week. the ten year is yielding 4.44. we'll be back here tomorrow. >> wearing our glasses later this afternoon. we'll see you back here tomorrow. right now it's time for "squawk on the street". good monday morning. welcome to "squawk on the street." futures are steady despite some rising treasury yields. busy week in focus with cpi. yellen in china. a total eclipse of the sun. america's chip plays, taiwan semigetting a billion-dollar investment from uncle sam.

>> treasury secretary yellen is not ruling out the possibility of new tariffs on china. >> janet yellen wraps up her visit. >> it's beneficial and desirable and it needs to be on the level playing field. and in the number of ways we feel it's not. >> jamie dimon's warnings for investors. higher rates, and the profound implications of a.i. we begin with news vonding a major supplier to nvidia. the white house announcing $6.6 billion for the company's arizona plants. under the commitment, tsmc is committed to adding a third complex. jim, we're talking some 20,000 construction jobs, there's money in here for workforce training.

>> this is a big one, it's the ones that we really need. i don't know, we'll have to talk about how much they really feed. we don't have enough engineers to build these. david, you know that this is the most tenuous, we'll talk with sara about it, the most tenuous situation we have, which is we could lose access to this if china moves on taiwan. >> we could. >> that's a big threat. >> certainly important component of our concern if that were to occur. >> and supply chain. >> we've said so many times when it comes to high-end chips, tsmc is the de facto place to go. i heard your comments about

intel on friday. >> we'll ask her about intel. the comments that i made were really existential. >> as for tsmc and the $6.6 billion, it's going to require an enormous investment from that company. it may not still be the forefront of the technology -- >> yes tashgs's true. at that point -- but the fact is right now this is pretty good. i mean, nvidia could use it. >> right, right. >> carl, one of the problems we have over and over again, why did we go to taiwan? because we didn't have the engineers and it was too expensive to build and we didn't have a sense that maybe the u.s. would be left adrift.

it was much more private capital and a company we need to go boundary. it made sense. if this country weren't located within the zone of what china thinks is theirs we wouldn't be doing this. if this were in mexico, which is another cheap labor force -- >> important to point out that taiwan gave plenty of subsidies as well throughout the years. plenty of state support there for that company. >> always. we wish that it weren't in taiwan. >> i understand that. when we see sara with secretary yellen and we talk about level playing field, it's important to note they were offered great support. >> maybe we should go to sara. maybe we should go to sara and ask. >> we can. but i just that's also --

>> just ask sara about ipas. why it became such a powerful force in chipmaking. they stepped up. >> they sure did. they had a core level of engineers that we don't have. it's very difficult to get an engineering degree in this country. >> really? >> yes. >> i'd like to see the numbers on that. >> my wife is on the board of bucknell. >> you know how many universities in our country. the key dividers with every other country in the world. the best education system by f far. >> an engineering degree, not a b.a. >> i understand china graduates more engineers than we do.

they also have a lot more people. >> we do import a lot of our engineers expertise. the ceos of google and microsoft can attest to that. >> asked the people like -- we want to do the number. what's the work permit number we're giving in. >> i have no idea. >> that's the key to inflation. >> cpi this week. >> you can repeat what i say. total eclipse of the sun. >> i like to repeat that. >> go to know have scotia and what it. they mentioned the treasury secretary in china wrapping up six days, or sara eisen spoke with her exclusively and joins

us live from beijing this morning. hey, sara. >> hi, carl. good to see you all . she met with the mayor of beijing, she met with students at university. subsidies, this issue was certainly front and center in her criticism she did a little bit of a diplomatic dance between strengthening communication around the economy and also criticizing china's heavy manufacturing subsidies for these industries like they did with steel a few days ago. so, i asked her in this interview what's next f they don't do anything are we going to put tariffs, more tariffs on these products. here's what she said. >> we need to keep everything on the table, want to work the

chinese to see if we can find a solution. we're engaging in a four-year review of section 301 tariffs that's not complete so i can't really speak to what will come of it. i wouldn't rule anything out. but i think we need to deal with this this issue. >> reporter: what she wants to see them is redirecting their money instead of subsidies toward solar panels and into the consumption. let's talk about evs, because i've been here for a few days and i've seen a lot of evs, about a third of cars sold in china are evs. when you do to the mallses you see all these fancy beautiful showrooms of electric vehicles. also, you had these auto

manufacturers who are teaming up with the tech companies here and releasing new cars. i even got in in one of these showrooms. there's a new car, a self-driving car, so the guy at the showroom told the car open the door, i got in, there's driver there although it's self-driving, they're beautiful cars and they're attracting a lot of attention, they're situated inside these malls all basically western brands. then chinese evs, which i think is a big part of the story, we've been telling this story for a long time but the focus for treasury, guys, is on the exports which have gone up 1500% in the last three years, chinese ev exports. and that is the concern that's going to put pressure on prices and kill our auto industry and that's why yellen is sounding

the alarm. >> we talked about the increase in quality of these automobiles significantly, it's interesting you mentioned full self-driving, but when i hear the treasury secretary talk about a level playing field, so difficult, how do you define what that is, what represents a level playing field, how do you deal with the subsidies that have come for so long from the chinese government or for state-owned enterprises and on from there or so many other things that impact it, can they ever really get to an equal definition, i guess. >> reporter: well, i think what she's talking about here when she's criticizing the subsidies and the level playing field is that being more of consumption-led economy and not a supply-driven economy, where in order to stimulate their manufacturing in a weak economy which their economy is weak by historical standards right now they're putting all this money

into manufacturing and now they're manufacturing their surplus is now at 2% or so of world gdp, higher than any other country so instead of shifting all that money into there putting it into the consumer economy and refocusing their maco-economic policy. that's how she was defining the level playing field. so we can stimulate competition in places like evs and solar panels. because right now, it's harder to do with china flooding these markets europe in particular it makes the u.s. hard to compete. we heard elon musk talk abit and now the treasure secretariry is talking about it. >> sara, i watched the interview, fantastic and riveting, i think i think treasury secretary made a point

