that would justify that. in terms of the imf guidance you know i believe the imf plays a very useful role by undertaking reviews of the economic policies of all of its members. obviously, there is a range of opinion among outside observers and market participants as well as among the committee's participants, as you can see in the sep about how economic conditions are likely to unfold and consequently the appropriate timing of an initial rate hike. i think we all agree and the imf agrees that policy should be data dependent. and the committee is always doing its best to assess the implications of incoming data. i would point out that we have had incoming data since that

report was written. but, again, i want to emphasize and i think the imf would agree with this that the importance of the timing of a first decision to raise rates is something that should not be overblown whether it's september or december or march. what matters is the entire path of rates and as i've said the committee anticipates economic conditions that would call for a gradual evolution of the fed funds rate toward normalization. with respect to the spillovers this is something that we've been long attentive to. we have to put in place a policy that is appropriate to evolving conditions in the u.s. economy.

we can't promise there won't be volatility. what we can do is to do our very best to communicate clearly about our policy and our expectations to avoid any misunderstanding of our policy that could create volatility in the market. and potential spillovers as well, to and i have been trying to do that now for some time. i've been doing my best to make good on that pledge. >> marty with the associated press. you just talked about the fact that you can't promise there won't be volatility in the markets. there seem to be two schools of thought. one is that the fed learned from the mistakes made in the 2013 with the taper tantrum. and you're going to telegraph this so well that will limit it. and the more pessimistic school of thought seems to be that when

you do start raising rates, they've been low for so long that it's going to be make the taper tantrum seem mild by comparison. which camp are you falling in on that? >> i -- i think our experience suggests that it's hard to have great confidence in predicting what the market reaction will be. to fed decisions and there have been surprises in the past. i don't think the committee anticipated that its decision would cause the taper tantrum. and all i can say is that uncertainty in the markets at this point about long-term rates doesn't appear to be unusually high. and, we can only do what is in our power to attempt to minimize needless volatility that could have repercussions for other countries and for financial

stability more generally. and that is to attempt to communicate as clearly as we can about our policy decisions, what they will depend on and what we're -- what we're looking at. we will be responding to incoming data. we've tried to make that clear. and i think it's clear that the market is also responding to incoming data. and you can see that in daily market reactions to surprises in the economic data. and, of course, none of us can quite forecast what incoming data will be. >> your latest projections show that you expect the unemployment rate or many officials expect the unemployment rate to fall more slowly this year and to fall by implication more quickly next year. could you talk about what has changed in your assessment of the labor market and how that influences the path of policy?

>> so, we are -- productivity growth is a factor that affects the pace of improvements in the labor market. productivity growth has been extremely slow for the last couple of years. and i think in part the pace of improvement in the labor market that we're projecting reflects the notion that there's likely to be some pick-up in the pace of productivity growth. obviously that's something that's quite uncertain and it's conceivable that if productivity growth disappoints something, i hope we won't see because that's -- it has very negative implications for living standards. we could conceivably see faster improvement in the labor market. but, in addition, there are

other margins of slack that don't show up in the unemployment rate, labor force participation that has at least is appears to be depressed, at least, to some extent because of cyclical weakness. and the fact that labor force participation rate has remained roughly stable for the last year or so when there's an underlying downward trend suggests that some slack is being taken up by in a sense improved or diminished cyclical impact on labor force participation. i expect that to continue and i would expect also to see some improvement in the degree of part-time employment that's for economic reasons.

>> jonathan with reuters. to your point, on needing more decisive evidence in order to initiate the first rate hike, how close do you feel the economy is to full capacity now? and gich that you know employer costs and monthly wages are at a pace it's at a six-year high now. what is the risk? how has the risk changed that inflation could strengthen quicker than you're expecting? >> so, the committee estimates that the longer run normal level of the unemployment rate is 5.0 to 5.2. at 5.5, we have an unemployment rate that's still exceeds the committee's best attempts to estimate what is normal unemployment rate for this economy. and, as i mentioned, there appear to be unusually large elements of slack over and above

that in the form of somewhat still depressed labor force participation and part-time work for economic reasons. so i think it's fair to say, most members, most participants in the committee wouldn't judge yet, or some might, that most wouldn't judge us to be at, quote, maximum employment. wage increases are still running at a low level, but there have been some tentative signs that wage growth is picking up. we've seen an increase in the growth rate of the employment cost index and a mild uptick in the growth of average hourly earnings. i would call these tentative signs of stronger wage growth. i think it's not yet definitive but that is a hopeful sign. still, however, inflation not

only headline but stripping out food and energy underlying inflation, core inflation is still running below the committee's objectives. so i think we need to see additional strength in the labor market and the economy moving somewhat closer to capacity. the output gap shrinking in order to have confidence that inflation will move back up to 2%. but we have made some progress. >> thanks. >> thank you. i'd like to turn your attention to the housing market for a question. both rents and house prices have been rising rapidly recently squeezing americans on both sides. how comfortable are you with this? and does it impact monetary

policy? >> well i mean -- the house, the increase in house prices is restoring wealth of many households who have that as their major asset. it is an important part of the wealth of american household, american household sector. and for all of the households that were underwater, those house price increases are improving their financial condition. although, of course, at the same time, it's making housing less affordable for those who look to buy. at the same time housing overall given the low levels is still low level of mortgage rates remains quite affordable. i think credit availability remains quite constrained from mortgages. anyone who doesn't have a

pristine credit rating is -- finds it very difficult at this point to qualify for a mortgage. and i think we're seeing quite a bit of reluctance given the job market and given what the history of what's happened to house prices of young people to want to buy homes. we've seen them delay marriage and wanting to have the flexibility to move. so the demand for multi-family housing to rent is very high in rent prices are moving up, i think, because of that. >> hi. i have a question on europe. as you know there's a growing political gridlock on greece. and the scenario is getting every day more likely. how concerned are you by these

developments? do you fear it could impact the u.s. economy? and could it influence in any way, sorry, when you will decide to increase the interest rates. >> well i, unfortunately, greece and its creditors are faced with very difficult and consequential decisions at this point and in the days ahead. and my hope is that they will continue to work together to try to find a solution to the, you know, current difficulties and impasse. obviously european leaders place great value on preserving european monetary economic and political integration and the greek people have made clear it's important to them to remain in the euro area. so this is a very difficult situation. in the event there is not agreement, i do see the

potential for disruptions that could affect the european economic outlook and global financial markets. i would say that the united states has very limited direct exposure to greece either through trade and financial or financial channels. but to the extent that there are impacts on the euro area, economy or global financial markets there would undoubtedly be spillovers to the united states that would affect our outlook, as well. >> chris? >> thank you. from bloomberg news. i'd like to come back to the topic of consumer spending. consumer spending has been disappointing for many months in the u.s. economy. i'm wondering, do you think there has been a meaningful

shift and one that will persist in the behavior of households with respect to spending and savings? or would you be more inclined to look at the recent more encouraging retail sales figures? and see perhaps a return of the american consumer there? >> so i think in recent weeks, we have received data that suggests that consumer spending is growing at a moderate pace. i'd say, you know car sales, for example, were very strong part of it probably represents payback for weak sales during the winter months, but nevertheless, the pace of car sales has been strong in recent readings on retail sales and on

spending on services have suggested an improvement in the pace of consumer spending. there are questions at this point about just how much impact we have seen of lower energy prices on consumer spending. the decline in oil prices translates into an improvement in household income on average of something like $700 per household. and i'm not convinced yet by the data that we have seen the kind of response to that that i would ultimately expect. and i think it's hard to know at this point whether or not that reflects a very cautious consumer that is eager to add to savings and to work down borrowing. or in part some survey evidence suggests the consumers are not

yet confident that the improvement they have seen the decline in the need to spend for energy for gasoline that's going to be something that will be permanent. they may think it's a transitory change. and not yet be responding. so i think the jury is out there. but i think we have seen some pick-up in household spending. >> peter barnes fox business. madame chair i wanted to shift over to the decision in the aig case this past monday. and in it, the judge in the case said in his opinion, quote, there is nothing in the federal reserve act or any other federal statute that would permit a federal reserve bank to take over a private corporation and run its business as if the government were the owner, yet that is precisely what the federal bank of new york did and the judge went on to cite the

