resolving the accounting scandal. >> steve obviously cheated and looked at my "final trade." fmc corp. >> that's going to do it for us. "the exchange" starts right now. thanks for watching. ♪ ♪ frank, thank you very much. welcome to "the exchange." i'm tyler mathisen. here's what's ahead on a busy wednesday. less than 60 minutes to go to the fed's decision on interest rates. no move expected on that front, but the markets could move on what chair powell says. and our panelists are looking for some very specific clues from him today. and we will tell you what they are. plus, reddit, the first major main stream company set to ipo this year in the tech area. one guest says he wishes it wasn't. he's here to explain what he means by that.

shares of chipotle topping $3,000 on a historic stock stick. these all ahead. we begin with dom chu with some numbers. >> they are numbers in the green, but very modestly so. you can't get much more in a holding pattern than we're at right now. let's go through the percentage gains. it's about flat, flat, and flat for the dow, the s&p, and the nasdaq. the dow currently at 39,158, up 50 points, that's the outperformer. we're spot-on up two points in the s&p to 5181. and just for context, again, very tight trading ing range, o up six points for the s&p, and six points at the low. the nasdaq, 16,175, up an eight modest points. pretty much flat overall.

we are seeing some movement in catalyst driven, news driven stocks, particularly with regard to the computer chip business. intel, after the news oh of that big chip grant, $8.5 billion in lones totallingly $11 billion. intel chairs are now down 2/3 of 1%. nvidia shares down 1%, as well after its big developer conference and unveiled its next ai chip. micron reports earnings today. and smh, down 1/10th of 1%. chipotle shares did at one point top $3,000. still up 4%, but up 8% at the highs so far. just to give you an idea that 50 for 1 stock split puts these shares closer to that $60 range when they do kind of split it. but tyler, this is a company

that's now worth roughly, almost $80 billion, and just to give you an idea, it's not necessarily ai returns, but up 80% over the year means it's bigger than target. >> holy guacamole. thank you very much. let's start in washington and steve liesman with what we should expect from the fed chair and the fomc today. hi, steve. >> hey, tyler. yeah, it's possible the most important answers or the most important question of this meeting, when might the fed cut rates may come at 2:00. in january, they said -- >> well, they repeat that, it's going to be like going back in time, resetting the clock once again, telling investors they still don't have that confidence to cut rates. they need more data showing

declining inflation before they telegraph any rate cuts. new projections could provide clues to the policy outlook, as well. they projected in december gdp 1.4%. unemployment, 3.9%. core pce, 2.9% in january. so running a little hotter that be their forecast. and the fed funds rate with a projection of 4.6%, there is some concern that the individual fed members, once they get done projecting it, could take off one of those rate cuts from the projection there and raise their outlook for the federal reserve funds rate for the end of the year. it would take only two members to do that. i'll live it there, tyler, and throw it back to you. we'll look at the projections and some information on the balance sheet of what's expected to be the start of a discussion about ending that balance sheet reduction. >> i would love it if you would

give us a tutorial about a phrase that i'm sure is going to come up multiple times over the next hour and a half, and that is the so-called dot plot. what is the dot plot, why is everybody paying attention to it? how off do they plot the dots? walk me through it. >> so the dot plots are the individual forecast of federal reserve members for where they believe the federal funds rate should be at the end of this year, next year, 2026, and the long run. they take all those dots and they create a median out of it, and it's what is the general or average projection of the federal reserve for the funds rate that they set. the problem with the dot plot is it is confused for policy. you have 19 fed officials. they give you the dot. it comes up with an average. and that average is 4.6. people confuse that for being the policy of the federal

reserve, to reduce it to 4.6. it is not the policy, simply a derived average of 19 different fed officials. you can kind of guess policy from there. yeah, they look to be cutting. if there are fewer dots and a lower range, it might mean they're going to be projecting fewer cuts. but it doesn't mean that's the policy of the fed. it's just their outlook all things being equal. >> this is their forecast, in other words. >> exactly. and you know what they say about forecasts. >> tell me. >> well, i was just going to use the joke about what they say about assume, right? put it this way, they're almost always wrong. >> almost always wrong. steve, thank you very much. we'll see you a lot during the next hour here. unanimity is the name of the game. our next guests are yunanimous that the first cuts won't be until the summer.

