i want to bring up the old thresholds of 6.5% unemployment and 2.5% inflation as the period during which the fed promised to keep interest rates low. that has sort of assumed, i guess sort of suggested that the fed was comfortable with inflation rises above 2% but you just said moments ago that you don't want to wait until inflation actually hits your target before you are ready to lift off. i wonder if you could explain that a little bit. is there a shift in how much inflation the fed is actually willing to accept? >> so let me be clear. 2% it our objective. we want to see inflation go back to 2%. 2% is not a ceiling on inflation. so we're not trying to push the inflation rate above 2, it's always our objective to get back to 2, but 2% is not -- is not a ceiling and if it were a ceiling you would have to be conducting

a policy that on average would hold the inflation rate below 2%. that is not our policy. we want to see the inflation rate get back to 2% as rapidly as we can. but there are lags in the impact of monetary policy on the economy and if we waited until inflation was back to 2 and that would probably mean that unemployment had declined well below our estimates of the natural rate and only then did we start to begin to -- you know, the word tighten monetary policy i don't think is really right because we have an immensely accommodate testify monetary policy in place. so let me say just to begin to diminish the extraordinary degree of accommodation for monetary policy we would be

overshoot -- we would likely overshoot substantially our 2% objective and we might be faced with then having to tighten policy in a way that could be disruptive to the real economy and i don't -- i don't think that's a desirable way to conduct policy. >> gina, bloomberg news. you mentioned earlier that there is always going to be some uncertainty in the global economy. yet it seems that uncertainties are what kept you from hiking this month. you know, how do you communicate to markets what is its kind of uncertainty that keeps you from lifting rates and what is the kind of uncertainty that you can overlook and move in spite of? >> so that's a very hard question and, you know, it's why we come together and have very careful evaluations of a wide range of factors, but at the end of the day what we're focused on

are two things, the path for employment and whether or not we feel confident that we are on a road that will take us to our maximum employment objective and whether or not we see the risks around attaining that as balanced. of course, there will be uncertainty around it. and whether or not we have reasonable confidence that inflation will over the medium term go back to 2%. and it's really through that filter that we're trying to look at uncertainty. of course, there are many uncertainties in the global economy, but we are asking ourselves how economic and financial developments in the global economy affect the risk to our outlook for our two goals and whether or not they create unbalanced risks that we want to wait to resolve to some extent.

>> peter barns, fox business. could you talk a little bit more specifically about what foreign developments you discussed in the meeting today, what you are concerned b we all assume it might be china, that was in the july minutes. are you concerned about the chinese economy slowing, the markets there? do you have any concerns about the european economy? and then related to stock markets, could i ask you how you feel about u.s. equity markets right now because you did talk about your concerns about them back in may, you saw they were generally quite high and were worried about potential dangers in u.s. equity market valuations, now equity prices have pulled back. thank you. >> so with respect to global developments, we reviewed developments in all important areas of the world, but we focused particularly on china

and emerging markets. now, we have long expected as most analysts have, to see some slowing in chinese growth over time as they rebalance their economy and they have planned that and i think there are no surprises there. the question is whether or not there might be a risk of a more abrupt slow down than most analysts expect, and i think developments that we saw in financial markets in august in part reflected concerns that there was down side risk to chinese economic performance and perhaps concerns about the deftness in which policymakers were addressing those concerns. in addition we saw a very

substantial downward pressure on oil prices and commodity markets and those developments have had a significant impact on many emerging market economies that are important producers of commodities, as well as more advanced countries, including canada, which is an important trading partner of ours, that has been negatively affected by declining modity prices and declining energy prices. there are a lot of countries that are net importers of energy that are positively affected by those developments, but emerging markets, important emerging markets have been negatively affected by those developments. we've seen in significant outflows of capital from those countries, pressures on their exchange rates and concerns about their performance going forward.

so a lot of our focus has been on risks around china, but not just china, emerging markets more generally and how they may spill over to the united states. in terms of thinking about financial developments and our reaction to them, i think a lot of the financial developments were really -- so we don't want to respond to market turbulence, the fed should not be responding to the ups and downs of the markets and it is certainly not our policy to do so, but when there are significant financial developments it's incumbent on us to ask ourselves what is causing them. and of course while we can't know for sure, it seemed to us as though concerns about the global economic outlook were drivers of those financial developments and so they have concerned us in part because they take us to the global

outlook and how that will affect us. and to some extent, look, we have seen a tightening of financial conditions during, as i mentioned, during the intervening period. so the stock market adjustment combined with a somewhat stronger dollar and higher risks does represent some tightening of financial conditions. now, in and of itself it's not the end of story in terms of our policy because we have to put a lot of different pieces together. we are looking at, as i emphasized, a u.s. economy that has been performing well and impressing us by the pace at which it is creating jobs and the strength of domestic demand. so we have that, we have some concerns about negative -- negative impacts from global

developments and some tightening of financial conditions. we're trying to put all of that together in a picture. i think importantly we say in our statement that in spite of all of this we continue to view the risks to economic activities in labor markets as balanced. there is a lot of different pieces, different cross currents, some strengthening the outlook, some creating concerns, but overall no significant change in the economic outlook. >> i'm with reuters. just so piggyback on the global considerations as you say the u.s. economy has been growing. are you worried that given the global interconnectedness, the low inflation globally, all of the other concerns that you just spoke about that you may never

escape from this zero lower bound situation? >> so i would be very -- i would be very surprised if that's the case. that is not the way i see the outlook or the way the committee sees the outlook. can i completely rule it out? i can't completely rule it out. but really that's an extreme down side risk that in no way is near the center of -- of my outlook. >> michael mckee from bloomberg radio and television. if the economy developments as the summer of economic projections suggest to you we will see improvement in labor market but it won't push inflation up any faster. i'm wondering what the argument is for raising rates this year as suggested by the dot plot because even allowing for long and variable lags you are not forecasting an inflation problem that would seem to suggest the need for a steeper and faster

rate path for at least a couple of years. >> so if we maintain a highly accommoda accommodate tive monetary policy from here and the economy performs as we expect, namely it's strong and the risks that are out there don't materialize, my concern will be that we will have much more tightening in labor markets than you see in these projections and the lags will be probably slow, but eventually we will find ourselves with a substantial overshoot of our inflation objective and then we will be forced into a kind of stop/go policy. we will have pushed the economy

so far it will have become overheated and we will then have to tighten policy more abruptly than we like. instead of having slow steady growth, improvement in the labor market and continued improvement and good performance in the labor market, i don't think it's good policy to have to then slam on the brakes and risk a downturn in the economy. >> mic derby with dow jones news wires. one of your colleagues in the dot plots said they would like to see negative interest rates. i didn't expect to see that. what do you make of negative interest rates as a potential source of new stimulus if the fed were to have to do something more as opposed to maybe going to qe?