replacement of aig's chief executive officer and taking control of aig's business operations. i wanted to ask you, did the fed break the law in assisting aig back in the crisis? and if this decision is upheld on appeal how does that affect the fed's tool box? how does it affect the ability to help firms in trouble in a future financial crisis? would it make that kind of assistance illegal? would you have to get congress to change the law, make a fix? thank you. >> so the federal reserve strongly believes that its actions with respect to aig in 2008 were legal, proper and defective. and it believes that they were necessary given the threat that a disorderly failure of that company would've -- the likely implications for the economy,

for the flow of credit to households in businesses and the economy. and it believes that the -- we believe that the terms of that intervention were tough and appropriately so in order to protect taxpayers from the risks that those rescue loans presented at the time they were made. now, i should emphasize that dodd/frank changed our 13.3 authority. and said that the federal reserve may not in the future crisis intervene to attempt to address the issues of a particular company. at the same time it gave the

government a set of new tools that it could use in a situation like the aig situation or lehman to try to resolve such a situation that poses systemic risks in an orderly way. i just say at this point, the federal reserve under dodd/frank can continue. if necessary in some future crisis to engage in broad-based programs the programs we had in effect in 2008 to provide support. for the issuance of asset backed securities that enabled loans to small businesses and to students and a credit throughout the

economy or to support the issuance of commercial paper. . at this point, i believe we are working with the department of justice to decide on next steps. >> madame chair, so much discussion about rising rates, seems to focus on the potential negatives. i'm wondering if you talk a little bit about some possible unintended benefits of higher rates. and one of the things i'm thinking about is the fact that savers have suffered through so many years of returns and many may be anticipating a positive way seeing a better return on their investment. thank you. >> so let me say to my mind the most important positive is that it, i believe a decision to raise rates would signify very clearly that the u.s. economy

has made great progress in recovering from the trauma of the financial crisis. hopefully that'd be confidence inducing for many households and businesses. this has been a difficult period. many retirees and i hear from some almost every day, are really suffering from low rates this has been one of the adverse consequences of a period of low rates. you know, we have a good reason for having kept rates at the levels that we have. to pursue the goals of maximum

employment. and price stability. that's what we've been doing. and obviously there are benefits from a strong economy to every household in the economy including savers from having a better job market and a more secure economy. but, yes, when the time comes for us to raise rates, i think there will be some benefits that flow through to savers. >> just to follow up on that question, i think a lot of savers were hopeful that they would see a rate increase if not this meeting, soon. what sort of -- what kind of assurances can you give them and the people out there who think the fed is never going to raise rates. i got e-mails today from people saying they're never going to raise rates. what kind of assurance can you

give to people who are waiting for that to happen? >> i can't give an ironclad promise. but i think it's clear from our summary of projections that we anticipate that the economy will grow, that the labor market will improve, that inflation will move back up to 2% as we -- is our objective over the medium term. and if economic conditions unfold in the way that most of my colleagues and i anticipate we see it as appropriate to raise rates. and as you can see, the largest number of participants anticipate that those conditions should be in place later this year. obviously, we have to you know there can be surprises that might not happen. it's not an ironclad guarantee. but we anticipate that's something that will be appropriate later this year.

>> dow jones news wireless. could you shed some additional light on how large repo operations are to be in the initial phase? and additionally how important are financial conditions to the pace of the fed's tightening cycle? how important is the market's reaction in determining how fast or slow and the ultimate end point of a fed tightening cycle? >> so, with respect to you asked first about overnight reverse repos and we communicate in our minutes that the intention to make sure they were available overnight, repos are available in large quantity at liftoff to ensure that we have a smooth liftoff.

that there'll be an elevated provision of overnight rrp. however, it is our expectation and plan that fairly quickly after liftoff, we will reduce the level of the overnight rrp facility. and we have a variety of ways in which we can do that. with respect to market reactions, we always in evaluating the economic outlook have to take account of financial conditions. whether it's the level of long-term interest rates or the value of the dollar in assessing the economic outlook to the extent that there are market reactions and market movements whether they're in reaction to decisions of ours or in reaction to other events foreign events

are unfolding economic conditions we will always take those into account in following the path of policy. >> good to see you. you mentioned that the dollar has stabilized. and, in fact since mid march, i believe it's given up a good bit of its gains from last summer. to what extent now do you think that there will be an ongoing drag from the dollar taking into account this dollar retreat? and overall, how important is the dollar exchange rate in monetary policy these days relative to the past? >> well, i think we still are since last summers have seen an

appreciable increase in the value of the dollar vis-a-vis most of our trading partners including emerging markets. i think we have seen it's had a negative effect on net exports. served as a drag on the economy. and probably that drag is going to continue. for some time to come. so it is a factor reflecting the outlook. in addition, import prices for nonoil imports continue to fall. i think that's serving to push down a core inflation a little bit. eventually, i expect that impact to ebb. but it is a factor affecting the outlook that said we obviously have no target for the dollar we

take movement in the dollar. one of many factors affecting the outlook. and in spite of the appreciation of the dollar the committee obviously thinks that the economy is likely to do well enough to to call for tightening later this year. >> i'd like to ask a regulatory question, if i could. last month, senator elizabeth warren and congressman elijah cummings sent a letter to the gao asking about an inquiry into the fed and other regulators' implementation of the community reinvestment act. the concern being that as it's implemented now is not giving communities, communities like in baltimore and other places enough access to basic banking services.

do you think the fed is doing everything it can to give access to those communities? to these kinds of services? do you think it needs to be doing more? >> so we take cra very seriously. and evaluate for those banks that we supervise. we have a set of guidelines and are very conscientious in attempting to evaluate cra performance. certainly something we take into account in assessing applications we receive for emergers. and we have very active programs to try to bring together community groups. with banking organizations to provide them with information about how they can assess

community needs and best address them. we are looking at cra and continue to look to see whether there are ways in which implementation could be improved. >> thank you very much. >> and that is fed chair yellen wrapping up the news conference. we're watching markets build here, of course as you watch and tune into the "closing bell." welcome, everybody. to gauge the reaction to both what was in the statement, the projections and what the chair just had to say. >> when she began her news conference, the dow was up 3 points, it's up 60 points now. it was up 80 points. come back a bit. did that two-step it often does after the statement comes out. there was a minor rally, fell back until the beginning of the news conference. and it has moved higher since then. interesting some of the other markets and how they've responded to this point. the ten-year yield today has come back a bit, as you see.

it's now at 2.31%. a bit of a decline. and maybe even a little bit more dramatic is the dollar index itself, which has fallen. dollars fallen against many of the major currencies out there. and right now, it is down .75%. let's bring in alan valdez here on the floor of the new york stock exchange with a quick reaction to -- what do you think the market's response tells us about what they heard from the federal reserve, alan? >> this is normal. we get this bump after every fed announcement and speech. it's not surprising here. i think the market's going to keep bumping along here. nothing definite said about september rate hike. we're still where we were yesterday. essentially. no real surprises anywhere. >> what do you think the market is doing here? a september rate hike is more likely or less likely or that it -- the whole path of rate hikes is different now? >> no i think it's probably saying more likely. but we feel it might not be the

right time to raise hikes if in fact, they do raise it. even though the market's at an all-time high, there are a lot of internal problems in the market. if you look at the s&p 500, 100 of those major leading stocks are in bear territory. if you look at railroads, 5 out of 6 railroads are in bear territory. and that's usually a precursor to the market. and as you guys were mentioning this morning on cnbc the junk bonds. people are -- the investors are getting out of junk bonds. that's always a precursor. >> is the move in the market right now indicating that all of those concerns have been bought some time? in other words, if we're seeing the dollar fall the interest rates fall and stocks turn green and everybody's talking about this being a dove-ish statement and discussion, then the concerns that you just mentioned, does that delay them? does that buy people some time? >> it should delay them buy people time. that's for sure. but you never know with the fed what they're going to do. i don't think we'll see a rate hike in september, personally, i think the numbers are there.

