Battle twith microsoft and the battle with prime. Things were in a different place with layoffs and a big restructuring taking place with the distribution model at the company. If you look at where things are right now, even with some of the downward pressure on stocks across the board, you are looking at the market cap of 1. 9 trillion. The Company Making 575 billion in revenue and sitting on 70 billion of cash. The stock is up year to date and is now up 6 since andy jassy took over from jeff bezos in july of 2021. That was in the middle of the pandemic. We have so much to talk to him about. We will bring that interview to you in the 8 00 hour. As you mentioned, given everything with inflation and the consumer may be feeling at this point, really perfect time to be talking to him about what he sees with his huge Retail Operations and beyond that and what is happening with technology. If you look at where the markets stand after big declines s yesterday, the dow down 400 points. The similar with the nasdaq and s p 500. You are looking at red arrows this morning. Dow futures down 112 points. Nasdaq indicated off 40. S p futures duown 15. The treasury market yesterday. Hotter than expected cpi number came in with yields and the equity markets moved instantly on this. A 20basis point move within a matter of minutes. T t twoy twoyear yield at 4. 95. Mike, what was interesting is this is not a major move if you look at equities. Pull back of 4400 is 1 . The shift with the big moves in the treasury markets and the idea that the fed will not be cutting as soon. It created a plot twist for the year. If you go back a month, the idea is the bull case is the economy is better than expected and earnings are higher. Bond yields are tame and oil was okay. Although it was rising. We were likely to get the fed to ease pretty soon into the record high stock market. Perfect scenario. Now it seems there is a bit more waiting to be done for inflation. There are tradeoffs. We have to understand if the fed will slow more before declaring victory on inflation. It is a complicating factor. 1 move down in stocks. That was the move that was predicted by the options market. Yields will determine if stocks can get out of the fix. There is some rate sensitivity in the market. You are looking at commodities prices, whether it is oil or copper or aluminum. Precious metals across the board and the commodities prices are higher and the concerns of iran and the retaliation and what it means for oil prices. When you have all of the commodities moving at the same time, that brings you to concerns over inflation prices. The goods disinflation seems like we got the benefit of that. You cannotcount on that going into the right direction. The surprise was modest. 0. 36 rounding to. 4 . We cannot count on it going down from here. You will have harder comparisons in the next several months. We have to see how we navigate that. Andrew, you have breaking news from there. Once a year when we come out to see andy jassy, this happens at the same time. We will bring you this right now. Amazon Ceo Andy Jassy releasing his annual letter to shareholders. I want to bring you notes from it. Im sure well talk about it when we speak to him later in the broadcast. He is striking a more optimistic tone in this letter than the prior year. A challenging year they had navigated layoffs and restructuring with the Distribution Centers and amazon stock trading near alltime highs. It has been a turn around. The investment making the Delivery Network and a. I. Appear to be paying off. A. I. Is the theme of the letter. J andy jassy writing much of the world is built on top of aws with a. I. There have been questions of microsoft and what it has been doing with openai and what google is doing. He says he believes that generative a. I. May be the Largest Technology transformation since the cloud and since the internet. We heard something similar, by the way, from jamie dimon, in his annual letter last week. Part of the strategy is amazons effort to compete in the chips business. He goes into depth in the letter. It is worth looking at it if you follow amazon. Aws sales side, andy jassy is seeing improvements while 2022 companies were trying to save money, but he said by the end of 2023, he saw cost optimization and new deals accelerating and customers renewing at larger commitments over longer time periods. He made it easy for people to turn on and increase the dial or lower the dial. Some people thought he should force the customer to keep on the dial. He said if you give them the option, they will come back when things get better. Amazon has changed the Delivery Network to the regional model to bring products closer to customers. If you are a customer, you might imagine you are getting packages quicker. Andy jassy saying that shift has not just gotten the packages to folks more quickly, but brought costs per unit down to 45 cents in the United States. Also, the number of items delivered same day or overnight increased by almost 70 . Thats a remarkable thing. They are beating their own numbers from the past. On the advertising business, that is a big grower. Grew 24 year over year to 47 billion. Then, im sure in the media world, people will focus on this in the letter. Andy jassy writing, we have increasing conviction that prime video can be a large and profitable business on its own. We will dive into all of this when we speak with Ceo Andy Jassy coming up at 8 30 a. M. Eastern time. Of all of the ceos in america that have touch points in so many pockets of the economy, it may be that andy jassy has a pulse on where things are and as we figure out where the economy is going. We could not be more thrilled than to talk to him this morning. Absolutely. Plenty of touch points. Thank you, andrew. Now to the fed and minutes from the recent meeting backin march. Officials neared agreement on the plan to slow the run up of 7. 