look to bonds for things like the airport and feel more secure than for the state overall thank you for joining me and talk again soon, craig appreciate it. >> thanks, kelly. >> craig brandon from eaton vance. time to join tyler and melissa for "power lunch" which begins right now. >> kelly, thank you very much. we'll see you over here in just a minute i'm tyler mathisen with melissa lee. new at 2:00 this day, the american economy still showing a lot of muscle. will it keep doing that? will it keep growing what does this mean for the market and no deal, the president walks out of his summit with north korea's leader what does it signal about trade talks with china if anything modern monetary cherry i know you've been wondering about this as i have been. they're getting a lot of attention these days but what exactly is it? we're going to talk to a leading proponent in this growing movement "power lunch" begins right now

>> and welcome to "power lunch." i'm melissa lee. stocks are holding steady on the back of the latest gdp number. a boost from larry kudlow's positive comments on cnbc about the china trade talks. the s&p 500, by the way, trying to avoid the first three-day losing streak of 2019. it is down just fractionally kelly? >> we begin this hour with the american economy fourth quarter growth coming in better than expected and full year growth of just about 3% steve liesman is joining us live from an economics conference, in fact, down in washington with more steve? >> reporter: kelly, thanks very much a sequential weakening from the third quarter but well better than expectations, much less weakening than expected. about 2%, still 2.6% take a look at the details consumer was stronger than expected coming in at 2.8. business investment stronger 6.2. we've had sort of squirrely monthly numbers on consumers and business spending that these

numbers are better than residential. you can see the housing market not really contributing from growth and wasn't very well led by government as well. 0.4% growth on the government level. one thing that did contribute was inventories. look at year over year, people expect inventories to roll off the weakening is expected to continue down to 1.9% as our cnbc rapid update for the first quarter and that's really just a slowing trend that's the expectation and part of that is the inventory. j.p. morgan said inventory surprised to the upside and this development may pose a head wind for gdp growth this quarter but larry kudlow mixing business acumen with enthusiasm for the president's policies says these kinds of things are going to continue, these kind of good numbers. >> so people are saying, well, there's a sugar high one year. that's it. just plain wrong these policies are working, so

i'm going to say 3% 2018 and say 3% 2019 and 3% as far as the eye can see. >> one thing that was definitely wrong was that recession, the market was so sure of in the fourth quarter didn't happen in the fourth quarter maybe it's to come, kelly but not in the recent data. >> okay, steve liesman, thank you. big interview this afternoon. bill dudley at 4:45 eastern time talk to him about all of this too. fourth quarter gdp stronger than expected. is that a rally for stocks strategist with allianz and then blakely adviser group and cnbc contributor. thank you to both. fourth quarter gdp seemed good enough and there were some green chutes when it comes to how businesses were spending. >> that's a key. we've looked at the durable

goods numbers of orders where obviously shipments would be in the first quarter. they're declining at an annu an annualized rate i expect to reverse in q1. what's the health of the consumer and was the december retail sales number an anomaly that quickly reversed itself? we saw january auto sales somewhat mediocre. i think it's the consumer that's going to determine what kind of bounceback, but i think with the government shutdown thrown into that, that's why you have a one hand on a lot of these gdp estimates. >> the consumer, two-thirds of the economy, mona. so when you gauge the consumer, do you look at those measures given to us by the government? may not be clean data or look at walmart's results, for instance? >> i think the market has spoken pretty clearly taking the walmart results as its answer quite a dramatic rebound with

lowe's up about 19% on the s&p i think that was driven for a few reasons. the fed pivot but not only the fed now but global central banks. not just the chinese stimulus but bank of australia, bank of india, england, all more accommodative paths going forward. will the stimulus or more accommodative paths lead to a trough in q1 gdp and is this just a mid cycle slowdown? i think that's where the market is going on that. >> two questions for you, peter. one is, you talked about the importance of the consumer what do you think the consumer's health is and how much do you think that they will be spending as we move into the first quarter and later into 2019 and you draw attention to the idea that the fed seems as it always is in circumstances like this, trying to engineer a soft landing. do you think they can do it and what does a soft landing mean in an economy that's growing pretty

well at 3% why are we worried about soft landings when we seem so far above the runway >> could be the answer to the consumer question very mixed housing has moderated. using credit cards to spend. interest rates have gone up. i think that's affecting retail sales. i don't think that the december number was as bad as that but i don't know how much we'll see a reversal i think it's somewhere in the middle and when you see walmart doing really well, what does that say about the actual consumer so i think it's a mixed bag. and the second question of -- >> soft landing. >> the soft landing. since world war ii, they've succeeded only 20% of the time 13 rate hike cycles, 10 put us into recession and when you think how extraordinary this pace of easing was with zero

