we want to take a look at both things and not take away any simple morals. >> peter and then jen. >> peter bartz, fox business. chair yellen i wanted to check in with you on whether or not you have concerns about bubbles out there in the economy, particularly the financial markets, debt and equity markets and i want to refer to your most recent monetary policy report to congress in which you said overall equity valueses by some conventional measures are higher than their historical levels. valuation metrics in some sectors continue to appear stretched relative to historical norms. in the same report last year in july, the report specifically mentioned biotech and social media stocks as being substantially stretched. do you still feel that way and can you comment on bubbles in particularly these sectors? >> well i don't want to comment on those particular sectors.

you know as we said in the report overall measures of equity valuations are on the high side but not outside of historical ranges. in some corporate debt markets we do see evidence of unusually low spreads, and that's what was referred to in the report. more broadly we do try to assess potential threats to financial stability, and in addition to looking at asset valuations we also look at measures of credit growth, of the extent of leverage being used in the economy and in the financial sector, and the extent of maturity transformation, and taking into account a broad range of metrics that bear on

financial stability, our overall assessment at this point is the threats are moderate. >> jen and then steve nelson. >> jen lomberto politico. i want to ask about some of the tension between the fed and congress lately with some lawmakers calling for more transparency and accountability measures. i wanted to ask to what degree that there might be room for the fed to consider some of these measures like maybe a rules-based approach like the tailor rule or some of the measures that would change up who has a voting seat on the fomc. to what degree does that make it more difficult to accomplish your mission? >> so i believe the federal reserve is already one of the most transparent central banks of any around the globe. we provide an immense amount of information both financial about our balance sheet and our

monetary policy operations. we have audited financial statements. we publish our balance sheet every week. if you want to know exactly what's in the portfolio, it's listed on the new york fed website. i have press conferences. we issue minutes. we have, you know, statements that we release right after meetings and transcripts within five years. so if you put all that together we are a transparent central bank. with respect to congressional changes that are under consideration that would politicize monetary policy by bringing congress in to make policy judgments about in realtime on our monetary policy

decisions, congress itself decided in 1978 that that was a bad thing to do that it would lead to poor economic performance, and they carved out this one area of policy reviews of monetary policy decisionmaking from gao audits. the gao looks at everything else that goes on within the fed, and i think that that is a central bank best practice. the global experience shows that giving central banks independence to make monetary policy decisions that they think are in the best interest of the country and consistent with their man dates leads to lower inflation and more stable macro economic outcomes. so i feel very strongly about that but we are accountable to congress. of course we're ready to

provide information that congress needs to evaluate the fed's decisionmaking in monetary policy and elsewhere. with respect to monetary policy rules, they can be useful and i find them useful and long have as a kind of benchmark for thinking about what might be the appropriate stance of policy but to chain a central bank to follow a simple mathematical rule that fails to take account of many things that are very important in making monetary policy, for example i was earlier asked about being against the zero lower bound, which is an important special consideration, that would be a very foolish thing to do and i oppose it. respect to proposals having to do with voting and the structure

of the fed that you mentioned, a lot of ideas have been mentioned. i would say for my part i think the federal reserve works well. the system we have was put into place by congress decades ago. i don't think it's a system that's broken. of course congress can revisit the decisions its made about the structure of the fed. there were good reasons for making the decisions that were made about how to structure voting and other things, and i don't think the system is broken. i think it's working well. so i don't see a need for changes, but, of course it's up so congress to review that. >> steve nelson and then nancy. >> i was wondering whether you could quantify the effect that

the stronger dollar has had on economic output so far this year, the extent to which it's sort of acted as its own rate increase, and what sort of obligation you feel, if any, to make life easy forethe ecb, bank of japan, and the many emerging market countries that are struggling with some of the issues we struggled with not that long ago. >> so with respect to the impact of the dollar on the u.s. economy, i don't have a quantitative estimate to offer you, but i certainly expect net exports to serve as a notable drag this year on the outlook, but, remember we have to put that in context. there are a lot of things that affect the u.s. outlook, and while that is serving as a drag on economic growth overall the committee continues to see

sufficient strength, particularly in private spending that we are expecting above trend growth even so. with respect to our neighbors, we look very carefully at what's happening in the global environment. rerealize that our own policies affect performance in the rest of the world and that performance in other countries has an influence on us so we spend a good deal of time discussing global developments. it is important for us to keep our own house in order, to put in place the policy that's consistent with the objectives that congress has given us and i think a strong u.s. economy certainly is something that is good for other countries as well. we have pledged to communicate

as clearly as we can g monetary policy and i am trying to do that and will continue to do so. nancy and then craig. >> nancy marshall with marketplace. we talked about the risk of tightening too early. what about the risk of waiting too long especially since it can take a while for fed actions to work their way through the economy? >> well i agree with that. many, many studies over decades and decades have showed that there are lags in the way monetary policy affects the economy, and, therefore, monetary policy does have to be forward looking. that's why we spend so much time preparing forecasts and discussing them and we want to put in place a policy that will be appropriate for where the economy is heading.

that is, you know a reason that many of my colleagues most of my colleagues are anticipating that it will be appropriate to begin to tighten policy sometime this year in spite of the fact that they are projecting that inflation will be low. they're looking forward and they say that by the end of 2016 or 2017 with the labor market recovering and assuming that inflation expectations remain stable and transitory influences no longer affecting inflation, they see inflation heading back to our 2% objective. so just as we don't want to be premature in tightening policy and aborting a recovery that we have worked long and hard to proceed as far as it has, we also don't want to be behind the

curve and beginning to tighten given those lags. >> craig? >> madam chair, i'd like to preface this by saying i do believe you stand for accountability, and so recently a bunch of us were in a room over there. there was a police guard outside, and your staff had taken our cell phones and they controlled the internet in the room. all this to guard the security of the fomc statement. if one of us had leaked it we would lose our jobs. surely, there would be a prosecution, and my friends here in the press would certainly have a banner day with that story. there was a leak in the fomc. we don't know what happened. i have asked. i can't get an answer. and now congress is asking. both parties want to know. i'm not going to ask about the ig's probe. i understand that's an active case now suddenly after two years of just sitting there. but i would like to ask what you

found at the board. you weren't chairman then. you were vice chair, i believe. so what answers do you have and are you going to respond to congress? >> so let me say that the committee and i personally take very seriously our responsibility to safeguard confidential information. we have a set of policies and procedures that are in place that we're to follow if we believe that there have been leaks of confidential information, and this is something that doesn't occur very often, but if it does occur, we follow those procedures. it has been reported that our inspector general is engaged in a review at this time of this matter, and in light of that

ongoing review i am not going to get into details, but let me just say that we welcome that review and are looking forward to its conclusions. with respect to congress congressional inquiries, we have arranged to brief members of congress who have asked about this and will certainly cooperate in trying to provide them the information that they seek. >> thank you. >> john. >> madam chair, thanks for taking my question. the banking sector has clearly improved since the crisis in terms of capital retention, but there's also seemingly a number of scandals involving forex manipulation of course,ly bor lyibor.

do you think the culture at the banks is where it ought to be and if not, what is the fed going to do to improve it and when? >> well, it's certainly been disappoint -- i mean it's certainly been very disappointing to see what have been some really brazen violations of the law, and we absolutely expect the banks that we supervise to comply with the law and to have in place controls that ensure compliance in organizations, and while changing the culture of organizations is not something that we can achieve through supervision, we will make sure that the banks that we supervise have appropriate compliance regimes in place, and to the extent that compensation schemes

might be incenting such behavior that inappropriately reward risk taking that's something that was -- we will, you know look for in our supervision as well. [ inaudible ] you introduced a compensation rule in 2011. when do you think we might see some movement on that rule ? >> the agencies are working jointly to bring out a rule on this, but we do have supervisory policies in place concerning the structure of incentive pay and compensation and our supervision covers that topic now, and we have seen i think, meaningful changes already in the structure of compensation in banking organizations to diminish ways

in which it might incent risk taking. >> i guess i have two follow-ups. one with regard to craig's question. so before the ig's investigation according to republican congressman hensarling's letter to your office, he says that it is my understanding that although the federal reserve's general council was initially involved in this investigation, the inquiry was dropped at the request of several members of the fomc. now that predates the ig. i want to know if you can tell me who are the members of the fomc who struck down this investigation and does not revealing these facts go directly against the sort of transparency and accountability you're trying to bring to the central bank? >> that is an allegation that i don't believe has any ba i sis in basis in fact. i'm not going to go into details but i don't know where that piece of information could

