to get -- >> i think we've run out of time. >> i'll do it on "fast money." >> no then i can't defend myself. i said west virginia would win. i was horrifically spectacularly incorrect. >> wrong. >> but on "fast money" we'll do it with stocks and match up nvidia and intel. >> thanks for watching, everybody. have a great weekend. yes, hi and welcome to "the closing bell," everybody, on this friday. i'm kel i evans. >> and i'm bill griffeth. by any stretch of the imagination this has not been a great week for stock market bulls. if it doesn't finish in the green, it will have lost ground each day this week something that hasn't happened since march of last year. also we have two more trading days, of course, in the first quarter of this year monday and right now the s&p is just

about even for the quarter. it is in danger of snapping an eight-quarter win streak. the final hour of course usually has some accelerated moves so don't go anywhere. we're still positive right now but not by a whole lot. >> we have seen that the last couple sessions where we hit the lows going out. something for traders to keep an eye on. you'll want to stay tuned for my exclusive interview with chevron's ceo john watson. he says oil below $50 could be with us for two more years. you'll hear it all coming up in just a few minutes. >> prices down rather sharply today. maybe they heard about that comment. if you thought you could shut it down for the weekend when the bell rings for an hour think again. fed chair janet yellen not only speaking later but also taking questions. it all starts at the top of the next hour. we'll have the news of what she is saying and we will show you the question and answer session live. it could determine stocks for next week. in fact, ahead of all of that treasury yields have come down

today. i mentioned the price of oil moving lower but treasury yields down sharply in the last hour or so perhaps in anticipation of that. >> and no march madness to compete with. first game isn't until 7:15. you can fit all your yelling in. >> the dow is up ten points. the nasdaq adding three to 2058 on the session. look at the nasdaq the outperformer today. it's been -- whatever we have seen going on with the broad index, the s&p has a high beta. when we're up the nasdaq has been outperforming, that's the case today. up 17 points to 4880. >> let's get to the "closing bell" exchange. steve parker is here with us from jpmorgan. rob morgan and s.ethi financial group. beth ann and rick santelli. the latest revision on gdp came in at 4.2%.

we remember 5%. growth is slowing. we're just about to finish the first quarter. some feel we may have zero growth. >> we did bring down our first quarter gdp growth closer to 2% shaving off 1% off that. obviously the dollar strength is weighing on exports. we saw that with the corporate profits exports and that's going to weigh on it further. also the energy led investments are going to be a pull back as well but we're still pretty optimistic overall. we'd add that weather or mother nature is at play here as well and we think that's transitory and when spring warms up the area, we're going to see some improvement. >> steve, what do you think is driving the improvement here? >> i think we've got a story that looks very much like last year. if you think back to this time last year we're going through a period where u.s. economic data was disappointing largely driven by some transitory factors beth

ann was talking about. western at a point where the u.s. market was flat which is where we are today. a lot of the positive momentum is really going to be driven by things like lower energy prices more spending. there's a lot of tailwinds that are being pent up and i think you will see that starting to fade through in the economic data. the other thing where we're seeing positive momentum is in markets outside of the u.s. that's been a big difference from last year. the s&p is flat, but europe and japan are up 5% to 10% and 10% to 20% in local currency terms. so the global recovery is certainly being reflected in markets and that's a positive sign overall. >> rob morgan we just mentioned we could have our first negative quarter for the s&p in six years. it's quite a long time. could it signal a rough ride for the market going forward? i know you still like stocks over bonds at this point. >> yeah bill. obviously it would be a disappointment if we see that

down quarter as you're talking about, but just echoing what beth ann and steve said i'm fairly positive. a lot of the factors weighing on gdp in a negative way are transitory. we're probably going to see an earnings season that maybe isn't quite as good as we thought it might be but then looking out forward past that once we're through the transition period i think that stocks will -- u.s. stocks in particular will continue to do well. >> so you would use this opportunity -- you'd see this as a buying opportunity then any weakness we're going to see here? >> absolutely absolutely. based on quite a number of the factors that beth ann and steve talked about. >> rick is this a diet coke or a pepsi economy? >> oh i think it's somewhat of a -- i don't know maybe stale water type economy. i don't think it's a sugary drink. i don't think it's a diet drink. i just think there's a lot of

stagnation some call it the new normal. i think we're talking ourselves into the fact it's going to taste sparkling at some point. listen, do you think it's a coincidence, we're at 6, 6 1/2 years of zero interest rate policy. we just ended qe talking about normalizing rates and this is going to be the first quarter potentially we don't see equities close up? i think it's that simple. the answers are staring us all in the face. i just think it's a question of what we do with that information. nobody would be happier if we normalize rates, we actually put a value on capital so instead of moving paper, maybe we could move some real investment and after normalizing the equity market didn't lose any ground and we held it at least we'd know for sure what was driving the stock prices, how correlated it was to the economy. those are things we can't answer today and trying to answer that nobody is going to be able to take the uncertainty away. no am of press conferences, no amount of talk from stan fisher or janet yellen.

and nobody knows the answer to how it's going to turn out. >> in the meantime though let me just ask you this slide in yields we've seen in the last hour or so some feel maybe they're anticipating a rather dovish speech from janet yellen. we'll be covering that in the next half hour. >> the topic is the new normal which rick was just alluding to. >> do you sense that's what that buying into the treasuries was about? >> oh i personally don't. as a matter of fact, if you look at today's 24-hour chart of ten-year note rates, we were down basically this 1.95 level at 10:00, at noon, and, yes, we're there again. very normal for a weekend coming up, especially at the end of a quarter after $90 billion in supply. if i didn't know janet yellen was speaking, i wouldn't look at today's chart and say, wow, something weird is going on and we're still up two basis points on the week. >> let me ask you if the fed are desperate to see a better return on capital and if they raised

short term rates to 4% tomorrow and the 10-year, the 30-year didn't budge, what would happen across the economy and these markets. >> you said if they raised them to 4% tomorrow? >> yeah just to pick a number. aside from the recession and all that. >> i think markets would go haywire, that's for sure. what's more important is a gradual pace. the thing that's really important to recognize about the fed, there's two things one, they have been very patient in the way they're talking about policy. two, they're very overcommunicative. if they would do something to surprise markets like that, certainly that would be a bad thing in the near term. what's important to recognize though is the fed is not going to move until they feel like the economy is gaining some of that momentum. so by the time they do that we should be in a much better place and i'm not worried about that sort of drastic move you just mentioned. >> beth ann, those who are wringing their hands about the slowdown in the economy even though we haven't yet seen the fed start to raise rates here is it possible we're just going through a normal business cycle at this point? >> we've gone through this before. remember, steve had mentioned last year we saw a contraction in the first quarter and guess what?

we saw some pretty nice numbers after that. i think the first quarter, this first quarter, will be a slow one, certainly a slow one, but i do expect to see a nice bounceback after that. look at some of the readings we are seeing now, housing. housing was weak i do believe tied to weather. permits were incredibly strong up over a million since july. i expect to see a nice bounce. i expect to see pages pick up. we've seen job gains holding up nicely. i'm expecting for friday we're looking for about 250,000 job gains. that's another nice reading and i'm sure chairwoman yellen will be talking about that today. >> it is the new normal. if you can call anything normal anymore. thank you all. have a good weekend. see you later. appreciate it. >> about 50 minutes to go here. we're looking at the nasdaq outperforming again. it's the one that's been under pressure a lot this week. we've had some big moves. stocks generally this week has been down. oil has really popped. today a little bit of a reversal of those trends. green arrows across the board. not huge gains, 16 points on the dow. 3 points on the s&p and 17

higher on that nasdaq. >> coming up we'll have coverage of fed chair janet yellen's speech within the hour. she's out in san francisco so it's a lunchtime speech out there. that's why it seems to be so late on a friday but she's talking the new normal on monetary policy. see if the markets move on that because we have a 15-minute window when her speech begins and the market closes. that should be interesting. so stick around for that coming up. >> also ahead, chevron ceo john watson telling me how the oil xlaps is affecting profits and strategy at the second largest energy producer in this country. you won't see this interview anywhere else on tv today. don't go away. ♪ ♪ ♪country. you won't see this interview anywhere else on tv today. don't go away. you've got to make every second count. banking designed for the way you live your life.

