participants would regard as consistent with normal in the longer run, 5.2% to 5.5%. so there is significant underutilization of labor resources. we continue to discuss whether or not the unemployment rate itself is in an adequate measure of how much underutilization of labor resources there really is. and as i went into detail until jackson hole and won't repeat all of that there, there are other ways in which we see underutilization, high levels that have come down only very marginally of part-time employment for economic or involuntary part-time employment, perhaps some remaining shortfall of labor force participation as a result of cyclical factors. so i think there still is -- and

the statement says significant underutilization of labor resources and a very modest pace of wage increases that's picked up very little i see as essentially a reflection of that. >> "the wall street journal." i want to come back to the interest rate projections that put out today. the public i think would be enlightened by knowing a bit more about where you stand in relation to these projections. and with that in mind and in the name of transparency, i wonder if you could describe to us whether you're at the low end of those projections within the central tendency or at the high end? i also want to ask you about a san francisco fed paper that came out recently which suggested that market expectations have been running below the fed zone projections. so i wanted to ask you if you

see that as well and whether it's at all troubling that market expectations might not be aligned with what the fed put out today. >> so with respect to identifying myself, the committee has had discussions during the years that we have been providing these forecasts of the participants to the public as to whether or not it's desirable from the standpoint of a committee functioning to identify who's who in these pictures. and thus far, while occasionally an individual will indicate in a speech what their personal views are, we have not yet decided it would be a desirable thing from the point of view of our decision-making process to identify individuals. we have a subcommittee on

communications that's now chaired by vice chair fisher. and they will be considering the sep and whether or not some changes are appropriate. but until and unless there is some change in the committee's stance on this, i don't want to identify myself. you asked second about the san francisco fed paper that did point to a notable divergence between market views and the views of the committee. i'd say that there have been any number of different analyses of this topic. there are many different survey measures and interpretations of what the market thinks. i don't frankly think it's completely clear that there is a gap.

there are different views on whether or not such a gap exists. to the extent that there is a gap, one reason for it could be that markets and participants have different views on the evolution of economic conditions. for example, i think i'd note that when the committee participants write down their forecasts for the federal funds rate, they are showing the funds rate path that they consider most likely. their economic forecasts are of the conditions that they think are the most likely ones. you don't see a full range of possibilities there. and the path for the funds rate is the path that each individual thinks is most likely. market participants,

understanding that there are a range of possible outcomes with upside and downside possibilities, are doing something slightly different, i think, when they're determining market prices. they are taking into account the possibility that there can be different economic outcomes, including even if they're not very likely ones in which outcomes will be characterized by low inflation or low growth and the appropriate path of rates will be low. so differences in probabilities of different outcomes can explain part of that. we want to learn. market participants may have different views on the economy than the committee does. and that's something we want to try to infer and learn market views in part from information

of this type. what i can say is that it is important for market participants to understand what our likely response or reaction function is to the data. and our job is to try to communicate as clearly as we can the way in which our policy stance will depend on the data. and i promise to try to do that. >> "washington post." my question is about the new exit principles you guys state that you don't plan to end reinvestments until after the first rate hike. can you give us a little bit of a sense of what are the conditions you're going to be looking for when you eventually begin to end the reinvestments? sounds like tapering the reinvestments is also on the table. what might go into your decision on whether or not to end them altogether, whether or not to taper them? and do you have a general time line for how long you think it

will take to shrink the balance sheet once you actually start? >> all good questions. so i think the committee will be focused on we intend to use the path of short-term interest rates as our key tool of policy and of course market participants will be very focused as we are on what is the appropriate timing and pace of interest rate increases when that time comes. and i think the committee would like to feel that it has successfully begun the normalization process and that we are successfully communicating with markets about how that process will be playing out over time. and i think when the committee is comfortable that that process is established, is working well and we're comfortable with the

outlook that they will begin the process of ceasing or possibly tapering. but eventually ceasing reinvestments. so we say that it will depend on financial and economic conditions. but we want to make sure normalization is successfully under way. if we were only to shrink our balance sheet by ceasing reinvestments, we probably take -- to get back to levels of reserve balances that we had before the crisis, i'm not sure we will go that low. but we've said that we will try to shrink our balance sheet to the lowest levels consistent with the efficient and effective implementation of policy. it could take to the end of the decade to achieve those levels.

>> you said a few moments ago that there is perhaps some remaining shortfall of labor force participation as a result of cyclical factors. this seems consistent that some members of your staff said -- labor force participation is basically out of the equation? the second question, in the statement of exit principles, you said the committee will act as soon as economic conditions warrant. there had been an idea in circulation at some point that you might stay lower for longer as a means of compensating for some of the damage done during the recession. is this an indication that that debate has been settled and that that idea is off the table? >> remind me of the first question -- >> the first question was, has the labor force participation been removed from the slack equation? >> so the recent brookings paper by the fed economists clearly

indicates -- and i said this at jackson hole -- that there are structural reasons, particularly demographi demographics, but not only demographics, wide labor force participation should be expected to decline over time. and i agree with that. and i believe that most of my colleagues would endorse that as well. however, they did indicate in the paper that they see some remaining cyclical shortfall by one technique that they use. they placed the estimate at 0.25%. but by another technique they used, they said it could be as large as 1%. so my own personal view is there is some cyclical shortfall. and something certainly and probably within that range. but nevertheless it's a meaningful cyclical shortfall.

it's not completely -- i'm giving my own personal view, not a committee assessment -- that i see the -- given the underlying downward trend in labor force participation, we might interpret the flattening out of labor force participation over the last year as showing that that cyclical component has diminished somewhat. i think there's something that remains. but eventually i would certainly agree with the authors, we should expect over time to see labor force participation declining. and then let's see -- the second was -- >> [ inaudible ]. >> we stayed low for a very long time. we have been at zero for a very long time. and below the levels that some common policy rules would now be

suggesting, given the level of unemployment and inflation, so the recovery has been very slow. we've also been doing unconventional policies in terms of assets. and we have been longer than many standard policy rules would suggest. so in the sense that is a policy we have had and once we decide it's appropriate to begin to normalize policy and to raise the level of our target for short-term interest rates, it would still take some time for rates to get back to levels -- you can see in our projection that by the end of 2017, the participants are on average

projecting that rates will reach the levels they consider normal in the longer run. and similarly we could make a similar statement with respect to where the funds rate would stand relative to the recommendations of rules. so that would take some time to return to those kinds of levels. >> the "associated press." there were two dissents from today's decision. i'd like to get your thinking on how you treat dissents. i think in chairman bernanke's eight years, the largest number of dissents was three. do you see two dissents as a yellow warning flashing light that -- how should market participants read the dissents? >> well, i think it's very

natural that the committee should have a range of opinion about a decision as crucial as what is the right time to begin to normalize policy. and we do have a range of views in the committee. i don't consider two dissents to be an abnormally large number. presidents plosser and fisher have been quite clear in all of their speeches recently in stating that they think the time has come to begin normalizing policy. i think they perhaps have some concerns that if we don't begin to do so soon that inflation will pick up above levels that they would consider desirable. or that they have some financial stability concerns.

but the committee adopted today's daytime by an overwhelming majority. and i don't consider the level of dissent to be surprising or very abnormal. >> "the economist." there's been another downgrade in your near-term forecast. does it appear the potential is much lower than you thought and therefore slack is closing more quickly than you thought? there seems to be a persistent pattern to your forecast? how concerned are you about events in europe and the recent decline in inflation expectations there? >> there's been a little bit of downgrading, i think even this time in the longer-run normal growth rates that committee participants have written down. you are certainly right in

saying that over a number of years now, there's been a pattern of forecast errors in which either we have been on track with respect to unemployment or unemployment has come down in some cases faster than we anticipated and yet growth has pretty persistently been surprising the committee to the downside and that is a statement about productivity growth which has been pretty disappointing. so we have had downward revisions in the level of potential output and to some extent, at least for a time in the projected pace of growth. so that tension has been there. there are a range of views about long-run growth, a lot of people are writing about this topic. i think the committee's

longer-run estimates are neither at the most pessimistic end nor the most optimistic end. about europe, certainly we have discussed the outlook for eur e europe. the very low level of inflation that they have seen recently and the decline that they saw in inflationary expectations and the slow pace of growth, it is one of a number of risks to the global economy and we certainly hope that they will be successful in seeing the pace of growth and inflation pick up. and i think that will be good for the global economy and the united states.