possibly have come from. >> if i can follow up on his question. i think when you get asked about financial crimes and the public hears you talk about compliance you get a sense there's not enough enforcement involved in these actions and that it's merely a case of kind of trying to achieve settlements after the fact. is there a sense in the regulatory community that financial crimes need to be punished sort of more forcefully in order for them -- for there to be an actual deterrent against unethical behavior? >> you're talking about within banking organizations? so the focusecus of regulators the banking regulators is safety and soundness, and what we want to see is changes made as

rapidly as possible that will eliminate practices that are unsafe and unsound. we can't -- only the justice department can bring criminal action, and they have taken up cases where they think that that's appropriate. in some situations when we are able to identify individuals who are possible for misdeeds we can put in place prohibitions that bar them from participating in banking, and we have done so and will continue to do so. >> steve beckner. good afternoon, madam chair. the fomc said last september that we'll wait until after the first rate hike to stop or to discontinue reinvesting proceeds of its nbs holdings and stop

rolling over maturing treasuries. what is the fomc's current thinking about how long after liftoff you should wait to stop reinvestments and rollovers, and given the very large amounts of treasuries maturing next year would it make sense for the fomc to vary the pace of runoff that it allows? >> so we issued in september a set of normalization principles and as you noted the committee indicated that we will eventually cease reinvestments or diminish the pace of reinvestments as a way of gradually reducing the size of our portfolio over time. we said we would do that when economic conditions were appropriate after we begin

raising rates because we want changes in our target range for the federal funds rate to be the main tool by which we shift the stance of monetary policy. we've not made any decision at this point about how long it will be once we begin to raise rates before we reduce or cease reinvestment. we will see how things go, and the committee will revisit that and make a decision at a later time. you also indicated that we have a substantial quantity of treasuries that will roll off our balance sheet over the next several years. that's true, and that will i think over the next two years almost $800 billion will mature and they will be short term obviously treasuries at that

point, and that's a way in which we anticipate diminishing the size of our portfolio. >> can i just follow-up, please? some people have suggested that you might need to manage those runoffs a little more granularly, if that's a word. perhaps pursue a different track for treasuries versus nbs or given quarters when you have a very large am maturing and there might be a spike in long-term interest rates, that maybe you would vary the rate of runoff. is any consideration given to that? >> that's something for which we've made no plans, and i don't really have anything for you on that. >> greg and then peter.

>> greg rob from market watch. we hear that productivity takes a long time before you can understand it, but it's been very low in this cycle. what does that mean for fed policy? >> well i agree it has been very low. it's been disappointingly low. a positive aspect of what is fundamentally a disappointment is that the labor market has improved more rapidly than might have been expected given the pace of economic growth. so the unemployment rate has come down more rapidly than i would have expected and the labor market has improved more rapidly than i would have expected. we have written down our estimates of potential output. in the long run it is a

disappointing factor about the ultimate prospects for the u.s. economy if it continues. i would expect it to pick up, and as you can see from the longer run growth projections, most fomc participants believe it will pick up above current levels but it means it's something that would, if it persists retard living standards and would likely retard real wage growth and improvement in living standards for ordinary households. >> peter, last question. >> peter cook of bloomberg television. madam chair, one clarification if i could logistically and then a question about congress. you've been asked this before. i want to see if we can clarify. when you decide to start raising

interest rates, could that decision happen at a meeting in which it's not followed by a press conference, and on my congressional question, i would like to get your reaction to the treatment you received up on capitol hill the other day. it didn't look like a very pleasant experience certainly in front of the house, at least at moments. i wondered if you have concerns about that. has the relationship between the fed and congress deteriorated to a point that it causes you concern. what, if anything, can you do about it as well? >> so let me start with the press conferences. i said this previously and let me reiterate it that every meeting that the federal open market committee has is a live meeting at which we could make a decision. clearly, if we decided for the first time to raise the federal funds rate it is something i think it would be appropriate to answer questions and explain in more detail. we've long had the capacity to call a press conference after a

meeting that we would hold by teleconference, by conference call and that's a capacity that was used on a number of occasions by my predecessor during the financial crisis. it is something that remains a capacity we have and would expect to use if it were necessary. on the second part of your question with respect to testimony, you know it's very important for the federal reserve to be accountable to congress. we have a wide range of responsibilities, and it's entirely appropriate for me to testify and be quizzed on a range of topics by members of congress. you know, i think i need to be ready to answer questions on any

aspect of federal reserve behavior, and that's an important principle. >> thank you so much. >> fed chair janet yellen wrapping up other conference. the headline the word patient has, in fact come out. another headline as she said as far as rate increases down the road go the april meeting has been taken off the table, but you cannot rule out the june meeting or any meeting after that. now, the markets are rallying big because the fed's expectations down the road for growth and interest rates have come down. >> this is a pretty stunning session. i have to say. look at what's happened since you had the fed decide to make a more hawkish change to their statement and yet get a response in which pretty much all asset classes are responding favorably. you have stocks -- look at the dow up 230 points. better than 1%. the dow has retaken 18,000. the nasdaq briefly retook 5,000.

the 10-year interest rate the yield has gone back below 2%. even oil is green on the session. you couldn't have orchestrated a more graceful if you will response from their point of view. the question with a sector like utilities leading though now with goldman saying it's going to be september and others moving to a later projection, is that the best sign, development for the u.s. economy? in a way it means the data is weaker and the plaininflation is weaker and that means no. >> we have collect the some friends, romans and countryman to join us. jack bouroudjian, keith fitzgerald diane swonk from mesirow financial, rick santelli and steve liesman will join us momentarily when he comes out of the press room. diane, ladies first. i guess your message is the fed is no longer patient but they are more cautious now, yes? >> exactly. i mean basically they pivoted.

they did the hooky pokey and ended up where they were in the starting place and that is we still have september for a rate hike for liftoff although a very modest liftoff and i think what they did is they pivoted away from focusing on this language of patience and said we're data driven, we want flexibility, but we don't see it anytime soon. >> this is a pretty disappointing turn of events in fact, isn't it jack because what they're saying is relative to just a couple months ago, the outlook for gdp is weaker. the outlook for inflation is weaker. a silver lining i guess the unemployment rate comes down but this is a fed that itself is basically projecting lower rates for longer. >> well, you know, there's a reason for that kelly. remember, over the course of this last couple months, weaver've seen some data that are weaker and they're a data dependent fed. i'm going to disagree with you. this was not what i consider to be a hawkish statement. this was a well-balanced statement -- >> no nobody is saying it's a hawkish statement. nobody is saying it's a hawkish statement.

>> because that's the way it sounded to me. it's a well-balanced statement. >> there's nothing hawkish about this. >> doves are flying. >> other than the fact they removed the word patient. >> it's a flock of doves. >> if anything what we found is a greenspan-esque statement. this was a very well-balanced statement. what i will say though is that over the course of the next couple months chances are we are going to see that data start to get a little better. then that question baitdebate is going to be whether it's going to be september, later in the year. what i found interesting is you had two dissenters that think we should wait until next year. that's even more interesting. >> steve liesman does join us. i thought you had a great question asking chair yellen whether the fed policy now is to keep the markets guessing. she had a great answer for that but i'm curious, your thoughts why take patient out if in fact, their expectations for growth and interest rates down the road have come down right now? >> so that you ask me that very question, bill right? so you focus on what the

forecast is for growth rather than the word for patience. this was a design -- it's a pivot that the fed has been trying to do for a while. i'm sorry i didn't hear all of your previous conversation if you already talked about this but the idea of moving from the dates to the data but what happens now is we're in a period of uncertainty and that's kind of what i was getting at. is that what the fed wants? because we don't know what further improvement in the job market looks like, and we don't know what confidence at 2% inflation looks like. i suppose it's movement in the data in the right direction but how much movement is unclear. i thought she was a little hawkish at the very beginning of the press conference when she said we don't want to rule out the possibility of an increase in the target rates and it may be warranted at subsequent meetings just because we're saying it's not happening on april. if we get a big move in the unemployment rate a big move in inflation back towards 2% i guess it could happen at the next meet pentagon. >> although rick santelli doesn't it seem like the

takeaway is that it's more important to the fed what the inflation trajectory is than the unemployment trajectory? >> i couldn't answer that question. i have no idea what's important to janet yellen from meeting to meeting. i think that if i looked and listened to the press conference as i did today, it just blows my mind that everybody takes this so matter of factly. data dependent would have included the original premise of 6.5% unemployment. that's a data point. and they were data dependent until they weren't and we're over 3% for gdp until they weren't. we're looking at end of the year fed funds rate at around 1 3/8 until they weren't. taking patience out and replacing it with worse than patience is unbelievable. i wish she had have raised the quarter point, shocked everybody, and maybe get some semblance of the fact we can't normalize rates. let's look at the facts instead