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four consecutive down days this week for the s&p and the dow, but we're positive today. we're wondering if that could keep up. if we have five consecutive down days, we haven't seen that since march of last year. here is the heat map as we call it, all 500 components of the standard & poor's 500 index. just a slight bias to the green side going to the close. >> oil has been popping this

week. i believe it's up something like 7%. today coming back off of that a little bit. it's at 48 bucks, $48.50 right now, down $3. it's been all over the map basically as middle east turmoil again takes center stage. jackie deangelis what's going on? >> i don't want to sound like a broken record but this volatility continues. as a matter of fact, it looked like we were going to have a 7% pop on the week. it was only about 5%. we closed at $48.87 under $49 a barrel. the reason we saw selling today part of it was profit taking because we were up so much. also part of it coming from a goldman sachs note saying you don't really need to worry about yemen. it doesn't seem like the situation is that drastic right now. also saying if talks go well with iran maybe we see some of that iranian oil coming onto the market and also sort of flooding the supply and that of course would be bearish. goldman saying we're going to see production builds here in the united states through the second quarter. to the other side of that the flip side of it we had baker hughes out with their rig

counts. we only saw 12 oil rigs coming off line. so the declines are slowing. at least from the producer side it looks like things may flatten out. when it comes to the volatility for next week you got to watch the dollar. that's what traders are eyeing. back to you. >> thank you very much jackie. let's get more clarity on what's happening in the middle east with america's seemingly fighting with iran in one area and with iran in another. let's bring in michelle caruso-cabrera and former u.s. ambassador james jeffrey who is now with the washington institute for near east policy. michelle, strange bedfellows. we're talking about two sides of a key proxy fight in the middle east. >> we are negotiating with the iranians right now about their nuclear situation. when it comes to fighting isis in iraq we are on the same side as iran and then when it comes to the situation in yemen, we backed the saudis whereas iran book backs the rebels. it just goes to show how

complicated the situation, always so complicated, has become only more so recently. >> mr. ambassador, what do you make of it. we've gotten ourselves into this. we keep changing alliances as time goes on as you well know but what do you make of our relationship with iran now even as we're trying to negotiate this very important nuclear plan with them? >> well first of all, as your reporters have commented, this is an extraordinary moment and things do seem to be falling apart. nonetheless, in and of itself negotiating a nuclear agreement with the iranians is not a bad thing as long as we understand that that doesn't make them our friends. we negotiated a whole series of nuclear agreements with the soviets without thinking the soviet union would become our friend. the administration has not made clear they understand this. until they do make that clear, there will be great suspicions

of any graeme, evenagreement, even a good one, and this policy will not last beyond this administration. that's something that the white house needs to keep in mind. it's not going to last forever, and they have to have a policy that the american people and the american congress and the other party will accept. >> at the same time mr. ambassador, you're saying the u.s. support -- i don't know how to put it our working with iran to some extent in tikrit to fis fight the islamic state was the right move? >> i think it was the right move. the priority for us now is to destroy isis. isis is damn hard to destroy, as you see with the battle in tikrit. isis is tenacious on the defensive. they are not going to fade away easily. we need to do everything possible, and if others want to join in that fight as a tactical necessity, that's not a bad thing. again, it's like negotiating a nuclear agreement. make that an operational issue. don't draw conclusions from it

either that we have flipped to iran or that iran has flipped to our side. we have so many problems in the middle east right now we have to look at them very very cold-bloodedly, use american power where necessary, and most importantly support our allies beginning with the saudis. >> michelle what do we make of the market response in oil prior primarily. this week a big pop in oil, brent and wti, not only with the u.s. move into tikrit but the saudi bombing in yemen. now the price has come back again. are things settling down do you think? is that what the market is trying to tell us? >> the initial reaction was the concern about the strait at the tip of the saudi peninsula and whether or not 3.8 million barrels per day that moved through would be affected in any way, and when analysts look at the situation, 3.8 million barrels isn't all that much in the scream of things in a world awash in oil right now. two, at the same time they felt there were other avenues for the oil to get out. governor bill richardson the former energy secretary brought

up a bigger issue which at this point doesn't seem to be in play but it is the greater concern in the long run which is throughout all the turbulence in the middle east, when we saw the arab spring as long as there was stability in saudi arabia whether you like it or not because we know it's not a democracy, there would still be a steady supply of oil out of there, and if this conflict for some reason expands beyond what it is limited in yemen, what does that mean for oil supplies out of saudi arabia? right now the market is telling you they're not concerned about that. >> michelle as always thank you. ambassador james jeffrey, good to see you again. thank you for joining us. >> thanks. >> heading to the close. 40 minutes left in the trading session. it will be interesting to see. the market right now virtually neutral. the dow is up a fraction. but if you are just joining us we're waiting for a speech by janet yellen that begins around 3:45 eastern time and we'll wait to see if this causes some volatility going into the close. >> even though her speech will

last past the close we'll get the bulk of the statement at 3:45. coming up next we'll get john watson's take on the middle east mess. he sits down with me in the cnbc exclusive. we discuss the impact the middle east turmoil is having on profits, where he sees oil prices going from here and much more. >> also ahead when fed chair janet yellen speaks, the market moves. steve liesman will have highlights from that speech scheduled to kick off within the hour and you will see live the question and answer session. that's where things can really happen. that's coming up here on "the closing bell." stay tuned. the quietest or nothing. the sleekest... ...sexiest ...baddest ...safest, ...tightest, ...quickest, ...harshest... ...or nothing. at mercedes-benz we do things one way or we don't do them at all. the 2015 c-class. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services.

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40 minutes left in the trading session. the nasdaq is up 16 points. we should point out oil prices down sharply. >> take a look at what's happening on the session. crude down 4% to 5% at last look. wti down almost 6% off 3 bucks to $48.40. it has been a very volatile week for oil. in fact perfect landscape for our next interview. i spoke with chevron ceo john watson earlier and he told me to expect more big swings in the price of crude. >> i think we're going to see a very choppy year in 2015. so i believe prices will respond to physical things that are happening in the marketplace and political events all around the world. over time i think market forces are going to determine where prices go. right now we've got surplus oil. i expect this to be a choppy

year around the change that we're in today. >> you sound like bob dudley at bp who said he sees volatility ahead and says that's actually more normal. what does it mean though for you guys if we're in a choppy price vi. environment environment? >> certainly for us it means you better be very flexible and adaptable. we've kept a very strong balance sheet so she can continue to invest through the business cycle on some of our key developments such as our big l and g products in australia. we're committed to continuing to grow the dividend over time and so we can hnlandle both of those things with the capacity we have on our balance sheet and we'll adjust the spend down over time and also adjust to the expense environment that i expect to be somewhat better than it's been in the recent past. >> how much down? so if you have $35 billion in capital expenditures, and i bring it up because you're one of the biggest investors in this country, how much might that

decline if oil prices stay at current levels? >> we told the financial community as we finish our big projects under construction we'll go from $8 billion in spend this year on those two projects to one in 2017. that gives us a lot of flexibility. i expect that our flexibility by 2017 will be $8 billion or more less than we're spending today. >> so you'd like to maintain that dividend drawing on some of the cash levels you have built up in the past or tapping debt markets? >> absolutely. we have significant debt capacity. we're committed to the dividend. our shareholders very much want us to continue the dividend and we have the capacity to get through this cycle of big projects and we've told the financial community we would be spending at a high rate for the next couple years and then we'll be in a position in 2017 to be balanced where our spending and dividend is covered by the cash flow we generate from these new projects and our ongoing business. >> did you see the drop in oil prices coming? >> well we've seen some --

we've seen these alot over my lifetime. i can't say we expected this size of price drop that we've seen this time. it's not unusual to see some weakness but to see a 50% drop in prices that's i think surprised a lot of us. >> obviously yemen is raising people's concern as well not because it's a big producer but because it's seen as a proxy for what's happening with saudi arabia and perhaps iran across the middle east. what's your anticipation of what the saudi government is able or trying to accomplish here and how much they may draw down or increase their reserves to try to bolster or just respond to some of the movements in the oil market? >> well, opec has gradually reduced its market share over time. they produce about 30 million barrels today. they did 30 years ago, but demand has grown. so they've seen their market share erode over time and i think what the saudis are saying is we want to keep our market share and we're going to continue to produce at roughly 9 million barrels a day and we