let's bring in julia on the phone, president and founder. and head of u.s. rate strategy, and david baylem. subadra, let me get your baseline view of what will happen today and what is your outlier view? in other words, if the baseline doesn't come through, what would your next alternative be? >> yeah. so like steve was mentioning, i think the fed might upgrade its growth forecast, as well as its -- maybe a tick higher on inflation for this year. but really, the focus is going to be on the dot plot. so we're expecting that the fed retains three cuts for this year. our call is that the fed will deliver the first cut in the june meeting, and then stick to a one-cut per quarter schedule for the remainder of the year.

but really, the surprise for us will come if they move the dot for 2024 to suggest only two cuts for this year. and there's also a chance that both 2025, as well as the long-run dot gets pushed higher. so that would suggest that the fed is looking at a much -- perhaps a higher trajectory fed funds rate. that, i think, would be a clear hawkish signal that the fed is sending to the markets. and that in turn, would push treasury yields higher. >> let me turn that same question to you, david, and ask you what your baseline scenario is, and you gagree that the possibility is a more hawkish tilt? >> well, i think the place i take issue with that view, i think the fed may start one meeting later. once things start, it's more likely than not they'll have a

series of cuts. everyone is expecting three, that's the average of views. once they begin to cut, having a regular, systematic approach, a baseline of 25 basis point cuts this year and beginning of next year, i think is more likely than not as a baseline. we want to normalize their policy. the fed tends to look at all the data from time to time. but once they get going, they want to be in the direction where they begin to normalize the curve and policy associated with buying back bonds. ending a portion of qt. then the outlying scenario is the other way, which is the economy weakens more than we expect in the area of emp employment. with that, we would see the fed move a little more aggressively in terms of the amount they might decrease rates at one of those subsequent meetings. so we tend to lean that way. ultimately the fed's higher rates in qt is ultimately going to be -- the economy has been

wildly resilient, but when that break happens, does it happen gently or do we see a more sustained decline in employment the >> julia, let me get your baseline thought here. if the fed turns out to be a little bit more hawkish than we anticipate, what do you expect the economic response would be in terms of inflation and growth and unemployment, and what do you think the market's response will be? >> right. that's a great question. so i think we all share a similar baseline that they'll keep it largely up changed, but the risk is they'll take a cut out. one of the conversations that's happening in markets and at the central bank is whether potential growth might be a little bit higher to cycle because of immigration, because of better productivity. that might signal a higher, longer run rate and/or it might leave them to take a cut out of not this year but next year. so i think there's maybe an

intent to balance the risk here by keeping the current baseline unchanged. nobody thinks the neutral rate is 5.5%. inflation's coming down. they're going the start the cutting cycle. but they're going to proceed carefully and cautiously, again, outside a deterioration in employment. and they can proceed to be careful and thoughtful as chair powell indicated. but they don't necessarily want to delay forever, because the longer you stay at this rate, the greater the risks are for that sudden turn that david just described. >> subadra, how and why did we go from last year's forecast where many people thought there may be six rate cuts in 2024 into 2025. now down to three or maybe two? how and why did we get from that to this? >> so, i mean, full disclosure, we were in the same path. we were thinking that the fed could potentially cut rates by

150 basis points this year. we ranged our call, because the economy has been extraordinarily strong. the second, the third and fourth quarter of last year, growth was very strong and the momentum seems to be carrying into the first quarter. the jobs market, the regular market is extraordinarily tight and inflation is high and kicky. that's really what the market is recalibrating to is a much stronger trajectory for growth. we've taken out our call for a recession for this year. so in that context, it makes sense that the fed cuts rates a few times, maybe three. they might need to cut rates even to orchestrate a soft landing in our view. but then three cuts might be sufficient for the fed to provide some level of stimulus, but at the same time, you know, make sure that there's a soft landing. >> so david, should we be happy if the fed indicates that it may cut only two times this year or maybe three times this year,