of all the circular games we're playing with that press conference. two years are down five years are down 16, tens are down 13 abase points. 30s are down 8 basis points. the dow has had a 370 point turn around. i think that pretty much says it. when it comes to normalization, the drip drip drip and everybody is on continues and this is about the evaluation and the level of stocks end of story, and i know nobody will agree with me but -- >> that's crazy. >> it's the unemployment rate and they managed to throw that out there in a way that will a appease the masses in their ignorance of economics. >> wrong, wrong. >> keith fitzgerald isn't it possible the fed will never get all the parts and pieces they need to begin -- >> never perfection. >> -- in terms of the inflation expectations and the job growth

they're trying to target at this point? >> that is a very insightful point. the fed engaged in the finest verbal judo in years. they said the stove was hot but they said don't touch it. then they said we're going to do something about it but not what. i think it's really interesting because that's the only option they have available to them is how they can say something without actually saying something. to rick's point the market is going to move one day or the other. the bond traders did it today. the price went. equities moved. money is on the move just because yellen said nothing. so i didn't think it was hawkish, i didn't expect to have dovish. it's exactly whey expected but a masterful job of confuseing the on obvious. >> what about the dollar rick? >> i'm sorry? >> rick santelli the consensus trade coming into this and the big moves in the dollar for months has been the story. is this the end of that for a time? >> no, because i think as questionable as everything is

we're discussing about our own central bank multiply whatever that adjective is by two and you're at the ecb level. so now the game will begin afresh in my opinion, although although i think that if the notion with the ecb relative value trade on everything from the euro value and dollar and interest rates which are all really the interest rate differential, if we've changed europe's psyche and pushed off that increase that i never expect in 2015 anyway we might get a reprieve for a bit on the euro but that doesn't mean the euro problems are over. it just means that they're in the fantasy land phase of their qe where everything goes up and people say see, better opportunity in europe. not talking about the underpinnings of the economy but what happens when you qe. >> diane, let's continue our circular conversation. when do you think the fed will raise rates? certainly they're data dependent, they're not patient anymore. >> it's a cockpit that looks like a 747 dashboard now. that's our dashboard. it's very complex. i understand that rick doesn't quite understand those

complexities but it is complex -- >> oh, yeah it's complex. it's complex. >> we changed it -- >> like a perpetual motion machine, miss. that's how complex it is. >> i think it's more like a magic eight ball. >> or like a tesla. it reminded me of an elon musk press conference. imaginative. >> go ahead, diane. >> i think it's important to understand that the fed has learned from mistakes of the past. remember when -- and steve's point about uncertainty is really important. the question he asked bass really to another issue is when the fed started raising rates the last time around you could plug into your balance sheet, your spreadsheet, every quarter point every meeting. they don't want to promise that. they have learned from that mistake. what you see is a fed learning from its mistakes. it is not pretty. it sometimes is the sausage being made but it's really a point that the fed is trying to learn from its mistakes and saying we're going to move when we need to move and not before and we're not going to make a pledge about when we're going to move and i think they pivoted off that. >> go ahead, steve.

>> i was just going to say, i think what di arn is saying is pretty profound. i think it changes the market changes how you invest. i don't know exactly how, but if you can think about the world we lived in for the past six years, effectively with a precommitment on policy for the fed, and now if you told me september, i guess i'd agree with you, but i'd want to see the evidence. if you told me june i don't know right now. i have to say live on national television, i don't know when the fed is going to raise rates and i'm honestly not exactly sure upon what criteria it would base a rate hike on. i asked about that balance of risk question which i don't think the chair quite understood because under greenspan if the balance of risk were negative it meant future policy would likely to do something. but apparently they're not using that statement in the same way right now. >> steve -- >> i just -- >> from. -- >> hang on everybody.

same question to you, steve, that i just put to rick a second ago. don't you think -- if they lower their growth forecast they also lower their unemployment forecast the inflation forecasts are coming down in other words the unemployment forecast coming down was the good news but they didn't see rates respond to that. rates instead now look lower for longer. doesn't that mean to them inflation is probably the most important here? >> yes. >> it's important, kelly, but i also think the idea that they want to see further improvement in jobs, i went into this meeting thinking the fed was relatively satisfied with jobs. i learned today they were not. >> and i think -- steve, i think that's a nod, too. some of the dogs on the fed, like charlie evans, they want to see more improvement in the labor market and to bring everybody on board on this statement and remove patience which some people believe is important, i think they had to do a 2340d to the labor market. i think that's important to think about who is voting on the fomc. we did not get a dissent. they cushioned it pivoted from

patient to caution. >> keith fitzgerald is this a green light to invest in the u.s. market now? >> it's been a green light for a long time. if you see the yields go down and the treasuries get bid up what that tells me is traders don't trust what the fed said regardless of what it actually said. so i think there's a money move 75% of the treasuries are never sold. there's a lot of consistency there. that changes the variables in terms of how you invest in terms of how you allocate a portfolio. from an individual perspective, an individual investor's perks perspective, i think they're more returned with the return of their money than the return orn their money. >> i want to go back jack to the weaker dollar move because simply if everybody has been making the same bet, strong dollar, weak euro buy europe buy japan, et cetera does this now mean that we have to rethink a lot of those trades and

positions or no? >> i think we do kelly. i have a feeling you're going to start to see reallocation of some of the assets back into the u.s. remember, over the course of the last couple of months, we have seen money going out of the u.s. into some of the european markets, into asia. look at what's happening in china, look at the shanghai market, look at what's happening in bombay. all of that is probably going to work back into the u.s. markets. remember, this is now a green light. like bill was just saying. in fact what i would say to people that were mispositioned in this market which are the with uns covering and are running for the door right now is the same thing i would say to rick, trade the market you have not the market you want. >> it's a green light. it's a greener green light. i agree. >> green light for what? >> if it gets any greener, we're all going to have a pail of green throughout the entire country coast to coast. >> steve -- >> the green light in my opinion is the fact that janet yellen is giving us more transparency than you're giving her credit for.

>> she's telling us until we see -- >> no. >> she's giving us a magic eight ball. >> why wouldn't they just raise the quarter of a point and be done with it? why are we doing this every six weeks? come on, people. just be a little objective. come on. >> rick my friend i know you're disappointed by these developments. maybe -- >> i'm not disappointed. your kids will be disappointed. >> but you're disillusioned by these developments right now but you are at all -- >> disappointed disillusioned. >> are you at all empathetic to the role gentleman has tojanet yellen has to play right now where she's not only beholden to free market traders -- >> she's not beholden to them. >> but they are also beholden to other constituencies in the u.s. economy where they're trying to -- >> like who? >> the labor market -- >> too good to fail banks, primary dealers. >> congress. >> the consumers out there. >> if the labor market was as advertised at 5.5% they'd be running over each other to

tighten. they know that doesn't depict the reality. that's where they went off the track a couple years ago in front of an election i might add. >> and changed their position. i think it's important -- >> they're still not using -- >> can i ask -- >> one at a time. >> they're still not -- >> i want to ask our panel here this is something that bugs me. jack says green light, and it means green light to invest. jack you tell me let's say i was right that housing was very weather related. you come in in april and you get a march housing report that shows a rebound, you get a retail report that shows a rebound. all of a sudden aren't you more nervous now about a rate hike from a positive e con report in april than you would have been from the same report in march or previously when you had precommitment and transparency from the fed? >> without question, steve, but, remember, that's what janet yellen is telling us. if the economy gets -- >> that's my point. >> if the data starts to verify -- >> although i think we need more

than one month of a rebound. >> we probably need three months of solid numbers. but if that happens -- >> which make it is difficult. >> -- start to agree with rick and saying the fed should move. but it's going to be very difficult to see that happen before september. >> don't you go to bed now, jack, with your gun under your pillow if you're an investor? you got to wake up in the middle of the night -- >> no, no no no. >> because when the fed -- >> when -- >> one at a time please i'm begging you. >> when the fed starts to move you will see the bond start to break and equities will rally because that's what happens at the beginning of every tightening cycle, and you're going to have -- >> this is just another normal tightening cycle. >> all right. >> can we get back to the dollar? >> clearly we don't have enough voices yet. we need to add two more. here they come. lindsay lindsay and steve. welcome, welcome for whatever we're doing here this mayhem going on right now.