they're not compelling to raise the rates. >> financials had rallied lately you tillties had fallen anticipateing a rate increase. that's reversing here. would you play either of those or in general those stocks that would move whether you get a rate increase or not? >> again, i don't think we're going to see it. if you believe you were going to see a rate hike in september, yeah you play those two issues without a doubt. >> and as we head into the close here with half an hour to go what are you keeping an eye on? >> we're keeping an eye on the market in general. we're watching that bond market. keep an eye on the bond market. that's going to tell you where the market's going to go. see bonds raise a little here after the announcement. keep an eye on that i think. >> all right. alan valdez thank you for the market response, if you will. >> thanks bill thanks, kelly. >> good to see you. >> let's turn now to someone -- where are we going?

to someone inside the room with janet yellen today. that, of course would be our senior economics reporter steve liesman and also with him is diane suanne who has been tweeting up a storm during the news conference. what did you hear from janet yellen today? >> you know, i think they're on track to hike rates. as long as the economic progress continues, i don't think there's a great mystery out there. and all you've got to do is look at the dots. and the dots that ten members see a hike 15 probably see two quarter point hikes, that's clear. with a short horizon until the end of the year. i think those dots become more meaningful. and she talked about the idea when i asked her about there being progress on the economy. here's what she said. >> we agreed that labor market slack has diminished to some extent in the immediate period. and obviously, we've made

considerable progress in moving toward our goal of maximum employment. so in spite of the fact that there is some progress on that front, the committee wants to see some further progress before feeling it'll be appropriate to raise rates. >> and that's what they expect bill. she would say the same thing, essentially, about inflation. there's been some progress. they need a bit more. but i don't think they need much more, bill. that's my take away from what the chair said today. >> diane, what about you? from either the statement, the projections or yellen's press conference just now. >> well the most telling stuff is the dots. not only this year but what's left this year. that obviously people within the fed, the majority of them would like to get to lift off this year. i think that's important. the bias is there. the other thing that's important is the longer term trajectory is

coming down. we're seeing the movement down. that's important, too. because you're seeing the more lower, longer and even lower longer. i think that's very important, and the fed chair tried to stress that things would still be accommodative. even though they want to get to liftoff, i think the bias is clearly there. the elephant in the room is what to do with the balance sheet. we didn't get a lot of enlightenment on that in terms of what's going to be happening with the fed's balance sheet, when the fed's going to be anticipating they'll allow the balance sheet to shrink. the fed is sort of committed to keeping things accommodative, and they'll be sort of not hitting the brakes, easing up on the gas gently. >> yeah go ahead. >> diane, i think it's well to point out that diane, you know you follow this as closely as i do, which is where the market is, where economists are, and where the fed is. and it seems like every time the market's won here the fed has come down to where the market's been. that happened last time. the fed came down to where the market is. each time here the market is leading the way for where those

fed projections are going to be. >> that's one of the things the fed has to come to terms with. some of the outliers are out of the game. some of the people pushing for much higher rates like fed president fisher of dallas who is now gone and ploszer of philadelphia. and the other thing, another issue you brought up in the past is the forecasts have been very optimistic and overly optimistic in terms of rate hikes, in terms of overall progress towards their goals. and let's face it this depends on them being right in getting liftoff in the market saying, you know, fool me once, shame on you, fool me twice, shame on you. >> richard fisher will join us shortly. get hiss response to get his response to today's action. a couple of tweets stood out for me, you said this is no answer as it gets. yellen leaving all options open. does not want markets ahead of the fomc. and you called her news

conference greenspan-esque and noncommittal. there were those who thought we would get strong hints. they didn't get it. were you not surprised by that? or were you? >> no. i think steve really read it right. look the dots mean more when you have the second half of the year and six months to go in the year the dots going up. and, you know, if we get more progress and i think steve is exactly right saying the threshold is very low from yellen's perspective. and at the end of the day, it's her vote that matters the most and her dot that matters the most. that said -- >> you know, diane, diane, i think you're suffering from ha little delusion of nostalgia. let's remember greenspan here. absolutely inscrutable. i think it's really unfair the efforts by the chair to be as honest and forthcoming and compare him to alan who was purposefully -- >> yeah i think that's true. i think she's got to be dancing a little bit on her way home

feeling good that she didn't reveal her personal hand that she didn't reveal any bias of the fed. and that's in the way she was greenspanesque. they could say, well they nodded there's improvement. >> i'll give you that. >> so, i think that is -- >> the only special case diane. >> alan actually spent time thinking about how to make it confusing and he was entertained by how confusing he could be. she wasn't trying to confuse deliberate ry deliberately. >> it's finally coming around to. not so much about the timing of the first hike but what happens next? i'd be interested in what happens next. it's not going to be a stair step. we're going to go slow gradual and conditions dictate otherwise. what do you anticipate this time around? will it be different? >> i think it is going to be very slow. unless the economy, i would hope it to be much faster because it would mean the economy is much more robust. i don't see that strong of an

economy or that rapid of inflation. it will be slow. and the fed is really -- even as the economy firms, they're going to be treading cautiously. until they get to much higher rates, their powder is dry. they don't have a way of -- so they still are hedging the downside risk. and to the point made earlier, the market has -- they've constantly come to the market. the market's not come to them. and i think that's a little bit telling something they don't like. but the reality is, like it or not, the fed is a bit hostage to the markets in that reality has been weaker and at the end of the day, she did acknowledge, as well, that if financial market conditions are really disruptive, that could delay the fed. >> steve, i thought she was very diplomatic when she was asked about christine le gard's call calling the imf, their word useful, but didn't want to go beyond that. she's holding her ground against those who have been very vocal about what they think the fed should or should not do on that

first rate increase hasn't she? >> yeah exactly. and i think that the -- she knows the imf has a job to do. this article 4 consultation which is what they have to do. and more and more because the issue of fed policy especially is an issue of global financial stability, you see the imf commenting more on internal domestic monetary policy and that includes especially, the united states. it's a bit of a tricky position. i think they get along reasonably well from what i understand. and she understands that she has to do with what she has to do there and warn of that. and she's come forward and said you know what, we've done the best we can to warn emerging markets about the outcome, and you also had a whole speech by stan fisher on this issue saying get ready, we are not the globe's central bank here. >> yeah and i think that's really important having stan fisher's voice. his history of the world bank at the central bank in israel. these are all really important.

there's a little different perspective here. when ben bernanke was chair. it was sort of hey, we're sorry, we're the central bank of the u.s. during the taper tantrum or the beginning of it and turned around in that they are much more acknowledging of it, yet, obviously these issues doesn't dictate monetary policy but does have a deliberate view on legitimate view on it. >> who is here to ring the close closing bell today is here to join us. >> see you then guys. >> we're going to move on now to reaction from a fed insider himself, joining is former dallas fed president and noted inflation hawk, we might ad richard fisher. >> welcome back richard. >> great to have you. >> i apologize for not having a tie on. i'm on vacation. >> that's okay. you're allowed. you're not on the fed anymore. >> if you had been on the fed, would you voted against today's policy moves? >> no, and i actually think

janet handled the meeting exceptionally well. she gave a very balanced view. the fact is, this is data dependent. i have been eager to get the process started. i should tell you that internally in our deliberations as far as my interventions were concerned, it was just getting the process started. but i fully agree with something she articulated which is that doesn't mean you move automatically at every point. it means you are data dependent, you look at things, the economy's improving. we are seeing less slack in the economy. i don't think the committee should be as worried now about slipping back into deflation or even further disinflation. the trim meaning of disinflation used in the deliberations has been running with one exception for almost a year now at 1.6% to 1.7%.

so we're getting closer and i thought she articulated herself extremely well at the press conference. >> we have talked here lately richard, about how it seems that various members of the fed are just very anxious to get this thing going. to at least get that first rate increase underway. do you think they regret now setting up those metrics they did for themselves? the 2% inflation target and the unemployment rate they wanted to see. are they feeling constrained by those? would they have otherwise begun the process of liftoff anyway? >> well, you know, we went through a little time definition of when we might move. and then it was setting the economic conditions. let me tell you what forward guidance is. you can summarize it in two words, we'll see." and we'll see meeting by meeting they will see meeting by meeting as i think chair yellen clearly articulated in a lot of words, but it comes down to we'll see

how things are progressing. and clearly, things are getting better and better. you know my view. just imagine if we had a fiscal policy that actually was definable and gave people definition as well as what the federal reserve has been trying to do. we'd be progressing a lot faster. i do think the fed has done a good job. i think there are some that would like to get the process started. the key communication point to me in that market for the markets in that statement of chair yellen and the statement itself is that 2:00 don't assume that this becomes an automatic process. it is very much, is what they say data dependent. and what they mean is how you sense and how you feel and how you smell the economy going forward as to what the progress of the path of rate increases will be. >> i'm glad you -- >> i think it's important to get the process started. the markets are already discounting the beginning of this process. and the so-called dot plot the one thing i'll disagree with diane, is pays zero attention to the long-term dot clock.