rates and a quin up thequintuplg >> you should stick around for later but the chicago pmi number this morning was phenomenal. 64.7 one of the most recent, most forward looking signs we can get and suggests, again, moving past december, things look pretty good. >> yeah, i mean, i think that's exactly the type of data we're looking at something more forward looking rather than the backward looking q4 numbers what we're watching for, not only the pmi data in the u.s. but a chinese, last night we got a pretty weak pmi number out of china. third month in a row, sub 50 what we look for is their stimulus to kick in. we think a combination of a chinese strengthening and the u.s. to continue to grow at the rate will help the global economy. i think that's a picture we're looking forward towards the second half of this year. >> thank you president trump abruptly ending his summit with north

korea's leader without a deal saying sometimes, you have to walk eamon javers is live in hanoi with the fallout at this hour. eamon? >> reporter: the president did walk he jumped on air force one and took off they cancelled a lunch they were going to have with the north korean leader and cancelled a joint signing ceremony there was nothing to sign after no deal was reached. the reason for the break-up of the negotiations is because the north koreans were demanding that all of the sanctions be lifted, but just within the past hour and a half or so, the north korean delegation remaining here in hanoi hosted an impromptu press conference and said they only asked for a partial lift of the sanctions. so there's a dispute about what the dispute was here in hanoi with the north korean delegation saying ultimately, they only asked for some of the sanctions to be lifted and also said ultimately, they felt their offer was practical. the president obviously zbra

disagreed. he zugted it wsuggested it was opportunity, particularly for north korea's economy. >> i want that country to grow that country has such potential, but they have to give up or we could have done that deal. >> the president now is speaking in alaska to troops there at a refueling stop at the air force base not recapping the events here, just thanking the troops for their service. we'll see him back in the united states, in the continental united states and shortly, where do we go from here no plans, we're told, for another meeting between kim jong-un and president trump anytime soon back to you. >> thank you, eamon. eamon javers so what does president trump's decision to walk away mean for potential trade deal with china let's bring in sun yoon lee, the kim korea foundation for korean studies. professor, good as always to see you. does the abrupt seeming end of

the summit in hanoi have any implications for the trade talks between the u.s. and china >> no, i don't think so. if the hanoi affair were a musical play on broadway, let's say, it would be a flop because there's no happy ending but as in combat sports, in boxing, if a hyped up match is a controversial decision or draw, there's a rematch. there will be summit number three and everyone will be happy, kim will be much happier because he's still poised to rest away from president trump for the united states. far more gains than the other way around going into this summit, it seemed that president trump would give away the farm and much more in turn for buying the same horse thrice now, in return for north korea shutting down its nuclear reactor at the same facility they've done it before in the '90s and 2000s but apparently

president trump demanded more. as he should have. to talk away from a bad deal, i think, is better than signing on to a faulty deal >> are we better off with respect to north korea and our relations with that country than we were a year ago, 18 months ago, and how much of that, if we are better off, derives from the way president trump has played his hand >> president trump has argued that north korea has not flagrantly violated security council resolutions and a weapons test, ballistic missile or nuclear test, so that's a small victory. i don't think so because in the past, there have been three different distinct long periods where north korea restrained from its test and second in '09, '09 to 2013, 2013 to 2016, what

does that mean they were not building the bomb? no it's a bit premature to say that one year of the diplomacy and no nuclear tests is a victory now, diplomacy, of course, it's great when it works but when you are ensnared by the weird looking but still very crafty north korean regime into a process of negotiations, what happens? kim is able to buy time and money to further advance his lethal capabilities. so it comes with risks, what president trump has initiated by impulsively agreeing to meet kim last year. >> i know you've been quite skeptical of kim jong-un as you just outlined. but a lot of people are making a lot out of him answering questions from the foreign press for the first time these were informal questions. he had no idea what the questions would be he did answer them and this is a real departure from the last time he was shouted out a question, he did not respond whatsoever is this part of a charm

offensive? >> he looked very confident. he looked at ease. why not? he's treated as a demigod in his own country. he does not travel abroad often but only in his mid 30s and commands a nation of 25 million with his finger on the nuclear button so the fact that he replied curtly to a question does not strike me as odd at all, does not strike me as a departure from his old ways. we tend to patronize because they are so weird, such a strange mix of medieval and buffoonish, whenever they do something normal, we grow quite impressed, but they've been weaponizing their weirdness for decades now. kim jong-un, what he's done over the last year is exactly the same as what his father did for the first six years of his rule when he refused to travel abroad, meet with a single world leader and then lined up the

chinese president, vladimir putin, madilyn albright and clinton all in 2000. >> professor, thank you so much. sun yoon lee thank you very much. >> thank you coming up, two big ceo interviews first, we're talking wings with the head of wingstop that stock higher today despite an earnings miss and huge jump for shares verizon drug to treat eye disease. we'll ask the ceo about this drug. health care up 6% so far this year. sounds pretty good but it's actually the worst performing sector on the s&p 500 after leading the index in 2018. "power lunch" will be right back ♪ (butcher) we both know you're not just looking for pork chops. you're searching for something more... ...red-blooded. right this way. you thirst for adrenaline, you hunger for raw power.