lindsey, in your view is fed policy as a result of today's statement more confusing than ever? do we have less guidance on when the fed thinks it will be raising rates at some point? >> there's no doubt there was a juxtaposition in what we saw. by removing the patient language we saw a willingness to raise rates in the near term possibly even by june but we also saw that lower expectation for growth, inflation, and a median level ever rates which extends the time line. i think it was a very crafty move on the part of the fed. by doing those two moves in tandem, the fed was able to control the market's reaction to that removal of the patient language as well as extend the market's expectation for a rate increase out to the end of the year. remember, we were pricing in a 60% chance of the fed raising rates in the midpart of the year and now we've pushed that out. the fed has bought themselves a little time but removed the possibility of an overreaction in the marketplace by removing that one little word that has gotten so much attention. >> steve, i can't wait for your

reaction. you've been clear on this point for months been screaming the labor market is strong it's too strong, the fed has to move they should have already moved. you must be disappointed today. >> well that wasn't my interpretation at all to be honest with you. i have been telling people the fed is going to tighten later rather than sooner and i have been saying ignore the labor market conditions. in fact i'm very disappointed by the tone and substance of the debate that's been going on because everyone seems to have glossed over the concept that the fed also lowered their growth numbers rather dramatically in the summary of economic projections and we keep going back to just the unemployment rate. the unemployment rate is a useless measure. it is probably the worst labor market measure we have and there's been too much focus on it. i think what janet is doing right now is getting everybody away from focusing on the unemployment rate and getting them focusing on the broader economy and everyone in the dialogue i have just heard is kind of missing that point completely. it's growth and inflation and neither of them are doing well. they lowered both of them and

they turned around and said and even with that we're lowering the unemployment and we expect no tightening in rates and that's a critical statement. it's a two-sided mandate. everyone is ignoring growth. >> can you have one without the other. >> i think we've been talking about that for months as a panel on wednesday afternoons. >> one at a time. >> the reality of the situation is you'll get both. >> steve, my apologies i was confusing you and mizuho with ms. zhuo know. i'm sorry about that. >> steve liesman, what do you think of what steve just said? we'll get back to you, diane. >> i think it depends a lot on your outlook. i think i'm a little more bullish than steve, but i don't think that's saying very much about how bullish i am. i think steve is a little pessimistic on the economic outlook. and if you're reasonably -- if you feel this recent bout we've had is temporary and the economy comes back then i think you're looking at a nearer rate term or rate hike and i think that's

what's worrisome to me and maybe i have it right. maybe it's a matter of understanding the fed is looking for that improvement and it could get it sooner. when she comes in there effectively, you know, guns blazing and says just because i ruled out april doesn't mean i can't do it sometime after april, i think that's a reason to be much more on edge. >> diane? >> the reality is -- let me jump in because of what steve said. i'm sorry, diane. what they basically did was they said patient was through april. now we have thrown patient out and we've put april out there. so the reality is they were data dependent throughout here and the data has been very very disappointing. so this concept they're going to run out immediately after april and raise rates if the data turns around is just as incorrect as the discussion that santelli had before about the concept that raising interest rates would normalize the economy. endingq e will normalize rates before the fed actually goes out and raises interest rates and that's what they're supposed to do. >> steve, do me a favor while

somebody else is talking, put your mic back on. thanks. diane, go ahead. >> one of the issues is the dollar issue. did the clearly get into the discussion and i think that's one of the reasons why in addition to the weather related losses we've endured in the first quarter, reviseing down growth statements in the role the dollar played a roll. the export forecast is less and they talked about lower inflation because of the transitory effects of lower energy prices and low import prices. that's the dollar right there. this is also an issue we haven't discussed is what is the dollar's effect on profits. we don't know that's going to be overwhelmingly positive. i would tend to go it's more of a slowdown in profits this year that profits remain relatively weak this year. and the dollar plays a key role in that. i think it's really important that the fed did actually get the dollar in there more than i thought they would and that was reflected to the growth forecast and the inflation outlook and that brings up some of the challenges. >> lindsey, a quick word if you would -- >> it's one of the warmest winters we've had in history.

>> okay steve, you're killing us. we got more voices in here. go ahead. >> i want lindsey, if you could address where you see the inflation outlook going. how much is it complicated by the drop in oil. are you as bearish as the fed? >> you know i am as bearish as the fed. as we saw in the january fomc minutes, there are plenty of committee members concerned about the fed's overly optimistic forecast for inflation and that near-term reversal back to the target of 2%. so by recognizing the ongoing weakness, the lingering weakness we've seen with the cpi and the ppi and net negative territory and the pce not far behind the fed had to acknowledge that weakness, and i think by acknowledging that the markets has now recognized that the fed is paying attention to indicators other than the unemployment rate and, again, that will extend those expectations for a rate increase from the near term out to at least the end of the year. >> by the way, if anybody is just joining us we have 12

minutes to go the markets have been rallying on the fed statement. they've removed the word patient. they have taken the april meeting off the table as far as a rate increase goes. it's anybody's guess what happens after that but they have tempered their expectations for growth and interest rates down the road as well. so we've had this rally in equities today, yields have come down on the treasuries especially the long-term treasuries, and the price of oil has turned around and gone higher and art cashin just signaled to me that the bias is to the downside only slightly as we head toward the close with about $3 million in stock to sell. who wants to take this one here. steve liesman, i mean janet yellen is janet yellen and we are not, and it is her job to try and herd these cats that are the federal reserve fomc at this point, but she also has to be mindful of what's going on at the ecb and the bank of japan and elsewhere. i know she did address that to some degree in terms of they

just monitor what the other central banks are doing, but aren't they in communication? isn't there some sort of backchannel communication that goes on with these central banks to not coordinate policy but at least be mindful of what everybody is doing at the same time? >> i think that's right, and i think it's a little bit unfortunate the way all the timings have worked out. i know the fed and the u.s. treasury were prodding europe to act much sooner than it did. >> yes. >> so what's happened is you have europe moving towards qe at a time when the fed is departing qe. had the fed had its way, that process would have started a year maybe two years ago, and they would have been much more synchronized and perhaps you wouldn't have had this huge gulf open up between the expected interest rates and in the currencies you see right now. so that's something that yellen has to deal with. and if she deals with it i think by acknowledging it very forthright on the dollar and the effects. didn't give us the exact numbers

but says it weakens exports, reduces u.s. inflation and export prices, overall a negative for u.s. growth but reflecting the better u.s. economic growth we have out there. so i think they've wanted to sink ronnize these things. and the fed will have to manage that and it is something to give a nod to steve on that something that does stay the fed's hand for a little bit here, maybe a little longer than we first thought. >> a quick last actionable question, jack bouroudjian, to you, does this mean people need to rethink their long europe trades? >> yes. >> i think they do. remember, i think we've seen this rally in europe over the course of the last three months especially in germany, it's just been phenomenal it's been pair boll irk. if you're long those markets, it makes sense to lighten up. the reality is qe has taken it up to the point you expected it to. now you want to see structural reforms. just like in this country we have seen the fed do all it can do. what we're waiting for is something to come out of d.c. to

give us pro growth policies so the fed doesn't have to be so heavy-handed with what they're doing. >> all right. folks, thank you. speaking of herding cats it was a lot of fun. thank you for joining, everybody, with your thoughts on the federal reserve. what a day. what a market day. what a fed day. it's our own version of march madness, by the way, is what's going on here. >> eight minutes to go into the close, and the dow looking for a gain here of almost 200 points. that u.s. 10-year treasury yield below 2%. the s&p better than 1% session, up 22 points. the nasdaq up 41. even oil is green. gold up. look at that almost 20 bucks on the session. and the heat map tells you just what kind of session it is. one in which about 9 out of about 10 names are positive on the session. >> about four hours ago that was a very red chart. turned around big time. we'll have much more on the fed policy, what it means for markets and your money still ahead on "closing bell." stay tuned.

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the dow jones utility average. having a big upside day, just up around 2.5% 3% on the heels of today's fed announcement. . if it were to to hold above the 3%, it would be the first 3% gain for the index since 2013. if you look at the one-year chart of the spyder it lowered expectations for the pace of anticipated rate hikes. the lower interest rates make the dividend yields look relatively more attractive so at least for now it looks like buyers of utility stocks on that recent 10% drop in values are being rewarded at least for today's trade. also with this weakening dollar, you take a look what happened with oil prices which are also getting a boost, 3% for wti crude today. brent is up 5%. west texas intermediate up 3%. check out some of the big gainers in the oil business. drilling services companies like transocean immediatetioncean leading

the s&p 500. dan denbury resources, nabors. for now energy traders looking at what's happening with the oil stocks. back over to you. >> thank you very much. three minutes left here. by the way, i guess in all of the mayhem of the last segment, i said that the bias was to the downside where we had 3 million to sell. it's $300 million of stock to sell, not just $3 million. thank you, ivan for calling me out on that one. can you tell where the fed statement came out? this is the dow chart for today. yes, this would be at 2:00 eastern time and it was off to the races after that. for the industrial average it got us back above 18,000. fon on the nasdaq we were for a time back above 5,000. the yield on the 10-year moving the opposite direction, going sharply lower after the announcement, back below 2%

today. now 1.91%, and dom mentioned the move in oil but it's worth noting the chart as well to see the move there. the price of wti crude up almost 4% today back above $45. joining me on the floor is nick guardside on jpmorgan and bob pisani. is the world a little clearer now. >> it is. today we saw the death of forward rate guidance. it's data watching though and what the bond market is telling you is it's september with a risk of december. you have weaker inflation, weaker growth as well. also, that coded reference to international developments, that's telling you the fed is saying hang on the dollar has been on a rampage and that's bad for growth. dollar appreciation takes about half a percent off u.s. growth this year. >> this was a performance for the ages. as exciting as it gets covering the fed.

i mean that really. we have been doing this for 25, 30 years. this is one of the best i have ever seen. suppose you had an assignment, this is what you want to do. create one of the biggest stock rallies of the year create one of the biggest bond yield declines of the year and one of the biggest declines in the dollar in three or four years. write a fed statement that would do that. they did it. it's an absolutely remarkable -- and her performance afterwards. i call her the anti-drama queen. look how she seemed to calm the anxiety. it was one for the ages. >> is it possible even though expectations for growth and inflation have come down, is it possible that they could still raise rates in june just to begin the process? i mean they're not going to start a huge increase after that, but just to test the waters maybe? >> you've got a situation where inflation gets to something close to zero and then on the other hand you've got the fed raising rates. that just seems too early. much more likely september.