should we be happy about that or should we -- because it would suggest that the economy is growing nicely and unemployment is not rising that much, if at all. or should we be worried because inflation is stickier and more intransigent than we would like? >> let's deal with the inflation question first. our view is that we are really in a situation where our highest confidence is that inflation is definitely going to be down at the 2.5% level at the end of this year, which is very much the fed's target. there may be some noise along the way. but january and february were a little hotter because price increases took place at that time. we really see the vast majority of the inflation indicators heading down with the exception potentially of fuel. and taking a look at the other side, the economy -- we thought the economy was going to slow down and accelerate. we just increased our earnings per share projections from 5% this year to 7.5%, which is a large change for the average

stock, for s&p. with that, we're building in the idea that the markets can go higher based on those earnings. but the fed at the end of the day has to come up with a plan to normalize that rate curve, to have an upward slope, and the longer it waits to do that, it adds risk to the market and takes away the possibility of resilience. jay powell said that at the last meeting, where he doesn't have to wait for every signal to begin lowering rates. he knows leaving them at this level is, itself, a danger to the economy. >> that's very interesting. julia, let me conclude with you, to pick up on what david just sort of referenced there, and that is the idea that the fed might cut rates before, it doesn't have to wait for perfection, it might cut rates before inflation gets to 2%, not waiting until it does. >> yes, absolutely. the fed still believes in long and variable lags in monetary

policy, and chair powell has said point blank, if we wait till we get to 2%, we'll likely have waited too long. again, nobody thinks 5.5% is the neutral rate. so this is not the right place to be once you have gained confidence that inflation is moving in the right direction. some judicious cuts are in order, and likely, you know, when chair powell spoke before congress in recent weeks, he said they need just a little bit more data showing that inflation is moderating. january and february probably didn't meet that bar. in fact, we have some firmness in january that was beyond expectations. but we do expect that march and april are going to deliver that downward trend on inflation. it's going to reassure the fed, and they will be good to go with the jup ne cut. so chair powell will want to keep that on the table. i think moving to a two-cut baseline would be probably a bridge too far.

>> thank you all very much. appreciate your time today. see you again soon. all right. let's turn to housing and another sign of how sensitive buyers are to any movement in interest rates right now. diana olig has the latest. hi, di. >> yeah, it's all in the weekly mortgage demand numbers. you see it there, and they're getting more sensitive to the small rate moves around bigger numbers, like 7%. so rates rose last week for the first time in three weeks. as a result, demand came down for the first time since february. the average rate on the 30-year fixed rose to 6.9 b%. if you take a look at the daily rate, by thursday, the rate crossed back over 7% and rose higher to start this week. so applications to refinance a home loan, which are most sensitive to weekly rate changes fell 3%, and we're also 3% than

a year ago. applications fell 1% and 14% lower than the same week a year ago. and interesting on those purchase applications, with housing supplies still so low and prices still so high, the average loan size for purchase applications increased to the highest level since may of 2022. tyler? >> diana, thank you very much. coming up, reddit expected to price its long-awaited ipo this week. what wall street is looking for and whether reddit's path to profitability is the biggest wrinkle to investors. and aaron levie just made a big acquisition in the ai space. we'll ask him about that and why he thinks ai will create more jobs instead of replacing them. 43 minutes till the fed's decision on interest rates. "the exchange" is back after this.

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welcome back to "the exchange," everybody. astera labs up 69%. the chip firm priced its ipo at $36 a share and opened at $52, giving the company a $9 billion valuation in total. biggest ipo since arm went public in october. at the same time, we are waiting another big ipo expected to

price after the well today, that would be reddit. leslie has all the details. >> that performance should bode well for reddit, it shows that there's mow mmentum in the ipo market. reddit, it's been 827 days since reddit announced it had submitted its paperwork to go public. that long-awaited day is nearly here. they are expected to price the ipo after the close today with a trading day tomorrow. it sounds like discussions are leaning toward $34 per share, but there are still four hours to go before that final decision call where the bankers, the advisers, the company all gets together and decides a final price for this ipo. reddit has been marketing a price point between $31 and $34 a share, which has a valuation of $6.4 billion.

reddit calls itself a global digital city, where 73.1 million daily active users collaborate through different communities with common interests. the headlines, just while the company was on its road show over the last week and a half, encompass a letter from nokia, noting infringement on patents, and in talking with investors, some were surprised that reddit, despite being a two decade old company was not profitable and the pursuit of profitability upset users last year, leading to a short bloackout in the summer of 2023. the s&p is near record highs, with a company that has a topline growth of 21%. of course, there are certain tailwinds we see from astera labs, as well.