of distinguishing europe and us, i wanted to know whether you got into the idea of the mexico trojan horse, you can make the volvo in u.s. with just enough u.s. content and it wouldn't be subject to tariff. did she address that at all? >> she didn't specifically address the fact they can build factories in mexico and then ship them over and avoid the high tariffs. should chinese evs be allowed to be sold in u.s. market. she said they're allowed to be sold in the u.s. market. yes, we have tariffs on them, but she said we're open to having chinese imports in the u.s. market. including evs. i think the problem that they have just the fact they're producing so much of the evs and the solar panels on a global

stage it's much more supply than meets demand and that's the problem she has. jim, in that instance and other instances she was very open towards trade. she didn't criticize europe's and china's close trade ties. should tim cook of apple be reducing his manufacturing footprint in china she said, no, we're not here to discourage investment, the closer economic ties, we're here to encourage that in a fair way where it doesn't interfere with national security or it doesn't interfere with the unfair trade practices. >> she was pro-notion of still investing. but, look, if they want to do trade with us they want to start with blackwell, they want jensen, they want nvidia, did

she say anything about we own chips and we're not playing with them because we think they're cheaters? >> reporter: over the course of the weekend, no question about it, the chips were in focus, right, and some of -- more on the chinese side, right, of retaliation when it comes to limiting u.s. chips and what can be sold in the u.s., for instance on micron, but i think it's a good example of some of the pushback actually, jim that we've been monitoring here on the ground and in social media and in the newspapers and the commentary is on this whole overcapacity issue and trade practices, they say it's just an attempt for the u.s. a chance to limit competition and limit china's growth of dominant industries. to squash things like tiktok in the united states. or other electric vehicles, so

it's an interesting on the ground to hear the different sides of the story and really try to understand the chinese side because the readout from the chinese state run media is completely different. >> great look, sara, especially about what kind of local press coverage the secretary is getting. sara eisen in beijing when we come back, jamie dimon's message. got some airnews on airlines. lot of reaction to tesla and other calls. when we return.

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we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for. markets coming off the worst week. the fed might scale back plans for interest rate cuts. you got jamie dimon with his latest laterer letter to

shareholders. he cites inflation, record-high deficit spending. >> he's a little bit more negative. what i see here is that he basically says we could be in for budget deficits. david, when he said 8%, he used to say 6%. but he's very concerned about the long term and how much rates are going to go higher. >> yeah. >> the market side, not the fed. >> understood. he's been cautious for quite some time. we can remember -- you want them

to be ready for particularly tough times if that happens. i was more taken in some ways about his comments on a.i. as much as his continued belief that we could see a spike in rates at some point. talking about a.i., we don't know the full effect, but we're completely convinced the consequences will be extraordinary, possibly transfor transformational as inventions such as the printing press, the steamengine. their use of a.i. at jpmorgan could augment every job as well as impact their workforce. >> david, you would be very interested in the comments about these agencies that make

decisions when it comes to proxy fights and how he doesn't like them, he said they may not be as relevant. >> a criticism for a very long period of time. >> judging what you saw last week, i assessed and you came out in favor. maybe it shouldn't matter. >> it didn't have a large impact. jamie dimon, which i can't remember him having done took sides as well in the proxy fight. took sides of bob iger. what do you make of 8% rates? >> i just don't think so. i think they would be self-regulating. the economy would get hurt really badly. carl, one thing when you listen to what's coming out of congress you're not hearing anything that's reassuring about the deficit. kind of not on the radar screen.

>> congress is back to work. we'll see what kind of ukraine funding johnson may put on the floor maybe in return of lng -- >> it did kill major products, if you're going to do lng, do a gigantic facility, well, you got to start now for 2030, he killed projects right now, i don't know if he knew that, carl. i don't know if they knew the sense theivety to this. unlike semiconductors it may not be as knowledgeable about -- >> right. we'll talk some energy. oil is lower today. as netanyahu does pull some troops out of gaza, we'll talk about the weekend. we'll get cramer's mad dash countdown to the opening bell.

we kick offer a big week between the inflation data and earnings and a lot more, don't go anywhere. also ahead the commerce secretary on the billions in chips that are being granted to taiwanem sis. in a moment.

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take a look at some s&p gainers micron at top. nvidia to 1200. we'll talk autbo that and get the opening bell in just a few minutes.

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all right, let's get to it. mad dash to start this week. >> i have not been all that optimistic about google's prospects versus microsoft. but, i think this is important. tomorrow, thomas will give his keynote at the cloudnext conference in vegas, this is the google cloudnext conference and is going to show off that google's not being left behind.

i believe it's going to move the stock market. >> it's recovered from those existential concerns. >> opening bell here. big board. it's done, unilever celebrating 20 years of real beauty campaign. come friday, jim, we'll be talking about the banks a lot. >> we've got earnings season. we have a lot of positives. analysts keep rising numbers. they do better in a longer, higher situation, so keep in mind that banks are better than

you think at this stage of the psych zbll speaking of wells, chris harvey over at wells today ups its year-end target. systemic risk is on the rise he says jim. >> i actually found great encouragement with mike wilson today, mike did a pretty good piece i think about how we can still buy large-cap stocks, and david, i think he's come around to the bright side of things to some degree. >> all right. that's good. i like wilson. he was alone in the wilderness. >> you always want to see a guy have more flexibility, all i wanted was more flexibility from the beginning. you're really kind of hostage to money -- to fund flows. you can be very right long on the stocks. he's very right.