know we're not a high cost producer, and we'll let others adjust so the markets stay in balance rather than trying to engineer more spare capacity through its relationship with opec. >> is opec still relevant? >> well opec is an organization that's a forum for producers that are members to gather and talk about supply and demand and they have the wherewithal if they choose to reduce capacity and to try to influence the price in the marketplace. they still can have significant influence. they aren't choosing to exercise that now. >> a lot of the places you're operating have significant demows tickde domestic pressure, venezuela, brazil brazil, the middle east. how does that change your productivity? >> political turmoil is a part of doing business national internationally. we pride ourselves on having people in country that work closely with people in power to try to produce energy either for local consumption or for export

and we try to navigate through the tough times we see really in many countries around the world over the long cycle time of our business. >> will you be investing concentrating more in the u.s. as a result of all this or mo? >> with the shale revolution that's taken place in this country, the prospects we have in the gulf of mexico we'll still be investing in a very big way here in the united states. so we go where the opportunities are best where the fiscal terms and costs make the most sense, and the u.s. has a very very bright future. >> when we look at the industry today, excess capacity that may be a result of the boom we've seen how much consolidation do you think might occur across your space? >> certainly with prices dropping 50%, we're seeing some companies under pressure so it would be natural to expect some consolidation in the business. we have a portfolio where we don't need to do an acquisition. if there's an opportunity, we can take a look but certainly there are going to be some tough times and it will force some

rationalization or consolidation in the business. >> we heard david rubenstein of carlyle tell cnbc he thinks energy is one of the brightest prospects for dealmaking if you will, and for investment. how are these flows from private equityies or investors of all stripe affecting the industry's needed consolidation? in other words is it almost making it harder or will it spark some of the needed consolidation? >> i think the combination of low interest rates and a lot of liquidity is creating opportunities for those who have difficulties to solve their problems either through recapitalization in some form including private equity money coming in so i think it will facilitate some stability in the business and really for the industry it's probably a good thing. >> do you think we're in a new normal environment for the oil price here at around the $50 level? >> i think this year will be a tough year and i think prices will be lower than what we've seen other the last few years for the next couple years, but i do think in due course we will see some rise in prices --

>> will we ever see $100 again? >> never is a long time. it may take some time to get back to that kind of a level, but one thing i know is demand for energy is growing. oil demand is growing about a million barrels a day per year and there's a big decline. oil fields decline over time. we need to invest in new big fields, not just shale over time. and either costs will need to come down or prices will need to come up in order for some of those big investments to be made by all the players in the business around the world. >> and we've discussed two of the major policy hurdles, export regulations, pipeline regulations. what else keeps you up or frustrates you or impedes business at this point given the current administration or what opportunity do you see if there were a change in leadership in 2016? >> well there's certainly political turmoil and many challenges in my business around the world. i think the opportunity for us going forward is to make sure we're taking advantage of all the sources of energy we have in

this country, including more opportunity that we have in oil and gas. so, for example, we need to continue lease sales on public land. we need to be sure that if we put in place new environmental standards, that we've done thorough cost/benefit an analysis? >> like the ozone standards? >> if implemented as planned, it could make most of the united states including national parks in nonattainment and it would make it difficult to take advantage of the low cost of energy for that manufacturing dividend that everybody is expecting, so you have to have policy that's well coordinated. you have to be sure that the environmental benefits -- that we're not reaching diminishing returns at huge costs both in terms of foregone opportunity and the costs that are put on existing businesses today. >> and that's john watson ceo and chairman of chevron, bill. >> covered a lot of ground. great interview. >> there's much more. i believe a transcript a full write up more available on cnbc.com. >> great. time now for a cnbc news update

with sue herera. >> lufthansa will pay out an initial sum of 50,000 euros, about $54,000 per person to relatives of passengers of the germanwings flight that was deliberately crashed into the french alps. the airline saying it wanted to provide some immediate financial help to the affected families. dramatic surveillance video from cameras outside a cafe showing the initial explosion at 123 2nd avenue in the east village in new york city yesterday. 25 people were injured in the blast with two people still unaccounted for. former ford ceo alan mullally mullally's compensation fell 5% in his final year can the. he retired july 1st and among his benefits was a free car. a school bus driver helped students safely exit a burning bus in front of an orange county california, school.

two children were treated by paramedics because they were emotionally upset but they were not injured. the school bus driver is being hailed as a hero. and i think that is exactly what he is. that's the cnbc news update. back to you guys. >> sue, thank you so much. we've got 30 minutes to go until the close. 15 minutes until we hear from chair yellen. we'll see if that spooks some of the markets or sees indexes more volatile than what we have today at hand. the vix down a half a point. the dow is up 14 points. the s&p is adding 3. that nasdaq up almost half a percent adding 21. >> we have some new stats in this morning. people are fleeing the stock market at a rate not seen since the financial crisis. but could that actually be good news for where the market is headed next? we'll ask the godfather of exchange traded funds himself, reggie brown joins us right after this.

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waiting for fed chair yellen's speech in about ten minutes. right now up just 11 points. s&p is up 3. nasdaq gaining steam here. up 22 points right now, and here is the nasdaq heat map. this is the nasdaq 100, but most of the components of the 100 are positive right now. >> still a tough session for

sandisk. that's been in the news all week and less that the under achiever of the session. we've got some breaking news on intel. dom chu has, well the intel. >> i have at least some intel here. what's happening right now are shares of altera which is another semi-conductor industry company, the shares are halted right now. they were up 7% before that on a volatility trading pause or a trading curve kicking in meaning the stock has spiked too quickly. dow jones is citing sources that intel is in talks to buy altera. that sent the stock spiking up before trading was halted. this is a dow jones citing sources story saying that intel is in talks to buy altera. the deal would be the largest in intel's history. altera had a market value of about $10.5 billion going into this particular trading session, so we'll keep an eye on shares of both intel and altera but altera right now halted not for news pending, just a volatility trading pause. we'll see what happens when the

stock reopens for trading. >> thanks dom. bank of america merrill lynch is out with a note citing the biggest outflow out of equities since 2009. now, where is it all going? it's a combination, cash bonds, somewhere else. >> we're going it find out. joining us right now with his take on the friends is reggie brown, head of etf trading at cantor fitzgerald. >> welcome back. >> thank you very much. how are you? >> good. thanks. people are pulling money out of u.s. stocks and putting it where? >> well seems like it's all going to europe. european exposure is all the rage. we're seeing a lot of flows going into hedge european equity etfs. >> wow. we've heard time and again, reggie from people on this program they like europe they like japan. i mean is there -- can you tell they're not just kind of putting it into cash or getting defensive? if anything it at least sounds like an opportunistic play. >> no you know literally i think that it's about being

bullish in europe, not so bullish on the euro. we're seeing money flow into broad based bonds yielding 3%. you know so i think you're seeing a little movement in cash right now. so i think it's out of broad base u.s. out of small cap equities into europe into asia. >> last time you were here we talked about that. that migration of capital out of stocks and into bonds in the etf arena. do you sense -- i mean can you blame the individual investor for wanting to get out while we've had such a bull run for the last six years? we've been at all-time highs and now the market is starting to show signs of faltering a bit here. >> well, i just think as a shifting sentiment, i think that the u.s. had a great run, but, look, i read paper. i'm a market maker and i look at what clients are thinking about from a broad-based measure, and we're just seeing flows flow from the united states into

europe and looking at other growth areas, into asia. i think it's just a tweaking of the portfolios. i don't see it as fleeing. i don't see fear. it's just a little profit taking. >> before we let you go a quick look under the market the surface of the u.s. market anyway. tech has been a real laggard, energy doing better. does that reflect the flows you are seeing or no? >> we saw a small bounce in energy exposure that's correct, but i think that's more geopolitical around saudi arabia getting a little busy with yemen. you know so i think that the world is getting riskier, and we're seeing investors taking pause around that. >> thanks, have a good weekend. >> thanks so much. >> i love what you're watching on television behind you, by the way. go back to dom chu. more on intel and altera. >> what we have right now is reopening for trading of altera. the stock is up 19 now 20%. remember, it was paused for volatility on a dow jones story

that intel was possibly in talks to buy the company for about at least -- there's no details but it was worth about $10.5 billion going into today. the stock is now up 21%. we're also seeing shares of other semi-conductor stocks take a little bit of a rise here. notably what's happening with xylene shares. some takeover chatter possibly here involving intel maybe buying altera. that's a dow jones story citing sources sending altera stock up. we'll be watching that and the other seem my conductor stocks as we head to the closing bell. bill kelly, back over to you. >> there's a sector already that's been in focus because it was under pressure. >> exactly. >> we had this whole discussion is it a leading gauge, is it not. update from dom on that important story with 20 minutes to go. >> and the dow is up 47 points all of a sudden. we've had a bit of a pop as we head to the last few minutes of trading because we're going to hear from janet yellen shortly.

