way the committee is thinking about policy going forward that's why that came out did i get all of your -- >> financial conditions remain loose even though you've raised rates 200 basis points. >> yeah, yeah. if you look at a broad financial conditions index, that's pretty much the answer you'll get we don't control, that and as i mentioned earlier we do take financial conditions into account in what we do, and financial conditions are affecting the broader economy so by definition we're taking them into account, but if you look at interest rates, you know, look at long-term interest rates this year, and shored-term interest rates this year. very significant increases and with your long and variable lags that should be having an effect over time. >> hi, victoria guido. i was just curious that given

nelly was put on the board and what input did you have in recommending and nominating candidates and if i may follow up on the financial stability discussion from earlier. you know, you've mentioned before that corporate debt is at high levels, and i was curious whether, you know, you have any qualms about loosening up restrictions on leverage lending by making that guidance less of a cudgel i guess while at a time when leverage lending is gaining steam. >> okay. so, in terms of nominations to the fed, those are entirely completely under the control of the white house and ultimately the president, and traditionally the fed chair has been consulted on those, and i'm happy to say that that has continued, but these are really decisions for the white house, and think of us as just being consulted.

i will say that i'm very happy and excited about the team that we're putting together, and i'm very much looking forward to having those offices up and down our hall filled. it's been pretty quiet more quiet than usual which is saying something on the board hall, so we're looking forward to getting some people confirmed. in terms of corporate debt you know, i was an investor for a long time in areas that were very close to the leverage lending markets, so, you know, i haven't had a lot of experience, and that market has evolved really significantly since before the crisis, and, you know, the -- the banks take much less risk than they used to. they are essentially in the business of distributing these loans and bonds rather than keeping them on a balance sheet to a much greater degree, but it's also true, and there's significant research on this, that excessive risk-taking in

the leverage lending marks does have channels for affecting the real economy and we monitor that carefully. you know, the -- the guidance isn't binding, as you pointed out. that's just the way that the law is interpreted, so it's something that we're monitoring, and as i mentioned, we think overall vulnerabilities are moderate >> i'm with the "new york times. if i can come back to accommodative. do you think of policy as accommodative at present how close are you to neutrality, and do you share the view of some of your colleagues that you'll eventually need to be restricted >> so, are we accommodative now? i think if you look at the -- look at the dot plot and the s.e.p., you'll see that the federal funds rate even after today's move is below the longer run neutral estimate of every single participant who submits

an estimate of that, so that's why this is the perfect time to take the language out because, you know, it's perfectly clear that there can't be a signal, you know, because by definition that means an accommodative policy it's not because policy wasn't accommodative. it is still accommodative. the thinking was more, as i mentioned, it's more that the language has run its useful life there's another point though, too, you know, we don't want to suggest either that we have this precise understanding of where accommodative stops or suggests that that's a really important point in our thinking. you know, what we're going to be doing, assume that we stay on this path, is we're going to be carefully monitoring incoming data from the financial markets and from the economy and asking ourselves whether our policy is achieving the goals that we want to achieve sustain the economy, maximum employment, that's the way we're thinking about it. that does kind of amount to thinking less about one's precise point estimate of the neutral rate, so that's how i think about that

>> the second question is do you think you'll end up in a restrictive posture? some have suggested that you will need to do that do you agree >> it's possible it's very possible what happens often, and as i mentioned many -- many of the participants have written that down and have written down really massive overshoots amounting to one rate hike kind of things which wouldn't have a big impact on the economy. i would just say, you know, it really depends on what happens it depends on -- if we keep going -- you can think of it different ways maybe we've underestimated the neutral rate and maybe we'll be raising the estimate of the neutral rate or will go with that and keep the neutral rate here and go one or two rate increases beyond it. i think it's very possible but, i mean, ultimately, is it really the question we're answering? the question we're answering is how do we provide the economy the right amount of support, not too much or not too little to sustain the recovery and achieve

our statutory goals? >> thank you, mr. chairman greg robb from market watch. the ten-year anniversary of the bankruptcy of lehman brothers got a lot of attention over the last month i was wondering if you thought there were any lessons from the crisis that you want to share, and two points on that you go to congress a lot and talk to members of congress. secretary paulgsen and mr. geithner and chair bernanke have said that congress made a mistake when it took away the fed's emergency powers in defrand dodd/frank are you confident that the non-banks never got put into the f-so fsoc system so are you confident in those systems >> three things. the first that the single biggest thing that i think that

we learned, as i mentioned earlier, the importance of maintaining the stability of the financial system, so i think if you look back at the way the models worked and the way people thought about risk and the economy, that's what was missing, and i think it's not missing anymore. so, you know, we put a tremendous focus on that we raised capital, liquidity we have stress tests which force banks to under the largest banks to understand and better manage their risk and have enough capital to survive a really substantial shock that's at least as bad as the financial crisis, and if all that doesn't work we've got resolution plans which we've, you know, through many cycles have made really substantial progress, more than i thought was likely so we've done a lot. nobody is i think overconfident that we've solved every problem and now we're going back and kind of taking a hard look at everything, and, you know, trying to make -- trying to keep ahead of it, so i think those are the really important

lessons, and, you know, we're determined not to -- you know, not to forget them, and that's i think a risk now is to -- is to forget things that we learn. that's just human nature over time i saw that the article that you're talking about the question is did congress take things away, emergency powers from the fed, so there was sort of a trade for taking away our -- our power under section 13.3 to provide support to individual non-banks which is really holding companies and other companies. in exchange for that, we got liquid days authority and resolution authority was it a mistake i don't think there's any sense that congress would seriously look at changing that. i have real doubts about whether it was rise to take away our crisis-fighting tools. i think you put them away and you hope you never need them again, and i certainly strongly oppose efforts to take away more

of the tools the thing thing that you mentioned is the designation power and it's really important power. in my mind, my thinking is it should be used sparingly and that means, you know, in situations where you have -- in principal you could have another lehman brown and it's not a bank and it could be capable of creating systemic risk and it's a critical power to have, and, again, i would tend to use it fairly sparingly >> are you worried about the effect of rising interest rates on consumers credit card rates have jumped to more than 17% since the fed started raising interest rates mortgage rates are up. what do you say to consumers >> yeah. we look -- of course, we look at that very carefully, and interest rates are going up across a broad range of consumer

borrowing as they would when we raise short-term interest rates. they are still quite low by historical levels, and -- and the other thing i'll say -- if you take housing, if you look at the nar affordability index, housing is still more affordable now than it was before the financial crisis, so you're right that the cost of borrowing is going up, but it's going up from what were extraordinarily low levels, and it is something that we watch carefully. the effect on consumer spending is very important channel through which interest rates work and we do monitor the effects. >> hanna ling, american banker occ's decision to go at cas is an indication there's a disagreement to go along with the joint plan what are the issues that are preventing a joint plan from develop and how close are you to a possible joint plan? >> well, at the fed we are, you

know, deeply committed to the mission of cra which is for banks to provide credit and other banking services in the communities they serve, and we have also been of the view for some time that with the evolution of technology particularly and changes in the nature of the banking that -- that it's past an appropriate time and now is certainly an appropriate time to revisit the way that we think about cra, but we don't want to lose that focus on community, and, you know, we definitely want to see that fundamental purpose of the law sustained. many of the issues that we had were reflected in the cc's anpr, and we're hopeful that over time there will be a joint proposed rule-making with the occ, the fdic and the fed it's a process, and, you know, we're very much interested in continuing to push it forward.

