>> thank you, mr. chairman. jeff kearns from bloomberg. looking at credit scores for new home loans rising into the 700s, is that something that you would consider to be a successful transmission of monetary policy? and especially given how well the fed says the banks are capitalized. >> well, the tightening of credit and mortgage markets, i mean, our sense is that it's gone too far. i mean, some tightening was obviously needed. there were people who bought houses prior to the crisis, who really couldn't sustain a mortgage. so terms and conditions have been tightened up and we're now seeing much higher credit quality requirements on potential borrowers.

we are concerned that a variety of factors, such as concerns about put backs, that banks may have, uncertainties about regulation, which we're working on to get done as quickly as possible, may have tightened the mortgage credit box more than would be desirable in a long-run, healthy economy. that does have some effect on monetary policy. one of the most powerful tools we have is bringing down mortgage rates and stimulating home buying, construction, and related industries. so that is an issue we take into account. i would say one thing, which is that as the housing industry has strengthened and home prices have gone up, that has actually brought some people into the credit box, in the sense that the number of people, for example, who are underwater on their mortgages, is declining, as house prices go up. so as people have bigger down payments, bigger equity in their

homes, they become more creditworthy. so to some extent, not -- i don't want to overstate it, but to some extent, monetary policy, by strengthening the housing market, helping support house prices, is bringing more people into the mortgage market. >> fox business. the stock market has been hitting all-time highs. it's recovered all of its losses from the financial crisis. i just want to know from you if i still have time to get in. but, seriously, how do you feel about that? is it good? is it bad? mission accomplished? and are you worried about bubbles? we're still at 7.7% unemployment. i mean, what do you think? >> that's right. we're not targeting asset prices. we're not measuring success in terms of the stock market. we're measuring success in terms

of our mandate, which is employment and price stability. and that's what we're trying to achieve. we do monitor the entire financial system, not just the parts that we supervise or regulate, and that includes the stock market and other asset markets. we use a variety of metrics. and i don't want to now be pulled into going through every individual financial market and assessing it, but in the stock market, you know, we don't see at this point anything that's out of line with historical patterns. in particular, you should remember, of course, that while the dow may be hitting a high, it's a nominal terms, not in real terms. and if you adjust for inflation and for the growth of the economy, you know, we're still some distance from the high. i don't think it's all that surprising that the stock market would rise, given that there has been increased optimism about

the economy and the share of income going to profits has been very high. profit increases have been substantial. and the relationship between stock prices and earnings is not particularly unusual at this point. >> marcy gordon with the associated press. mr. chairman, the statement mentions that fiscal policy has become more restrictive. how much of a drag on growth do you see from the social security tax increase and the cross the board spending cuts that went into effect on march 1st? and is it possible that the fed might see a need to provide more support to the economy, if that -- because of that drag, the drag on fiscal. >> well, our analysis is fairly comparable to analysis that

congressional budget office as presented to the congress. and they estimate that putting together all the fiscal measures, including the fiscal cliff deal, the sequester, and other cuts, that federal fiscal restraint in 2013 is cutting something like 1.5 percentage points off of growth. which, of course, is very significant. so that is an issue for us. we -- you know, we take as given what the fiscal authorities are doing. the economy is weaker, job creation is slower than it would be otherwise. and so that is one of the reasons that our policy has been as aggressive as it is. that being said, as i've said many times, monetary policy cannot offset a fiscal restraint of that magnitude. and so the final outcome will be worse, or in terms of jobs, than would have been the case with less fiscal restraint. i want to emphasize that i do

believe that long-term fiscal stability is extremely important and i urge congress and the administration, as i always do, when i go to testify, to do whatever is necessary to put us on a sustainable fiscal path, going forward. but in doing so, i think it's a good idea to pay attention to the impacts in the near term on what is still not a completely satisfactory recovery. >> mr. chairman, good afternoon. you, earlier, stressed that you want to see improvement in the labor market sustained, and to make that determination, you have to have adequate economic growth. and yet the projections in the revised summary of economic projections has kind of a, seems like an oakens law dilemma there. they have reduced the projected rate of unemployment, at the same time, lowered the growth forecast.