>> yes, we are. minutes away from fed chief janet yellen speaking on monetary policy. the new normal it's called. what will she say? we'll find out when we come right back. jack's heart attack didn't come with a warning. today, his doctor has him on a bayer aspirin regimen to help reduce the risk of another one. if you've had a heart attack be sure to talk to your doctor before your begin an aspirin regimen.

welcome back. with some breaking news out of the federal reserve, let's send it out to our steve liesman at headquarters. >> thanks. fed chair janet yellen in a major speech at the san francisco federal reserve saying a rate increase may be warranted later this year and maybe a bit hawkish on when interest rates may finally begin to rise saying she does not need to see an increase in core inflation. said it's not essential before a rate hike and saying the fed should begin hiking rates before the fed reaches its 2% inflation target. on the other side she does also say they're unlikely to hike if inflation or wages are weakening but it looks like stable inflation at this point or slightly rising is enough for the fed to hike. she goes on to caution there is no predetermined course of

tightening, although the next move is probably going to be up after the first one, but on the front end she's more hawkish. on the back end maybe a little more dovish saying a return to a normal funds rate is likely to be gradual and goes through a bunch of reasons why the fed should be gradual, including international experience. she cites japan and sweden as reasons that they should be really cautious against tightening too quickly. she points out that the dollar appreciation has been hurting exports and says the economy is still weak by historical standards. pointing out that if, you know this level of accommodation out there, the economy should be booming if things were normal. a couple comments she makes on the current economy saying job market progress has been more rapid of late. progress on inflation, the other side of the mandate, has been quote, noticeably absent. growth, she says will be faster in the coming quarters and the headwinds that have been holding back growth are likely to ease. she finally cautions guys, that if the fed keeps rates too low for too long it could encourage risk-taking or a quick rise in

inflation inflation. bottom line is i would say she's a little more hawkish on the front end and a touch more dovish or pretty much as she was about the rate of increase later on. >> you know steve, there are two camps, as you know about the u.s. economy right now. one is larry summers, weak for longer stagnation. the other is a goldman view that things will be okay if we give it enough time. this speech even though she's calling it the new normal is she still reiterating the fed thinks the economy is going to be pretty healthy so it's not in that larry summers camp. >> what's really interesting is whether a fed chair could actually embrace this notion that we have this permanently lower growth rate and this permanently lower need for a low funds rate. i don't know that that's politically possible. she points out -- she brings up this notion that larry summers has coined the secular stagnation, and kind of

dismisses it and says nobody knows and can predict what productivity and the growth of efficiency will be in this economy. >> one of the headlines, she notes that the markets she feels are more pessimistic than fed officials are right now. i will say it's not a lot, but the dow did come down a little bit more after her notes did come out at this point, but do you sense that the markets are fearing a rate increase more than they should? >> well you know bill this is like shakespeare, a play within a play. so she's talking about the markets and trying to guide the markets here in the same way. there's been this noticeable gap between where the fed has been on the outlook for interest rates and where the market has been. much more pessimistic. now, the fed came a long way down to meeting the markets in its last forecast bringing it down by up to 50 basis points. maybe now what yellen is saying we came down to you guys. you guys may need to come up a little bit to us here to make things a little bit more even. >> all right. great stuff, steve.

she's going to be talking and as soon as they get to the q&a you will be back and talking about that and responding to that at that time. >> stay tuned for that. it will happen next hour. it will take her a few minutes to get through this speech which the market is digesting. >> art cashin just signalled to both of us that the bias is to the sell side as we head to the close about $300 million of stock for sale going into the closing bell here. meantime, the major averages trying to end a rather dismal week for the bulls on an up note. we'll see how the yellen news impacts stocks as we head in the close, so stay with us. ♪ its effects on society really came about because, not because i was selfish and wanted one for myself, which i did. its because i had, had a passion. my whole life i wanted to teach myself to build computers. i wanted to build these things for free. i just wanted to do it for the world and you know when you want something, that's what you do the best. ♪ ♪

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eight minneapolis left inutes left in the trading session. >> this is interesting in terms of this market action. david darst joins us here at post nine. janet yellen, you could argue, disappointed some a little bit in this speech who bid up equities right before she started talking saying the fed is still going to proceed with raising rates. are you surprised that we're not seeing more disappointment here as we head into the close? >> i think people expect the economy to do better in the second half. you're going to have a slow first quarter. the corporate profits number is supposed to be minus 5%. you all have reported that on

here already. the atlanta fed just came out, kelly kelly, their first quarter number is 0.5%. you saw that. one word the market did not like this week to be used twice is air strikes. u.s. in iraq and saudi arabia in yemen. so if you get a third use of that word air strikes somewhere else, that could cause the market to sell off where we would be buyers. we've always said let it come back to you a little bit, now add for the second half. staying with that. >> we've been waiting for this mythical 10% correction. i will point out our last trading day is next week. there's a possibility that the s&p will see its first negative quarter in a number of years here. >> it's like -- >> would that presage more weakness do you think as people rethink this? >> i think it would cause people to think the second quarter, will it be as weak as the first quarter?

durable goods orders factory orders, ism coming next week you have to watch that very carefully. retail sales, week. they will come next week. four >> david, stay right there. we're going to come back here in a moment. tough week for stocks. we'll have the closing countdown and see how we do in a moment. >> we'll bring you the q & a portion of fed chairman janet yellen. her appearance in san francisco, sometimes the real news is made as soon as that q & a session begins. we'll have that for you. stay with us. is talking to you right now? it kinda is. it's as crazy as you not rolling over your old 401k. cue the horns... just harness the confidence it took you to win me and call td ameritrade's rollover consultants. they'll help with the hassle by guiding you through the whole process step by step. and they'll even call your old provider.

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the answer is yes, it can. so, the question your customers are really asking is can your business deliver? coming up to the last three minutes here. let's show you a quick review of the week here and how we have done. the dow down 2.25%. we're wondering -- we're up 48 points right now, so it doesn't look like we'll get five consecutive fountain daysdown days. oil, volatile week. midweek with the air strikes, the price moved up sharply, it's come back to some degree. down 3% today. for the week though oil up almost 6%. for a time it was up 7.3% but it has come off those highs from the day. one more very quickly we have

the 10-year notened and what the yield did there this week. we keep hear being people fleeing equities and going to bonds. we saw the yield go up to some degree, up 1%. bob pisani is joining us. altera has moved today on this late word that maybe intel is looking to buy the company, and that stock is up 25% right now. >> we've seen a lot of the semiconductors move rather -- xilinx moved on the upside not just intel. i don't know if you can put up smh, the semi-conductor etf. that's a good way to indicate. smh shot right up. that's a basket of semi-conductor stocks. we went from $54 to $55 and change up number 4% just on that news. this is a broad basket of stocks. that's an enormous move for such a short period. what we had this week david, i think you will agree, a collision between a couple

things. number one we saw concerns about fed raising rates. a negative earnings scenario for the quarter. that's not a good combination. >> no, it's not. janet yellen the fact everybody was watching it to carefully i think is a big positive. it means the fed is watching. if we start to slip off, they'll step on the gas a little bit. monetary accommodation, jobs are okay, believe it or not. the jobless claims fell this week. >> it's possible we get a good number next week. >> that's right. on good friday. you got the consumer is coming -- not the retail sales but the consumer confidence did okay this week and europe is doing a little bit better. so all of those things indicate to me that underlying strength is there. and this is just a bad patch. >> i just want to point out -- >> very quickly. >> oil, $45 to $52 this week and collapsed this afternoon. >> late this afternoon. >> i have never seen such a divergence of opinion on where oil is going. >> maybe expecting a deal on

iran. we'll see. but a lot going on right now. we're going out with a 37 point gain on the dow but stay tuned. janet yellen still speaking. we'll show you the q & a session live and maybe we get a word about intel and altera coming up on the second hour of "the closing bell" with kelly evans and company. have a good weekend, kelly. thank you, bill. welcome to "the closing bell," everybody. to close out this week i'm kelly evans and let's begin with how we closed out the session on wall street. janet yellen, the fed chair, is continuing to speak in san francisco. those comments hitting the wire at about 3:45. we saw some action right before during, and, of course, after that. we're going out with the dow seeing a gain of 31 points slightly above the 17,700 mark today. the s&p adding just under 5, to 2,060. the nasdaq by far the outperformer on the session. we'll talk about a big deal that looks like it's happening in the chip space there in a moment.