>> steve beckner, freelance journalist filing for npr. mr. chairman, following up on the neutral rate issue you touched on this, you know, that you and your colleagues slightly lifted the longer run estimate, the neutral funds estimate to 3.3%, but i believe that's still 125 basis points below where it was six years ago. what are the odds that productivity, you know, investment, productivity, labor market, other developments could -- could further push up the longer run estimates and possibly make the -- the projected funds rate levels less restrictive than they now seem >> so in principle the -- these starred variables, the long rate growth of the economy, the neutral rate of interest and natural rate of unemployment

don't move quickly they move very gradually and pinned down by longer term forces like demographics it's productivity and appetite for safe assets and demographics and other things, too. so they move quite slowly through time i think we all look at them. those of us who file seps every quarter will make a look at it and every now and then make a change, and you're right we actually -- the median ticked up a tenth, a tenth that we're talking about here, so, still, i think it's a positive thing that people could be raising their estimates of the longer run neutral rate and potentially the longer run growth rate, who knows, and maybe reducing their level of the natural rate of unemployment which has been the trend. it's just that you -- you change those estimates over time. they are informed by incoming data they don't change a lot though, although they did -- it's interesting that the neutral rate changed quite sharply after the financial crisis in many different models, and it's been

slow to recover. i don't expect a dramatic recovery there, but, you know, we -- we're so bad at forecasting productivity it's just very hard to know when productivity is going to arrive napped what quantity, so i think we have to be humble about how little we really know about where the starred variables either are or are going. >> hi, chairman, i think i would like to ask again. you mentioned that a gradual pace of rate increases will make it easier to react, but specifically what are you going to be looking to see because you've also mentioned, you know, that monetary policy operates with a lag, so any kind of specific sign posts that maybe we've reached the end of the tightening cycle is where we should stop. secondly, if youiory about the

did i vergnens between straights in the u.s. and internationally especially at a time when emerging markets are under pressure thanks. >> sure. so, some of the things we'd be looking at to test whether more are getting close to supply side limits would be first does job growth slow down a slowing down of job growth would be an indicator, you know, an unexpectedly sharp increase in wages or inflation could tell you that you're reaching those points you know, if headline growth slowed down, that's another one, so all of those things would be worth taking into consideration. i think, also though, we've seen sometimes sharp tightening in the financial conditions as we saw at the beginning of 2016 can have a substantial effect pretty quickly on our economy if it's a broad and significant tightening

and we would be looking for those kinds of things and many other things the u.s. economy, i think, that i mentioned is strong, and is it a pretty positive moment, you know, with strong growth, healthy labor market and flakes right on target, as i mentioned, and -- and we've seen growth abroad, but growth i think both in advanced economies and in some emerging economies has slowed down a little bit, and in that world, you know, the u.s. is -- is stronger than -- that's just part of the context, part of the environment that could mean a higher dollar it could be -- it could, therefore, mean that some of our -- our demand will wind up being shared with other economies. that's the way that the integrated international economy works, so, you could see, that and those are all things that go into thinking about, you know, the path of the economy.

i would say, you know, we're not responsible for the dollar of course, the treasury is responsible for managing the dollar, but the dollar has only partly recovered the decline that it had in 2017. it's moved off of its lows, but it's not as high as it was by the beginning of last year by a significant margin >> hi. jean young with market news international. can you give us an up date on technical adjustment and implementing monetary policy that the fed made earlier this year when it decoupled the interest on access reserves rates from the upper bound of the target range, and have you been happy with that adjustment, and do you see the need to make another such adjustment in the near future? >> so we've said that we would use our tools to assure that the federal funds rate trades within the target range, and the principal tools that we use have been interest on excess reserves

and on the bottom end reverse repo facility, so in june when we raised rates, we only raised the interest on excess reserves by 20 basis points and the range by 25, and that moved federal funds sort of back into the range. it worked, and it was successful the federal funds rate traded in the low 190s, well within the range. we may do that again you know, again, we have our tools, and we will use them. we think it's principally a function just of a number of things, but particularly high treasury supply which is showing up in repo rates and showing up in fed funds as well so we don't see it as a big problem. we see it as a problem that we can address with our tools, and we'll use them if we have to >> hi, chairman. courtney brown from axios.

last month the c.a. outlined a different way to calculate wage growth has the fed looked at that at all, and what are you seeing in terms of the non-basis compensation >> i wouldn't comment on a c.a. paper and i don't think they would comment on one of ours either i would say the question, we look at a range of indicators of pages, and i think the -- the broader the better in a per -- a perfect wage measure would also include benefits because a lot of compensation these days shows up in the form of benefits rather than rages, so i think it's right to choose those broader ones, but they are all kind of telling the same story right now. if you look at the principal four that we look at we look at a whole way of rage and benefit cost indicators. they are all now showing wages and benefits around 3% growth, right clustered around 3%. a full percentage point higher than it was five years ago that's a good thing, and then the other question is what about inflation? you know if you're looking for real wage

increases, you've got to ask inflation, and there you have to pick an inflation measure. some people pick cpi we, of course, pick personal consumption expand tours because we think it's a better measure, is a little broader and tends to run clear and that's not why we pick it. we just think it's more accurate the trend there is running around 2% so if ranges -- wages and benefit are running at roughly 3% and inflation running around 2%, pc headline inflation is at 2.3% pce core is at about 2%, and i think we see, you know, the -- the temp are you increase in headline inflation as being a function of oil prices probably, and we expect inflation to go back down 2%, so we think of that as 2% that's how we think about that i hope that helps. >> chair powell, i want to follow up on something that you said at jackson hole you were talking about longer

term structural challenges for the economy, and you mentioned that addressing the federal budget deficit, which has long been on an unsustainable path becomes increasingly important as a larger share of the population retires i'm just wondering if maybe you could expand on your thoughts there, and if this is an issue that comes up among members of the fomc at all. >> so it doesn't really come up. it's not really our -- our job, and it -- and we do -- we do monetary policy. we regulation financial institutions and financial stability. that sort of thing we don't have responsibility for fiscal policy, but in the longer run, fiscal policy will have a significant effect on the economy, so for that reason i think my predecessors have commented on fiscal policy, but they have commented on -- at a high level rather than trying to get involved in particular, you know, particular measures, and i -- my plan is to kind of stick to the same approach and stay in our lane, and, you know, so i would just say it's no secret.

it's been true for a long time that with -- with our uniquely expensive healthcare delivery system and the aging of our population we've been on an unsustainable fiscal path for a long time and there's no hiding from it. in the end we'll have to face that, and -- and i think, you know, the sooner the better, and -- and also these are good times. these are -- you know, this is the economy at nearly full employment or in the range or in the neighborhood of full employment interest rates are low it's a good time to be addressing these things, so i -- i just -- i put that out there and leave it at that >> thanks for taking my practice i would like to ask about emerging markets what do you think about the impact of u.s. monetary policy on emerging market, taking into consideration depreciation and capital flow from other countries and do you think there's a possible to stop the

interest rate hike due to emerging market? >> the second question was >> there is a possibility to stop the interest rate hike. >> to stop the interest rate hike. >> well, we sever a domestic mandate which is assigned to us by congress, and that is to interest maximum employment and stable prices. about half of global gdp is outside the united states and way more than half of the growth is outside of the united states, and in emerging markets, i should say, so the performance of the emerging market economies really matters to us in carrying out our domestic mandate i would also say, you know, that a strong u.s. economy where americans are buying things and the economy is growing and, you know, that's going to support demand all around the globe so that's a good thing. now we do understand though that when our economy is strong and we're raising rates, that puts

upward pressure on interest rates around the world and can affect countries, particularly countries that have significant external dollar borrowing, and what we try to do is be very transparent about what we're doing and why, and we have been, i believe, and we've also moved quite gradually so i -- you know, i think we've been performing well on that front. there are some countries that are undergoing severe stress, a handful of them, but not most emerging market countries. it's a relatively small number, and those particular countries, have you know, particularly vulnerabilities which are well known in the form of budge deficits and significant external dollar borrowings and high inflation and things like that, so, again, we'll continue to conduct u.s. monetary policy as transparently as we possibly can, and that's really the best thing that we can do along with supporting u.s. growth i think that answers both of your questions actually.

>> you mentioned earlier a possible not probable correction, and i want to come back to the high level of the stock market are there any participants to the fomc to think that we are witnessing an episode of irrational exuberance or rational exuberance, and if there was a strict correction, would it provoke financial stability concerns >> so i don't comment on the appropriateness of the level of stock prices i can say that by some valuation measures they are in the upper range of their historical value ranges, but, you know, i wouldn't want to -- i wouldn't want to speculate about what -- what the consequences of a market correction should be. you know, we would look very carefully at the nature of it,

and, i mean, really what -- what hurts is if consumers are borrowings heavily and doing, for example, against an asset that can fall. when housing levels and values are falling, we know that's a bad situation. a simple drop in equity prices is all by itself, it doesn't really have those features it could certainly feature -- it could certainly affect consumption and have a negative effect on the economy though >> thank you, mr. chairman mark hamrik with bankrate.com. one thing that's changed since the crisis is the majority of mortgages came from non-bank lenders. what confidence do you have about supervision and i suppose also regulation in this space given the role of housing finance and the crisis thank you.