4 trillion in Asset Holdings choldings. This is a concern over the bonds they used to stabilize in 2020 and 2021. Officials are allowing the holdings to run off in the months to slow the pace of the runoff to ease Interest Rate pressure and ease the supply demand for treasuries. The minutes show most fed officials show cutting the pace of runoff by half. Meaning there is a bigger buyer in the market that is still the fed . Yes. They wont go as high . They wont buy enough to keep the overall amount steady as bonds mature. Mart part of this is to make sure there are enough reserve nos ine system. It is not just driving Interest Rates lower. It is part science. It is a method of easing to some extent. Quantitative easing. Their argument is neutral if it is no runo off. It is neutral from where you stand right now. Not neutral from where we thought we were headed on the path to tightening. A lot of handicapping of when they would do this. I think this would be earlier than expected and they are sensitive to not creating these log jams in the overnight funding market which happened in 2018 and 2019. Coming up, a. I. News from companies belike microsoft and adobe. And the latest on thimcte pa of hotter than Inflation Numbers and the election. Squawk box is coming right back. Go deeper with thinkorswim our awardwining trading platforms. Unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. And sharpen your skills with an immersive Online Education crafted just for traders. All so you can trade brilliantly. My name is oluseyi and some of my favorite moments throughout my life are watching sports with my dad. Now, i work at comcast as part of the team that created our ai highlights technology, which uses ai to detect the major plays in a sports game. Giving millions of fans, like my dad and me, new ways of catching up on their favorite sport. Welcome back to squawk box this morning. Sam altman has been meeting with officials in the uae. He is meeting to boost the supply of data center chips. The report saying altman is Holding Meetings in washington this week over part that the concern of chips and infrastructure will not keep pace with the Rapid Deployment of a. I. One of the issues he has been raising is the issue of how much energy it will take to make all of this happen. Of course, im sure well talking about this very topic with andy jassy here in seattle in a little bit on squawk box. Becky. Andrew, that was a big issue we spoke with dan this week. Microsoft was saying this is opening a data center every three or four days. The demand they have seen overall for electricity, there is no way we are on pace to keep track with that. The needs for the electricity everywhere in large part of the because Cloud Data Centers and a. I. This is going to be something to watch because it is not easy to get that electricity to the right place and permitting issues have been a problem. The buildout itself and the expense to do this is something they have been talking about for a long time with the demand on the evs on the grid. A. I. Puts it in a new chart. You have to wonder if that is a limiting factor with how much we can deliver on a. I. And how quickly we move to try to fix the constraints. Sticking with the a. I. Theme, microsoft is releasing new tools for the pcs at the build conference in may. That is according to the session list posted yesterday. Among the new feature, we have advanced pace which will draw on a. I. Models that run directly on pcs without having to send and receive data back through the cloud. Microsoft shares, if you have been keeping track, up 13 this year. 425. 47. Separately, a bloomberg report says adobe is buying video to build a a. I. Model generator. The Software Company is offering photographers and artists 3 to 7 per minute of video. It is seeking to show people engaged in walking or expressing emotions. It is requesting video of simple anatomy shots of hands, feet and eyes and video of people interacting with objects like smartphones and fitness equipment. The Company Warns against sharing copyrighted material and nudity. This what adobe is trying do. Build without the copyright infringement. Everybody else is suck up the data and move faster. Well figure it out later. Andrew, we talked about this for a while with adobe. It is fascinating. We will talk to andy jassy as well about this. They are building their Large Language Models. Data is the new oil, if you will, as how these things are generated. How do you build them . People are running out of data to train on. You are trying to boil the ocean and dhow do you do it without infringing on copyright . Openai build a program expectly specifically to try to generate transcripts off youtube to train off the transcripts. There is a question over if that is a copyright issue. This is a very big issue. It is interesting to see how adobe is trying to deal with this. Everybody in the space is trying to hoover up what they can with the copyright issues which need to be addressed. We will see how it gets addressed ultimately. It is an argument against the companies vacuuming up the data and saying well sort it out later. It is an argument saying it is the only way we can do it. Adobe is proving there is another way do it. How successful remains to be seen. There is another way to do it. The Justice Department has opened an indepthing antitrust investigation into the nippon steel takeover of u. S. Steel according to the politico report as japans Prime Minister is visiting washington. The timing could not be more awkward. The Prime Minister said in the conference yesterday that he hopes the proposed deal would proceed and