the composite up 27 points to 4,891. joining me now is michael santoli from yahoo! finance, mark la pressie, and robert frank. also with me is "fast money" trader tim seymour. we begin with dominic chu. dom, you can tell us just what has happened with equities and a pretty volatile and strange week for us. >> it has been very much an eventful one for a lot of traders out there because we have seen a good amount of that vol volatility. this is the week that was as we start to settle out some of the numbers. for this one-week span the dow jones industrial average down by about 2.3%. same thing with the s&p 500, and then of course what's happening overall with the nasdaq composite as well. this past week not exactly a great one that we've seen overall for the markets. if you kind of take a look a little bit more longer term in terms of how these now stack up on a year-to-date side of things, take a look at what's happening here. the same indices are fairly flat

at least if you look at the s&p 500 and then the nasdaq composite up by 3%. dow jones down about 2/3. we'll see if we can close out the quarter with some gains. if we do go negative on the s&p it would be the first time in nine quarters we've seen a quarterly drop in the s&p's performance. that's a pretty good stretch. maybe we will see that broken. and then if you take a look at two of the sectors that are really starting to drive things for at least for some traders here health care continues to be year-to-date, up 7%. the single best performing sector in the s&p 500. the xld tracks a lot of large health care names. if you look at one more on the opposite side of the spectrum the utility stocks continue to be laggards so far this year. if you look at one of the etfs that tracks them the xlu, you can see down by about 7%. so that's where the momentum is right now. health care to the upside utilities to the downside, and right now the s&p is flat. we've got two days left to go

here for the quarter. we'll see what happens, kelly. back over to you. >> looking to the panel quickly. mike, is there any chance this intel deal it sounds like a deal for altera could have boosted the broter erbroader sentiment as much as anything we heard from janet yellen? >> i think so. obviously excitement in intel stock. yeah a little bit of a reflex move but i don't think it did color the whole day. really it was limping into the end of the week and just waiting for yellen and then really not really paid off for that suspension because no real new news there. >> we'll get in more of that. on the phone with more on this possible intel deal we are joined by alex from jmp securities. alex, thank you for calling in. it looks like intel shares are higher on the back of this report. what would this mean for the company? >> well, kelly, it's up because the deal would make a lot of sense for intel. we already know that intel and altera are in partnership together. altera potentially representing intel's first big break into the

foundry business but more importantly we know that fpgas with their massively parallel capabilities are serving a strong role in accelerating the data sensorcenter. this deal would make a lot of sense. it will be interesting to see if they get it done. >> explain if you don't mind what intel making a big move into the foundry business means. is it this data center piece you were talking about? >> that's part of it. i think intel also has a lot of challenges as we know from their recent preannouncement in trying to grow their core business so i think as intel tries to purryies to pursue opportunities like an apple, it's needed players like altera to come in and prove that road map for them. there are a couple different facets in addition to getting the data center acceleration. >> so you see this alex as a

reaction to some of the concerns we've seen reflected across the semi-conductor space lately that the more mature players simply haven't caught up to the changing trends in technology. >> that's right. i mean jmp has been identifying ongoing trends and opportunities in mergers and acquisitions for this as you put it maturing space. so for a name like intel that's struggling to grow organically and has turned to acquisitions recently and increasingly large ones mcafee and then infinnian, this could be one solution for them to continue to be a growth company. >> quick question before we let you go who else now could follow in intel's wake because often we see in any space that perhaps needs consolidation, when one big player moves, everybody else feels the pressure to follow. who could be possible other targets here? >> well the logical co-target along with altera is their peer xilinx. it's a much larger company. it's making some different bets than altera is and was not a

partner of intel's but for example if we were to consider qualcomm that recently announced it, too, has interest in the data center and they also work with pcmc like a xilinx does they could find themselves joining forces. this deal would make sense on paper. it would be interesting to see for what price and under what terms they could get it done. >> alex thanks. stay there for a second if you would. tim seymour, thanks on this report? >> i think this is great news. intel was lagging on a couple things and as was talked about here, the core business i think is out there. the data center is really where there's a lot of excitement in the stock and it's setting intel apart, also diversifying the model from the straight semi and i think if you look at the rest of the sector intel to me is the consolidators. they are the largest cap. they offer to me also the most value, and they're a high div payer. we kind of thought, in fact intel is on our "fast money"

elite eight today. when you look at the stock from a trader's perspective, it trade tradeed back to $32, broke through there and we thought around $29, $29.50 the stock offered value. now we've traded up to a level i think the stock needs to show more oomph. >> intel is the acquirer they will pay what -- altera has a 30% jump in shares and intel stock is up almost 7%. >> a that was the first thing i just noticed. they must be showing the wrong stock because that's the acquirer who is paying a huge premium for this company and look at that. i mean it's up like it's the target. >> what does that tell you? >> that tells me this is a great deal, that intel is doing something to get out of pcs, so dependent on pcs, and into something else. >> it's going to be a continuing story. it's going from a growth story

to the survival story for the legacy chipmaker. they have to diversify and get into the growth parts of the businesses, and they have the cash on the balance sheet now to do it. you're going to see more of this in the future. >> i was going to say in this m&a cycle, it's become more common for the acquirer stock to perform well on a deal announcement. >> at least they're deploy the cash. at least they're doing something, right? >> and we're not at the point of the cycle brwhere silly deals are getting done. >> i wonder how much that indicates about the perhaps excess -- i don't know if excess capacity is the right term because we're talking about transitioning into important future business areas, but we were talking to chevron's ceo earlier about consolidation that's going to happen across that space. if the share prices continue to move higher for the guy buying it and being bought that would suggest that the 345shg9 generally is rewarding these companies. >> i think the market in general is showing some dernconcern about a shortfall in aggregate demand. that's kind of what you're seeing. the flip said is maybe you don't

need as much capacity. >> once you see shareholder will reward your stock price you will see more ceos saying there's really no downside but there is a downside to keeping cash because then you have all the activists out there who are going to start ganging up on you. >> do you agree, tim seymour? >> i do. to be clear, i'm long intel. look at the food industry. obviously the heinz/kraft deal this week and these accretive to kraft. stock by stock you have to look at where corporate management can able to grow and extract margin control and that is part of the value added. >> what would you advise, mark in this case? is this where you go as we've just indicated, a lot of corporate board rooms and say there's no downside of something like this. do we have to be worried if the m&a cycle picks up more steam it could mean more layoffs? >> these deals do unfortunately sometimes have concomitant

layoffs with them. if the space continues to be as frothy as it is it's going to be very hard when the deal teams from the banks come around and stay, hey, guys what about x plus "y," very difficult decision to turn these deals down in the wake of the need to return real value to shareholders in this kind of market. we're going to see more of this. >> it's still within the industry, right? where things got crazy in previous m and a booms is when you get somebody in tech buying something in autos and it's totally outside their business. this is somebody with a low growth buying within their industry of where the growth is. >> it was interesting going back to chevron, here is an example where the investor appetite the market's appetite over time always changes. there's a period when they want you to be the big, you know, guy with a lot of different options and then there's a period when they want you to be a pure play name. you have to imagine some of the ceos, those who have been in it more than a couple cycles must be getting so frustrated. >> by definition you're always

frustrated. people always seem to want what you're not doing right now. i think the market stopped rewarding heavy buy back activity. of course, they still like the heavy float shrink names but it's no longer an easy trade at these levels. you have to think that maybe you're going to look for other ways to utilize the capital. >> tim, the last word for you. any other names you will be buying off the back of this? >> i think you have to find places where activists can be aggressive in pushing some type of balance sheet engineering and a lot of these companies i think are ripe for that. i think the activism story, places where buybacks and giving capital back to investors is going to still drive and put a floor under this market right here. >> all right, good stuff. thank you very much. thanks alex as well for calling in on this. much more coming up on "fast money" at 5:00 today. they'll have the one chart that caused one of the traders to sell out of more than half his positions. and we have breaking news on a silicon valley sex discrimination case with scott cohn.