>> that's a good question, so you're right that a lot of mortgages originate outside the system many of those have to meet certain basic standards to be bought by the gses i think we -- if we look at mortgage credit more broadly though, what we see is that credit is pretty widely available to people with high scores and with good credit, good credit records, and much, much less available than it was before the crisis to people with low scores and perhaps troubled credit history you know, it's -- have we set -- have we got that exactly right i don't know i mean, but that's clearly -- that's the reality in terms of those institutions, they do have supervision by the cfpb and other state regulators, but you're right much of the original nation process has moved outside of the banking system and that's something that we monitor. >> thank you

>> there goes chairman powell finishing up his press conference a very good afternoon and welcome to "closing bell." i'm wilfred frost alongside sarah sara eisen if we look at the ten-year treasury note, first of all, we can see this see-saw session that it's had in the last hour or so. initially despite the rate hikes we did see rates slip because of the removal of the word accommodative. people wonder federal that signalled the end of the rate drawing sector or drew closer to it and it spiked when fed chair powell said that was not the case and fell again when he said he thought inflation would not surprise to the upside. >> the biggest headlines here. chair powell says the dropping of the accommodative language no longer says anything important about policy there were a lot of follow-up questions about that, how investors are going to read into

that, and obviously a lot of chatter, something to ask our guests, but he says it does not signal a policy change he says this is a good moment in our economy and now becomes walking the line between doing too much to slow the rate hikes and do little to let the economy overheat the fed upped its economic forecast and projecting one more hike this year. >> and he did say businesses are starting to be concerned about the trade war, the tariffs, et cetera, but he says we don't see the tariff impact in the numbers yet. so there is the s&p 500 reaction, kind of an almost opposite reaction to what we saw in yield and this year a little bit of a jump when yields fell and when yields rose again and when yields fell again -- >> doesn't do much to alter the market's view of where interest rates are going. one more hike for this year is already baked into the market. there's more than a 95% chance three more hikes is what the federal reserve is looking at next year.

not really a shift in terms of what the market was expecting. i would look at the dollar for some reaction a. a lot of knee jerk moves in how to interpret the accommodative language which was really the only change within the statement. as you can see it sold off and went off and it's basically where we started joining our klebl exchange we've got actually instead we want to go to the president who is sitting down with theresa may with the uk. >> meeting, after meeting and after meeting and this is really good and every meeting became better and better. i will say that we're talking about a lot of different things today. trade, military, security, protection, all sorts of things. we have a myriad of things to talk about i just want to say it's great to be with you and great to have you as a friend. thank you very much, theresa. >> thank you very much, mr. president, thank you donald. it's great to be here and looking forward to the discussion that we have, as you say on quite a variety of topics the relationship between the uk and the u.s. is a real special

one. >> yes. >> deep and enduring, but there is much for us to talk about as we go forward together, particularly obviously the ambitious and wide-ranging trade deal that we want to do between the uk and the us, but also security partnership and defense partnership and those many challenges that we are facing around the world and how we can together cooperate. >> we'll talk about them and come up with solutions and answers. thank you very much, everybody. >> thank you, everyone thank you. >> mr. president, are you going to watch tomorrow's testimony? >> we'll see you at the press conference at 5:00, thank you. >> a very brief little appearance there between prime minister theresa may of the uk and the president. not really saying much of course, theresa may alluding to the fact that she wants to do a trade deal once brexit is done with the u.s., but many, many hurdles. >> always reiterating the importance of the special relationship. >> we dent get a hand holding.

>> the last time he said it was the highest level of special. >> the highest level of special, something that tony blair has commented on on this show. we'll go back to the president he's holding a press conference which will be involving far more questions than we just saw that's at 5:00 so we make sure we'll bring that to you. >> fed chair jay powell just wrapping up his news conference taking a number of questions from reporters, including our very own steve liesman steve joins us now with the highlights steve, what did you hear that stood out? >> you know, i heard a chairman who didn't answer a whole lot of questions, but he doesn't have a whole lot of questions to answer for. the economy is running very much the way the federal reserve predicted it would they are hiking rates the way they said they were going to hike rate in the market, and the market does not seem that concerned by, it so there isn't really an edge to the question, and there's no real sort of demand for an answer here's how he explained when

asked like what is behind the good growth we have right now. >> some of it is no doubt the effect of the fiscal policy changes, the tax cut and the spending increases that's got to be part of the story. part of it may be higher oil prices which are calling for more investment in the oil patch, but, be you know, the growth picture is very much supported by very high readings of household confidence, business confidence, so it's a -- it's a -- it's a pretty particularly bright moment that i think if you look back over the last decade, this is a pretty good moment for the u.s. economy. >> i think all of the questions and answers really came back to that idea, the economy doing very well, and the fed is going to raise rates gradually the one edge to probably any story that's out there right now is the one on trade, and here's what he said about trade, the protection to the u.s. economy. >> we've been hearing a rising chorus of concerns from businesses all over the country

about disruption of supply chains, materials, costs and increases and -- and loss of markets if -- if all of the tariffs that have been announced are applied, what would be the effect at the aggregate level, and they are still relatively small. you know, we worry about a couple of things one is loss of business confidence which could reduce investment again, we don't really see effects that we could measure yet. >> reporter: so there you have it, sara i asked him specifically about the market being at all-time highs and whether or not that factored in. he's given the answer that he's given in the past saying they do take financial conditions into account but they were not a huge part of the reason why rates are going up right now, sara. >> i liked the other part of your question better like what's going to happen in 2020 and 2021. >> shook his head from the podium and i said i know you can't tell us, but and by the way it's maybe worth pointing out. i don't remember a chairman who

has more disdain for forecasts like this one. we'll do it. we don't know what's going to happen and we don't pretend to know what's going to happen. >> he says we're so bad at forecasting productivity that was a direct line he knows what he doesn't know. >> that's well known and always been acknowledged. the productivity that. economists are terrible at that, but the idea of just his disdain of forecasts, that they have going through the process. we can come back and revisit this next year a little bit if some of the sep and forecasting that the fed does gets winnowed down because you know he spends all his time answering questions about what will happen in the future by the way, he spends all his time answering questions about the median value of the forecasts from people who are not him. >> that's true. >> of what will happen in the future it's important to the process of

what will happen and how the market prices fit in, but there's not much that he can do with it. >> steve, stay with us we'll continue the discussion and bring in renew norse art cashin and our own rick santelli at the cme in chicago rick, i'll start with you. clearly, what we saw is a bit of a yo-yo session for most of the bond yield, but the 30-year really falling quite significantly lower by the end of that press conference >> no, you're right. whether you look at 10s minus 2s or 30s minus 5s, two favorites on this floor, they both have mild flattening and both have charts up. make sure we pay attention to the scaling. not talking about big moves, but you're right on the spirit of the move, if i take a step back, here's what i see. we failed at 311 on the lead-up to the fed meeting and expecting a rate increase, we got it they removed language with regard to accommodation and i agree with the chairman. i don't know that that's big a deal what we walked away with is a

market i wouldn't say that our days of trading over 311 are over. what i find you is need to let this simmer through a bit. to have a chairman, and steve just nailed, it listen, they never have their feet on the ground with respect to policy, and since the credit crisis it's more like being in outer space anti-gravity you don't know if you're standing upright or not, and i think this chairman understands that, he understands the limitations of modeling and understands the limitations of forecasting, but more than ever, i think he also understands that there's lots of policy collateral damage if you really get focused too much on trying to combat inflation that hasn't shown up or why the unemployment rate is falling so precipitously. you know, are those affected in equal helpings by the policy that's supposed to move them a pragmatic fed governor at this point in time is a real asset to the u.s. economy. >> you can say a lot stylistically about the news