>> rate increases could be warranted at any time. she gets it any way she wants to. >> what a crazy day and we're not finished yet. stay tuned. larry kudlow among others weighing in with his response to what the fed did today on the second hour of "the closing bell" with kelly evans. see you tomorrow, kel. thank you, bill. welcome to "the closing bell," everybody. i'm kelly evans. what a session it turned out to be after that fed meeting. here is how we're finishing up the day on wall street looking see if the nasdaq might close above 5,000. we didn't get there on the close but we still saw that index up 45 points or almost 1%. better than 1% gain for the s&p and for the dow. finishing higher by 25 points and 223 points respectively. the dow closing back above 18,000. the s&p couldn't quite retake 2,100. again, a vastly different session after that meeting, after janet yellen's comments

today than what we walked in with this morning and it's the u.s. dollar in particular we got to talk about. weaker. the u.s. treasuries at the same time that yield also moving lower. oil is up all sorts of things are going on. let's bring in today's panel to sort through all of it. joining me at post nine cnbc senior contributor, larry kudlow sara eisen and nathan bacharach from simply money. for more is greg ip from "the wall street journal" and steve grasso will join us momentarily. nathan, your gut response to what we've seen? >> so many comments so little time. a lot of yellen no screaming. janet yellen ran out of patience, you as an investor better start having some. i think when you cut through all of the headlines, guess what? gold is up. i don't think it's staying up for very long. oil went up it's not staying up for very long. there's way too much of it building up in cushing. it's not going to be around for very long. the dollar forget about it. the dollar has only one way to

go and that's back up because the euro only has one way to go and that's back down. >> that's why it's so interesting and we were asking jack, if suddenly the dollar is weaker, that's going to totally upset the trades everybody has on. >> it's helpful for the u.s. stock market. janet yellen and bill gross said this i'm sorry, larry, but the gut reaction was janet yellen put the u.s. in the currency war. she mentioned the dollar a number of times. it was mentioned in the statement in terms of export weakness, concerns about the pressure that it was putting on inflation. obviously it is a growing concern, and she did what she could, which is not a lot for a federal reserve chairman this is obviously under the treasury to talk it back lower. as nathan said the trend is higher. it's a powerful force with 25 other ganks cutentral banks cutting rates. >> when you have a strong dollar and falling energy commodity prices, you don't want the fed to be raising interest rates.

so my mantra has been for her later, not sooner and that is still my view. you want to create better economic growth in the usa, slash the corporate tax. that's my point. as regards the dollar the dollar is going to continue to trend higher -- >> so today is just a pause -- >> you can jump -- >> it's been a crowded trade. >> she didn't change anything. the fed is going to do what it's going to do. i just hope they're going to do it a little later in the cycle. you have deflationary forces but i will repeat my view. a strong dollar and lower oil and commodity prices are a double tax cut for the economy. they are incredibly bullish, incredibly bullish for stocks and the economy. >> welcome greg. if those two forces are incredibly bullish, should the fed be anticipating that and tightening policy or not? >> well the fed doesn't share larry's view. janet yellen was pretty clear on that.

the dollar restrains exports and adds downward pressure to inflation. you don't have to call it a currency war. it's basic economics. if the fed wants financial conditions to be a certain level of tightness, if the dollar adds to that tightness, they have to subtract from that mix on the interest rate front. you know, what i thought was striking was we didn't get a lot out of janet yellen's statements, but if you look at those projections -- >> yes. >> -- it is clear that in terms of the war that's been going on between the fed and the markets the fed is throwing in the towel, and they're coming around to the market's point of view about where rates should go. that is liftoff and trajectory, both lower than in december. >> hold that thought for one second. hang on, let me get some breaking news on target. may be relevant to the conversation. dominic chu has the details. >> certainly on a fed day talking about the jobs picture and the employment front, target, one of the biggest big box retailers in america, has said that it's going to raise its minimum wage to $9 per hour

for all employees and that's going to start as soon as april. this according to dow jones. again, so according to dow jones, target will increase minimum wages for all employees in april to $9 an hour. according to the department of labor, the current federal minimum wage is $7.25 an hour. so the latest company to boost that minimum wage level for employees. back over to you. >> thank you very much dominick. greg, your reaction to this as we see more and more companies, does this ultimately tell us the labor market is tightening or no? >> we've seen a few of these now in the last month or two. the puzzling thing is why we haven't seen the anecdotal reports show up in the aggregate numbers. there's a strong view at the fed with the unemployment rate where it is and continuing to drop it's only a matter of time before you see those numbers. i thought it was interesting that yellen said they could decide to raise interest rates before they see the wage numbers start to move and one of the reasons why is because they still have a strong view that a tighter labor market invariably

will push up wages, generate consumer spending. >> with all due respect to greg ip and i guess janet yellen i don't think more people working is a bad thing, and i don't think more people working causes inflation. >> larry, more people working -- >> let me finish -- >> what they're buying is cheaper. >> the reason that i'm on optimist about the economy is a strong dollar will hold back inflation, attract capital from all over the world, and permit the economy to grow without any inflationary problems. so whether the fed plots this or not, it may be a miracle, it may be immaculate conception. we are exactly in a good place here. that's why i like it. >> sara maybe we can show what's happening with the euro right now. >> it's like zooming -- >> but against a bunch of currency which suggests it's not just a fed move. >> the euro just shot up out of nowhere to 109. we started today's session 105. >> wow.

>> that's a giant move for a currency right now. keep in mind this is an extremely crowded position. so many people have been betting on the u.s. currency the air that came out of this as a result of what the fed did and what janet yellen said today, boy, you are seeing that trade reverse pretty hard right now. >> this is the biggest single day move we have seen in the euro/dollar since at least 2011 and we've had some pretty turbulent times in the last couple of years. >> this is a 3.5% move. that is crazy. >> just enjoy it. just enjoy it. stocks are going up -- seriously. there's no inflation in the u.s., stocks are going up. the economy is improving a little bit, enjoy it. >> but my point is today's trading reflects the opposite of the case you just laid out. we all want to see the case you laid out. today what are we seeing? the dollar is weaker stocks are higher -- >> i don't do one-day trading. that's not analytics. >> understood. >> what you have is a trend line -- by the way, even before today the stocks were up for the last year as the dollar was up and i like this story. again, whether the fed stumbles

into this or not what you're seeing is a strong dollar low commodity prices and an economy that's probably getting a little better. >> nathan. >> forget about janet yellen and tomorrow when all things get back right with the world and the sun comes up we'll find out goods from outside the united states are going to be cheaper. the dollar is going to get stronger -- >> not after today's session. >> give it -- >> tomorrow okay. i understand. >> give it a little patience here. unless you're a day trader this is all going to right itself. the euro has got to weaken. >> let me bring in steve grasso. >> they've got a long way to go. >> hang on. let me bring strefeve grasso into the conversation. if the fed does something and markets react, that might tell us the next paradigm trade for a little while. do you think that's what we're seeing or no? >> i think this is going to be an unwind of a trade we've most recently seen. i know larry in his career always loves a strong dollar and he's not a day trader as he just said, but i think if you look at

it going forward, this is not a good thing for the united states economy, it's not a good thing for the markets. the s&p will get hit with a huge headwind. >> no. >> we have to keep the euro/dollar up while we have this conversation. >> why were forecasts coming in? because of the strong dollar. so we take a minimalistic hiatus from that but your good friend and mine michael pento was afraid of the inverted yield curve. the fed is afraid. that's what's going on here. >> i'm not worried about an inverted yield curve. >> why? >> because the fed isn't going to tighten. every recession in the united states since world war ii has been preceded by an inverted yield curve and a spike up in energy. we have a spike down in energy and we have a yield curve that is positive. i just want to say again against this standard conventional wisdom a strong dollar and low energy prices -- >> i get it. you said it before. i totally respect that. >> let me finish reduces the

cost structure of the entire economy and makes us more competitive. it also makes our consumer stronger. >> i would like to say something once. if you look at the buffer that you get in the past with recessions in the past you usually have a 400 basis point cushion between longer dated and the fed funds, right? 10-year and the fed funds. this time to have 200 basis point cushion. that's why the fed isn't moving and that's why today everything rallied. what rallied the least? the bank stocks because they understand going forward the economy doesn't look as great as people like to think. >> maybe so, and the winter numbers are coming in poorly. i don't disagree with that. all i'm saying is i believe the fed did the right thing today. that's all. >> perm economy . >> personal economies -- >> i waited eight minutes -- >> steve, buddy -- everybody hang on. steve, our apologies.