does negative interest rates have any part -- should it be part of the fed's tool kid essentially? >> let me be clear that negative interest rates was not something that we considered very seriously at all today. it was not one of our main policy options, but one participant in the committee would like to see additional accommodation is concerned by the inflation outlook and things that we need additional stimu s stimulus, additional accommodation to provide that and propose doing so by moving interest rates negative. that's something we've seen in several european countries. it's not something we talked about today. look, if -- i don't expect that we're going to be in the path of providing additional accommodation, but if the outlook were to change in a way that most of my colleagues and i

do not expect, and we found ourselves with a weak economy that needed additional stimulus, we would look at all of our available tools and that would be something that we would evaluate in that kind of context. >> marty, "associated press." in july when you were talking to us you said that you, yourself, expected to see the first rate hike before the end of the year. is that still your expectation? and also when you talked about the developments in financial markets and what caused the august turbulence you mentioned china and other things you did mention the prospects of a fed rate increase. do you think that played a role as well? >> so you asked me about my own expectation and i'd say i don't want to -- i speak on behalf of the committee and tried to explain committee decisions and

we don't identify who is who in terms of our projections of the funds rate and i don't want to change that and have the focus be on my -- on my personal views on the path. you know, i have characterized the committee view as a fork -- you know, a forecast that will likely -- if it prevails, if that's how the economy evolves, call for a funds rate increase later this year and i think that's a fair summary of the committee's assessment of things. you asked me i think also about uncertainty about our own policies -- >> no not uncertainty, just the fact that the market turbulence a lot of people said part of it was a concern was the fed was about to raise interest rates. you didn't mention that as one reason for -- >> so i think the main drivers of the turbulence have been

concerns about the global outlook. that's how i read t but i know that of course there is uncertainty about fed policy. as i mentioned, we're well aware that there has been a huge focus on the decision today and i would ask you to appreciate that there are a lot of cross currents in economic and financial developments that we need to take into account in deciding on what the appropriate course of policy is and we don't make continuous decisions every single day about our policy, we meet periodically, we do our darndest to pull together the best analysis we can and to exchange views and to arrive at committee decisions. i do understand that during this inter meeting period that every word that an fomc member has

said has been parsed for its potential implications for what our decision will be. i think it's -- you know, that's an unfortunate state of affairs, but i understand and i think it's natural when you are at a point when conditions may be falling in place for there to be a shift in policy. it's natural that that should happen and it does to some extent contribute to uncertainty in financial markets. >> michelle ferry, bbc news. you talked a lot about the strong dollar. i wondered do you see your policy actions affecting the dollar? is it something you consider when you are making policy decisions? >> so monetary policy, u.s. monetary policy, is directed

toward trying to achieve the goals that congress has laid out for us. when we -- when monetary policy tightens and interest rates rise it commonly is the case either when it happens or in expectation, the expectation that that is coming interest rate differentials globally do tend to reduce capital flows that have impacts on exchange rates. so monetary policy often has some affect on the exchange rate and it's not in my view the main channel by which monetary policy works. it's one of a number of different channels by which monetary policy works, but it does have some impact on exchange rates and of course, yes, we need to take that into

account. >> greg rob from market watch. i want to see if you would shift gears a little bit and talk about the housing market. you say in the statement the housing market has improved. how much are you counting on the housing market for growth going forward, especially since the committee sees rates rising? thanks. >> so we are envisioning further improvements in the housing market. it remains very depressed. housing starts below levels that seem consistent with underlying demographics, especially in an economy that's creating jobs and we have lots of people who are still doubled up and demand for housing should be there and should materialize as the job market improves and income

growth improves. so are we counting on it? housing is now a very small sector of the economy. it is not the driver of -- it is not the key driver in my own forecast of ongoing improvements in the u.s. economy. it plays a supporting role, but consumer spending is the main driver, bolstered by, you know, decent outlook for investment spending, but i would continue to expect housing to improve and, remember, we are envisioning if things go as we anticipate a pretty gradual path of increases in short term interest rates over time. to some extent that's already embody yeed in longer term

rates. on the other hand as time passes and we move beyond the window in which short rates are zero, it will be natural for long rates to rise some and of course, we recognize that the housing market is sensitive to mortgage rates. it is an important factor. but that's something that of course we are taking into account and thinking about what's the appropriate path of policy. >> nancy marshall with marketplace. you mentioned you have gotten a lot of unsolicited advice, the folks outside, but there is another side that says the fed should raise interest rates because keeping rates so long for so long has actually exacerbated the wealth gap. do you think the fed has widened the wealth gap with its low interest rate policy, these people say low interest rates mainly benefit the wealthy? >> well, i guess i really don't see it that way.

it is true that interest rates affect asset prices, but they have complex effect through balance sheets, through liabilities and assets. to me the main thing that an accommodate testify monetary policy does is put people back to work. and since income inequality is exacerbated by having high unemployment and a weak job market that has the most profound negative effects on the most vulnerable individuals, to me putting people back to work and seeing a strengthening of the labor market that has a disproportionately favorable effect on vulnerable portions of our population, that's not something that increases income inequality. there have been a number of

studies that have been done recently that have tried to take account of many different ways in which monetary policy acting through different parts of the transmission mechanism affect inequality and there's a lot of guesswork involved and different analyses can come up with different things, but a pretty recent paper that's quite comprehensive concludes that the -- that fed policy has not exacerbated income inequality. >> john car with "politico." what role did a possible government shutdown this year play in your decision today to delay the rate hike? and what would you say to lawmakers who are pursuing the

strategy yet again? >> well, it played absolutely no role in our decision. i believe it's the responsibility of congress to pass a budget to funneled the government to deal with the debt ceiling so that america pays its bills. we have a good recovery in place that's really making progress and to see congress take actions that would endanger that progress, i think that would be more than unfortunate. so to me that's congress' job. congress charged us with forming an economic outlook that is focused on the medium term and taking appropriate policy actions based on that outlook and that's what we have done in the past and will continue to do going forward. >> madam chair, did he have

beckner of mmi. you said in your opening statement that the fed's policy of maintaining a large balance sheet by not starting to slink that balance sheet by curtailing reinvestments and rollovers, that helps add to your accommodate testify monetary stance on top of the near zero federal funds rate by delaying rate hikes logically are you not also delaying reducing the balance sheet a year ago if one sees that it would not start shrinking the balance sheet until it started raising the funds rate? so is it a concern that you are delaying normalization of the balance sheet, was that an issue that you and your colleagues discussed? thank you. >> we have been and this was reported in the minutes of our july meeting, we have been discussing reinvestment policy.

our normalization principles indicated that we would not begin to either reduce or eliminate reinvestments until after we have done to raise the federal funds rate. our principals said that the fact timing of that would depend on economic and financial conditions and our evaluation of them and that guidance continues to be accurate. we don't have anything further on it, but it is certainly true that we have committed to wait to begin running down our balance sheet until after we have done the process of normalization. so, yes, if we defer, this is not a very large matter that we are talk being fm a stimulus point of view, but it is to some

extent true that if we delay raising the rate it probably may be delays the timing at which that process will begin, but there's no fixed -- we have not given some fixed amount of time at so many months after we start and we are continuing to discuss what the appropriate timing would be of that policy and haven't made any further decisions on that just yet. >> thank you very much. >> all right. fed chair janet yellen completing her news conference following the announcement that they are leaving interest rates unchanged following their two days of meetings. welcome to closing bell. i'm bill griffeth. >> shaking my head because the reaction down here, a lot of people were shocked, we saw

stocks jie rating wildly, first the dow up 100 points, then negative and then that has repeated itself i don't know how many times since. the decision came out 90 minutes ago. for the last hour we have been hear from janet yellen. various different remarks have been responsible for pushing these markets around. the dollar is down by a point on the dollar index, the vix is moving up higher, so in a sense we are back to where we started. >> it dipped bloi the vix below 20 at one time. i want to look at the two-year note as well. that seemed to be signaling earlier when it hit 81 or thereabouts maybe it was anticipating a rate index but it's come all the way back down as you see at .69%, the dollar going lower, that has pushed commodities higher, gold for one has popped today as they say. so that's up $12 now, a 1% gain, one of those few gains we have seen in the price of gold lately. >> if you are wondering why that

hasn't pushed crude oil high i didn't remember, remember yesterday what we priced in crude oil was up about 5% and stephanie link told us she thought that might have been in anticipation as well. so a lot of buy the rumor sell the fact or maybe not going on again here, too. >> let's kick it around. get some reaction from our panel of wall street experts. with us diane swan, we have jim bianco, bob willis and rick santelli is there in chicago as well. diane, i'm going to start with you. with the added wrinkle in the statement today that they are watching developments on the global economy and the softening there, it would appear that they're widening the net of what they're watching to tell them when it's time to raise interest rates. do you agree with that? >> i agree with it and i agree with it because it's a net that's already widened for them. data dependency doesn't just mean it's data, how the incoming data, stronger dollar, effect