conference, art, but one of the biggest questions is what does that removal of the word accommodative mean in terms of policy the chairman said nothing. how do you read it >> well, it's not nothing. i mean, it's a modifier, and it's a descriptive modifier. accommodative means that we're doing a little extra to try and accommodate the economy and move things along, so what the chairman did right now is he pulled a goldilocks. they took accommodative out, and he said rate policy is just right right now. that means that, you know, people in talking we're below what the real rate should be, et cetera, et cetera. he's saying this is very close to what the temporary real rate should be. he said a couple of other important things he said the dollar is a matter for the treasury, but we're watching it, and he's very careful to say that, and he talked about trade and they are watching it. so the fed is really caught up

in a variety of other things >> the ten-year kind of tested 31 is and it 311 and come back off that level. would you buy at that level? >> i bought my first treasury bonds in a very, very long time. used to be you couldn't buy any treasury bonds and have self-respect because yield was so low i like the two-year bond that's part of the yield curve where i think you get a lot of value. i bought some 2s yesterday and got a yield of like 2.86 and that yield is right around the same place today. >> renation i know you're focused on etfs. the dow has gone negative, down 14 points. any big moves to make as a result of what you heard and saw in the fed statement in that news conference today? >> well, i kind of expected that, and i do expect that we'll continue to see rate rises, so, you know, as far as i'm concerned investing in the market right now is like playing a game of hopscotch.

you really do know have to jump over, what not to be in and what's the best places to be in. i think as fed chair mentioned, it's too early to know what the effects of the tariffs are and so as a result of that i'm focused on the small-cap marketplace. i am an etf girl, and i think it's another quarter or two before we actually see what kind of impact there's going to be so there's still great opportunities there. the cyber security space is also an area to watch now, we've already had substantial issues and problems with regards to hack, but now we have social media platforms that are making that a priority, and i think this is an area that is going to be tremendous finally, financial services. now, also there was a mention of that with rising interest rates. that's going to be an increase in profitability for a lot of our major banks, even though they have had quite a bit of pressure on them over the past few years due to the financial

crisis, but we're over that. we're ten years out, and i see that whole space really increasing substantially one other thing i will add which is the energy sector, too, which is a top performing sector of the year as well. >> we saw the high of the session right on 2:00 p.m. when we got confirmation that the rate hike. we are now at the low of the session pretty much as we approach the close does that make sense to you? >> yeah, a little bit. as i said, i think by removing the word accommodative, he pretty much said we would be at the spots where the rates would be reflected all along some would say, wait a minute, things aren't quite as easy as we thought they should be, and they are no longer going to be, if you works ahead of the curve on the economy, and after some reflection that's why i think you're seeing stocks go slightly negative it's not the end of the world. some of those other things are important, too, about them looking at the dollar and not

being in control of it, and -- and trade. >> steve, go ahead. >> art, i was wondering how much the market thought it could have strong growth and low rates, too? isn't the market stepping up and saying if we're going to have strong growth we'll have higher rates. in fact, we might have rates as high as 3.4% you now have a situation, where, is it 12 of 16 now are forecasting the fourth rate hike in december, and i think it's something like 11 of 16 see three rate hikes next year so it looks like we're headed to 3% barring some decline in the economy or move in inflation at this point. >> i think the market thought we were in kind of a magic sweet spot where the fed would be cautious enough that they wouldn't keep moving ahead, and that's why if you look at the differences in things. the healed on the ten-year is amazing, and -- and my smart new

friend alan here who bought those two-years, they are up where they were when lehman fell, and that's again based on the fed, so i think we're moving out of that sweet spot and that's why the market is moving. >> i want to raise another issue that was brought up, and alan, maybe you can hit this chair powell was asked about the recent criticism from the president about the federal reserve. he said politics don't factor into fed decision-making do you see this as a risk? they have raised rates again they are set to do it again, this time in december. that would be four this year and more coming next year. >> yeah. i heard a little bit -- i read between the lines and i heard had a little bit of some innuendo that is kind of forecasting a clash between trump and powell you know, trump clearly just finished, you know, this big fiscal stimulus, this tax cut, and he put his foot firmly on the gas of the economy here you have the fed stepping on the brake, and i think the point about taking away the

accommodation is part of the fight. the point of him mentioning the fact that one of the things that keeps pushing the economy forward is this fiscal stimulus, i think we've got a little bit of a fight going on, and i think that him even saying we're not accommodative. he's basically saying, look, we're not going with that trump agenda of let's push things forward. let's slow things down. >> okay. guys, we'll leave it there. >> i have to respectfully -- hold on, wilf. >> rick, go for it, final word. >> final word is the president might have talked that game, but all his picks, several new governors, new vice chairman, they are much more hawkic and in line with mr. powell so you have to look at what the president says versus the actions of who was picked and confirmed and sitting in the big room now. >> being a we'll leave it there thank you all.

we have 157 minutes 15 minutes . right now the dow is down. >> you'll hear more on "closing bell." >> a look at how rates are affecting farming. sonny perdue will join post 9 in a first on cnbc interview. he'll be ringing are the bell here today as well we're back here in a couple of minutes.

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which i used to offer health insurance to my employees. my unlimited 2% cash back is more than just a perk, it's our healthcare. can i say it? what's in your wallet? welcome back to "closing bell." we're at session lows as you can see very clearly from that chart, and art cashpjust mentioned 3 billion to sell at the close. hence why we're seeing the pressure with 12 minutes left of trade. down a full half a percent or 122 point on the dow last month the trump administration announced it's unveiling a $12 billion aid package for the u.s. farmers

which said they are unjustly targeted by the tariff war with china. the aid package called the market facilitation program began accepting applications in early september and provides nearly $4.7 billion in direct payments to soybean, dairy and hog farmers among others joining us to discuss the trade war impact on farmers is today's new york bell ringer, the u.s. secretary of agriculture, sonny perdue mr. secretary, thank you for joining us. >> good afternoon, my pleasure. >> how much longer can this support from the government go on, and how deep are the pockets? jaccoma said recently, this trade war could go on 20 to 30 years. is the government going to support farmers for 20, 30 years? >> it will even out over time. this to 18 mitigation package is before 201 the farmers who planted in the spring couldn't predict what could happen so president trump committed they would not barrett brunt of the trade disruptions

and is fulfilling that commitment from the aid package. >> have the farmers started to get their checks yet >> they have applied it's based on actual production and they have to come in and indicate and register their production, and it's based on the amount per bushel. we're already getting some checks out. >> a little bit of complaining from the corn and wheat farmers. >> yeah. >> versus the soybean farmers which are getting more per bushel of relief how did you make those calls >> it was done really by the way we have to defend in the wto with tariff damages. soybeans were the most affected by the trade disruption. corp less so and wheat a little bit more than corn, so there is some -- disagreement about that, but we've been very transparent about how those calculate and why they were included the way they were. >> how do you think that the opinion that the president has changed given the trade war amongst farmers that you speak to a lot >> it's absolutely amazing how confident that the president is doing the right thing regarding

a level playing field. farmers know they have not been treated fairly since john has been in the wto. they know about intellectual property theft and they know even digging up corn seeds in iowa a few years ago and they know what the goal is and have been supportive even under financial duress. >> how long do you expect it to last >> it's like a drought we don't know. we hope it rains soon. >> there's no scheduled talks between the u.s. and china happening so to wilfred's earlier question, how much pain can the farmers endure >> what we're looking at with a domino effect. we have the deal with mexico and hopefully canada will come on very soon and friendly discussions with eu and japan and hopefully china will see we'll not be intimidated no breaking on this and they need to reform their way of doing business. >> can i also ask for an update on hurricane florence, the fallout from that and what is

your latest take on how quickly farmers can get back to production and service >> well, eastern north carolina is inundated we were down there monday and saw and rode around. we were going to do a helicopter tour we were fogged in and it was better on the ground because you could actually smell the -- the vegetation rotting down there. some of that water had still not receded in eastern north carolina the farm drops east of i-95 are very much damaged in the carolinas, and that's why the safety net of the crop insurance is so important to our farm and producers. >> is the federal government preparing to help? >> yes, they are congress is already putting into some of the cdbg emergency resolution money that will go to the states to help them get back we also have crop insurance that they can -- and some other regular programs for those who have lost poultry and swine to get them back on their feet.