so we'll see what happens this evening and tomorrow with trading. but so far, we've seen a decent test in the ipo market today. we'll see if it carries over for reddit. >> yes, if it does well, we will -- it would auger well for the ipo market. leslie, thank you. our next guest predicted reddit to lead the main stream of ipos back in january, but says he wishes another company was leading the charge. let's find out why. duncan, why would you prefer to see somebody other than reddit sort of in the -- at the point of the spear here? >> it's because of all the skepticism of reddit. i hope it's a successful offering, but the most ironic part of this is one of the biggest reddit communities, wall street bets, has sentiment which is highly negative of the ipo. they think it's going to be a pump and dump situation, not a sustainable situation. i hope they're wrong.

>> they say short it, right? >> yes, the sentiment is kind of ironic, i think. but if it turns out it captures their attention, then it turns into what steel call stonk and it could run up like crazy. but i don't think it will happen. i think it will price high, as you said, but i think it's going to be a volatile offering, given the range of sentiment on it. >> does the astera labs ipo tell you that hey, this is a good time to go public, and if reddit has a good debut, does that say ipos may come to market at a greater pace? >> i would like to say that, but i'm not sure. astera is trying to ride the ai wave. it's getting huge demand from ai. reddit is arguing it's an ai company, but it's really not,

because it's selling its data to google, maybe later openai, chatgbt. but it's not really the core of what it does. so you're seeing the market really is hungry for ai. it's not quite as clear it's that hungry for social. >> let's talk about social there for a minute. this is a company that has something like 800 million in annual revenue, i think i'm right on that, i'm not sure. how do they not make money? >> well, their argument is they really haven't tried. they're now trying hard. they're going to have a billion dollars of revenue if you believe their plan in the next year. this offering on the surface looks amazing. this is the number three social site with attention in the world, after meta or facebook and google. it should be doing much better. professor g, who i find very entertaining and inciteful,

thinks it has a 100 upshot. this does have upside. if they go toward profitability and keep growing, it could double or triple from the offering tomorrow. i just don't think that will happen quickly. there's a huge overhang in this company of private investors, so i would recommend to people, watch this thing, if it doesn't become a stonk and go up like crazy, i would wait for the overhang and then look at buying it and holding it as a serious long-term play. >> was it smart of them to offer the stock to their so-called redditers? >> i think it is. it does create volatility risk, but their community is their strength, and they need to feed and support the community. the community is very skeptical of the advertising model, because it doesn't like ads.

but i think the community in the end, wall street bets not withstanding, will support their own company here. >> duncan, appreciate having you on. thank you. let's talk about chipotle, hitting a all-time high, crossing $3,000 a chair. that's a lot of bowls of mexican food. first time after announcing a 50-to-1 stock split. we'll look at the next steps later on in the program. "the ehae"etnsft is.cng rur aer hello, mia. are you ready to meet your demise? man, we really need to upgrade your trash talk. ♪♪ nice shot... shot... taker. who programmed you?! i'll see you tomorrow. the future isn't scary, not investing in it is. 100 innovative companies, one etf. before investing, carefully read and consider fund investment objectives, risks, charges expenses and more in prospectus at invesco.com.

welcome book back to "the exchange." here is your cnbc news update. the u.s. is warning foreign hackers are targeting water and sewage systems across the country. in a letter to state governors, the administration warned the attacks were perpetrated by chinese and iranian hackers, citing a downed facility in pennsylvania. professionals have singled out water and sewage plants of targets because of the service they provide and their lack of adequate defenses. the environmental protection agency issued new rules to curb

carbon emissions from vehicles today. in a push toward evs and hybrids, the new rule says as long as 56% of new vehicles sold are electric by 2032, the auto industry could meet its carbon emission limits. the epa says the rule will avoid over 7 billion tons of emissions over the next three decades. and the mega millions jackpot is close to a billion dollars ahead of friday night's drawing. the pot has been buildingfor 29 straight drawings now since december's last winning ticket. the current jackpot, $977 million. they're going to have to rewrite that old song, "if i had a billion dollars." >> exactly. i'lltive got a chance. i'm going to buy one. bertha, thank you. coming up, aaron levy will join us on the heels of investor day. in the past, he's opposed the overregulation of ai.