>> a verdict has been reached in this high-profile trial of ellen pao against the form alleging that she was discriminated against because she's a woman and then retaliated against when she complained about it. this verdict is to be read in court at 5:00 p.m. eastern time but let me caution you, this is going to be a tremendously complex undertaking and it is likely to take some time to read the verdict. we've been talking about this for the last couple of days since the jury got the case around midday wednesday our time. it is a seven-page verdict form and a series of questions that the jurors had to answer about what happened to ellen pao and why. there are four central questions in this case. one, was she discriminated against. two, did the company retaliate against her when she complained. and number three, did the company retaliate against her

again when she filed suit. and also did kleiner perkins take reasonable steps to prevent discrimination in the workplace. this jury is also to decide damages, if, in fact ellen pao was discriminated against and retaliated against. one of the questions was the amount of future lost earnings and past lost earnings and then they also have to decide whether she's entitled to punitive damages, and if so that triggers another phase of the trial, more testimony, more deliberations. so as they go through this roughly 30 questions in this form, it's going to clearly take some time to read the verdict, but we do know that it is expected to come at 5:00 eastern time or thereabouts. the jury as i said got the case midday on wednesday. this was their second full day of deliberations. it was a four-week trial that included all kinds of salacious

details and allegations about sexism at this giant, venerable silicon valley venture capital firm. ellen pao, a rising young star initially, hired in 2005 as the chief of staff to the senior partner john door. she wanted to move on into an investing role which is what the company specializes in and claims she was held back because of what the plaintiffs called a boys club at kleiner perkins. the company says that she was just a poor performer and that's what happened. so we will be standing by for the verdict again at 5:00 eastern time. >> and scott, that questionnaire made my head looking through it. thank you for reiterating it could be a complex verdict. that's our scott cohn following that case for us. meanwhile, fed chair janet yellen will begin taking questions any moment. we'll bring that to you live to see if she will give any clues about when the fed will raise interest rates. first, should pilots with a

history of depression be allowed to fly commercial planes? we'll speak to a top psychiatrist when we come back.

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we begin with a news alert and our dominic chu. >> so kelly, the madison square

garden company has filed paperwork with the s.e.c. with regulators about its intent to separate itself into two different publicly traded companies. one focusing on sports and entertainment and the other on its broadcasting entertainment business. msg is filing paperwork to intend to spin off its sports and entertainment business from the overall business in terms of the broadcast media side of things. so, again, one company would focus more on the new york knicks, the rangers, also you think about the madison square garden arena, radio city music hall and the other would focus on the broadcast side of the business. those shares are moving maybe 3% to the upside, relatively light volume. we knew they were contemplating this move and now they've filed some of the initial paperwork required. >> thank you very much dom. new details emerging on why

germanwings co-pilot may have intentionally crashed that plane. nbc's katy tur has the latest. >> the german prosecutor's office has released findings of what they were able to find within the childhood home of bubitz and the dusseldorf apartment. they said they did not find any evidence of a suicide note or any note claiming responsibility for this crash. they found in evidence of a religious or political affiliation but they did find evidence of illness. they wouldn't say what sort of illness exactly but german media has been widely reporting he was suffering from depression. they did find the evidence that he was being treated presently for that illness. now, there were doctor's notes as well excusing him from work in the past few days including the day he was flying that plane and the day that he crashed that plane into the side of a mountain which means that he should not have been working that day, that he was ignoring doctor's orders not to be at work. also evidence he was hiding this

from his employer which would coincide with what lufthansa has been telling us that they had no warning signs, that nobody within their organization no co-workers had said they would seen anything wrong with him. it o insides with what we're hearing from neighbors out here or from people who knew him during his flight club days, that they didn't see anything wrong with him. which means he was clearly quite good at hiding whatever was going on in his head from other people. investigators will now be looking at whether or not they can find any reason that this was premeditated, any motivation for this crash. back to you. >> nbc's katy tur. this tragic story opening up a global debate on if the rules need to be modified for pilots who display depression serious enough it needs to be medically treated. joining us right now is dr. gail saltz. dr. saltz, thank you for being with us. do you feel from what you have

learn this week from the existing psychological standards for pilots are high enough? >> i think they could do better. and actually in a way they think they are doing better because they have these annual or biannual examinations but part of those examinations should be at least a cursory psychological evaluation. that doesn't mean something that's, you know neuropsychological testing and days and days of that but really just basic questions. in fact there are rating scales about suicidality which can be given by somebody who is not even trained which takes just a few minutes. the problem, of course is that if the person is not going to be honest about what's going on with them well you know nobody can be a mind reader. so if they lie, if they are trying to cover it up because of frankly, stigma which is usually the issue and the fear that they will be stigmatized or lose their job, then there isn't too much that anybody can do. >> that's right. because given the details we're

learning about this particular pilot it does sound like whatever -- that he was going against the advice of his own doctors, even for showing up to work that day. how much of a problem is that with clients you deal with? >> how much of a problem is that with? >> would you get the sense they're ignoring your best advice? >> you know the problem is that frankly, until we deal as a world with stigma against mental illness, this will continue to be an issue. most people who understand that mental illness like any other medical illness is a, treatable, and, b, does not mean you're a bad person or a weak person, and, c, that once treated, you return to normal functioning, and you can do any job including being a pilot until everybody can come together and sort of support each other in that i think we're going to continue to have the kinds of issues we do. but it is a treatable problem, and while, you know, if you're in the throes of the worst of it, you shouldn't be responsible for other people's lives. once you are treated, you should be able to go back to that job.

i just think that unfortunately, the fear that your family will look down on you, that your friends will look down on you, that your job will be lost keeps people from being honest. >> robert? >> dr. saltz, i wonder this is probably going to spark a debate about whether employers should have a right in certain industries to really get access to your employee's records so if they are hiding something you're able to see that. should that be the case? should we even start skuting that or should privacy being the overriding concern? >> i think the issue is really without privacy, wount have anyone going to seek help and you won't have any kind of real treatment going on. there is a ruling that yes, psychiatrists must keep confidentiality. however, if a patient reveals that they are suicidal or have any intention of harming someone else then they actually have a duty to warn. so in fact if he'd reported this to his doctor his doctor would have been obligated to go to the employer and say hey,

this guy shouldn't fly the plane and that would have been perfectly fine. mandating that an employer get the records will just make patients go farther underground and not report or not come in for treatment at all. anyone -- there really isn't a way to capture the person whose, frankly, going to lie and cover up and not report because, you know you can't get inside their brain. >> i think we need to recognize that when you're in charge of a common carrier, an airline by way of example, this is a special situation. this isn't an individual in the workplace generally. they're responsible for hundreds of lives. there should be a higher standard. their personal privacy should not be tantamount to the safety of the customers. whey think will happen is the airlines recognizing this is a whole other area of liability where they have clearly as in the case of the germanwings corporation utterly failed to make sure that the people they had flying these planes were fit to do so there's going to be changes and there should be. if you want to fly a plane,

privacy has to be second. >> i disagree because that man would have never come into a psychiatrist at all if that were the standard. that's what i'm saying. not that they're entitled to privacy because of some special condition. they just won't come in. >> we appreciate it, dr. saltd.z, got it leave it right there. investors could be about to get new clues about the timing of a fed rate hike. we'll bring you janet yellen's question and answer session. we'll also get the verdict in the silicon valley sex discrimination lawsuit at 5:00 p.m. keep it right here.