i know it takes a while, especially on days like this for us to get everybody's voices in. we're trying to do this to reflect what's happening. >> when you walk into costco the samsung 50 inch television costs less. your dollar is going further. when target can actually give you a dollar raise and janet yellen says that inflation is now coming in less than it was before, i don't know what it will mean for a large u.s. company stocks who have to do business in europe but for personal economies, if you have got a 401(k) you just got some time to have some patience because your standard of living is pretty darn good and that's i think -- main street will have patience with their investing even though wall street all around us may not. >> steve, give us a couple levels to watch as we try to sort through what positions people are going to be putting on now. >> if you look at the short-term day traders, the s&p cash is what the short-term day traders focus on. they don't look at the dow or the s&p. 2120 was that overshoot level. that's what you want to look at. right now we're in an overbought condition the s&p cash. if you have been holding onto

stocks right now, i would still trim. i expect this to work off but it can take a couple days. >> and greg ip just to make sure our viewers are aware, the euro has touched about $1.10 on the session today. did mario draghi's life just get a whole lot more complicated? >> i don't think so. i think this is a sign of just the positive effect that monetary easing in the eurozone is having around the world. when the european central bank basically embarked on this process, they drove the euro down essentially transmitting some of that pressure to other countries, and they've all had to respond. first it was switzerland and sweden and denmark with negative interest rates and now the federal reserve has said we now have a stronger dollar that puts some pressure on us. we're going to delay tightening. so in this way, monetary ease gets transmitted around the world. so, larry, i'm actually with you, i love the strong dollar because it meant a weak euro. europe needs it more than we do. that policy has helped distribute strength from the

countries that have it like the united states -- >> by the way, greg -- >> whole world benefits. >> we can agree there is a transmission here because our consumers are stronger and they're buying -- they're importing more goods and services from around the world. my point is in that sense the transmission is pro-growth for europe and pro-growth for japan. i'm just saying the strong dollar itself makes america more competitive and that's a good thing, not a bad thing. >> so you can debate both -- and you're both right here but what's different right now and i think what's got a lot of folks worried is the speed and the magnitude of the moves. it is not normal to see these kind of moves and these trades unwind in such crowded positions, the speed of a move. a 20% move in the dollar in a year, 8% move in a matter of a few months is unusual and that's the thing. it's disorderly and it can be disruptive and that's something certainly that has to be on the fed's radar and traders' radar as well. >> you may be right. it may be too fast.

i have seen it faster down through the years. i6 all i know is this stocks are doing well okay? the dollar is doing well. the economy looks weak from the weather in the first quarter i'll grant you that, but i think the economy is still decent and we need a corporate tax cut. >> and we're going to leave it right there. steve, thank you very much, sir. thanks for your patience. pun intended. more coming up with steve grasso on "fast money" at 5:00. they'll be asking the man raked number one in fx strategy jens nordvig what he thinks of the fed's decision. greg ip, thank you for joining us. much more continuing coverage after this. "closing bell" continues in two.

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welcome back. we continue the conversation on the fed today and what's happening in the markets now and next. with us, dennis gartman of the gartman letter and jeff cox who was in that lock up at the fed for today's announcement. welcome to you both. dennis a pleasant surprise to have you down here at post 9. even more of a surprise are some of the moves in the currency market though. what do you think about the u.s. dollar and the pop in the euro

today? >> it is amazing to me. i have been changing foreign exchange for 45 years and other than the plaza court, other than the weekend after the plaza court, i cannot really acall a day when we saw that many big figures go flying by. i looked at my screen and saw 109 now you hear it was trading 1.10 that was astoun initialling. i put if we got to 1.0875 i would probably start thinking about selling the euro again. this is astorn initialling. >> jeff cox, your' reaction? >> it doesn't seem like a market that's pricing in a central bank hiking rates in three months. there was some reaction after the meeting was over that the fed opened the door to a possible june rate hike. i think you have to look at this as incredibly dovish. i think they ruled out april but i think when you look further down the road they're ruling out further hikes and i think they won't hike maybe until september and i think that's really the only way you can explain this market. >> dennis -- >> if i had looked at this and

not seen what the fed had said i would have thought there had been a discount rate cut. >> can i make a point? you have been around watching the fed, as i have i really like this idea of removing the word patience, adding some mystery to monetary policy. stanley fischer first came up with this in a story a couple weeks ago. when i was a kid working at the new york fed in open market operations, paul volcker made a fetish of not signaling anything. alan greenspan said he was proud of it he would talk and no one would know -- let me finish this point. i think that this is good for main street because i think main street gets cut out with the fed, all their signaling and so 230r9 forth. and it keeps the hedge funds honest. that may account for today's -- you don't know now. you may be right about september, but if the fed adds

some mystery, i love it. >> dennis, how -- >> hang on. >> when yellen said that not to look at the schedule for press conferences to determine when they would raise rates, she actually said well if we do raise rates when there's not a press conference we can always schedule a press conference. she was really cagey about the future direction. >> yellen is trying to help the consumer in every way she can raising rates would help with certificates of deposit. we're looking to get more employment. but how does this help the average investor. if you have a 401(k) you go home and you go i heard dennis talking about 1.09 on the euro. what does it mean? >> i think it means rates are not going up anytime soon. the fed has understood it made mistakes. it's learned the lessons of what it might have done back in 1937. it's not going to do the same things. i like larry's idea there's a sense of mystery. we know rates are going to go up. there's no question but they're going to go up less severely, less quickly than we thought they were going to go up before.

i think this is a good lesson to main street. i think this tells them be calm. sit down. take a deep breath. >> a serious point. i'll make a concession to you. >> finally. >> larry never makes concessions to anybody. >> well, i've gotten diplomatic in my old age. >> your idea of the speed of the transition in the dollar. let's say you're right. i don't think you're right historically -- >> it goes back to the plaza accord. >> i'll go back to bretton woods in 1973. here is my point, the fed should wait. you have deflationary signals, a strong dollar and low energy deflationary and it happened fast. so it's good that they're waiting. i like that very much. >> completely and it's a reaction -- >> what happens if the euro/dollar keeps ripping and a move like this if it keeps going because people's positioning has been so on the other side of the boat what happens? >> the euro/dollar is not going

to continue ripping. there's so many problems in europe that are incumbent on keeping the euro under pressure. this was an overwrought, overextended, one-sided trade. people are getting taken out of their position but the long-term trend is toward a weaker euro. >> kelly, could i -- >> translation -- >> could i tie a bow around this? >> jeff? >> it's really all about just volatility, talked about this six months ago. that's going to be the theme this year. you're going to see some really outsized, bizarre moves from the market this year because of all the uncertainty around central bank policy. >> you know we used to have a constrained market thanks to the fed. now all of a sudden we have an unpredictable market again. >> good. >> and isn't that wonderful? we have to get up in the morning, be on our toes -- >> more opportunity. >> and isn't that -- >> this is why i like the mystery. >> i like mystery when i-dating in college.

i'm not sure i like mystery -- >> i want speculators to be kept honest okay? so you don't build up these gigantic positions because you're betting with the fed. i think the fed has been very very helpful to the big boys and girls on wall street and not so helpful to people on main street. >> i couldn't agree more. >> amen. >> level the playing field. >> dennis we'll give you a last word. >> i have not seen the statement yet completely but did they say anything about the dollar at all? i suspect they didn't but i suspect they're also as happy about the dollar getting weaker today as the bank of ja china -- >> she said it puts pressure on exports and inflation. >> there was nothing in the statement about it but yellen did talk a lot about it. >> and that's the big move today. the story, the takeaway really from what's happened over the last couple hours. dennis, appreciate you being here on a day like this. good to see you. >> buying or selling gold? >> i own gold in euro terms. not as happy as i was earlier on but i'm still going to own gold

in euro terms. i don't want to own gold in dollar terms. >> because it's going down. >> it's probably still going done pup. >> thank you, jeff. much more on the markets big rally reacting to the fed and gold to larry's point did pop today as well. also apple is now officially a member of the dow 30. at&t has been kicked to the curb. so will this change be a boon or a bust both for apple and for the dow? that's next. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. you're driving along, having a perfectly nice day, when out of nowhere a pick-up truck slams into your brand new car. one second it wasn't there and the next second... boom!

