Transcripts For CNBC Squawk Box 20160616

News. It was down 3 . And remember this follows 3. 5 earlier in the week. The shanghai was down half a percent. We had a boj viewing party last night. You didnt make it. You look tired. We ordered sushi and got some red bull. Just to, you know, full effect. You are trending on start saying sushi and stuff like that. I dont want to get too stereotypical here. Well, you know. It is a safe zone. Since when . Im with becky. Since when. Lets look at the futures, they are indicated lower follows the first five day losing streak since february. When did you come one that though . That borders on a shtick for you this morning. A stick . You told me i wasnt allowed to use yiddish. So the mid western version of stick. I was up we had a viewing party. Lie. Coming one things now. Try good. Youre doing a stick. Because you i dont you really didnt stay up. No see, you aric making that up and you are going for a laugh. Ive learned a lot. Because i was going to pull away. You could get me. U. S. Stocks gave up gains after the Federal Reserve held rates unchanged but signalled a slower pace of Interest Rate hikes. Really . Slower . Shocking. Slower. How do you get slower . Is this a stick . Yes. And i told wilfred and sara this. Do you remember new math . There is a point. In geometry. There is a point in geometry. Two points, you connect them it. Makes a line. I know the answer and you know the answer to that too. The dots were meaningless. They werent real. Only one point in time we have no gonna be at 0. 5 still. What is the pace of rate increases so far when you have got one rate increase in nine years, what is the pace of that, other than glacial, other than not believing anything they say or not having any credibility whatsoever at. Steve leisman threw in the towel yesterday. I read that too. The fed kpacht icapitulating. Its over at one . At a quarter point the rate hike cycle is over. This is all very strange. I dont want to call it the new normal. I want to call it the Rinehart Rogoff idea is wrong. And now self inflicted. This actually eight years later. Long leverage. No its overregulation. Not doing the things necessary to get economies moving anymore. It is turning into also us being hampered by Global Growth. We could lead Global Growth. We are. Right were leading it under 2 . And they did this weird thing where they lowered their forecast so it averages out to 2 so they can still say hey were doing 2 . I mean, if you were cynical and we have Richard Fisher and hes not known to always be a poly anna. I think well get him to just say. They could have said or done a lot of things yesterday that made the lack of a rate hike yesterday feel like it wasnt the end of the end. We wont be japan because we know how do these things. Our bank clears things up quicker. Despite their best efforts this is what it looks like to me. This looks like were going to be here forever. Were never going to have negative rates here . I wouldnt bet on that, would you . I wouldnt bet on never. It is a better version of japan. Elevated version of japan. Lets tell you what is going on with the yield. It did tick back below 1. 6 following the feds announcement. Go out and get yourself a mortgage or refie today. In the meantime in the early european trading weve got why would they go up . How can it possibly go up now . Equity markets. The only thing going to go up now is gold. And you missed your opportunity. I missed my opportunity. Here we have ed arrows across the board. Five Straight Days. The fed is part of the problem. Definitely not part of the solution at this point. Okay. Well debate that but im also, i feel hampered because i cant use this. Stick. And other times searching and realize i cant use it. And you had an issue yesterday with wilfred yesterday trying to use i dont want to say the word because it is supposedly an epithet in another land. He used an epithet himself. So kind of cleared the way. Does it count if you vega is far or somethint or somethin. The air around the world. Take a look at crude moving lower there. Following government report that said u. S. Inventories fell last week. Less than half of the barrels expected. And quick as joe mentioned, he wished he had bought that well. Via com . Wished to buy gold. We were going to sumner still thinks that via com is gold. Theres gold. The dip is where you tried to buy but didnt get your act together in time. You need a special account to buy that. So mad at that. Right there too. There is a full slate of Economic Data on the days agenda. Weekly jobless claims. May Consumer Prices both out at 8 30 a. M. Eastern. Headline cpi is forecast to rise on higher gas prices. Well see whether the cpi is also hotter than a time square rolex at like yesterday. And dirtier than a mouth of a pos some. You needed more texas. We had dan rather on yesterday. We had fun. And he had fun. Also look for current account figures for the first quarter. And 10 00 a. M. A National Association of Home Builders month survey. Earnings front, kroger and rite aid are going to report. Earnings somebody has been over a month. Stragglers. And oracle and smith and wesson after the close. And in political news, speaking of wopder if they did on this purpose . Nder if the did on this purpose . Just did smith and wesson earnings. And yesterday democrats had a 17 hour fill bust they are finally ended early this morning after Republican Party leaders reportedly agreed to allow votes on two proposed gun control measures and in his statement senator cris murphy that a deal who whether the. And whether to expand background checks to gun shows and internet sales. Ask yourself. What can you do to make sure that orlando or sandy hook never, ever happens again. With deep gratitude to all of those who have endured this very very late night, i yield the floor. Over the course of a 14 hour and 50 minute filibuster murphy was joined by other senators, including blumenthal and booker. And i guess the other part of this story is that donald trump has at least shown a glimmer of and this is i. Im very curious where you are on this. Well i would have thought other liberals would have said wow this guy might be pragmatic. Maybe this guy will do things right . I thought that i actually was very you can imagine how the nra after endorsing him how mad they are now. But the daily news deciding that trumps plan is actually groveling. Come up with some ideas that he would like to go along with some of these restrictions. That is what i mean. And that is a pretty purist sort of ideological i understand where it comes from because everybody deserves due process. You cant just take rights away. But i also understand if the guy cant fly and if hes on a terrorist watch list and just to put a fine point, what trump has suggested thus far is he would be prepared to make sure people on the terrorist watch list cant buy guns. Come prepared to understand what im talking about. Dont need to surmise. And the other component is he was not prepared, unlike bill oreilly. In terms of the assault weapons and the size of the magazine. Hes not inclined to support who knows . At least thus far. Because there are purists and then there are people that at least would listen. And also he said there are some indications that there are other parts of the gop. Not maybe the guys in the most there are two bills we should say also. We showed that one. But there is the other one as well. I just, you know. It is anything now. I dont want the left i think you should focus on that paper and the hufgten pofi post. Great op ed about donald trump as a businessman. Well just try to explain the phenomenon in how author today set 160 in terms of vanquishing pretty good candidates. Nonetheless a man who thus far cant be vanquished. Sumner redstone continuing in that battle. Sumner receipt stone saying he no longer trusts the board or ceo philippe. He made the comments. Redstone wrote i no longer trust philippe or those support him. The board are ignoring his wishes and he doesnt think they are acting in the best interest of shareholders. Citing the decision to sale stake in Paramount Pictures and via com shares are down 36 the past year. Former ceo tom preston also had harsh words for management in an interview on cnbcs fast money last night. The whole soap opera versus the redstone and the women and the lawsuit i think has been a side show compared to the real story which is the fall of via com from grace over the years that have been really one of the leading Television Networking companies in the business and now its fallen to a level below really any of his its peers on almost any metric plagued by all times trieps of problems. Redstone is never one to want to sell anything. While known has floated the idea he couldnt take the ceo job if asked. In the meantime lets get back to this morningss market moves. Dependingen what you think happened yesterday and what may brexit joining right now is. You heard the argument from joseph. There is no line or dots. There is only one dot. We want to slow down the pace. If the line of equities now as a result is functionally going to continue going this way. To me the uncertainty and in fact the fed feels very uncertain. Situation where they said things are lousy here not going raise rates and the equity market has said this is spectacular. Lost control though. Right. Is this a moment of the loss of control . Weve been in the correction camp for a while. And i think what the fed did yesterday was a relative ily easy decision that just reflected the reality of whats going on in the marketplace. The dual mandate, the labor market has been noticeably slower. The metrics have ticked down. First quarter Economic Growth and corporate earnings were terrible. The brexit vote in eight days, which right now is probably no better, no worse than a coin flip. Given all of that uncertainty what else could the fed have done. Is it possible they come back in july . If the data supports that . Overly pessimistic about the data currently. We feel really good about december. But july or september is going to be a tougher call. The data has to support that and right now that is a crap shoot. Is larry right . Are we the new japan . Is that whats going on here . Well joe making the point in the first segment were relying way too much on the fed to solve our problems and the fed cant solve the problems. We need better government action. When things are tough we need a government to comes together and sets good policy and we havent had that. Are we the ones leading the world into the slow growth . Or are we following . I think were doing it together . I agree with allison. Fiscal policy matters here. Were at 1. 7 full year gdp. The fed was at 2. 5 working down to 2. I suspect they are going to be sub2 for the second quarter. We dont think were going to get anywhere near the bounce that a lot of folks. One side of the dots but not the other. Because they missed two years ago. And you can fault the fed at a lot of points along the way. But at the very minimum when they should have a couple of years ago, it is not just that they are, you know, suddenly unable to do any good. It is they own part of this. And when you say well the fed did the right thing yesterday given the economic backdrop. Well that is a given. And the economic backdrop is part of. It is not just that they are not part of the solution. They are part of it. But not the whole solution. No. And youre not following me. They are part of the problem. It is not that they cant do anything. It is that they are part and parcel of the issue that wore facing in the first place. They own central bankers own this malaise. And now because they didnt do it two years ago were totally painted into the corner. In terms of the corner there is a projects, not a high one but a probability that we could be looking at the recession in the next year or two. The fed would like to reset to a hundred basis points. To be able to do something they are at a quarter point right now. They have to force in a couple of hikes to reload. Make it practical here. If i missed the gold trade what do i co i dont think you missed the gold trade. Weve been playing defense all year. We continue to play defense. The allocation in equities in stock bond right now is two ticks below neutral. We havent been this low since the great recession. Weve got more cash. More bonds. We like gold. Stock market is going lower. You have got to play defense here. I think the second half of the year is going to look a bit better. All of the head wind we had last year should be working against us and were just seeing moderate growth but there is too much unserntd near term. And that is what makes a market. All habituated to believe that now and that its not self inflicted. Half more than a decade of planning the Shanghai Disney resort opening today with a price tag of 5. 5 billion. And eunice, ive been watching some your tweets this morning about the average line to get in, about two hours long. Just to give you a sense of the crowds. The average wait outside of the gate to get into the park was two hours today. Tens of thousands of people braved the rains to get into the park. And so on a day which is very important for disney. Earlier today the ceo bob iger was presiding over a dedication ceremony for the grand opening. Several high level government officials took part including the vice premiere. And the ceo stressed the importance between disney and the chinese government. Today is a celebration of creativity and collaboration, commitment and patience. A triumph of imagination and innovation. And a testament to the Strong Partnership between disney and china. Disney said that they had congratulatory messages, both from president obama, as well as president xi jinping. Now, this part has been long in the making. Five years of construction. 5. 