we'll ask him if he still feels the same way, that's next.

welcome back to "the exchange," everybody. shares of box stock up more than 10% this year, outperforming the

s&p, as the content management company shifts to ai. box counts 67% of the fortune 500 among its customers and is looking to implement ai for businesses to use safely and securely. joining us is aaron levie, ceo of box. good to have you back on cnbc. appreciate your time. >> thanks for having me. >> how is ai going to change your business, which i think is broadly defined as the content management business? what is it going to allow you to do, and is it effectively act 3.0 for box? >> yeah. so we're incredibly exided. we're entering a new chapter for the company. with box, we have managed and secured some of the most contents. think financial records, marketing assets, contracts, product designs. so all of this unstructured data today that powers how businesses

work. with ai, and with this new chapter that we're entering, we can fundamentally transform the insights that you can get out of all of that information. we can have you automate more and more of the critical business processes in your enterprise, and keep your data more secure. so for the first time ever, ai is actually able to go through this content and synthesize the underlying information in this data. that was never before possible with unstructured data or business contempt. this is why we think it's a breakthrough where we can turbo charge activity for employees, ultimately give people back more time to do what i think we're best at, which is building amazing products, serving customers. >> i guess what i'm hearing you say, and i am a dunce when it comes to ai, but that your business, which was in the business of managing, storing data, now it -- with ai, it will

allow the user, the company, to use that data, manipulate that data, access the data, and bring it alive in ways that are not just storage, per se. >> that's exactly right. so just -- i'll give you a simple example that will resonate quickly. imagine that you are a company with a large sales team and your sales team needs answers to what products are selling. today, with any knowledge-based environment, the sales rep, or the engineer on that account, would have to find exactly the document that has the answer that they're looking for and learn the information. with ai, you just ask a question of all of your data and get an answer back instantly that will accelerate whatever that problem is that individual is solving. this has never been possible before. so we're taking the power of all of this content in an enterprise and turning it into realtime

knowledge and insights for anybody across the organization. and so what we specialize in is making sure that's safe, secure, that you only are getting answers back from the data that you personally have access to, so there's no way for you to ask a question and get answers back that you're not supposed to see. but just think about what this can accelerate in life sciences, health care, financial services, for any kind of market team in an organization. so you can tap into the underlying knowledge inside of your organization. >>ky go in and find out the precise paragraph in a contract, for example, that i need to help me understand. this is where the acquisition of crews comes in, an acquisition you did about a month or so ago. it helps you vault into this area? >> yeah. so we're basically combining the power of box ai, which is a platform capability that connects to leading ai products like openai or google or ibm or others. we're taking the power of the

ability to extract structure from your unstructured data, be able to take out all the key variables from that contract that you care about, and then with the crews acquisition, now you can automate the viewing of all of your contracts across your enterprise. now you can run reports on show me which contracts are up for review or renewal. show me all the contracts with risky clauses in them that you might want to pay more attention to. so now you have the ability to get business insights from all of the data in your organization and box really never could have provided that before. but frankly, it was never before possible before the role of ai emergence inside of enterprise software. >> quick thought on ai and jobs. a lot of people worry about the fact that the idea that ai is going to eliminate lots of jobs. you have a much more nuanced, and i would say optimistic view of that. could you give us that in a thumbnail? >> yeah. so basically, i think that

humans do way more inside of our daily jobs than simply tasks. what ai is good at is automated those wrote tasks. so what emails should you send to a customer, how do i extract data from a contract, how do i automate an invoice process. ai will streamline how we serve customers, how we avoid risk in our organization. that will give back time to employees to do what we do best as humans. and when you think about a company, let's just say even box, if we could make our sales reps more efficient, if we could make our customer support agents more efficient, we're going to growfaster, which means we'll hire more people in those functions. so i think ai will drive growth in organizations. that will allow them to reinvest even further in the human side of the work that we're doing. so i'm extremely optimistic on how ai will augment the human aspect of work and will actually be a net boone to job creation

over the long run, because all companies are striving for more growth, to drive more innovation, and ai is an accelerant to all of that. >> more growth typically means more people. aaron levie, thank you very much. coming up, intel receiving more than $8 billion in grants alone. we will hear from the ceo next. at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today.