>> "the financial times." back to the forward guidance. a lot of the committee has criticized the guidance has being calendar-based. but you say that's not correct. how should people understand it and if it doesn't have a defined meaning, what purpose is it actually serving and do you expect to have to revisit it in the near future? >> we are constantly discussing forward guidance and thinking about whether it's appropriate and how to revise it. and we did do a major overhaul of our forward guidance in march. i think the committee participants who have spoken out on this topic recently want to make sure that we have the flexibility, that the committee has the flexibility to respond to unfolding developments.

they want to make sure that if progress really does turn out to be faster than we would expect, that the committee will be in a position to start sooner tightening monetary policy. they do not want to be locked into something that the markets see as calendar-based and firm commitment. so they want to emphasize data dependence of our policy and make sure that we have appropriate flexibility. but i agree with that. and as i said earlier, i think we do not have any mechanical interpretation that applies to this. it of course gives an impression about what we think will be appropriate. but there is no mechanical interpretation. and i've said repeatedly and i

want to say again that if events surprise us and we're moving more quickly toward our objectives and the committee sees a need to move sooner or later, depending on what the data is, that we do feel -- i do feel we have the flexibility to move. and it is important for markets to understand that there is uncertainty and the statement is not some sort of firm promise about a particular amount of time. >> good afternoon. getting back to the -- one aspect of the forward guidance is the statement which you've reiterated about the funds rate probably needing to stay below normal for some time after achieving mandate consistent

levels on unemployment inflation and so forth. the sep assessments of appropriate funds rate levels show the funds rate getting up to that 3.75% normal level at the end of 2017. if you look at the sep projections of unemployment, inflation and so forth, they seem to get back to those mandate consistent levels by the end of 2016, if not much sooner. so what is the justification for waiting that much longer to get back to normal, particularly when you have such a large balance sheet that you intend to reduce only gradually? is there a danger of getting behind the curve? and secondly, can i just ask, can you envision a time when to reduce reserve pressures, you may have to resort to asset sales that you don't anticipate doing now?

>> so on the first question of some time before rates return to normal levels, as i mentioned, you can see in the sep that by the end of 2017, many participants are anticipating that rates will return to what they think are normal, longer-run levels. but the economy in their view will have probably gotten back to normal levels of unemployment and near normal levels of inflation some time in 2016. so that looks like a year or more in which rates would be below normal longer-run levels. we ask participants why they hold the views that they do about appropriate policy. and there are a number of different applications that

participants give. but a common view on this is that there have been a variety of headwinds results from the crisis that have slowed growth, led to a sluggish recovery from the crisis and that these headwinds will dissipate only slowly, that they are dissipating. an example would be the fact that mortgage credit really is at this point available really to those with pristine credit. credit conditions there are abnormally tight. another thing that we see is that households' expectations about their likely income paths remain quite depressed relative to pre-crisis levels. that's something that may be holding back consumer spending. so the view would be those forces will dissipate over time.

but only very gradually. in addition, we have had slow productivity growth and a slow pace of potential output likely depresses the pace of investment spending. and so those are some of the things that participants mentioned as why it would take some time to get back. it's not that the fed is behind the curve in failing to return the funds rate to normal levels when the economy is recovered. it is rather that in order to achieve such a recovery in 2016 or by the end that it's necessary and appropriate to have a somewhat more accommodative policy than would be normal in the absence of those headwinds.

>> i would like to follow up on greg's question about europe. tomorrow scotland is going to be voting on independence from great britain and there is some concern that if it does vote to break from great britain that this could cause some turmoil in global financial markets and the global economy. are you concerned about that? do you see any impact if scotland does vote for independence on the european economy and potentially on the american economy, and if so, is the fed doing anything in preparation for that possibility? thank you. >> scottish voters are about to go to the polls tomorrow and they have had a good debate about this topic. and in light of that, i really don't want to weigh in on this today. >> dow jones news wires. my question is about your particular views, about whether a gradual approach to tightening

is better than a more aggressive and less predictable one? because there was some discussion about internally and externally about whether it was the fed's predictability in the 2004-ish period that created the conditions of complacency that led to the housing bubble. so i wonder if you'd be more inclined to be gradualist more in your approach and more transparent in outlining future moves or whether you think keeping the market guesses, there is some value to that? thanks. >> this is something the committee is going to have to discuss when the time comes to normalize policy. looking back on the period, the run-up to the financial crisis, i don't think by any means measured pace and the very predictable pace of 25 basis points per meeting explains why we had a financial crisis. but it may have diminished

volatility and been a small contributing factor. and the committee will have to think about how to do this. i think many people in the aftermath of that episode think that somewhat less of a mechanical pace would perhaps be better. but this is a matter that we will in due time have to discuss. >> all right. >> welcome to "closing bell." that was janet yellen. i'm kelly evans. >> and i'm bill griffeth. chair yellen just wrapping up her news conference following the announcement that they are leaving rates where they are. considerable remains in the statement that they will leave rates at a record low rate for a considerable period of time. and they are continuing to scale back their purchases of

financial assets out there. >> a couple of different crosscurrents. and the statement about the labor market having slack in it. markets up as much as 80 points on the back of that. while we heard from chair yellen in her press conference, the worry being maybe she would sound as hawkish as some elements of both the projections and the statement and the dissenters could have been read. but so far, that not feeding through into the reaction of the stock market. >> let's show you how we are doing right now. the classic stutter-step, if we were to show you on intraday chart of the dow, markets were trying to digest all the information at 2:00 eastern time when it first came out. up, then down, then up, sideways, up, down -- it's been that kind of a trading session following the announcement and then during the news conference. but right now, we are in record territory for the dow. it's up 44 points at 17,176. the transportation averages also in record territory. the nasdaq higher by 18 points.

well off the highs of the session. but volatile afternoon here. the s&p was in record territory early on during this process. but it has sense falling back. we're at 2,005 and change. >> if we could take a look at the ten-year and the u.s. dollar. we've been watching these closely as investors around the world look at what we've just heard from chair yellen and try to figure out what it means for the trajectory of both -- especially on the back this morning of consumer price inflation data not getting the attention it deserves. it was soft yet again. there's the ten yer. 2.61%. there's a little bit of move on the two and five-year. keep an eye on the dollar which was earlier trading at eight-year highs against the japanese yen. 84.53 is the latest. >> let's talk about it. diane swang, joe lavorgna, jim

bianco and steve liesman will join us shortly. he's still in the briefing room making his way out to our cameras there in washington. diane, what's the headline for you today? anything stand out for you? >> two things are important. one is gradualism is intact, the federal reserve isn't going to move quickly and stay away from as much thin ice as possible on the u.s. economy as it tries lift-off. the second important issue is although the dots may be more hawkish, chair yellen clearly isn't and she is the chair of the federal reserve. those voting to dissent will not be voting in january. >> jim bianco, as we look at the reaction across asset classes here, what do you think is the takeaway? what's your takeaway, importantly, too? >> i agree with what most of what diane said. i think we might be further away from the first rate hike now than we were right before the announcement came out. there was nothing in this