5 billion. And it is all to as iger told me, to create a booster rocket for the business here and the expansion in china. This is a brand building exercise in many ways because the park could have more people come here. People get more familiar with the brands and characters and might want to go out and watch more disney films and buy more disney products. And there is some reason to believe that there could be a big payoff. And because by disneys own estimates, 330 Million People live within a three hour radius and can travel there in that time either by train or by car. And are what they call income qualified. And that means they are able to afford a vacation here. So already if you believe as many economists do that the chinese economy is advancing in the longterm and that people are seeing their incomes rising and that Household Spending is playing a larger role in the economy, disney is well poised. And already from what analysts are told us, they have some pretty optimistic estimates about how many visitors they expect in the first year. The range is from 10 million all the way up to 15 million. Visitors in the first year alone and that already if it does come true is going to really launch this park to some of the top numbers in terms of the most visited parks by disney. The company has also been tailering this park to the chinese. 80 of the tractions here are unique to china. And one thing they are not doing and not allowing is the selfie stick. This beloved by Chinese People and many people in asia but unfortunately it is not allowed here for safety reasons. Thank you eunice. A great story. And a great day to celebrate what is going on over there. I did want to ask given that its been in the news here in the United States and whether it became a conversation at all over there given the disney executives, this terrible incident down in florida with this toddler and an alligator. You saw a statement from bob iger later in the day offering his condolences to the family. Is that a conversation happening over there . Or not really . It is not really a conversation happening amongst the public. Certainly as you said iger issued a statement sending his condolences to the family. But from a public level of course people are heard are of the story and are horrified by it. But in terms of their enjoyment and their fascination with disney and this park it really hasnt resonated very much. Okay. Eunice yoon how to much. The country in crisis. One Opposition Leader has a plan to turn it all around. That interview is next. I was reading how they are attacking trucks on the way into the ports, that they cant even make it into the cities now because the road to get there. Really are free when you have socialism. Amazing. Clearly this is a country on the brink. Believe it or not the parliament is controlled by the opposition but the to what people believe are senior antidemocratic measures. Theres been a movement for a recall referendum of the president. Have been trying to push a vote a National Referendum immaterials been thwarted. This comes as john kerry just yesterday says he also backs this referendum and the dialogue with venezuela. I said to mr. Vek owe, listen, from o outside what we see on the ground t only thing we think might happen there is military kups. Is that possible . Military coupe could be a disaster in venezuela. We dont want to get to that point. And that is why we are pushing so fast. Do you worry a possibility . Yes. We are in a totally collapsed country right now. It is not working. So well see if there is enough pressure from other leaders to get maduro to actually allow this recall reverend skpm to have a constitutional process what so the process would be they allow that renchds referendum to occur. If it occurs next year and people vote yes he should leave office then the Vice President can take over and be in charge until 2019. Dragging his feet. Absolutely i dont know how you keep control when you see scenes like this and when people are starving. Which raises the fears of the military cue. The military is deeply entrenched. Very much a lawless militaristic state is the way its been described. And dont forget theres been a lot of cuban influence as well. Because they still supply oil on a daily basis to the cuban government. How long has this president been control . 2013. And you have had socialism there since 2002. Hugo chavez presided over much higher oil prices. Thought he was nnt power until 2002. There was a couple of iterations. Im look at the piece here written just last year. At that time it was latin americas most fluent country. Its producing two Million Barrels a day. It should be doing just fine. With that form of socialism. We hear Bernie Sanders form and say no this is democratic socialism. Was that democratic socialism. So i think the first election was democratic socialism. It was democratic. And after a while they would do all kinds of things to really disrupt the democratic process. In other words giving people the right to vote this is not a bad experiment in terms of okay. So do you think hes looking down or probably up at whats happening in venezuela right now . I brought up this question to carlos and this is what he had to say about our election here. Something is happening in the u. S. Political system but on one side you have the trump and on the other side you have this Bernie Sanders. So they are something is happening with the u. S. System. The problem is not trump. The problem is not bernie. The problem is that the people is voting for those ideas. We have to take a hard core examination of what was happening here to explain why. And he said there was a deep parallel to what he saw in venezuela before the rise of chavez. When hugo chavez came to power you know what he said, he said i am not the cause, i am the consequence. Im not sure that is true. They could have been a totally different venezuela could be a different country right now if they hadnt tried that. Yes. Absolutely but venezuela always had a big problem in latin america. Very rich and very poor and corruption and no middle class. And corruption. I see few parallels. But in general, few parallels when venezuela and the United States. I know. And hosting a conference on diversity and leadership today. Carla harris will join us next. As we head to break look at yesterdays s p winners and losers dont you know that you are a shooting star and all the world will love you just as long welcome back to squawk box everyone. As morgue stanley prepares to. Carla harris. Is going to be moderating the panel on diversity at todays event. Harris also serves as chair of the National Womens Business Council and thanks for being here. We hear from from time to time and talk about the idea of diversity in the board and in management helping but how do you bring the point home . One of the impetus for this conference is last year executive Leadership Council released a paper on what is global leadership. And one of the Core Competencies was around multi culturalism and as a firm this is something we are very committed to. So we thought why not convene a conference which currently does not exist in the market at all of the most Senior Leaders of color and corporate and civic america to talk about business topics, cyber terrorism, business security. Capitalal markets interpretive and have the attendees be the leaders again who are multi cultural. And by definition because of whos speaking you are going to have a slightly different conversation than in any leadership conference. How is the conversation different . What different opinions might you hear. Well all of us are the function of who we are and where we came from. Despite the education and expertise you have you naturally bring your personal perspective to the conversation. And i think again because you are going to have the most senior African Americans and most senior hispanic americans and Asian Americans in this room coming from all different perspectives you will have a different conversation around Disruptive Innovation and big data and perspective on the Global Markets and perspective on the civil rights agenda and im really excited about the conversation were going to have the today. How duke Corporate America is doing noefrl terms of promoting i think were starting to get it. You cant debate the changing demographic and the shift in consumers in this country and obviously whats happening with the millennials. So in order to compete Going Forward you are going to have to embrace multi culturalism and have a competency around it. In my thesis, the business thesis is if you are competing around innovation you need a lot of different ideas in the room because it takes a lot of different ideas to get to that one idea that will allow you to lead. And if you need a lot of different ideas in the room you need a lot of different perspectives and experiences. And you have to start with a lot of different people in the room to get to that one innovative idea. If you are a ceo watching right now who is thinking how woe do hiring at whatever company. How do you do it . How do crow actually think about it . Do you think quotas maybe how do you make it work . There are three things if you really want to make it work with respect to diversifying your leadership and pipeline. Intentionality. You that have to be intentional about making sure you have people there. With respect to women and people of color f they see someone in positions of leadership they are naturally drawn to that company. So you have to be intentional about it. You have to be accountable because not only does it need to happen at the senior levels but throughout the organization. You need to say andrew, middle level manager. What are you doing with respect to your pipeline and how you developing your people and how do your pipeline look . And then you have to be consistent. It cant be a bull market phenomenon. When things are great and bull market then other not so much. And Warren Buffett has been explicit when it comes to the board, for example, that diversity is not something that he not that he doesnt put a priority on it. But that is not the goal line for him. It is just about surrounding himself with great trusted people who he thinks are really brilliant and Everything Else is secondary. I got to tell you though hes intentional about it. I had the privilege of seeing him at the united state of women in washington a couple of days ago and he was very articulate and focused and intentional around how he has added women to his board. Sure they have all the characteristics that you mentioned but he was very intentional about making sure that he had some diversity on his board and hes got some great women on his board. And he messaged that he intends to do more. Carla thank you very much for being with us today. And again this is the first one of these conferences. Maybe you can come back later and tell us a little bit i look forward to it. Thank you. Cnbc will be covering todays conference and james gorman will be on the closing bell at 4 00 p. M. Eastern time. When we come back, ab inside look at Donald Trumps stunning primary win that few people saw coming this time last year. Nobody thought it would happen. A former Investment Banker who literally wrote the book on Donald Trumps playbook. A check on european markets right now. Things are in the red and looks like well be keying off that as well in the United States. Can the call just came in. Shes about to arrive. And with her, a flood of potential patients. A deluge of digital records. Xrays, mris. All on account. Of penelope. But with the help of at t, and a network that scales up and down ondemand, this hospital can be ready. Giving them the agility to be flexible reliable. Because no one knows like at t. Every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. Welcome back. Time for squawk planner. A full slate of Economic Data. Among the highlights we get weekly jobless claims and the may Consumer Price index at 8 30. And then on the earnings front we get kroger and rite aid reporting before the opening bell. And then from oracle and smith and wesson after the close. Donald trump i dont know about this intro. Says here hes all about winning. Hes proven it so far by beating a dozen other candidates to get the gop nomination. Lets look at a secret to the success if we can. Joining us is author jeff. Jeff is also an advisor. And former Investment Bank apparent Goldman Sachs. The way i would have introed. I would have said it is almost not just trump but it almost was a perfect storm. And im trying to think of the last 10, 15 years to try and explain the trump phenomenon. Perfect storm is used by everyone now. From that book. The fonz where he actually he said it was a crappy episode but it has become a real [inaudible]. So perfect storm. Democrats you had w. And everybody hated w. And for republicans you had 8 years of obama where colleagues went down because of a the senate t house of representatives they all sort of were sacrificed. So both parties had i would say a reason for their core to be d disillusioned and then enters trump. But that wasnt enough. He had something that appealed to this environment. And what was it . Right. Where i start is this is a game of game a skill. This is a game of skill. Which is your ability to tap into how people are feeling and then move them towards where you want to move them to. Look at all the candidates many of them were campaigning against the establishment, against a new approach to the washington. Ben carson, ted cruz, carly was an outsider as well. So what did he do different is this. Really two things. Which is the idea that i start from is that he is a master. Winner and a masterful winner is hard to beat at any game. What does that mean . If you look at Warren Buffett. Why does he win is this because experts at winning are able to develop strategy, masterful strategy and skills. Instinct too . It is instinct, absolutely. And one of the reasons trump is so hard to beat at this is because he spent 40 to 50 years mastering these skills. And im not trying to be critical of trump in this instance. The whole premise here andrew is he says hes not focused on his controversial comments. Hes just focused on the 16 jeb bushs and scott walker so that is a fact thats happened. Once it happened lets try and figure how it happened. I understand that but the question im about to ask is about this idea of winning. And this is an op ed in the Financial Times by mike moretz from. One of the great venture capitalist whose makes an argument that donald trump as the businessman has not been a winner. In truth his performance has not been successful in compares on the Warren Buffett. So a, whos right . And if mike moretz is right how trump has otherwise convinced people that he is winner if he really isnt. Well i mean, what is your definition of winning . Exactly. A world defining brand honestly you cant figure that out. I can. That is a totally specious piece. The he went 160. If a Football Team went 160. Nobody would be standing around and asking hes the crowd favorite. They would be asking what has he done . What was his Winning Strategy . What were the skills they needed to crush the rest of the field and that is really my focus. Some people would think 20 million is a successful person. And then get toperson. 