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welcome back. here is a quick look at what happened on the session today. here is the dow and notice that about 2:00 p.m. eastern it was down around 100 points. then the fed statement was released. we turned green, we ended up higher by almost 230 points. what a turnaround. joining us with their thoughts, jim bianco and peter boockvar on the phone line. welcome to you both. and let me just begin, jim, with you here. the argument we've kind of been having so far is whether today is the new trend or today is a break in a trend that will resume itself. where do you come down? >> i think it's a break in the trend. i hold an unconventional view that the market has largely had the fed wrong for the last 90 days. and today they finally figured it out. fed has no intentions of raising rates this year and probably even into early 2016.

janet yellen let me be blunt about this she's just not a good presenter at these conferences. she says stuff that gets her in trouble. a year ago she said considerable time being six months. that's in fed speak puts them on a calendar. that's not what the fed wants. they have to pull that back. in december she defined patience meaning two meetings. she didn't want to do that, so she had to get rid of the word because she put a definition on it that the fed didn't want. that's all they did with patience. once you look past everything else with the downgrading of the economic assessment and with all the other stuff, they clearly said patience went away because i made a mistake in december and said it meant who meetings when it didn't. the rest is the economy doesn't look that great. there's no rate hike on the horizon and that's why every market took off. >> i'm interested peter, to see whether you share that point of view. is this janet yellen's fault? >> i was convinced they were going to raise in june because they kept talking about the

labor market as the main thing they were watching as opposed to the inflation rate and i just don't know anymore. to me data dependent are two hollow words that are completely meaningless because, as jim said, they've changed the rules over and over and over again. and i think what today reflects is the fed is just completely winging it. and they'll know it when they see it. what they see i don't know but i don't know anymore. to me monetary policy is in somewhat disarray in the sense that we're six years into a recovery, rates are still zero and they still can't figure out when they should go higher. >> wow. >> jim and peter, nathan bacharach, would either of you have been happier if she had come out and say forget the language, the emergency is over after six years, emergency measures are off the table, and now i'll take a look at the data and so the some point if i think i will raise rates i will and leave it at that. >> from a perspective that normalizing i would have been happy if she'd done that, but even yellen said today values s

are high. if she had come out and said they're going to raise rates in the middle of the year you would have had the opposite reaction in all the markets today. we saw that off of the very strong payroll number report a couple weeks ago. the markets are going to have a real problem when the fed raises rates. i think the fed knows that and i think that that's why the fed is afraid and real quick to peter's comment, you're right, peter, for the last two weeks, everybody has come out and said well, the data has been weak but look at payrolls. payrolls have been very strong. payrolls overrides everything else. the fed pretty much said no, payrolls are now a backseat. everything else being weak is kind of a worry. that's the problem with data dependency dependency. >> actually though -- >> i'm interested because your view seems to be different. you have said you support the fed. >> i'm not sure how they got here because i don't agree with their phillips curve and the labor stuff and peter, i have to tell you, we're old friends, when i look at the commodity markets, the exchange markets, when i look at the t.i.p.s.

markets, as a commodity price rule guy we're in price stability. since i think the job of the fed is to keep price stability and to keep the currency sound and confident, i have to say however they got here and it's a bit of a mystery, they got here and we're in preettty good shape and therefore i'm happy with their views. i have said for weeks and weeks, later, not sooner. >> well i'm of the power play that the economy with zero rates and a balance sheet that's 25% of gdp is a fake false economic construct. what the economy is today is not real in the sense that zero interest rates is not a normal state of being. so to me the real test for the u.s. economy is not when rates are at zero. it's when they're at a normal level and let's define normal as let's say real rate at zero which would be a 1% to 1.5% fed funds rate. the fed can't figure out a way

to get us out of this fantasy land. they're completely trapped -- >> listen we have to leave it there. it won't be the last time obviously we talk about this issue. i want to give you, jim, a quick second to give our viewers something actionable to walk away with. >> with the fed going to stay easy assets. probably anything. buy gold crude oil, buy stocks. it's like qe. everything is going up right now. >> well that's pretty clear. thanks for being here. really appreciate it to you both. some fascinating discussion. jim bianco peter boockvar and we'll send it out to sue herera for a news update. >> here is what's happening. tunisia's president addressing the nation an gunman raided a major museum earlier today. authorities say there's a manhunt for two or three suspects linked to the deadly attack. officials say 19 people were killed, 17 of them were tourists, and 2 gunman were killed. about 50 people in all were injured in that attack. two twitter accounts allegedly linked to the islamic

state group based in syria are praising the assault. the cruise ship operator carnival saying one of its ships is docked in tunisia and the company believes some of its italian passengers may have been at the museum. the ship's departure has been postponed until tomorrow. secretary of state john kerry issuing a statement saying the u.s. condemns in the strongest possible terms today's deadly attack and he offered his condolences to the families of the victims. that is your cnbc news update at this hour. back to you, kelly. >> thank you very much sue herera for us. apple is now the apple of the dow's eye. will the stock's inclusion in the blue chip index send the market higher or could it upset the apple cart? and the housing market has shown signs of slowing. the home renovation space though is still red hot. will that change if the fed ever raises interest rates? "closing bell" is going to ask when we're back in two.

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welcome back. hard to believe after all the roller coaster rides this market has taken lately the s&p 500 is only up about 2% this year. so what's the next leg, up down?

dom chewu is looking at what could tip the scale. >> the bulk of the move to the 2% upside was just today. it was a huge move higher for the markets. if you look at where the scales have tipped the bias is a little more toward the bullish side given the fed comments today but put it in perspective, some of the big factor that is investors are weighing that have drawn to at least a draw here for the overall market. if you look at the bullish side of the equation on the big economic picture side of things we do have an improving jobs picture, at least that's what most will argue. the trend has been for jobs to be on the upside. and that's one of the things we can argue. the health care sector has been a real standout. one of the best performing sectors in the s&p 500. drug companies, biopharma, that sector has been doing well. and apple stock, it's going into the dow starting tomorrow. it's been a huge upside story. maybe that carries the market further. that's the bullish side. it's all being weighed and balanced out by some of the more negative side of things in the market. first of all, what's happening with retail sales.

people don't appear to be spending as much money as we thought they would and that latest string of retail sales data we've seen has not been all that bullish. two-thirds of our economy is driven by consumer spending. the energy sector it's a good day today but it continues to weigh on the market. oil prices is this just a dead cat bounce or do they have further to go to the downside in energy is a wildcard. and stock like intel, last week sayingp pc demand isn't as robust and they're taking down their forecast. you can see where that tug of war is happening although we will say that if you want to kind of put the tiebreaker today, the fed pretty much went to the bullish side of things. for right now macros sector micro, it's balancing out. >> we just heard jim bianco's view. he said buy anything. that was the last segment. dominic chu taking an

investigative look back at headquarters. we're looking at the impact apple might have on the dow. it's joined the dow 30. at&t is gone and what will that mean for the overall market? we'll ask kenny polcari joining from o'neil securities joining us from the bar, i mean from the floor of the new york stock exchange. just kidding. >> the dow is an index of 30 stocks. apple is certainly the biggest company in the world. maybe it's about time it's in that average but most people look at the s&p. it's a much broader average. the dow is kind -- >> that's a different discussion. we know but what about for the dow? >> if apple performs well it will pull the dow up for sure. but i don't think people should be buying apple just because it's in the dow. you're going to buy apple because it's apple and you like apple. >> isn't the question whether the people should buy the dow because apple is now in it? >> if they want to buy the index? if they feel that strongly about apple they should buy the index.

