The last week or two. Lets talk about what minneapolis fed president Neel Kashkari has been saying because he was speaking at the Wharton School of business kashkari saying if the economy is stronger than we realized on the margin, then that tells me rates would have to go a little bit heiigher and held higher to cool things off. We will talk to him about that directly he will join us live in the 8 00 hour he sounded more hawkish. He is sounding hawkish, but maybe we got to be hawkish given how strong things seem how they seem who knows . And Jpmorgan Chase ceo speaking to cnbc in india overnight. Here is what he said about the economy and fed policy so, if you have higher for longer and good growth and inflation is contained, thats good you have more fighting for capital and payment for capital. The world needs it for the military and Green Economy and i. R. A. Act and chips abs act an deficit spending right now, it feels good fiscal stimulation was extraordinary. That was a global phenomenon more in the United States than everywhere that is a little bit of a sugar high that will do away. That will go away you have ukraine, oil, gas, disruption of trade flows, wi winter good leadership on the part of america and india and china and europe could make sure the negatives dont happen i put myself in a cautious category the negative could happen if the government shuts down. We will talk about that in a bit. And what would happen if the world got to 7 Interest Rates the world is not prepared for it i dont think that is something he is anticipating, but that is the worstcase scenario. He said im cautious at the very end i would listen to him. Im glad i learned that express gradually all at once. I think a lot of people think that will happen the nfed doesnt know the lag effect of 500 basis points how long does that take . You have the lag effect of the inverted yield we are right where that is supposed to be 14 months or 15 months he said december. He came up with that model. Predicted eight he said no it has been correct every single the time could you fathom them lowering rates next year does that make sense the people like gundlach say that was it. You cant tell a pause from the last one until it happens. I dont know the whole question is whether with we are actually restrictive right now. Are we in restrictive territory at 5. 5 the question is have you tamed inflation. Some of that is out of our control. I read through the issue in jamie dimon. He is blaming politics on it the Energy Prices and food prices what you may see coming from that his comment is if they will have lower volumes and higher rates, meaning lower volumes of energy and higher food. There will be stress in the system he he said Warren Buffett says you see who is swimming naked when the tide goes out. Politics is his biggest worry. We will see what deal the president can do if he gets the auto workers President Biden is going to join the uaw picket line i think his possible rival in the 2024 election was ready to do it, too both of these guys this is what pushed him donald trump was saying he will go there if you lose michigan, you will have a tough time winning the election the first time in over 100 years First Time Ever we had a sitting president going to stand on the picket line his chief rival was threatening to do. We had Debbie Dingell on last week she said he could lose she told me off camera she said he could lose michigan because trump resonates with the auto workers and the people there. It is a tough situation there are positives and negatives. Inflation is the reason people are sour on the economy. He is standing he is doing this in his words solidarity with the uaw. Shawn fain will speak out. Phil lebeau will be there watch withing the picket lines in wayne, michigan. Note, Brian Sullivan will host last call live from wayne, michigan at 7 00 p. M it is fraught with many moves. He did not stand in solidarity with the railroad workers. If the strike goes on for a long time and it starts to impact the economy of the United States, the economy of michigan, you could have it back fire in an election year. It is an unusual move that people are watching. Shawn fain from the uaw has been reluctant to say they will support biden. He has proclaimed he is the most unionfriendly president in history, the head of the uaw is pushing that. All of this is with ford pausing construction of the battery factory in michigan. The company did not say if it is connected to the ongoing uaw strikes. Said we will limit spending on construction until we are confident about the ability to run the plant. Ford was planning to operate the plant in partnership with chinese based catl, the Worlds Largest ev battery maker, with shares falling in overseas trading. I figured that out they are not making diehards batteries to start your ice car. This is a situation where republicans have been pressuring the company to not do this with the association with china i thought the same thing i could not figure if this was union or caving to china hawks a lot of money. They are losing money at this point. Its early everything that the f150 makes, a lot of what the profits are going to will transition and they are losing money. Are people buying evs en masse not yet. When they do, they are not buying big evs the uaw should get big pay raises the ceos messed up by paying themselves too much which is lousy. He thinks the federal regulations need to be rolled back because the big three automakers cannot be profitable with the heavy regulatory push toward ev. I have seen cool evs. They are not tesla ionic. There are cool ones i have not seen a nice big one hyundai or kia both have nice evs. Of course, kia the kia looks cool. Thats what im