that matches what we saw at the close yesterday where the dow and s&p were down. nasdaq was up. let's look at what is happening with treasury yields. the ten-year yield is below 4.4%. 4.39%. the two-year yield at 4.27%.

gold prices is up 1.3%. it is currently $2,382. if you are watching bitcoin, it is pulling back a bit. yesterday, bitcoin was above $72,000. it is $70,452 right now. oil prices have been picking up steam as well. in the nmeantime, we talk about a.i. every 20 minutes on this show? >> more frequently. >> it could be a drinking game. we will continue the game in a different way. elon musk speaking out on x saying his guess is we will have a.i. that is smarter than any one human, probably, by the end of next year. he said within the next five years, the capabilities of a.i. will exceed that of all humans. >> i don't know if that is

com commentary on the intelligence of a.i. or humans. >> oh, burn. a year from now -- if it could be that smart that quickly, sam altman talked about chatgpt 4.0 as a competent helper. they always do something that is a little wrong. the answer is not always exactly the way it is supposed to be. >> ight. >> are we a year away from the competent helper being a super competent human? >> if that is the case, if elon musk sees it as smarter than any human by the end of the year, competent helper will get a quick upgrade. >> i may have missed it. five years smarter than anybody? >> smarter than -- five years

than all humans. >> smarter than some humans or any human. >> if it is smarter than any one human, you will have a better and competent helper. >> it is possible. at the rate this stuff is going, i was playing with claude, and it is better. it can do stuff that is shocking. >> you know how you have the smartest iq person around? >> and not the most street smart? >> and they don't have eq? >> this is what will happen in the next year. we haven't gotten to the point -- it can do multi-step problems, but not a ten-part of things that have to happen at the same time. >> the emotional levels, too, being able to read people.

i don't know. maybe it is there. maybe it is not. >> i think claude is better than most of the others on that stuff. people are using it -- we talked about this with the psychology and other things. >> right. >> in a way that is different than chatgpt. >> yeah. okay. we have an update on the collapse of the francis scott key bridge. the process of removing containers has begun. that process will take weeks to remove the containers and tow the ship. the goal is to restore access to the port. it is a difficult process and dangerous. former president trump has lost an appeal to delay the criminal hush money trial. a judge denied the request to move the case to another court on the same day his attorneys

filed it. trump is charged with falsifying business records to conceal a payment to stormy daniels before the 2016 tpresidential election. the case has not disappeared yet. the jury selection is set to begin next weekin new york. take a look at this. shares of trump media falling 8% in the session yesterday. wiping out $2 billion of value. the company has a market cap of $5 billion despite generating $4.1 million in revenue in the last year. we talked a lot with barry diller about the valuation of that. i think he had choice words about that. we will await becky who is drinking a bit of water at this

early hour to catch up. we'll talk basketball. >> i don't know if you stayed up last night. i watched the first half. went to bed at halftime. it was a late game. this was really something to see. the first half was pretty close. that's not what happened at the end. uconn winning the men's ncaa championship. it becomes the first time to win back-to-back since florida in 2006 and 2007. the huskies beating popponents y 23 points. dominating the ncaa brackets. purdue's star zach edey scored the most points . uconn had waves and waves of playe

players who wore him down. that was the strategy that paid off. in the beginning, they had two big men playing on this. edey is so dominant and able to score 20 points within the first minutes of the first half on this. really, they exhausted him and uconn had the strategy. it is waves and waves. amazing effort. really something to see. in the meantime, record ratings for the women's tournament. south carolina and iowa drew 18.7 million viewers. the most watched basketball game women's or men's college or pro since the world cup final between the united states and japan. when we come back, a lot more here on "squawk box." will talk about tesla. shares rising after elon musk saying the robotaxi would be

unveiled four months from now. mark your calendar. i believe it is august 8th. we will talk to an analyst about all of that next and what it means. lkbolater, scott gottlieb will ta aut cancer drugs showing improvements years ahead of the trials. we'll coming right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. [alarm beeping] amelia, turn off alarm.

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welcome back. tesla is settling a lawsuit over the auto pilot crash that killed an apple engineer in 2018. the ev maker filed to seal the terms from the public including compensation fees paid to the family. tesla will avoid a trial around the tech nationalnology ahead o robotaxi launch in august. and martin eberhart said he is amazing in his words that tesla gets away with rolling out autonomous driving given the history of fatal accidents. his words on this. the stock was up 5% just on the idea that robotaxis are coming in august and that is something we will talk about right now. joining us to discuss this is tom, the global auto analyst at

rbc capital markets. tom, thanks for coming in today. >> good morning. >> this was big news as far as the market was concerned as far as the robotaxis having a date. >> it is not a surprise for investors who are long tesla stock. certainly analysts with buy ratings on it. it is 60% of my valuation. robotaxis, autonomies, fsd to some extent. >> self driving. >> assisted driving. robotaxi is level four. drives you completely. >> the idea that it is coming in august. does that hinge on the valuation? is this something that you could be a little flexible? that has been the knock before with the timeline is laid out

and not met. do you think the same thing with the valuation call? >> my valuation is based on a new target and discount that back and apply a multiple similar to fsd. if it is august 8th or next year -- robotaxis will not be mainstream for a long while. i do see why he's doing it. he's trying to highlight the value this could bring. it's huge. >> when do you think it could rollout on the streets? >> we have a robotaxi service in san francisco with waymo. i don't think it is in scale any time soon. >> the difference and i'm curious. there is a view among the community that the reason why the waymo and cruise products work is because they use live right now. you roll your eyes.

this is the whole thing. it is a laser pointed in places and that gives you feedback about what is around you. elon decided he wants this with cameras and without the radar. it is a different approach. as a result, there are some people who have a view that is not fully ready for primetime self driving. that's the question. my question to you is do you believe the robotaxi version of tesla is solely on cameras or a shift in strt ategy? >> that is what fsd is based on. could he pivot toward using light ar? sure. he changed his mind before on things. >> that is in terms of getting things out on the street. >> it is depending on where we have the products.

is it geo? we heard mobilize which is building with vw and that uses light ar. it adds a layer of redundancy. it is fis not 100% necessary. you have to reengineer cities to make it work in the future. >> reengineer cities how? >> imagine the robotaxi in the champs elysées. you have it in london with certain types of vehicles or pedestrianareas are separated. cities are going to change dramatically in the several years ago deck ades. >> there have been problems along the way as the former ceo and co-founder of tesla stated. you have gm rolling out their

taxis with safety drivers now because of accidents. grand scale, is it going to be safer eventually? probably. you have people who cause accidents all the time, but the liability factor will weigh in on the manufacturers of the cars. >> that has been the real overhang of the difficulty. bmw says as soon as it kills h humans, we're finished. >> you still have to live within the legal framework and the outrage of the family that loses someone. >> what about the other people? >> i asked elon this question specifically which is what is the politically palatable number of people who will due in america because of the computer will malfunction?

that is the fundamental question. if you believe 30,000 people die in a vehicle ever single year in america and i told you 5,000 people would die every year in america, but a computer would do it because it malfunctioned, would you say that is a good outcome or is that acceptable to you? i don't know. it's not clear. if you got the number from 30 or 20, i don't think that would be politically palatapalatable. >> we know 94% of accidents are caused by human error. that number won't go from 30,000 to 5,000. it will be smaller. other cities happened with aviation. tons of crashes early on. trains. over time -- >> that's the logical dr. spock view. logic doesn't prevail. when there are deep pockets

behind it, that's what the lawyers will go after. for the family that loses, i understand the dr. spock mentality. that is not how it plays out. >> we will get there eventually. look at china they are moving full steam ahead with it. that's the spockian view. >> when you have the centralized government. >> we'll get there. >> the valuation call. you are looking for the price target at $298. did you raise that from $297? >> you raised it a dollar? >> i raised that a bit ago. >> long-term prospects for the self driving for the robotaxis is the valuation. you have the street looking at deliveries that were a miss. how do you wrap up the immediate miss and the long-term promise?

>> i do acknowledge the car business does matter. it is only 10% of the valuation. another 10% is energy storage. nobody is talking about that. incr incr incredible opportunity. it you look at the delivery number. 307 k. the quarter before that, 485. there was the pull forward that happened because the model 3 expiring. the two issues in europe with the arson and the red sea issue. they delayed the model 3 on purpose because they were trying to get the highland out. china rebounded in march. they performed okay. the whole market softened. i need to look at these things with the model y refreshed. in the context of the perfect storm in q1, they did the fsd trial which could reignite demand. it is too early to freak out about this. deliveries do matter for

investors and retail stock. i acknowledge that. let's not lose sight of the bigger picture which is autonomy and energy storage. >> tom, thank you for joining us. tom narayan. and later, we have the japan prime minister visiting the white house today. we will talk to our ambassador rahm emanuel coming up. because when there's no limit to how far mobility can go, there's no limit to how far businesses can go. (♪♪) hi, i'm david, and i lost 92 pounds on golo. my life partner connie and i were in really rough shape businesses can go. regarding our health. and our doctors told us that we needed to lose weight. i saw a golo commercial and i thought, "we really need to try this." as the weeks went by, the weight came off. we learned to make healthy choices and be supportive of each other.

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welcome back to "squawk box." google looking to turn down the heat on the message board as

tensions have been simmering over the war in gaza. the company planned to eliminate the virtual thumb's down. it will remove metrics to allow people to see how popular other posts have become. employees are worried it would censor their freedom or turn the message board into the dull corporate tool. >> it is doing what it is intended to do. >> for us who use slack or teams, there is the icons you can do the up and down. >> it is the popularity contest on social media which has turned everything into. it is one thing at work. i hate it when it is done to kids and put in this thing. it is not nice at work, especially if you are looking at anti-bullying stuff.