>> can i ask about the farm bill do you think a deal will be done by sunday night. it looks unlikely. >> i'm hopeful but it does look likely the hill seems to be a good ways away over issues not just the food nutrition differences or work requirements but also other things within the title of the commodity titles. >> the house said earlier that the world didn't stop running last time this happened. is that a fair summing up of the consequence if no deal is done, no extension is done >> obviously we would prefer a foreign bill be done we've said that all along, but it will not stop working i think congress does need to pass an extension that will make sure that the programs that are still there in the '14 farm bill will survive and we can continue business as usual that way >> sonny perdue, thank you very much we have to let you go to ring that bell. >> that's right. >> u.s. secretary of agriculture. we do have a clarification on a nafta headline that we

brought you earlier here on cnbc ylan mui here with the details on that. >> i want to clarify a statement that i said earlier. the bilateral trade deal between the united states and mexico is expected to be released on friday, not tomorrow, because tomorrow is thursday, not friday we do have two sources confirming friday though u.s. trade representatives briefed reporters this afternoon and would only commit on the record to releasing the text of the deal by the end of this month. he said they are running out of time to get canada on board. back over for you. >> ylan, thank you for that. six minutes left to trade. we're at the session lows pretty much, down 123 points on the dow, and after the break we'll be back with the closing countdown. >> and after the ball goldman sachs's chief economist will weigh in on the fed's decision to raise rates and taxes "csi's all coming up on long bell." you're watching cnbc, first in business worldwide

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♪ ♪ wake up early, o. ♪ slap on some cologne ♪ i'm 85 and i wanna go home ♪ ♪ just got a job ♪ as a lifeguard in savannah ♪ ♪ i'm 85 and i wanna go home ♪ ♪ dropping sick beats, they call me dj nana ♪ ♪ 85 and i wanna go don't get mad. get e*trade, kiddo. welcome back to "closing bell." we've got two and a half minutes to trade we're right near the session lows hit the session highs as the news at 2:00 p.m. came up about the 25-point basis rate hike there's the intraday chart you can see that very clearly, that selloff in the last couple of hours the dow is down 117 points

if we look at all for you indices, the dow is down 0.4%, let's have a look at how the fed affected things this afternoon firstly with the ten-year treasury note. initially we did see yields slip a little bit they then spiked and they are now back down again at their lows, 3.05%, the yield we were at 3.1% earlier in this week let's have a look halt the sectors now and how they performed as we bring in dom chiu to discuss the impact today on trade, and we'll see financials are lower because we've seen yield slippage and seen a flattening of the yield curve. the best performing sector is communication services, the new sector at the start of the week and the consumer stocks doing okay as well, but not too significantly high, dom. >> the red that you're seeing in the lower right-hand corner with financials, real estate, utilities, that's the standout there in terms of the way that things are playing out right now. i would also point out, if you want to accentuate the positive, healthcare and consumer

discretionary, they are poised to get towards record high levels at this point, so there are leadership points in the market it's just not the ones that you want to see a big fed day when interest rates are in question and financials specifically regional banks, specifically the money center banks, are the ones starting to lag the market the two etfs we mentioned so often that track those particular parts of the market are at session lows right now, down by 2% so doubling up if not more the market's overall decline. >> rick santelli was pointing out the yield curve is flattening a little bit. >> 23 basis points versus 25 before. >> it's a worrying direct on a day when rates got hiked. >> right, so the idea the banks would do better when the yield dynamics are more in play, right, when longer term yields are higher hand shorter term will yields lower, they make money in that way. what is disconcerting is whether or not those financials can assert some kind of leadership not that they are not terrible

not doing much of anything and this today won't help matter much. >> it's a new sector a good first week for those guys out there. the fang sector. >> only up slightly and the market itself down at the close. is 14 points on the dow. s&p down zero points 4% at the close. ringing the bell here at the big board. as we know, the united states secretary of agriculture sonny perdue that does it for the first half of "closing bell." sara, back to you. welcome to the "closing bell." i'm sara eisen here for kelly evans. things on wall street took a turn south in the last half hour of trade or saw. the dow closing lower by about 100 points, .4 of 1% s&p down .3% and the nasdaq down .2. the russell 2000 small caps that

got slammed the hardest, down a percent. yield lower across the board the dollar is higher banks, the worst performing group. we'll get bed bath & beyond earnings after the bell. and president trump set to give a news conference here in manhattan just about an hour from now we will take you there live as soon as it starts. help us walk through what to expect to hear from the president. let's talk about the market selloff. joining us, seebds senior cnbc market analysis. mike, you said it. you said there's always a delayed reaction to the fed. was this selloff into the close about the fed or something else? >> often a head fake got a little bit of a pop on the statement and the market goes to sleep during the chairman's

press conference, and then you have a little bit of a heavy reaction it's certainly about the fed in the sense that this is very much in character with how this market has dealt with fed rate hikes this cycle this is the eighth one six of the previous seven, the markets either stalled or slipped a little bit yields came down after the rate hike, so this is not unusual to see a little bit of hesitation i don't mean on the day off. i mean weeks afterwards. that being said. i think the idea that the committee did not signal aleness or is looking for an opportunity to pause next year in their plan it shows that growth will slow but you won't get a lot of help on the rate side. >> let's get a look at all things related in the room steve liesman joins us with the summary. >> reporter: yeah, the fed raising rates. the new range if you aren't paying attention, 2% to 2.25% and the fed signaling another rate hike coming as soon as december and fed chairman jay

powell was pretty clear why the fed is doing all of this. >> our economy is strong growth is running at a healthy clip unemployment is low. the number of people working is rising steadily, and wages are up inflation is low and stable. all of these are very good signs. >> now, amid expectations for the good times to more or less continue next year, federal officials on average forecast, this is what mike were talking about, rates will rise another 75 basis points next year and finish the year above 3, that's 2019 powell said there are risks out there to the fed not doing this. >> if we move too quickly we can snuff out the recovery or if we move too slowly we have an economy that can overheat. that's happened through history. we don't see any signs of that now, but we're always trying to navigate between those two scholes, and we think that gradually, you know, raising

interest rates is the way that we kind of take both of those -- those risks seriously. >> some response to my question about the level of the market. he did not seem overly concerned about asset valuations or corporate leverage he said tariffs have yet to show up much in the economy to represent a risk, and there are good times now and the fed thinks by nudging rates higher and stopping it at a low level, guys, it can let the good times roll somewhat longer sarah? >> steve, stick with us. we'll continue the discussion. dennis, do you think that the markets interpreted everything correctly today? we haven't had huge moves but did get quite a clear flattening. >> that thing is pretty darn flat these days, isn't it? >> pretty fair interpretation, and when i look at the language, the 290 words, very terse. keep that in mind. 290 words issued by the fed today, you know, i think it's kind of a signal day that they have taken accommodative out of that language. certainly been preparing for it for a long time. nonetheless think about where we

were five years ago, ten years ago, three years ago, and that language is out of the statement. that's a meaningful moment here in our economy and ten years past the crisis. i don't think we should let that go unreflected upon. >> another thing, one of the reporters, i don't remember who, asked chairman powell about this he said is this too good to be true we've got super low unemployment the lowest it's been in decades and not runaway inflation. we're in this sweet spot you're at liz-yard now and how long can that last >> seems like a sweet spot we went through the same thing and despite there being all sorts of potential problems out there, it does feel like a sweet spot which makes me naturally think, a-ha, well, what could go wrong from there but to make's earlier point, unemployment is where it's at. cpi is where it all seems about right. >> consumer confidence is skyrocketing, 18-year high go ahead, steve.

