Dow was down 2. 25 . If you look at what has been happening with treasury yields, this is the question. Will the fed cut and by how much the question is when. The tenyear note at 4. 44. We have seen yields push up. I think traders are actually betting that two rate cuts are more likely this year. Just seeing that in the fed futures at this point. We get inflation data this week with the cpi. That is key. Last week, we were talking about the jobs report and people were saying the Inflation Numbers are more important. The jobs number is big. We will talk to Mohamed Elerian about the topic later. And breaking news. The Biden Administration announcing funding from the chips act. Taiwan semiconductor is giving 6 billion in grants and 5 billion this loans for the factory in phoenix and then a third was announced. Gina raimondo will be on squawk on the street to talk about the chips act and the award at 9 30 a. M. Eastern. That is good news for Taiwan Semiconductor and good news for america. Not as good news for folks like intel and others that wanted access to the chip awards. It is important we have production in the United States. The idea of it being in phoenix is huge. 80 of those chips produced in taiwan. That is a dicey situation. We saw how concerning it is to have too much of your supply chain located in one place in the pandemic. This will be a change that brings about needed production in the United States. A foreign ally, but competitor. Would you prefer to have it owned by an American Company . Do we have the resources to do it . Thats the issue. Thats part of the problem. Ultimately, would you prefer it be made by u. S. Suppliers . Yes. The important thing is it is produced here and they have the know how. Im sure there will be a lot of debate about the award. Treasury secretary janet yellen janet yewrapping up her whine. She spoke to cnbcs sara eisen. It shows the u. S. Is firing on all cylinders. Inflation is coming down. The job market is very strong. Growth is really a lot stronger than i would have expected at this stage. We had 3. 1 growth last year. Inflation is coming down. Labor supply is up. Comments on a strong economy. Sara will join us at 6 30 a. M. Eastern with more of the interview. Interested to hear what she has to say after all of this and the reports with the information from the press conference and how much tension and distrust there has been this weekend with the meetings. I dont know that is the case. She started the comments in the press conference with the idea that things have gotten better over the last year. It will be interesting to hear what sara thinks. I think what janet yellen is saying, im sure, she feels genuinely about that. The other reports and reporters who seem to be writing about this seem to think things have been more compliccomplicated. Talking about complicated. In brazil yesterday, the Supreme Court judge opened an inquiry into elon musk after the owner of x said he would reactivate accounts on the platform that the judge ordered blocked. Musk said he would lift all the judges restrictions because they were unconstitutional and called on the judge to resign. Neither side recalled the issues that were blocked. They are accusing fake news and hate helps ackmessages. Musk said this judge applied massive fines and threatened to arrest employees and cut our access to x in brazil. As a result, we will probably lose all revenue in brazil and have to shut our offices there. Principles matter more than profit. Musk vowed that x would publish all of the judges demands. I want to say one of the things that is interesting about this and i applaud him for doing this. However, you know, there have been times where he said we will follow the local law. Whatever the local law is, we will do. In america, we will fight for free speech, but in other countries, we will not fight for free speech. This question has come up time and time again. I asked him this question about china. If bad things are happening in china, will with you do something about it . The answer is we will follow the local law. He has a lot of business in ch china. Tesla. Tesla and other things. If the judge in china said we dont like what are you doing, it seems you would hear him say we will follow the local law. In brazil, where i imagine there is less business to be had, he is taking a principled stand. Thats all i have to say. Nothing else needs to be said. Probably right. The way of the world. In other musk news, the tesla ceo saying the company will reveal the robo taxi product on august 88th. He posted that tesla scrapped plans for the lowcost electric car. Musk accused reuters of lying without specifying details of the story. If you look at what the judge did, it is a problem. You could argue that maybe there was a case in the country where he believes the laws are in place to allow him to keep these people on the platform. The judge is making the wrong decision. Maybe, you know, i can go back and forth on this. Were still in musk land. In a. I. , investors close to musk are in talks to help xa. I. To raise 3 billion. Among the backers is gigafund and the board member of spacex. The reports were denied about raising additional money for xa. I. Take it for what it is. By the way, we will speak with ron baron. He will join us on thursday this week. We will talk about all of these issues with him at that point. Yeah. The faa is launching an investigation after the engine cowling cowling . Oh, cowling, the cover of the Southwest Airlines plane fell off during takeoff in denver and struck the wing flaps. The cowling is the protective cover, like the hood over the car. Workers can open it and work inside of it. The boeing 737800 plane returned to the airport for maintenance. Shares of southwest this morning are down 1 . Boeing shares are off 1 . United airlines is postponing the