>> thumbs down. >> you stink. >> if you put out your persp perspective, i don't know. you are asking for a lot of something. >> right. as a workplace, do you want to be the one doing that? if you do it online, fine as adults. if you want to grade and rate everybody? maybe not. when we come back, with congress back from break, the battle to approve new aid for ukraine gets back on track. we will take you live to roch rochester, new york, where one defense contractor is awaiting that funding bill. as we head to break, let's look at yesterday's s&p 500 winners and losers. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. (sirens) [due at target in 5!] copy that. make a hard left down the alley.

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good morning. welcome back to "squawk box." we're live from the nasdaq market site in times square. on this tuesday morning, you are seeing modest advances in the

foo futures. yesterday, tnasdaq was up. let's talk about this. we will go to washington here. congress is back in session this week and aid for ukraine is high on the legislative agenda. emily wilkins joins us from rochester, new york, where a contractor is waiting the funding from the bill. good morning. >> reporter: andrew, funding for ukraine and israel and bridge in baltimore and the surveillance measure on the agenda for congress as lawmakers are returning to d.c. let's start with the big deadline. congress is racing against the clock to pass the update to the fisa by the 14th. attempts previously have been sidelined from lawmakers who want more transparency for consumers. speaker mike johnson is working

on the plan to pass billions for the funding for ukraine. i'm here at the facility that would give the tactical communications radios for ukrainians. the funding is giving a majority of house republicans on board. mike johnson is looking at part of the aid alone, but we are not expecting the plan this week. congress is going to also have to consider approving spending on the rebuild of the francis scott key bridge in baltimore. and in the senate, chuck schumer has a to-do list on tiktok and kids safety online and cannabis banking. before any of that, the senate is required to handle the house impeachment of mayorkas. we are expecting the senate to dismiss this quickly, but it will take time to get the procedures started. that will take time away from other issues.

andrew. >> emily, thank you. for more on the legislative agenda, let's bring in julie graves. help us handicap, if you could, julie grace. what is atop of the list and what will happen and not happen? >> mike johnson is in for a rough week with fisa and national security hawks. they will work through that this week to walk through that. they pulled the bill twice before. the leadership is trying to get that done. ukraine funding is a big one. leadership is hoping to unveil something and get something passed before memorial day. mike johnson facing the biggest threat to the gavel. marjorie taylor greene hasn't pulled the trigger on the vote to vacate. if this comes to the floor, conservatives could oust him. >> could i throw something into

the pot here given we have so many issues that are swirling? tiktok, mcconnell, schumer. what the will happen? >> i think mcconnell coming out in favor of the tiktok bill puts pressure on schumer. schumer is meeting with two today to discuss moving forward. there is a push for public hearings. mcconnell push ramps things up to get things moving on the senate side. >> if were you to handicap it, are we banning tiktok before the election? >> there is still pushback. i talked to a number of senators who said with provisions and with change, they could see something happening. it will be interesting to see how it plays out. >> can we talk about the bridge in baltimore? i'm curious what your view is as weal as emilys?

th there is back channel of how they will pay for it and the insurance companies and if they get the private sector to pay for it or will the government pay for all of it? >> reporter: the house caucus came out and said we want to see what insurance will have and they want to see what other routes are for spending. at this point, president biden made it clear when he visited baltimore last week that this is full steam ahead on funding. andrew, you have seen congress say a bridge collapse, no problem. we have the funding to repair it. it will be interesting to see how the pushback is and if we are facing some delays in getting the funding for the francis scott key bridge. >> juliegrace? >> the funding is not sure with the pushback there.

if johnson can get the funding support here is an issue which is conservative which is the biggest complaint with him. it takes moving on his end. >> finally, i wanted to ask about where you think things stand with the middle east and the price of oil the last couple weeks and what is going on there. how do you siee things playing out there or as it relates to here in terms of funding and the like and the overhang of that conversation in all of the conversations that we're talking about now? >> i have spoken -- >> i'm sorry. juliegrace.have talk to a numbe leaders on this. despite the calls for the cease-fire, they are planning to bring up the aid package. it is interesting to see how democrats vote on this.

republicans will continue to show support for israel. >> emily? >> reporter: we talked about ukraine funding and with that funding, that support for israel and tie ataiwan. it is interesting to see how they approach the package with the funding to israel without wider consideration for what is happening in gaza and in palestinian right now. it is interesting to see how all of the dynamics come together. if you pass israel and ukraine, you have a lot of juggling to do to make sure there are enough votes to get a package across the finish line. >> juliegrace and emily, i appreciate your time. emily, good luck today. thanks. when we come back, dr. scott gottlieb will join us on a new study of cancer drugs that show some fast-track treatments which

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welcome back. a new study finding cancer drugs fast tracked remain unproven. this after five years of the app approvals. joining us with more is former fda commissioner dr. scott gottlieb. he is a board member of illumina and pfizer. this is a surprising one, doctor. if it was approved, there would be substantial data to support it. now there's not. what's supposed to happen? >> there is data to support it. remember, this is the accelerated approval program. this is to give patients with

life thrlhreatening disorderingo have no other drugs to treat to give early access of the drugs. this was in the hayday of the h hiv drugs. now 85% of drugs are approved on the basis of tumor shrink or for survival without seeing it progress. not on overall survival. they are approved on the basis of the surrogate end point to clinical success. the ability to live longer. this is seen as surrogates for overall success. under the law, they are required to go back after approval to hit a clinical end point like overall survival.

the lament of the study shows many drugs don't and when they complete the studies, they are not improving overall survival, but response rates. the challenge is it is hard after the drug is approved to improve the overall survival under the construct fda approval. if the drug is demonstrated to shrunk tumors, you want access to that drug. not enter a placebo controlled trial which would be required to demonstrate survival. i think the bottom line is we need to think of different constructs to allow the data to prove benefits without the random to placebo. we need to start adopting them. >> scott, i'm confused. they are conducting the studies

and they are not showing results or nobody can sign up for the studies because people don't want to take the risk with the placebo? >> it is the latter. if you look at the study, the particular lament of the study was it was the latter. people are doing the studies and not demonstrating overall survival. the drugs are getting approval on response rates. there are cases where the companies don't complete the studies or the studies don't show benefit. we have seen fda get more aggressive in the recent ye years withdrawing the drugs that don't meet the benefits that they need to show. one withdrawn from the mrarket n a week ago for als after it failed to show clinical benefit after the accelerated approval. >> that's two very different

circumstances. one is the drug doesn't work. the other is nobody wants to sign up for a test or a study where you don't get the drug because itmiraculous. >> it is right. what this pointed out is about half of the cases that the drugs go to fulfill a post-market requirement and get full approval, the full approval is on the basis of something other than the overall survival. i don't want to diminish the fa fact that the drugs don't work. the studies fail to enroll. that is the challenge here. we need to design constructs for collecting evidence post approval that patients are willing to enroll in. the fda has had studies which are difficult to enroll. the agency has got than better in recent years. they are relying on real-world

evidence to confirm the benefits of the drugs. as they do that, it will get harder and harder to demonstrate overall survival. people who believe these drugs after accelerated approval should go on and demonstrate survival and they will be disappointed. it will be hard to do after the drug is on the market for the life threatening condition. >> doctor, i want to ask about a different headline. all of the headlines of the avian flu in dairy cows. i'm trying to understand what you do at the market. p what are you supposed to do? >> the spread on the farms between cows does appear to be happening with the milking devices. the virus appears to local 00 in the udders. as the cows go into being

milked, that is where the transmission is happening. if you buy pasteurized cheese and eggs, you should be fine fully cooking the eggs. i would not be consuming raw mil milk. i would not consume it in the current environment. >> i hear you on that front. that's not a message i heard broadly broadcast. that is really good to know. if it is pasteurized, you should be fine. >> you will be fine. it is designed to kill bacteria. it kills worse than the virus. the pasteurization process eliminates that risk. >> witare we worried about cows what about chickens and eggs?

>> it has been on poultry farms for years. h1n1 has been around for years. the strain has been around since 2020 affecting the cattle. this is a newer strain. it hit poultry and now migrating to animals. fox and otter and now in cows. it is concerning to see it move across species. it has been around for a while. there have been 13 human cases with the particular strain. most of them were very mild. there were nine of them picked up incidentally because of routine surveillance on poultry farmers. there hasn't been a lot of stra. it has affected poultry. there shouldn't be a human health risk with poultry. they have been able to cull

flocks. i would not consume raw eggs. >> final question. i don't know if you saw the he clip eclipse yesterday. people who wore the glasses properly who say their eyes hurt today. i don't know how much they are supposed to worry or not worry or if they should do anything. you have a thought? >> if you wore proper glasses properly, there should be no health risk or concern. perhaps they have eye strain from staring through the glasses for a long period of time. there should be no damage to the retina. >> if the glasses were properly made. they had to be certified. if you bought subpar glasses, maybe that could be the problem? >> perhaps. i think most of the glasses that were available online and i bought one from amazon. i think it was straight forward how to discern the proper

glasses. i would be surprised. >> if you could see anything out the glasses, that's the problem. >> i was on the street when it happened. people were passing glasses around and other people looking down and up. looking down and looking up. that's what was happening yesterday. >> operator error. >> i don't want to downplay the risk of staring at the sun. the damage occurs with sustained exposure. by sustained, up to a minute. if you took a glance for a few seconds, that's not going to cause damage. it is looking at it for a longer period of time. >> my children did not have a good answer. they said, dad, is it worse to stare at the sun on a regular day than it is with the sun blocked? i said, well, i would think just staring at the sun by itself would be actually worse. maybe i'm missing something.