so how do you square those two? how do you get sustained improvement in the labor market if the economy is going to slow down? >> well, if, in fact, that happens, it's an issue, obviously. there's been some disconnect, at least in the short run, between unemployment rate changes and growth during this recovery, and there have been periods, at least, where unemployment has fallen relatively quickly, even though growth has been more limited. so we're just going to have to monitor developments in the economy and see what happens. you're right that we're not forecasting extraordinarily strong growth, but it is also true, as i think you noted, that our projections for unemployment in the fourth quarter are noticeably lower than they were in september when we first announced this asset purchase program. so there has been some improvement in the outlook, as measured by that metric. but you're right, you know, we do need to see a sustained

improvement, one month, two months doesn't cut it with, and normally, you would expect that you would need to see a reasonable pace of gdp growth in order to achieve that. so we're just going to have to keep providing support for the economy and see, you know, see how things evolve. >> hi, chairman, victoria green with the dow jones newswires. in the stress test that the fed recently conducted, there is an adverse scenario and a severely adverse scenario. and you published results prosecute individual banks under the adverse -- the severely adverse scenario. but you didn't under the merely adverse scenario, which featured an inflation shock followed i a quick rise in short-term rates. so i have a two-part question. first, why didn't the fed publish those results? and second, even if you can't share how individual banks

performed, what did you learn from how -- from the results you did see under that adverse scenario? >> well, the reason for publishing the severely adverse scenario, of course, is that's the ultimate asset test, you know, whether the banks are sufficiently capitalized. presumably, if they can survive a severely adverse scenario, then an adverse scenario would be obviously less strenuous, less stressful, and they wouldn't have as much difficulty. so i think in terms of evaluating the health of the banks, the severely adverse scenario is the right one. that being said, i don't see any principled reason why we couldn't provide information. i will find out at some point why we're doing it that way. the severely adverse scenario is mostly just a scaling up of the adverse scenario, for the most part. there are some differences. for example, we have used some of our work to look at interest

rate risk and interest rate sensitivity. and found, generally, that banks can also sustain a significant increase in long-term interest rates, as well, for a number of reasons. one of them being that higher interest rates increase their franchise value, because it increases their net interest margin over time. so, again, i think the severely adverse scenario is the one that really puts them to the test, but we're always talking about, you know, what information will be useful to investors and to the press. >> ryan abam, "the economist." you have mentioned that most of the committee members don't expect an increase in rates until 2015 or 2016, and it looks in the projections that the expectation for the long run

rate of the federal funds target is around 4%, which would be below the sort of peak rate we saw before the recession. given the committee's concerns about unconventional policy, is there any feeling on the committee that perhaps recovery isn't going fast enough and that more accommodation would be justified, and has there been any discussion about a change in policy targets to try to stay effective, without much of a cushion there, between the fed funds target rate and the zero lower balance? >> well, as you point out, we're at the zero lower band, and that makes further accommodation not impossible, but harder to predict with more side effects that are difficult to predict. i'm not sure i understand the whole thrust of your question. as you know, we have given this guideline for, let's call them signposts, for how the funds rate is going to evolve over time. and a lot of academic research

shows, when you're close to the zero lower bound, by telling markets you're going to keep rates low for a significant period, that's one way to get longer term rates down and provide more stimulus to the economy and we think this has been a pretty effective tool. now, we could go further. we could lower, even further, say the unemployment rate that we've hit. we've discussed variance and at least one member of the committee has suggested that. but for right now, we find that the thresholds that we have put into that rate guidance seem to be sufficient to approximate, what's called the optimal control path of interest rates, that it seems to give a path of unemployment and inflation that's about as good as we can get with the monetary policy tools we have. it doesn't mean we're satisfied. it just means that we don't have enough firepower to get the economy back to full

unemployment more quickly. i don't know if that was responsive or not. >> given the concerns about unresponsive policy, relative to normal interest rate policy, is there a feeling that more should be done so that in the next potential recession rolls around, there's more room to cut rates. or are you comfortable using these threshold policies on an ongoing basis? >> so you're talking about the inflation target, basically. is that fair. >> yeah. >> okay. so, historically, the argument for having inflation rated, we define price stability as 2% inflation. and some might ask, price stability should be zero. and the answer is the question you're raising, if you have zero inflation, you're very close to the inflation zone, and nominal sbrfrts will be so low, it would be very difficult to respond fully to recessions. and so, historical experience has suggested that 2% is an appropriate balance between the

cost of inflation and the cost that you're referring to. we haven't contemplated changing that. we just put that number in fairly recently. i think at this point, it's still being debated in academic circles, you know, and we'll see what kind of outcome they come up with. but it's an interesting question to try to quantify. there is research, for example, which asks the question, how often do you tend to hit the zero lower bound. and our belief a few years ago is that it was a very rare event, and now it has become more common. so i'm sure there'll be a lot of thinking about this in academic and other circles. >> mr. chairman, ben weill, "congressional quarterly." there's a lot of talk about whether certain institutions are too big to fail, and i wanted to get at a different if related question. in 1980, let's say, there was about -- the financial sector comprised about 5% of the u.s. economy, u.s. gdp. now it's about 9%. i'm wondering if you think that shift is beneficial to u.s.