investor day amid the faa review of the compliance with the safety regulations after a series of incidents there. United said it would simply send the wrong message to the team to have an exciting investor day focused on financial results. Among the incidents in the last two months, the plane landed in oregon with the missing external panel, plane rolled off the houston runway into the grass and plane diverted after losing a tire in San Francisco. All of those occurred on boeing planes, but people are pointing to maintenance for those issues. The investigation is still ongoing. When. When we come can back, we will talk to tom lee about the fed and the outlook and much more. And later, snapchat is making changes after the back bla backlash on the report of teens mental health. That and much more when squawk box comes back. Announcer this cnbc program is sponsored by baird. Visit bairddifference. Com. grunting at morgan stanley, old school hard work meets bold new thinking. laughter at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. Old school grit. New world ideas. Morgan stanley. Youve got xfinity wifi at home. Take it on the go with Xfinity Mobile. Customers now get exclusive access to wifi speed up to a gig in millions of locations. Plus, buy one unlimited line and get one free. Thats like getting two unlimited lines for twenty dollars a month each for a year. So, ditch the other guys and switch today. Buy one line of unlimited, get one free for a year with Xfinity Mobile plus, save even more and get an eligible 5g phone on us visit xfinitymobile. Com today. Welcome back. The stock futures this morning are relatively muted to start the trading week. The dow futures off 35 points. Joining us to talk about what he is seeing in the markets now is tom lee. He is the Global Advisors managing partner and cnbc contributor. Tom, we are sitting very near alltime highs. Yet, it does feel like there is some nervous nness in the marke at this point. A lot of this is coming from hotter than expected Inflation Numbers and stronger than expected jobs reports and moving num manufacturing ism. That has people wondering if the fed will cut rates. Areunnerved by this . I think, becky, this wednesday will answer a lot of questions. You summed it up well. Can the fed be in the position to reduce real rates if we have good Economic Growth . This coming wednesday is the march cpi. It will be the first clean cpi report of the year. It wont have any residual se seasonality. We expect it to be a good report. Lower than expected inflation. It will help investors get to the place where we can have good growth in the economy and there is slack in the labor markets. Inflation is falling fast enough to cut rates this year. I know you have been telling people to buy on the dip. Not that there is much of a dip. Does it matter if the fed cuts rates . Earnings are strong enough. Is that enough to justify valuations at this point . I think the fed being supportive of the economy and managing the Business Cycle is the most important thing. In the last two years, the fed was fighting inflation and hawkish. That was tough for equities. If we are in a mode where the fed doesnt know how many cuts it needs to make, but supports the Business Cycle, that is good for stocks. You dont need three rate cuts. You could have a good scenario with the fed only cutting once. If the fed is in a position where they feel the need to raise Interest Rates, that is bad for stocks. Tom, hold on just a moment. We have breaking news. We would like to get your reaction. If you dont mind listening. We have news crossing this moment. Jamie dimons Jpmorgan Chase is publishing his annual letter to shareholders. We want to bring you the news in the letter. Highly watched letter annually. Dimon writes the following. He says despite the unsettling landscape, war in the middle east and ukraine, growing geopolitical tensions in it china and polar 00ed here in the United States, he believes it is resilient and the market is pricing in a 70 to 80 chance of soft landing. Dimon thinks the usual you is lower. Citing ongoing fiscal spending and remilitarization of the world and the global trade and the Green Economy. Another issue is artificial intelligence. Dimon writing the consequences will be extraordinary. He says Jpmorgan Chase has grown the a. I. Organization materially with more than 2,000 Machine Learning experts or data scientists on the payroll. Dimon issuing a warning. We may be entering the proper treacherous geopolitical eras since world war ii. He is concerned about the large deficit supported by kwaun tayl kwa quan quantative easing. He said this may be creating rfk to eclipse anything since world war ii. We should not take them lightly. It is interesting. Jamie dimon is somebody who has been fairly optimistic about the United States and the economy. His concern about the geopolitical events is one echoed by other people who are optimistic if you talk to Warren Buffett. The letter is optimistic. We just hit on what i would describe as the news piece in the tonally, he is talking about a. I. This is 20 years since the bank won the Jpmorgan Chase which put him in charge of the company. The largest bank in the country, market cap wise. It goes to other pieces to it. It is a worthy read. There are a few ceos who actually write their own letters without worrying about lawyers and other people going through it and reading it and telling them what they can and cant say and writing it for them. Jamie dimon, obviously, a huge one. Warren buffett, jeff bezos wrote a very straight forward letter that you could tell was written by him with their voices. Larry finks letter was up there with the parents at the top of the letter. Thats why these letters are so interesting. The tone in the markets is consistent for the last year. That is the important