believes appropriate procedures based on law are implemented by the u. S. Government. President biden previously said u. S. Zsteel must remain an American Company. President biden yesterday said he stood by that position. Of course, along with the japanese visit, President Biden hosted the japan Prime Minister at the state dinner at the white house. Amongst attendees are jay powell and masa son and apples tim cook and shawn fain, jamie dimon and larry fink. John gray and ibms arvin kris hak krishna. The guests were entertained by paul simon. Becky, can i make a quick point . To me, one of the most salient or fascinating facts about the dinner. Jamie dimon at the dinner. I raise it because there is a lot of conjecture since we did that interview with jamie in davos about his comments about politics and President Biden. Specifically President Trump. A lot of people took the clips he said on air as if he was a supporter of President Trumps. I thought that was misconstrued by the public and not his intention to suggest he was backing President Trump, but saying you have to respect a group of people who want to support him. By democrata, godemaging him ma for society. Every person that the default, is a supper of sorts of President Biden. His comments at davos were not just respect people who voted for President Trump, but his point was there is a reason they are voting for him because of the policies he thought were better from immigration to others. He named them beyond that. I dont think he came down on one side or the other saying he was supporting one candidate or the other. I think it was more than just saying you cant mock those people. He was giving a reason for why. Some of the policies. It was an explanation to the the public about that. For those who were curious, if he was all of a sudden named exploded as a potential treasury secretary for President Trump for those of us who have reported on this and understand it would never happen in a million years. The idea that jamie dimon is voting for President Trump, i think, for those online who seem to be conjecturing that was the case, i think that is not the case. I think the evidence is on the tape, as they say. We very more coming up on squawk box. We will talk about the hotter than expected inflation data. Later, dont miss it here in seattle. Our interview with ay jay. Ndss that is coming up at 8 30 a. M. Eastern time. Were coming right back. Announcer this cnbc program is sponsored by baird. Visit bairddifference. Com. When it comes to investing, we live in uncertain times. Some assets can evaporate at the click of a button. Others can deflate with a single policy change. Savvy investors know that gold has stood the test of time as a reliable real asset. So how do you invest in gold . Sandstorm gold royalties is a publicly traded Company Offering a diversified portfolio of mining royalties in one simple investment. Learn more about a brighter way to invest in gold at sandstormgold. Com. upbeat music with the push of a button, constant contacts ai tools help you know what to say, even when you dont. Hi constant contact. Helping the small stand tall. New projects means new project managers. You need to hire. I need indeed. Indeed you do. When you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. Visit indeed. Com hire and get started today. Welcome back to squawk box. Our next guest says anger is the Biggest Issue for voters heading into the election. Joining us to talk about the rising issue of inflation is head of policy and politics. Tobin marcus. The second the number came out yesterday and you see the headlines means this is a headwind for the biden administration. They had been hoping the trend was turning the opposite way. It has turned back. What do you think . I think an th lot of the dam has been done. A soft landing would be better than reacceleration. Anecdotally, a lot of voters want prices to come back down which is not what anyone is steering toward for the policy perspective. It will remain a huge problem for biden regardless of the data in the near term. Pushing rates outdoes not help. What would be helpful is Mortgage Rates coming down and auto loan rates coming down. Credit card rates coming down in a durable way. Not a rate full of cuts. You know, i think biden is at the disadvantage over trump in the economy with regards to data. This is a question that we talked to Lael Brainard about over the last three years. A lot of voters say their wages have not caught up with inflation, even if they are outstripping inflation today. The view is the current trend, if the trend is friendly, and now it was not, but if it was, it doesnt matter with the damage already taking place and you will not get back to where you were three years ago . Right. Change happens at the market. One way or the other, voters will say trumps rating on the economy is better than bidens when election day comes around. I think we will start to mitigate the vulnerability. I dont think we get a version in november. Biden is doing a great job steering to the crisis and we give him the election. I think bidens campaign will be populous and talk about drug pricing and set up priorities and values. The Trump Campaign will be focused on remember 2019. That felt better than today. There is no way that dynamic changes. Is there anything that you think either President Biden could have or should have done or President Trump could have done or would have done relating to the inflation issue or is it doesnt matter and it is always something that is in the hands of jay powell and whoever was the president sitting on top of that would be held responsible . There have been a lot of recriminations of overstimulation in the american Recovery Plan passed in 2021. When you look with the benef