announcement, there was nothing in this press conference that i saw that suggested the fed is in any hurry to do the first rate hike. gradualism is the case. considerable time is still there. it's going to be a while before we see a rate hike. >> joe, do you agree with jim in that? are we further away from a rate hike than we were before? and is it a good thing or bad thing in your view? >> still probably june of next year away from the hike. the problem is the market -- the futures market has a lot less tightening still priced into it than where the dots are. 50 to 75 basis points. so the market could have a lot more room to sell off if the fed is going to move the middle of next year. and if things are better, the markets still could flirt with a sooner-than-expected tightening despite inflation because those numbers are lacking. >> to quote citi on this, the fx team saying, the statement

barely changed but the forecast is very hawkish. seeing that reaction perhaps across the u.s. dollar. but it is interesting that the dots sort of point one way, the statement perhaps points the other. and how much should we put on those projections -- >> if you didn't answer that question again today, she said, don't focus on the dots and then said the dots are somewhat relevant a few meetings ago. and now we kind of are focused back on the policy statement. the point is the fed has tightening priced into the forecast. the market, in my mind is making the bet that yellen's dot is a lot lower than probably where it is. therefore i think investors are offside. if the economy continues to do well, as i believe it will, then we are much closer to the timing of tightening than many in the market believe and the trajectory is faster if you believe the fed, as i do. >> steve liesman now joins us. steve, you were the first

questioner in the news conferen conference. you got a rather notable statement from her that the timetable is not based on the calendar, as she put it. what was significant for you out of what you heard from her? >> just that. i have to tell you, the impression of being in the room there was she's as cool as a cucumber and tough as nails right there. you know she has felt the pressure. it's been public coming up to the meeting to change parts of the statement, to become a little more hawkish. and she very much in my opinion has maintained her druthers on this one or maintained the position, not giving up any. i think there was probably a cost benefit analysis on this. it doesn't cost us anything to leave it there and it probably hurts us to take it away. so at the end of the day, what i heard her say was, leave it there and explain it away as being, look, we're data dependent.

this is just a characterization of the time it might take. but we're not time dependent. so i don't think i would lengthen my forecast for when the fed would raise rates. but i certainly wouldn't shorten it after this meeting. it's a steady as she goes press conference, consistent message of mid-2015 seems like the right call for the rate hike. >> what about joe's point? talk to us about the dots and the fact that they are still above what the street has priced in here. >> it's an issue and she was asked that question, she doesn't see a very meaningful difference when it comes -- if you adjust the dots for the economic outlook. she is a little bit -- i forget who was saying -- maybe it was joe explaining it away as noise. she is not particularly concerned. that was one of the issues going in. and joe's right to bring that up. does the fed need to adjust the market and in a sense finesse it in keeping current rates the

same but getting the outlying rates to be a little bit higher? i didn't hear that the fed chair is particularly concerned about that. she's willing to let it ride and let the market come to her. she doesn't see a big deal there right now. >> a few things that stood out to me, diane, one was based on her answer to greg's question. over the last several months, the fed's expectations for long-term growth continue to come down. they keep reducing whatever their expectations are. do you think that's going to continue? >> i think unfortunately it may continue. i hope it doesn't. i think the important issue here is how much potential growth do we have in this economy over the longer haul? if it does continue to come down, it could mean a sooner rate hike. but she really did hold onto her views and separated her views from the rest of the fomc. she didn't say too much about them but i think it's very clear who holds the gavel in that room. chair yellen holds the gavel. this is really a very important issue.

when we're splitting hairs talking about which month the fed may raise rates, we're all pretty sure the fed next year we hope will get to that point of raising rates. if they do it sooner, all the better. >> steve, one second. let me get to jim bianco here on the actionable side of this. i'm curious what you think the message to investors should be? is this a, it's time to position for higher rates even though they're not till next year? or should people look at the cyclical parts of the market? >> i think the market has been rallying the last couple of days, expecting considerable time it was going to stay. it did. it saw this meeting as being

more dovish. the fed is going to continue to stimulate. it's going to continue to stay positive for risk assets. and i think that's going to be the case right now. stocks are going to like what they're seeing and they're going to continue to like what they're seeing. if i had any argument with what i've heard so far, i would be surprised if we slide through the middle of next year without the first rate hike. what we're talking about right now, we've been talking about for five years. this is q.e. 3 that's ending. we've already ended q.e. twice. we've restarted the program twice. we're going to end it a third time now and hope that this time it's really over and they're going to raise rates and they're not going to find a reason to continue to drag their feet and give us more q.e. in the future. this is no reason to they rate hikes are coming anytime soon and maybe not the middle of next year. >> what were you going to say, steve? >> the one hawkish part of this press conference was the issue about the labor participation rate. it wasn't clear to me if yellen

has really changed her view about the -- >> i don't think she has. >> she thinks there's some. but it sounds like there's not quite as much as there was before, especially in light of that question, the growth numbers keep coming down, means the potential of the economy is lower, means the amount of slack out there may be less. >> and i think she addressed that very well with a lot of uncertainty, agreeing with the federal reserve's assessment, along with the congressional budget office assessment, along with almost all the other assessments out there, that some of -- a good portion, a majority of the reduction in labor force participation is structural. but there's still a little bit that's cyclical out there. that's the part, along with the other part of slack that she looks at, her dashboard of slack that she's still counting on to give us a little room. as we mentioned earlier, the inflation numbers today were pretty benign. but some of the deceleration in inflation, the fed will look through. >> talking about airfares.

>> airfares are down 4.9%. i don't believe that for one second. i don't know what that's about. >> second month in a row, bill. >> not the airfares i've been paying, steve. >> it's because you're in the front of the bus, bill. >> yeah. everybody stay right where you are. we're going to come back in just a moment. we have a lot more to talk about. we have to keep an eye on this market as we head toward the close with 20 minutes left here. the dow is up only 26 points right now. we are sitting right at all-time high territory. looks like we're going to come off that high. >> and joining the fray next, former fed governor mark olson to give us his reaction to janet yellen's news conference. right here. with a control pad that can read your handwriting, a wide-screen multimedia center, and a head-up display for enhanced driver focus. all inside a newly redesigned cabin of unrivaled style and comfort. ♪

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ahh! four days? yep. find out how fast aflac can pay you, at aflac.com. welcome back. generally equities are higher at this hour with about 18 minutes left in the trading session. the dow's up 36 points. we are in record territory for that as well as for the dow transportation average. nasdaq and s&p are higher but not in record territory. >> mark olson joins the conversation now. a former federal reserve governor rejoining us along with diane swank, joe lavorgna, jim

bianco and steve liesman. the conversation we were having is this, is the u.s. economy in good enough shape and is inflation finally, do you think, going to move up enough here that come the first part of the next year, the fed will have to begin to raise rates? >> i don't think you can peg it to a time because there is so little change in the overtime economy from the last statement that there is nothing new about the economy that we can peg a time any more certain. that's what the markets say. when the ten-year yield moves up only slightly, seems to me the markets are saying, we're assured that inflation is a long ways away. >> expectations, mark, they keep saying it's data dependent, it's not a calendar-based timetable they were on. but we were discussing how they will change their expectations for what they think growth rates are going to be or what the inflation target's going to be

or the unemployment rate target. if it's not data dependent, why do they keep changing their own targets here? >> i don't think the targets -- remember, what we're talking about is inflation, not fed funds. so it's very data dependent, depending on what happens with inflation. but a very key message that i think has been missed thus far is that when we're talking about adjusting rates, we have for the past ten years being talking about adjusting the fed fund target. starting today, according to their report, we are now going to be talking about the rate that the fed actually pays on excess reserve. we're in a whole new paradigm. that didn't get much attention in the questions and the discussion thus far. >> that's partly because there's still so much uncertainty getting to that point. if we could go back, we were joking about airfares before the break. but this is an important point. for the second straight month, a big drop there.