about the soft landing not necessarily being ascert certain as the mar expectation. Tom has been the bull. Tom, what do you think . Um, i think jamie is doing his shareholders justice because they want to hear from him about all of the concerns out there. I think he does a great job of detailing all of the things that can go wrong. At the end up of the day, when it comes to markets, i think markets tend to price concerns quickly. I think thats really the concern for the last two years. That hard landing. Now inflation pressure are easing at a time when consumers dont have a lot of leverage and 6 trillion of cash on the sidelines. Inflation, we dont know how quickly it will fall. Our bet is it will fall quickly. That means some of the concerns of hard landing is because of sticky inflation. We will have a good economy. Is this a twopronged outlook on the economy and the markets, tom . Is flag the one big issue . If wednesday proves it is a hotter than anticipated or expected cpi, would you change your ideas about what that means for both of those things for the year . Thats right. I think if inflation march is the first clean cpi report. We know they have come in soft and better than expected. If it is higher than expected, it raises the question that inflation is stubborn and getting from 3 to 2 is difficult. If it is a soft report and favored below 3 , that is the consensus. That will change minds that inflation may not be stubborn. You have been telling people to buy. You have been buying on any dips. Were not talking 5 drop, but 2 drop and you are buying into the market . Thats right. There are many reasons there is gas in the tank in the rally. Part of it is we think the Inflation Trajectory is on a glide path lower than consensus. The second is there is too much caution out there. When you look at prime brokerage borrowing, it is below october of 2021. There is still cash on the slide s sidelines. As long as investors are top calling and allooking at the wod as half empty, they can arrely the wall of worry. Tom, thats a bold call. This is a big deal. We are trying to be data dependent and figure out where inflation is headed. What makes you think the market is lower than necessary or some of those who are concerned about the market are raising issues . What do you look to in terms of your expectations and read on inflation . I think it really comes down to two basic frameworks. Number one is we look at year over year core cpi at 2. 4 is where it was at average before the pandemic. It is 3. 8 now. Of that, 1. 8 points is shelter and Auto Insurance. Shelter is statistically going to start to actually ease this year because of the catch up. Auto insurance is also statistically going to ease because it is a catch up. Core inflation without Auto Insurance and housing is below the fed target. The second issue is january and february tend to suffer from both statistical and rezsidual sea seasonality. That will disappear in march. We will get our answer on wednesday. I think it will look quite good. A lot anticipation. Thank you, tom. Thank you. Coming up on other side. South carolina sending cloaitli clark home without an ncaa title. We will talk College Hoops in an moment. L l later, we talk to Mohamed Elerian about his outlook for the fed. So much more on squawk box. We will head to china to get latest on Janet Yellens etg. Sara eisen is on the ground. We will talk to her in just moments as well. You know whats brilliant . Boring. Think about it. Boring is the unsung catalyst for bold. What straps bold to a rocket and hurtles it into space . Boring does. Great job astropersons. Over. Boring is the jumping off point for all the unboring things we do. Boring makes vacations happen, early retirements possible, and startups start up. Because its smart, dependable, and steady. All words you want from your bank. Taking chances is for skateboarding. And gas station sushi. Not banking. Thats why pnc bank strives to be boring with your money. The pragmatic, calculated kind of boring. Moving to boca . Boooring. That was a dolphin, right . Its simple really, for nearly 160 years, pnc bank has had one goal to be brilliantly boring with your money so you can be happily fulfilled with your life. Which is pretty unboring if you think about it. Thank you, boring. Good morning. Welcome back to squawk box. We are live from the Nasdaq Market site in times square. Dow futures off 20. Nasdaq off 10. We have a lot happening. Were going to be checking out where things stand in the treasury markets in a bit. You see it there. The futures overnight as you were watching the South CarolinaBasketball Team capping the perfect season. Gamecocks defeating hawkeyes 8775 making history. Perfect season for them. In the meantime, Caitlin Clark ending her recordbreaking career without an ncaa title. She is the presumptive top pick in the wnba draft. An mak amazing conversation. And then in the mens, uconn is the favorite to repeat and champions. We have the founder of collect media with us. It is officially launching today covering the 500 billion collectible and memorabilia market. A longtime friend and former colleague of the show for a very long time. If fact, darren and i see each other. We run through each other at rutgers and northwestern games. I follow you closely on instagram. This is exciting. You have been a collector your entire life. You know everything about sports. This is a phenomenal run to watch what is happening to Womens Basketball thanks to Caitlin Clark. It is unbelievable. Even on the collectible side. Hyvee launched cereal with Caitlin Clark. It costs double frosted flakes. They were 50. 75,000 card. She has worn six jerseys all year. Our site has that today. One was given away. There has been a 500,000 offer for another one of them. We have never seen this in terms of the interest. Lets talk