their outlook. i guarantee you they opened up the meeting laying out the down side risk, if china has even more of a slow down we could see slower growth in the u.s., the nature of below potential, that would push up unemployment. they saw that scenario going in and my guess is that scared a lot of them. we saw more people join the ranks of doves. >> let's bring steve in, he has just stepped out from the news conference there and you were able to ask the first question. you did, in fact, ask about that new sentence in the statement about they are looking at the global economy, you asked specifically if they were talk being china. you didn't get much response on that one. what did you make from what you heard from janet yellen today? >> i thought she was a touch more hawkish than the

combination of the statement and new forecast. those new forecasts were on the dovish side if you look at the idea that they lowered the outlook for the feds fund rate and inflation rate and four members don't see a rate hike until after 2015. that's up from 2. so both of those things made me -- there was a more dovish attitude on the federal reserve. the gist that i got from yellen instead of point to go anything specifically was that we had a shock in the summertime, let's wait to see how it plays through, let's be prudent about this and then she uzed that phrase in a little bit. a little bit and they would come back and perhaps consider, even october, maybe more likely december for the first rate hike. >> and that's the point we want to bring up now as we bring our panel back n jim, if the fed didn't do it today it gets real inn clear with the calendar, october there is no press conference, december richard fisher yesterday form he will earl of the fed told us they don't like to do it in december

because of year-end window dressing. then we get into 2016, more towards the political cycle there. jim, if they didn't go today when do you think they're most likely to go now? >> yeah, i'm in the camp that they're probably going to go in '16. i thought steve's first question laid it out and i thought yellen's nonanswer was the answer. the data they are looking for and the market calmed down that they're looking for it can't happen in five weeks, it's going to take a period of several months before they see what they want to see in terms of financial market conditions and the data from overseas to show them that there's not a problem. that's not going to happen in october, in fact, the market right now is only putting a 20% chance of an october rate hike. probably not going to happen in december. all of a sudden we're look at now 2016 for a rate hike. >> ben willis, tremendous indecision if you want to cull it that, volatility came back here in the last 90 minutes for the equity markets primarily. >> right. >> what's the market -- are they just trying to make sense of it

all or what's going on here? >> the al go writ ilgs f ims usually are switched off when the fed makes a statement because they are so difficult to discern, which is why you saw a delay and very dramatic movements but i owe my friend art cash inn is glass of well marinated ice cubes that he called this correctly. i firmly believe that they should have raised already, this is another missed opportunity but we are also going to have to take a look at the opportunity that she will be able to raise rates when there is no meeting. that is still a technique that can be used by the federal reserve. they don't have to call a meeting. the uncertainty that it leaves in the marketplace is very dramatic and she just took the mantle of those who believe our central bank is the world bank, she just claimed that tight snool no. >> diane, did i hear you chuckling? >> excuse me. >> i thought i heard a chuckle there. >> i think there was a couple of us chuckling to that. i actually think the most important point steve made earlier was how chair yellen tried to counter the negative

impact in the dovish tone of the statement is a saying our sfraft still out there, we're still going to make our goals, we still think the baseline scenario is one that the economy is improving. i agree with jim that october is off the table. history will not be written on when they do their first rate hike, it will be on how their second and third rate hike is decided and thereafter. i also think it's important that december is a possibility still as long as the u.s. economy does hold up. that will make a big difference if the consumer continues to charge ahead in the fourth quarter, that could bring those doves back offer of that 2017 or 2016. i think 2016 with the negative rate hike he's leaving, he made a point and chair yellen dis counted that. >> rick santelli it's your turn. it is your first chance to respond to what didn't happen following the fed meeting today.

what do you make of it now, my friend? >> china has been slowing for quite a while, commodity prices have been going down for quite a while. the only thing that's really changed is the communist lead remembers panicking a bit about it and that seems to be something that has affected the fed, but i continually go back to 1977. you have pillar one, okay, unemployment maximized. i don't know. i think you could argue that at least based on their numbers that's true. you have pillar number two, very stable prices. they are stable. 2% is arbitrary. but anybody thirsty out there, you now have a third pillar, boehner, are you listening? congress are you listening? they should a third pillar, they are now the u.n. central bank as well and i'm not so sure that they're sanction tods make that as large a focus at a time or in janet yellen -- -- >> that he is comments, they are beyond silly. >> it's my turn.

>> yeah, but you're being really silly. >> it's my turn. >> why, steve? >> let rick finish here. >> the european central bank doesn't have the latitude that's not given to them by their leaders and i'm not sure that janet yellen is completely on solid ground here. it sounds to me like an excuse and i think that these press conferences ought to be rethought. that was very uncomfortable to listen to. >> steve, why do you disagree with the notion that -- >> i thought -- >> when they are watching very carefully. made it clear they're watching global developments and the impact it can have on the u.s. economy right now. >> right. does that also mean that you're driving somebody else's car when you are driving down the street and looking at where they're going or looking for people crossing the street? i really thought television time was precious, we need to be smart about the things we're saying. the idea -- >> well, then let me talk. >> the federal reserve is looking at what's happening

globally and considering the impact on u.s. inflation and economic does not make them the world central bank. that's just silly. >> it's not silly. it goes against the mandate that they are empowered by the government -- >> that's right. >> they took the mannedel by going global. the fact of the matter is the plot points they pointed out other than inflation show a reason that they met the matrix in order that they should be letting the interest rates normalize. >> hang on. >> every central bank in the world is ultimately worried about inflation, whether you like 29% target or not they are missing their target. >> that wasn't the main reason for not going. >> there is no las vegas in the global economy. >> no, las vegas is the fed against the hedge funds. >> i suppose you guys want to put up -- >> hang on.

>> wasn't to see when rand paul calls a conference and calls janet yellen in front of the congress for making the statement they are concerned about the global effects rather than the effects on the united states and the secretary beneficiaries and the retirees that are being negatively impacted by this interest rate scenario. >> are you just making it up in your mind? they didn't say anything about concerned about -- you have to listen to what the fed chair -- >> this is how it effects the u.s. economy. >> we d we didn't hear much. >> we didn't make anything in our mind. >> -- having a negative impact on american citizens. >> jim, let me ask you for a second if the fed is their own enemy in the sense what they're worried about is simple, getting inflation back to 2% and all the language around it is trying to point out all the different reasons that's not happening therefore distracting people to focus on those factors. do you think they're too hesitant to say, look, when it's 2% or higher we are going to go? >> i think so. i think, diane, you had it

right. the fed is looking at trying to get back to their inflation goal. they are knots achieving t guess what, they haven't been achieving it for years. this is nothing new. now, what comes along here is a financial crisis. i think that yellen said it a little bit in her press conference, it's knots that the u.n. central bank or world central bank, it's more a stock market central bank. we don't worry about the ups and down of the stock market but we're worried about the upts and downs of the stock markets. they predicated qe on the whole idea of a wealth fegt. they don't want to reverse wealth effect by being the reason that the stock market goes down. that's why they have loth lost their opportunity. if they are going to wait for inflation to come back they're going to be waiting for a while. it's not coming back in october or december. >> steve, what's your take on when if not now? how long is it going to take these global developments to work through our own u.s.