it's useless. i'll tell you why, the members won't be there that made the dots. but i do like to look as steve mentioned, the 2015-2016, i think that does send a message and shows that people are eager to get moving but they're going to be gradual and deliberate in the process. >> you bring up fiscal policy and we heard him say he wants a 4% growth economy, 19 million new jobs. based on your view of where we are in terms of slack of the economy and productivity rates and population growth. is that achievable? what's it going to take? >> well that would take a long discussion. i will tell you, the key demographic you all should always be looking at is between the age of 20 and the late 50s 24 and 64. that's the key demographic. that's only growing at 0.6%. >> a wide swath. >> and it's very hard to get those kind of growth rates up there. i do believe it's possible. we've seen them before. we saw them for almost two

decades. but we're late in the business cycle here. later, and it's going to be tougher. but i thought -- i'm not at all partisan or involved in this stuff, but i did think that jeb bush's statement and the way he handled himself is very impressive. i must admit. as a central bank observer i hope he's able to if he gets elected, achieve that goal. >> kelly mentioned earlier. and you know it's widely believed you were probably the most of this bill. extreme accommodation could lead to an inflation rate that could get out of control down the road. do you still feel that way especially with what's happened here? with oil prices and the pace of growth in the economy overall as a result? >> i think if you look at the transcripts, i haven't talked much about inflation being that great of risk going back to when it was really a risk of august 2008 just before the legs were pulled out from under the table. the real key is -- and this is a

key point. we have these excess reserves on the balance sheet of the federal reserve. they are a very large amount. it's just a portion of the total liquidity in the economy i've known janet yellen and worked with her for over ten years. i know what she knows, which is her task is to engineer and exit from what we did to save the economy to normalize the balance sheet and normalize interest rates. this is going to be her legacy. and she will proceed and lead the group who are very supportive of her in a very deliberate manner. that's what this exercise is all about. janet yellen will be defined as chair by how well she manages the exit. i have great confidence in this woman, by the way, and i think she'll do a good job. >> and i know this is another complicated issue. but just before we let you go on the mechanics of how this is going to work speaking to her leg is how much of this will be

the fed raising the rate? >> that is a great, that's a great, that's a great question. i believe myself the rate becomes a -- talking about the corridor between the interest on excess reserves and what chair yellen referred to as the rrp, the reverse repo activity of the new york desk. that will really define where we will be in terms of anchoring the short-term end of the yield curve. i believe fed funds become a slowly -- a vestigal. the interest paid on excess reserves and on the other side is the on rrp rate and what we do with that desk. we have so many different counterparties now. our counterparties in the

greenspan day and the volcker days were depository institutions. now look at the counterparties there are over 100, many market funds and dealers and so on. that's the way that the fed, the modern federal reserve, the modern central bank of the united states will have to deal with a short-term and a yield curve. and those are the key rates to look at, in my opinion. >> very good. richard, always good to see you. thank you for your time, enjoy the rest of your vacation. >> thanks so much. >> thank you so much. vestigal organs. the appendix? i guess it serves a function today. >> i failed anatomy class. >> that's why i love reading fisher's speeches and remarks at the fed. makes interesting analogies. ten minutes to go into the close here. time to watch the markets carefully. we are well off the highs. the question giving what we know has been weakness at this time anyway this year is whether we'll actually stay in the green with the dow up 30 the s&p up 5

and the nasdaq about 12. >> the more interesting move is by the dollar which we'll talk about coming up here in a moment. we'll discuss janet yellen's remarks met the expectation with black rock's head of fixed income rick reider. >> and fitbit pricing the public option tonight. but some watchers think the wearable may be too late. >> plus, oracle going to release its results after the bell. we'll bring you the numbers and break them down coming up. keep it here. >> a lot coming up.

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sometimes too much attention is placed on the timing of the first increase in the federal funds rate. >> do you think she was talking to us kelly? >> hello, bill. i'm talking to carol roth. but let's send it out for a quick market flash. >> we're watching some unrelated to fed type moves here for a couple of stocks. harley davidson first of all, spiking after authorizing the repurchase of up to 15 million shares, and that's in addition to the existing 20 million share repurchase program from last year. they had around 16 million shares left on that. in the amount of about $750 million. they will use the proceeds to repurchase common stock through the remainder of 2015. also checking out what's happening with edward life sciences, as well. a spike intraday.

we're getting the headlines right now. the fda has approved one of the artificial heart valves more details as we know more. but, again, the two stocks on the move. not necessarily related to the fed. back over to you guys. >> thanks. we've got a lot coming up after the bell rings tonight. but before then it's the closing countdown. and joining us we've got the gang together now. we've got rick santelli in chicago. there in chicago, and bob pisani with me on the floor. and rick, i'm going to start with you, buddy, and i don't know, i would think you're disappointed by today's announcements in the aftermath of the meeting there. she gave no real clue as to when they're going to raise rates at this point. >> listen bill i don't know. i watched every word of it. i don't know that the people in charge of the central bank are really up to the challenge. i thought the press conference. let's put it this way, people on the floor were looking for some meat on the bone. they ended up with a lot of

fudging. but in the end, it was all sponge cake. that's about all i can say to answer it. if you look at the market the market was pretty clear. everything was fours are wild, two are four basis points lower, fives are four basis points lowers. tens are unchanged. the curve is steepening. not anything a market would do that was seriously looking at a tightening in the near term versus the latter term much less two tightenings for the rest of the year. maybe everybody's on the wrong page. i can't tell you. but there were so many aspects of the press conference i found very disturbing with regard to what's going on with dodd/frank and how the aig ruling i thought that was a wonderful question or answer was, okay maybe it's illegal for us just to seize somebody's property but dodd/frank can do it now. no i'm sorry, dodd/frank can't do it. repeal the fifth amendment. maybe we'll talk about it. yes, when it comes to today's press conference, one thing traders were griping about the

most was they don't care about the path. they want to know when it's going to start. that wasn't a knock at you. they p want to know! they have a lot of money at risk. they've been surfing the fed for many years. >> yeah. >> and there are those who want to know a better handle when it's going to happen. but her message was clear, we're obsessing too much about the first rate increase because after that it's going to be very, very accommodative for the foreseeable -- >> gradual. kept using that. so much someone asked, is this a new policy term? and she's right, look. what does janet yellen want most of all? two things. i believe she wants a rate hike in september. i believe her primary goal is to guide everyone toward that hike right now. but also doesn't want to rock the markets along the way. and in that sense, i think she accomplished both goals today. i think she left a clear impression that the economy was improving and we are moving towards a rate hike. but, it's going to be gradual even after that. and that's why she said don't concentrate on when it's going

to happen concentrate on the glide path where it's going. bonds move to the downside stocks generally held up very well. the only thing that didn't move today was bank stocks which rally when rates go higher. >> jack we've been stuck in this trading range in the market since the highs of march 2nd. and we're still there. i mean what do you think it's going to take to get this market moving again? you know if they're looking to the fed, they're not getting anything right now. you're clear. >> bill i've been waiting for the end of the quarter before i start to see that identify been talking about unleashed. usually takes a couple of weeks for it to happen. as far as the feds are concerned, i love the statement, the press conference. it was a dovish statement and she was clear and i don't know if we were watching the same press conference but she made it clear that they're going to stay -- >> obviously not. obviously not. >> and the good news is -- >> you had analog i had hd. >> that tells you more than likely -- >> yeah that's why they're down

in the same year talking about tightening! >> the other thing that she said that i thought was very very important, and it's something i used to tell my children every time i try to give them medicine, it's not going to be that bad. all right. and that's exactly where we're at with this first rate hike. she's telling us. >> thank you general custer. >> it's not going to be that bad. so you know what for everybody out there that is waiting for the world to come to an end in the stock world and the bond world. >> hey, the only reason we think the world's going to come to an end is because they have press conferences like this one trying to buy time! if what you're saying is correct -- >> she was very clear! she was very clear. >> clear about what? >> she talked about the fact that greenspan. this was green! >> i've got to go. thank you for your thoughts on that. >> well, there's a headline the head of greece is scheduled to

meet with putin on friday according to the greek government. there's another shot across the bow. more games being played. >> oh by the way, a lot still to come here in the second hour of the "closing bell" coming up among other things the finance minister of india is with us today and the pricing on that big ipo. here's kelly evans with that. i'll see you tomorrow. let's begin with where markets are closing after the federal reserve's latest decision on interest rates and the press conference from janet yellen. the dow off at times in the session but going out with a gain of 38 points. the s&p closing on the nose of 2,100, the nasdaq up about nine we've got to keep an eye on all of the other asset classes. we're also breaking down the fed's news conference with black rock's rick reider coming up.