economy? >> i don't think i know the answer to that question. certainly, the financial system has -- i could argue two ways. i could say, well, the u.s. economy grew pretty well between 1945 and 1975, 1980, and the financial system was much simpler and didn't have a lot of exotic derivatives and so on. so that would be one way to argue that maybe all this extra financial activity is not justified. on the other hand, the world's a lot more complicated. the world's a lot more international. you have large, multi-national firms that are connecting resources, savers and investors in different countries. there's a lot more demand for risk sharing, for liquidity services, and so on. so i think based on that and based on the innovations that

information technology has created in lots of industries, you would expect financial services to be somewhat bigger. so i don't really know the answer to that question. i think that my predecessor, paul volcker's claim, that the only contribution to the financial industry is the automatic teller machine, might be a little exaggerated. i know that some people have that view. but, again, i don't know the answer. i think a somewhat bigger financial sector can be justified by the wider range of services and the more globalized financial and economic system that we have, but the exact number, i can't really say. >> hi, i'm jeremy. i have a follow-up question on cyprus. as a central banker, do you think it was either appropriate or fair to impose a levy on every bank deposit in cyprus, even those insured by the european union itself? thank you. >> well, i've not been involved

in those conversations and i don't necessarily know of the details. so i know they're grappling with a very difficult problem. i think the issue they face is, that there's a pretty big hole, a financial hole in the sense that there is a fiscal issue and there's also a bank restructuring, recapitalization issue. so, they're looking for resources where they can find them. i think everybody understands there are certain risks with that, besides the equity issue of taxing lower income people. there is the issue of setting a precedent that might reduce confidence in banks, in subsequent periods. but, again, that being said, it's a very tough issue, and finding the resources to solve cyprus' problem, you know, there's probably no easy way to do it.

and we're going to keep monitoring that, but i don't envy them that particular challenge. >> thank you. >> there's been a trend in the last couple of years where the economy kind of jumped out of the gate in the first part of the year, only to kind of forward. is that something that you're worried about this year? and does that suggest that qe might have to stay kind of at the same pace you are now, into the third quarter, until we're sure about that trend? >> well, you're absolutely right. there's been a certain tendency for a spring slump that we've seen a few times. one possible explanation for that, besides some freaky things, some weather events and so on, one possible explanation is seasonality. because of the severity of the recession in 2007 to 2009, the

seasonals got distorted and they may have led -- and i say, "may," because the statistical experts, many of them deny it, but it's possible that they led job creation and gdp to be exaggerated to some extent, earlier in the year. our assessment is, though, at this point, that we're far enough away from the recession, that those seasonal factors ought to be pretty much washing out by now. so, if we do, in fact, see a slump, it would probably be due to real fundamental causes, and then we would obviously have to respond to that. as i said, we're planning to adjust our tools to respond to changes in the outlook, and that can go either direction. >> don judd, cbs news. i was wondering if you can tell me how a run on the banks

happens in cyprus, how that might affect u.s. markets? and also, is it possible for the u.s. to levy a tax on regular deposits here or why not? >> well, as someone mentioned, cyprus is a tiny economy and i don't think that these issues, as worrisome as they are, and as concerned as we would be for the cypriot people, i don't think that they have a direct implications for the u.s. economy. the only way that they would create a problem would be if the runs became contagious in some sense. if depositors in other countries lost confidence. but to this point, i'm not aware of any evidence that that is, in fact, the case. the argument that the europeans are making is that cyprus is a unique situation, a very different situation, and indeed, it is quite unusual to have a banking sector as large as they have, relative to their economy.