economy here? what do you think is going to be the outcome if they are not raising rates today's "today"? >> so jim makes an excellent point it was really what i was getting at in the question is how the developments work through the data. we know, for example, that exchange rate changes work through -- when they do effect an individual country they take months and sometimes a quarter. so it could be that you don't get the latest down drafting commodity prices work through the inflation data for two, three or four months. it's worth noting, however, that yellen pointed out some further improvement in the labor market could offset the concerns about inn flag. now, all of that has to be put under the scrutiny of this idea of the connection between unemployment and inflation seems broken at best right now but that's the way the federal reserve is thinking about it. it's at least possibly october, i want to listen to yellen when she speaks in a couple weeks, she will be giving a speech, but i think december is more likely and it is still true that the majority, the vast majority of the members of the sfchlt omc

expect the rate hike this year. >> but steve the vast majority also expect two rate hikes this year, one member expects three rate hikes this year. >> diane, what was also interesting is to look at that negative dot as people are calling it, what the heck was that all about? >> a little statement -- >> yeah, i think he's leaving, he has made it clear he would like more accommodation. she dealt it w. it and said, listen, we didn't take that one too seriously. i think it was interesting that he put it out there. it's easy to do, he's leaving the fed and he's going provocative. i will leave it at that: i do think the other important thing is talking about the labor market offsetting it. we have been cautious on wages, we think wages are about to accelerate. as long as you get 200,000 or less, a little less than that gains in the labor market through the end of the year you could see wages begin to accelerate that and would help offset some of these things the

fed is seeing being a drag this their outlook. >> ben willis, what are you expect nothing these next 20 minutes? any levels you're watching? >> you are inside a no man's land trading band and tomorrow is a quadruple expiration. you can expect anything you want. you will hear from art cash inn a little later. technically the technique calls you are inside no man's land. >> art will join us before the close on the count down so we will hear from the man himself. thank you all for your thoughts on today's action or lack of it from the federal reserve. >> no comments on anyone's looks so far so i think we're in good shape. 18 minutes to go into the close here and in that vacuum that ben mentioned stocks are fluctuating pretty wildly today. we've been up, we've been down, currently the dow is negative by 25, the s&p barrel down, the nasdaq is up 18. >> we will bring in former fed officials gary stern and randy kroshner, tell us if they think the fed did the right thing and

what comes next. stay tuned. this just in: 50 million customers' data was not compromised this morning in a security breach that didn't happen. wall street. not rattled. at all. no. not at all. not at all. i mean, look at the day. sir. sir. what went right? what went right? everything. thank you. with threat intelligence, behavioral analytics, and 6000 experts, ibm security will help keep you out of the news. my dad's company wasn't hacked today. cool. 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.

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welcome back. if you're just joining us the fed decided to leave interest rates unchanged today and the markets have gone all different

directions here. i want to look at the s&p 500 heat map, all 500 components pretty evenly split right now. >> we will take a look at the sectors shortly as well. this is a market where you have people who are benefitting like some of those previous biotech names, some of the trading ranges that have held going into this meeting now perhaps getting a second wind. >> let's check other stocks that have been making huge moves. dominic chu has an itemization for us. >> bill, kelly, we are watching a few names, shares of ely lily on a steady kpliem all day today. new data shows that one of their drugs significantly reduced the risk of cardiovascular deaths in treatment, this is a treatment for type 2 diabetes, those shares up by 7%. also large cap telecom verizon shares dragging down the telecom sector and perhaps a bit of the s&p 500. the company did warn next year's earnings might plateau.

again, some pretty big moves for some of these stocks but we are watching all of these guys in the wake of what's happening with the fed. back over to you. >> and that bio techs index up about 2.4% for the time being. did the fed make the right move today? let's bring in two fed inside sneers former if he had governor randy kroshner and gary stern. >> good afternoon. >> both of you, you've been in the meeting room, you know how to works. are they playing offense or defense? what did you make, gary, of the result today? >> well, first of all, i wasn't surprised and i can give you a variety of reasons. starting with the fact that the fed is a very conservative organization. so you're looking at a situation where the markets have been volatile, the economic outlook abroad not domestically but a brord has been deteriorating they haven't achieved their inflation target. you add all that up and it seems

pretty easy for them just to continue on the course they have been on. whether that's the right decision is another matter and personally i would have favored a move at this point, but i'm not in the room anymore and so that's the way it goes. >> but we would like to focus on the right decision, randy. do you also think they should have raised rates today? >> i think one of the things they were looking at is they were looking at the softening of export demand exactly as gary said a lot of uncertainty and sort of why take the risk of having to shift back. i think one of the things that has been important and hasn't gotten enough attention is if you look at market expectations of inflation, those market expectations and moving down, the expectations in particular of inflation from five years today to ten years today, the two called five year five year forward the fed looks at that a lot and that was a key motivator for qe 1 and 2 and that's been bouncing around significantly below where it had been. it's hard for them to say they are so confident when the markets seem to be res kef dent.

>> randy, i keep saying will we ever see all the stars in perfect alignment, all the different metrics that they're hoping to see in we have the job growth, we admitted that is correct we just don't have the inflation but as our rick santelli pointed out what you do have is price stability which is part of the sfed mandate. are they waiting for good dough at this point? >> hopefully not. the question was put to janet of whether it will ever happen she said there is a high probability that it will but she wouldn't say that with certainty. there are always excuse not to act and exactly as gary had said with the fed being a conservative organization you can look to those. in some sense that's why the fed in the past has been behind the curve in acting to inflation they want to make sure all the foundation right side there. i think given that we were in such a tenuous situation i can see why they're continuing to defer but i really hope they feel the confidence and courage of their conviction to move soon. >> this brings up the important

point about when that next opportunity s so october there is no press conference, december is the end of the year and again richard fisher told us yesterday, maybe you can agree or not that you don't like to do it at the end of the year for window dressing purposes. then we're into 2016. being a conservative institution where do you think this leaves them? >> i would make two points in response to that. i agree that october is off the table. i do not agree that window dressing precludes december but the way i read the statement i would not put a very high probability on december, although apparently chair yellen was trying to balance the scales a little bit in her commentary. i take it that it's not going to be almost next year sometime and i think bill made a very good point. if you wait until all the stars are perfectly aligned you will wait forever. especially when you are adding the global economy now, too. >> well, and of course they look at the global economy, too.

>> they rarely include that in the statement, so blatantly. >> that's right. i think we've got a situation where at some point and maybe it will come from the domestic labor market, something will trigger action, but until that occurs they seem to have given themselves lots and lots of leeway to continue the policy that's been in place, a very accommodative policy that's been in place for a long time. >> ben willis mentioned they could raise rates any time -- >> inter meeting. >> how high is the bar for any kind of inter meeting move? >> very high. there's no inflation pressure that's immediate and it's going to take them a while to see it move up and i think it's going to be not going to see those market expectations move up, we won't see it until commodity prices start moving up and we won't see it until anytime soon. i don't think december soft table. they a nounlsed the tape nr december.

just because it's near the end of the year doesn't mean that they won't move. i disagree that december is not on the table. >> we will see you all in three months. >> and three months after that. >> yeah, yeah, right? it becomes an annuity after a while. always good to see you. thank you both fofr joining us. >> let's send it ought to the nasdaq with bertha coombs. >> nasdaq is off of the highs but is positive territory along with a small 2000 and it's a little bit of the usual suspects leading us again. the so-called fang stock are all leading higher today holding on to gains as we head into the close. it looks like investors went back to bio techs. janet yellen seems to be good for bio techs whether speak being them or not, bio techs stood surging, in fact, after the fed announcement and moving out of correction territory from the recent highs in july and we

had one biotech that was brave enough to go public today, regenixbio, $22 a share getting a next gain today. they do biotech technology for drug developers. >> bertha, thank you very much. bertha coombs. >> is it time for the closing count down already? all right. we will be back, we will wrap up what has been a wild couple of hours of trading here, bob pisani and art cash inn will join us as well. >> and our special fed coverage does continue after the bell with the dow down 73 points. keep it right here, you're watching cnbc first in business worldwide. don't let unanswered legal questions hold you up, because we're here, we're here, and we've got your back. legalzoom. legal help is here.