>> more top down than bottom up. >> yeah, talk to jamie dimon, he would sell stocks. mike wilson, okay, those are really bad worries, he drew the conclusion that you should know caterpillar. okay, look, this is my view, anything can happen, but you need my negativity colors my thinking. versus denny, he was kind of -- the fundamentals don't look good but it doesn't mean the economy won't go higher. >> investors are worried about missing comps, lulu, nike, ulta, but it gets an upgrade. ulta. >> i'm reaching out to e.l.f.,

because e.l.f. has been thebest about trying to figure out where people are buying data. i turn to you, david, for completely no reason whatsoever, ulta is under assault from sephora. i don't know whether you've been to a kohl's or an ulta. >> i've been to a kohl's. >> they play up se. hora. if you to to target they play up elf. you have other places to go as opposed to ulta. the deal they made with kohl's was genius, otherwise david, we wouldn't go to kohl's. >> because we go for se. hora. >> no for the koll's cash.

>> your point is that elf is the beneficiary here. >> no, ulta is being hurt because sephora made this deal with kohl's. right now, i'm wearing a plastic belt for $13, i happened to get two belts for $26. my belt was more expensive than david's outfit. look at this. this thing is just -- it's made by dupont. oh, no. my battery pack. but look at this thing. look at this. >> that is some fine vinyl. >> you can use it with floor

panels, for a belt. this is what's going on in america. when you to to kohl's you're buying incredibly cheap price -- david, i have to tell you in all my years i never thought it would come to this. no cows were killed. i think that -- >> very nice. >> carl? >> on the challenge, a challenge looking for segue i would go to goldman >> that's probably right. b.j.'s probably doesn't have anything nearly as bad as this belt. the other belt i threw away immediately. b.j.'s being kicked by costco, but also by walmart. we haven't talked about walmart later but that split helped it. chipotle feels like it should do

a split. >> nvidia and you talk about the need for a split there. >> i sktd him about a split. sometimes, people don't listen to what the person asked. one of the things that the great cfo of chipo 2tle made, it' gre for employees. they don't want a fractional share. no pushback from any large institution. none. >> guys, i'm going to move on to tesla quickly because it's mover this morning, up some 3.6% this after friday when there were a lot of questions about the lower end car that they're supposed to be introducing, musk came out later, yes, we still are, lower price point and then also came out and said we're going to have

full self-drive zmrg at 5:00 because he couldn't take the stock being down. he was looking at the stock. >> perhaps i'm wrong in that assumption of not looking at the stock. the stock is rebounding from recent lows, carl, not seen in quite some time. >> 162.50 was the year to date closing low. i mean, the analysts clearly have no clue what's going on. >> none. >> bernstein today thinks this announcement on 8/8 may be more apresen apresentational. >> i mean, look, congress is about jurisdictions. an autonomous vehicle for the airport the phoenix airport to the super bowl, and you are to get out, they don't allow it

everywhere, if you think there's anxiety there's jurisdictional anxiety. i'll drop you off and get a real uber. >> so, uber and looifrt were lower in part because of this notion musk was taking the pole position on rbo, is that deserved. >> yes. because of the hype, when he speaks people decide he's right and therefore uber gets hurt. >> real quick, guys, obviously going to follow the saga of paramount, down another 3% as shareholders continue to clue in is the favored deal, the one that involves david ellison.

merging skydance into the studio and issuing an enormous amount of equity, some 3 billion, which would be diluted. you'll start to see some opposition to the deal from some shareholders questioning the special committee as to why they greenlighted this 30-day exclusivity period to get this deal done. you'll need some communication for the other side saying why they view it as such as a positive. one thing that could come out of this if this deal does succeed is, you start to see some rationalization amongst the streamers starting with paramount plus, enters a joint venture with for example parent comp peacock, a likelihood you'll see begin to see that process we've been talking about for quite

some time. simply too much money being spent on this content. >> you're known as the man who killed that deal, you killed paramount. >> i didn't kill paramount. i reported on the terms of the deal. >> your report killed it. that's what everyone told me. killed it. let's segue. back to chips. >> chips, baby. >> chips that are potato chips -- taiwan semi securing more than $6 billion from the biden administration, they're ramping up u.s. chip production with three factories in arizona, these are the chips that we wanted and needed. so u.s. commerce secretary rai many, o in, do joins us now. can you explain how important two nanometers is.

>> good morning, thanks for having me. this is huge, jim. we've talked about this a lot, the first time in a very long time that we'll be making these leading-edge chips in america. a.i., you guys were just talking about artificial intelligence. a.i. runs on two nanometers. right now, the u.s. makes zero percent of these leading-edge chips in america and tsmc said they're going to start making this in the u.s. at scale. it's good for our economy but quite frankly it's good for national security. >> can you expect that a company like nvidia would only use this instead of relying on taiwan semi in taiwan? >> you know, tsmc is the leader

in this manufacturing, and i, you know, nvidia and apple are some of their biggest customers. a.i. is game-changer. the demand for chips, not just from tsmc, from intel, from samsung is going to go through the roof we need this produced in the united states. >> one last question, there's some criticism of this policy we have of so-called anointing different parts of tech could you please tell people -- i looked at your team, your team is the foremost team of people in america to be able to judge financially what's the right thing to do. >> yeah, exactly. i have a team of rock stars who work seven days a week, former, very senior people from the top private equity and investment

banks and firms in the world, we have folks who come straight out of industry, economists who come out industry, engineers, product managers, so i have full confidence in my team, but you know, you mentioned we're, you know, we're giving the company just over $6.5 billion they're investing more than $65 billion. so our money is a small fraction of their investment, not to mention jim a dozen suppliers are coming from asia to the united states to service tsmc. we're building a whole cluster of this supply chain and chips are unique, chips are the building blocks of everything digital in a.i. and we need to make it in our country. >> secretary raimondo, it's david faber. i had an opportunity to pass by the plant not too long, an