>> no, you are not. the reality is you can stare at the sun on a regular day. that's why people don't do it. during the lunar eclipse, you can do it and they receive the damage from it. by day, and people stare at the sun on a eclipse day -- it's impossible to look at the sun for a sustained period. >> good to see you. thank you, sir. >> thanks. the rising costs of attendance and uncertainty over student loan relief. that's next. later, white house economic adviser, and right now a little bit of pressure, futures off by

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the biden administration has unveiled a new student debt relief plan that could aid as many as 30 million people if it survives expected legal challenges. students are facing what pmany are calling the financial aid delays acaughtic. thank you, angel, for being with

us this morning. i will set aside the whole loan forgiveness for now, because i think that's controversial, and let's talk about the other issues that are making it so complicated. there were changes that were put through, and it was delayed, and colleges don't know which students will come because nobody can get anything of the stuff together without the information. >> yeah, several technical glitches as they were trying to redo the applications this year, and as a result a lot of students are not going to get their financial aid awards until later this year. >> what does that mean in reality? what does it mean for the families that are trying to figure it out? what does it mean for the colleges trying to get their class counts straight?

>> it's a lot of confusion for a lot of families, and some families have not been able to submit the application yet so the department is working through that. colleges and universities are trying to work as quickly as possible to get the students financial aid awards, and they can't do that if they don't have that from the department of education. the typical deadline for enrollment is may 1st, but a lot of colleges and universities are extending those by a month, and this is the year to be patient. >> that's on top of confusion with the idea that some colleges are saying we want standardized tests again after many got rid of it after the pandemic, and that changes things. then you have the idea of

student loan forgiveness, which keeps getting floated out there and taken away, and what is your take on that? >> actually, my organization pwh believes any kind of support and relief that students and families can get appeared student loans is critically important. the reality of the matter is in this country we are overly reliant on student loans to fund education, and we are delighted to see some relief even though we know it's controversial. we are big advocates for income-based for payment, because if you graduate with hundreds of thousands in debt that will be difficult for you to pay your rent and for you to get into the marketplace for a car, for example, and spend in the economy, and we also think it's a good potential driver for the local economy. >> angel, can i say, look, if you aren't going to be able to pay for these loans, maybe they

should not be offered or taken out, and maybe some of the onus should be on higher education that keeps doing things like putting in newer dorms and amenities, swimming pools in dorms, and upgrading across the board to the point where those of us that went through college years ago don't even recognize the places they live and the things that now come along with it, and if you want lower tuition, you have to have less amenities. >> yes, the matter of reality -- this is coming from the dean of admission for many years on college campuses, and running campuses is a expensive proposition. you are feeding students and providing them with services and housing them, and this is the kind of stuff families expect. higher education -- >> angel, if we can't afford it and the loans are too much and it doesn't make financial sense for students to come out with

debt because they can't afford that, and the cost of college tuition far outpaced inflation. >> i agree with you. and again, there's hope out there for students, if they can get through this year's process, there are lots of resources out there available. the majority of students do not pay the actual set tuition price at colleges and universities. >> not knowing that information makes it that much more complicated for students this year. do you anticipate there will be kids that get left behind this year and matches that don't make up because of all the chaos happening on the federal level? >> this is where honestly i am most concerned. during covid we lost about a million students in the pipeline to higher education, and those are students that have not come back, stepped out and never came back to the process. according to the national

college attainment, we are thinking another 500,000 students could step out. i have been talking to high school counsellors around the country and they are struggling to keep students in the process and are frustrated and they say maybe i will do this next year. the reality is once students step out, they don't come back. it's important for the economy, and this is 1.5 potential million students who will not be in the pipeline to higher education and future jobs that require college degrees. >> we have to run in a minute, but quickly, sats, mit brought it back, and some said it was a mistake to take the sats away, and some say sat is racially motivated, and changes it upon

the economic status, and that doesn't surprise me, so where did you land on it? >> the reality of the matter is the majority of colleges and universities in the country have not gone back to the sats and do not plan to go back. the reality of the matter is 90 plus percent -- >> what do you think? do you think it's a mistake or not? >> if it's a mistake to go back? >> is it a mistake to go back or was it a mistake to stop using the test? >> in my organization, we believe not having testing is really good for students. there's a lot 6 research that shows the test something bias and a lot of research shows it favors students a lot wealthier, and institutions show they are more diverse by dropping the teg tests and we are delighted by that.

>> what do you make of the other research that seems to suggest that the sat is a indicator of how well you will do in college and there are a few things that can't be changed by grave inflation or something else? >> it's important to note that that research happens on campuses that are the most selective institutions with self selecting applicants. i would say take some of the data with a grain of salt. what i don't want is for students to have the fear that they will have to take the sat to get in college when a majority of institutions do not require it. >> thank you for your time today, angel. >> thank you. in the meantime, it's just after 7:00 on the east coast. you are watching "squawk box." i am andrew ross sorkin along with becky quick. joe is off today. we have a lot going on over the next two hours. let's show you where the futures stand now. they are off 20 points on the

dow. nasdaq down about a point, and the nasdaq offer half a point. the ten-year note at 4.394. we are talking about the upward pressure on cold. we will talk about crypto in a moment. right now you are looking at gold standing at $2,374. crypto inched up but has come down a little bit to $70,700. let's start off with a more macro call. kris harvey now upped his price end target for the s&p. 5.535 now. it's 6% higher than what it was

at the close of the bell yesterday. he thinks it could lead investors to shake off concerns. the s&p, by the way, trades at 21 times next year's expected earnings. sticking with the macro theme, another record high, gold futures, as andrew just pointed out. the new benchmark high, by the way, for gold, 2,373, and it's up 15% already this year to date. keep in mind the gold mining stocks. all up roughly 2 to 2.5%. eft is up 1.75% as well. then we will cap things off with

an analyst call that is getting attention this morning. american express shares are about flat right now. thin or fair market trading, an ae kwult weight and it was an overweight before. they are citing a more balanced run, and they think there could be a slight deceleration in the first quarter growth, and up 40% over the last year. for more on that and other top analyst calls of the day, head over to cnbc.com/pro. back over to you. >> thank you very much. our next guest says she's not concerned about the wild market action so far this month. for more on that we want to bring in kristen bitterly, ahead

of northern investments. >> what we saw last week, last week was geopolitics. it was a lot of fed speak and a lot of the macro data, and it was the robust jobs number we saw. we are still in the position where we have a lot of cash on the sidelines. we have over $6 trillion in money market funds. we had earnings that troughed, and when you start to look at the fed funds rate, that it has peaked and there's a question as to when we will get that first cut and inflation is going down, it's a conducive set up for growth and earnings growth. >> earnings growth, and i think

that's the key. we are about to get into earnings season, and so much of what our focus has been has been the fed and inflation, and we have another inflation number coming tomorrow, and you are saying to look through that and focus on inflation itself? >> chair powell has been extremely clear in the fact that he doesn't feel like he has to break the labor market, the job market, to begin a rate cutting cycle. this doesn't surprise us because we always were in the camp that the first time we would see a rate cut would be over the summer months, but because the labor market is so strong, yes, there are some points of weakness you could point to, but the inflation is in the driver seats as to the fed's trajectory. if you are able to have growth, the market is rewarding that.

>> you are overweight in health care supplies. why? >> you break that sector out into various components and it's an area that has been under pressure with the recent announcement with medicare, and it's the macro environment of health care where the providers will be in the spot lot. it's an area that caught up over the past several months, but it has been an area largely out of the spotlight. last year, all of the action in the space was driven by glp1 drugs. we have seen peak rates if we see the continued strength, and if we see the pickup in mna activity, and that drive flows into the sectors. >> beyond that, you are looking

at the bond market at well? >> we are. when you are looking at the potential outcomes, the best way to play this as an investor is to seek opportunities both within yields as well as within equities. you can see within the equity portfolios, they are well diversified. we have similar positions to the s&p, equal wait. also looking at going down in terms of capitalization, but focus on the small and mid cap companies profitable and poised for growth. with fixed income you have to look at the absolute yields, so when you are looking at rates where they are today, there are attractive coupons that become animportant part of portfolio construction, and there are opportunities in april with munis. >> thanks a lot. >> thank you. coming up -- are you ready

for this? i don't know if you saw this on youtube, but it's cool. the creator -- we will talk to the team behind the viral dudes perfect videos. if you are not familiar, check them out during the commercial break because it's pretty amazing. later, the ceo of mazda north america will be here, and we will talk about the disruptions from the baltimore bridge collapse and so much more. don't go nywhere. "squawk box" returns in just a moment.

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from trick shots to a big money deal, the dudes from dude perfect getting a large investment to take that wildly

popular youtube group to the next level. yeah, these guys are funny and we get to hear directly from the dudes, next. japan's prime minister is set to visit with president biden at the white house at 7:50 p.m. and rahm emanuel will join us. "squawk box" is coming right back. ♪ upbeat music

they are concerned by the prospect they would be forced out of the my name is oluseyi and some of my favorite moments throughout my life are watching sports with my dad. now, i work at comcast as part of the team that created our ai highlights technology, which uses ai to detect the major plays in a sports game. giving millions of fans, like my dad and me, new ways of catching up on their favorite sport.

welcome back to "squawk box." now with more on the create your chi, dude perfect, a popular youtube group known for their impressive tricks and videos receiving investments ranging from 100 million to $300

million. that's a lot of money. joining us right now are four of the five dudes from dude perfect. time-out capital's cofounder, jason. we are big fans here on the squawk set. jason, how did you find these guys? what are you trying to do? what is the investment thesis here? >> these guys are icons, right, and i have three kids that have grown up watching them and following everything they have done, and all you have to do is go outside a smoothy king right now and watch kids line up and do smoothie things, and we

started a relationship and it turned into a rather large investment. >> guys, did you ever think you would get an investment like this? what do you see yourself doing with all this phmoney? >> this has been a long process for us. when we set out on the journey we did not intend to raise as much as we did or get to this point, and we found the time-out guys and our goals for what we want dude perfect to become is very similar, and we felt like they would be a great partner moving forward. we are looking forward to the trust we built with families over the last 15 years and turning that into an extension of the brand and something that can live long beyond the five of us, hopefully doing water bottle flips like you are seeing now, when we are 65 years old.