it's true that it's a structural, methodilogical quirk -- does that mean it comes roaring back? >> it feels like they make the numbers up. but what i can say is service inflation is consistently running above 2%. all the disinflation has been in goods that reflects the weak global economy. if you believe as i do that the unemployment rate is moving lower, it's inevitable to get some wage pressure. and service prices are likely to rise. this recent downshift in inflation is temporary. we'll be back up near 2% by year end. i believe it's temporary. i do not believe most of it's structural. >> i'm not the guy you're talking about that says they're making up these numbers. >> no. >> the big question we had going into this meeting was whether or

not they would remove the key phrase considerable period of time. here's what janet yellen said about that. >> it will be likely appropriate to maintain the current target range for a considerable time after the asset purchase program ends, especially if inflation remains below the 2% objective. so i wouldn't describe that as -- i know considerable time sounds like it's a calendar concept. but it is highly conditional and its link to the committee's assessment of the economy. >> what do you make of that, mark olson? are we obsessing too much about the phraseology they use here and what do you think? >> bill, i don't think we're obsessing too much about it. i think what she is signaling is there's not been a lot of change thus far. but you have to add to it the fact that they said very specifically now, at least for the first time that i can remember, that they are going to allow effectively passive

tightening by allowing the balance sheet -- by allowing the size of the balance sheet to be reduced according to maturities. that is a very significant change. and i think as one of the reasons that they're changing the metrics also from the fed funds target to the rate of excess reserves. >> steve and diane, do you think that's the case, that that is a change? i thought the comments around using the balance sheet were not necessarily as a tool of monetary policy here right away. >> steve? >> i've heard it before. i don't agree with mark on this. we know this idea that the ioer was going to be out there. but it was sort of always going to be, i thought, the case and the idea of letting the balance sheet run off was always the way they were going to let it run off. they've talked before about not selling assets. this has come up in the minutes before. now i guess mark is right. it is code now in terms of --

codified to be part of that principle statement. i don't think it's a big deal. i'm more interested in between now and that time, between when it happens. >> yes. >> i was just wondering while you guys were talking, what if this economy puts out a bunch of three numbers between now and the end of the year? so the numbers would be like this -- we'll do 4.5% in the second quarter, 3.2% right now in the third quarter and another 3% for the fourth quarter? it might take considerable time to get rid of that and shrink it just a little bit. >> diane? >> what about the u.s. dollar, though? every day it's strengthened, that points toward disinflationary -- >> here's the conundrum. i believe the forecast that steve just laid out is very likely. i think the fed knows that as well. >> what do you do with it, diane? you don't change your fed

forecast on 3% until the end of the year? >> they're already edging it up just a little bit on the rates. that's reflected in there. but this is such an unknown to them, i think they continue to do it the way they have been. i don't think they change it based on that alone. i think they continue to edge it up. i also think the hawks throwing in, you don't have names on those dots, helps the hawks to be able to edge up the rates forecast a little bit. we did have the two dissents. the people who are voting next year are the most dovish composition of fomc members you could possibly have, people much more in line with the fed chair today. i think those things are more important as we go forward. i think steve just laid out a very likely scenario for what we have for the rest of the year. i think the fed is well aware of that. >> art cashin just signaled the bias toward the close is to the downside. we have about $400 million to sell in terms of equities.

so we could see a little bit more downward pressure here as we head toward the close. >> and i have to wonder, jim bianco, given the fact that people have said -- peter boockvar has been pointing it out, there's this divergence, the bond market is taking its cue from the dots. stocks from the statement here -- now that we've come significantly off the highs, do you think it is going to be a hawkish thing -- >> no, it's not going to be hawkish. but the bond market interprets it differently than the stock market. if you have a stimulative fed and they are going to be easing for longer, that usually tends to be bearish for the bond market because the bond market starts worrying more about inflation, worries more about growth. and that's why you tend to see the bond market go up in yield while the stock market tends to go up as well, too. just real quick on what steve was talking about, about the growth rate being 3% to the end

of the year. that's likely but if you look at the pattern that we've had in growth since the end of the great recession, we've put in three or four good quarters. then a real plunker of a quarter. that pattern has repeated over and over. and at the end of the day, we grow around the 2% range. i guess we've all officially ignored the first quarter, that minus 2% never happened. now we're back to a 3% world until we get another bad quarter. what does the fed do when that happens? seems like we always get one every four or five quarters. >> and that's exactly what the fed's hedging against, right? it's exactly your point. we could very likely get the scenario steve lays out and then the risk is, although it's not all of our forecast, but let's face it, we've been wrong, at least i have, on this issue. we then stumble and the fed's been wrong about that. they're hedging on that downside. that's why they don't change it dramatically before the end of the year.

>> three of the last four quarters, growth has surprised to the upside. and consensus is coming up sargently for this quarter. what steve implied, by early next year, running at 3.5% rate on gdp. and that will be the fastest in a long time with a real stimulative fed and the markets aren't prepared for it, i don't think markets are going to grow. >> we're at 1% for the first half of the year. >> yes, but there are reasons why if growth accelerates in the back half, there are reasons why that will be sustained. and largely on the fiscal side. you don't have the fiscal drag that you had for much of this cycle. that's important. >> and i think -- >> can i interject that we didn't do these two quarters that we're going to do which are going to be the second two strongest quarters since the end of the recession, some of the strongest two quarters in a decade putting together -- we didn't do it with inventories like we did in the second half

of last year. that's why it has more legs. by the way -- >> i agree it does. it still has a risk, though. >> i'm inclined to agree with steve also. the third and fourth-quarter outlooks are going to be stronger. and i think there's a certain wariness among the fomc participants that they've gotten out over their skis a little bit more than they've wanted to and have been disappointed by what they have -- by their projections. i think they're scaling back out of wariness at this point. >> we have to go at this point. great discussion here, folks. thank you all. diane swank, joe lavorgna, jim bianco, mark olson and steve liesman. it could be another historic close here. but we'll have to wait and see because the dow is up about 27 points, that's just about good

enough by a comfort zone of 20 points or so to give us that all-time lie close we've been waiting for. haven't done it since july. let's not forget. there's more news coming this week. two days until alibaba comes public with the ticker symbol baba. what you probably don't know about that offering but should. that's later. when change is in the air you see things in a whole new way. it's in this spirit that ing u.s. is becoming a new kind of company.

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big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. [b♪ll rings] time and sales data. split-second stats.

♪ its so close to the options floor, you'll bust your brain-box. all on thinkorswim, from td ameritrade. welcome back. three minutes left in the trading session. a classic fed day market. very quiet up until the 2:00 announcement. lots of volatility both down and up. we're finishing right now with a gain of about 25 points, enough for an all-time high for the industrial average. at least now. we're 18 points above the previous all-time high set back in july. we'll keep an eye on that. the dollar, the dollar index moving higher.

we're up about 0.5% at 84.50. and the ten-year yield volatility, up to 2.62% on the ten-year. joining me brian reynolds and chris heisey. what did you make of the fed's announcement? >> people were fearing a lot of change from the fed and we only got a little change. i think that's a good thing. the most significant thing to me today is credit derivative spreads narrowed. that tells me people aren't going to panic over this decision. that's probably a good short-term -- >> is that because they're not making wholesale changes so far? >> they're not. and this credit boom is going to continue no matter what the fed does. eventually they'll raise rates. but right now people were scared there was going ton a mi be a m panic after this announcement. >> i think people were trying to

create a mini panic by discussing what words were going to be taken out. the reality is nothing would be changed measurably. that's the word we'll hear a lot. measure, transitory, et cetera. the most important thing out of the meeting, could take ten years to unwind the balance sheet. that's a massive statement. that basically tells everybody, rush on -- >> to get the balance sheet levels back to normal levels -- when do you think we see the beginning of rate increases from the federal reserve? >> some time next year. >> so i'm in line with the -- >> that's no surprise. the thing is that when they raise rates in a credit boom. that's when the best stock -- first there's a little correction but the credit becomes more intense as the credit funds have to invest more aggressively. >> do you agree? >> completely agree. around the late first quarter into the late second quarter.