200, 300, 400. Its not 10 billion. There are ten trump golf courses, the apprentice, ten years of one of the highest rated shows. There is the brand. You are talking about semantics. If you go 12 months ago look at the polls today. 12 months ago nobody gave him any chance of winning. As soon as he stood up on the debate stage he absolutely did things that nobody could predict. He flies by the seat of his pants. Yesterday he gets the nraest endorsement. Everything is great. The nra loves him. He is finally trying to court conservatives. Then he says, you know what, maybe we shouldnt sell guns to the nra is like, what . This is totally by the seat of his pants. Sometimes it looks like such a blunder. Is there a method to that . Youre sure there is a method to the madness . I have modeled it. In this book i literally put a structure around what hes done. I call it the trump twostep. The trump twostep is how does he drive an enormous amount of attention he has earned himself 2 billion in free media, but most importantly, joe, how does he take that attention and move it towards his messaging. And this is really the core of influence. There is a very big difference between everyone knows he has the best messaging. What he also has is the best skills of influence. Is it replicable . Meaning, is it specific and idiosyncratic to this particular individual or can other people barack obama did it in 2008. What did he do . He stood up with a message of hope, change, yes, we can. Bernie sanders did it. Its a skill set and its ability to tap into how people feel. Thats the twostep. But there is Something Else trump does, what i call the trump fourstep. The fourstep is how do you move people from problems to solutions. Every expert on selling, every expert on influence knows that you have to start with a problem. And thats why youve got all this controversy. You have to really embed the problem and then move people to a solution. Bernie did the same. Barack obama did the same. Its a set of skills. Geoff, thank you. Thank you. When we come back the brexit vote just a week away. We have an updated betting line. Well give you that next. Stick around. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive mr. President were on mars. Switch to a video call. Sure, we can do that. Congrat. Picture from mars looks great. Its about Time Business Communications caught up. Go from an audio call to a Video Conference with the push of a button. Vonage. Business grade. People friendly. Time for your daily brexit update. The latest betting line shows a 65 probability that the british vote will be to stay in the european union. That probability rising from 62 yesterday. So well see if the betting line stays and whether theyre right. Coming up, the Federal Reserve signalling a slower pace for the rate hikes over the next couple of years. Well a talk to former dallas fed president Richard Fisher who never holds back. Back in a moment. For decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. The fed dialing back its rate hike forecast. Markets now turn their focus to a possible brexit. A closer look at what central bankers are thinking with former dallas fed president Richard Fisher. Thats straight ahead. Is trump on a collision path with gop leaders. Will Bernie Sanders step aside for Hillary Clinton. Former white house chief of staff is here to talk about the race for the white house and more. Plus, is content still king . Executive producer of lost and editor in chief of wire join us live from the wired business conference. The second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box, here on cnbc, first in business worldwide. Im Rebecca Quick along with joe kernen and andrew ross sorkin. We have been watching the futures. After the markets closed down again yesterday, fifth session in a row, and thats the longest losing streak we have seen in a while for all the major averages. Red arrows once again. Dow down 38 points below fair value. S p off by 6 and nasdaq down by 13. Take a look at oil prices, which also not coincidentally have slid for the last five days as well. Were below 48 a barrel for wti. Down another 65 cents this morning to 47. 36. Brent down at 48. 33. Lets tell you about some of the stories that were watching this morning. The Federal Reserve kept Interest Rates unchanged and signalled it still plans to raise rates twice in 2016. Janet yellen acknowledging that the may jobs report had fueled doubts about the strength of the labor market. The number came in at just 38,000, well below expectations. Well have a lot more on the fed decision in just a minute. The other big story of the morning, the bank of japan deciding to hold rates steady. Policy steady despite sluggish Global Growth and inflation. The yen as a result of that spiking. What are you nodding about . I am just thinking how im going to intro richard. Japanese stocks as a result of this plunging in a News Conference bank of japan governor commenting on further easing saying theyll examine risks but will not hesitate to take additional measures to reach their 2 inflation target. Jabil circuit is cutting his fullyear outlook again citing a weakness in its mobility business that overshadowed Third Quarter results. I thought it was a cool name. Jabeel. Its a guy named jay and bill. Jay and bill. They know a lot about like connecting stuff. You know. Circuits apple accounts for a quarter of their total revenue. So check out jabil. Jay and bill. Switching gears for a minute back to general news. Today president obama and Vice President biden travel to orlando to stand in solidarity with the community after this weekends shooting at pulse nightcl nightclub. Law enforcements officials are learning more about the shooter. Investigators say theyve received volumes of tips that theyre now following up on. They say theyre methodically recreating the crime scene and reaching out to anyone who knew the gunman. While the president and Vice President are there theyll spend times with victims of families of victims. Senate ended a 15hour filibuster this morning after Republican Party leaders reportedly agreed to allow votes on two pro posed gun measures. Senator chris murphy said a compromise had been reached. Votes would be held on whether to ban people on the terrorist watch list from obtaining gun licenses and whether to expand background checks to gun shows and internet sales. The nonstop series of speeches stretched 14 hours and 50 minutes. Just crossing the wires, bank of england leaving its key Interest Rate unchanged. Central bank commenting on the possible effects of a brexit saying a vote to leave the eu could trigger a sharp fall in sterling, a rise to unemployment and an adverse spillover into the global economy. The fed leaving rates unchanged. Janet yellen says that staying cautious is the right move. Recent Economic Indicators have been mixed, suggesting that our cautious approach to adjusting Monetary Policy remains appropriate. As always, our policy is not on a preset course, and if the Economic Outlook shifts, the appropriate path of policy will shift correspondingly. Steve liesman is here. He joins us with more. Steve, you kind of threw down the gauntlet yesterday and say the that all bets are off. Well, you know, i just to recap. Yesterday morning i was here telling you to expect changes in the outlook for what the fed thinks of Interest Rates. It was more than i expected. And the reason is because they think that some of the things depressing the data right now are going to remain and become more permanent. It is a turn to pessimism is the key. Here is the key to the meeting. Yesterday they lowered the outlook for the funds rate but didnt change their growth forecast. So what does that mean technically . It means the fed now thinks it will take a lower funds rate to get the same inflation and the same lack luster 2 growth. That is the neutral rate is lower. Practically what does it mean . Yellen references it as the new normal. They believe the stuff depressing growth will stick around longer and be permanent. How long is the term . Exactly. The feds rate forecast. The chart we showed you yesterday updated for today. It keeps coming down. They were much more optimistic that they could have a higher rate, that the neutral rate was higher. 2018, come down from 3. 5 to 2. 4. You see 2017. Didnt change for 16. Still. 9. Six members now think there will be one rate hike. One says there is no hubris, only humility. The fed is now finally trying to run policy with a bias to keeping away from the zero bound. That is, do not raise so much that you have to go back to zero. Peter book var says we have a committee walking blind in the forest and on a path to nowhere. Real quickly, i want to show you whats happened to the rates. This is where they were before relative to the cnbc fed survey, aka the market. And right now. You see its much, much closer to where the markets view of rates is. Maybe thats positive. A representative from isi said a fed embracing the right neutral rate as opposed to one thats too high is better than the other way around. He thinks the change will be good for risk assets. Lets say the fed was believing in a higher neutral rate and thought that the economy could stand that. Thats thats they were wrong. If they were wrong. He says going back to reality is a better way to run the railroad. Are we artificially inflating them because were holding Market Forces not good. Five straight down days. There is a guy on the set with strong feelings about that, so ill let it go right now. I dont know where the market would set these rates if the fed were not doing what its doing. They may even be lower. Lets talk to richard. Im glad someone made up the expression chicken and egg. As long as we think that the economy is a kickchicken and thd is the egg, its one thing. I think the fed is part and parcel to the whole mess were in right now. For them to say, yeah, were just looking at whats happening and well stay at zero. What if you are causing everything to stay below 2 . One other thing ill say. One rate increase, is it in nine years or ten years . Nine or ten years . How do you slow down that pace . That does that mean . One quarter point increase every 20 years, 30 years, 40 years . How do you slow from one in ten years . Lets get back to the chicken and egg thing. All right. So theyre just responding to whats happening. Not their fault. Lets be fair to the fed. Its the only agency that acts. Fiscal policy makers do nothing. Were going through the ritual that steve and i go through after every meeting. Nobody else takes any action in washington. The burden is on the feds back. I want to come back to another thing you said. There is a consequence to what theyre doing. Were speaking in macroeconomic terms. How do you goose the economy enough to keep it going and provide the fuel and the psychological boost . But there is a price being paid. And this is killing the insurance industry. It is killing the commercial banking industry, particularly local banks, regional banks. Those that lend to the middle income groups and what you would call the middle class if you believe in the class theory, which i dont. So there is a byproduct here which is, i think, retarding growth, which is the point you are getting to. Because there is very little incentive, together with the Pincer Movement of regulatory excess, for people to go out and lend and to jobcreating enterprises. This is what we need to do a better job of. If i were back at the fomc, insisting during discussions we dont just talk about the theoretical neutral rate,e. But talk about it combined with the regulatory policy since we have feckless fiscal authorities. Its a joint strangle on what moves our economy forward. If you are in the second or third income quartile, whats your form of savings to protect yourself . Insurance. If youre a pension manager, a public pensions. The ripple effects of what you just described. Goes all the way through. Were undermining the returns that basically protect the future of peoples savings. If you do that, joe, one last thing. If you do that, you end up personally having to harbor more at home and you spend less. You are not getting as much return on investment. You are getting nothing. So now, as to the decision yesterday, there are some counter indicators here. Unemployment claims are at a significant low. We are seeing mismatches on skills and so on. I can understand how they had a very difficult decision yesterday. I am not as ive said yesterday, the music of wagner is not as bad as it sounds the way things came out. Im very worried longer term that this could be undermining the ability of the basic Financial Fabric of our country to do what its supposed to do, which is to finance Economic Growth. No one is talking about what they should have done yesterday. The actions that they may have taken or didnt take a year or two ago that may have been the chicken that put the egg where it is right now. I have known you for a while you knew what i was advocating a year or two ago. I knew what you said three years ago. That is, we primed the pump. Now its up for everyone else to take the prime that the fed has given the economy and to run with it. That never happened. Three years ago you said it was basically not not having an effect anymore. What is the impact now . We have a president ial election which is meanspirited and angry. Why . Because both republicans and democrats didnt do a damn thing. Yeah. Fiscal policy. I want to we were supposed to be at 4. 