in terms of the united states. you know, the fdic was founded, i think, in 1934 and insures deposits and they're very proud of the fact that no one's ever lost a dime in insured deposits. and during the crisis, the response of the government was, in fact, to increase the level of, you know, deposit or account sizes that were insured. so i consider that to be extremely unlikely in the united states. >> tom lee, "l.a. times." would you be in favor of reducing the flow of stimulus if we had another month or two, as we did in february, of job growth and the unemployment rate dropping, but the long-term unemployed didn't change much? and on a related question, how much of a pickup do you expect to see in the labor force participation rate and what would we need to see there for

that to show substantial improvement? >> on the first question, as i said, i mean, that's a decision for the committee. we're going to have to make a judgment about how significant the improvement is, how sustained it is. long-term unemployment is one dimension of the unemployment problem. but, i think that probably the best way to get the long-term unemployed back to work is to get an overall strong labor market. and i think that's -- we'd be looking at the overall key indicators, like overall unemployment rate, payrolls, and hiring and some of the other things that i've mentioned. the other part of your question was about? other, labor force participation, yeah. labor force participation has been declining on a trend-like basis in the united states for a while. that's the result, mostly, of demographic factors. partly the aging of the

population, partly the fact that female participation is no longer increasing, it's, in fact, decreasing a little bit. it's also the case that labor force attachment, within people of working age, has declined for a number of different reasons. so there's a trend underlying this. and in addition, there are probably some people who have left the labor force, just because they're discouraged and they can't find work. so as the economy strengthens, the labor market strengthens, i would expect to see some of these folks coming back into the labor force. for example, the number of people who are out of the labor force, but say they would like a full-time job, and are not actually counted as unemployed, that number has actually been enjoying up, which suggests there are more people thinking about the labor force and going back to work. but i doubt in the near-term, at least, that we'll see an increase in labor force

participation, because besides the effect of the slow recovery, high unemployment, we've had a downward trend in the u.s., which is not due to the recession, it's draw to underlying demographic factors. >> katherine hollender from "national journal." you argued in a 1992 speech that monetary policy was not the right tool for addressing asset bubbles. but in january you argued that there might be a use for it. has your thinking on the issue evolved and can you explain why? >> well, i still believe the following, which is that monetary policy is a very blunt instrument. if you are raising interest rates to pop an asset bubble, you might at the same time be throwing the economy into

recession, which kind of defeats the purpose of monetary policy. and therefore i think the first line of defense, i mean, i think we have sort of a tripartide line of defense. we start off with very expensive and sophisticated monitoring at a much higher level and much more comprehensively than we've had in the past. then we have supervisionary regulation, where we work with other agencies to try to cover all the empty or uncovered areas in the financial system. and then in addition, we try to use communication and similar tool s tools to effect the way that financial markets respond to monetary policy. so we do have some first lines of defense, which i think should be used first.

that being said, you know, i think that given the problems that we've had, not just in the united states, but globally, in the last 15, 20 years, that we need to at least take into account these issues, as we make monetary policy. and i think most people would agree with that. what that means, exactly, depends on the circumstances. i think if the economy is in very weak condition and interest rates are very low for that purpose, it's very difficult to contemplate raising rates a lot, because you're concerned about some sector in the financial sphere. on the other hand, if you're in an expansion and there's a credit boom going on, the case in that situation for making policy a little bit tighter might be better. so, as i've said many times, i have an open mind on this question. we're learning, all central

bankers are learning, but i think i still would agree with the point that i made in my very first speech in 2002 as a governor at the federal reserve, where i argued that the first line of defense ought to be the more targeted tools that we have, including regulatory tools and to some extent, macro credential tools, like some emerge markets use. >> thank you, mr. chairman. as tempted as i might be to end with your ncaa picks or your view of the nationals, i have something a little more serious to ask you in line with your future. given the unprecedented future, to what extent do you feel personally responsible to be at the helm when those decisions are made? and how does that affect your future, and more specifically, sir, the last time we gathered here at the press conference, you were asked about if you've spoken with the president about your future and you said you

hadn't at that time. can you tell us if you've had that conversation? >> i've spoken to the president a bit, but i don't really have any information for you at this juncture. i don't think that i'm the only person in the world who can manage the exit. in fact, one of the things that i hope to accomplish and was not entirely successful at, as the governor or as the chairman of the federal reserve, was to try to depersonalize, to some extent, monetary policy and financial policy, and to get broader recognition of the fact that this is an extraordinary institution. it has a large number of very high-quality policy makers. it has a terrific staff. literally, dozens of ph.d economists who have been working through the crisis, trying to understand these issues and implement our policy tools. and there's no single person who is essential to that.