and the pricing for fit bit's ip ipo. bringing in carol roth. welcome to you both. and with us with more on today's action. welcome. and "fast money" trader brian kelly. let me quickly start with you. what do you think the market action is telling us about the fed here? >> concerned that the fed was extremely dove-ish. i thought that was very very dovish. at best, we're going to get a quarter point rise and then she sounds like they're done for a while. i think the market's trying to price that in. we had a rally in the stock market initially which faded when people started to realize what the fed's talking about is the economy is stagnating weakening, no mention of weather in this at all. they talked about when they had their projections their projections came down. so i think that's what the market, the stock market reflected right now. >> sound familiar? >> yeah it does. all year when i looked ahead to june, i thought they were two things that would be certain. one that the chicago blackhawks

would win and, second that the fed hawks would lose come june. and that is completely what happened, kelly, and as i've been saying all year i don't see them raising rates any time before december. i think that the market in some cases got ahead of itself, thought that we might hear some news. you know, first it was june then it was going to be september. >> do you agree with what brian was saying about the reason behind this? >> let's remember what happened before today. the wealth effect the housing that's strong, the energy the labor market, the consumer was in a great position risk was done well before the fed came out, and the trajectory as they upgraded for the second half of the year. the trajectory is slower and steadier as she goes. that's a good story for us. that was in the market before the fed. it's only going to stay with the market. >> if you look at the u.s. dollar weakening significantly on the back of that. is that consistent?

>> well i don't think rates did anything of note today. and i would suggest to you that the dollar is range trading. nothing going on with the dollar. at this point in time more focused on tomorrow and europe and greece than it is the fed. there was nothing in the fed today that has significantly changed the dollar or the bond trajectory yet. >> well certainly a reaction. almost 1% move in the u.s. dollar. a little bit surprised on the dove-ish side. she said that we have to see more decisive evidence was the quotation that there's progress on the labor market on wages and the slack in the economy like long-term unemployment and more progress on inflation. also mentioned international concerns and there's potential for there to be disruption from grease if there's no deal reached. she didn't overplay it but did say you could see spillover from the economic effects that would cause in europe and the market effects. >> to boil it down, are you saying this makes everything that's happened this afternoon makes the september rate hike more or less likely than before we walked into it? >> well look we've been

looking for a september hike. there's nothing we've seen today that would suggest that september's off the table. that's our preferred -- >> carol? >> yeah i think that's not going to happen. i think you've got -- >> not going to happen this year? >> i said potentially september. >> you said three times, it's overrated -- >> understand, i think she's prepping, going to keep saying it. i gave you plenty of warning. but i do see her sitting on her shoulder going, you know probably not a good time for you to be raising rates. >> speaking of oracle's let's get to the quarterly results with josh lipton who has those numbers. >> oracle just reporting. so let's get you those numbers. reporting 78 cents on 10.71 billion, analysts were looking for 86 cents on $10.92 billion. that's a miss on the bottom and the top. just looking through the release, kelly, total cloud revenues up 28%.

in a statement here, larry ellison is saying they expect to book between 1.5 and 2 billion of new software as a service and platform as a service business. more new software and platforms. he said the only remaining question is how much more. this conference call we're going to be waiting for that q-1 guidance. and, of course it's an oracle conference call you can expect some colorful commentary from executives about the competition that conference call starts at 5:00 p.m. eastern, we'll be on it and bring you headlines. kelly, back to you. >> all right. thank you very much for now, i'll note shares of oracle down about 5% after hours. let's bring in dan for more reaction here. and what do you make of this? >> well kelly, top line growth below expectations. i was looking for about $563 million in revenues on their cloud business and roughly about

3.956 billion in terms of total licensing revenue, which would include the core products and data base and enterprise and along with the cloud. initially, looking at the number kelly, and obviously we don't have all of the data points, but it appears it was a bit of a struggle for them big miss on the bottom line, looks like fx concerns continue to hurt them. doesn't look like a good number initially. >> bk, what do you think of it? >> i thought it was interesting they actually mentioned crm by name. oracle has been rumored to be one of the potential bidders for crm and if they're looking to go after them there's two ways to do it. tremendous competition or buy them. it'll be interesting to see on the conference call what they say the trend in this earnings season has been, wait until the conference call because the stock tends to move in the opposite direction in that point in time. >> how significant is the miss to you? >> how significant? >> actually, on a bigger scale, i think it's fairly significant. this is a -- you know it's an

indicator of business activity. now, if we start to connect the dots and see it across different areas, i'd look to microsoft. but the fact that they missed on revenues is a bit concerning. >> dan, would you be buying oracle shares here? how long do you stick with the company? at what point do you not like the story anymore? >> we're in a long-term in terms of holding oracle. we look at it as kind of a conservative software company. i think we've got to give them a little bit more of a chance. making this transition over to the software as a service, platform as a service, cloud technology. we know it's going to eat into their current licensing revenue growth and their core -- >> yeah. >> standard models. so, you know we've got to give them a little bit more chance. and we know that you know there's going to be quarters like this where it's going to be a struggle. and you brought up a good point

about, you know, how did they get there? did they do it internally or do a big acquisition? and -- >> do you have a preference one way or the other? before we let you go? >> yeah i mean oracle has done a great job in the past in terms of major acquisitions. you know they did the deal sun, which people are still scratching their heads about. but they've got a great history of buying really large companies and integrating them and adding you know, various software to their portfolios. either way's fine, it may take a big acquisition to get wall street excited about what they're doing right now. >> okay. >> they're not getting that big of a growth that we'd like to see. especially on this quarter. >> okay. dan, thanks for your thoughts this hour. appreciate it. dan morgan is the shareholder to oracle there. shares down better than 6% after the earnings miss afterhours. there'll be more starting at 5:00. we'll pivot back to the markets unless anybody wants to paint a theme of earnings misses from the bigger names underscoring i

don't know jordan some of the trends for the markets. >> well, look, we were talking about technology before that. and you have to make a decision. technology tends to do well in secular growth times. it's about innovation and it's about technology and health care. however if you think gdp is going to ratchet higher then technology is going to underperform. you go to the materials, energy. if you believe growth is going to be slower than people expect that's a technology play. but if you think growth is going to accelerate it's going to be an underperformer. >> we're in a different time in terms of technology here and there's a lot of disruptive technology and a lot of changing of business models and i think that's what we're seeing here. and oracle obviously, they're changing their business model and it will take some time to -- >> the other thing i would point in time out is that currency was a huge head wind for them. looking at the software and cloud revenue, 8.4 billion down 6% it would be up 2%.

which is a huge head wind for companies right now. even janet yellen cited this today. should be a better relief in the quarter. >> maybe not long-term. >> right. >> if we're talking about raising rates. >> let me jump in quick. i'm going to respectfully -- when anyone says this time is different, i'm running for the hill. i'm going to disagree that technology is different. but to bring it full circle about the fed, if we see the dollar significantly strengthen on the back of greece headlines, what have you. that may circle back to the fed if the market starts gapping away. it's a bit of a boilerplate statements what they've made. but if we see significant degrees. see the dollar really start to rock this summer the fed is going to pay attention. >> and bk a word to you before we let you go sir, is just to buy a bit coin kind of signal? >> bitcoin did move higher. >> yeah it's up 10%. look at what happened when cypress had capital control, bitcoin up about 10% in the last couple of days. yeah absolutely. you know i'm a big fan.