7 and everything is flush. We ought to be at 70 headed the right direction, not the wrong. Its taking a lot longer because of fiscal fecklessness. They reported the lowest unemployment numbers in a long time. You threw in the towel as well. I am not defending the fed. I want to understand something. How do you go to an executive and say, higher Interest Rates make that project you were going to do more attractive rather than less attractive . First of all, you go you move to lower their return. You are going to an executive, if you are a banker, saying its now attractive for me to lend to you, mr. Dry cleaner or their cost of funds is still below what they can lend at. The yield curve has flattened, steve. Its more severe but its still a profitable venture for them to lend and they havent been doing a whole lot of that. On the regulatory side, i am not sure higher rates leads to better Economic Growth. I think we need to better integrate Monetary Policy with the regulatory side. I never sat on a single meeting in ten years at the fomc where the two were joined. Draghi is tougher on the regulatory and fiscal side than yellen. I think carney is tougher. Who is outperforming . The United States. In my question yesterday there was an opening for her to go to the fiscal side. She chose not to. When do they tweak the Balance Sheet . The last survey said sometime in 2018. I thought they pushed it back. Its later. The rollovers are very important. This is something people are missing. Forget about quarter point increases or cuts if we have to make one cut. The question to me is how they invest s. O. M. A. System open market account portfolio. How far out they go. She hinted at that in the economic speech in new york. She referred to it again yesterday. Thats the way to stay accommodative. The fact is, you can continue to suppress the yield curve, and that keeps accommodation going by how far out they move when they roll over their portfolio. Referred to it twice now. I think thats become the principle tool explain that one more time. They have a large portfolio of securities. Between now and 2019 its 1. 1 trillion maturing. Let it roll . You can invest is short or invest in longer treasuries. She has twice referred now, her economic speech in new york and yesterday during the press conference, we can use the reinvestment of that portfolio. Were going continue to do so and push it out longer. Bernanke said the way we reduce the Balance Sheet is to let it roll off and not reinvest it. Of course. But this is a new circumstance. Were later on in the economic cycle. What do you think about that . I can imagine about bernanke might say. What do you think. I cant imagine what he would say these days. Hes also seen the progression of time. When i am visiting with the people i speak to, i am reminding them that that is as powerful a tool as whether they move a quarter point or not. As powerful a distortion also. 20 of treasury, federal debt, is held by Federal Reserve. We have to go. Youre one of the youre a Texas Democrat, so i am not really sure what that is. Its hard to leave that totally behind. You have made great progress in the years. And you were a Texas Democrat, but you still come back. Lloyd benson type. You still come back to the Feckless Congress is the problem. And thats why you cant leave those old habits behind. Right. Why wouldnt without congress doing anything, why wouldnt a normal private sector unfettered by executive actions and regulations and obamacare, why wouldnt that have been sufficient to do much better and so the fed wouldnt be you always go back to, oh, congress isnt doing anything. Do you want a 20 million stimulus . I want more unfettering to use your word. Thats not from congress. Its from the executive branch. Thats not true. Who put doddfrank together . The congress of the United States. You want to repeal doddfrank . I would like to change the way its structured. Look at the federal register. All the regulations dont come unilaterally. The Congress Supports them. I have left the lights on for you to come home completely. But you still old habits die hard for you. Even though a Texas Democrat is not wonderful man this guy is. Love this im in bad trouble now. Thank you, comrade. What are you pointing at me for . Just saying, its great to see you. I went to report on the transition of russia from communism to capitalism. You tried to no, no i was the lead reporter, joe, of the greatest capitalist transition of all time. Lets think this trhrough. Im going to keep saying it until you get it. In texas we get things done right. When we come back, time to power up the portfolios. Utility sector has been electric up 20 over the past year. Find out if the sector is still a buy after the break. Later, former white house chief of staff bill daley joins us to talk about the race for the white house. Back in a minute. In our whats working segment, so were not going to talk about the fed here. Obviously. The utility sector is surging up more than 15 this year. Con edison hitting alltime highs. Duke trading at its highest level since february of last year. Joining us with how to play utilities and what is working now, david burks, senior Vice President at hilliald lionlions. I thought we were in a tightening cycle and utilities were not a place to be. The demise of that sector was greatly exaggerated. Thats right. This has been an ideal environment for the utilities. Sustained low Interest Rates, modest Economic Growth and a relatively flat stock market. That type of environment utilities tend to outperform on an absolute and relative basis. Still, and its been that way for a while. So given what happened yesterday, i figure that just buys more time for yield type stocks. Thats right, joe. One thing i would point out, though, that just yesterday the dow jones utility average hit an alltime high. In fact, over the past five years that average has risen over 60 . So these really are the good old days for utility investors. The average electric trading around 18 times estimated 2016 earnings. By comparison historically theyd traded around 14. 5 times earnings. That represents a 25 premium. We believe the group looks more overvalued than undervalued at this point given the gains weve already seen. Unbelievable chart. If i want to get in, whats your favorites in that group . Yes. We still have a buy on ppl corporation, American Electric power, and a longterm buy on nextera energy. All these stocks are relatively near our price targets. As you alluded to moments ago, nearly every name in the group is here a 52week high. We are a bit cautious in terms of committing new funds to the group right now, but the reasons for owning them longer term are still intact. They still offer attractive dividend yields and consistent earnings and dividend growth. Anywhere between 3. 5 and 4 as far as yields even with the stocks at alltime highs, right . Yes, sir. The average yield is around 3. 6 right now. Most utilities are growing earnings 3 to 5 annually and raising dividends 3 to 4 per year. I thought there was a move to part growth, part dividend. In the past, Florida Power and others now, rich yields. Thats with the stock already having moved up. It looks pretty good. David, we appreciate appreciate your time. Down in louisville. Did you go to see any of the muhammad ali yes, sir. We saw the procession and attended the memorial service. He was a great champion, but even a greater person. Thats true. All right. Appreciate your time today. Thanks. Thank you. Coming up when we return, former viacom ceo tom freston with harsh words. In the red right now. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Mary buys a little lamb. One of millions of orders on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of at t, and security that senses and mitigates Cyber Threats, their Critical Data is safer than ever. Giving them the agility to be open secure. Because no one knows like at t. There goes my sensitive bladder. Sound familiar . Then youll love this. Incredible protection in a pad this thin. I didnt think it would work, but it does. Its called always discreet watch this. This super absorbent core turns liquid to gel, for incredible protection thats surprisingly thin. So i know im wearing it, but no one else will. Always discreet for bladder leaks images, videos, social updates. We call it dark data. 80 is invisible to most businesses. The ibm cloud has tools that can help see dark data and put it to work. Hello, my name is watson. Working with watson in the ibm cloud, we can help an Energy Company predict pipeline corrosion. And help a startup to use social data to predict market trends. Now businesses can get more out of their data. Thats what the ibm cloud is built for. Welcome back to squawk box. Nearly a decade after being ousted as ceo of viacom. Tom freston has harsh words for the companys current management. In an interview yesterday on cnbc fast money, freston came down pretty hard on ceo philippe dauman. Is he the right guy for the job right now . I would say no. Some described him as an arrogant elitist. Would you agree with those words . Totally. Totally. Yes. And, you know, i has a reputation of not being a great listener. Theyre currently embroiled in a highstakes legal battle over control of the media company. You can see more of the interview on cnbc. Com. When we come back, former white house chief of staff bill daley joins us. This is right after the break. Stick around. Squawk box will be right back. I wa welcome back to squawk. Among the stories front and center at this hour. Full slate of Economic Data. Jobless claims and may Consumer Price index. Cpi forecast to rise 2 on higher gas prices. Look for current account figures for the first quarter. At 10 00 a. M. , the National Association of home buildings monthly survey. Despite sluggish Global Growth and inflation. Governor kuroda saying theyll not hesitate to take addition the measures to reach the 2 inflation target, similar to ours. People think were turning into japan. The announcement sent the yen moving sharply higher and sparked speculation on whether the policy makers would intervene. Golfs second major of the year, u. S. Open, getting under way in just a few short hours. The tournament is being held at the Oakmont Country Club near pittsburgh. Have you played there, joseph . I have not. I know someone who loves it there. Never been to that one. Some of the worlds best players. Rory will be there. Calling the toughest course theyve ever played. Im sure theyve narrowed the fairways and grown the rough. Thats how they do it. The rough gets so bad, if you do find your ball, its see, those guys its half a stroke penalty because they chip it out. Put it on the green and sink the putt. To anybody else its a twostroke penalty. I hit it out. Then i miss the green and i get it out again and then i threeputt and i get an 8. Spoken with experience as a man who has played on are you ever roughs. Thats what i said yesterday. You know what you can do . If you grow the rough beforehand, then you can cut it down to what you want for the tournament. If its too short when the tournament comes, you cant go out there and pray for so, you know, now theyre just its out of control. Got to bring a weed whacker. Right. Golf club. Thats what i call my sand wedge. Pick it up and toss it out. That will work. Take a couple of strokes. Or get a caddie to do. End of the line for Bernie Sanders. Or is it . After Hillary Clintons final victory heading into the convention, senator sanders still refusing to endorse his rival. Joining us to talk about the road to the white house and more is bill daly, former white house chief of staff to president obama and former commerce secretary as well. Bill, great to see you this morning. Thanks very much, becky. It was a little surprising. You started hearing some things from Bernie Sanders last week when he was at the white house with the president that sounded as if he might be more open to endorsing hillary. Right. After the final primary. Thats come and gone. We still havent heard an endorsement. I think the circumstances of the last week, ten days has changed the dynamic. I think the president coming out right away, Elizabeth Warren, has made, even though its obvious senator sanders is going to endorse hillary, the fact is, the country has kind of moved on and obviously the tragedy over the weekend in orlando has changed the whole discussion. And donald trump continues to make news, totally outside of what happened in the primary. So i think the fact that the primaries are over, you have the two nominees, its less its important, obviously, that senator sanders be there to help hillary in the general election, but that whole discussion of last week seems to be old. Whats going to happen at the convention and blah, blah. Most people are thinking of this as a twoperson race, donald trump and Hillary Clinton at this point. Right. Dnc still wont say she is the official nominee. The bigger question becomes what happens at the Convention Just in terms of what concessions can Bernie Sanders ask for . He has started to lay out some things around superdelegates. But the fact of the matter is thats inside baseball. Most