talking about. Ionic. Rivians are cool. Lu lucid is cool, but it is expensive. Polestar thank you, god. I think no, i was talking to my producer. Voices in my head. A lot of voices in your head. The countdown to the Government Shutdown and moodys now warning the shutdown could lead to a negative outlook and downgrade. The company says this is how Political Polarization is weakening policy making. Moodys rates the u. S. Government aaa the last of the big three a agencies to have a aaa rating. It is the last agency to maintain the rating like this after fitch downgraded the government by one notch in august s p gloebal downgraded it in 2011 fitch did it and saying this was the wrong time and did not make sense. Part of what fitch said is there is polarization that things wont get done this is not the same as the debt default. Moodys is saying this is signaling that there is no way politics wis working. Coming up, we will talk about the strategy of the trading day which doesnt look good at this point down 145 points. Not a great week last week either in a bit of a consolidation or correction mode here probably based on Interest Rates and maybe oil. 150 possibly. Dont miss the interview with iac chairman barry diller. He joins us on set at 8 00 a. M. Eastern. You are watching squawk box on cnbc it takes years of dedication to get to this milestone. The New York Stock Exchange is a symbol of what america is all about, the potential of an american dream. It is day one. A lot of work has happened to lead to this historic moment. The only way you can move a Society Forward is a true expression of freedom. The first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. We just got an order from dinosaur, colorado. Start an easy to build, powerful website for free with a partner that always puts you first. Start for free at godaddy. Com rich, velvety. Coffee. Cafequality. Espresso. One highpressure system. That can do both. Brew to your hearts desire. With the lor barista system. Now brewing peets coffee. Nice footwork. With the lor barista system. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. Futures right now are solidly in the red this morning. More than 100 points 137 points nasdaq is weak as well for more on the markets, lets bring in a. Jj. Odom. After that move off the october lows, were in a back filling or something more substantial i think the volatility is concerning about lately we heard the idea of recession. If we look back to the fed meeting, it seems like a soft landing is in play for them. It seems the market is concerned that it is possible they can potentially go further with rate hikes. It seems like a dpgoldpold golds scenario with the s p. It should be happy with the soft landing scenario with the s p. That is the paradox we find ourselves in the fed hasnt done enough you heard jay powell or chairman state it. Expectations rising and the consumer is not fazed by prices. That is the concern with the soft landing turn into no landing and if they raise rates higher if you are in that scenario, we move into recession. We are moving into the next phase and how the fed navigates rate cuts or do they cut before hikes . What do you think will there be more hikes your heart of hearts i think we have seen the last of the hikes in this cycle you do . Yeah. Rates are fairly restrictive at these levels if you look at the forward thinking measures on inflation and what is coming out for september and you see that sticky Inflation Expectations are 4. 1 for september we see that continue to move in the right direction. Oil prices are a concern and how that impacting headline inflation. We feel that is short term in nature for now. You worry about the system with wage increases on the horizon. We have unions still at 8 t . They have been rising. That could not add to the weight diffe differential if it is everyone wanting more because of inflation, that could turn into one of the spirals. I need more money. They need more money we have seen that movie before. Average wage growth is 4 3. 5 is indicative of 2 inflation target that the fed needs to get to. To your point, there are headlines out which are concerning to have an impact on the long term. The fed is pushing out to 2026 a little further is a bit concerning we will see how that plays out i think some of the headlines are showing pockets here and there. You hear about lower quit rates and it will be interesting when it comes out in the next couple months. Suddenly 2024 is not a great year for s p Earnings Growth is this the rebound we are looking for after the flatt yea . We see it in mid 2024 that is the soft landing base case you believe the fed will pivot the market should rally from there. We see positive earnings revisions in the last month. We look poised to perform quite well as the fed looks to pivot you look at 88 of the s p Consumer DiscretionaryCompanies Beat expectations. The s p is continuing to push higher. Is it possible rates dont go up enough for multiples to contract multiples say where they are and earnings grow 10 to 12 and it is reflected in the stock price . Yes, definitely i know there is a concern of a consid contraction and that impacts earnings i think in the nolanding scenario, you would see a contraction. You should start to see higher levels or us able to reach the alltime highs on the s p. As far as multiples do, they are not cheap. No, but back out of the magnificent seven and the equal weight is 16 times erarnings as opposed to the magnificent seven. Some of the air coming out means there is room for valuation across the bhe board those are the ones you want to own you can get that bounce back and a little bit more bang for your buck and look outside of the seven names. I know