so between march and june is the best guess. and that's when p/e multiple expansion starts. >> thank you both for joining us. we close out an eventful day as expected. the scottish vote tomorrow. alibaba's ipo on friday. all that coming up on the second hour of the "closing bell" with kelly evans and company. see you tomorrow. thank you, bill. welcome to the "closing bell." i'm kelly evans. here's something we haven't done since july. the dow jones industrial average closing here at a record high. going out at 17,156 points. that's above the prior closing high of 17,138. we hit intraday trading highs today. the nasdaq adding nine points on the bell. the s&p 500 only adding about three going out at the level of 2,001. let's bring in our panel for more reaction to the fed. joining me is jon najarian, nathan backrack, kayla tausche,

rick reider, steve liesman and tim seymour. rick, stocks hit new highs after fed decision, what does that say to you? >> i think it says a couple of things. one, today was mildly hawkish. certainly nothing that would create any different opinion of how the fed is going to be gradual in their approach. and i think gradual approach means it's good for risk assets. >> dr. "j," you agree? >> i do. you look at the vix, the volatility metric for the s&p 500. coming into this yesterday, we were pushing up against 14. we couldn't quite hold it. today we traded up to about 1440 for the fix and then dropped to

12 for the vix. now we're back to very slow and gradual fed. janet yellen is not going to get in there and rip this bandage off real fast. instead it's going to be very slow and well into next year, i believe. and i think most of the market agrees. >> let's show the dollar index. we'll talk about what's happening across the two-year, five-year space. tim seymour, given some of this was priced in, we were already rallying, why such a sigh of relief, especially as some of those projections moved higher? >> you got a sigh of relief but reaffirmation in the q and a. but you have competing forces here. let's not say it's going to be a runaway. risk assets are under pressure and i think volatility, despite what doc just said, i think volatility goes higher every tick the dollar index goes higher.

we had a lot of forces around the world against the ecb and the boj. today's move through to 84.60, watch that. you have an open door policy where other central banks will push through the door. you have a race to the bottom. the chinese central bank pumped a lot of liquidity there. i think the dollar can definitely go higher and the impact on commodities and interest rate sensitives may be big. >> nathan? >> the federal reserve is a big bunch of weenies. finally got down to having $15 billion worth of asset purchases left, we couldn't do it. we couldn't say, we have our short-term emergency measures over after six years, excuse me, we now have to break the last $15 billion of purchases down into $5 billion a month for the next three months? come on. at least tell us we've gotten out of time-out. and this word moderate -- moderate is like the financial version of having a blind date with somebody who has a nice

personality. >> the cpi is surging. if we hadn't had a minus 3% first quarter gdp. rick, what's your response to that? do you agree with the characterization here? >> not entirely. i think what's happening is there's clearly debate happening on the committee. there are two dissents. clearly have an active debate. my sense is that chair yellen is more on the dovish side and why you have considerable period and significant underutilization in there, it's to mute some of the effect from clearly the beginning of a normalization process, clearly a hastening of rates moving higher. they were dealing with markets not overreacting to what is clearly the beginning of the normalization process or at least the thoughts that we're going to normalize over the next number of months. >> having said this, i have to tell you, i raised our equity position from 67% stocks to 70%. and i'm going longer on duration

because i don't think we're going to see interest rates going so much higher that you couldn't get good total return now as the treasury is at 2.6% and 2.8%. nobody's ever said, the yankees, they're in the middle of a moderate streak. >> you're like an unhappy goldilocks. >> i like a little more octane in the tank. >> you know the market is not only feeling better about the prospect. yellen is hedging herself with comments about household incomes being depressed and about the labor market having slack. those are hedges at that point. those are not the bulk of her statement at this point unlike several months earlier from this point. you're also seeing yields going up. so even if we have considerable time before rates, short-term rates do rise at the behest of the fed, you are seeing the yields tick up. you're seeing the ten-year still

above 2.6% and the prospect of banks being able to lend out at higher yields and consumers having more demand to borrow. what i'm most interested in is next month when the fed is completely done with q.e. and they have to start talking about what happens to the balance sheet. we haven't really introduced that into the conversation. but next month, they will have to start talking about it. >> and that's a point mark olson was making saying, people should know -- we didn't have a fed statement today. we had two, we had the statement and then this whole document on policy normalization principles and plans. there's a lot to wade through here. >> there is. but the issue is the balance sheet for '15 is not a big deal in the since that i think i did the numbers not too long ago. there's something like $15 billion or $20 billion that if they stopped on january 1, 2015, it would roll off. if it's not done through sales, you don't have a big number in 2015. but we'd all make a mistake by looking at the stock market

reaction here. to pick up on what kayla was saying, talk about the dollar index you showed earlier. that's a big move and that's the dollar taking a somewhat hawkish view of what the fed said today and what the fed is doing. that's the first thing. the second thing is those bond yields, particularly the ten-year is maintaining that 2.62 level, level that it rose to coming out of the statement. that's a hawkish signal. stocks seem to be like, everything's fine, full steam ahead by the federal reserve. so i'll say there's a very mixed message for markets here. i don't know that you come in tomorrow and see one coherent headline about how markets reacted. >> fair enough. it's just irresistible to pair the all-time closing high with the biggest event that happened today. but point taken. tim, i wonder what you would recommend. looking across not only what we've just heard from the fed but also on the back of the chinese central bank doing a

couple of things to perhaps shore up that economy and the impact that's already had on commodities, where does that leave us? give us a couple of ideas here trading-wise? >> i don't think you can make a blanket statement. on china, that market deductible matter about the macro. it matters about liquidity and momentum. but when i look around at the asset classes, gold and dollar sensitives are going down. we had a bit of a rally in oil. that's a bit of a head fake. some of that is a function of supply. some of it's seasonal. you can see commodities continue to trend lower. staples, things that are going to be dependent upon a stronger dollar and a stronger u.s. economy, banks can do well here. i agree with steve. i don't think you walk in tomorrow and you have a very easy play on moving into risk assets. i think emerging markets, for example, are somewhat mixed here even though they expected much worse today. that's the approach. but gold i would not even touch. i think banks are your best play for putting capacity to work in the u.s. market. >> nathan, what about you?

>> i like intermediate corporates. i've lightened up in europe rand going down to latin america. there's not a lot of inflation down there -- >> even though commodities look potentially week here? >> i've taken the money we had in europe and moving it to latin america. >> talking about brazil, mexico -- >> talking about the whole -- >> the whole shebang? >> the whole shebang. give me latin america. fine for me. i'm heavy in u.s. stocks. a modern portfolio last year might have been 60/40. now it's 70/30, in spite of the caution i really have -- we're not coming out of a typical recession where we ran up a lot of -- we had a lot of inventory we had to work off. we're talking about a major amount of debt we have to work off. this is a different kind of recovery. that's what stops people from

going, happy days are here again. we've got a fortune in debt we have to work off. that's what makes this recovery so much more unique. that's why moderate is the new good. >> dr. "j"? >> i bought the cme last week after i talked again with terry duffy, the chairman of the exchange, and i bought the i.c.e. today we had unusual activity in that name. so i think exchanges are likely to do well based on more trading activity. a lot of that coming from speculation on both sides. whether it's interest rates, whether it's commodities that are getting cheaper, which is good for many of the folks here like the dardens of the world, mcdonald's, for that matter. i think you're going to see a lot of these exchanges do very well over the next two or three months. >> rick, we'll give you the last word here. for people whose heads hurt because of everything we're

sifting through from the federal reserve this afternoon, what is the message here? is it time for investors to expect and start to position for higher interest rates or no? >> i think what we're seeing in the market today is a premonition of where we're going. the front end of the yield curve should shift up as rates normalize, the fed begins that normalization process. the yield curve will flatten, we think. there are so many factors constraining how high they can go, including where rates are globally and the demand for safety in the world. front end has room to go. >> and, steve? >> i'm so rarely on with tim seymour, i'm hearing a rumor that we might be appearing together at the roctober chaurty event -- >> that's just a rumor. >> it's an important and great

event. i want to get it out there the news that i know. it's out there. >> it's going to be hot. >> they've not agreed. their agents are talking. >> your people have to talk. >> we'll continue to monitor developments in that important news. steve liesman, thank you so much, sir. coming up with the rest of the crew on "fast money" here at 5:00 p.m., they're going to be asking the king of valuation what he thinks of alibaba's pricing. our thanks to rick as well. coming up, more reaction on the fed's news today. rick santelli and jack bouroudjian don't usually see eye to eye on this topic. and also, alibaba, not much buzz around this ipo since facebook. and we all remember how that went. so what's alibaba doing to make sure everything goes off smoothly this friday? we'll take you inside with a special report. bulldog: save up to $300 on sealy posturepedic