people will not worry about that. Youre on to the discussions whether its national security, gun control, terrorism, foreign policy. We have moved rather quickly to that. So a discussion around whats going to happen on the platform, which i dont know if anybody ever reads. I think youre looking at an election for there are a lot of people in the middle of the road who havent decided to theyre going to vote for. Depending which direction Hillary Clinton goes. To this point she has said my views are my own and im not going to be pulled by that. But sanders had a lot of support and democratic votes. If she tacks to the left to make sure she keeps the base, it does one thing. If she stays where she is or moves more towards the center, it does Something Else in terms of the broader election. I think you saw her take some steps in the primaries to address some of that. The support and enthusiasm for senator sanders moved her maybe a little more to the left of center than i would say definitely more than i would have expected. I dont think there is a lot more room to run if youre looking at a general election. If Elizabeth Warren is your Vice President ial ticket well, thats a possibility. If you think thats a possibility in my opinion not a probability. Dont bury the lead. Not a probability. Dont bury the lead. Youre saying this guy. Who is it going to be . Al franken. Thats what i said here a couple months ago. Wait, joe, before you react as you normally do, first of all this isnt even my normal reaction. Talk to your republican friends. Al franken has been a serious senator for eight years. Got reelected with a very did you know that . Yes. In recent years hes no longer the comedian people think he is. Right. Depends on your perspective. I think the stuff he stands for and says now is much funnier than anything he ever said on on i am not kidding. He is a progressive guy. He is not a center guy. Not a center guy. Thats what i am talking about. Hes from minnesota. So, you know. But thats the issue. The issue is that right now the country thinks that hillary is generally in the center, right . Right. There are concern republicans, i think, that may decide that they dont like trump, they dont really like hillary but but if she picks Elizabeth Warren if she picks al franken and moves that direction, all of a sudden it becomes a much more challenging its not that theyll vote for donald trump necessarily but certain people wont come out to vote. There is a possibility a lot of people wont vote, period. With all due respect to Vice President s they mean nothing in the end on election day. In this case but for people, when they walk in, will vote for the president ial nominee, end of discussion. I dont care who they have for Vice President. It will tweak it a little but there is very little historical evidence, except going back to a johnsonkennedy year these candidates seem so polarizing to begin with. Am i wrong . Theyre reflective of the country in my opinion. You dont think whoever is the Vice President ial candidate for either side is going to move the needle . Not so much so that it will change the dynamic that the president ial nominees are causing in the election. Certainly these people it will have an effect. It will change the way people think about how either progressive theyre going to be or how conservative theyll be . I would not you put lae Elizabeth Warren in that pot. I wouldnt put al franken in that big of a message that this thing has moved and Hillary Clinton has gone way left. He is so crafty. I told you, he is so crafty. He says you would look forward to frankens wit and ability to drive trump crazy. Thats another one of the benefits of he would appeal to a lot of the sanders voters, obviously, young people, motivating them in any election is difficult to do, to get them out. I think al franken would be part of that. I believe there are other candidates. Tim kaine is a solid. Former governor from a swing state. Important state, virginia. Is the Senate Problem really going to be taken into account, do you think . With a guy like sherwood brown, a guy who is a republican, could appoint a republican. If i was running in a president ial election i would say, in the end winning the presidency and maybe having a difficult time with one more senator and unless you have 60, i dont know if it matters, to be frank because they dont do anything anyways. Not having congress, senate and the house, didnt stop president obama from asserting his will on which way the country was headed. Many of the things he did with executive orders could be reversed if a republican wins. Thats your hope. Let me change the topic. The royal your. In general, the Republican Partys. Thats what youre talking about. Yeah. Not you. If they appoint me. In your role as former commerce secretary and in your role today, what do you think of the feds decision yesterday to hold on rates. By a lot of parsing what they were talking about, by their knew economic forecast. People think were not going to get a rate hike in july, september. It could be off the table for a very long time to come . What does that mean . I think there is no doubt, in my opinion, that its off the table for a while. Not to say that the fed responds to politics because they dont and theyre not political, blah, blah, blah. Youre now into a very dicey period where, you know, and former fed chairmans have been criticized one way or the other for raising rates or not raising rates around president ial elections. So the impact of a rate increase between now and november would be a forget the economics of it politically could be very important and damaging to the fed. So my sense is she did telegraph. And again, i dont believe the fed is responding to the politics, but they dont live in a bubble. My sense is thats one more factor to make it more difficult for them to take a step for a rate increase. Is that the right move . Weve been at basically zero Interest Rates. I dont believe it is but thats my personal opinion. Listening to the statement yesterday, its obvious that seems to be the message. Its off the table. Again, i think they dont live in a bubble. They dont respond to the politics, but thats another factor. A rate increase at this time would be would be thrown into the middle of a very difficult president ial election, difficult for the nation as far as the emotion of it all, and that would just be another factor that i think the fed would be a little leery. If i was giving them advice. Looking at it from the other side, probably half the country thinks, look, you are being political by not raising rates. I agree. Greenspan had this problem in 2000. Senior george bush blames him for the reason right. There are those who believe he should have started the rate cut, waited until after the election and raised 11 times between not the election. After the recount was over. Which brings back great memories and 9 11. There were 11 rate cuts in that period. Secretary daley. Great to see you. Tightening cycle. Slow it down. One quarterpoint increase in 11 years. So were going to it will be one every 33 years. Or 22. I dont know im not sure what the new the dots mean a lot. When you look as young as we look now we may not see another i hope we do. That might be something to strive for, that were around for the next rate increase. Your previous guest, Richard Fisher would be a great secretarytreasurer. He is a Texas Democrat. So far from a chicago democrat. Dont even act like youre allies. Not really. Eye of the beholder. He has come a long way from coming on this show. Thank you. Coming up, betting on content. The executive producer of the hit shows such as lost and the strain. Joins us to talk about the future of media. Check out the futures right now. Five Straight Days down. Indicated down another 62 on the dow today. Squawk box will be right back. Welcome back to squawk box. Today wired hosts its annual business conference. Bringing together Business Leaders to discuss the forces reshaping modern business. Here to preview a bit of the conversation happening later today is scott dadich, the wired editor in chief and carlton hues. Executive producer of tv series lost, colony and the strain. One of the things i imagine youll talk about later today is the future of media and the future of sort of storytelling writ large in both the tv medium and also digitally in terms of news and magazines and how this all goes. I am curious, when you think about tv now, the binge viewing, how do you think its changed storytelling itself in terms of how you even go about it . Its changed it a lot. For instance, when i started doing lost, the Network Business had almost no serialized storytelling. There was no mechanism for people to get caught up. They were afraid the audience would be lost. Now we have all the technology in the world to allow people to get caught up. Serialized storytelling is more immersive and engaging. The engagement is the key buzz word these days. What do you think of the phenomenon of people say, if you can get through the first two or three episodes sort of like a book. The first 50 pages are slow, but if you can get to the next part. Where is a great procedural or closed end show that can be watched at any time. Which way are we moving long term . I think a bifurcated system where Certain Networks like cbs will continue to make closedended shows and have Great Success with them and were going to increasingly see more and more serialized shows and complete storytelling taking place on places like netflix and amazon. Why cant you do serialized shows on network . Why is it so much harder . Its just the shows are really valuable. Cbs can take a show like csi or ncis and sell it all over the world because you can put it in any time slot, any channel. You can watch it as a oneoff. Those are valuable commodities for companies. It works as one selfcontained episode. You do 12 on cable, right . You need a major star to sign on for. What, 22 or 24 . Its harder to talk people into. You cant curse. You cant show s m. The biggest [ laughter ] thats right. I was casting a Network Pilot at the same time i was casting a cable show i make for fx. There was a group of actors who were unavailable to come in for the Network Pilot who didnt want to commit to ten and a half months in new mexico versus five months of a cable show. Most actors are open to that. Almost no one is off the table in cable. Its a combination of basically not having to commit your entire life away, plus there is interesting story opportunities. Just from the storytelling, though, what do you prefer . The actual i mean, being able to tell a serialized story with a beginning, middle and an end is far better. As a writer, what you wanted to do is take your audience from a to z. Thats why breaking bad was so engaging at the end. People wanted to see the end of the story. Thats why fargo and true detective are to engaging. In eight hours is takes you beginning to end. Unreal. Do you think were moving to even shorter. You talked about a tenepisode show. What was the show we were just watching . The fall. I stopped watching it. U. K. Model was doing six and five episodes and then theyre not coming out for a year or two. It comes down to the economics. Its pretty tough to make that few episodes and be successful. But i think the eight to ten model is really the sweet zone in terms of highquality drama. We werent really watching it together, though im open to that. We were both watching simultaneously. You just never asked me. But i mean you do you have microwave popcorn . Fake butter . Real butter. Real butter. Really . I have to get into the city. Thats not in the city. Question about digital story telling. Do you think your storytelling has changed . Absolutely. Not how its delivered but the actual thought process around telling the story. Absolutely. The availability of the platforms and, again, the way that we deliver the story has changed so dramatically. The bar the barrier to entry into getting into actual reporting is much lower. We can report in public in a way that we didnt used to do with a magazine. In the old days you would go off, report a story for three or six months, then youd work with an editor and hed build it into something that might go on the cover. We can actually continue the reporting in the open and actually write out the story in realtime. You may see six or seven dispatches against a particular subject, as we did with the cover story this month, before we actually get to the cover story. Cover story is a different thing entirely and its treated as a different process, but you see the story elements in the reporting end up thats hard to give up as a reporter. Absolutely snu dont want to give up your chocolate chips. We find were Building Audience along the way. We those people ready and waiting for the cover story at the time its ready to release. You guys at wired have always been on the edge of the edge. Are you of the view that there will be a print magazine in five years . Absolutely. I use texture. Its a netflix of magazines. Thats pretty much how i am reading magazines, on an ipad. The engagement numbers on prints are still off the charts. People who love print really love print. Fewer of them take it, but were making more stories. And so the best stories are actually getting into the print magazine. And were seeing that bear out in the numbers. Those same stories that end up in print are the highest engagement on the website. So even this year, year to date, the top four stories on wired. Com were all print stories. Back to tv for a sec. On the creator side. Curious about the economics of it all. When you think about network tv, that was always where the money was and the opportunity for syndication. When you think five years into the future where every network is going to have their own app, effectively, and possibly a closedwall garden, do you see the economics being the same, or are they changed . My friends and i like to joke that we