enormous project. sorry for the background news here. it's been delayed. complaints from tsmc in the past in terms of lack of potential engineers and the like, how much of that is a concern for you, overall in terms of what they're trying to accomplish here, having enough of the actual experts on the ground in the u.s. to be able to get it done. >> you know, what tsmc is doing here is path-breaking, scale they never invested in the united states before, so ob obviously you have to assume there will be some challenges, that being said, these projects are on time, we expect them to be producing at scale 2 to 3 nanometers in the coming year. we know talent is the factor for growth. that's for every tech company. this country has to produce more

engineers, more cybersecurity technicians, more materials scientists and we'll do that, we at the commerce department are st setting up a semiconductor center. working with colleges and universities, community colleges, high schools, tall isn't the name of the game. the more we produce the faster we can go. >> secretary, one follow-up from me on broader question about a.i. as you said, lot of this is being done we continue to be a leader in producing the chips that then power the data centers for things like generative a.i. i'm curious how much a threat you view it, jamie dimon talking about it, japan, where do you come down in terms of the

guardrails. >> listen the threats and risks are very real, so the challenge is, we have to harness the benefit which are incredible especially if you think about drug discovery, drug delivery, a.i. applied to healthcare and only case, very exciting, but we have to keep a lid on the risks. i've just stood up at the commerce department under the president's leadership and the a.i. safety institute focused totally on safety, look with a.i. we cannot go fast and break things. we cannot. we have to go fast and make sure we have the protections in place because when you apply a.i. to for example you know bioterrorism it's a level of risk we haven't seen before. it so's a balance. it's a balance. we have to be as focused on the

danger and the downside as we are on theup side. >> i'm all-in on this program. first trepidation which is when i heard that intel $8 billion over i thought well i hope the secretary is monitoring their balance sheet because that's no longer an -- an acceptable risk for your program. >> i hear you. i hear you. that being said, intel is america's champion semiconductor company and we're backing that company, we're backing pat as you well known, you know, it's a turnaround, he's executing on it and we've got confidence in him and that's why we put so much money into the company, that being said we partnered with them, like any partnership, jim, of course we watch them, we want

to hold them accountable but most of all we're in it to win it. >> my concern is duly noted. thank you so much. >> thank you guys. by the way, more from the secretary at the first-ever cnbc changemakers event in new york city on april 18th. this year's changemakers also include drew barrymore, the commissioner of the wnba and many others, scan this qr code to learn more or visit cnbcevents.com/changemakers. s&p s&p 500 watch bonds this morning as well. we did get to 4.46 on the ten year. don't go away.

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the cities of success, looking atples of urban economic remove. we'll shine the spotlight on en denver and boulder, colorado. pretty flattish action so far.

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let's get to jim and stop trading. >> so many cross currents last week where you had 3 m with a spinoff, ge, nova. and vernova went down to 115 and now at 128. i urge people to look at this company. this is the environmental company when it comes to wind. okay? it is amazing. when it comes to power, it is incredible. they are also of course an

amazing company and people should understand, it has a software component that is pure genius. and even up six it should be bought. >> your favorite of the three? >> absolutely. >> more than aerospace? >> i love aerospace. we own ge health care. but that is not mispriced the way this one is. this is just mispriced because of the crazy nature of the spinoff because people didn't know what they got. now it is starting to come back. all three are good, but they have a really good ceo and i think that larry koch gave you three gems. if you are esg centric, this is the one you should by. >> and how about tonight? >> i have a company called ferguson which a lot of people may know is a high end plumbing, hvac. a very exciting always on the 52 high week list stock. and i love those. david, welcome back. really great job with bob. >> oh, thank you.

we haven't seen each other. >> and what is great about disney, people are raising the numbers. passport sharing. the free cash flow. so you didn't kill disney, you can just kill paramount. >> thank you, jim. >> no problem. >> jim, we'll see you at "mad money" 6:00 p.m. >> when we come back, sara's exclusive with the treasury secretary in china in a moment. r s with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity. e*trade from morgan stanley. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000

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good monday morning. and welcome to another hour of "squawk on the street." i'm sara eisen live tonight in beijing. a headline filled weekend here in china. as u.s. treasury secretary janet yellen meets with chinese leaders trying to thread the needle as she says relations are on, quote, more stable footing.

for from my weekend with her coming up in a moment. >> decent gain here at the open. holding 52 another on the s&p. dow up about 17. obviously treasuries are important as we turn back to china and watch the secretary's trip there. not a lot of data out today. always more fed speak. and all leading up to cpi wednesday. and then ppi which some argue might be a little more important given some of the supply considerations right now. >> yeah, and actually i spoke to treasury sent yellen nsecretar the inflation picture here in the united states. and she said she still expects inflation to be on a downward path and not dismayed by the flare-up we've seen in some of the inflation readings so far this year. but she is here in china, her send visit in nine months, which is not insignificant. and this time she spent four full days on the ground.