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we begin with earnings news and our dominic chu. >> two companies we're watching on the earnings front after the closing bell. we start with pier one imports.

posting weaker-than-expected fourth-quarter profits. they cut their guidance. shares down around by 9%. a different story for united natural foods. the natural and organic food distributor beat on the top and bottom lines and gave full-year guidance above wall street forecast. those shares up. a tale of two stocks. back over to you guys. >> thank you for now. we're continuing to follow the reaction in the market and on the street to the fed today. as we do, go to cnbc.com/vote and tell us. did the fed do the right thing today? and joining us to discuss it all, jack bouroudjian from index financial partners, greg ipp and our own rick santelli. jack, is it open skies, green light, buy, fill your boots

here -- >> i have to tell you, it was a balanced statement. people talked about being dovish or hawkish. it was perfect. there was a little bit for everybody in this statement. the doves got what they wanted. the wording was left in there. the hawks got what they wanted because there was a time frame for the exit, all of which tells me this is the fed doing what they have been doing over the course of the last five years, which is a magnificent job. yes, the green light is still on. in fact, what we are looking at today is going to be probably the beginning of the great rotation. something that nobody's really been talking about lately. but i think that today is the beginning. and we'll look back in hindsight and talk about how it began with this fed statement. >> jack, great rotation from what to what here? talking -- >> talking about from fixed income, talking about the ten-year yield, the 30-year going up and stocks going higher. >> you agree, mr. santelli? welcome back, by the way. >> thank you.

i agree the five-year note yield is about to march through this 1.85. virtually at the highest level in a year, september 2013. the dollar index, fascinating. it's at the best level in about a year as well. a little over a year. july of last year. but it's very close to breaking out to a level we haven't seen since july of 2010. and what do both of those tell us? you can't escape the fact we're in a closed global system. we could all debate as to whether our stock market should be where it is, whether fed policy should be where it is. but without a doubt, we are the tightest of all the developed economies and the fed understands that. and i think it will use everything in its global bag of tricks to continue to play the music for us to dance to, for us to debate different phrases within their statement. but at the end of the day, i think a true tightening is still very far off. >> greg, if you were in the room, what do you think? what's your assessment here? >> i think what we got was a very dovish statement because it

kept the considerable time language. but a hawkish set of projections and press conference by the fed chair. let me just emphasize one thing that janet yellen said that a lot of people may not have appreciated. asked about considerable time, she said, i think that statement gives us all the flexibility we need. the markets need to understand it's not a firm promise of a particular part of time. that means if the economy continues to get better quickly, they can move rates much more quickly and sooner and faster than market expects. by the way, the projections tell us that unemployment is coming down faster than they expect. the economy's running out of slack. the surprises have been in that hawkish direction. so i would not take excessive comfort from that nice inclusion of considerable time -- >> but, greg ipp, they left it in. you're exactly right. she basically said, i left it in even though it doesn't mean anything, knowing full well that it would be read in front of a

bold stock market. everything is to propagate the notion that you don't need to get out of equities yet. so the game keeps going on. >> look at the bond market. it's remarkable in the last few months, you have had the bond market steadily retreat with the long yield up about 0.25%. the two-year note yield up. and the stock market is holdinging in there -- >> maybe the fed is starting to see the world, the treasury market has seen all along. the treasury market's been quite predictable. these rates are no prize to anybody with a chart under their nose over the last few years. >> the federal reserve is going to wait until everything is so obvious to everybody that it will be no surprise at all -- they won't have to worry about whether their words were phrased properly. we'll have a little bit of growth, can handle a little bit of inflation, profits don't get killed and all of a sudden when the fed says, we're raising

rates, the investors say, saw that coming, no surprise there. >> they've already said that. janet yellen has already told us that. she is going to be behind the curve. there was no doubt about the fact that the fed is going to be late in raising rates. and the reason they're going to raise rates is one of two reasons. either inflation is starting to kick in and the dollar going up is helping that scenario. and the other reason it would start raising rates is because the economy is doing better. and that is very bullish. and, rick, when you start talking about them pumping up the stock market, we're talking about a 17 multiple on this market, not talking about a ridiculous 25 or 30 multiple -- >> of course we're talking about a 17 multiple. did you notice the article that they brought back more share than they did last year at this pace? certainly there's less stocks. i get it. i get it! >> come on, rick! you're telling me that

chairmanen yellen is the reason that everybody's making a lot of money -- >> greg, what did you make of the statement that when chair yellen said it would be six years before the balance sheet goes back to normal? as hawkish as the press conference was, seems like it's going to take an extremely long time to get us back to normal? >> yeah, that's why it's especially important to monitor what they're doing to get interest rates up. one of the kind of things that's going to make our lives as fed watchers hard is in that period while they're syncing the balance sheet, the federal funds rate is going to move around with volatility. that's why they're talking about federal funds rate ranges instead of pinpoint numbers. that's a process we can expect to go on for another five or six years until that kind of volatility -- that's something we used to live with back in the '70s and '80s and disappeared in the more recent era. that could be coming back. it's going to be an interesting

period in the money markets. >> and just so everybody knows, we have closed the poll now. it was neck and neck. but 55% of the viewers saying the fed did the right thing today. for anyone who missed it, greg, can you reiterate why you think the press conference with janet yellen was, as you put it, very hawkish? >> well, for a couple of reasons. when she was -- because she said, i think considerable time gives us all the flexibility we need to respond faster if the data change -- and she presented us with suggestions that data is calling for perhaps a swifter rise in interest rates in coming years. generally speaking i think she's trying to make it clear that she and the committee are data dependent and they don't feel because the words are in the statement it doesn't preclude them from moving ahead of the april-may time frame if they have to. >> but we have housing being slow and she didn't see the recovery in employment she wanted to see.

these are two big areas. if we're being hawkish, i wanted to see a lot more out of her than that. >> greg, you agree, at least? >> yeah. she was asked, are you worried about the fact that the market has a lower path for interest rates than you do? she said, there's a lot of discussion about that but suggests they have a different forecast than we do. their forecast is out there now. if the world goes the way they think it's going to happen, the market has to reassess their view. >> thank you, everybody. greg ipp, leaving that press conference to join us. jack bouroudjian, our rick santelli as well. two days to go until alibaba's highly anticipated ipo and all the buzz making some remember the mess on facebook's first day of trading more than two years ago. find out what alibaba is doing to make sure history doesn't repeat itself next? and anheuser-busch, the latest nfl sponsor telling the league clean up its act. they may talk the talk. will any of these sponsors walk to walk and drop their deals? the former head of

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are so many institutional investors that manage umpteen billions of dollars that are going to be in front of you. what you should know is if you did get a chance to take a look at who invested in the ipo, you had to be a very, very good client of these six banks to start off because they are the co-managers. they're going to run the books on the entire deal. they're the most important underwriters, the financiers of this initial equity offering here. citigroup, credit suisse, morgan stanley, goldman sachs, deutsche bank and jpmorgan. they split the risk of raising all this money. but it's not just them. if you don't have relationships with them, there are also other participants of the syndicate, the group that will raise all this money, what could be around $22 billion, $24 billion by the time it's done. and look at this huge list of other names, about 35 total underwriters in this syndicate.