>> can you go backwards for a second and take us back to the origin story and how this all began? people will be fascinated by it. i am curious when the eureka moment happened when you knew you caught lightning in a bottle? >> it started in 2009, and we became fast friends doing bible studies together, and then we made another video, and aod video, and within six or seven videos we got our first partnership with gmc, and then that was the first time we got paid for something we totally would have done for free if we didn't realize there was money for that out there for it, and we were just five best friends having fun. that was so early on into youtube that i didn't think we had any clue of what could be, and as we continued to do it and

the space continued to grow, we have been so blessed to be able to make content, and it was 15 years ago today that dude perfect started. we didn't plan that but fun timing. >> i was just watching another video, and i don't know if you consider him a colleague, a peer, a rival, and mr. beast has spent somewhere like $3 million for every video he produces. when you produce a video, what is the all-in cost? >> we are not quite at the level of the $3 million, and you asked if he was a colleague or enemy, whatever you said, but he's awesome. within the last 15 years, creators have caused us to be better. >> that sounds like a competitor? >> yeah, he's a competitor. but we are are friends of jimmy. he's awesome.

>> where this goes as a brand and where it goes within the social media ecosystem, we keep talking about youtube, and what do you think is happening with tiktok, which is a platform you have to care about to some degree, and how do you see your content getting to people in the future? >> it has been fun. last year we launched the dude perfect app that is available everywhere, and we want families now to be able to watch dude perfect content with clean ads that are prescreened before it goes on our service, and we are with other creators whose stuff is trusted and that's one of the main reasons we took on this opportunity is to expand that. we are looking to change the direction we are headed and make

it even broader for families. the last 15 years people trusted what we have done by watching it mostly, and now we want to bring experiences to them where people can touch and feel dude perfect for the next 15 years. >> we have shown the bottle flips and other things you have done with the videos, and the stuff i love the most are your stereotypes and some of the very funny videos you put out there. where do you guys come up with content? do you sit around and make this stuff ripping off each other? >> it's the hardest part 15 years in, but having five guys in the group total is nice because everybody has their own individual role. when we started off15 years ago i was in charge of the creative and still am somewhat today, but it's pretty much an idea comes up and we will sit at a table and discuss it, but the stereotypes are fun because we get to involve the whole team, the production guys and editing

team and let everybody get involved and that's one of the funnest things about the journey, the stereotype series. >> you asked about our expensive video, and every time we rage on something that price goes up and up. >> my last one, and i think people are watching this and saying to themselves what i always wanted to know, which is how many takes does it take to sometimes land either the bottle -- i mean, we are showing some really cool things where you are seeing all sorts of balls landing in various hoops. there's the famous sort of david beckham viral video where he lands the ball -- people think it's edited and i know you say it's not edited, so how many times does it take to do this? >> depends. usually the hard ones you think will take forever end up being fast and the easy ones take a

long time. cody's blindfolded world's longest shot, the first try, and the las vegas world's highest shot that we did not too long ago, that was three days. pretty much between one try and three days, and the answer is somewhere in there. >> i wish ai would have come 15 years earlier and that would have saved us a lot of effort. >> we will call you a dude for today, jason, and congratulations on the investment. we will follow that progress and hope you come back and flip some bottles here at the table here. thanks. >> thank you, guys. >> very cool. when we come back, binance's

ceo. we'll be right back.

paris watching week kicks off today. it's europe's biggest block

chain of digital events and we are talking to some of the key industry players, including binance. >> it has bhas rough, and now it's up to the new ceo, just a few months into the job to clean this company up. he comes from a military background and i sat with him a couple hours ago and started asking him how he planned to change the culture at binance. let's listen in. >> in the early development, again, the rules, there's no clarity on that. binance was operating in a certain fashion, right? we have moved past that. as the company moves into

greater maturity, and looking at sustainability, and the direct travel is clear, there's much more compliance which is why we are bidding out a robust compliance program. >> binance was a lot younger, and he's stressing the company is working with regulators around the world to address some of the concerns brought up, and this is the task on his plate, changing the long history of the culture and making people trust in the company again. bitcoin still very near its all-time highs and we are a few days away from a bitcoin event, and bitcoin often moves in the four-year cycles, and many are saying this year or cycle is different. and when i asked him his views on the market, let's listen in.

>> normally after six months after seeing the all-time high there are surprises, and this time around, it's why it's unique in terms of market cycle and a lot of key reasons is the introduction of the eft, and you are bringing new users and liquidity. >> i have seen some wild calls on bit coins priced and one thing is clear here in paris is that the industry is very bullish and excited about where the market is at. andrew, back to you. >> thank you so much. fascinating stuff. when we come back, a lot more here on "squawk box," the expiration of the trump tax cuts and jobs act on the horizon of 2025. congress needs to start working on a plan now to avoid paying later. remember, the future of tiktok is on the agenda, and also on

that agenda, former trump inside of the right stuff dating app, john mcentee coming up.

welcome back to "squawk box." former president trump tax cuts and jobs act set to expire, and if congress does nothing the law will impose tax increases.

joining us, natasha sarin and former treasury department official. good morning to both of you. i want to start with state of play, what has to happen in advance? i think there's partially a view that we will get to 2025 and then debate it and the clock will get to midnight and then we will have a big food fight. what could be done in advance? what are you arguing for? >> well, i think both parties need to really think through their priorities and what an acceptable deal would look like, because this is going to rush up on people pretty quickly after the election. you have the automatic expiration of all the tax cuts and you also have the debt ceiling kicking in sometime in 2025. you have health care subsidies expiring at the same time.

people need to ideally be thinking through what kinds of tradeoffs they are willing to make. >> what kind of tradeoffs are you willing to make? >> me? personally i think we ought to have a fiscally responsible package and one that preserves the child tax kids in particular and make up for some of the ground it has lost due to inflation over the last few years. what that means is we need to take some of the tax breaks that shrunk in the act, and shrink them further. >> natasha, if i made you king or queen for the day, what would you do? >> what is interesting and great is that i think there's a lot of areas where we both agree on this. the debt to gdp ratios will

raise from 116% to over 130%, and so my package would include refundability of the child tax credit and make sure we help the families that need it most. >> how are you going to raise revenue and do that at the same time you are hoping to grow the economy and not put the brakes on things? >> the package i would dream design would include an increase in the corporate tax rate as it has been proposed by the biden administration -- >> to what number? >> the biden administration's proposal is to go to 28. i think it's worth noting that when tcj was legislated, what the roundtable wanted was a tax rate of 25%, and there's a lot of revenue to be had by a pretty

small increase in the corporate rate. >> should the biden administration be asking for 25 or 28, or is this a situation where if you move it one way you hope you can get it to 25? >> i think that's what he said in his column, which i thought was pretty thoughtful, which is you need to start sketching out areas of compromise, where you are hoping to see both revenue raising focus and spending focus, and most importantly, fiscal responsibility in the years ahead because we are not in a position where we can deficit the finance going forward and have debt to gdp ratios continue to rise, and that has costs for the american people, and it's fiscally dangerous. >> so what is going to happen to the individual tax rates, and dare i ask, since i am in one of those states, what is going to happen to the salt tax? >> if congress doesn't act, the individual tax rates jump up and

the salt deduction, the state and local tax deduction, that cap goes away. a lot of things happen and it's a complicated situation and will be hard for people to predict how their taxes change, because the child tax credit shrinks more than it has, and on the third and fourth hand the standard deduction shrinks back again, and there will be pushes and pulls on peoples' tax bills in every direction. >> finally, i don't know -- if you watch, carried interest, it's one of the only things in the tax code to me makes literally no sense and i think it's inarguable. what do you think happens to that? >> i think there's a huge battle

and a lot of lobbying money gets spent and then nothing changes because it seems to be the way congress likes it, to keep it as a lobbying issue. >> natasha? >> i am more optimistic. you can't defend carried interest. there's no way. it's $10 billion over the decade, but it's not the hugest money but it's a set of provisions that has to be addressed. it's crazy. >> donald trump said he didn't like it. >> you can't find anybody to defend it outside of the lobbying community where there's a lot of energy. >> kyrsten sinema can defend it, but she won't be on the job. >> donald trump says a lot of things. >> we will see. thank you both. appreciate it. >> you are welcome. when we come back, an automaker directly impacted by the baltimore port closure.

the ceo of mazda motor corporation, what he sees from the ev demand to the supply chain issues. "squawk box" will be right back. this is "realtime insights." i am here with the chief commercial officer with ey consulting principal. what are you doing at dow to improve the overall experience? >> we are one of the foundational supplies to almost every critical product you use in your life today, so we have

to get it right on delivering that on time and we are constantly listening to the customers and trying to change our processes so we can more predictably serve them as they need. >> how are you seeing this benefit your customers? >> the critical thing is confidence they have that they willhave product available when they need it, and the keys is using digital tools so customers can get realtime order confirmation. >> how are you working with other b 2 b companies? >> everything from identifying their data and turning that data into opportunities, new products, new services, to harnessing the power of ai to turn those opportunities into actions. >> jay, dan, thank you so much for sharing your insights. >> thank you.