>> next currency of greece right? >> well. >> where they think there's a proxy, if you will for underperforming currencies? >> u.s. dollar. >> or u.s. dollar. thanks, brian. brian kelly our currency expert. catch more bk coming up. "fast money" the oracle earnings. they'll have all the latest headlines for you. we'll have to wait a little longer for a fed interest rate hike apparently. is janet yellen waiting too long to make a move? he'll tell us when he thinks the fed should make its move. plus, uber has faced a ton of regulatory hurdles, but a new ruling about the drivers could be the biggest rod blockad block yet. keep it right here you're watching cnbc, first in business worldwide. y of a breach can quickly become the only thing you think about.

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let's get a quick check of the after hours earnings action. >> so let's start off here with a recap of oracle. like josh lipton told us earlier on, earnings coming in at 78 cents a share, that very much misses the 86-cent average. revenues coming in at $10.7

billion. as a result of that other factors, the shares are down about 7% as you can see there. also this is a contract electronics manufacturer companies, some of which apple is possibly actually a customer of jabil circuit. them and other large companies use them to make products for them. that matches analyst estimates, $4.36 billion for sales. they also say their fourth quarter and full-year earnings and sales guidance and it does come in below analyst expectations. you can see those shares down by about 9%. relatively light volume there, though. and pier 1 imports, 8 cents a share in profits, that matches the estimate. a narrow miss $432 million of sales, $434 million was the estimate. those shares up by about 2.5%. that's the recap, we'll bring you more throughout the afternoon. back over to you. >> thanks very much, dominic. no rate hike today by the fed,

but won't be that way forever. and believes all signs are pointing toward a september hike. he oversees $727 billion and joins us here at post 9:00. >> thanks for having me. >> it's going to be september? >> i think it's going to be september. one of the things pretty important is what chair yellen said. there shouldn't be this focus on is it september, is it december? the pace is going to be gradual. listen, we think all the data suggests you can move and they could do it. i would argue the move today, it's not a surprise. they didn't, but yeah i think september's the base case. >> you get into the point that now everybody's starting to obsess over which is what does the trajectory look like? is it a 25 basis points? what's your anticipation? >> yeah i think they're going to -- it was one of the speeches, they used the term gradual 14 times, i think it's going to be very gradual, vale wait the data. i think the base case is move 25, probably go again in december, do another 25.

but it's ambiguous today, clearly with where the dots move. base cases, i think they can do that, and then you know, you move another four times in the 2016. listen i think they're very deliberate. i think there's a concern. i mean the effective funds rate. there's 4.5 trillion on the rate. we're not talking about '04, '05, '06. i think you have plenty of room to go. >> sara? >> doesn't a lot of it depend on what happens with greece which is still an unknown and all signs point to the fact that it could be disruptive as janet yellen said. now the fed is more internationally sensitive. whether she wants to admit it or not. doesn't that matter as to when the first rate hike happens? >> maybe. i mean listen i think greece gets a lot more attention than it should given the size of the economy, the influence. there's the discussion of contagion, clearly gets a lot more influence. it gets a lot more discussion relative to the u.s. economy. i would argue the impact is not that dramatic. the signs whether it's housing starts or auto sales or humans

being hired is pretty impressive. the data you can count as opposed to gdp which we think is skewed and aggregate retail sales is pretty impressive. >> there's a debate raging about whether or not junk bonds, if you will are you buyers or sellers of high-yield debt here? if it's a stronger economy -- >> yeah. >> that's ultimately a good thing for riskier companies. >> yeah, i would say from you know, we're shifting a little bit in terms of -- in terms of high yield. high yield is a good asset class. if you assume you're in a reasonable growth paradigm you assume rates will stay fairly moderate. not just high yield in the u.s. but -- >> flat currency, why are the ones to have such a reaction? >> one things about currencies, you have a big technical in the marketplace. the entire world is long the dollar and is of the assumption that you're going to get clarity around when the fed's going to move and the dollar's going to appreciate. so the technicals certainly drive the currency.

when you don't get the catalyst it drives it away from where the technicals would suggest. >> i want to go back to high yield for a second. if you look at the history of high yield, you know never gets redeemed, always gets refinanced. we have so much high yield sitting on balance sheets that will eventually come to you. and if rates do raise, by the time it comes due, this means there's going to be a lot of extra interest on the balance sheets with companies that really haven't invested in capital. they've been buying back their shares. what happens then? >> so i would say there are a couple of things. high yields very different paradigms in how they're running that are balance sheets. high yield companies i would argue, no doubt, putting on more leverage, no doubt forcing a lot of interest rate sensitivity in the marketplace. high yield for the last four or five years has done an amazing amount of refinancing and pushing that maturity wall out that the amount of financing that has to be done is -- >> do you think the blue chips have gone too far?

>> i don't think. we've talked about it a bunch of times on the shows before that you create when you keep rates this low you create this unbelievable subsidy that gets down to the equity that i think equities will continue to perform well. and by the way, i don't think when the fed starts that stops that process. i think people have talked about very extreme levels the demand from overseas given where bunds are jgbs the demand for income suggests we can't move up that much. but the economy's moving the fed's going to start moving. i think you're going to continue to drift higher. and it's not that provocative, but it's right. i think it'll be right and it's been doing it. i think that's what will keep happening. >> and a final question what about what happens in europe? everything we've seen in this huge move relatively speaking already in germany and parts of that market. where are you guys buying? and where are you avoiding in europe? >> in our base case there will

be a solution to greece. and it is extraordinary to us. when you think about the dollars, the euros, to bridge the gap in terms of creating closure. we think ultimately create closure that greece to go down the path of walking away and what it does to the economy, does to the banking system that is so debilitating we think there'll be a solution. we like the rates market in europe particularly in the peripheries. that being said, we're holding a lot less than we used to because you have to be sensitive to this greece dynamic. >> rick thanks for being here. appreciate your perspective as we tour the world. chief executive officer at black rock. we've got jeb bush starring the inflation debate this week with his goal of growing the economy at 4% a year. a top economist says that's possible but could also bring double digit inflation. you can check that out right now at cnbc.com/thespark and richard fisher also weighed in on this. the fed interest rate hike

will have a huge impact on markets. and india's finance minister is here to tell us about the fallout on one of the fastest growing economies. and thousands of greeks taking to the streets after warning of an uncontrollable crisis. we'll get you the latest on this drama coming up. and the fcc fining a trkst&tat&t. we'll dial up the latest on the wireless outrage coming up on the "closing bell." big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. summers heating up with royal caribbean's wow sale. our biggest sale of the

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welcome back, we have a news alert. hi, meg. >> hey, we're getting highly anticipated data coming out from biomarin. that's the most common form of dwarfism. this coming in positively. the company saying the drug showed in a small study that on the highest dose it increased the growth velocity for those patients by 50%. going to take that into the next stage of trials. so hitting some expectations for this trial, the stock rising about 7% in the after hours. again, with this drug there are no currently approved drugs on the market for this most common form of dwarfism. good news for biomarin. >> wow, it is. thank you very much. crowds, meantime gathering in greece earlier today amid continued debate over the stalemate between athens and international creditors. that drama weighing on european

stocks and concerns over fed rate hike concerning investors. for that international view, we are joined by india's finance minister here at the new york stock exchange. you just rang the closing bell. welcome. >> thank you. >> what is your reaction to janet yellen today? and the federal reserve going to raise interest rates soon. what impact is that going to have on india's economy? >> well, it's going to be high. we've been working, our central bank has been working to bring them down. but of course, in terms of investment, if there is an easing as far as the united states is concerned, it certainly has an impact on the whole world. i can't say the markets won't be impacted. but as far as the structure of the indian economy are concerned, they become far more stable. i don't see any significant impact. except some initial impact. >> and you raise the structural reforms. investors around the world have

been so excited about modi. perhaps thatcher is another analogy, but we're about a year now into this. what about the progress year-to-date? >> we are extremely pleased over what we've done. i've met a lot of investors today in the united states and there is a positive impact of all the reforms we've carried on how the investors view india. the credibility of the indian economy has been virtually reestablish reestablished. then, i've been repeatedly saying while there's excitement there is also a lot of restlessness as far as the indian government are concerned because we feel that 7.5% growth rate we have achieved is not our best potential growth rate. >> you can do better. >> we think we have the ability to do better. and therefore reforms aided by a lot of investment particularly

in infrastructure improvement in manufacturing, agriculture. these are the areas which can push up and i think our growth rates certainly end of the year should around 8%. future years, i'm keeping my fingers crossed that targets will be higher. >> a better investment than china? >> well i don't compare the two. i don't compare the two because we've grown in recent years. but china had a growth rate for a lot of decades. we have a lot of distance to cover before we can equate ourselves with that. that's a good example to follow. and therefore, i'd rather india grow for a decade or two by that growth rate. and it's only then our entire potential will be realized. >> there are some just as they're excited about india's potential worry about what they're called renewed tax terrorism. what can you tell us about the extent to which you look at companies as a potential source of revenue and any concerns that international giants should have? >> i was the one in indian politics coined that phrase.