hsbc, mizuho securities, stifel financials. rbc capital. this is like a banker-broker convention. all these people are getting together to put together or what's anticipated to be a historic ipo. and remember if you didn't get a chance to get in on it here, you've got to buy it on the first day. and that's when all bets are off. you don't know where this thing is going to start trading once it does. >> that's for sure. thank you. cnbc's seen writer jon najarian has a piece heating up cnbc.com talking about how the company's worked hard to avoid a facebook face plant. he's here with our panel. it traded up a little bit on the first day. it took as long as to open, destroyed confidence. and that plagued it for months. what's changed for alibaba here

as the company hopes avoid a similar outcome? >> as far as the first day of trade itself, it's going to be here on the new york stock exchange. that's different because there are people here. that's true of the nasdaq now. you think of it as all computers. there's an ipo officer there who tries to make sure everything is okay and they don't actually begin trade until they get a green light from the underwriters. that's changed. but fundamentally this company is a little bit further along in mobile. and part of that is just that it's two years in the future. people didn't know if it was possible to make a lot of money out of mobile with facebook. it took a long time to sort that out. but we know that alibaba is doing well on that front. >> we also know they've done a couple of dry runs to des the opening. it is going to be a huge amount of stock hitting the open market and we have to digest right off the bat. >> $22 billion in equity being issued or being offloaded by existing shareholders is no small feat. you want to make sure you have a system that can handle it.

one of the clogs in this system during the facebook ipo is that a quarter of the entire facebook deal, roughly $4 billion of that, was sold to retailer at-home investors, many of whom were trying to play the first-day pop or the first week pop. and really you want to be in ipos -- if you believe in these large cap stories, you want to be in them for at least six months to a year because you have a lot of dilution events over the first few months. but facebook and twitter both have doubled from their ipo price. they create value but alibaba knows it doesn't want that first-day flip. it doesn't want people to sell out in the short term. so they're going to have next to no retail investment in this. >> there are a lot of people who have looked at the recent relatively good streak of high-profile big names. what are you hearing in terms of interest? >> our clients on the wealth management side have been clamoring for this one. they've said they would sell

anything. and i told them, you should sell anything to get in on this particular trade. >> what about diversification? >> these are trades. >> these folks aren't going to flip it. they're going to get the options out on this within five days, which means, of course, that it comes public on friday at some moment on friday this week. the following week, we're going to be getting options either listed that friday or monday morning, the 26th -- 29th or whatever. but when we get that, they will overwrite, they'll sell options against stock that they have. but they want this stock. they think this is a $95 to $100 number by year end and they want to ride it. and if they get in at $70, it's fine. >> they're not held by the same rules the united states companies have. you pointed out to me in a conversation earlier. given that, you're able to get information verbally that's maybe a little different, a little hush-hush. but this looks to be a company that's making a good deal of

money and should have a great future ahead of it as opposed to are they going to get in mobile? >> well, as long as they stay on the right side of the chinese government. >> one thing i wanted to point out, you're not buying a chinese government. you can't. you're buying a cayman islands company. i don't want to spook everyone. but there are some important differences that you should be aware of. one thing is disclosure. disclosure laws are very different in the cayman islands. if a director resigns at a u.s. company, they have four days to announce. in the cayman islands, it's 40 days. say a compliance officer or cfo resigns, they don't technically have to tell you for quite some time. i don't expect them to behave like that. bidu is in the same boat. >> much more information on cnbc.com and we'll have more in the moments leading up to it. coming up as we continue to shift towards the next big

events on the horizon, it's tomorrow's vote on scottish independence that could be the market-moving event. up next, we'll go live to scotland for a look at how the vote is shaping up and why it could have such a big impact on your money. and then nfl sponsors lashing out at the league. so far, not pulling their advertising, though. they're largely just talking the talk. we want to know what you think? your chance to vote on this issue is ahead on "closing bell." we needed 30 new hires for our call center. i'm spending too much time hiring and not enough time in my kitchen.

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if we can't offer faster speeds or save you money we'll give you $150. comcast business built for business. the people of scotland set to vote tomorrow on whether or not to split from the uk. before we get to that story, though, we have a news alert on apple with our dominic chu. what's going on? >> if you were one of those folks that updated to the apple ios 8 operating system today and were looking for a way to get those health kit apps made very public in apple's presentation about the new ios 8 in its launch, you are going to have to wait because according to an apple spokesperson, they discovered a bug that prevents the company, apple, from making the health kit apps available on this new operating system, ios 8, today. they're working quickly to have the bug fixed in a software update and have the apps available by the end of the

month. apple saying if you're looking for health kit apps to work on the now ios 8 operating system made available today, you may have to wait until the end of the month because they are fixing bugs within the system. they will have a software update by the end of the month. back over to you. >> dom, thank you. as mentioned, the people of scotland are getting set to vote tomorrow on whether or not to split from the uk and become independent. cnbc's mechaniichelle caruso-ca is in edinburgh to give us the latest. when might we first know the outcome? >> reporter: absolutely. the no's still have the lead but not by much. the campaigning, very, very intense today. we spoke with a number of voters today, including some who have already voted by mail. it is very clear that the people here are deeply divided. >> probably vote yes. i feel scotland has a right to

termination. >> no. >> reporter: you voted no? >> yes. >> reporter: why? >> worried about my job. >> i want a better future for my children. >> reporter: you'll get that with a yes vote? >> i hope so. >> voting yes. >> reporter: why? >> because i think we're better when we can keep our politicians where we can see them. >> reporter: you're not worried about the pound -- >> absolutely not. it's our pound, we can still use it. >> reporter: the yes vote is about patriotism and self-preservation. the no vote is about fear and why risk it. the scottish politicians in charge of the yes campaign want to be in charge of the tax revenue that comes from scotland because they'd like to do more welfare spending. they say -- this is part of their literature. they say, look, down in the british parliament, we voted against the following -- we voted against means-testing for government subsidies, we voted against privatization of the royal mail and against raising the retirement age for pensions and yet we were overruled by the

conservatives down south. if here in scotland the scottish n.p.s had their druthers, none of those things would have happened. we'll see what the voters decide. by the time you wake up on friday morning, that's when you're going to know the answer. we'll start getting early, early results but not meaningful 9:00 p.m. tomorrow night east coast time. >> got it. early hours of the morning, we'll all have to get up and get the coffee ready -- >> or go online and check -- follow the money all the time. >> i don't know. we'll see. we'll find out shortly. thank you very much, our michelle caruso-cabrera on the ground in scotland. on this side of the pond, attorney general eric holder promising to finally go after employees of wall street firms charged with crimes. our kate kelly has the details. on important development for these individuals. >> reporter: absolutely. in a speech earlier this morning at nyu law school, holder pushed back against one of the chief criticisms of his tenure as

a.g., namely that he has had very few criminal convictions of individuals for fraud committed during the financial crisis specifically, discussing the challenges of bringing such cases and highlighting the need for greater whistle whistle-blower awards, in effect, the buck stops nowhere, let alone with the leaders of the companies. despite all that, holder vowed to hold individual employees accountable for wrongs done maybe even before year's end. >> we have investigations open right now that are focused on the conduct of individuals at specific financial institutions. we are making good progress in these cases which involve conduct that has undermined the integrity of our markets. and we expect to bring charges in the coming months. >> reporter: as part of a justice department's ongoing currency manipulation case, for

example, holder said the feds were relying on mulls within the firms right now raising questions as to whether that would be one of the cases resulting in one of these charges, perhaps soon. >> and certainly on the minds of a lot of these employees. we'll continue to follow the story. appreciate it. a lot happening. janet yellen is on fire, at least when it comes to the hot list today. fed-related stories burning up cnbc.com. what you're looking for on the web is coming up next. and the message that had the power of a team of clydesdales. [ chld. the former head of sports marketing at budweiser joins us in just a bit. accounting firm's mobile plan. and "minus" our expenses. perfect timing. we're offering our best-ever pricing on mobile plans for business. run the numbers on that. well, unlimited talk and text, and ten gigs of data for the five of you would be...