welcome back to "squawk." >> an update now on the collapse of the key bridge. it's expected to take weeks to remove the containers and tow the ship and open the port of baltimore. they are want to go restore access to the port by the end of may. we will see if they can meet that deadline. japanese automaker mazda is one of the companies feeling the impacts of the baltimore port closure, and joining us is

masahiro moro, the president and ceo of mazda motor corporation thank you for being here. >> thank you for having me. >> let's start with the baltimore port, because it's in the news. >> first of all, our thoughts go out to those who are -- you know, who are heavily affected by this tragic incident, and we would also like to extend our sincere gratitude to everyone who has been working tirelessly on the recovery efforts. really appreciate it. we have used the baltimore port for a long time. it's the biggest port for us. our local team has been working closely with the port of baltimore to understand the long-term impact. in the meantime, we have found nearby points, and we need to go

to another port temporarily to minimize the delay in delivery to customers, and we will come back to the baltimore port once operation resumed. >> how big of an impact will it have on your financials? the u.s. is a pretty important market? >> absolutely. baltimore is the biggest port for us for the east coast side. right now we have inventory on the ground and it's about to arrive at a nearby port. i don't expect a big impact right now, and we are quickly shifting our delivery route, and i don't expect a big impact right now. >> let's talk a little bit about mazda, because in the first three months of the fiscal year,

your orders -- global sales volume was up 17,000, and you're up 83% in terms of the earnings from a year earlier, and a big part of that is in the united states. what is happening? what caused that huge increase? >> there's two parts. one is we have been working on drastic network restructuring for many years. when i was in the u.s. for six years, we were working to get our dealer partners to rebuild dealer facilities, and they are really engaged to focusing on brand value. that's one part. the second part is products that are very successful. we introduced 690 and about to produce 670. last five or six years, our

revenue has gone up $8,000. >> one of the things you said in the news at the end of last year, ev adoption is difficult and it's hard to see how consumers are going to get to that point and as a result you are changing some of your strategies and pushing off the pure electrification for things like hybrids. what is happening around the u.s. market and around the world? >> the ev adoption pace is slow right now, and our approach has been we provide a hybrid and ev, so we expect the individual needs and lifestyles, and i think it's a well-received strategy. we are a large product, like a

690, 670, and 650, and they all have hybrids. so our approach is very prudent, and consumers is everything, the starting point for us. >> i have been of the opinion you can't force things down the consumer's throat. >> freedom of choice is important. >> there are standards in the united states that require massive amounts of fleets to be electric in years coming up. do you think those standards will be met or are they too difficult because consumers don't want them? >> we focus on actual demand, and the consumer comes first. you have to find out in a way to deal with, and we put the customer at the center of everythingwe do. that's our business philosophy. >> what are the biggest challenges right now in terms of the global supply chain or

regulations or other issues you see. what are the things you are working hardest on? >> the last couple of years, semi conductor shortages are a big issue. right now logistics is a big challenge for us. there's a geopolitical risk out there, and the truck shortage and a number of challenges for the logistics side. the supply chain is another big challenge for us. >> we want to thank you very much for being with us today. we appreciate your time. >> thank you so much. >> thank you. coming up, japan's prime minister set to sreuz the white house. the u.s. ambassador to japan, rahm emanuel, will join us more with the key items between the two nations. in the meantime, a soft landing, hard landing or no landing? we will get a preview ahead of tomorrow's key inflation data. "squawk box" returns after this.

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tomorrow, president biden set to host the japanese prime minister for an official visit to the white house. the first such visit by a japanese prime minister in nearly ten years. for some insights on what we might expect from the significant diplomatic summit, i want to bring in rahm emanuel. nice to see you, it's been too long. help us understand what you think are the most significant issues between these two countries right now. >> well, first of all, this comes at a historic moment. if the last 60 years were defined by alliance protection, the next 60 are going to be defined by alliance projection. japan has done a series of major changes in the defense posture, increasing budget from 1% to 2%, becoming the third largest military, taking off the cap on defense technology exports, normalizing relationships with south korea. is we're now also making a series of fundamental changes from a hub and spoke system with bilateral relationships with

multiple countries in the region, to a lattice-like architecture, strategic architecture. we're bringing coalitions of countries together. like you just saw the other day, australia, japan, the united states, and philippines doing a naval exercise. at the end of this visit on thursday, you're going to have a major significant first-time ever, the leaders of the united states, japan, and the philippines coming together for an historic trilateral relationship. that combination of changes in both countries will lead to a series of actions that will change the kind of cooperation and the level of deterrence, both diplomatically, development wise, as well as on the defense side. on the defense side, they've made japan have a new command and control center, a joint center. we're going to fundamentally change the way we have a posture there, so we can do a better coordination with japan and make the most of the efforts of bringing deterrence to the theater. the second area, now that japan is willing to do defense technology exports, is we're

going to have a military industrial consort to look 180 degrees, what we can co-license and co-produce together, because one of the big challengeswe have is our military industrial base is stretched thin, and japan's has never been on the field. that's going to be an additional benefit, so we can fulfill that effort. and also, in the area of ai research, as well as in science and cooperation between nasa and jacksa, japan is a major science spatial partner for us in the exploration of lunar area. >> let me ask you this, janet yellen just spent time in china, and we have talked about having this sort of, i don't know, frenemy relationship with china, where we say we want to be friends in some ways, and we say we want to be enemies in others. this is a huge impact on japan, to be honest, and the question is whether these mixed messages, whether you can be both. whether you really can be a frenemy. >> here's what i think is

fundamental. the united states will say, look, you want to have a strategic competition, we're fine. but if you're going to continue to adopt the relationship of being a strategic adversary, these are going to be the consequences and the steps we're going to be taking. i think that's exactly how you should approach it. china basically has spent a decade of intellectual property, economic espionage, take the look of semiconductors. asml is obviously a dutch company. there's tokyo eelectron in can that are dutch companies. tokyo electron doesn't do that. canon doesn't to that. so either we're going to be strategic competitors or strategic adversaries. google just discovered in the ai space that china was stealing trade secrets. you can't have an economic competition where stealing and cheating are norm and accepted. >> the question is, if that is the case, then the answer is

isn't, i want to be your friend, the answer is, i can't be your friend at all. >> the answer is exactly before this goes any further is making a choice. that's why it was so weird to have u.s. business leaders in china applauding the leadership of the prc, having all had their -- i can't tell you as chief of staff how many of those individuals were talking about trade secrets being stolen or being forced to hand over all the family jewels so they can get access to the market. and yet, china is discovered and by our own fbi and intelligence agencies, actually spreading misinformation in the united states. >> you're making the argument against doing business with china. >> i'm making the argument that you're very clear with china. and the fact is that you'll continue down that road, here are going to be the consequences. this is what you do before you take this next step. >> i agree with you 100%. >> number two, let me just ask,

what does that mean for american businesses. american businesses can't go and do that. a ceo can't go and say, the administration has to do that. >> that's right. and the united states has to be clear with u.s. businesses. we understand, that's a market. they want our capital. now, here's the strategic import. there are three chinas, not one. there's a china that's at the core between the prc and the chinese people that want calm and it's rattling really hard, because they have capital fleeing and they have people fleeing. number two is what's in the region, what i call the conflict. they're in conflict with india, they're in conflict with the philippines, they're in conflict with japan. then there's the outer ring where they want to say to the rest of the world, there's a win-win and to charm china. the three cs. charm, conflict, and calm. and there's a tension in each one of those. and in china, the basic point is their economy for a series of bad editions they made in years past and even currently is on the back heel. that back heel is one of the greatest pieces of deterrence.

and to the american business, here's a china that -- remember this. and i would say this to every leader in the united states, your research and development is zoo s subsidized by the united states taxpayers. we give you a taxpayer so you can do that. you cannot allow economic espionage to go because you want access to a market. you're part of an economic strategy, and i would say to the united states, i would say, be very clear, also, not chinese leaders. you want -- you want international capital you want actual business leaders investing and growing your economy, you cannot cheat and steal the way you did for the last 10 and 20 years. can't happen. >> that makes sense, but you're dealing with a lot of different united states, too. i can think of flyers or five different united states. one is, we want trade. a second is, we want cheap imports, for things that are cheap for consumers. a third is, we want to make sure that we have peace and safety. a fourth is, we want to make sure taiwan is free. how do we take all of those

things and kind of add them up? what should be the driving goal in everything we talk to, because we talk to so many people on the show who say, yeah, we just need talk to the chinese and make it easier. the other is, we need to ban tiktok. what's the u.s. -- >> my view is creating, one is redefine what deterrence is. on this show, as well as other shows, and in the united states just public debate, we think of deterrence is what the ronald reagan aircraft carrier brings. i would tell you, when the president brought the leaders of japan and korea together at camp david in august, an historic trilateral meeting, that's deterrence. when the united states economy is growing at a pace and china shrinking -- not growing at the pace it used to, and the spread between the united states and china is growing. that's deterrence. when, in fact, there's capital fleeing and chinese middle class families and others are fleeing. that's deterrence. having a more global approach and saying there's a cost to the choices you're making. now, you took hundreds of

millions of people out of poverty, but you didn't do it. the international system you were a part of allowed you to do it. now, you want to turn your back on it, and you think raw exercise of power and intellectual property theft and economic espionage is the way you're going to go, we're not participating in it. and that's exactly clear, not just to the united states. brazil, a member of brics, just told china, i'm taking you to wto. thailand did that. the world is organized. the principle strategy with china, their entire strategy, their most persistent and economic strategy is coercion to achieve political hends. their job is to isolate in china, floin philippines. we're all coming together, you'll be the isolated party. whether you participate in a system that helps you raise party, or eliminate poverty in your country, bringing people into the middle class, or return, which is what you're doing to your youth with a 30% unemployment. off choice to make and we're ready to work with you and have