>> the question is do you want to buy apple? i want to know your opinion on apple, not the dow. >> i like apple. how can you not like apple? you'd almost have to be anti-american to not like apple. i think apple is a tremendous company. it's changed the world. i think it's something if you're an investor and you like technology and technology, you got to own apple. >> do you think mrs. clinton should have had an apple iphone. she could have done two accounts on one phone. >> that's a whole conversation -- i'm still scratching my head. >> does the dow need a home makeover? are we starting to see is apple more a bellwether saying this is what a modern company looks like. ibm, this is what an old technology company looks like and microsoft we don't know where you are in between and -- >> ibm continues to transform itself. it's not necessarily an old company. and apple for sure needed a place in the dow because it does represent a new world. but that being said the dow is

still 30 stocks. so the when people look and they're pricing portfolios they're looking at broader indexes. >> another interesting thing about the dow recently and we are continuing today the trend of late which is triple digit moves for the dow up or down. it's been eight out of the last nine sessions of trading. volatility obviously. but interestingly enough the dow has had an outsized move and today is no exception. 1.3% while the s&p and the nasdaq -- s&p up 1.2% and the nasdaq 1%. what's with this bigger move? is it because of the dollar and the more overseas exposed multinationals that comprise the dow? >> i think that's exactly right. xshl when -- look at the dow 30 stocks. they're all big mule tie nationals. when people get nervous, the dow jones exaggerates to the down side. >> we got to go but i look at the news coming out of starbucks at their annual meeting, they're doing a two for one stock split.

kenny, do you have a view one way or the other. starbucks in the dow. >> i hear you but i'm the wrong person because i don't like the coffee. it's a burnt taste in my mouth. >> you're talking about two multinational companies, starbucks and apple. how are they doing? great. >> right. >> profitable. the strong dollar has not hurt -- >> because apple is raising their prices everywhere else. that's how they're maintaining their margin. >> absolutely. >> thanks very much kenny. >> you're welcome. >> home depot has gotten a boost from the rush to renovate. how will this red hot stock rise? tomorrow i speak exclusively with the ceo craig menear in his first interview since taking the helm. that's a "closing bell" exclusive you won't want to miss.

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welcome back. there you can see tomorrow "closing bell" will be live in las vegas for a very special show. i will be sitting down with home deposet depot's ceo. is it still a good bet if and when the fed decides to raise rates and how will it impact the housing market and home renovation space.

joining us now is brian jacobson along with our panel. brian, good to see you. we've had pretty meager, if you will assessment of the economy by the fed. you know the housing market isn't off to that great a start this year and yet home depot as an investment continues to do well. what needs to happen for home depot to still remain a buy here? >> well, i think that with home depot it's going to be very interesting to see what happens with the interview tomorrow as far as what their growth plan is. if you look at the housing market in general, yes, it's been off to a slow start, but i think a lot of this is perhaps just seasonal weakness or actually weather related weakness because it's been unseasonably bad weather that we've been having and it's actually been reflected in some of the housing starts data. if the fed decides to raise rates at its june meeting, i don't think it's necessarily going to have a material impact on mortgage rates. even if it does look at what happened to home depot back during the taper tantrum. how did their sales do?

i think they actually upped their guidance for sales because their pretty well insulated i think from any increase in interest rates here. >> larry, would you have any concerns? what macro things have to go wrong for a home depot to stop working here? >> i think consumers have to crash, and i sort of agree with brian. i think a lot of the lousy news on housing related stuff is just bad winter weather news okay and you got other stuff, dock strikes, whatever. brian, i will be real quick about this, i'm looking at wages rising at 2% a year. that's not much. but hours worked are rising at 3%-plus, so total income for the average wage earner is actually over 5% with no inflation. and i just keep thinking when the weather clears up brian, you may see a very strong consumer, maybe a mini consumer boom. >> brian? >> it's entirely possible that you could see a consumer boom because, as you point out, wages are beginning to rise hours worked are beginning to rise as well and you add the two of them together. i think investors typically fixate a little too much on the

average hourly wage number not taking into consideration that well, it also matters how many hours you work and that's been hanging in there pretty decently. so i agree with you. i think we could see some upside surprise with consumer spending here. >> brian, nathan bacharach. we do a sentiment survey and what we're finding if you own a home, you're very happy with housing. if you don't own a home your capacity to afford one is very much in doubt. as a long-term headwind here you can only fix up your house so much before you finally go i'd love to move and i can't, when does home depot run against that? >> i think that's a few years down the line here. that's not something that i'm really looking for for 2015 or even 2016. mainly because i think that if we see wages begin to increase even if we see a slight increase in mortgage rates, it's not really going to detrimentally affect housing affordability. if you own a home you're happy with it. if you don't maybe the problem is you don't qualify for it because of underwriting requirements. it's not because the interest

rates are too high. i think that -- >> i agree with that. >> it'sen -- >> i wonder how you think about whether that's structural changes in the housing market post financial crisis whether it's psychological, whether it's fewer younger new first-time home buyers or people just saying at home with their parents. these kind of issue that is don't factor in and perhaps that's what's it's been so hard to get a straight line up. >> there's been a lot of talk about whether the millennials will be homeowners in the future or whether they will continue to just rent or perhaps just crash on their parents' couch. but at some point the parents are going to kick them out. and actually if you look at a lot of sentiment surveys as far as home ownership expectation they find that millennials anticipate that they're going to be homeowners eventually. it's just maybe right now they need to wait to find a better paying jub, full-time job instead of multiple part-time jobs or they want to pay down

student debt. i think there really hasn't been a structural change. i think it's a matter of waiting for some of the economic environment to improve for the millennials. >> we'll see if craig can give us any insight on this inflection on that inflection point. thank you very much. brian jacobson wells fargo funds. will be speaking with the ceo of home depot here. let's send it to dominic chu with an earnings alert. >> three of these guys to tell you about. a retailer, is surging about 10%. you can see 9% now after earnings results. came in at 63 cents beating expectations of 50 cents a share. revenues, however, missed. company sees a bigger than expected loss for the first quarter on currency issues. now it's william sonoma down by 3.5% after the company's close. adjusted fourth quarter profits of 1.52 in line with expectations. sales came in before forecast

though. the company said the recent port problems on the west coast should reduce its full year earnings by anywhere from 10 to 12 cents per share. the company is raising its di dend by 6% so balance is down by 3.5% and electronics company jaibls circuit but getting back those gains you can see right now, only by a percent. it beat the top and bottom lines for second quarter. third quarter earnings per share, guidance though is mostly in line or maybe just a tick above estimates but on balance again, 1% move to the upside for jaibls circuit. back to you. >> thank you dom. janet yellin and the fed. no surprise. burning up cnbc.com. a huge market move today and a lot of people trying to read the tea leaves after yellin's announcement. a red hot hot list coming up.

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welcome back. janet yellin speaks. let's check in with alan host hostler: what a crazy three hours it's been. >> crazy, kelly. over 135,000 people dipped their toe into fed coverage in one way or another. the centerpiece was the live blog from the statement to the market reaction through the press conference with jabtnet

yellin. 46% of readers think the fed is more clear than before. we had a red line up which brings our readers inner criminologist. to compare the statements side by side, people love that one. the big difference is dropping the word patient which got people into a write-up where he thinks the new word is prudence as they look at the data points like wage inflation, strength of the dollar to make their decision. so that's the wrap kelly. all fit. >> so use of the word prudence has changed so much over time but i digress. thanks alan wastler. the fed's big move today and don't miss jim cramer's announcement. the controversy on having workers, discuss race relations with customers. that's tonight at 6 p.m. eastern. we're back in two. ork state, we're reinventing how we do business so businesses can reinvent the world. from pharmaceuticals to 3d prototyping, biotech to clean energy. whether your business is moving, expanding or just getting started...

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welcome back. time for a quick final thought with our panel. nathan, you first. >> don't get freaked out by these wild moves. everything will settle out over the next couple of days. >> sara? >> i would watch nike earnings tomorrow after the bell. obviously, it's a good sort of micro/macro, see how companies are strong and well positioned

with the consumer are dealing with international head winds like currency because they get most of their revenues outside of the united states. >> great point. learner? >> i'm worried about profits and productivity. i'm not worried about the currencies just productivity is falling and that's not good for profit. >> you're worried that profits are going to start falling too? >> i'm worried that the reports are going to come in. there's been a lot of markdowns and i'm worried about that. that's the, my achilles' heel. >> that's a change that's noted. we'll reflect that. be sure to tune in to "closing bell" tomorrow. we'll try to answer your questions. talk to home depot ceo. and see if i can share some valuables. and newton joining us onset. danke schoenn is all i can say.

time for fast money. what do you got on tap? >> kelly, by the way, have a great trip to las vegas. i hear it's your first time there to sin city. so. >> true story. 24 hours. >> fast money madness is on tap and tonight, we've got the match-up. microsoft versus cisco. we'll see who wins that bracket. >> okay straight to you. >> thanks kelly. live from the nasdaq market items overlooking times square i'm melissa lee. karen finerman. banks that lend taking a hint and the euro. speaking of europe major protests at the european headquarters, anti-aus terry protest leaving dozens injured. the fed removing the word patient from its statement but sounding a dovish tone that a rate hike will not be in the near patient.