she has really built up a rapport and relationship with some of the leaders here. for instance, over the course of the four days, she spent a total of 11 hours meeting with the vice premiere who she developed a good relationship with i'm told. she spent 80 minutes meeting with premiere lee, second highest ranking government leader here next to xi jinping. all the meetings went over time which is always a good sign when it comes to discussions. so my take is that china welcomed here and the leadership welcomed here and the people welcomed here. they love yellen, but they don't love the u.s. policy. and they don't love the attitude toward u.s. commentary about overcapacity, which she was here to talk about. and commentary on the national security front as well. which she included these tough messages, even though she was away to garner i think a lot of enthusiasm. she was on the cover of

basically every newspaper, china, u.s. discuss key economic issues as yellen's visit continues. she was on the cover of every paper today and throughout the weekend. so tough messages, but also a warm reception. >> warm reception notwithstanding though, i mean, asking the chinese to change their patterns of consumption and cutdown on their surplus of ev being sent to overseas markets. that is an awfully big ask. i cannot imagine -- i assume progress will be measured in other ways, but i can't imagine them actually doing that. >> it is hard to imagine and there was no breakthrough on that front. she hammered this message over and over about their concern, the u.s. concern, the administration's concern, that china has been flooding the world with cheap evs and cheap solar panels. they produce about 80% of sole plan panels in the world, that drives down prices and

discourages competition. and you today it is the top of the 10:00 a.m. hour on squaugs "squawk on the street," i made two charts to illustrate this point. on the overcapacity, we have a chart looking at the manufacturing surplus globally for china. 2% of world gdp. and has increased. it stagnated a little bit in 2023 post covid as consumption economy slowed down, but it far exceeds the surpluses we've seen in history from export powerhouses like japan and like germany. and the other side of it, you know, the basic assumption here is that it requires a manufacturing deficit in other countries of the world. and the u.s. is on the losing side of that. and that is part of the problem that she is raising here. and another chart shows how china is investing in its industrial economy and not in its real estate economy because of some of the problems it has had with some of the real estate

sector and the restructuring that it has had to see. and that is weighing on the economy. instead to stimulate their economy, they do what they have done, which they add stimulus in the manufacturing sector. and that is really what she was here to talk about. and yes, some of the comm commentaries and social media was to push back against the u.s., they are just complaining about china, trying to dominate, you know, certain industries while protecting their own high tech industries. but she did say that they heard the message loud and clear and they do respect her as an economist. >> interesting to listen to her not be grudge any u.s. company from investing there. you talked about the visit to the brbreweries, areas where th two are already cooperating. more of a charm offensive when last week the operative term was

compercive moves. >> and she is clear that she doesn't want to see a decoupling. and to your point with the brewery, it was her last stop tonight actually of the whole four day tour and she went to a chinese brewery that imports american hops, so good example of how american businesses can export to china. she said this is one of the most important bilateral relationships out there, but when they have disagreements on things like overcapacity, i.t. protections, she wants to make sure that the communication lines are open. and i think that is where the most progress has come from with her as treasury secretary. the communication lines have been open and that is why she said this afternoon in a undeniably the relationship is in a better place than it was a year ago. the bigger question though is what happens after the election. right? i mean, i did ask her about president trump and where that relationship would be if he gets

reelected. and she obviously wouldn't comment on that, but he's threatened 60% tariffs. the chinese are still worried about the tariffs he put in place last time that the biden administration has kept in place. and she said that was raised in the meetings. >> yeah, former president trump certainly an issue. finally, i know you had a chance to look at some evs. i'm curious as to your own personal take on it. was the quality equal to what you are accustomed to? i want to get your ratings here so to speak on the chinese evs. >> i thought they were beautiful. we were very impressed with the evs. there is one called avatar that my producer is in love with and wishes schehe could get at home. and especially the suvs, they have sleek, polished. a lot are actually collaborations with some of the chinese tech companies like

huawei or baidu which make them feel very high tech. i went into one that was a collaboration between baidu and the chinese auto maker and it is said to be self driving but you still need a driver in the car. although i definitely wouldn't feel safe driving it here in beijing because they are more aggressive and crazier drivers than even new york city. so it is very crowded here. it was a lot. the cars were -- they looked great and i'm sure a lot of americans would be happy -- by the way that suv slfr driving, basic starting price is $30,000. so you can see why american manufactures are concerned about it. >> without a doubt. something that we'll be discussing for quite some time. we'll check in with you again and get more from beijing. let's get to the broader markets. the next guest says the market is priced to perfection and taking everything in stride.

and sigh with an semi manufacturing is one of his top holdings. and we're talking about the calsters. you have $100 million in assets. largest pension fund in the world. and so why do you sound like you are a little -- i don't want to call it pessimistic, but perhaps not as instructive on the market as some of the parade of guests we might have here on cnbc? >> hey, david. i'm saying i'm realistic. this market is doing so well. think about the fact that at the fed pivot back in november, they were expecting six cuts this year. then only three, now some talk about not even any. market is taking that all completely in stride, set new highs. so i like the market but it doesn't mean it will grow to the

moon. >> which means what if you had to predict as how things will go the rest of the year, are we kind of done with the big appreciation given the fact that to your point we may no longer get those rate cuts that had been assumed or almost assured at the beginning of the year? >> i realize now it is so hard to predict the future. i think the market probably has more legs to it because look, everybody is bidding on ai and it is unknown what that will add to productivity. jamie dimon had a big statement today in his letter. but you know over time the market can have a pullback of 10% or 15% during a bull market year. so i think that people have to realize it is not always going to be straight up new high after new high. we'll have see-saw patterns. >> is the general dynamic for the year going to be better nominal growth, more focused on

growth than rate cuts and more volatility? do you stay -- is your closeness to quality gloegrowing even fro here? >> i'm surprised by the lack of volatility. we don't have that many 2% days. normally we get quite a few of those during a year. and we haven't had those, it has been a slow grind. so i think that the fed should back off a bit but not a lot. and we're having great gdp growth. there is a lot of optimism about what ai can bring to the economy. i think we're ahead of the game, but the market always looks ahead. so the optimism will stay through the election. 2025, all bets are off. i don't know what that year will look like. >> and when it comes to ai, i'm curious as to why you are not as

optimistic on the productivity gains that many are pointing to as a real possibility. >> it is hard to predict. just simply that. i don't know. you know, i think comments about having einstein on your phone and that is great, so we'll all make better decisions, we have to ask better questions, but it doesn't mean that everyone will be using it. and oh, by the way every once in a while it gives you a mistake and a problem. so it will make us better. it will make us more efficient. i don't know if it is as big as a steam engine, but it is a major advance probably as much as the iphone. so we'll see. but it will take time to roll out. it is advancing very quickly. companies are embracing it. consumers will see. you know, i'm seeing slow adoption. a whole year since the big excitement about chatgpt so we'll see. >> i always like to look at your allocations in terms of the massive asset base. so fixed income, you've got an