and therefore, it's my responsibility to make sure it doesn't happen in india again. now, as far as direct access are concerned, we are following a road map of one of the most progressive direct access in india. i've now made a public announcement in my budget that over the next four years, we are going to bring direct corporate taxes down to 25%. that's globally competitive. there were some categories of taxation retrospective taxation. we have publicly announced it won't be done. no notices, retrospective laws will be issued. all the issues will be sorted out by appropriate forums where they are pending. and a number of them by the way, have been sorted out. there were issues with regard to the future. all the fears by amending the law. the past is pending before the

supreme court which i think should be able to decide on that issue. and therefore, the age of that kind of aggressive tax regime is over. we'll probably have one of the more tax friendly regimes in india. >> arun thank you for joining us. >> thank you. >> we look forward to continuing the conversation. time now for a cnbc news update with sue herrera. >> hello, kelly, and here's the update at this hour. the mayor of berkeley california saying the investigation into that deadly apartment balcony collapse points to water damaged wood. six people were killed seven more seriously injured when the fourth floor balcony fell during a late night party earlier this week. joyce mitchell charged with helping two convicted murderers escape from a new york prison discussed with them a murder for hire plot targeting her husband. the district attorney said mitchell talked to matt and sweat about targeting her husband. disney canceled layoffs.

back in may, the employees were told they were being let go and they would have to train immigrants brought in by an outsourcing company to do their jobs. the spokane city council president says rachel dolezal violated ethics rules by serving on the spokane police oversight commission. dolezal resigned this week. and that is your cnbc news update at this hour. kelly, back to you. >> thank you so much. fitbit is set to become one of the biggest tech ipos this year. it could price its offering any moment now. we'll see if this is a step you should be adding to your portfolio. later, it's the california ruling that could deal a massive blow to uber's business model. details coming up on the "closing bell."

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welcome back fit bit is expected to price the ipo any moment now and kayla tausche has been all over this story. she joins us from cnbc headquarters. what should we expect? >> hey, kelly, we are expecting to get that pricing which usually happens after the bell. any moment now, the fitbit ipo carries the markings of a successful pricing so far. raised the price range for shares to $17 and $19 earlier this week.

also increasing the amount of shares sold by insiders. growing at a breakneck pace at 5 million in revenues in 2010 and it posted a 200% rise in revenues the most recent quarter. it's distributed most major big box and e-retailers. about 28 times trailing earnings. it was profitable last year. and that valuation is about the same as garmin which is the closest public comparable stock. though, that stock has been suffering since fitbit filed to go public. but there are still some questions about how fit this company is for the public markets. it needs to show it can post repeat profits. and there are always weakness and costs associated with lock-ups and new stock issued to employees post ipo. that has softness for the companies in the first year after they go public. there are also a couple outstanding lawsuits, too.

and as many weeks from the fiercest rival jawbone. the million dollar question raised by everybody is whether the business model is sustainable as a stand alone company or whether it's ultimately a takeout play for apple or the likes of underarmour, which nike is of the mentioned. but now the question is what that price will be. we'll bring it to you as soon as we have it which could happen any minute. back to you. >> we'll let you go to that. and our next guest thinks the ipo price could be upped tonight. let's bring in char liplie anderson. with a welcome to you. you seem to know quite a bit about the company already. is it a good investment? >> depends on the price as always kelly, i would say if the price is at anything in the you know low 20s if 18 is the midpoint now, that's a good

price. we have a 28 target. so, yeah. >> is this company, charlie, growing the wearables category? or is it going to have to take share? >> no it's growing at clearly, i would say, you know with these rates, you know roughly 11 million units, the market's never seen a product like this before. we think they can do 16 million this coming year. i'll note they did move into the gps watch category with the surge product and clearly expanded that market from our perspective. >> carol, would you be a buyer? either of the device or the shares here? >> so i have a conflict of interest. i'm actually an investor in jau jawbone who is a competitor and a lawsuit. i'm conflicted about talking about the company. but in terms of the category, i think the thing you want to look at overall in any company like this is innovation. and what's next. i think fitness is that first step. but any device needs to have that reason for you to continue to use it over and over again. it's going to be the investment in innovation across the board

for all of the companies in this base. and what else is it going to be able to do for you and how well can it be done? >> right. >> so charlie, i guess the thing here clearly the market leader and it's seen tremendous growth. it's even profitable. but one of the concerns out there has to be competition with the apple watch, with everybody going into the wearable space. and whether it serves the same function, or not, as the apple watch. don't you see that as potentially destructive toward the market leading position? or maybe not. >> you know, last year they had a lot of competition, and they were very resilient. started the year with a recall. they had one key product and saw a lot of competition, they did just fine. early on through the apple watch launch, all of our checks indicated they're selling extremely well. it's a big difference in price point here. and i look at a retailer like a best buy you know there's not a lot of apple watches for them to sell at this moment. they're pulling these products to the front of the store,

fitbit giving them incentive to sell the product. >> as you said, key to the whole thing, thanks for your time. >> thank you. >> and if you're an at&t customer, you may not be getting what you paid for. the fcc fining the wireless company for slowing down speeds of customers with unlimited data plans. we've got details on that one next. and uber hitting a red light today. it's a decision that could put a dent in the car service and we'll give you the details coming up on "closing bell."

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come see what the new angie's list can do for you. welcome back. your unlimited data plan with at&t might not be unlimited after all. the fcc preparing to hit the telco giant for allegedly slowing down speeds on unlimited plans. joining us now onset with more. welcome back. and what do you make of this ruling? >> well, this is in line with the open internet rule that basically the fcc set up years ago and was upheld by the courts. they were in a fight you know a while ago about it and it basically says you can't throttle. you can't throttle without telling consumers. it calls for transparency. you know, this is about what is the definition of unlimited? and at&t says we'll give you as much as you want, but sometimes it's going to go really, really

slow. and the sec says no. >> is this limited to at&t? >> no i think there are other providers that have in situations. especially when they felt the network was overloaded by people downloading too much video. in fact what people said they couldn't do gps and couldn't do video streaming. >> if the argument is you can't regulate that traffic you have to maintain the open internet or whatever, are they given any other choice? is it they didn't represent to customers this is happening? >> right. so you can do what's called reasonable net management. okay. as long as it doesn't mean that you can throttle because you can say my network is being overloaded by you consuming my network. >> what do you think the consumer backlash is going to be about this? because as a consumer with a brand that i'm supposed to trust and i hear the word unlimited, i have a certain perception regardless of the technicalities. so what kind of expectations do you have in terms of the consumer here? >> well, i think as a consumer you really have to learn to read the fine print.

and should not have any expectation that a simple word means what that word means. >> that's a big expectation, lance. i'm not sure we're going to get the consumer to do that. >> but it's a reality. especially with these kinds of plans. i mean you see the paperwork that comes with them. you see the detail. i'm pretty certain that this information was in there but buried. >> we all hit accept. how does this square if it does with what happened on the video side of things as well? there was this whole discussion about net neutrality. >> well totally squares with the plan in place now. it is exactly the same thing. it says that you have to be transparent, you can manage your network, but you have to tell people up front. you could still get unlimited plan but have that limit when you hit 2 gigabytes or more of consumption. >> the commissioner, by the way, said they were warning customers that they were going to slow down their internet speeds and customers did say they were warned. and he said that the enforcement

confirms the concern that the internet is governed by engineers, not governed by engineers and innovators. there is that argument. >> it's going to be -- >> is this going to hurt investment? >> oh, i don't think so. i mean look people are going to still go on the internet, look for the best plans. there's great competition out there. constantly people looking for good deals. i always tell consumers, make sure you read the fine print to understand what you're getting. >> i'll confess. i'm the first one to never do that. thanks for being here. it's not even print anymore. lance, thank you very much. uber may have to head back to the drawing board. suffering a setback today that could create a traffic jam. and that story is next. fund manager bob olstein will tell us why you shouldn't always believe the hype when it comes to indexing. looking forward to that tomorrow on the "closing bell." sleep in sleep out