work twice as hard now for half the money. You dont have the big pot of gold at the end of the rainbow that used to exist in television. The days when carsy warner would sell the cosby show or roseanne into syndication and make hundreds of millions of dollars are gone for show creators. Whats emerged in its place is much wider storytelling opportunities and the ability to really do things that you couldnt do. The old network days it was all about getting the biggest under a yeaudience into the show. Now its about being a favorite show. I love how much you put into training people who are under you and how proud you are when those people go on to be show runners themselves. What inspires that . Thank you very much. You know, i think its like almost everything. You kind of do what you love. I love the teaching aspect of the job. And im really proud that i have a bunch of writers who started out and are now running their own shows. I love that part of the process. I also love to work in collaboration. I function best as a storyteller when i can sit with someone and bounce ideas. To do that with young, fresh, talented writers just excites me. Its fun. Its great. Cool. Thank you guys. Carlton and scott, thank you. Good luck with the conference. Im afraid you might ask me to netflix and chill at your house. Not that theres anything wrong with that. You are invited over anytime, you know that. Popcorn, alcohol. Becky is invited too. Gm Ceo Mary Barra is among those speaking today and becky is sitting down with her. Well bring you that conversation tomorrow on squawk box. When we come back this morning, a check on the markets. At the top of the hour we welcome our guest host, alliance chief Economic Advisor and get his reaction to the fed and more. Here is a hint for you. The markets are seeing red once again. Squawk box will be back after a quick break. When we return this morning, Mohamed El Erian will join us to talk Global Markets and central bank moves. Stick around. Squawk box will be right back. I asked my dentist if an electric toothbrush was going to clean better than a manual. He said sure. But dont get just any one. Get one inspired by dentists, with a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean oralb. Know youre getting a superior clean. Im never going back to a manual brush. Its all about the pace. The fed reining in the rate hike paths. Hillary clinton taking aim at carried interest. The democratic nominee sounds off on what she would do to close the tax loophole. That story straight ahead. All that plus what the [ bleep ]. Cnbc has learned which phrases get flagged. Well bring you that report as the final hour of squawk box begins right now. Because you know im all about that bass no treble live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box, here on cnbc, first in business worldwide. Im joe kernen along with Rebecca Quick and andrew ross sorkin. Were less than 90 minutes away from the opening bell on wall street, the futures weak again down 56 points. Five Straight Days down. Thanks, janet. Checking the markets in europe at this hour. Why would they be up . No reason. Because theyre not. Theyre down anywhere from, in italy. Big selloff in italy. Down a percent or so in germany, france. And the ftse. In asia, nikkei closing lower after the bank of japan kept rates unchanged despite a sluggish Global Growth and inflation. How come they dont get more negative . Just correct me if im wrong, but isnt cant you go like down 10 . Didnt work last time. Cant you go down 20 . There is no limit. If you dont think zero is a lower limit, you can go as low as you want, cant you . I suppose you can. If its not effective, whats the point . Because if you think its effective at all, if you take the assumption that it is effective, then keep doing it until it gets if it doesnt work the last move they made had the complete counter thats what i mean. It doesnt work. You would think there would be no limit to how negative you could go. If you really think it is effective. If you realize its not effective. Dont even try. Stop and get out. Exactly. Look. They think its not effective to do it if inflation is minus ten, youre ready to go minus nine . I am not and im on the record against negative Interest Rates. Remember, the bank of japan had a choice. Ill h either it will be ineffective or counter productive. It decided to be ineffective. As opposed to our fed . But its important. If you go more negative you become more counter productive. Its alice in wonderland. Well need a second sequel. Its the last thing johnny depp needed was for that movie to bomb. If we do a sequel, it will be on the central bank in the in the what is it . 2010s . What do we call it . The teens . Maybe. I dont know. Among top stories this morning, the Federal Reserve, as we have been talking about, kept Interest Rates unchanged and also signalled that it still plans to raise rates twice this year. But when is anybodys guess. Former dallas fed president Richard Fisher weighing in on the feds impact on Global Markets. I am very worried longer term that this could be undermining the ability of the basic Financial Fabric of our country to do what its supposed to do, which is to finance Economic Growth. And in other central bank news, bank of england leaving its key Interest Rate unchanged and commenting on the possible effects of a brexit saying a vote to leave the eu could trigger a sharp fall in sterling, a rise in unemployment and an adverse spillover into the global economy. Not helpful. The pound is under additional pressure today. Dollar up against it. Trading 14135. Yen at 104. 42. New data on jobs and inflation due at 8 30 eastern time today. Well get the may Consumer Price index and the closely watched weekly jobless claims. This coming up in 25 minutes time. Political news this morning. Senate democrats ended a nearly 15hour filibuster early this morning after Republican Leaders reportedly agreed to allow votes on two proposed gun control measures. In his closing statement senator chris murphy said that a deal had been reached to hold votes on whether to ban people on the governments terrorist watch list from obtaining gun licenses and whether to expand background checks to gun shows and internet sales. In other political news, Hillary Clinton says she would use an executive action to end a tax loophole for wealthy americans if elected. In an interview with usa today, Hillary Clinton says if congress doesnt act she would ask the Treasury Department to end the carried interest loophole. This will ask Hedge Fund Managers to pay a lower rate by counting income as investment income. We always say hedge fund, but its typically actually private equity. You have to hold for at least over a year. She has also agreed to give back all the speech money shes made from giving speeches to private equity firms in the past that accrued from the carried interest she is willing to bite the hand that feeds her. So unlike the clintons. Our guest host for the next hour, here to weigh in on the fed decision, the upcoming brexit vote and more is Mohamed El Erian. He is the former ceo of pimco and allianzs chief Economic Advisor. We have seen a variety of investors who have thrown in the towel and said the fed is calling the shots from here on out. Do you agree . I agree that the fed doesnt have a clear vision of where the economy is going and, therefore, its overly data dependent. And because of that it sends conflicting signals over time, and the market ininterprets that as either the fed being totally inconsistent or the fed being a slave of the markets. I dont think they have a vision of where the economy is going. They do keep moving the goal posts. Because they havent taken a view yet. Theyre getting there. Yesterday chair yellen started to talk more structural than before. She said shortterm issues will be in play for much longer. But its taken them a long time to realize that there are structural issues in play in the economy. Do you think she is right in playing it cautious at this point and not raising rates . Look, i would have raised rates before. As chairman bernanke reminded us in august 2010, when you go unconventional there is costs and risks and sometimes they become too large. The consequences of this prolonged experiment with very low Interest Rates, very big Balance Sheets, are starting to have a meaningful effect on the economy. Mohamed, its amazing that, as far as forecasts for the last eight years, the fed has been as wrong as likes worst economists. Way too optimistic every single year. Yet you would think theyre always able to explain how it happens in hindsight, which is just weird that they could never take into account the same factors that they cite for the slowness in when its in the rearview mirror. They were never able to anticipate that it was going to be that way looking ahead every single year. Theyre wrong every single time. Behavioral science tells you, when you have grown up in a cyclical world where things go up and down you think cyclicly. When you face structural issues, you dont see them. She said new normal. She did. We first said new normal in 2009. Thats the problem these are the people supposedly looking ahead. Seven years later they finally they use your term. Look, its very hard for advance country people to think dont give them excuses. If you could figure it out. Maybe they could have figured it out five years after you. Seven years after you. They were hoping for the handoff from what they do i would be embarrassed to say it yesterday. I would come up with a new name. You have the new moediocre. Secular stagnation. I have a new name for this, janet. The new normal. What did you say . 2009 . January, 2009. Mohamed, Richard Fisher said something that really concerned me earlier. I hadnt thought much about it. He says yellen has now twice said that theyre going to take the Balance Sheet and, as some of these treasuries roll over, reinvest them. Their decision is whether that goes into shortterm investment or longterm investment. Every financial guru i talked to a few years ago about the size of the Balance Sheet and should we be concerned said, dont worry, they can let it roll off. If they dont let it roll off and continue to invest another 1. 1 trillion comes due. If they continue to reinvest that were prolonging this for an incredibly potentially extended period of time. Its not just the low Interest Rates. Its, as you mentioned, these massive Balance Sheets too. The main Collateral Damage of unventi unconventional policies is what you do to the Financial System. There are two effects. One is, by having so many securities on your own Balance Sheet, you change the liquidity, you change the price determination. And you tamp down the market and artificially move it and motivate it. Correct. People start spending much more time trying to guess what youre going to do as opposed to fundamentals. Thats the first element. The second is that you undermine anybody providing financial services, and especially longterm financial services. All of us pool and get that because someone is willing to provide us that. Youll find fewer and fewer providers of those services. Life insurance, catastrophic life insurance, pension. Anything thats a longterm promise becomes very hard to deliver in this environment. So the Financial System slowly starts eroding its role in the economy. That has implications. Thats what people are starting to realize. To be fair to the fed joe will not like that they have assumed from day one that they wouldnt be in this business long term. Now theyve found themselves in it long term. Why . Because they havent been able to hand off to other policymaking entities who have much better tools. Thats like the addict blaming the people who are at some point you have to stop enabling. You stop enabling, but its not easy to do. I told you last time i was here, think of the Central Banks as doctors. Doctors dont walk away from their patients even if they dont have the right medication. Eventually tough love has to step in. Tough love as a parent is hard to impose. As a doctor its even harder. After years and years. We still argue about whether doctors should prescribe heroin to addicts. Some make the case they should. I think its better to get off it. We would help the cause. The cause being a better economy. Markets supported by fundamentals. We would help the cause more by focusing on the other policy tools that are not being used. Thats what we we obsess with Central Banks, right . It would be good if you knew the fed wasnt dr. Kevorkian. Youre in good form this morning. Thank you. Must be another loss by the Cincinnati Reds keeping you going. Then i would be in a bad move every day. They did lose. They did lose. Theyre only 15 games behind, i think. Maybe 19. They beat atlanta a couple times. Thats not so great this year. I thought there was one other thing. The other thing we dont talk about anymore is we dont talk about the deficit. Oh, yeah. No big deal. Its coming down. Medicare, social security. Wait until rates go up. Thats what im saying. Weve all been in yeah. Weve all been oh, yeah, not a problem. What if they went to 5 . We cant even pay that, can we . Thats not going to happen until i know until never happen. Its better that it never happens and we never go above 2 . Thats a concern weve raised again and again. Remember when we used to say japan cant happen here . Thats what i said earlier. Japan is slowly happening. Keep an eye on the bank of japan. Certainly this week was the most important meeting for them because it tells you how far a central bank can go to a place where theyre not used to being, which is ineffective and potentially counter productive. Keep an eye on that. Thats the most important central bank meeting. Were right there. Were here. Its here they lost control. Its ineffective and counter productive. Were here its the new normal. There you go. Mohamed is going to be with us throughout the rest of the program. We