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i like to bake. add new business services with at&t and get up to $500 in total savings. four minutes left in the trading session, time for the count down. i have art cashin and bob pisani joining me. quickly you were saying we had a sell imbalance going into the close. >> right now $700 million to sell on balance, at one point earlier there was almost a billion 3. >> that's a little higher than normal. >> so here is today. this is the dow, quiet until the moment we had the announcement and, you know, chaos. right now, though, we're down 91 points, setting lows for the session. calm other things to keep an eye on, the two-year note which early in the week seemed to be

signaling expectations, .18% is down to .68%. the dollar index is coming lower, that has pushed commodity prices. down 117%. gold up 1% in reverse and the vix has come lower. for a time it was below 20 but now we are at 21. >> now it's back again. you had a spirited discussion at the top of 3:00 -- >> do you think? >> whether or not the fed has essentially introduced a third mandate. i think it's a legitimate question. janet yellen specifically called out china in her press conference as a factor in their decision-making, that the not normal part of their mandate and kwet is how do you get that genie back in the bottle? do you now take into account the shanghai stocking decks as a potential? >> i differ to some degree. >> we have to give you your due because you have been saying all along that we will not see a rate increase in year. >> absolutely. >> even as we get the other clues that it might be

otherwise. >> and particularly the september one because this was a credibility gamble. they had the inf, the bank for international settlements and world bank all telling them not to do it. if they had done it and something bad would have happened their credibility would have blown up. even more than what happened in china that's what got them. they said we don't risk doing this with this firepower telling us not to. >> have they widened the net? being explicit in the statement that they are watching global developments right now, are they ever going to have a situation where they will have all the metrics that they're after to start raising rates here? >> i don't think so. certainly not this year. look at the voters. fisher who was very, very forceful about how he wanted to make a move this year, he voted with the chair and the only one was lacquer who voted against him. >> we will never raise rates

agai again. >> larry pedlo was on record saying that. >> giver me the market sense. we have an expiration tomorrow, how does that complicate things right now? >> it will complicate things. as of now it looks like the early look is that it might be slightly to the sell side, but what's more important is we have to see what happens around the world tomorrow. their reaction here was important. >> you mean overnight here. >> what is critical is what happens in europe and in asia overnight. >> if you look at chinese equities, for example, the fxi, the etfs generally traded to the upside. the early bet seems to be they will be up overseas. >> you would think that the chinese stock market would go higher as a relief hallie that the fed didn't raise rates. >> more particularly the emerging markets even than china. that's what we will be watching. >> they did move up on the early. >> thank you, guys. see you later. >> tremendous volatility, we

were up 100 some odd points, down 100 some odd points, going out with a decline of 50 right now as interest rates remain unchanged from the federal reserve. stay tuned, a lot more to come. don't go anywhere. we have the second hour of the "closing bell" with kelly evans coming your way right now. i'll see you tomorrow, kelly. thank you, bill. welcome to our special fed market coverage. i'm kelly evans here at the stock exchange. here is how we're finishing out the day on its wall street. the dow down with 63 points decline, the s&p giving up 5 points, the nasdaq hanging in there, adding about 4 points on the session and interestingly enough one of the areas that did benefit from the fed's decision not to raise rates today and this won't surprise you, it is bio if he can, that nasdaq biotech index up 2% on the session what, this means for markets we will find out. we have lots of heavy hitters to put the fed's decision in

perspective including black rocks rick reader, sheila bear, and economist david rosenberg all coming up and our own team standing by to break down what the feds said, steve liesman, bob pisani and bertha coombs out at the nasdaq. steve, let's kick things off with you. >> thanks, kelly. here is all you need to know, the fed didn't raise rates and cited concerns about global economic developments and financial developments. let's look at the exact wording that the fed used to really rationalize not raising rates here. do we have it? we may have it. there were recent global economic and financial developments may restrain economic activities r tift somewhat and are likely to put further downward pressure on inflation in the near term. which raised the question, well, when about the federal reserve gain confidence that inflation is heading back to their 2% target and that the global

economic developments are not really restraining growth in the u.s.? i asked that question of fed chair janet yellen. >> there will always be uncertainty, we can't expect that you know certainty to be fully resolved, but in light of the developments that we have seen and the impacts on financial markets, we want to take a little bit more time to evaluate the likely impacts on the united states. >> well, that's what we have now, a little bit more time. we don't know if that means october or if that means december or next year. it's well to point out there are four members of the committee who do not see a rate hike this year but see it later, that's up from two in the prior forecasts that were put out. take a look at the forecasts and what you see is they are sort of on the dovish side, they brought down all of the forecasts for the fed funds rate, this is the median forecast of fomc members by as much as .3 in 2017 and .3

over the long run for 3.5%. so that's a more dovish trajectory. you also see they moved further away from their inflation forecast as well by .2 and .1. they are the inflation forecasts, .3 for this year. remember, that's a 2% inflation forecast that they don't hit until right about 2018. guys, it's a walgt game again. janet yellen did say if there were more improvement in the labor market that could offset concerns about these global economic developments. kelly. >> steve liesman, thank you. let's get over to bob pisani now. bob, the stock market reaction was all over the place. >> this is an exciting day even when the fed didn't move on interest rates they did surprise particularly with that comment on taking into account global economic and financial developments. take a look at the dow jones industrial average. initially we moved down on the fed announcement but then had a huge rally in the following hour, the dow rallied 250, 270

points to the upside and then in the final hour from 3:00 to 4:00 went exactly the opposite direction dropping almost 300 points from the high to the low. a lot of people were trying to figure out whether people were just taking profits and i think that's the most obvious explanation after big gains in the last couple of days. interest rate sensitive stocks had problems after the fed announcement. if you look at any banks like jpmorgan those stocks generally moved to the down side and for the most part stayed down ending at the lows for the day. with the dollar weakened you might have thought that some of the big global names like general electric might have fared a little better. that didn't really happen after moving up initially most of them like ge moved to the down side and most of the big global names ending at the lows for the day. a lot of discussion about the fed now getting involved in the chinese economy and i think a legitimate question about whether or not there is a whole new third potential mandate that the fed has. big debate down here about that. >> a lot of new questions.

bob, thank you. let's bring in today's panel along with steve and bob, jim la camp and sara eisen and "fast money" trading tim see more. jim, has the fed wasn't it hadself into a corn here? >> yes. central banks always come down -- they always forget the unintended consequences of their action. it's like the patient that waits too long to get his wisdom teeth removed and has to have a root canal. by the time we figure out now that we have impacted the rest of the world we've created currency wars all over the world and now what they're doing is impacting what we do and they are always going to get it wrong. the word -- this is the worst outcome and the reason it is is two months from now we will all be sitting around gaming the fed chltd we are not doing our homework, doing all sorts of market moves, all we are doing is watching the fed so they have become the 800 pound gorilla in a canoe and we're watching them moving forward. >> sara, what would you say about that? >> i would argue with the third mandate criticism that the fed is getting because janet yellen

clearly described why they decided to wait and, yes, they are wearing on the time of caution because tin flunss the outlook of the u.s. economy including inflation which she said in her view softened, that's a good case for not raising interest rates. you also did not see panic in the markets because the markets largely weren't that surprised by this move. the dollar was weakening into this decision, treasury yields were lower into this decision, jeffrey gun lock was on half time report today before the fed came out and said the bond market is saying don't move. he wasn't expecting a move. >> two year treasury yields -- two year treasury yields plummeted. that tells me this was already priced into the market. i think we would have been better off doing a quarter a point and saying from now on we are going to be a wallflower for a while. we're going to get out of the market's way, we've raise add quarter of a point, let's let the markets deal with that and come back later. >> tim.