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welcome back. uber losing the first round of a legal battle today in california on whether the drivers are considered employees or contractors. kate rodgers tracking the fight for us. what did we find out? >> the ruling from the labor commissioner sides with an uber

driver saying she is in fact an employee. she sued the company for expenses related to her work and she was awarded $4,000 in expenses related to operating the vehicle, including mileage and bridge tolls. uber is appealing the decision and in a statement says the california labor commission's ruling is nonbinding. indeed, it's contrary to a previous ruling made by the same commission which concluded in 2012 that the driver quote, performed services as an independent contractor and not as a bona fide employee. this ruling is important because the fact that uber and lift consider their drivers to be independent contractors and not employees is a key part of their business models. today's ruling could very well set a precedent for that case. kelly, back over to you. >> stay right there, kate. i want to bring in the panel's take on this. carole, what did you think? >> it's a very bad precedent. not just bad for uber but small businesses across the country.

i think the irs needs to change the definition of what a 1099 independent contractor is versus an employee. most small businesses in this country spend 40% of their time doing in this country spend 40% of their time doog administrative work that doesn't directly produce revenue and with the very narrow definitions of what an independent contractor is same thing could happen not just to an uber but to your neighborhood small business, other small businesses and the like. it's not just the sharing economy but it's the main street economy and the government needs to get their act together. >> kate your response? >> what will be interesting to see here kelly, and i certainly can appreciate and agree with some of what carol just said there, but uber's valued at more than $41 billion right now and people certainly aren't considering them to be a small business. it will be interesting to see here whether or not this turns into a complete class action suit. there's a hearing on whether or not they will achieve that status beyond just california. later in august according to

shannon west reeden who is the plaintiff's attorney in the uber and lyft cases. it's going to really impact how the entire sharing economy operates. >> exactly, kate gets right to the heart of it. kate rogers with the latest on uber there. we meantime have a news alert on spotify. dominic chu, what can you tell us? >> according to the dow jones, citing people familiar spotify, the streaming music service here is going to hire a new cfo. that person's going to be barry mccarthy, formerly the netflix cfo. mccarthy was already a member of spotify's board of directors. in conjunction with this deal according to dow jones mccarthy will give up his board seat on spotify's board in order to devote full time to being the chief financial officer at spotify. again, dow jones headlines, spotify hires a new finance chief, barry mccarthy. he's going to be the new cfo. he was formerly at one point in his career the cfo at netflix. he will reside his board seat at spotify to devote full-time toward his duties as cfo. that again according to dow jones citing people familiar. interesting news here on the technology front kelly.

back over to you. >> and a really competitive space too. thanks a lot, dom, appreciate it. today we said good-bye to one of the biggest dealmakers on wall street. we remember the life and career of jpmorgan's jimmy lee when we return. sup jj? working hard? working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative pricing model, honey? for all the confidence you need. td ameritrade. you got this. you probably know xerox as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies

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sad news today to bring to you. jpmorgan vice chairman jimmy lee has died unexpectedly at the age of 62. lee was the former head of jpmorgan's investment bank and was well known for his work in the syndicated loan market. ceo jamie dimon saying jimmy was a master of his craft but he was so much more. he was an incomparable force of nature. we're joined by kate kelly and andrew ross sorkin for how wall street is reacting to this loss. kate? >> kelly, people are very shocked. i mean jimmy lee was an inexhaustible presence traveling all over the world working with clients seven days a week, all night. to think he passed and at this very young age unexpectedly is just a shock to everybody. everybody i've spokeown to on wall street be this they in the hedge fund world, private equity alumni of jpmorgan, people still there, share that surprise and really sad necessary. sheryl sandberg posted something on facebook about her sadness at the loss of a friend and collaborator. jpmorgan of course one of the underwriters for facebook's deal, its ipo. and i do remember when her book came out, "lean in," jimmy lee,

interestingly, being a man, put together a women-only breakfast at jpmorgan in sheryl's honor and she spoke about the book and brought together really quite an array of women not just from wall street but from the legal community, from the entertainment community, and he really was somebody that was good at bringing people together. so i think wall street and beyond will feel the loss. >> he was a face we saw on cnbc. he spoke with our david faber just last october. in fact, he also was on strategy session during that show's tenure and said i love coming to work every day i love the content of what i do and who i do it with. and kate, to your point he just said time and again when asked when his favorite thing to do outside of work is i love being with my family got a great wife, three great kids i love being with them, and that's what he enjoys the most. andrew, what are you hearing today? >> personally it's shattering. i've known jimmy for a long, long time. i was just off the phone with jamie dimon and steve schwartzman. it's one of those -- he was a presence, a bigger than life

presence. it just needs to be noted that i used to think of him as the last investment banker on wall street. he represented almost a different time. he was somebody who had relationships with not only other bankers but ceos in a way that frankly i would argue even today's bankers don't. it's just at a different level. when rupert murdoch needed to do something he called jimmy lee. when jack welch needed to do something he called jimmy lee. when brian roberts the ceo of comcast, the parent company of our network, had a deal to do he called jimmy lee. he was in the middle of the aig crisis and helped save that company. he did the gm ipo. alibaba. you think about jack ma. i'm not sure jpmorgan had any business doing that deal but he went to china and he got jack ma to do that deal. same thing with facebook. so he will be somebody who will be remembered for a very very long time. and had just such a huge impact. i think to the point you said about work. he was somebody who loved to work and he loved jamie dimon

and he loved jpmorgan. he loved the people he worked with in a way -- it's almost indescribable, hard to articulate because it almost seems comical or like a caricature, but he really was that person who loved this business in a way that is so hard to describe. >> andrew and kelly, one thing that's interesting about jamie is the number of times he reinvented himself. he started some 40 years ago at chemical bank and was a pioneer in the syndicated loan market making loans to corporations and sort of fueling the junk bond rise of the 1980s. many years later he took his suspenders and his cufflinks and his sort of connecticut lineage and wengtd to silicon valley and became a tech underwriter. as andrew note ed was involved with some very big tech players here and abroad be it alibaba, facebook. he brokered a settlement albeit a trern one between carl icahn and john done ojo of ebay when icahn wanted donoho to step down and paypal.

jimmy was the one who brokered the piece. >> it's amazing. i don't think people appreciate he was a person not in the spotlight, he as a behind-the-scenes guy but as you indicated with the carl icahn stuff, so many of these activist situations in the past couple years he was behind the scenes either putting things together or fighting fires. it really is a terrible loss. i was also thinking about -- he did the gm ipo. government motors. and put that back together. it's something together. it really is. >> he even had tom brady call jamie dimon, katie, in the thick of the london whale crisis back in 2012 when investors were really being critical of jpmorgan and thinking that it was being mismanaged and of course there were some terrible missteps involved. but just to encourage jamie and to make him feel better he had tom brady of the patriots call him and buck him up kind of out of the blue. and that was the kind of thing he would do. >> and i can understand andrew hearing all these stories, why he was colloquially called the

trillion-dollar man. >> you could add up the deals, and i think if you did the math i'm not sure there's a person on wall street in the past generation that's done nearly the number of transactions but more than that the relationships. >> andrew and kate thank you so much this afternoon. our thoughts with jimmy lee's family. and "fast money" begins right now. indeed "fast money" does begin right now. we're live from the nasdaq marketsite overlooking new york's times square. hello, everybody. i'm mandy drury sitting in for melissa lee tonight. cnbc has breaking coverage of three huge stories at this hour. oracle out with earnings just moments ago and the stock is tanking. the call getting under way now. our own josh lipton will bring us those headlines in just a matter of moments. also the protests in greece just concluding but will there be even bigger ones tomorrow as a crucial deadline looms? plus we're awaiting the price of fitbit which could be