>> denis, did you see the fed's gdp forecast i wonder what the folks at listard think about th-- at lizd think about that down the road it looks like the rates get pretty mediocre. >> on the far end of that prediction curve i think you and i both know that that is a nokes in the wind, steve. i would say the one question that i had that i still wonder about, i'm sure steve does, too, is productivity growth in this country. it still has been slapped. >> behind that question that you say, sara, was not just aren't these great right now but implicit in the forecast is unemployment is staying at a low of 3%, 4% for years. the question was how much weight do we put behind the specifics

of the forecast and chairman powell is consistent about this saying it's really not about some careful clockwork precision of forecasting three years down the road we're kind of going to wait and go in gradually is the way not to break things along the way and that's how he interprets poll >> i that's how we get the goldilocks talk. steve liesman, thank you. >> pleasure. >> it's the end of an era for sky as fox officially says they will sell their 39% stake in the company to comcast for $15 billion. this comes after comcast won the right to buy a majority stake in sky in uk regulators this past weekend after its offer of 34.8 billion that topped fox's offer. fox shares closing higher today. so looks like it's all going to go. >> this was the sort of sensible outcome once we got the weekend's development. >> sure. >> if the disney/fox partnership had tried to hold on to a minority stake when the price was so attractive on the table,

that would have come as a big surprise clearly it helped comcast by having total ownership and really helps business as well, a $70 billion plus purchase. immediately a 15.of billion cash injection into the pool of what they are buying, mike, and that comes away with something allowing them as they have said to invest more in the content creation of the sort of entertainment assets. >> adds back a lot of financial flexibility that you would have to lose if you were to swallow the fox assets without the cash. disney has a lot of borrowing assets and it's a good kind of upfront payoff on this and if you're not going to outbid -- you're not going to bid higher and buy the rest of it, implicitly you're a natural seller. >> the media and friends have done it. do you see it continuing >> i do. i think it's representative of something that's being reconsidered as we speak, and that is what does it mean to have distribution in this age, and i think of netflix as more of a content company netflix at its heart is an

amortization engine and it's able to amortize every bit of content that it has almost in every country so sky for comskast a nicomcas is a nice amortization >> the only other point i would mention is over the weekend there was a suggestion that hulu would be used as a bargaining chip for the 39% and that's clearly not the case hulu is kind of a gem in the crown, as it were, and it's something similar to netflix, and it's still lost making and comcast clearly financially stretched with this new deal some analysts saying if they sold their stake in hulu it actually improves their immediate metrics in terms of their ability to cover the interest rates. >> i think we talked about this trade happening. >> probably would improve it, but it might be considered short sighted because i think you have to keep your options open in terms of what the future is going to look like, and i think

you want to have participation there if you can maintain it. >> it has what, 30%? >> minority stake in hulu. >> it's interesting. i think today's development is probably seen as a win, win, win for pretty much everyone involved keeping with the topic of media, richard parson has been named interim ceo. he's served with both time warner and citigroup's board in the past this comes after former ceo and chairman leslie moonves's ouster amid allegations of sexual misconduct and richard cohen and one other board member is stepping down. mike, i guess a lot of people are waiting for this, and wondering whether the board has -- has got away with less criticism. >> perhaps i mean, i think for the interim, you know, dick parsons is very familiar to the elder statesman

role to kind of oversee this and be kind of an embodiment of kind of good governance but without being really somebody who will take over the company and make strategic decisions it seems at this point i don't know it seems to fit with what the current project of this company is to get credibility back on the board and maybe find the next person to run it or find where this company belongs in the big scheme of thing. >> i wonder if this will quiet the criticism that the board could potentially face here, denis. >> i think dick parsons is a really fine choice to mike's point. the strategic questions still remain as we see comcart doing netflix doing what it's doing, and i think the question is clear in where does it go from here >> still a question of whether it goes with viacom. >> how long since it last lit up >> '06. >> just to the broader point of m & a earlier in the media space about netflix. do you think once all the m & as

are settled the new valuations of the new immediate can a companies will narrow with the valuations of the old media companies that are doing these keels to try to modernize themselves >> well, when you look at the netflix business mold del, it really can be, and if they can put a piece of content not just in one it uncountry, so countries and 12 countries and 20 developing or developing world countries at the time, the amortization as i mentioned before is so powerful. if others can duplicate that, that gets into the country as much as distribution, and i think perhaps those values do sort of compress but perhaps at the higher end that's the question. can they true hi do that and go international? >> great to have you with us thank you all very much. up next, goldman sachs chief economist jan hatsus joins us to discuss increasing trade tensions between the u.s. and china and how that factors into the u.s. economy. >> and we'll discuss whether

banks which have been underperforming the broader market had a really hard time. will they see a bounce if rates do continue to rise? this isn't just any moving day.

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5z welcome back to "closing bell." as expected the fed is raising rates by 25 basis points and saying economic activity is rising at a straight rate and as trade tensions continue to rise could the u.s. end up losing if an all-out trade war happens joining us is jan hatsus of goldman sachs. very good afternoon to you thanks for joining us. >> good to be here. >> let's take the initial reaction to the rate hike which has been a little bit bearish. what's your interpretation as to why the market is rising in relation to a flattening yield curve? >> i'm not sure it's driven by anything we heard today because what we heard today i don't think is really different from expectations i mean, the only sort of nuances were that the longer term neutral rate estimate edged up a little bit, and they got rid of the accommodative language in the statement, but chairman powell made it pretty clear i

think in -- in the press conference that that wasn't really meant as a major signal about the monetary policy path, so, you know, i didn't really see a lot of news, and i think if you look at what happened in the fixed income markets, you know, it was relatively moderate the equity market moved up first and down and i don't think that's closely related to the new moves on monetary policy. >> do you think the risk at this point is for faster interest rate hikes than anyone thinks or slower ones? >> our forecast remains four hikes this year in total and one more in december and four hikes next year so we're above the market that's been true for quite a while, and, you know, i think it's possible that it would be faster but i think for that you would need more of an inflation overshoot relative to the 2% target than we have in our forecast. >> is that why you're at four next year and you think inflation is going to be a bigger problem >> no, that's not the main reason i mean, we're a little bit above

the fed projections, but i think for me the main thing is that if the economy is already below 4% on the unemployment rate and still growing above trend, so the unemployment rate is still coming down and inflation is, you know, somewhere close to where they want it, maybe even a little bit above where they want it in the longer term, i just don't see them stopping. >> slight upgrades to growth for 2018 and 2019. quite a big drop-off after that does that sound sensible to you? >> it does i think after that it's a natural forecast to come back down to approximately a trend growth rate, and, in fact, there's a little bit of a hint of the low trend growth if you look at the path for the unemployment rate that rises by a couple of tenths in 2021 that's all pretty sensible if you think that you're actually at or somewhat beyond full employment, and, you know, they do have the unemployment rate below the estimate of the sustainable level so that makes perfect sense several years out. >> trying to sketch out exactly

what circumstances you think will be necessary for the fed to go from three where it is now to four rate hikes to where you think they will be next year they are already saying 3.5% on gdp and expect up employment to remain below 4%. what has to change to move the fed faster >> i think just continuing to be on this path if we do realized a path o continued above-trend growth and inflation is somewhat above the target, i think they will ultimately get to -- close to 3.5% by the end of next year i mean, remember, their own projection has almost 3.5% by the end of 2020. to me it's a somewhat more natural expectation to actually have that last rail hike in 2019 i think it's -- it would be -- >> it would be more surprising i think to -- to not hike say at the december meeting and it could happen, but for us the more natural forecast is that

they keep going and by the end of 2019 they are done. >> haven't seen a really big economic hit from trade. chairman powell said we could see a loss of business confidence from tariffs. do your economic forecast numbers change if we continue to not have a deal with china and instead have more escalation and more tariffs and by when? >> so our expectation is that we will probably see, you know, some further escalation. there's already some escalation that has basically announced an increase in the tariff rate on the 200 billion and we think there's a reasonable chance, maybe more likely than not, that you also get additional tariffs on the remaining imports from china. >> will that slow the economy? >> we don't think that it's going to be a big drag on near term growth? it's sort of the question of what it does to, you know, longer term, you know, living standards, and on that we very

much agree, that you know, big trade barriers over the longer term are going to be detrimental to living standards, but whether it's so much of a negative impulse in the short term is still the question chairman powell touched on some of these in the press conference as well. it is a risk fanned there was a significant loss of confidence or increase nun certainty in the big sector that led to the delay of investment projects, that would be a risk, but as you said, so far we haven't seen it. >> to what extent quickly is the flatness in the yield curve a factor of foreign yield anchoring the long end of the u.s. government. do you think that's about to change long-term expectations, eu, japan, expect the policy to tighten coming up. >> well, i think over the next several years that's probably going to change to some degree i do agree without explanation that foreign factors, easy monetary policy abroad, low inflation abroad that that has been a factor at the long end of the u.s. yield curve. i think that is eventually going

to charges but i don't think it's going to change quickly if i look at, you know, the european unemployment rate or the japanese inflation numbers, those are still quite far away from where they can ultimately be and where the central banks think they should be the u.s. -- i think in the u.s. it makes sense to normalize monetary policy, but i think europe and japan should not be and i think won't be in any kind of hurry. >> jan hatzius, thank you. >> we've got an earnings alert on bed bath & beyond meg tirrell with the numbers. >> looks like a big miss in the fiscal second quarter and the stock is reacting that way on earnings coming in at 36 cents a share versus estimates of 50 cents a share. revenue coming in at 2.94 billion versus analyst average average of $2.96 billion a miss on comparable store sales. they declined by 0.6% versus an expectation of growth of 0.3%.