but, again, with respect to my personal plans, i will certainly let you know when i have something more concrete. thank you. >> welcome back, everybody. we have been watching chairman ben bernanke. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. this market continues in rally mode, following the fed's decision to leave interest rates unchanged, and even during his speech, bill, not a lot of activity. maybe it's off the highs a bit, but still showing that double digit move. >> biggest rally on the open this morning, then it kind of tapered off, and took off again after that fed's announcement. let's get to our panel for instant reaction. joining us, mark marniac, kenny

p pa palkari is here on the floor of the new york stock exchange. steve liesman is at the bernanke conference in the room there. is that it? that's all the people we could bring in here? mark, you've been sitting here with us. what did you make of what you heard today and the market response? >> i thought narcotmarket respos very good, bill. and i commend the committee. i think they're doing a phenomenal job at this point in time, really. investor sentiment is rising. as long as unemployment remains above 6.5%, i think the fed will do everything to provide accommodative policy. their mandate is to get the unemployment rate below 6.5%, and i think investors, overall, at least my clients and i sense that of other clients, they're feeling really good about the risk assets right now, versus, you know, what might be going on in the economy. >> right. but i guess, kenny palkari, you've been watching the story from the floor there.

what kind of flow did you see as bernanke was talking? is there any feeling that anything changes for the foreseeable future? >> no, there is not. and you know, we've actually been talking about this for a while. everyone expected exactly what they got today, right? especially in light of what's going on in europe, they expected ben bernanke to come out and be this stabilizing force and continue to reiterate his support of the market. and that's all well and good, but the fear is going to be, how do we start to exit. and yes, the market feels great, and like your guest just said, his customers are feeling great, of course they are, because the market's up 11%. i love that too. but at some point, when the fed starts to pull out, the market's going to reprice. and that's the trick trade, right? >> that is the question. when and how they will do that. peter olides, last time you were here, you felt that we would be peaking out some time in february. but that, of course, hasn't happened. i'm reminded yesterday, a high-profile bear on wall street, adam parker, has turned

bullish now. and his reasoning is that the fed's impact on the markets was just greater than he anticipated. is that what's going on with your work as well? that the fed's monetary policy, very easy, has wreaked havoc with your analysis of this market? >> absolutely not, bill. i don't feel that way at all. in fact, i think i called you one or two days after the interview, or sent you an e-mail saying, this is a long cycle. this is 2 to three years. it's been rather exacting over the past century, but the cycle actually goes back to 1836, bill, 25.3 years. so we're within a half a percent margin of error right now. to me, this whole federal reserve thing is fascinating. because it's like, i don't think i've ever seen a greater disconnect between what's happening in our market and what's happening in our economy. >> exactly. >> who said "exactly"? >> i did.

exactly right. >> kenny, yeah? >> let me ask you in, in terms of today, for example, mid-cap stocks hit act all-time high. transportation's down. do you read into anything, in terms of this allocation and rotation that we're seeing in this market? josh brown, in terms of where we are in this bull market, looking to what's working now and what's working less, than at the beginning of this? >> i think the real key here is that a lot of the rally we've had has been driven by an expansion of p.e. multiple. in fact, this is probably one of the biggest p.e. expansion multiple rallies. and so what's come along with that is the fact that we're looking at things like housing, that actually make sentiment better, make people feel better. since the bottom in 2009, we've seen $1.5 trillion in household wealth, come back because of housing. last year, the stock market generated 400,000 new millionaire households. we're back to about 9 million millionaire households. so you can say it's the feds,

the fed, the fed. but at the same time, wealth is increasing. and the game right now is to say, what is going to jar investor faith and confidence? what is going to force p.e. multiples to contract? and frankly, it could happen out of the blue, but it hasn't happened yet. and we do have actual improvement in some pretty key areas in the economy, construction, et cetera. >> let me go to mr. mark and rick santelli. put them all together for us here. it's been very much a risk on day. the euro has gone higher, the treasuries have gone lower in terms of price. what do you make of the market and the message today here? >> well win look at a two-year 25-year basis points, it really hasn't moved. i look at a five year at 79.8, which is exactly where it was before any of the fed activity. 195 ten-year, the 30-year at 318. dollar index has marginally improved to smaller loss. and stocks, by far and away, have held on to about 20 points a gain they didn't have.