>> kelly. >> did ahead tim. >> plummeting bond market tells me it was not to the market. you had jobless claims which were the second lowest since the '70s when you had single family construction starts the highs at the cycle. yellen told you that the u.s. economy was doing just fine. as sara pointed out we brought in this owe pension third and other people pointed out what do you do with china? if anything we've introduced more uncertainty today and widened the net for wit feds can fall back on. that's disappointing for everyone who wanted to get on with this but i think it leads you back to the place where there is a global growth scare and that puts you back in the august soup at some point. >> steve. >> i'm just having a hard time with folks who are saying that ultimately the fed has some third mandate here. i want to associate myself with sara's remarks. who forgot that the world is interconnected, china has

emerged as the second biggest economy in the world and what happens there could have some effect on the united states economy? but i have not heard a single word and i challenge people who say this to please tell me where did the janet yellen say that what they're doing is to influence china's economy? everything i've read or heard was in order for the federal reserve to see the effect of overseas economic developments and financial markets on the u.s. economy. i don't hear anything about a third mandate anyplace in anything that was said. >> let's put this very question to larry kud low. hang on everybody for a one second. i want to bring larry kud low in for his reaction. did you hear what steve just said? what do you think about the fed responding to china here or taking it into consideration and not raising rates today? >> steve is right. the fed has always looked at international events and you know -- >> you just won a nobel prize, larry. can i give you a mow bell prize? i want to give one to you. >> i accept it and you are a

sweetheart and great american. look, kelly, we have talked for weeks and weeks, i have argued that market price indicators have said to the fed don't do it and i by the way love yell len's appearance today, i'm really becoming a yellen fan. she said you've got a strong dollar, falling import prices, falling oil prices, she mentioned that bond credit risk spreads are widening that is correct shows a tightening and financial conditions, that's very important, the dollar's rise itself is a de facto tightening and i think one of her messages right now is with zippo inflation, inflation expectation right side coming down, the actual index indexes are flat. why do it? she's exactly right. there may come a time when these market indicators say something else, but right now if you operate on a commodity rule or market price rule she did exactly the right thing. >> jim. >> that may be the case, but this is a situation that central

bankers around the world have created themselves. global debt has grown by 9% per year. the fed's balance sheet has gone from 788 billion to $4.5 trillion and what has it achiev achieved? it's achieved a slow recovery. now we have a global economy that is muddling along, disappointing everybody especially the fed and the problem is we are not doing -- we are not taking any of the right policy measures and we are struck at the zero and there is no positive catalyst here. >> i don't have a problem with zero. can i just tell you that? if you have virtually no inflation and stagnant growth worldwide you should have zero inflation and slow growth. that's what we have. if you want to improve the american economy, that's not the job of the fed, the fed's job is to protect the currency and get price stability which they have. what you do is slash the corporate tax rate which i've said a million times. right now i think yellen knows that another 10 or 20% rise in

the dollar would be inn opportune, wrong timing, we have already had the big dollar rise, that's a de facto tightening. and here is the final thought, their models are giving them bad signals and she's ignoring the middle. the phillips curve trade off between unemployment and inflation is not work as it has not worked for the better part of 30 years. they are being very flex inl and letting the markets guide them. i think they're completely right. what we need now is profits. let's move the conversation to profits which are the mother's milk of stocks. >> let's actually -- bob pisani and then tim but i want to get both of you in. first to you, this point on profits that larry is making. >> i think yellen probably did the thing everyone expected her to do, i personally was in the one and done camp, i've been there for a while, i do think this is a legitimate question on china. she singled out in his press conference said china's slowing economy was a factor in their

decision-making. suppose we get inflation starting to move up, u.s. economy improves and china goes into the tank in a big way again do they not raise rates citing kmien in a as a factor. >> it's different from a third mandate. >> it makes it more complicated. >> in inflation -- look, see, here, again, i love this. they're targeting inflation and inflation indicators. if inflation indicators go up the fed will move, as they should. so i don't think it's that complicated to tell you the truth. regarding china, look, china has an impact on global inflation. you do -- you do not want a tremendous division in currencies right now, one of the missing links if you want to criticize, these central banks don't coordinate their currencies anymore and they should as paul volker gave a speech on this a while ago, that's missing currency coordination. >> i just want to add the imf has been vocal about policy coordination and one of the things they're worried about is

exchange rates. they have to be happy, steve, with what the decision was today. >> i think so and i think what we need is we need larry to be the chairman of a second britain woods to get toth and i think he is the right guy for the job, he understands the right indicators to look at and it is an issue and i think it's interesting that he points out that yellen fears another 10 or 20% appreciation of the dollar. that could well be. i got this feeling of yellen saying, look, we got a shock, i want to see how it plays out. if i'm going to make a mistake i'm going to make it to the down side. i think they still want a hike, i think they still want a hike this year. >> okay. >> it's still my forecast that that's what's going to happen, that they're going to hike and pa san gee is going to be right, it's going to be a one and done. they are going to do it but i think she wants to see how this filters through. there is a big question about how a chinese slow down effects the u.s. economy. take a look at it and do it.

>> we've got to go, everybody. i'm so sorry. >> we got the strong dollar. we don't need a second round right now. i think that's at the heart of yellen's decision and i happen to think she's dead on right. >> tim see more, you have been waiting patiently. a wind word. >> u.s. corporate exposure to china from a direct revenue perspective is 1.6%. china is not going to destroy u.s. corporate earnings. if you bring it to broader em it's 6.5%. when i look at the spectrum i think people have overreacted to client fashion the dollar is down 6% over the last six months. i think there's a lot of conflicting forces here, more uncertainty, the fed did the right thing today. >> we will leave it there for the time being. everybody, thank you. i really appreciate it. trying to get everyone in here. tim see more much more coming on you on "fast money" at 5:00. he will explain why he thinks the market is vulnerable again after the fed decision. don't miss that.

much more of our special fed market coverage still to come. rick rei dechlt er gives us advice on the fund trade. and a fund manager tells us how to play the banks. you are watching cnbc, first in business worldwide.

welcome back. what a day. there's the dow, closing down 65 points, the nasdaq did still stay positive by 4. let's get to dominic chu with an earnings alert on adobe. >> cloud software provider ad e adobe, mind that suite of products, shares are now unchanged at 185,000 shares after the company reports earnings of 54 cents a share that is correct beats the average analyst's estimate. revenues coming in slightly better, $1.22 billion, average analyst estimate was more a little below that $1.22 billion estimate. adobe does see its current quarter per share earnings per share on an adjusted basis between 56 and 62 cents that falls shy of the average analyst estimate of 64 cents. also revenues between 1.28 billion to $1.33 billion also falling shy of $1.63 billion

average analyst estimate. those shares unchanged in the after hours. year to date those shares are up 10% over the last 12 months by about 20%. back over to you. >> dom, thank you. now joining us exclusively with his reaction to the fed decision not to raise interest rates today is rick reader, the ceo of fixed income at black rock. >> thank you. >> they didn't raise rates. we started to seat short end and long end of the curve falling in terms of those yields. what do you do now? >> so i think quite frankly i think you introduce a bit more uncertainty. if there's one thing you know you are going to be the front end of the yield curve will be supported for a period of time, you are seeing that play out in the marketplace. i think you still keep the door open to october but there's not that much data between now and then. i think some of the guests have described this, you are basically pointing towards a december move. i think you are going to increase the discussion about when are they going, what are they looking at and i think -- i don't think you've done anything

to improvement certainty, the equity market gave you a good read on that. >> what we saw the second wit market rally into the decision not to raise rates on this idea that they would not raise rates. so can the stock market continue to go higher even though we have this continued uncertainty. >> i think the equity market will continue to rally for different reasons other than the feds keeping rates at zero. it's more important to look at the path and yellen was clear about when they go. i think when you go they're going to be gradual, it's going to be a slow process in terms of how they raise rates and that's supportive of all markets. i just think the uncertainty that you can get started a and improve your flexibility if you got started together. >> my other question was on inflation. she has made that a priority. when are we going to see that tick up? >> there are a number of factors as the chair talked about in