the company revising its outlook for the year saying it sees comparable store sales flat for the year previously they had seen growth in the low digit percentage range and say the earnings per share is going to be at the low end of the forecast around $2 a share there. however, they do say at the end of this release they are still on track to grow earnings per share by 2020. that stock down 15% after a 14% drop year-to-date before this drop after hours, guys back to you. >> meg, thanks so much for that. mike, clearly same-store sales disappointing. the earnings very poor. >> what they had to say about the holiday quarter, which is not encouraging. the stock over two years down more than 40%. if you look at the retailers that have not gotten any release from this better environment and higher customer traffic, it's basically l brands, victoria's secret and gamestop. category killers that seemed not to have an answer for the new

way people are shopping. >> i spend so much money at bye-bye baby. >> still a relatively small piece of the whole thing, unfortunately. but you're trying. >> and i am using coupons as well which is a part of their problem. >> great coupons. >> facebook ceo mark zuckerberg unveiling the virtual reality head set. >> and just half an hour away from president trump's news conference at the united nations. earlier he accused china of trying to interfere in the mid--term elections because of his tough trade atsts. we'll have full coverage coming up

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welcome back a news alert on amazon meg has the details. >> reporter: amazon is opening a new physical store calling it amazon four star it's going to be in new york city, and it will sell top sellers and most-wanted items, things with ratings of four stars or more. they stay at this physical low chase they will be selling devices, consumer electronics, kitchen, home toys, books and games, products with ratings of four stars or above and they will be selling a lot of amazon devices, smarthome accessories, alexa, an interesting concept. back over to you. >> other news to tell you about.

imf chief kristichristine lagar be speaking. argentina went to the imf and asked for a bailout and since then it became clear it needs a bigger and faster bailout. we're expecting lagard to speak on the subject and we'll take it to you and any market reaction when we get it wilf. >> facebook's oculus unveiling its latest virtual reality head set. josh lipton joins us after speaking with the top facebook execs. >> reporter: the next vr head set is here. ceo mark zuckerberg on stage introducing the world to oculus quest. >> this is it. this is the all-in-one vr experience that we have been waiting for. >> reporter: now the oculus

quest, wilf, will ship in the spring of 2019 50 games available at launch did i catch up with hugo barr, the company's vp of vr he says vr and ar will one day transform how we work, live, play and connect, that we're truly moving to a world of immersive computing. i did also ask him about these departures of instagram founders this week. oculus founders, whatsapp founders and i asked hugo barr what's going on at facebook. is this something traders and investors need to be worried about, and here's what he said. >> these are people who have dontrelle douse amounts of work for facebook and the world and we wish them well. they have shared their thoughts on sort of why they are moving on >> reporter: now i did also ask hugo barr about his own job, own important role at facebook and

has senior management changed how they are approaching him in some way they are maybe restricting their oversight, giving them less freedom and he didn't suggest so. >> we're working on long development horizons, there's products that will take over many years for us to develop and we've gotten nothing more than tremendous support and we need leaders to do that >> guys, back to you >> josh, thank you very much for that interesting comment particularly on those departures as well. no further clear details but that's been grabbing headlines, of course. let's take a look at how we finished the day on wall street. the dow lower, of course we've sold off in the finaltwo hours of the session down over 100 points at the close for the dow. 107 points and s&p down 0.33% and nasdaq outperforming and the russell down 1% in part because of the regional financials index which is about 25% of the

russell. the smaller banks that underperformed significantly and financials more broadly on the s&p did so time now for a cnbc update with frank holland. >> how is it going canadian prime minister justin trudeau says he will not russia into renewing nafta indicating it's possible that the u.s., mexico and canada might fail to bridge a new pact. >> as i've said many times i will not negotiate in public we will continue to stay focused on getting a good deal for canadians, recognizing that it is very possible to get to a deal that is both good for canadians, good for americans and good for the entire continent. >> the fda is taking steps to give the public more information about avoiding contaminated food it will now announce where the food is sold retailers will be named in situations where it's difficult to consumers to figure out if their groceries are affected and doctors at johns hopkins have locked at magic mushrooms

claiming it could be a highly restrictive sleep aid saying users are not likely tobecome addicted now back to you. >> frank, thanks very much. >> i hope were you stand and i heard you're very tall and wilfred has had a complex. >> perhaps i'll put my chair up the same height as yours. >> and you'll look like a giant. >> banks stocks falling and dragging down the market following the fed's interest rate hike. up next we'll debate whether you should buy the banks which tend to outperform in a rising rates environment. >> i look normal you do not. >> president trump, accusing china, this is serious, of interfering in the mid--term elections in retaliation for his trade policies we'll discuss whether there's any truth to that. plus, we will count you down to his news conference which is coming at the top of the hour. don't go anywhere. you're watching "closing bell.

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speaking outside the embassy announcing that the imf is going to increase the size of its bailout package to argentina total tab goes to 57 billion from 50 billion, and it's also letting them access that aid faster it will now be able to access 19 billion by the end of 2019 remember, this is a country that's in the middle of a currency crisis. a crisis of confidence they have began through two central bankers in the last three months, and there are a lot of questions about its debt and whether it could spark a debt crisis. the hope is from the leaders, are mr. macri, who is here in the u.s. in new york to announce the new terms of the bailout to extend the slide of the currency once you're at the mercy of the imf, you have to impose very strict fiscal rules to clean up the debt >> you mentioned the change in central bankers, the one this week very much to allow this added bailout and, therefore, more restrictive terms from the imf to happen. it was something that the

previous central bank disagreed w.hence the change and very much being driven by mr. macri as opposed to anybody else in the government. >> sort of a reminder that the emerging market problems are still in the center and there's no easy fix. >> no easy fix at this point the market seems to treat them as kind of isolated extreme cases, right, so it's not spillover. yeah, it's hard to see exactly the path forward for someone like argentina. >> the federal reserve raising interest rates for the third time this year by a quarter point. 2.25% is the current rate. >> the spdr reason fall banks lower. let's talk about the impacts a very good afternoon to you both david, if i start with you, clearly today was meant to be a day that sort of presents positivity for banks if rates are going up, but opposite

reaction only a slight flattening in the curve. are you surprised how much banks sold off >> well, i don't think today, you know, takes away sort of the three or four things that the industry has been struggling with lately. one is obviously the yield curve. you've talked about that loan growth is one deposit costs have been an issue that have come up for the smaller banks and then you've got the cost pressures on investment banking or asset managers, that doesn't go away i think the good news is that the fed is raising rates which will allow the banks to raise the prime rate which takes pressure off the margins, but other than that i think it -- we're in the same environment. i think the two things i was surprised that we didn't hear today was any talk about the balance sheet. there hasn't been much talk about that even in the commentary or in his prepared remarks and secondly was benefits that consumers were getting for rising rates there's a lot of talk about consumers having to pay more on credit card and what about the

rising cd rates that are the other half of the population that nobody seems to be talking about how that's going to benefit everybody, so i think a lot of cross-currents here at the end of the day here, the peak rates are 3% which is what they are talking about in the out years, the dow is yielding 2 and the s&p 1.7, i don't see where that's a problem for the market in the growth in the overall benefit to the companies are going to continue to do well. >> now you're looking at the charts how ugly was the action today in banks and how core rated are they these days to the yield curve? >> well, i think that's a little bit of the problem it's interesting because this group has been stuck in a sideways range and badly underperforming for 18 months now, and -- and along with some of the negleative comments or issues, we also have the european banks down near bear market territory and, of course, the housing stocks have acted so poorly lately and you wonder what will happen with the