have a lot more to talk about with him. Me . Okay. Coming up, a fairy tale in china. Shanghai disney officially open to the public today. A look inside the park next. Heading to break, a check on u. S. Equity futures . Improved at all . Dont bet on it. Hows the new project going . Check it out. Lights. Meeting configuration. Blueprints. Call hruska. Weve gotta set up a meeting. Sure. How do you spell that . Abreu, albert, allen, anderson c, anderson r. You know what . Ill just tell him myself. Door. Andrade. Its about Time Business Communications caught up. Call anyone in your network just by saying their name. Call hruska. Vonage. Business grade. People friendly. Welcome back to squawk box this morning. If you work at Goldman Sachs, you have to listen up. Cnbc obtained a document detailing more than 180 phrases flagged by Goldman Sachss email monitoring system. Eamon javers joins us with a list of words that employees may want to avoid. Reporter welcome to a slice of life inside a regulated industry. Goldman sachs, like many banks, uses Automated Software to monitor employees internal and external emails. To do that theyve compiled a list of words that they flag as potentially concerning, the software flags the words and theyre later reviewed inside the Compliance Department to see if its an indication of potential trouble. Here are some of the phrases they are looking for according to the list we obtained. One is simply i have been trying to reach you. Stock will fly that seems to be a concern that they catch people overpromising on stocks. Also call the sec is a phrase theyre looking for. A couple other ones. Paying through the those. Ass or butt in terms of fees. Clowns managing or running the fund and way too effing much. There are 13 phrases on the list that contain the fbomb. And they use it in every kind of imaginative way you can think of. The list is from 2008, but were told that Goldman Sachs still does this monitoring. The full list is up on cnbc. Com right now if you want to check it all out and see what your emails might get flagged if you send them over to Goldman Sachs, guys. So is are muppets on the list . I searched. Its not there. Vampire squid is not there. All the ones you might expect. The list is from 2008. Theyve updated there was the guy who came out from goldman and talked about the muppets. Muppets might be on there now. We have to ask them. If you look at this list, you know, it is from 2008, and theyve changed their policies since then. Now, if you try to send an email with an obscenity in it inside Goldman Sachs, you get a dialogue box that pops up on your screen and asks if youre sure you want to send it. What did ldl . Lets discuss live. Right. I didnt see that one. Right. For internal use only and a bunch of phrases around keep this inhouse for internal. Thats a term that gets flagged as well. Call me. Can you check bollock. Bollocks. Bollocks . I think thats a british phrase. Were broadcasting theyre bleeping it out. You can use it on Goldman Sachs, you can say bollocks as much as you want. I would say never mind the bollocks and make a shout out to my clash fans around the world. Sorkin is still afraid to say bollocks. I am sitting in washington, d. C. , its not a curse word here in washington, d. C. Thank you, eamon. Dont be afraid. Try to be sensitive. I can think of a number other british phrases we can say gleefully that you cant say in london. Its a bloody shame. Thank you. Excellent its pertinent. Because who knows what the with brexit. Right . All right. Bollocks its a big day for disney. The company officially opening the doors to the Shanghai Resort after more than a decade of planning. If youve ever been to disney, i cant believe you it seems like it would take ten years to put that together, you know. So amazing. Price tag, 5. 5 billion. Eunice joins us live inside the park with more. We should have gotten you on tape saying im going to disneyland. Its a big thing over here when anyone wins the super bowl or anything, eunice. Because you are and you did. Reporter that is true. Right after i finish all my work im going to say, hey, im going to go to disneyland. Thats a phrase that a lot of people have been saying. Tens of thousands of people are at Shanghai Disneyland today. To give you a sense of the crowd, the average wait time outside of the park just to get in was two hours. This is a big day for disney. The ceo, bob iger, told me last week that he was opening that this park will become a booster rocket for the company to be able to expand its business in china. The hope is that once people come here theyll go home and want to buy more tickets for disney movies or more products at disney stores. There is reason to believe that this big bet is going to pay off. By disneys own estimates, 330 Million People who live within a threehour radius traveling here either by car or by train are what they call income ready, or in other words in other words, they can actually come and afford to travel here on vacation. And if you believe the whole story, which many economists do, that over the long term chinas economy is going to improve, incomes will rise, consumers will take a bigger part of the economy, then disney is well poised. Guys. Incredible. Yeah. What a what a life that i mean, you just think about one guy, eunice. Its unbelievable the impact one man can have on the entire globe. Anyway, have fun. It is its great. Its fun. You already road tron. Reporter i have gone on tron. I have been on pirates of the caribbean. Both of these have been souped up with a lot of new technology, visual technology, Virtual Reality technology. And also i took a spin on the new seven dwarves ride as well. I think after this ill go on the carousel to go on something thats more classic. Just seeing the castle in the distance is always when i saw it just now, you get that same feeling that from when you were younger. And they build reporter over here a lot of people are having a bigger reaction because this is the biggest Disney Castle anywhere in the world. Oh. Reporter when you say youre getti getting shivers in your spine looking at it. In china its that much more amplified. I wasnt quite a Chris Matthews leg thing but it was darn close. It was darn close youre such a weirdo. You said it. Or she said it. Can i ask what are the entrance tickets . I would rather get it looking at a castle than a president ial candidate when im supposed to be objective. How much does it cost to come in for an average person . I think we lost eunice. She said yesterday. She is on her way. 80 bucks. I think it is 80. Which is more than other parks in the area but less than you pay here. When we come back, there are some new developments in the battle for sumner red stones. Former viacom ceo sounding off on the drama. Well tell you what he said next. Calling all nappers. A new study says that split sleeping might actually be better for your health. That is according to the university of south australia. It says sleeping for a continuous eight hours is a modern invention and argues napping periodically could increase alertness during the day. Didnt know and ive been healthy for years apparently. When we come back, breaking economic news. Were a few minutes away from may cpi and weekly jobless claims. Stick around. Squawk box will be right back. 2 back at Grocery Stores and now at wholesale clubs. And 3 back on gas. Kenny used his bankamericard cash rewards credit card to join the wednesday night league. Because he loves to play hoops. Not jump through them. Thats the excitement of rewarding connections. Apply online or at a bank of america near you. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. We are just seconds away from may cpi and jobless claims. Futures indicated down you can see, down 70. Rick santelli standing by at the cme in chicago. Rick, the markets are not doing well. We need the fed to cut rates or something. I dont know. We need some help. Anyway, the numbers, please. I think we need an algorithm for the fed. Rules based. Account balance moved more positive. 124 billion. We were expecting more like 125. One initial jobless claims report last week, they were 264. They stick at 264. For this week, add 13,000 to bring you up to 277. Continuing claims, they actually moved up a bit from 2. 112 million to 2. 157. Cpi up. 2. Ex food and energy up. 2. Year over year, this is the one many will be looking at. The year over year ex food and energy up 2. 2. Why is this important . The 2. 2 number, what was usurped in february to 2. 3, we havent had a number higher than 2. 3 since the fall of 08. We actually have another number i want to read, and thats philly fed. This is a june number. More realtime. Were expecting one. This is definitely better than expected. Hip, hip 4. 7. The best read since the last positive number, which happened to have been in march, 12. 4. Every other indicator in this series, january, february, april, may, are all negative. So of course, that march number and this number comping to it are positive numbers. That indeed is a good thing. If i look at the landscape around us, we are still, you know, in the high 150s for a ten. High 60s for a twoyear. Of course. When we look at boon yields. They did go a bit more negative. Every central bank seems to have dipped their toe in a little muddy water these days. With regard to, you know, independent, not biased, maybe leading by the nose has grown to be habitual for some of these cbs. Carney seems to have a bit of a rats nest regarding brexit. I tell you what. Next week at this time markets and investors and myself included are going to be awfully interested to see how this all turns out. Not so much for the u. K. But for the rest of europe. Joe and the gang, back to you rick, remember, you know that tightening cycle . Were going to slow it down. Slow it down. We got one rate increase in 11 years. Were going to thats too fast we got a quarter point. Were going to take our foot off the tightening gas. Ramp it down a little bit. Slow it up a little. 71 vega on a hill out of gas. I got you. For more on data and defense of the fed to steve liesman. Let me start by defending the show, joe. Its 8 30. Time for a new joke. You started at 6 00 a. M. With the joke about the one dot. You didnt do that one. You left the one dot out. You want to do it . You cant look at the slope of a line with only one dot. It takes two dots to make a line. We dont know what the pace was. I wont say its really a change in the forecast, which is two dots. We wont do that. Looking at inflation. You have a lot of 04s and 03s. Rent to primary residence. You have a surge in rent thats going on. Better wages out there. Deficit perhaps of places for people to rent. Apparel surprisingly up 08. Two months of declines. New car costs keep coming down. 04. Gasoline surging 2. 3. Thats a big part of it. The 2. 2 year over year on the core rate is something the fed will have to watch. But i think what were talking about from this press conference yesterday is the fed may be more willing to tolerate higher inflation. That gets us back to your question that you asked this time and last time both about, look, all these goal posts, all the points you had set, you are not paying attention to now. Even when the data hits that. I am very interested, becky, in whether there is a better way to run this railroad. You look at the variability and volatility around whether the fed will hike. Talking to mohamed backstage. 33 for june. Evaporated to nothing all in the space of a single number. You think there would be more behind it. Was the fed wrong saying they were data dependent in leading us down this path or were they wrong in not following the data and hiking when they say it. All those things are true. There is not a solid framework upon which to base policy. What if its better it goes back again. When you think about Monetary Policy theory, the idea is you use the market and market expectations, you bring them forward, you set them backward. But the idea of jerking the market around, i dont think there is an appendix to the montanatory policy playbook saying that helps. We were having the enabler say, i dont see a big difference between june and july. It doesnt matter. They wont do it in june. But whats one and we said, what does one month mean . One month. When things can happen on a daily basis. And something did happen that day. I asked that question last year. Now july is off. June and july are both off. September is the new thing. September is the new june. Theyre not going to do anything in september ahead of the election. I have a bunch of guys ill call it up, who is saying Steven Stanley said saying september. A lot of guys who were saying two are now saying one. Thats the new the new talk on the street right now. Lets bring in drew maddis, deputy chief u. S. Economist at ubs. Still with us, our guest host, Mohamed El Erian. So drew, you have been patiently waiting. Can you you must have some some opinions about this. Is there a reason for cynicism or frustration . If my own view, as you know, higher rates would stimulate activity. Lets assume janet yellen doesnt believe that, because i think thats a fair assumption. The biggest concern i have are the massive shifts in the feds thought process that seem to occur based on single data points. Its worrisome to me that the fed is data point dependent instead of data dependent. In that you can get a massive swing on a theoretical construct of Something Like the real neutral fed funds rate over a sixweek period. Which strikes me as kind of the reason you have the theoretical construct is you dont have massive swings like that. Did it surprise you, the drop in 2018 that they took 60 basis points off the expectation. Thats in three months . What happened. Its four weeks from when they were saying you should be thinking about june or july. So i mean, the problem i have is just that the reactions that are occurring based on small data changes are extraordinarily large for a fed thats