terms of what's happenings in energy and growth around the world, obviously the slow down in china impacts the kmod itd markets and global trade. i think it was described right in the press conference, the medium term expectation right side for inflation to pick up and will hit -- to hit their target but in the near term and this is what are the of what's giving them the impression you can wait for a period of time in the near term it's hard to see inflation pick frup there. >> jim, you're going to get a bunch of calls from clients saying i was kind of ready for this new era of higher rates and i should get out of some of these investments and into others, what do i do now? >> what's interesting is there are a lot of stresses that have been appearing in the marked plate, high yield bond market, the spreads have blown out, the spreads have accelerated in some areas and stwrong r i don't think the federal reserve board did anything to a swaj us on that fund. the financials had gotten a boost from the idea of widening spreads. so i think it just introduces more uncertainty, more fed

watching and i wish again that we would get back to normal market forces >> to your point about banks if you look at the spider bank etf. the kbe down 2.3% today, rick. >> i think jim described it exactly right some of these markets where spreads have pushed out, you know, we have answer r been starting to address k because some of these levels have been attractive. i didn't learn anything about making me feel better about taking on more risk. the way market participants will look at where we are, add a little risk but i think you have to be deliberate. >> are you doing anything in the energy space? that space is very bifurcated, a lot of companies have hedged, a lot haven't hedged, some have better balance sheets than others, some say it's cheap or going lower, what do you think? >> we think from an energy perspective and commodity perspective we think we will be in a low range for a long time. you could err on the side of energy prices continuing to decline. we're looking for the better

quality companies, we've been looking at investment grade. the market has bifurcated in the credit markets. the names that are considered to be reasonable quality are not that cheap and not cheapened that much. how much risk do you want to take? we've add a little risk but still being deliberate about it. >> oil prices under pressure today. thank you for joining us. coming up here, former fdic share sheila bear has been calling on the fed to raise rates. we will get her rereaction to decisions. and a computer glitch grounding u.s. airlines planes nearly two hours today. awe believe active management can protect capital long term. active management can tap global insights.

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utilities up 1.3%. loving the fact that the fed did not raise rates today. sheila bear has said the fed needs to take action and raise hates raits this year. she joins us by phone. big mistake by the fed punting on this? >> well, i think it is disappointing. i think they blinked. i think they were getting market pressure not to do t i think there will be short term difficulties as they transition out of this. long-term it's the right thing to do. it was short term thinking and disappointing but i can understand the pressures that were brought to bear on them.

>> why do you think this is the wrong move and what are the risks from them not raising rates at this moment? >> i don't think the economy is going to get much better than this. monetary policy cannot stimulate demand. if it could we would have seen a rise in consumer price inflation already. the benefits of this to the extent there are they are not trickling down to the labor market in a significant way, it's increasing die manned for financial assets, we are seeing inflation in the bond and stock markets and that will correct as they transition out of this. this is why they need to do it slowly, but it's kreeblt a stability in the system, we never went through a process of deleveraging because they created an environment for everyone basically to shift out of the banking and consumer sector into the government and corporate sector. we're seeing it pick up again the consumer sector but we are not seeing a lot of real wage growth to match that. i think the kinds of instability we saw moving up to the crisis we are seeing exactly the same kind of climate that's repeated.

they need to get ahead of this by raising rates, trying to get to a normal liesed environment. congress could help if they counter acted any of the transitional difficulties with real stimulus like a revamped corporate tax code infrastructure spending those are the kinds of things that could give us economic growth but you can't do it with monetary. >> and i bond from their main concern sin flags. the cpi report disappointing on that front. what do you think it would take them to raise rates in october without a press conference or in december just to keep with the fed chair's repeated saying that she wants to raise interest rates in year. >> well, that's right. i don't know if they are going to hit their inflation target, i think that's misgeed to have the decision being completely driven by consumer price inflation again. this is not creating demand. it's creating instability. i don't think it's helping the economy. so i would hope that regardless of wherein flags was that they would start raising.

you are right they have been signaling this for a long time. they are punishing the people who prudently tried to start preparing for this by standing pat. so i think there is a problem with mixed signals as well. i don't think the economy is going to get any better than that th without better policies coming out of our elected officials. monetary policy can't do it. monetary policy deals from the future. you are encouraging people to borrow more, which they may or may not have the attempt to pay back in the future and in that sense you reduce demand. we're seeing that with student debt right now. we have a combination of interest rate and government policies that are encouraging a lot of students to borrow money. when they graduate and go to the work force it is dampening their ability to buy consumer goods, a house, a car because they have this debt. monetary policy borrows from the future it doesn't real economic demands. we need with a stable financial system a better fiscal policy.

>> sheila bair. thank you. i know student debt near and dear to your heart. >> absolutely. >> i appreciate your thoughts around this decision today. thank you so much. sheila bair president of washington college. time for a cnbc news update. let's get over to sue herrera. >> fee at that announcing that injury roen vauk has been put on lease and released from his duties effective immediately. fifa has been made aware of ear just allegations involving the secretary general and has requested a formal investigation by its ethics committee. toyota recalling 421,000 rav4 vehicles. the potential corrosion in the windshield wipers could make them inoperable. the recall involves the model years 2009 to 2012. cnn says the republican presidential debate drew an average of 22.9 million viewers. that made it the most watched program in the channel's history. the previous record was the 16.8

million who watched al gore and ross per row debate the naft at that trade agreement in 1993. and doritos unveiling a colorful and bold twist on its classic chips. do remember reit toe rain bows are designed to celebrate the lgbt community. on the back of the bag they declare there's nothing bolder than being yourself. to get the bag you need to donate $10 or more at it gets better.org. that's the news update. kel yeerks that was designed to encourage teens who had been bullied to stand up and be who they are. positive message. >> all the news and a bag of chips. >> there you go. >> thank you so much. up next, we will head to the nasdaq for a check on how the tech sector is acting to the fed's decision to leave rates unchanged, plus find out how this decision will impact the banks. we will be joined by ron krish he have ski and david ellison coming up.

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the stamps of monetary policy will likely remain highly accommodative for quite some time after the increase in the federal funds rate in order to

support continued progress toward our objectives of maximum employment and 2% inflation. >> here is how markets reacted to the if he had's decision not to raise rates. dow 65 points, s&p down 5, nasdaq up 4 on biotech outperforme outperformers. let's big into the move with bertha coombs with the highlights. >> after that decision with the dovish outlook from the fed it was risk on, investors seemed to go back to what worked before the market turmoil of the last month, we finished off the highs. when you take a look at the biotechs they led and rallied going into the fed and then moved out of correction after that decision. the sector now off less than 10% from its july highs cutting losses for the quarter. not a huge volume, that's what we saw throughout the trading in terms of tech. apple again among the usual suspects weighing on low caps on

fairly low volume. the stocks that have led the way like viral, amazon, again, leading the day today. amazon launching that $49 mini tablet just in time fort holidays. >> thank you. also in time for the holidays maybe a rate hike? we'll see. financials today falling after the fed decided not to raise rates. the opposite story of those biotechs. there's the s&p financials down 1.3%. let's bring in david ellis son and ron extra she have ski. >> banks today the share prices not loving this decision. how much more pressure does this put on your operations? >> not really. look, financials -- most financials are asset sensitive so they want to see a raise in short term rates, but -- so a little bit more of the same for a little while, no big deal. >> david, what about you? >> well, i think if you look at what's happening with the staller banks rates are moving

up. if you look at bank cds, you see ads in the paper at least in in market where banks are offering longer dated cds as high as 1.5% because loan demand is good. i have had four meetings with small banks and they are telling me loan demand is good. i think the fed is part of the rate thing but the reality is that at the don't pay forget the rates that the fed is offering. the business conditions for banks are good. jim, what what would you say about all this. >> if we could get better yield