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the first question to fed chair janet yellen how much of the potential gdp slowdown is the recession versus other factors? let's listen. >> that has been, you know running at 2% to 2.5% for a number of years and reconciling that puzzle of why we're getting surprisingly strong welcome employment growth in the context of only moderate economic growth has led us to the same conclusion. i don't know how much of it is due to the financial crisis. my guess would be that some of it does reflect the financial crisis, although i can't parse it out clearly. the committee continues to think, let's see, what are our exact numbers for our estimates

of long-term growth and potential real gdp. the committee's central tendency for that still runs in the range of 2% to 2.3%. so we have some optimism that productivity growth will pick up from its recent very disappointing levels but, of course, we're uncertain about that. >> i don't know why i'm rewarded for leaving the san francisco fed and going to irvine but let's have eric swanson ask it. >> thank you, john. in john's introduction he mentioned how research has been such an important part of your thinking many times and i was curious what research papers have you been thinking about lately or talking about with your colleagues -- >> bob williams. >> for example. >> well i have the williams

result. we have been tracking research. there are a lot of footnotes on the web that refer to recent research. the san francisco fed has done very interesting research on downward wage rigidity and the impact that may have had in understanding why we're estimating you have -- at the moment such a flat slope to the phillips curve that maybe at such very low levels of inflation downward nominal rigidity has stopped inflation from falling more and in part it's that research that motivates me to to at least bear in mind the possibility that as unemployment continues to fall and labor market slack diminishes we might see inflation pick up more

substantially than would be suggested by estimates that try to determine a phillips curve slope, especially using the last six or seven years of data but i do mention a bunch of different things in the footnote. of course, we're looking at research bearing on the long run equilibrium real interest rate as well. >> so you've mentioned we're bound on interest rates and we see in a number of countries that the lower bound on interest rates may be inferior to zero and i'm wondering what is the thinking at the fed on where -- where the lower bound on nominal interest rates. >> you're talking about on nominal interest rates, the possibility of taking them negative? >> yes, like the swiss, the ecb,

den denmark, and a few others. >> it really is interesting to see these european countries move to negative interest rates, and in a way i'm surprised that there hasn't been more pick up in the demand for cash. cash is not a very convenient store of value, but at a minus 75 basis point interest rate, i would have thought that maybe there would be some move in that direction. we debated for a number of years in the fomc during the crisis when we took interest rates down to zero to a quarter percent whether or not we should drop them even further or potentially take them negative. i think our assessment then was we were worried about the possible impact on the

functioning of money markets. now, that doesn't seem to have been thus far a problem in places that have gone negative. that was one concern and given the limited scope that we saw to do it we thought, well conceivably that could make a modest contribution but probably not more than a modest contribution, so we focused more on long-term asset purchases and forward guidance but certainly that is a tool we're seeing used. >> so kind of related to the last question, we're seeing worldwide central banks becoming more accommodative in their policy. seeing the ecb enacting qe. can you touch on potentially the impacts this might have on the fed's ability to move interest rates along the curve in a way that they desire? >> well i think we can move the

curve -- move interest rates along the curve that we think appropriate, but clearly we do have to take account of the global economic environment and the impact that it has on our own outlook, and it's mixed. we've had weakness in a number of countries, including the euro area and japan. we've had expansionary monetary policies in those economies that have pushed down rates considerably inducing capital inflows that have pushed up the value of the dollar. i mentioned that in a couple of places in my remarks certainly the appreciation of the dollar we mentioned in our fomc statement that export growth has

been weak. you know, net exports now are projected to subtract from gdp growth. so that is something that affects the u.s. outlook that we have to take account of. you might think of it as a factor pushing down the equilibrium real interest rate, but we have to put that in the context of everything else that's going on as well and consumer spending has been really pretty robust. the other angle of this is that to the extent that these policies succeed in improving the outlook in our trade partners faster growth abroad is also a positive, and then finally lower long-term rates is also a positive for our outlook. so there are a number of channels of influence. you know the dollar being one of them but only one of them. >> well i think our time is actually up now for the q & a

and for the session. everyone, please join me in thanking chair janet yellen. >> thank you. >> wow, that was a quick q&a. jam packed if i might add. that was chair janet yellen responding to questions from the audience. for more on what she just said let's bring in our very own steve liesman to respond, our rick santelli and larry mcdonald from socgen this hour. larry, first to you. what do you think the headline is here between her q&a and the remarks already delivered? >> well if you remember the fed statement -- the recent fed statement there were two mentions of the dollar in the press conversation and we've had two or three different fed governors mention the dollar now she mentions it again. the dollar is down 3% from the highs. i think clearly behind the scenes they're very concerned about the dollar a major investment firm lowered their gdp forecast today down to 1.5% citing the dollar. so i think the dollar comments

are the headline. >> what about you, steve? what jumps out? >> so i thought in the major speech the issue was she's trying to tweak a little bit the shape of the fed funds curve. i think she wants the market to be a little more hawkish about when the first rate hike could come. i think her comment that the fed could act even though the core rate isn't rising is pretty new and interesting and it suggests that maybe the fed may be a little bit more hawkish when it comes to that first rate hike. on the other hand, she is still doubling down and affirming that notion that once the fet standards hiking it will be very gradual. on that last question i thought that was the most interesting one. she did what you call the dollar dance. she said essentially that the appreciation of the dollar is a negative for exports of the united states but it's not determinative. it's one factor but not all of the factors. >> i also thought it was interesting when she was asked what research have you been reading and giving a lot of thought to. her response was some san

francisco fed research that basically said because wages are kind of sticky and they don't move down, that's why this country hasn't seen more deflation. you know it's kind of an interesting point. if anything we've seen wage pressures in the other direction, at least in the minimum wage stuff. >> was that for me or for rick? >> for mr. santelli. >> yes, please. >> i think there's a lot of reasons why we have the wage scenario we do. we have a tight labor market of skilled workers and what's left those that we still count as unemployed just don't have the skills, and i think it's a dynamic that the country hasn't really been faced with but the one sentence that caught my ear big time was cash is not a very convenient store of value. so let me see, we all got to work, and guess what we all get paid in whether it's euros or dollars or yen. i think a statement like that makes me very nervous and it also underscores why the bogeyman is always deflation. we live in a debt ridden

society. if what she says is true the only thing that saves the average middle class guy that gets paid in cash is lower prices. >> everybody is trying to evaluate effectively was she hawkish or dovish. dovish kind of appears to be the answer this afternoon. >> although she wants the market on alert for something that could happen in september. i really do think she wants people to believe the data dependency and not just assume they have a preconceived path. >> thanks gentlemen. steve, rick and larry, this afternoon. democrats getting ready for a major change in leadership. senate minority leader harry reid announcing he won't seek re-election. the person he wants to replace him is actually a big supporter of the big new york banks. how is elizabeth warren going to like that? "meet the press" moderator chuck todd weighs in when we return. the person he wants to replace how is elizabeth warren going to like that? "meet the press" moderator chuck todd weighs in when we return.

welcome back. as the dlen loomsdeadline looms for a nuclear deal with iran the u.s. is fighting with and against iran in many areas in the middle east. joining us is chuck todd moderator of "meet the press." so the air strikes this week again put the u.s. on both sides of this conflict. how long can that be sustained? >> i don't know. and you throw in the iranian deal, how is it that you can cut a deal with iran and fight them in some other place without hurting the deal you're trying to get done with the iran? i think it certainly makes it incredibly -- it was already going to be tough for the president to sell any iran

nuclear deal to the american public and to congress. now throw in the fact that we're actively fighting iran in yemen in some form or another, in this case it's providing intelligence to the saudis. then we're also fighting iran or at least for sort of findghting them for supremacy as the chief partner in fighting isis with the iraqi government and then at the same time he's got to sell doing a deal with iran that's going to make them stronger in the region? it was already a tough sell. i think yemen makes it nearly impossible. >> doesn't this also send a confusing message to our allies or our enemies across the middle east about what side ultimately we're on? >> this is why egypt and uae acted alone without the u.s. knowing anything in libya and let's not forget, despite what the saudis are claiming publicly, it appears they got involved with yemen without giving the united states much of a heads up either. so some of our chief allies in the region strategically, egypt

and saudi arabia, are acting as if they don't trust the united states. they are making decisions as if they don't fully trust the u.s. position right now because obviously iran as far as they're concerned, is their chief rival and that's not a good place to be. >> i know you will have a lot more on this on sunday. the news of the week, harry reid the democratic leadership he's going to hand over to chuck schumer. does that surprise to you, schumer emerging in this spot? >> it doesn't. schumer has been -- what's amazing is how well orchestrated this handover was. harry reid announced his retirement this morning. already chuck schumer put out a release thanking democratic members for their support. it's done. this deal is done. they will have the formal vote in 18 months but it's already done and i think it goes to the fact that chuck schumer has probably the best personal relationships with the remaining democratic senators in the senate than any other single senator. he was the head of the democratic campaign committee. he has -- he is viewed as a

senator even though he's a new york guy that is more pragmatic and understands the local political situations of different senators better than anybody else in leadership. >> i just want to ask mark did you get any good scuttlebutt for us? >> we made some phone calls. where does this leave elizabeth warren? there was some discussion of her being a possible contender. did she get a phone call from senator schumer basically saying, hey, listen, we're going to put you in a leadership position to be determined. chuck has got a little bit of amends to make as being viewed as a pro wall street senator in the caucus at large. how do you see all that shaking out because i got some interesting vibes from my friends on the hill today on that. >> look elizabeth warren already has this carved out leadership position. it's sort of a title in name only but it was something as a hat tip to progressives. look, there aren't enough progressive senators there for her to somehow make a challenge and defeat schumer.