you be part of a system that helped you grow economically, or you can turn your back on it. but when you do that, you're the isolated party and there are cost and consequences, which result in a lost generation of chinese youth. you make the choice. >> zoshambassador, before you g it's very poll that you and this administration will not be this administration at the end of this year. i'm so curious, as an ambassador to japan and speakingto the international community, how you discuss that very topic and how you think they perceive us and they perceive you? >> well, my joke is at least i've been there two years, and for the japanese people, it's felt like 20. so here's where i think it is, and this is an example of going back to the original question. there's two competing visions between china and the united states. china, this is our backyard. america's a declining power. you either get in line or we'll give you like what we're doing

floo philippines. our basic position is, you can bet long on america. and when you look at the trilateral relationship that the president brought together in august, in camp david. you look at the trilateral meeting we'll have, you look at the state visit, where japan has made major changes to be a full partner, each day america is gaining and china's strategy of basically this is our neighborhood, get out of here, that is declining, because the people of the indopacific, whether that's sing por, new zealand, korea, japan, philippines, even vietnam and other countries that may not be fully there, they want an america that doesn't allow china to be unanchored in that area. and then i would also say that our -- what we're doing today is putting the roots down into the system of america's lattice-like system that has changed from a hub and spoke system. the people of the indopacific, the countries of the indopacific, the leaders of the

indopacific want all of america, our development, our economic system -- >> ambassador, i get. my question is if former president trump becomes the president of the country, does all of this work get undone? do you think it persists? >> yes and no. that's the simple truth. some of this is embedded, and having worked for three presidents, and seeing the leadership of president biden, what happened at camp david is when a -- when people not only trust america, but they trust the leader. they'll go past the minimum. they'll stretch themselves politically to achieve something because of america's leadership. and president biden's personal touch to that allowed the prime minister and the president to both japan and korea, to not do just enough, but to do something historic. and so, when you ask me, the answer isn't a yes or a no, the answer is, it's complicated, and the fact that some of it can't be undone easily.

on the other hand, the intangible element can be and it starts to unravel. nothing is ever permanent. today, we are in a better place and china is isolated. and it's not because it just flipped a switch, chinese made a series of mistakes and president biden and the biden administration has made the most of those mistakes to america's strategic advantage, where our deterrence today at least has some credibility to it. >> ambassador, i want to thank you for joining us. always good to see you. >> thank you. >> appreciate it. it is just after 8:00 a.m. on the east coast. and you're watching "squawk box" right here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin. joe is out this week. we've been watching the u.s. equity futures and so far, things are actually picking up a bit. dow futures up by 50 points. the s&p futures are up by 10. the nasdaq up by 53. if you're keeping track of the treasury yields, which a lot of people have been doing for a long time, there is a little bit of weakness with the yields this morning. slightly slower than what we have seen in recent sessions. ten-year right now is below

4.4%. it's sitting at 438. you have the two-year sitting at 476. and we do have cpi that's due tomorrow. that inflation number is very important. the fed guessing game continues all around it, as that report could dim the outlook for future cuts. for more on this, we'll bring in former kansas city fed president, thomas hoenig. he's now a distinguished senior fellow with george mason universiti universitiy mercada center. let's first get your thoughts on what you think that inflation read is going to be, because there's a lot rigding on it. >> it's hard to know. people are projecting that inflation will stay near the -- the cbi near the 3% number. whether it comes down or not is a big question mark. no one knows, i don't. but i think there's a lot of reasons to expect it's going to remain evaluated. . and if you start with the real economy, as we've been talking about, the economy is doing

relatively well. we just saw the jobs number, we saw the manufacturing index number is strong, greater than 50%. and we have also seen the commodity markets pick up, not only in the united states are we seeing this improvement, which has been our track record, but around the world. so that means, there's a lot of demand being, i think, created in the stronger economy. and then on the financial side of this, you have basically the banking industry is being backstopped in terms of liquidity issues, around the fed, the fed has a lot of liquidity out there, it's excess reserves are around 3.5 trillion. there's a lot of liquidity still available in the market and i think that's also a factor stimulating. so it's going to be, i think, real questionable whether the fed can lower interest rates as it wishes. we'll see what tomorrow's cpi number goes. but one final point i would make

on this, that, you know, right now, the fed's -- the so-called fed funds rate is near 5.5%. and a lot of people, including myself, think that so-called real equilibrium interest rate is around 2%. you think about that and you think of inflation, your fed funds rate is 5.5, take 3% out of that, you're 2.5% real rates. you're really not a particularly tight monetary policy right now. so i think there's a lot of reasons for the fed to think carefully about that next move, influenced importantly by the inflation numbers that come out, but also just about how well the economy and the u.s. and now picking up globally is. so they have a big challenge ahead of them. and i'm not sure that interest rate cuts necessarily should be on the table, but we'll see. >> it's really weird. i mean, neel kashkari, who i've always thought of as being

pretty dovish is saying he doesn't anticipate any cuts this year. and former st. louis fed president, bullard, who's saying, he still thinks it's three cuts for this year. how do you come out with such a diverse outcomes oopinions, and people flipping the roles of what you would have traditionally expected, because bullard's always been pretty hawkish. >> that's a very good question. i don't know what jim bullard's thinking is. and i am surprised by neil, but i think neil's comments make a little more sense given how strong the economy is and how much liquidity is,in the u.s. economy. and globally, for that matter. so maybe jim is thinking that, we are going to see a slowdown, we are going to see inflation numbers, they've come down, maybe they're going to continue. what i think about it is, when you think of where interest rates are and where they should be, they're not that far off the mark, as long as the banking industry doesn't run into

difficulty. and i think the fed is determined to make sure liquidity problems don't enter the banking industry, which gives you a good case to leave things where they are. and that's where neil is advocating, it appears. >> i will say, bullard did predicate it with the same thing that you just said. that's on the assumption that inflation does continue on a downward trajectory. i guess, how confident are you in the data that we're getting, we're saying we're so data-dependent right now, but one month's data can be pretty useless or kind of something that gets revised away later. if you're looking at three months where inflation runs hotter than expected, when jobs run hotter than expected, does that make you think there's no way a rate cut should come, if that number is hotter than expected? >> i think right now, even without looking at those numbers coming forward, if you look at the conditions in the u.s. economy and globally, there's no real case for cutting rates. we're near equilequilibrium, yo

wouldn't want to cut them very much if at all, because the fact is real interstate interest rat little more than 2% and that's probably where they belong, given how strong the world economy and the u.s. economy is. we'll look at the data, they're data dependent, but in the long-term, in terms of this, i think where we are is probably a pretty good place, watching the banking industry carefully, and making sure that we know where our liquidity is, and that the liquidity that the fed's continues to supply. and if that remains strong, i think it would be hard to justify a rate cut. >> okay. thomas, we will leave it there. we appreciate you joining us today. and we'll see you again soon. >> good to talk to you. coming up, growing the nation's chip economy. lael brainerd will join us. "squawk box" retur aerhi nsft ts.

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i want to get a look at today's money movers with dom chu. >> let's look at the health care side of things. we have shares of pfizer, which are right now fractionally higher, just about a half a percent, around 60,000 shares of volume. the pharmaceutical giant said that its vaccine targeti ing rs showed promising results in a trial at how effective it could

be for higher risk adults under the age of 60. abrisvo is currently approved in other countries for those 60 and older and expectant mothers. now they're looking to apply for expanded use approval. pfizer shares catching a bid there. and keeping an eye on rtx, lockheed martin, general dynamics, northrop grumman and others. most are notably lower in the pre-market trade. one of the reasons why is their peer companies across the atl atlantic. analysts said they're not recommending european defense stocks given a sharp run over the last year and challenging valuation premiums. weakness in companies like ryan metal in germany, swab in sweden, and leonardo in italy is contributing to some of the downside in some of america's biggest defense contractors. and we'll end with shares of freeport mcmoran, they're higher

by roughly 3% or so. 65,000 shares of volume. helped along by another record high in gold prices, but also because analysts at bank of america have upped the rating from a buy to a neutral. given what they think is better free cash flow trends, also leverage for those rising copper and gold prices. for more on that and other top analyst calls of the day, head over to cnbc.com/pro. subscribers there can get the full story. i'll send things back over to you. >> dom, thank you for that. a lot more coming up right after this. congress getting back to business, the future of tiktok on the agenda. will the senate demand a sale of the chinese-owned social media titan in the name of national security? we get into the tiktok politics with a trump insider right after this. you do not want to go anywhere. ok currently has 2 million tikt followers. "squawk box" coming right back after this.