actual of i think it is 10.6%, your current target 12%. what does that mean? >> we are feathering back into fixed income. i like it. i think it is very attractive in here. fixed income finally has a return. you look at the last ten years, you know i'm really long term, we had rates go to zero twice but now you can get a spread. corporates are super tight but there is private lending. i'm seeing a lot of people use treasuries and sovereigns to balance their portfolio. and then they are going into private credit and getting a pretty good yield. market is still -- while there is a lot of money going in, the market is still pretty attractive. so you can balance your portfolio for once and not put all your eggs in the equity market. >> and there is some creeping conversation that europe is starting to give u.s. market as run for their money. some up side surprises today in german manufacturing. there is a sense that maybe we get rate cuts there before we

get them here. are you sensing that? >> i'm as surprised as anybody. but nonu.s. stocks are getting highs. not as fast as the u.s. market. growth rates aren't quite there. but, you know, maybe japan is finally going to come out of its doldrums for 30 years and turn it around. yes, we're seeing strength out of germany, parts of northern europe. so the global economy is doing okay. and that is a good sign. that means diverse ificationdiv getting benefits of that. i don't think that it can o outpace the u.s. i think our fed does a better job. but we have a problem with our deficits and that won't go away. so with have a big anchor in our economy. and so there will be opportunities around the world. >> you know, i'll end it there on that concern about the deficits.

are we going to revisit that do you think in terms of interest payments and having an auction that fails? i'm just curious given you mentioned it. >> i think that that will be the exact point. i have been telling my board to pay attention to the tail on treasury auctions. esoteric for a lot of people, but right now there is still an appetite for our debt. but as you get into 2025, u.s. debt will be -- the interest payment on u.s. debt will be such a drag on the deficit and the budget that it will slow our economy. u.s. budget can use ozempic, but it won't last weight as fast as other people. it will be the drag for whoever is the president next year. it will really be an issue going over the next four years just

like krg. i thi climate change. the mega trends are working against us, not for us. >> always appreciate it. thank you. and as we go break, 30 minutes in to trading some of the movers we're watching, tesla shares rebounding. and news of a robo taxing debut in august. taiwan moving higher. biden white house giving the company up to $6.6 billion to billed out a plant in arizona. more on the other chip names to watch here. and then watch boeing and southwest today, this engine cowling fell off a plane. faa looking into it.

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people had boeing in the crosshairs and frankly the airlines in the cross hairs in terms of concerns about maintenance and whether or not as we see more flights added, the maintenance of the aircraft are up to snuff. and those concerns fueled by this video out of denver international airport yesterday where there was a southwest plane, this video scary for anybody who was on this flight, as it is taking off, the engine

cowling, the covering on the engine, ripped off. now, there is not any incident in terms of -- it was an incident where there was nobody injured. the plane safely returned back to the airport. but understandably you see this, you sit there and say what is going on ere. and in terms of the cowling incident, southwest, we reached out to them, the maintenance team there now investigating the incident as is the faa which they cto with all these incidents. the plane was delivered in 2015. why is that important? yes, it is a boeing 737. but not a max model. and this has been in the southwest fleet for nine years. nine years. so it is a maintenance issue. boeing and ge will assist in the investigation as southwest looks into what might have happened here. as you look at shares of southwest, remember that the airline post results on april 25th. no doubt this will be one of the questions we have for bob jordan. not just about this incident, but overall aircraft and airline

maintenance and the issues front and center over the last six months to the last year. you look at shares of boeing, keep in mind tomorrow we'll get boeing's orders and deliveries not only for march but for all of the first quarter and then we can extrapolate that in terms of what we might see for the full year. that is really what is moving the boeing shares today because when you look at the concern about manufacturing at boeing, the question is, will they have to slow down production as they did in the first quarter for the rest of the year. we'll get some indication based on the numbers that we see tomorrow. >> yeah, some of the anecdotal reporting suggests production has really slowed to a news. still to come, this is a big week including fed minutes. and is the ai narrative breaking down? app abo aabollo chief economistk

about it.

welcome back. make or break week for markets where they host fed speak and fed minutes and of course cpi

and ppi inflation data. and the chart of the ma sgchlt 7 turned into the fab 4 just showing the splint erg ering of basket got a lot of attention. what do you think that says about the ai environment right now? >> that is very important question because i think last year and for quite some time, it was really simple and the market loves simple stories. it was all about the magnificent 7. you don't need to do your home work. everything will go up because the magnificent 7 will be fine. but looking at it today of course you have tesla down you also have apple and fairly significant developments when it comes to alphabet. on the other side, nvidia is up. so a lot more nuanced. so the bottom line, there are important developments that you can't escape. you have to do your home work. you have to figure out what of

these companies actually benefited going forward and is it just one ai story or more complicated than that. >> do you think it cooperates with the vision that the market is digesting this narrative processing information and broadening to other sectors which of course bulls have been waiting for for forever. >> i do think so and i think that this is spreading to other sectors because now there is more nuance in what industries are benefiting and what are not. but that is very important because it used to be the case in 2022, it was all about rates and invasion and now homework has come back, doing your homework and figuring out what should my stock picking be, what should my credit selection be, both private and public markets. and so fundamentals, yes, we can debate the discussion about the employment and unemployment and so on, but for individual names, you have to look at it from a