spreads maybe more more risk taking in the marketplace. it hasn't helped middle america. isn't there an argument that raising interest rates would help the economy not tighten things? i think if rates were higher not at 9%, if mortgage rights were higher there would be more lending and that would help the housing market. her body language seems it's about jobs and housing. i think that's good fort economy and good for consumption and loan demand, amazon demand and facebook. on the ground is cd rates are

raising loan demand is good and you see that in other places as well. >> i wanted to ask you about loan trading. do you expect that to continue now that that big decision will be delayed and so is the uncertainty coming from abroad? >> look, the volume comes from the volatility as well mplts. >> i think that what the fed did today was they are concerned about getting to their inflation target and inflation is nowhere on the horizon. all this discussion about whether an increase in traits we need it or not i think the fed did exactly what they were supposed to do today just for the record. >> ron, what's interesting about

that is richard fisher on the show a few days ago he said bank executives are lining up to tell him how far they want the feds to raise rates. >> from a business perspective i want rates to go up, it will be goods for business and my earnings. if i'm talking my own book i want rates too increase. if risks slowing down the economy when the world is trying folks port their deflation not u.s. we should not be raising rates into that economy. >> do you think a dwrt of a point rate hike that's been well price td into the market is going to slow down the economy? didn't you admit is it would help area r i can't say of the

economy. >> really today is no big deal. the real question will be if we don't have an increase in rates by the end of the year i think that will be more of the news, but a quarter point doesn't really matter other than the fact that it would strengthen the dollar in this economy with the dee nation naer rltsds z b8g9sds b8gsz. >> yes, thank you both. with a look at how this i'm facts the banks. much more of our fed day coverage straight ahead. plus would a massive buyout of another cable network operator could mean for the future of the media industry. quad play inin that's coming up. citi history matter to you? well, because it tells us something powerful about progress:

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dividend overall by about 12% to 38 cents per share on a quarter basis. also what's happening here, they say that they are going to authorize an additional $7.5 billion in their share or purchase program in addition to the $1.8 billion they have remaining on their prior ones so those shares in focus. also watching what's happening with shares of la quinta, 47,000 shares have traded after the company said that ceo wayne goldberg and the board of directors have agreed that wayne will step down from the ceo role. he will be replaced on an sbir rum bases by keith klein and the work is working with an executive search firm to find a suitable replacement. la quinta wayne goldberg the ceo stepping down. back over to you base gays. >> thank you, dom, for now. a technical problem forced

american airlines to ground traffic at three major u.s. airports today. phillip bow has more of the daniel. >> a bit of frustration for thousands of flyers, particularly those who are in dallas, chicago and mime re. we you a a few people who tweeted out photos of themselves at the gate, they could not check in at those three hubs. this was no a nationwide ground stop, there was misinformation earlier today about that. it was only a ground stop at those three hubs for american. again, miami, chicago, dallas/fort worth. now, american blans connectivity for the outage. there is no indication that the transition to the new center had anything to do with today's connectivity problems. as you take a look at shares of american really wasn't much of a reaction and this outage by the way it only lasted 45 minutes to maybe an hour and 10 minutes depending on where you were and the good news is that it happened in the middle of the day, a relatively slow time in

the airline business. if this had happened morning or afternoon rush hour, a lot more headaches would have been involved chltd. >> everyone was so captivated by janet yellen, phil, waiting on the fed chair they didn't mind so much. >> that could be. >> american shares having a pretty nice day, up 2%. more consolidation in the cable network sector, this time altese buying cable network vision for $18 billion in what could be a transform a testify deal. >> kelly, altese's acquisition comes as the european telecom giant continues it's push into the united states. news of altese's $7.7 billion, $37.90 per year spending cable network vision to highs they haven't seen in more than four years. the stock has been rising over the past year since the ceo effectively put the company up for sale. this deal which would make the

fourth largest cable network company in the united states comes as cable network vision faces growing competition from verizon fios and it follows a slue of consolidation, charter agreeing to buy time warner cable after comcast proposed acquisition of twc fell through and at&t recently completed its takeover of directv. there aren't that many players left but the question is which of the smaller guys might be up for grabs and who might be interested in buying. kelly. >> exactly. our julia boorstin. thank you so much. >> the fed reaping rates unchanged. up next, steve rosenberg on how this will impact the domestic economy and the markets. stay tuned.

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the federal reserve leaving rates unchanged today. everyone trying to make heads and tails of it. david rosenberg, did they do the right thing? >> i think that historians, three, four, five years from now are going to be the judge of that. i think it's too early to tell.

except that we can invest around this. this is lower for longer with a huge exclamation mark. every bear market had the fed's thumb prints all over it. maybe down the road, the fed is going to have to tighten more once inflation does come back. it might be dormant, but not dead. if you have a view the next six to 12 months, i think this is a very bright green light for the risk entree. >> david, do you need to see corporate profit growth return, better economic data, better macro economic data around the globe now that we'll be fixating on that data? >> the fed told us they were data-dependent, but we didn't

know the data were data outside the united states. when you look at the comments on the labor market, housing, consumer spending and the upgrade to business capital spending, the domestic side of the economy looks good to the fed. then there is this 10% chunk called exports or manufacturing hit by the light impact of the strong u.s. dollar and the impact from the more sluggish growth we're seeing overseas. you mentioned corporate profits. here is my assessment on that. corporate profits have been dragged down for the past 12, 18 months because of one sector called energy. at some point that's going to bottom out. if you have what i think is roughly say 4% nominal gdp growth, s&p earnings over time typically rise at nominal gdp growth, 5% profit growth right there and tack on the 2%

dividend yield and you have 7% expected return so long as the market multiple doesn't contract why would it contract if the fed is going to be keeping the system flush with liquidity for a longer period and bond yields stay in a range? what causes that multiple to contract? it probably doesn't mean much. the last time it did it was the asian crisis in the fall of '98. you had 4% unemployment, core inflation was around 2%. the fed stayed on hold ten months from september '98 through june '99. the trade back then despite all the fragility and white knuckles around the global economy, and

russia, we had argentina, equities were the asset class of choice. >> david, perhaps reassurance people in the market today giving the green light to equities or the risk on trade, thank you for joining us. >> thank you. >> david rosenberg. up next, we'll tell what you to watch in the market tomorrow. 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. the 306 horsepower lexus gs. experience the next vel of performance,

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today's comments and lack of activity was a statement about the rest of the world, more so than the u.s. when you look at negative rates in some places, slowing in china, the eu doing only okay, that's a big influence on the global economy. >> all right. that was wells fargo ceo john stumpf speaking to cramer about the fed's decision. you can catch the full interview coming up here at 6:00. a tough day for financials. >> i think we are going back to the same things. we are going to see money printing out of europe and japan. more money out of china. that's going to push the dollar up. that means we'll be focused on

the the domestic-oriented companies. >> it obviously impacts the outlo outlook. the dots point to an interest rate increase this year. perhaps we'll be obsessing about this in october. perhaps we'll do it in december or perhaps looking at profits in the economic data. >> risk is on but we'll get a shorter time period where we worry about the fed and that will increase volatility. >> all right. thank you both so much for joining me today. appreciate it what a day, in fact. the dow couldn't stay positive. was down 65 points. s&p down about five after federal reserve decided not to raise interest rates. nasdaq positive by four points. "fast money" is coming up.

melissa lee, what do you make of this? >> there is a lot to trade. there is one standout, the stock that underperformed the markets even when the markets were at their intraday high. that would be apple. >> apple. wow. all right. wouldn't have guessed that one. >> check it out. thanks, kelly. "fast money" starts right now. overlooking new york city's time square, i'm melissa lee. tonight, facebook, amazon, netflix, google all soaring into the afternoon. did the fed put the bite back into fang? janet yellen sounding the alarm on emerging markets in china, in particular. did the fed change the em landscape and is now the perfect time to get in? we'll start off with the fed chickening out, kicking the can down the road. we don't know how long that road could be. steve liesman is live in d.c. with all the details. how do you interpret