Fed's Williams: Rate Cuts Not a Topic of Discussion, "Special" Costco, Home Depot's 1,000,000% Return 12/15/23

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David Faber (0:31)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

We're getting ready here. It's Friday morning, clearing our throats. Welcome to Squawk on the Street. I'm David Faber with Jim Cramer. We're live from Post Night at the New York Stock Exchange. Carl's off this morning. Let's give you a look at futures. Things have changed a little bit since we heard from Williams. Yeah. Sitting down with Steve Leesman, you can see, all right, I don't know.

Higher open for the NASDAQ, right? I guess.

Jim Cramer (0:56)

Killjoy.

David Faber (0:57)

Yeah, killjoy. Let's get to our roadmap this morning. It does begin with the S&P. It closed in. It's closing in on a new record.

But as you just saw, futures are pairing their gains. As the New York Fed president did tell CNBC that they aren't, quote, really talking about rate cuts now.

We have Costco reporting another strong quarter. Says it is starting to see some prices come down, but not for food. We'll hear from Jim on that. Of course, he had the CEO last night. And Blackstone, it's a little fun here. Getting in on the Taylor Swift craze, private equity firm's Christmas card. They're singing and dancing. It's an alternatives era music video. We'll show you a bit of that.

Let's start with the markets, though, and those comments as well from New York Fed president John Williams. They were made about rates to our Steve Leesman moments ago. Take a listen.

John Williams (1:46)

We aren't really talking about rate cuts right now. We're very focused on the question in front of us, which as Chair Powell said, the question is, have we gotten monetary policy to a sufficiently restrictive stance in order to ensure that inflation comes back down to 2%? That's the question in front of us. That's what we've been really thinking about for the past five months, and I think we'll be continuing to think about for some time.

David Faber (2:10)

What are your thoughts? Any changes really from what you might have expected?

Jim Cramer (2:13)

Fed chief didn't say that.

Fed chief said he's been worried about slowdown. Fed chief said, look, there's going to be cuts. Maybe there's a little dissension here, but, and by the way, just so you know, March, maybe it's a couple months off, but the idea that there would be rate cuts next year, you can't take that off the table if you put it on the table two days ago.

David Faber (2:37)

It's ludicrous.

He said now, I don't know what now means. Now could just mean literally that.

Jim Cramer (2:44)

Well, look, I mean-

David Faber (2:45)

Not March.

Jim Cramer (2:46)

Powell changed his mind, Powell felt, unlike most Fed Chairman, that he's not worried about the regular person losing his job because the rates are so high.

David Faber (2:57)

Yeah, what, you know, everybody's been trying to understand what the take was. We had a CPI number earlier this week. None of us reacted to it with any great fervor because it seemed in line, what we'd expected, but somehow that may not have changed things. But what did change here then based on the data at least, given what we had in terms of the expectations, the Fed seems to be seeing something that others perhaps are not.

Jim Cramer (3:20)

Well, I do know that the Fed realized, and you can see it from the housing numbers, that unless they take rates down, there will not be enough supply because the anomaly of these 3% mortgages has made it so that no one wants to leave. If you get rates down, then the price of housing will fall. And he's very worried about that because that's the one thing that has not come down at all. Rents are down.

But also, I mean, I think he just, he decided that he thinks that we're far enough along that we can start thinking about being sure that we don't have a tailspin. I thought that was natural.

David Faber (3:57)

Right.

Jim Cramer (3:57)

And what John, what Williams is saying is basically, no, we didn't say that. Well, no, I mean, did he, who made him Fed Chief?

David Faber (4:06)

Well, what he really, I mean, he said a lot of things, by the way, during the interview. But again, what we just showed people there, have we gotten monetary policy to a restrictive stance to ensure inflation comes down back to 2%? He said, that's what we're very focused on. It's not as though they aren't continued, that Powell didn't say they continue to be focused on that.