bottom up perspective and it turns out to be a lot more complicated than simply buying the magnificent seven. >> and people are starting to worry about what is happening in the middle east will put on the headline inflation readings. do you think that is the most important story right now? >> if you combine that with what we saw last week, the fapgt that manufacturing is beginning to recover and show upward momentum including on prices paid, it does suggest that maybe goods inflation which of course as you know went up first a lot and then came down to more normal, now the fear is that maybe it is beginning to rye accelerate because of geopolitical risks and also the manufacturing sector coming back. combining that with super core inflation showing more signs of life, you begin to worry about the fed that this repricing of ratings i think is very important because it is telling you that we've been waiting for

this slowdown for so long, why isn't everyone expecting it to come in the next several quarters, particularly with the tail wind of the to being market up, $10 trillion since november fmoc meeting. it will continue to support inflation to the up side. >> way to make a splash with some of the graphics. good to see you. after the break janet yellen, let's get to sara this beijing with more on what she has ahead for us. >> you heard a lot about how she was concerned about overcapacity. the treasury secretary also had a pretty stark warning for china as it relates to supporting russia in its war against ukraine. you will hear from her on that. and also what she spoke about regarding tiktok and the legislation moving through congress with chinese officials. that is when we come right bac k. (sirens) [due at target in 5!]

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i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

welcome back. i'm contessa brewer with your cnbc update. former president trump issued a video statement this morning saying abortion laws should be left to the states. he does not take a position on a national ban promoted by some of his allies, but he took credit for the supreme court's overturning of roe v. wade in 2022. palestinians are returning to kahn counis. and a country cmusic star ws arrested after throwing a chair. morgan wallen faced a $15,000

bond and faces three counts of reckless endangerment and one of disorderly conduct as well. and now a very long toss back to sara eisen in beijing. >> the beauty of television. here in beijing tonight, janet yellen is just wrapping up four full days on the ground. both the manufacturing hub and here in beijing where she met with high ranking officials. the purpose of her trip was to just continue to open lines of communication about the economic relationship here. we talked about some of her concerns with overcapacity and potentially chinese dumping. she also had conversationswith chinese leadership about tiktok and that bill that is doing through congress that president biden did say he would sign if it passes the senate. i asked the treasury secretary how the conversations went with the chinese and whether they were concerned.

>> i think this is an important and profitable company and i think that they are concerned by the prospect that they would be forced out of the united states or what the legislation really requires is that they would sell the kcompany to a domestic purchaser. so i think that they certainly have concerns about that. >> do you think the chinese government will allow the u.s. assets sold to u.s. investors or u.s. company? >> i honestly don't want to get ahead of where we are on this. the president has said that he would sign the house legislation. >> you also brought up matters of national security on this trip. and said that there would be consequences for china if they increase support militarily for russia. and we also heard this week reportedly from secretary of state antony blinken who said that that was happening on a

large scale. so are we looking at sanctions on chinese companies? >> well, it is not only chinese companies. we would feel that any particularly any financial institution that facilitated trade in dual use goods or strictly military goods in violation of our sanctions and aiding russia's military, we would consider sanctioning. the president issued a recent executive order that would enable treasury to impose sanctions on financial institutions that are found to be doing this in the systematic way. we have not used this tool yet, but it is one that is available and what i've tried to make clear is that we stand ready to act if we see significant

violations by especially by financial institutions. >> in china? >> well, and other countries as well. >> what about the chinese government and its support of russia? >> he well, china is entitled t have a relationship with russia. what we've made clear is that it is unacceptable to us for china to support russia militarily. and that doesn't say that china can't have a relationship with russia. china and russia do a lot of trade. much of it is unproblematic. but anything that involves aiding russia's military in their brutal war against ukraine is unacceptable to us and we have the act to sanction it. >> and we've seen close economic

ties between china and iran. and especially now with iran increasing threats against israel. i wonder how concerned you are and american businesses should be about this. >> we have strong sanctions in place against iran and when we encounter ongoing violations, we've had a number of sanctions, actions that have tried to address, that is an area of great concern. >> but in terms of china's relationship with rusrussia, wi iran, is that matter that u.s. businesses who do a lot of business in china should be concerned about? >> to the extent that it creates a national security risk for us, it is something that we stand ready to address. >> should american companies be reducing their exposure to china on a manufacturing basis? >> look, i think trade and

investment between china and the united states is valuable. many american companies are doing excellent business in china, have been here for a long time. the same is true of chinese companies in the united states. and this trade is beneficial. and the great majority of it is uncontroversial. and i think that we should not do anything to impede that trade gz ing and investment raelationshi. but in areas where there are national security concerns, we stand ready to act to protect our national security. that may mean export controls or other interventions. and we try to target those narrowly so that they don't have broad based impact on china's economy as a whole.

and we have agreed with the chinese that we need a level playing field. when we interfere, when we have regulations that affect our trade and investment with china, if it is national security or other reasons, we go through an open and transparent rule writing process. we put out progressed regulations and accept comments. the chinese have the opportunity to come in. we take the input and we write regulations it is very clear what we're doing. in china's case often the support we believe there is maybe often a lot of support in ways that are not transparent and that really is a meaningful difference. but we're not trying to stifle trade and investment broadly speaking. so i would not want to advise american firms don't do business in china.