clients love them because thats how they got to where they got in the portfolio and concentration. There there are other opportunities outside of the seven. Gold or bitcoin if you did bitcoin, would jamie come and see you and say xnay on the itcoinbay very good we are looking at new technology i think we have not seen enough with the history of crypto in general. We tell them and we cannot advise on allocating dont put more than you are willing to lose in that position you look at the regulatory h headwinds there. You look around if jamie is there . We have a target on gold. I think a lot of portfolios are diversified. Gold has held up. It has been at 1,900 forever. A. J. , thank you. When wite come back, chatgpt is getting smarter it can now see, hear and speak we have details on that after the break. A programming note join us thursday for the delivering alpha conference here in new york. Meet with investors and leaders to provide analysis to help you balance risk with maximized returns. Scan the qr code or go to deliveringalpha. Com right now to register in the u. S. We see millions of Cyber Threats each year. That rate is increasing as more and more businesses move to the cloud. So, the question is. Cyber attack as cyber criminals expand their toolkit, we must expand as well. We need to rethink. Next level moments, need the next Level Network. [speaker continues in the background] the network with 24 7 builtin security. Chip . At t business. Announcer executive edge is sponsored by at t business next level business need the next Level Network look out, world. Chatgpt can now see, hear and speak according to the announcement from open a. I it says the a. I. Model can understand spoken words, respond with the synthetic voice and process images the update which is available in the next two weeks allows paying users to opt in on voice conversations on the mobile app and choose from five voices for the bort responses. The company said the synthetic voices were developed with voice actors and not collected from strangers. Users will share images from chatgpt and highlight areas of focus or analysis. Asking what wclouds are in a photo. This sounds like it is getting closer to jarvis tony starks a. I. Assistant. I know he had a pole on his plane. Jarvis a rather intelligent system it is played by an actor with an incarnation of the a. I. Bot. They didnt use real a. I. They didnt if this can see, hear and think, you are getting closer to what . The most her. I did see that. Same thing yeah. The big deal is not the voice st stuff. It is the thinking stuff. It is the image stuff idea you can feed it an image and it will tell you everything in the image and fix it and work it it breaks down security pro protocols . It is a totally different approach the mind blowing part is the issue with you talk to it with siri and alexa you saw amazon made the investment in anthropic. That technology will end up on the other side of alexa or other ser services they said it will help give smarter recommendations for shopping it is that level stuff with alexa which is scary by itself when we come back, we talk about scary. Government shutdown looming. Latest on the efforts in congress to avoid it and the consequences if it happens as we head to break, a look at yesterdays s p 500 winners and losers announcer winners and losers is sponsored by state street global advisors. The biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. It still does. What can you do with spy . Is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. Good morning welcome back to squawk box. Were live from the Nasdaq Market site in times square. Lets look at futures. Dow futures were down a half hour ago and we are indicated off 135 points s p off 20 nasdaq indicated off by 70 appoi points this comes after the down day yest yesterday. If you want to see what is happening with Energy Prices, it looks like crude is dipping below 90. Brian sullivan asked chevron ceo mike worth about the Energy Prices on last call. We see a Global Economy which is continuing to do well we have seen production cutbacks in the opec countries come on top of the market which was showing signs of tightening. It is fundamentally supply and demand sur prices have been firming here for weeks. Meantime, Goldman Sachs ceo David Solomon spoke at the same conference he defended the issues and demand the investment in the sector solomon said Traditional Energy companies are important to the economy sachs. In the meantime, we are in the last days of september and congress has four days to fund the government to avert a shutdown before september 30th thats the deadline. Joining us with more punch bowl news is jake sherman good morning to you. How do you handle that after i read your newsletter this morning . We should talk about the ukraine piece of the aid that is a Sticking Point andrew, the senate has been on the sidelines so far with the government funding fight is starting to move on their own stopgap measure they are trying to keep that very clean meaning little or no ukraine funding for 45 days. A little bit of disaster relief. The only question is can Kevin Mccarthy who promised to fund the border and institute border policies and cut spending. Can he put that on the floor the question is if Senate Passes this bill is should he upset the right flank of his conference to avert a Government Shutdown . If he puts this on the floor, he risks one of those snap votes on his leadership which would be very difficult for him im not saying he cant beat it, but they could challenge his speakership. That would be tough for mccarthy as we tick toward sunday, andrew, sunday night, the government shut shuts down. We will speak to mccarthy today. What is the chan