supposed to have this broad idea of how the world works. They seem to abandon that whenever they feel like it and then return to it. For janet yellen then to say, oh, july is on the table i mean, no one in their right mind thinks july is on the table, and she cant possibly believe that. So dont tell me it. The headline of your piece yesterday was take the summer off, we are. Right. Its not possible. When do you think the fed might hike . We think september. There is a fed meeting between the september meeting and the election, so it doesnt mean it means theyre going but not going directly in front of the election from their own calendar. We think they follow up in december. Our view is inflation is gradually gathering steam, the Unemployment Rate dropping is a sign slack is evaporatinevapora youre saying it from an economic perspective. I am saying the fed is taking the summer off. Even if july turns out to be a strong jobs report, and it turns out that the aberration theyre on vacation. If you have one weak number and one strong number, you dont know what the trend is. Mohamed, is that a serious question . This fed . Remember, there are three ways of interpreting the last employment numbers. One, its weak demand. Thats what the market embraced. Two is we dont know and it goes counter to other things. So lets wait. The third is, you know what, were getting closer for employment and the Participation Rate is not picking up. Maybe the problem is not the demand side. Maybe its the supply side. Give me a reality check here. Are we making too much of this . We are after all talking about a quarter point. I am happy to take more of the summer off if i could. If the idea is that were too focused on this Federal Reserve, im happy to entertain that idea. We are too focused on the Federal Reserve. We should be looking at other elements of policies, because were just going to focus on the Federal Reserve and it will become less effective but its the only game in town. It is the only game in town. You want a federal government out there spending tens of billions of serious structural reform starting with Corporate Tax reform and infrastructure spending. Deal with debt overhangs in the economy and get better Global Policy coordination. Thats what you need. If you get a couple of these things, there is so much cash on the sideline that the private sector do you concur that those are things that are more important than whatever the fed does . I think it would certainly be helpful. In terms of Global Policy coordination, i think its hard to be coordinated when there is one bank that has an extraordinarily low Unemployment Rate, low inflation levels as we saw this morning and is sitting at 25 basis points claiming thats normal. Were pushing everyone into on offsides position. Weve been i think its the other way around, drew. That we cant raise rates when everybody else is going negative. People always say, well, rates cannot go up because there is all this money waiting to flow in. For years the biggest buyer of u. S. Debt was japan. They had extraordinarily low Interest Rates. Somehow u. S. Interest rates managed to move on their own based on domestic issues. So i am not a big believer that the rest of the world holds back our yields. I am not saying it doesnt have an effect. I am just saying i dont think its the primary driver relative to growth and inflation. Speak to the flattening of the curve. Whats caused the massive flattening of the curve if not the pressure thats come from europe . I think you have a few things. But the one that stands to mind is just that people are continually being reinforced in the idea that u. S. Growth is weak, that there is not a sustained data set over time that encourages people to believe that we are through the Looking Glass in terms of risks of u. S. Growth. Drew, thank you for coming in. Mohamed will stay with us. Steve, i know how you can settle this whole thing. Book a bunch of vacation this summer. Then theyll raise rates. And you have to cancel your vacation. Thanks. So the fed not only coddles every trader here that might be on the wrong side. Well let you know. They coddle no, they coddle every other central bank. Got to make sure we dont do anything to hurt any of them. Every other currency. Even cyprus is not too small to worry about. No. The music is playing, joe. Is yellen going to jackson hole . Yes. When we return, celebrities unfiltered. A new platform changing the way influencers get social. The ceo of who say joins us with supermodel cocoa rocca. Huh . Detecting threats faster, responding faster, recovering faster. When your securitys built in not just bolted on, and you protect the data and not just the perimeter, you get faster. Wow, speed kills. Systems open to all, but closed to intruders. Trusted by 8 of 10 of the Worlds Largest banks. Welcome back to squawk box. Whosay is a consent Marketing Company for alisters. Celebs use the companys invitation only platform to manage relationships with fans across all sorts of social and mainstream media. Whosay backers include amazon, comcast. Joining us is the cofounder and ceo. And also coco rocha is here. Supermodel and founder of the new athleisure thats the phrase these days. Of co and co. Explain what this is all about. We really are at the moment a fastgrowing market content company. That means we make better ads for the world were really living in that matters which is this. Nothing really matters now in my humble opinion except for this. And television. And the ads on this. I consider them to some degree the same thing as well probably talk about. To make better ads on a mobile device is tricky. We make great Creative Ideas but we work with great professional people in the world of fashion and entertainment and sports and make sure the ads are distributed effectively to all the right places. Youre connecting with celebrities and other people to effectively endorse products . Or to use it to then send out over over their its a bit of both. If you think about it, its a form of endorsement. That market, of course, is a very large one in television. And television, of course, and the conversion with television and digital it happening faster than ever as everyone knows. What you need to do to make it work is you need to make a better ad. One way to do it is to work with Creative Professionals from the entire spectrum of celebrities. There is nuns ainfluence and im that you can have because you own to some degree your own audience. Coco owns to a degree her own audience which she can use in multiple ways. How did you guys hook up . I feel like early on in whosay my relationship with them was early on. I loved many things they did. The celebrity, as you could call me that they give me opportunities to do. If its posting something on my social media. I have 13 platforms of social media. I handle them. Me and my husband. Its a lot of work. How much time do you spend in a given day every day, all the time. An hour or two . Ten minutes here and there . My husband can work on it pretty much every hour as long as we have something to post. Not only posting, checking what people respond to. We want to make sure that whatever i am saying or doing, they dont feel im overselling. It sounds exhausting. It is exhausting. Do i check social media for fun anymore . Probably not. Social media is a business now. I think it is to most brands, new brands. I am a brand. My modeling career is a brand in itself. So yes, i think if youre smart and savvy and want to grow your business youll use social media the right way. You go to her with ideas . There are three aspects to what we do. A technology aspect. We built a platform to help our clients manage, as coco pointed out, whats now multiple Distribution Options that take a lot of work. Thats a simple invite only. You have a tailor a message differently for the different platforms. Over the years transformat n transformations have occurred. But snapchat might be the big exception because thats a different experience. The second part is we basically bring opportunities that are brandoriented to our clients and then help them manage the data associated with that. We have collected a lot of emails for our clients. Things you cant do if your professional life involves doing your actual job. Weve made it easier to do all of that. Of the social platforms out there these days, do you feel like one is hotter than the other . Are you a snapchat person . I am. One ever the reasons snapchat i think is working these days is because people know it is you. In the end it has to be you. For a while people loved doing social media on their own and then were sold for the fact that they should have a pr company doing it on their behalf. A lot of celebrities. And then the fans and followers notice, this isnt you anymore. It doesnt sound like you anymore. Youre selling me something that i just dont believe in. Snapchat changed that again in that it has to be me. It is me. And its raw. Thats the other thing about when i work with whosay. When something comes to me and they say, hey, this brand, so forth, is looking for a celebrity or so, it i have to make sure that i believe in that. And that, i think, is again, everyone realizes that they cant just randomly be like, yeah, im going to sell that coffee. I dont drink coffee. I am a tea person. It makes sense. I have to ask a money question on both ends. How much money can you make justinjust on the social media side . Not selling your athleisurewear but from stuff he comes to you with . My modeling gig bein, presoc media, thats what i media, i would model products for a paycheck. This is a new way to do the same sort of thing but now i get to own my content and say what i will do specifically. But it is always different. Everything is different. I think the big part of this business is theres a huge amount of money spent on marketing. The ads are currently not very effective. The popups, you dont have to be 20 to make sure theyre terrible ads. Are you profitable right now . Yes. Do you become independent or im trying to craft a path to global domination. Thats what were following. We will watch as the empire grows. When we return, jim cramer is going to be joining us from the new york stock exchange. Well get his take on todays big movers. Stick around. Squawk box will be right back. I could get used to this. Now you can. When you lease the 2016 es 350 for 329 a month for 36 months. See your lexus dealer. Lets get down to the new york stock exchange. Jim cramer joins us right now. Jim, weve been talking about the fed all morning long, what this means, whether theyre out of the game of rate headachikes. I think its a green light to buy high yielding stocks but were still hostage to oil, becky. Honestly, when i saw oil down again, i said were going to take our cue from europe, which is bad because the brexit. You have the fed saying the economy is not that strong. You say, all right, let it come in and ill buy General Mills when its right, ill go in and buy some kelloggs. Its difficult to buy anything that needs earnings momentum. Kroger is up on a not so great number. Thats a domestic company, dont have to worry about brexit. You still got to go to the supermarket. Its a suboptimal situation without as many stocks doing as good as we would have if the economy were better and oil going back to 50, which its not going. Oil prices, by the way, down for five sessions in a row, just like stocks have been down five sessions in a row, which will be six if we continue the way were going this morning. Ive seen largerthanexpected supply numbers coming in but then you have the weak dollar. Wheres the chicken and egg thing here . They bought the drilling rights from deffen and theyre going to add to the rig count. Unless venezuela drops off the face of the earth, the United States started pumping again at 50. 50 will be a ceiling. Oil can get down to 45 and bounce and when it gets to 45 and bounce, the stock market will go up again. The reverse linkage up six Straight Days. Up 25 today. I dont think its brexit or chaos or anything. I think its all fed, right . Yeah, thats all fed. Its an asset worldwide that people want. Im in favor of going there. I think gold is good. And i think rand gold is an amazing gold company. You see that stock go through 100. There were six downgrades where people didnt think gold could rally. Doesnt matter. Its a premiere gold company in the world. Stock is on fire. Well see you in less than four minutes. When we come back, well have parting shots from our guest host today. And weep hear from General Motors Ceo Mary Barra tomorrow, starting at 6 a. M. Eastern time. Shipped from here, on this plane flown by this pilot, who owns stock in this company, that builds big things and provides benefits to this woman, with new cabinets. They all have insurance crafted personally for them. Not just coverage, craftsmanship. Not just insured. Chubb insured. When you cook with incredible thingredients. Ato. You make incredible meals. Fresh ingredients, stepbystep recipies, delivered to your door for less than nine dollars a meal. Get your first two meals free at blueapron. Com cook. Will we get back ever above 5 in our lifetime on fed funds do you think . Not in my lifetime. And youre young. Not in my lifetime. Seriously . Yeah. I think we are at around 2. 5 to 3 in terms of the neutral right right now. Getting to 5 would require some enormous shock, positive shock productivitywise which i dont see. Wow. We havent talked about the effect segment. That has a way of transmitting volatility elsewhere. Dont forget whats happening on the effect side. We learned that before and were going to learn it again. Homemamohamed, thank you. That does it for now. See you tomorrow. Right now its time for squawk on the street. Good thursday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer. Stocks are off for a sixth day down. Central banks are the story all around the word, the fed, the boe all stand pat. We begin with central