>> if i'm tim cook of apple and looking at the geopolitical relationship and national security concerns, ultimately won't that trump the economic relationship? >> well, the purpose of the dialogue that i've been involved with now for well over a year with you're chinese counterparts is intended to make sure that that does not happen, that we don't have an unintended escalation of tenksions, that w avoid misunderstandings and we preserve economic interactions that are beneficial to both sides. we need to manage the relationship responsibly so that both sides can continue to benefit. >> you put a lot of work into this and you said in your news conference this afternoon that the relationship is in a better place than it was a year ago. >> definitely. >> do you worry about the relationship one year from now

if president trump gets reelected? >> i don't want to get into politics. i'm governed by the hatch ability. i feel president biden and president xi directed myself and the vice premiere to work toward a better and more stable predictable relationship with one another to stabilize our relat relationship, to try to manage our relationships, and importantly work together on many things where we can both make contributions that are important whether dealing with climate change or other issues, public health issues. debt issues of low income countries.

i feel our relationship is in a much better place. >> and one thing that has helped is the u.s. is coming with a strong hand on the economy. >> i think that we can feel great about the economy. >> what did you feel about the latest jobs report? >> it shows that the u.s. is firing on all cylinders. inflation is coming down. the job market is very strong. growth has been a lot stronger than i would have expected at this stage. we have 3.1% growth last year. labor supply it up and we're seeing some of the pressures we might worry about coming from the labor market impacting inflation, they are subsiding. but unemployment remains very low. >> you're still confident that

we can get to 2%? we've seen a flare-up. >> i think that it will continue to come down over time. that is my expectation. and, you know, i'm hopeful that we can certainly get into the 2s. >> and recovery stays intact with or without fed rate cuts? >> i won't make a forecast on the fed rate cuts. the fed has indicated that they want to make sure that inflation is really coming down and that they are obviously considering rate cut that goes would be appropriate when they reach that judgment. and we've had generally good news on inflation, you know. let's look at the data. i believe inflation will continue to come down. >> and i guess i'm wondering if the economy continues to hold up no matter what happens on the fed. >> i think that we've got a good strong economy. we have strong domestic demand. consumers are holding up, some

low income consumers are perhaps exhausting their buffers of saving that they built up during the pandemic, we're seeing more distress at the house hold level there. but generally households are in very good financial shape, our financial system is generally quite strong. i don't -- things can always happen. there is always recession risk. geopolitical developments could create risk to our economy. but i think that we've got a good strong economy that is on a solid track. >> and that position of strength in the u.s. economy has shifted the dynamic a bit here with china's economy being weaker than expected coming out of the covid recovery after they locked down. consumption hasn't been as strong as they have hoped which is one of the reasons why they have poured more money into manufacturing. and china is aiming for 5%

growth target this year. a ims still says china's economy growing in the 4s and still economic reports that come in weak than expected. on the u.s., she has been right in calling for a soft landing and no recession which now many other economists have caught up to. i thought it was particularly interesting that she is not too worried either about inflation numbers that have come in stronger than expected. we'll see what cpi brings wednesday. but she expects inflation to come down steadily here. and i tried to engage her on the fed but she wouldn't go there. she hinted though i thought in that answer about strong economy but inflation is coming down. so maybe a time for a cut without saying it. >> the line about being hopeful, we can certainly get into the 2s, definitely shouted on the to viewers i think. >> agree. and that is really the thing

now, whether we're in this last mile of inflation, if it will be tricky to get from the 3s to the 2s, look, where is brent, almost $90 a barrel. this is another issue that is flaring here with the commodity prices. but she's pretty hopeful that we'll get there. and as i said, when it comes to the chinese economy, it is hard to tell because we try to spend time at some of the malls and people were out and about. they were shopping. but clearly hangover from some of the real estate problems and also the fact that consumers just haven't come out in force traveling or spending as was expected is weighing on growth and i think that it gives her more of a credible position to come out and say change your model toward more consumption. stop stimulating the suppliy sie and do the dena demand side ins.

but it hasn't happened. so that is why in part the chinese currency has been much weaker against the u.s. dollar. currency is usually the first thing they talk about in these kind of meetings. but now their currency is weaker and they have been managing it to keep it up from not totally collapsing. so nothing to complain about there on the u.s. side. >> to that point, there has not been the resurgence or the jump in domestic consumption expected after the covid lockdowns. so hence the surplus of production going to export markets. again, back to -- we talked about this, i don't see the chinese really changing their tact right now. perhaps they may do a couple things on the edge in terms of trying to assusupport the marke but not what she's asking for.

>> no, not completely shifting the model to stimulate demand. it is the building which what they have always done, infrastructure spending, bridges to nowhere, that is what she wants to avoid. she said mistakes that hurt china's own economy. and if you look at some of the stocks of their solar makers, these stocks have been hammered this year. down double digits, is underperforming the broader china index because overcapacity is weighing on prices and there is not enough demand. so they are trying to get competitive again. why ev makers are looking to exporters in europe to remain competitive because the prices in china and the demand hasn't been quite what it hoped. so she's hoping that that message comes through loud and clear and she does have cred as

an economist. at the meetings, she met with students at university and what she heard from -- they wanted to know what she thought about the economy. they respect her views as a noted economist and that is what made this visit a little unique. there was no sort of harsh rhetoric that you would get from the politicians, demonization of china that we hear on both sides of the aisle in the u.s. >> they caller yellennini? >> yeah, grandma yellen. and they are obsessed with what she eats. it is trending all over social media. she picked very good place here on her first night. grandpas at the ping-pong tables in the park were telling our producer here, hillary, who is a ping-pong flaplayer about how g her food choices were. and her dexterity with chop

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i don't want to miss that. that's amazing doc. mobile savings are calling. visit xfinitymobile.com to learn more. doc? welcome back. not a merger monday but one deal we wanted to note, any activity continues to be relatively muted but black stone, the largest owner of real estate in the world continues to buy properties. in this case, air, air communities. about 76 high value rental communities concentrated primarily in miami, washington and the washington, d.c. area. the purchase price, $39.12 a share. roughly 25% premium to closing price of the reit on friday. you can see it is moving up significantly.

interesting to note blackstone committing capital. it's $10 billion. somewhere closer to $5.5 billion. this is not breit but given the focus we had on that, they have been meeting their redemptions before that blackstone traded fund. we have a lot more market coverage for you straight ahead. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire hey you, with the small business... ...whoa... you've got all kinds of bright ideas,

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