intel is in line to receive as much as $8.5 billion in grants on top of billions more available in loans from the chips act. but shares are down 30% since ceo pat gelsinger took the help three years ago. here's what he told about the turn around. >> we have taken our investors on a journey. we said very clearly this is five years to turn the company around. three years into that journey, and now we see the light at the end of the tunnel. we hope to manufacture the most advanced ai chips for nvidia, apple, amd, amazon and google. we want all of those chips to be

manufactured in america, taking advantage of the rnd that's done here uniquely in america, as well. >> and you can watch more of the interview with pat gelsinger on "closing bell" today at 4:00 p.m. eastern time. still ahead, it's one of the biggest stock splits in new york stock exchange history. chipotle shares reaching $3,000 apiece for the first time on news the board approved a 50-to-1 stock split. the timingndha a wt history reveals about returns, next. let's check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading. well, when at&t says we give businesses get our best deal, on the iphone 15 pro made with titanium. we mean it. amazing. all my agents want it. says here...“inviting pool”. come on over! too inviting. only at&t gives businesses our best deals on any iphone. get iphone 15 pro on us.

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morikawa on 18. get iphone 15 pro on us. he is really boxed in here. -not a good spot. off the comcast business van. into the vending area. oh, not the fries! where's the ball? -anybody see it?

oh wait, there it is! -back into play and... aw no, it's in the water. wait a minute... are you kidding me? you got to be kidding me. rolling towards the cup, and it's in the hole! what an impossible shot brought to you by comcast business. welcome back to "the exchange," everybody. shares of chipotle climbing to an all-time high today after it announced its first-ever stock split, pending shareholder approval in june. it's not just any split, a 50-to-1 split, one of the biggest this the history of the new york stock exchange. the facial casual brand on a tear, up nearly 85% over the past year. the share price is currently just above $2900. so if the split were approved today, shares would trade about $58 apiece, but you would have

50 more for every one that you own today. kate, welcome. good to have you with us. what do you think of this stock split? >> i think what you got, the stock has gotten expensive for investors, and chipotle wants to make this more accessible for individual investors and employees. i think two other notable things that i'm sure nick will hit on, they did announce a one-time special grant for general managers of their restaurants and for employees who have been there for at least 20 years. so they really want employees to take part in the financial success of the company. >> i didn't know chipotle was 20 years old. >> more than 30. >> is that right? wow. >> chipotle talked about investing in their employee base. you can move up to general manager and make over $100,000 with benefits. >> so nick, we'll get to the question of the stock split in a

minute, but this is a company that is on fire by sort of any measure. increased, what did we say 80% so far this year? that's just insane. how are they doing it? >> well, first, thanks for having me. i have personally been very surprised at the continued the carnet asada was a big driver in quarter 4. it was big in quarter one. hopefully, that is a contributor. the labor is no longer much of an issue. they can focus on speed of service. typically, during those peak hours, a lot of technology initiatives. again, focusing on throughput and efficiency, and obviously,

the market has been very effective as well, and last but not least is the loyalty program and a lot of the digital initiatives. >> nick, how much interest to retail investors have at a much cheaper price? think about younger investors. people love to invest in what they know. >> this would be on my son's list, by the way. >> what you think about that? >> i think there will definitely be a lot of incremental demand. practically speaking, if you are investing $500 a month on an ongoing basis, as an example, and you want to buy specific stock, chipotle, you can't do it if it's trading at $3000. this is just, practically speaking, going to allow many more people to participate in the story. >> do stock splits affect returns in any measurable way, or is it really a nonevent? >> i don't think it impacts the fundamentals. therefore, i don't think it impacts the

return. i think there is a correlation, just because usually you see successful investment unsuccessful companies tend to not have stock splits. yes, there is a big correlation , but i don't think there is causation. >> yeah, it's not causation. in other words, the healthy companies are the ones doing the splitting, so they might, you would expect, do a little better than those that don't. >> right. >> let's talk about what's next for this company. is it menu innovation? is it better use of digital approaches or drive-through, or what? what is their next chapter? >> i think it's all of the above. you are seeing ai enable digital. whether it's customer information, how you view the customer information, how you understand that customer information, how you set up the drive through, how you speak to customers once they go to the drive through, how you speak to