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welcome back. the fed and the word "hot" are not usually used in the same sentence. but cnbc.com managing editor alan has found a way. welcome back, alan. i'm guessing the hot list is all about the fed -- >> it was all about the fed today. people were piling into our coverage. we set a new record for people going into a story at one time over 1,100, just banging right into it. it's interesting. people really like our feature where we show the old fed statement with all the red lining in it versus the new fed statement. so fed all wall to wall today.

but people also jumped into this feature we have on poverty and how the numbers people typically used, based on cash income, might mask the reality. and people are looking at this alternative gauge which accounts for things like tax expenditures, food stamps, things like that, to get a better picture. that was interesting, too. third story on the hot list, this is my favorite. ibm, sends a memo to a certain number of its employees saying, you haven't kept your skill set up. so you have to spend one day a week to get your skills back up to par. so during that time, we're cutting your salary 10% -- >> oh, no. >> people interested in that headline. >> we'll leave it there for now. thank you, alan. one of the nfl's biggest sponsors flagging the league over its handling of recent domestic abuse cases. budweiser isn't issuing any penalties, though. is bud bluffing with this harsh statement?

the former head of anheuser-busch's sports marketing group joins us next. and tomorrow scotland hits the voting booth to determine its future as part of the united kingdom. ♪ [ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. you can't get any thbetter than that. trains.. siemens trains are not your grandparent's technology. they're something that's gonna change the cities we live in today. i find it so fascinating how many people ride this

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sponsors taking aim at the nfl, criticizing the organization for its handling o controversial events involving stars ray rice and adrian peterson. julie boorstin join wuss that story. hi, julia. >> that's right. nike suspended the contract with peterson after his indictment for child abuse saying "nike in no way condones child abuse or domestic violence of any kind." this after the nfl's response to peterson and ray rice's domestic abuse scandal prompted nfl megasponsor, budweiser, to warn "we are not satisfied with the league's handling of behaviors that so clearly go against our own company culture and moral code." anheuser-busch spends about $200 million annually on nfl ads, voin jo joined by visa, inning donald's, pepsi, verizon and other big brands which commented on the scandal. >> there's a very good chance

that sponsors will pull the plug on advertising dollars, not just with individual athletes, not just with teams, but potentially bigger contracts with the league, if things get worse. >> now the nfl is the best way to reach a mass audience, just based on those sheer rating numbers, but consumer perception of the league is at the lowest it's been since 2012, when former players filed a class action suit over brain injuries. kelly? >> julia, thank you. will any pop is source actually leave the nfl? would budweiser take all that beer money elsewhere? go to cnbc.com/vote right now and you let us know what you think. and join in the conversation now, tony ponchuro, former vice president of media marketing for anheuser-busch. great to have your perspective, 20 years, with the company? >> 26 to be exact. >> so, when you look at both what's happening in the nfl today and the tersely worded statement, but so far, just a

statement from budweiser, do you see them acting hypocritically there? >> i don't think they are acting hypocrite clirks they are making a statement to the nfl that they have to address this. i think we want all corporations to have their own conscience but it actually grows when your customers and your retailers and your distribution system and your own employees say what are we going to do about this as a company? >> what would it take, so, budweiser is the official beer of the nfl, talking about $1 billion contract. they paid $149 million, according to ad week, to advertise in the recent super bowls. what would have to happen for anheuser-busch to walk away? >> well, for them to not walk away is -- i think it's important that the nfl and probably the commissioner get out in front of the public before the week is out. it just happened in minneapolis where the owner, ziggy wolf, got up and said, you no he, we made a mistake, we fixed it and they basically suspended adrian

peterson. >> that wasn't enough to keep radisson from pulling their sponsorship. >> no, they suspended it. now that the vikings have addressed it, more than likely they will start to come back in. that's what the nfl has to do. they need to at least say, you know, whatever it was, whether it was bad communication, whether it was a mistake, whether it was a bad process, they need to sort of be out in front. i know roger, he is a very honest, straightforward guy and he really just needs to look in the camera and put it all on the table. drfrnlt j? >> tony, do you think in all likelihood we are going to see the nfl be the central point and have more or less i will call it a disaster protection team or something like that to address issues like this? because obviously, they screwed up the ray rice. i think the next domestic violence case they would do far better, now when you have individual cases like this springing up, don't you think they will have -- they want to be the voice of that $9 billion enterprise. they don't want zigby guy wolf or anybody else to be a lone cowboy, if you will. >> this is going to create preparation.

you know, i think they were taken a little off balance, a lot hit them all at once, they didn't have discipline regulations in to address it and i think they got a little under water a little bit. and so, now this is going to set up a system that says let's get out innant from, what are our policies, how do we address these things and just be proactive. >> it was a nice way for anheuser-busch to nudge them, guys, we need to have immediate response, no pussyfooting around, i understand we are dealing with gladiators that we worship every sunday, but deal with it immediately, you can't have any perceptions, as long as you push all of that away, deal with it straight on, i still don't hear the nfl saying, look, going to have a zero policy when it comes to the different kinds of domestic abuse. that's what i think is still missing. i think it's gonna get managed. >> do you think sponsors, tony, last word, will put that kind of pressure on the league to have that kind of no strikes response? >> no question. one, your own brand, their brand, one plus one has to equal two. it becomes minus two, there's no

reason to spend the money. >> here as we have asked viewers, all right nfl pull their sponsorships, any current nfl advertisers you will that irsponsorship also, 72% say no. >> it's the audience you want. i mean, you can't get that audience anywhere else. and we know that. so, it will take a much bigger thing than this to cause these guys to completely walk away. but they are modifying behavior. >> don't underestimate the voice behind the scenes, the special interest groups, the critics, the fans. >> puttinging on pressure as well? tony, thank you for your perspective. >> thank you. coming up, peter teal, one of the most important venture capitalists in silicon valley, not too high on twitter. >> twitter is hard to evaluate, they have a lot of potential, it's a horribly mismanaged company. the people, you know, probably a lot of pot smoking going on there. >> naturally, twitter ceo responding to that. we will be right back. this is a burrito made with

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big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. welcome back, in case you missed it, peter thiel talking twitter today, let's say, he is not high on management.

here's what he told our friends on "squawk box." twitter is hard to evaluate. this avenue a lot of potential, the a he is a horribly mismanaged company. the people -- probably a lot of pot smoking going on there. >> wow. what do you really think? >> but it's such a solid franchise, maybe it with works with that. >> dick costolo on twitter having fun with his response, saying working my way through a giant bag of doritos, i'll catch up with you later. peter thiel just trying to sell books here? >> well, that's what this whole media tour is all about. look, he has a very gal have aen needsing point of view on the company, didn't take aim just at twitter, but uber, and a bunch of other companies out in the valley, which is interesting, because he does so much business with them. i thought twitter had a good and very mature response to that. >> are you surprised? >> i thought it was really disrespectful, many things that he said, but that being most focused on costolo with the management team, because he is the head, so it start there is

and i was surprised that he went there with the pot smoking comment because you could be critical of twitter for a bunch of reasons, even though they have doubled, as you said, since the ipo, but i wouldn't be critical of costolo and the management there. >> have to leave it there. thank you, everybody, for being here. so much news to get through today. i think we did it that does it for us on "closing bell." "fast money" begins right now. live from the nasdaq markets, new york city's times square, this is "fast money." i'm melissa lee. tim seymour, pete najarian, brian kelly and guy adami are we me. the day the markets releasing for, the fed leagues the latest statement this afternoon and fed chief janet yellen didn't just give stocks considerable time, she gave them the all-clear. >> i want to emphasize that there is no mechanical interpretation of what the term "considerable time" means. i know considerable time sounds like it's a calendar concept,