i don't know. down on this floor, they say ben's an honorable guy, but a little bit of plagiarism going on. they really think that father time probably should get a lot of credit for the things josh has been talking about and the legendary peter has been talking about. but, of course, it doesn't really matter, i guess. as ronald reagan had on his desk, you can get a lot done in that town, if you don't care who gets credit for it. >> so time is healing all wounds. >> absolutely. >> i don't care who gets credit for it. i agree with rick -- >> i understand. >> you need time, time is the key, in any kind of balance sheet recession, delevering doesn't have in six months. >> can i make a comment -- >> hang on. hear what mr. legend says here. go ahead, peter. >> all right, this whole wealth effect thing is very laughable. yes, there's a wealth effect. the federal reserve was looking for that in order to goose the economy. so what did we end up with? we ended up with a fabulous wealth effect in new york city, go there and try to buy a

condominium, and san francisco, the financial center, go and try to buy a condominium. where's the wealth effect in the rest of america? it just has not worked. >> is there a world outside of new york? come on! >> energy-rich states aren't experiencing a wealth effect? florida's not experiencing a wealth effect? >> of course they are. >> no, they are experiencing a wealth effect. >> tell me what their unemployment rate is. >> what are you saying, pete, that there is no wealth effect? that when the stock market is going higher, people don't feel richer and they don't act -- >> real estate is a more important wealth -- >> but that's what the fed was counting on. they were counting on the wealth effect, because all they've done is create bubbles once again. you thought we had a bubble in '07? look what's happened now? look at manhattan real estate, look at san francisco real estate. look at collectibles. lack at all of the things that were bubbles in '07. we started the deleveraging process, it started to look out

nicely, liquidation of debt, and now we're back to where we started. >> and of course bernanke was asked about the wealth effect. let me talk to steve liesman here. steve, he was asked about the effect of a bubble and whether or not there is a bubble in this stock market. what struck you from bernanke today? >> reporter: what struck me, i think there was a really important piece of news here, maria, and it has to do with the creation, essentially, of a second litmus test for quantitative easing and the chairman talked not once, but twice about the issue of perhaps adjusting the quantitative easing amounts to go along with improvement in the labor market. and we had a kind of vague definition before of why they would bring it down. now we have an even bigger one as to why they might taper it down. i don't know if we have the sound, but i think it's pretty significant sound that the market ought to think about as to when the fed might begin to taper its quantitative easing purchases. >> we are seeing improvement.

i think one thing we would need is to make sure that this is not a temporary improvement. so we've seen periods before, where we had as many as 300,000 jobs for a couple of months. and then things weakened again. so i think an important criteria would be not just the improvement that we've seen, but is it going to be sustained for a number of months? >> so i would say, maria, it's a good time to start thinking about if the kind of numbers we've had in jobs continue for several months to come, could there come a meeting, could it be may, could it be june, where instead of doing $85 billion, the fed goes down to $65 or $40 billion. now we're going to begin a very interesting discussion about how to calibrate the amount of qe with improvement in the jobs market, and a guessing process will begin right now for fed observers, as to whether or not there's been enough improvement to begin to taper qe. so this is an important development today from this press conference. >> and for what it's worth, bill

gross tweeted o out a short time ago after that news conference that he felt that the quantitative easing, the bond buying, would be reduced sooner rather than later, even earlier than he had anticipated before. >> and bill, i want to -- >> go ahead, steve. >> one more thing is i thought the fed chairman talked more about the costs than i've heard him speak before about it. when i go back and think about what he said in the congressional testimony, he acknowledged them, seemed to maybe wave them off more. decided a little more concerned about the costs of qe down the road, and there was that addition about gauging the costs of it. i'm sure that's part of the statement this time around. >> gentleman, i know we'd love to talk more, but there's never enough time, especially with such an agust group as we've had today. we are in the final stretch of trading. we have a market that's holding on to gains, dow jones is up 62 points right now. >> so i guess the fed does continue to fuel the dow to more highs.