customers when they are opening up your mobile app. i think there are a lot of opportunities around that within the store. there is a lot of technology, like avocado cutters, et cetera, in terms of automation, so i think there are a lot of opportunities there. in terms of the marketing messaging, i think there are still a lot of opportunities there. 2 1/2 to 3% of revenue, market expense, all of the above. >> we have to leave it there. we have the fed coming up. we've got a go. nick setyan, and same to you, kate. that does it for the exchange. the fed decision a couple minutes away. about 6.5. courtney reagan will join me for power lunch in just a moment. we will pick up coverage on the other side of this quick break. i will be right back.

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it's odd how in an instant things can transform. slipping out of balance into freefall. i'm glad i found stability amidst it all. gold. standing the test of time. welcome to power lunch, everybody alongside courtney reagan, i am tyler mathisen. glad you could join us on this busy fed day. we are just four minutes from the fed's latest decision on interest rates, with no change expected for now. >> that's true, but let's get a check on the markets and where we stand ahead of the actual decision. fairly flat across the board. the dow, the s&p 500 and nasdaq composite are lowered by just a

touch. materials leading the way for the sectors. real estate and healthcare are the letters. >> let's get to our all-star panel as we are minutes away from the fed decision. joining us, as he often does, david kelly. kristen bitterly of city wealth, and john bellows of western asset. meantime, are we going to go to steve? no, we are going to wait and go to steve in just a moment. david, let me ask you, your base case scenario for what the fed will do and say. >> i don't think they will change their characterization of the economy in any significant way at all in the text, but there is a risk that they reduce their estimate for rate cuts this year from three- way cuts to two rate cuts. it would only take two members of the open market committee to change their mind to do that, so that's one issue. in the long run, they say the federal funds need to be 2.5%. that is the equilibrium number could that seems low to a lot of economists and strategists. i think everyone will be focused on the summary of

economic projections today, rather than what the fed says in its statement in a few minutes. >> kristen, do you agree with david? >> i absolutely agree with him but i would add two things. i think it's interesting that going into this announcement, we actually have -- the market has met the fed, so the market is pricing in three rate cuts, where we started the year close to six, so there are two other things to pay attention to. one, they will talk about balance sheet and quantitative tightening. we are not going to get the details on that. we don't anticipate, until may, but if they signal they have been discussing this, this is something that the market could react favorably to, and the last point is really around the data. what is chair powell paying attention to in terms of inflation? january and february were not prints that we like to come in terms of the disinflation or a trend, but when you look at things like year-over-year for a full 12 months of core pce, i can tell a different story, so we will pay attention to his data points as well. >> john bellows, how much do some of those data points on ablation, do you think, worry

the fed? i guess the second question would be, can the fed cut rates before, maybe even well before inflation gets down to the 2% level? >> i think it's possible. the fed has been a little bit discouraged by the inflation data over the last two months, but in economics, things generally don't move in straight lines, some bumps along the road are to be expected. the big picture remains unchanged. as was just mentioned, inflation is a lot lower than it was a year ago. our expectation, i think the fed's expectation is that it will continue to move lower in the months and quarters. that big picture, that is the foundation of rate cuts, and that remains very much on track , and as a consequence, our expectation is that today, the emphasis will be on the big picture and the rate cuts still in the forecast, because again, inflation is lower, and that's the basis of the rate cuts. >> of course, things have been fairly bumpy when it comes to

economic data points, and we don't exactly know what the fed will say in the commentary, but that is going to be very important as we listen to all of this, we think there is just going to be a hold pattern, but we will find out when we go to steve liesman, as he gets ready to tell us exactly what the fed is going to do. steve, what do you got? >> the federal reserve is leaving interest rates at five and a quarter to 5%. leaving in those rate cuts, 4.6%. i will get back to that in just a second. they see the economy expanding at a solid pace, same as they did in the last statement. inflation has eased but remains elevated, same as the last statement. here it is, not much change. only one change about job gains remaining strong, no longer saying that they have moderated, saying that inflation and employment goals are moving into better balance, and they said that they still do not expect