welcome back to "squawk box." the futures are picking up a little bit this morning. dow futures now indicated up close to 70 points. nasdaq futures up by 75. and you have the s&p up by about 15. >> okay, with the senate back in

session, republican leader mitch mcconnell is calling for action on tiktok. >> today, 170 million americans are active users of a social media platform that the people's republic of china treats as a tool of surveillance and of propaganda. this is the matter that deserves congress' urgent attention. >> joining us right now is john mckenzie. he's the former director of the white house presidential personnel office, during the trump administration. he's a senior fellow at the heritage foundation, and the cofounder of a dating app for conservatives that has more than 2 million followers on tiktok. so, who better to talk to this and about so many other things, john, nice to see you. you are a tiktok star. how worried are you about the national security issues around tiktok. >> i like you said, 170 million

americans, we love tiktok. obviously, it's fun. my sister and i share videos, we laugh until we cry. it's been great for our business. we've gone from 0 to 2 million -- >> really on the back of tiktok. >> really, more than anything, because tiktok lets a person without any following go viral. it's very rare now. you know, you can't do that on youtube and older platforms. people are discovering our app through tiktok. that would have found it no other way. that's not why i'm against the bill. i'm against the bill because it's new censorship power for the government. >> interesting. what about the national security concerns. do you have one? >> so the only two things they say are chinese propaganda within which no one has ever seen. there's been no instance of that, or american user data. but american user data, it's all stored in america with oracle, an american company. so are they scared of it somehow getting to china? well, why don't we ban the sale of american data to china. american companies do that. >> what about the idea that this prescribe prospective. which is to say, maybe today, it

is not a national security threat insofar as it is being misused today, but potentially if the chinese government were to want to use it prospectively, in the future, for some kind of -- to create a national security threat, or -- and some people use this as an example, the power of it. when tiktok went and posted a full screen the day that they were worried that they were going to be banned, they put up a full screen, and all of these people started calling their congress people. by the way, i think they have every right to do that. we free speech in america. there are some people thabz, look at the power of this thing. if these guys wanted to flip a switch, boy, could they influence america. >> it is incredibly powerful, that's why they want to ban it. it's news and a narrative they can't control. the chinese government doesn't own tiktok. bytedance does. that's not even a chinese company. that's a global company. >> senator ted cruz was and he said he had big concerns about

it, because of the algorithm is different and puts things out there. he went through cases of uighurs not being mentioned nearly as frequently on other social networks. went through issue after issue, where they are very much pushed on tiktok and not only other social media apps. and his concern is that. ly i will also say, anybody who has access to the highest level of defense issues and concerns around this, has come away and said this. and that's republicans and democrats alike. i don't have access to that. i know you were in the white house, but you probably don't have the highest level security either. those senator wos who do all wa away. >> the tiktok algorithm feeds you things off of your own interests. it doesn't promote anything, it doesn't put out its own content. creators create things, they share videos, hard stop. it's a younger audience, which is why boom vers have a hard ti understanding this -- >> i'm not a boomer, first of

all -- >> ted cruz might be. >> why is there less pro-israel content? the younger generation is less pro-israel. that might be good or bad or whatever, but it's feeding public opinion. it's not a top of mind issue for most americans. that's why you don't see it. >> but why is it so different from other social media apps, because i thought they were doing the same thing? >> it's not different. >> that's what ted cruz said. >> all of these studies are based on hashtags. they say, oh, tiktok promotes suicide because the hashtag i'm done -- yes, ted cruz could be wrong. the hashtag "i'm done" is a suicide hashtag. like, i say that every day. these studies are all crazy. they're ridiculous. it's not controlled by china. >> it's like gaslighting. >> okay, truth social, what do you think? you investing in truth social? >> am i investing in it? >> would you invest? >> i like it.

i think it's a great platform. obviously, everyone is there to see what donald trump skays and it's exciting. >> we have a dating app, that's your business -- >> and we have a truth social account. >> because the business is putting conservatives -- i don't know, conservatives, republicans? together. that's what i would assume truth social would be a big part of that. >> truth social has an older demographic, and that's why we're use tiktok, we're targeting a younger demographic. we're targeting a new conservative, a cultural conservative. someone that might not understand economic policy or follow twitter or fox news, but know that culturally things are weird in the country. they're being told that men can get pregnant. that's why our videos resonate, because we're calling out how crazy things are. >> um, do you -- so truth social as an investment, not for you? >> i don't really invest like that. but sure, i would if i did. >> you look at the valuation of it, you run a business, the

company is bringing in $4 million in revenue. do you say to yourself, this $4 billion -- >> i really have no idea. i think the upside is that it's an election year, you have donald trump, the most iconic man in the world exclusively on one platform. what's the value add on that? i don't know. probably pretty high. >> the other thing i wanted to ask you, just actually about sort of the future of the country, but also maybe, even your own experience, there were a lot of very talented people who went into the trump administration last time. some of who then left. i'm curious what you think, if, in fact, he wins again, and the polls suggest that he will, if the election were today, what kind of people you think he's going to be able to surround himself with? >> i think he'll get the best people. i think we have junior people in the first part of the administration, the first term, that can now occupy more senior roles, we know who they are. and project 2025 at heritage has

been doing local and national news, gotten a ton of attention, and got a lot of resumes and good people already, and that's going to grow throughout the year, especially when he wins in november. we'll get inundated, teach them how to be effective political appointees and hit the ground running. >> what do you think of his take on tiktok. we talked to him about when he called into the probroadcast a couple of weeks go. he was not taking a real position. even though he had a position, when he was the president. >> he's 100% correct that this enables google and facebook to dominate, right? that's who started this narrative, 2019, mark zuckerberg said, he was getting a ton of heat and said, actually, you should all be worried about tiktok. you know, chuina, and all the republicans fell for it. okay, the trump administration made some demands and tiktok exceeded them, right? there's a third party oversight over the algorithm, all the data stored with oracle, what else do you want? do you want to stop american data going to china? make a law that that's illegal.

that's it. you know? you don't need this new power to censor americans. >> one of the things i wanted to read you, i thought it was fascinating, when you walked in the white house as director of presidential personnel, jonathan swann wrote about your role at the time and making sweeping staff changes, and he said the following. he said, "this campaign helmed by trump's loyalty enforce," -- that's what he called you -- "a 30-year-old former body man who now runs hiring for the government, is part of the systemic purging of reassigning of those deemed insufficiently supportive of trump." what do you think of that, and what do you think of what americans think want both sides to come together? >> i think our understanding is the executive should have full control of the executive branch. his checks and balances is within other branches, not

within his branch. everyone working for him as a political appointee should be onboard with the agenda. if you're not, simply don't work there. i think people should be optimistic about what we can accomplish in a second term based on what we've learned the first time and have everyone rowing in the same direction. >> it was a little more than that. he went on to say that you had become such a powerful figure in the west wing by late 2020, that one senior staffer described youz as effectively the deputy president, as many advisers were thwarting his wishes, because they considered them dangerous or too illegal, trump enlisted mcentee to do things that other senior aides would not. what do you say to that criticism? >> this was this myth that donald trump was surrounded by yes men and he was surrounded by no men, and his instincts were correct. especially if you're coming from an america first perspective, if you want to be a hardliner on immigration or bring the troops home from abroad or renegotiate trade, there's no one better. you need people aligned with that vision. >> i guess there's a question about with whether you want

people who are aligned with the broad vision, but folks who are willing to say, you know what, not a good idea? right? you do want people with different perspectives around the table, hopefully to make your own ideas better to the extent that you listen to them. >> yeah. and i think actually donald trump is unique in that he would listen to anyone, right? if something comes on his desk, he'll ask anyone in the room what they think about it and make his own decision. i think that's what makes his so debris. whether it's the valet or the national security adviser, he wants to know their opinion. i think he always asks people their opinion. i think assist healthy way to do things. >> what's the chance you return to the white house if he returns to the white house? >> of course, i would be honored. i don't know what capacity they would need me. if they did, i would. right now, i'm totally focused on my dating app, the right stuff, for skconservatives and businesses and growing my brand. >> we appreciate you joining us this morning. really appreciate it. >> thank you for coming in.

r still to come lael brainard will join us and a reminder, as we thaed to a break, you can get the best of "squawk box" in our daily podcast. follow squawk pod on your favorite podcast app and listen anytime. we'll be right back.

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welcome back to "squawk box," everybody. the futures this morning have improved over the last couple of hours. we're off the very highs that we said a little bit ago. the dow still indicated up by about 50 points. the you have the s&p indicated up by 13 and the nasdaq up by 66. google kicking off its cloud next conference today. the company is expanding its in-house chip efforts and introducing new whhardware withn arm-based data processor and a new ai chip. the chip will be focused on powering search and ai-driven services in an effort to reduce

google's reliance on chip makers. further expanding its cloud offering. shares of google this morning are up by about 1.2%. when we come back, former s.e.c. chair jay clayton will join us to weigh in on a range of topics, including the biden administration's stance on china. that is straight ahead. right now, though, as we head to a break, let's check out the price of cold. it's up about 17% for the year. you can see right now, it's up by $16, $23.67. "squawk box" will be right back. it should be called wiffle tennis. pickle! yeah, aw! whoo! ♪♪ these guys are intense. we got nothing to worry about. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? got him. good game. thanks for coming to our clinic, first one's free.

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welcome back to "squawk box." yesterday, treasury secretary janet yellen wrapping up that big visit to china today. president biden is hosting the japanese prime minister at the white house. earlier this orning, we spoke with the u.s. ambassador to japan, rahm emanuel, and we talked about the issue of china. here's what he had to say. >> i would say be very clear, also to the chinese leaders. you want international capital. you want actual business leaders investing in growing your economy. you cannot cheat and steal the way you did for the last 10 and 20 years. can't happen! >> joining us right now is former s.e.c. chairman and cnbc contributor, jake clayton.

you've testified in front of the select committee before on these issues. can you be a frenemy in this environment? is that too far? >> well, we are. right? we are frenemies right now. andjanet yellen is just returning from -- >> she's saying to them, we need to be your friend. and we have a whole bunch of other people saying, actually, these folks are our enemies. >> and i want to be fair, i think they're both right. what rahm emanuel is saying, and i thought that was one of the most cogent and comprehensive discussions of where we stand with china that i've heard. i applaud, very honest, candid. talked about coercion and theft. and he's saying, look, we need to reset the table and secretary yellin is saying, we need to reset the table, but we also need each other right now. no one wants -- >> the question we keep asking is, we need to have both. can you really do that? if you tell me you hate me and

yet you want to be my the friend, it's very hard to actually think that could be true. >> right! and the question that we should be asking is how do we get from where we are now, we continue to make a bunch of short-term frenemy-type decisions to a better place. and if that better place is a decoupling or that better place is fair competition -- >> i thought rahm made a very good point about some of the changes, not just bilateral, but trilateral, putting together a lattice work of powerful allies to stop and say "no," we're not going to go along with the way you're kind of dictating things. >> i thought it was a terrific explanation. he was basically saying that china has used economic coercion to continue to facilitate the status quo. you know, the way that they have been playing this competition game. he says, we need to combat coercion with coercion. we can't just expect -- we have expected too long that they would change their tactics.