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officials in cyprus have been scrambling, looking for alternative ways to raise funds now that the tax on bank deposits there has been rejected by its parliament. and that's why the cypriot finance minister is in russia today. cnbc's steve sedgwick is in moscow with details. >> reporter: thanks, bill. yeah, it's been a fascinating day here in moscow, a day in which the finance minister of cyprus came to moscow, looking for a plan "b," maybe even a plan "c" to sort out the economic woes and the kploeimpl that seems to be having to the cypriot economy. in 2004, according to moody's, it appears that trans-regional cypriot flows of money were in the region of $250 million. they also hold about $30 billion euro in bank accounts in cyprus,

and of course they're very keen to see that money returned to those stakeholders as well. the russians have already got a loan in place of 2.5 billion euros back in 2011. the cypriot finance minister came here looking for better terms on that loan and potentially asking for an extension. some reports saying they wanted another 5 billion euros. but after a day so far here in moscow, it appears the cypriots haven't got what they want so far from the russians. as of yet, no deal between cyprus and russia. maria, back to you. >> let's get to kayla tausche right now with breaking news on jpmorgan. >> in the wake of news, control of the currency, thomas curry, has given a statement to cnbc, saying after the crisis, the occ raised its expectations for large banks, saying it will no longer accept audit and risk functions. the occ goes on to say, it, quote, has set higher

expectations in five specific areas. board willingness to provide credible challenge to management, talent management and compensation, defining and communicating risk tolerance across the country, and development of strong audit and risk management functions as well as protecting the sanctity of the bank charter. now, while normally a highly confidential rating shared only between a bank and its regulator, the downgrade to jpmorgan following the whale debacle was disclosed to capitol hill on friday. the occ has also in the past downgraded the ratings of bank of america and citigroup during the financial crisis and raising the bar from here on out, it lack looks like. maria, that's what we have from the occ. >> bob pisani, the dow and s&p 500 points away from their all-time highs. seems like this market continues unphased by news out of cyprus and the fed announcements. look at this market, 14,529. >> bob? >> 1,565 on the s&p.

we could theoretically do it in the next few minutes. during bernanke's press conference, there was an unintentional moment of mirth, an amusing moment, where he said he had spoken to an unemployed person recently. it wasn't meant to be fun. but a lot of people chuckled at that one. hey, maria, look at the dow moving up. there was about 212, 212. the fed statement has been out and all of a sudden the dow moved up and everybody came over to me and said, what happened? i think this is actually not due to mr. bernanke or the fed. there was leak from japan about what the bank of japan might say tomorrow. there's going to be a press conference, the new guy is giving a press conference. the nikkei newspaper came out and said he's going to make an extremely aggressive statement. if you look at that dxj, the japan stock market rocketed up just after 2:00. the yen weakened. so i actually think some

thoughts about what was going on here moved our market just a little bit here. guys? >> a dollar strong against the yen there. >> i think this is really interesting about japan. japan has not been a story for 20 years. and all of a sudden with ave's new policies pushing down the yen, you've got a whole investable opportunity in japan here, after 20 years of having squat. >> that's right. and corona, one of the reasons it was the nikkei newspapers that leaked this, coroda is supposedly going to call for aggressive asset purchases, ala our fed, even earlier than people had anticipated and in greater quantities than people were anticipating. so we'll see, but you're right, they're going to try this bold move to replait the economy. they're talking about at about 2% and above. they've been in deflation for a long time. they can get a 2% inflation rate, that would be something. >> and that's certainly what's boosting that dxj chart, bob,

for sure. >> and as you're speaking there, bob, you're right, we could hit these new highs before the end of the day. we've got 15 minutes left. the s&p is very close. 1,565 is the old all-time high going back to 1957. the dow is up 80 points. >> up next, how high this market can go. we'll check it out. what this means for your money and could this lead to more? stay with us on the "closing bell." tdd#: 1-800-345-2550 when i'm trading, i'm totally focused.

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tdd#: 1-800-345-2550 all this with no trade minimums. tdd#: 1-800-345-2550 and only $8.95 a trade. tdd#: 1-800-345-2550 open an account with a $50,000 deposit, tdd#: 1-800-345-2550 and get 6 months commission-free trades. tdd#: 1-800-345-2550 call 1-866-294-5412. welcome welcome back. we've been hearing a lot of fed talk today. our next guests with, though, say this market has more room to run. >> ben bernanke implied as much today. joining us to make a bullish case in today's talking numbers segment, we have bill stone of