if there were she might do it but i just don't think that they're there. there aren't the numbers there. there's more of a trust in chuck schumer. but as for the wall street i think that he himself, as you have watched him, he'll do whatever it takes to keep the democrats united on this. he'll give her bones, but i think what chuck schumer brings is i think you're going to have more in the style of tom daschle. this is sort of at the end of the day, he is a cut a deal pragmatist, whatever it takes to get a deal. >> does that inspire some sort of hope that we'll see big moves on corporate tax reform and i don't know, chuck, the million other projects that are out there that we haven't seen much headway made on? >> you can't do this -- i think the reid/mcconnell situation had become so personal and poisonous the two of them couldn't work together. i will be curious to see if schumer and mcconnell had develop a relationship or do you have to wait until there's a change on the republican side too and you have to start anew. is the atmosphere too poisoned

from the back and forth that reid and mcconnell have led against each other for the last five years. but i do think schumer is going to be known as a legislative pragmatist. >> it will be interesting for sure chuck. thank you so much. chuck todd with us this afternoon. >> see you sunday. >> see you sunday. chuck will be taking a deeper dive into the rising tensions with his panel of experts this sunday on "meet the press." don't miss it. here coming up if you've got a sweet tooth, you might recognize these names, pink berry, red mango, 16 handles. that's right. we're talking fro yo and even if you don't like the frosty treat, you have probably seen the shops popping up all over the place. some went away pretty quickly. i'll be joined by the ceo of 16 handles to discuss how he's the one surviving what has been called the fro yo bubble when we come right back.

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welcome back. competition is fierce in the frozen yogurt industry, and 16 handles is one of the industries relishing manyin the sweet success and survive hg the frozen yogurt and they are expanding into, yes, breakfast. here at post 99, it is the founder, and ceo, wellcome.

there is a frozen yogurt on every corner, and what about this industry? >> it is e growing about 22%, apdnd compound annual growth and growing about another 3.5% in the next three year ss. >> be honest with so many new location, and literally everywhere and the real estate costs must be going up, and everybody has been saying it can't continue and it is a fro-yo bubble, and is that talk or is it continuing the grow? >> bizusiness is growing, and it is challenging and faced with the increased are rent and advertising cost, and adverse winters burk at the end of the day, we came out here to create a lifestyle brand and we are succeeding because of it. >> i frequent one of the locations here in the city with my kids, but it is obviously, because it is serve yourself, what is the volume constraints are, and it can be crowded and slow because of the nature of the people wanting to spend time serving themselves and does that mean more locations without cannibalizing yourself or limits

of what you can do? >> there is a limit at some point, but we are not oversaturated yet. a lot of the competitors have made it seem that way, but they are starting to fall off. >> and talk about the breakfast thing, because what is interest interesting is that the you are seasonal business, and it is also a time sensitive business, because there is a certain time of the day that you want it. and what is in the breakfast that you want and what is the synergy with yogurt? >> well, we changed the game by the first sell service brand in 2008 and we want to change the way that people have breakfast, and the real opportunity is the morning hours to early afternoon. most of the stores don't open to noon, but we are paying rent 24 hours aday, so it opens the opportunity to do breakfast in to a smart do it yourself. >> what are you serving? >> oatmeal, and a acai bowl. >> and are you eliminating the

froe yogurt? >> not he limb nating it. >> but if you have 16 handles, and i cannot do a swirl and if you have the birthday cake here you have to do the self-swirl. you cannot push the button there there. >> and when we did it on 2008 somebody called us out, because you have 24 handles, because of the swirl, and so you have access to all of the handles. >> well, 24 is good? and you have coffee all day? >> yes, coffee and e tea. >> and how is that breakfast test going? >> it is gaining the momentum, and only three week ss, but week over week, it is an increase in the traction, and it is again, trying to be the process to change the behavior in the morning, and in a fun and healthy way that is delicious. and people are amendable to it. >> and we have seen a froe yo bubble, and it happened in the 90s and that is the glory days, and not to do with the dot-com,

and how do you know how close the comepetitors are, and how are you going the set it apart and stay where you rare? >> well, instead of the yogurt brand, we are a snack and dessert brand and there is room for growth. not to see how much frozen yogurt we can sell but how can we be relevant, and that is why we started the breakfast, and we have started with kind and some other grab quick snacks that are gaining tractions as well. >> so you are building a lifestyle brand here, and more than just oweyogurt. >> and the company is private? >> yes. we are private, and one of the few growing steadily, and we had the first international agreement with the group in the middle east for 150 stores and four other international deals in the works now, and we will continue to grow, and see what happens here. >> and you are a fraction of the ice cream industry? >> yes. solomon choi, i want you to bring the twist in the middle.

>> where is the yogurt? >> well, apparently some back at the headquarters, and thank you for being here. and the deals in the week and janet yellen's comments. that is coming up next. is out there. the problem is some of it's in this lab. some of it is in her head. some of it's in this new journal. and the rest of it is in your personal medical history. ibm watson can not only read this data, but understand it. it's trained by doctors. and it's always learning. it can help find hidden correlations and help your doctor recommend treatment options for you. there's a new way to work and it's made with ibm. being a keen observer of the world has gotten you far but what if you could see more of what you wanted

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welcome back and final week thought thoughts with the panel, and we have had a couple of deals this week, and one reported with intel and we will see what shakes out there. and robert, in your view, what is going to be driving the markets next week? that the deal activity or more of the data that we are getting or something else? >> what we should keep a eye on is the geopolitical risk, and the market has been myopic, and yemen does not produce oil, so it is going to be fine, but saudi does, and beyond that is the proxy civil war breaking out in the middle east is going to banish shoe. >> mark? >> well, it is clearly something that the market over the past week has by and large ignored. we have important economic data coming out, and case schiller coming out, and a and p numbers a tnsz jobless claims. >> and the first week of the next month and p best time for the economic data. >> and consumer confidence and

all of the things that are essential for the sustain theable growth stories, and what are the gdp numbers looking like. >> and we have had so many data misses that you are thinking that we should see upside surprises. >> yes, and the estimates for growth have not been coming down and the job estimates on the friday that is closed. >> that is right, it is good friday. >> and the scenario ahead of it, people will have to jockey themselves ahead of neutral, and the preannouncement season, you have to keep the ear out for it. >> and yes, for alcoa unofficially kicking off the season which is another one to keep it up. >> and the favorite fro-yo combination? >> coconut, and va nil l.a. because -- vanilla, because i don't like the chocolate. >> i gave up chocolate for lent that is how much i love it. >> and you put the chocolate sprinkles on the top with the crunchy thing ss. >> i am clearly missing it all

out. >> we will try it after the program. >> and so, coming up is "closing bell" for us, and what is coming up "fast money? >> thank you, kelly. ellen powell says that the former employer kleiner perkins did not promote her because of her gender and we have a verdict coming out any minute and we have scott there in silicon valley following it and what are you seeing, scott? >> well, the jury is coming into the courtroom, and let me lay the scene. we have the verdict form as we v have been saying is seven pages long, and what happens at first blush may not be what ultimately happens in the trial. this is an example. the first question that the jury is asked to answer is was ms. pao's gender a substantial motivation for