>> and we have been the more mature party for too long. i thought it was terrific, let's get a lattice work together, use our own economic power of that group to say, if you want to be part of a global trade, a global fair competition. you have got to change. >> let's continue this on the tiktok front, since that is what we were talking aboutbefore the break. where do you land at this point on tiktok. is tiktok genuinely a national security threat? and is it a threat today, or is it a prospective threat in the future and should there be a distinction? >> look, i'm not qualified to say whether tiktok -- what level of national security threat tiktok is. what do we know about media, all sorts of access to a citizenry throughout history, that countries are appropriately worried that it will be manipulated. we have -- look, we have the first amendment, we take much more risk --

>> but that's perspective, first of all. >> right. >> meaning, what you're talking about is a prospective threat, not a current. i think this is important. >> no, no, i'm saying, even today, okay, because of the openness of our society, because of the open access to all sorts of social media platforms, we run a risk of foreign influence. that's 100% true. no one can doubt that. the question you're asking is, is tiktok a more acute threat to national security than any of the other platforms and people's access. that's, i think, the question that people should be asking, if the answer is yes and it's materially more acute, we have to do something about that. >> okay, different question, as we're talking about social media, let's go to "x" and elon muck, someone who you brought a case against, by the way, when you were the head of the s.e.c. a brazil judge has now opened an inquiry into musk after his refusal to block these accounts

on "x," that he's saying should be allowed in under free speech laws that he believes are in truth in brazil, but he believes that the judge has made the wrong decision. at the same time, he's also said over the years that he would, you know, comply with local laws. what say you? >> well, let's go to the case at the s.e.c., which is fascinating, because what we did at the s.e.c., and people use this euphemism, the twitter sitter, we said, that when you're communicating with respect to tesla, and with your investors, we actually want a process the in place to ensure that, you know, the information is accurate, fair, and complete, like it should be when you're communicating. when we did that, i can say that i was actually, i was a bit nervous. because right there is free speech to the public, and the first amendment is such an important thing in america. you know, but that's commercial speech, it was a time, place, and manner, it wasn't a

restriction on what he was saying, it was a restriction on process. go to brazil, what are they saying? they're saying, you know what, we don't want to hear those views. you have to block them. that's a big step. and you know, i think he's right to say, look, that's a very different place to be than an open forum. >> okay, so one of the things that's fascinating about this, and becky and i were talking about it just yesterday is, if this was taking place in china. and by the way, i applaud him on the free speech stuff, both here in the u.s., and to some degree, maybe to a lot degree, in brazil. but what's interesting is, is he able to do that because the business that he has in brazil is not that big? meaning, if this was china, or is the issue that brazil has free speech -- supposed to be what somewhat of a democracy and that's different than china and we shouldn't conflate these two types of issues. >> see what i mean? and you probably had one of the

best interviews ever with him. i think you should ask him next time you talk to him whether he treats china different from brazil. >> it's an is interesting question. >> let me make a point on this. we're having this issue right now in the united states. the supreme court just heard a case on whether social media platforms were unduly influenced by the executive branch. and the executive branch agencies. the questions from the justices were such a good civics lesson, because of course if you're in the white house, you'll have lael brainard on. she's going to pitch their view, wants journalists to pick up their view. that's what i would say is appropriate dialogue. where does appropriate dialogue become a threat? and coercion around speech on these platforms? we're going to be facing that issue for years to come. >> that's an excellent point. and you're right, it's -- but at the same time, should the administration not be able to contact. >> it's really weird, the justices were great. both sides that you think of, there was no real partisanship there. it was like, wait a second, it's

really getting down to the -- >> we need to grapple with this. >> thank you for coming in this morning. nice see you at the table. >> thank you. >> thank you. when we come back, a lot more -- can you name that stock? it's a member of the magnificent seven. it's near an all-time high and analysts feel it still has room unto r. we'll unveil the name when "squawk box" comes right back. can you guess? adapts to different oxygen levels and starved it. i am here because they switched off egfr gene mutation and stopped the growth of tumor cells. there's a place that's making one advanced cancer discovery after another for 75 years. i am here... i am here.... because of dana-farber. what we do here changes lives everywhere. i am here.

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welcome back to "squawk box." the mystery of the magnificent seven stock that is back within striking distance and its all-time high is, can you guess, amazon? and wall street showing no signs of calling a top for the ecommerce and tech giant. kate rooney joins us from san francisco with more on amazon this morning. good morning. >> hey, andrew, good morning. yeah, wall street has been overwhelmingly positive on amazon. in the past two weeks, there's been a handful of price target increases and calls reaffirming amazon as one of the analyst's

highest conviction stocks. the target is $209. it's roughly 13.5 times above where amazon has been the trading, 95% of the firms out there have the equivalent of a buy rating with three holds and no sell ratings. as rbc put it in a note, amazon is one of the internet's largest true alpha dogs, thanks scale a e-commerce combined be its cloud business. the topic for morgan stanley, that firm laying out what it calls better cost to serve models. driving revenue there, clouded option hitting an inflection point and advertising potential for amazon. jefferies says there's still plenty to be excited about and plenty of runway ahead for amazon despite it nearly at an all-time high. very few mentions of ai as a driver for the stock. jefferies warns that amazon niece to improve ai ufrg to stay competitive. there are downside risks including aws revenue or margins

declining. the intense competition in cloud on the retail side plus any global economic slowdown. bark over to you. >> thank you for that report. still to come this morning, the biden administration granting billions to taiwan semiconductor to build its first u.s. hub in phoenix. national economic counselor director lael brainard will give us more on the deal. "squawk box" will be right back. go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. and sharpen your skills with an immersive online education crafted just for traders. all so you can trade brilliantly.

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taiwan semiconductor manufacturing will use some of its $6.8 u.s. billion grant to build the first u.s. hope in phoenix. joining us is lael brainard, the director of the white house's national economic council. lengths talk more about this, what it means for the country. >> this is a really important announcement by tsmc. it really means we're bringing leading edge semiconductor manufacturing to the united states that is in line with president biden's vision, and it's a new chapter for the american semiconductor industry. right now 90% of those leading edge chips tsmc manufacturers in taiwan, taiwan is an important supplier but now tsmc is committing the three fabs here in arizona. of course, they produce the

leading-edge chips that go into high-speed compute, machine learning, ai models and ev and av technologies. this is an incredibly important announcement for the future of high-tech in the united states. >> there have already been delays discussed with this for the schedules for production at those plans. one came when tsmc said it was going to push the timetable back because they couldn't find enough skilled workers. a second with delayed production for a second factory on the arizona site. when can we expect this to be up and running and make it so we're less reliant on chips manufactured in taiwan? >> well, as you know, these very large complex fabs require complicated construction schedules, but actually tsmc is

on track for the construction of these fabs. they anticipate having test wafers out of their first fab this quarter, production coming online next year, and then the second fab two years after that, and the third fab before the end of the decade. right now they're on track. and, again, really important to see not just the leading edge fabrication capacity in phoenix, but we're also seeing suppliers advance packaging, a whole ecosystem growing up around those commitments. >> when can we expect to have a reality of a chip supply chain ha is not so reliant? are you thinking 2028, 2030 or beyond? >> we're seeing already that next year that first fab will be producing advanced chips, and

the second one two years after that, the third before the end of the decade. so all of those will be producing leading-edge fab chips. of course, we recently had an intel commitment in this space as well. so there are multiple companies that are making those commitments. so we do anticipate seeing that production coming online actually over the next year, three years and then before the end of the decade. >> lael, there obviously are a lot of signs that the u.s. economy is really firing on all cylinders. if you looked at the jobs report last week, that was stronger than anticipated. the biggest issue of con sin has been inflation, and whether that continues to stay stubborn. we get a cpi number out tomorrow. what is your expectation for that number? what would it mean if it's a hotter number than economists have expected up to this point? >> what i would not do is overindex on one data point. if you look at the broader

picture, that jobs report was actually quite balanced, suggested we could see balanced expansion because, of course, labor force anticipation ticked up again oovps. we've seen a big expansion in the supply side of the economy. with regard to inflation, we've seen it come down by two-thirds. i anticipate we'll continue to see steady progress on inflation over coming months. but, of course, that's really important for american consumers. so we're going to keep our eye on that. i anticipate inflation will continue the remarkable progress that it's made. >> lael, we've been talking for the past couple days about this piece in the "wall street journal" that looks at the way people are polled about how they feel about the economy, yet how some of the data seems to be at odds with it. i wanted to ask you, when you look at inflation over the last 3.5 years, what you tell the

voter who legitimately feels, and the data would support their feeling, that their wages have been outstripped by inflation. >> so it is difficult for american consumers, and the president is very focussed on the fact that when you go into the grocery store, some of those prices went up, and although they are not rising any longer, they are higher than they were prepa prepandemic. so we're seeing, for instance, the price of a gallon of milk and the price of a dozen eggs coming down over the last year, but still up relative to prepandemic. we know from the data that the earnings wages have risen butch faster than inflation. so people actually have more purchasing power even with those price increases than they did prepandemic and they have more wealth even with those price increases. we have to keep fighting to

bring down the prices of health care where we are getting ins lins prices down, inhaler prices down, caps on drug prices as well as on things like groceries. >> lael, thank you for your time today. >> thank you. we've got just a couple seconds left. make sure you join us tomorrow. that's all i can say. "squawk on the street" begins right now. good tuesday morning. welcome to "squawk on the street." i'm carl quint neen yeah with david faber and jim cramer. futures near session highs as we await cpi tomorrow. ten-year back to 4.37. a prediction from elon musk who says ai will overtake human intelligence next year. >> also ahead, markets are