pnc asset management and gena sanchez. he said, these are nominal new highs we got, but in in terms, we've still got a way to go. do you agree? >> i agree. it's been over five years. so we still have a lot of room to run, if you believe, like i do, that earnings will continue to grow. >> will they continue to grow, with the global slowdown, though? you saw the edex numbers. does that tell you anything about the first quarter numbers that are only about two weeks away? >> what it does tell you, and maybe i should say this, but i think it becomes more micro, now that we've come further out of the crisis. i'll like the day i don't have to say crisis anymore, but i think that's part of the story. >> actually, i would say there's probably some moderation to come. i think that the markets have definitely gotten a little ahead of themselves. there is a recovery. it's very real. but, earnings expectations are still a little high. >> if it's not just about the fed, though, you have to admit, this market has gotten where it is today because of the

liquidity that the fed has added. so what happens when they do start to scale back on that liquidity? which is inevitable. >> that would basically be, not only very bad for bonds, but it would be very bad for stocks. right now stocks because of liquidity are very low. and stocks have been benefiting from a number of other things. sentiment, but money flows have been incredibly supportive of this stock move. and that may take a little longer. but that would also probably start to go in the other direction, if the fed pulled back. >> so who is participating in this move right now, bill? for a long time, we're trying to figure out, is the retail investor back? do you think the retail investor has woken up and started putting money into this market, but is this still very much an institutional gain? >> we've definitely seen flows coming into the market. this year, we are finally seeing the numbers come in. now, they have been starting to trickle down a little bit, but at the end of the day, relative to what we have seen for quite a number of years, it is the real deal. i think it surprises people that

it hasn't come out of bonds, even though we've had a little backup. so that's been the biggest surprise. it must be coming out of cash. >> and with the fed still in the bond market, who knows why the bond market is not coming down at this point. >> and that tells me that there's a lot more potential, because the money hasn't come out of bonds yet. >> still a lot of cash on the sidelines. we're still going to talk about as this we go along. >> the closing countdown after this short break. >> is it time to ring the bell already? and then, we're not finished, oracle set to report earnings right after the close of trade. we'll have the instant analysis and the numbers, as soon as they are out. >> also, activist starbucks shareholders trying to clamp down on corporate funds being used for political campaigns. chairman and ceo howard schultz will react to what has become a year of activist shareholders. that's coming up. you don't want to miss that one at 4:30 p.m. eastern on closing bell. 't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond.

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he'll start investing early, he'll find some good people to help guide him, and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade. okay. okay. market higher. we're heading towards the close with five minutes left, but we are off the highs of the day. >> definitely off the highs. see a little selling coming in at the end of the day. but this is a victory. >> here's what the chart lacks like. higher on the open this morning, kind of drifted until we had the news conference and the announcement here. sort of a delayed response, then a drift a little bit, and now we're coming off those highs with the dow up 50 points. but we were in all-time high territory, very briefly. and the same thing for the s&p. we've been wondering, when are we finally going to get an all-time high close on the s&p? doesn't look like it's going to

happen either. the number to keep an eye on, 1,565.15. fedex announcing those disappointing earnings, down sharply, down 7% today. that took the wind out of the sales of the transports, which you've been highlighting lately, maria, have been very strong. now a stock to keep an eye on after the close tonight. oracle reports earnings. they'ren't anding a profit of 66%. the stock virtually unchanged right now. but it's been a pretty good day for the bulls here. >> you know, oracle really will set the tone for tomorrow, but oracle has been losing. they're all very fragmented in this space because of big data. so there are a lot of small companies coming in and taking some market share. oracle will be a big number. people will focus on this, because of that market share as well as because it's going to set the tone on technology. we're warren myers. >> what do you make of what today's rally is all about? >> i think once again, it's a very impressive up day. we heard the fed minutes, we

heard bernanke speak. a lot of blame going to the fiscal policy and a few other things. >> a couple of zipperingers the congress. >> which is actually kind of nice to hear. at the end of the day, my opinion is the fed has invested so much money in this support and bailout, whatever you want to call it, that they're going to err on the conservative side. they're not going to pull the plug or raise rates too quickly. and because of that, i think the riskier assets are the place to be, for as far as the eye can see right now, and i think that's positive for the equity markets. >> look at this market right here, 46 points, well off of the highs. what are you seeing at the end of the day? buy on the dip mentality. >> we've seen that time and time again over the last month or so, you definitely want to buy -- if you're waiting for that big sell-off, you've missed a lot of opportunities. and people have finally come to that realization. any little bit of a pullback, that's starting to get people putting money back to work. >> we've got the latest fed meeting out of the ay