housing industry and that would be important for the bank stocks today's action or even the action over the last week, we've had the s&p hitting all-time highs. we've seen long-term rates moving up and the yield curve actually seepen a little bit in the last week or so and the bank stocks have gone down 4%, 5%, and today's action in particular is disappointing, because you look at the kre which is the regional bank krf, that moved below its 200-day average. that would have been rock solid support for the index or the etf and the fact that it fell below raises another yellow flag for the group. however, we're cautious, not negative you look at the chart of the kb, the large-cap etf, in a sideways range all year long. still about 2% above that so we're still okay, but if we break below that it's going to go from a yellow flag to red flag let's face it, fourth quarter, people start worrying about shifting their portfolios and sell their losers and buy the winners and with some of the energy stocks looking poised to break out that could cause a

problem for the group. it presents an opportunity and that may not come until next year. >> we have to leave it there quick final comment on the banks. i mean, surprisingly negative move today, particularly in the regionals is this worrying for the rest of the market >> you know, i don't think they have to lead, but they can't be kind of a dead weight. i think for the overall market to make progress, the market has been basically been carried higher without this group doing much of anything what's fascinating though is we talked about it last week how we had one breakout in yields and it seemed like the group was just urgently bought and now it's given most of that back so it seems still tethered to the yield story even though there's a lot going on that we're talking about w.nearly back to banks earnings my favorite time of the quarter. just about two weeks away. >> looking forward to it. >> yeah. >> i am. >> you were rude the other day, but you -- >> it's always a joke. >> but it's in the mornings so it's not alongside like we had

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commuters in san francisco had high hopes for the sales force transit center but the hopes have been trashed. aditi roy is there with the story. >> reporter: hey, that leaves for the moment the brand-new salesforce center has shut down after workers discovered a major crack in one of the steel beams and a press conference is just underway and we've learned that a second crack was discovered shortly after the discovery of that first crack the $2.2 billion transportation hub is located in a busy and bustling and booming construction area of the city. the transit center connects eight bay area counties with 11 transit systems. we're talking about bus, b.a.r.t., light rail t.stands next to the salesforce tower that's the tallest in the city and standing next to another high rise open earlier this year a lot of people are asking this question and they are worried whether the city is building too

much too fast. 17 high rises have been built in san francisco in the last five years alone. the transit center took two decades to build and spans several blocks the center is also next to the millennium tower which has been sinking since it opened in 2009. commuters are being diverted to a temporary transit center cause considering, as you can imagine, a lot of traffic jams across the city curing one of the busiest weeks already with dreamforce taking place, that event bringing about is 70,000 people into the city it's unclear how long that transit center will remain closed we know from the presser it will be at least a week a real mess out here, guys back to you. >> aditi, thank you very much for that aditi roy for us in san francisco. >> can't be as bad as at traffic in manhattan. >> a nightmare with unga, always pretty bad. testimony today on capitol hill about data privacy. what aaron lovie has to say

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we are just minutes away from president trump's news conference at the u.n. general assembly, right here in manhattan. our eamon javers is there, joining with us a preview, eamon. what can we expect. >> yes, sarah one of the things you can expect is a packed house in midtown manhattan getting ready are for the presidential press conference in an unusual location the president has been at the u.n. general assembly all week this week. he addressed the security

council earlier today. a lot of questions from the reporters in the room on the news of the tood day the president wants to ep talk foreign policy but the reporters want to talk domestic policy and politics and ask about the fate of the president's supreme court nomination, brett kavanaugh under significant fire, ails of sexual misconduct levied against him. the question is will the president double down on support for brett kavanaugh? he has been supporting him all the wait earlier today, called him a real gem and a terrific person there have been more allegations throughout the afternoon the question is what's the president going to say today about the supreme court nomination is he signaling any distance here between himself and his supreme court nomination also rod rosenstein, the number two at the department of justice. he is set to meet with the president tomorrow at the white house. that could be something of a showdown there had been rumors earlier in the week that the president wanted to fire the number few overseeing the russia investigation. now, know it may be the case

that rod rosenstein can survive the meeting tomorrow reporters sure to press the president on that. and of course we might hear a little bit about the allegation the president made earlier today, a dramatic accusation against the chinese government of attempting to interfere in the 2018 midterm elections the president said the chinese simply don't want him orp his party to succeed in the elections this midterm the president suggesting the chinese are trying to meddle in the elections, making a similar allegation to the allegations that we have seen about russian interference in 2016 surely the reporters here are going to ask the president about that as well, sue -- sarah sorry. >> what's his proof? eamon thank you. we'll let you get it thank you for setting that up. as eamon mentioned, president trump did call out china earlier today at the u.n. security council meeting and accused them of trying to meddle in the upcoming u.s. election this is a serious charge he went on on twitter saying they are placing propaganda in

the des moines register and other papers to make it look like news. it did come after china took out a few pages in the paper touting the benefits of the relationship between the u.s. and china, especially for farm zbleers no doubt there is a public opinion campaign by china. but four pages in the register, in the advertisement, isn't something covert, subversive activity it may go beyond that. but it's interesting way to highlight some kind of underhanded interference. >> let's bring in a couple of guests we do expect the president we might have to interrupt if that happens. jim from the american enterprise institute. and the author of come collapse of china aapologies if we interrupt gordon, your take on the accusation by the president towards the chinese interveeng in the mid-terms. >> the president is right the chinese have been trying to influence the election, more than just the four pages in the

des moines register. you for instance the heads of wall street banks summoned to beijing on september 16 clinton for the meeting. also the foreign minister wong yes sitting down with henry kissinger on the sidelines of u.s.gap china does other things in the u.s. per initials and illegal. but those don't seem to be directed towards the midterm one more thing, that is the tafrps the chinese imposed in retaliation. those were directed at the political base clearly the chinese are trying to influence the election but not out of bounds. >> maybe that's true, jimmy, don't you find it ironic the president has yet to accused russia of meddling in the presidential elections when all the intelligence agencies confirmed that >> yeah, i find it ironic. highly odd that -- you know you have russia which is sort of secretly tried to influence the election you know through the internet and facebook

and china is running a four-page advertisement in the paper in iowa the argument that china. >> gentlemen we have to interrupt. >> okay. >> and listen here to the president of the united states. >> three days at the united nations in new york. and this is quite a gathering, wow. it's a lot of people a lot of media we have -- we have covered a great deal of territory. just left as you know prime minister abe of japan. we are starting trade talks with japan. they were not willing for years to talk trade. and now they are willing to talk trade. and i'm sure we'll make a very good deal. just concluded, as you know two days ago, signed a deal with south korea, trade deal, a tremendous deal with south korea. it means a lot of business for our farmers. we're opening up for farmers we are opening up for a lot of

different groups we are going to be able to sell much more than double the number of automobiles that we were allowed under a deal that was totally defective that was there before and so we're very happy with that that deal is actually concluded. we are very well along the way with mexico. the relationship is very good. and with canada we are see what happens thp they are charging 300% tariffs on dairy products we can't have that we can't have that with china, as you know we put out an announcement today, they would like to see me lose an election because they have never been challenged like this. but i want to open up china to our farmers and to our industrialists and our companies and china is not open. but we are open to them. they charge us 25, 35, 5 a petros for things. and we charge them nothing in terms of coming into the country. cars there are 25% and we're at 2% and 2.5% and don't even collect it

but we collect it now. so we're doing very well in our situation with china on trade. i have a great relationship with the president of china president xi but it's got to be a two-way street for 25 years or longer it was not. and trillions and trillions of dollars was taken out of the united states for the benefit of china. we just can't have that. we have to make it fair. so we're at $250 billion now -- 25% interest at a lot of money is coming into our coffers. and it's had no impact -- absolutely by the way, no impact on our economy, which i said it wouldn't in fact steel is like the hottest industry there is. if you look at what happened with steel we are charging a 25% tariff for the dumpers they dump massive amounts of steet