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>> let's talk food wingstop earnings coming in slightly below estimates but total domestic same store sales up 4.6% they expect the same store sales momentum to continue in the first quarter. chairman and ceo of wingstop joins us, charlie morrison congratulations on a nice quarter and stock up 45% over the past year, mr. morrison. analysts seem to be pointing to your favorable outlook for same store sales. why don't you walk us through

the quarter just ended and what you see for 2019 on that number? >> you bet and thanks for having me today we had a fantastic year in 2018. our 15th consecutive year for positive same store sales growth for the brand and another record setting year for culminating in a strong fourth quarter. fantastic momentum driven primarily by some marketing efforts that we put in place early in the quarter to really stimulate excitement amongst our consumers, bring new consumers into the business and then prepare ourselves for an increase in our marketing spin going into 2019, which we believe is the catalyst for our strong out of the gates performance so far this year >> so 6% same store sales growth in the past quarter. is it reasonable to expect that that is an achievable number for 2019 or you might be able to even blow past that? >> well, you know, we always

want to anchor ourselves on our long-term outlook which is a low single digit same store sales growth, combined with 10% plus development both domestic and international, as the key anchors to the long-term outlook for us to become a top ten global restaurant brand but momentum has been quite strong both on a one and two year basis and as we enter the year, a lot of momentum out of the fourth quarter gives us comfort to have yet another strong year in 2019 but we haven't given any specifics to this point. >> part of the momentum in the fourth quarter, new sides like loaded fries and fried corn, those did quite well, charlie, but as you mentioned, i believe on the earnings call, you do expect bone-in wing prices to increase so can you sort of give me your lay of the land in terms of what you see last year with the pushes and pulls in your business >> sure, and we do expect to see wing prices up a little bit from

the 2018 levels we experienced which were well below in a very deflationary environment the numbers we saw in 2017 wings tend to be very volatile commodity. they're up and down in any given year but we do expect this outlook to be slightly up, but we don't think that's going to have an impact at all with franchisees performance and profitability and do expect strong development here as well for new restaurant development and overall, i think the outlook is quite strong for the wingstop brand? what about labor costs >> every restaurant brand struggles with the challenges associated with some wage inflation. you mentioned the new side items we put in place last year. those were aimed at helping to cut back the amount of prep we had to do in the restaurants which actually saved labor hours for our franchisees and from time to time, we will introduce some pricing strategically to offset the effects of wages

legislation and then the last piece, innovation and working on ways to innovate to help make the occasion easier for our guests, which also helps takes our folks that are taking care of guests and engaging in digital technologies to help facilitate a faster transaction and save a little bit this but for the most part, i think we're well positioned, again, with some of the best unit economics in the industry to continue along asteady growth path. >> what's your favorite menu item >> our favorite -- >> your favorite. >> for myself as well, lemon pepper bone-in wings that's our staple, number one seller unique and differentiated product. >> thanks. >> i see you're going to try them >> bone-in, not the boneless >> bone-in are so messy. that's my only thing

but it does slow you down a little paces you. a closer look at modern monetary theory known as mmt a hot topic lately powell asked about it in congress we'll explain what it is and ask one of the biggest proponents if it could really work that's coming up on "power lunch. to full-blown production. ♪ ♪ let's go from being on-call... ♪ ♪ to being on-line. american express can help move your business forward with loans, vendor payments and buying power. chat with one of our 4000 specialists and let's make it happen. the powerful backing of american express. don't do business without it. the powerful backing of american express. each day our planet awakens but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices,

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welcome back to "power lunch. i'm mike sanrick santelli. health care is the worst this year today with stocks like advi, signet rockefeller capital talking about the sector matt, obviously, a big sector, growth in here and value in here different parts of the industry. how does the sector overall shape up >> i think it's a perfect example right now, after this big run we've had in the broad market and everything seems to be moving up, it's going to be a little bit more selective going forward. and look at one sub sector, group within the health care area and i was looking at

medical devices. you look at the charts on these names stock like med tronics boston scientific, broke up the 2018 highs in a meaningful way another one, of course, that's been involved with ge but that's breaking out and then a third name i love is abbott labs they're much more than a medical dwiel devices company but it's broken above the fourth quarter in a meaningful way a near term basis, might have to take a breather but just shows after this big run, we'll have to be more selective and really in all the groups. >> michael, would you agree it's time to be a bit selective and if so, what would you select >> i think it's time to be selective yet. we're owning this space. let's begin with the macro reasons. our population is aging. if you have an aging population

with innovative technology with flooded with cash, they can spend on the r&d and bristol-myers, trading 12 times next year's earnings and 3.15 dividend yield and we own the broad based space for the next 6 to 12 months and then become selective. >> yeah, 12 months that will bring you into election season, some policy noise around this space as they're already started up matt and michael, for more "the exchange," head to our web site or follow us on twitter @tradingnation >> thank you, mirick santolli. the ceo horizon pharma, all that when "power lunch" returns. >> and now, the latest from

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welcome back i'm sue herera here's your cnbc news update at this hour. north korean breaking down the summit with kim jong-un. they only proposed removal of sanctions that affected north korean civilians trump said the north demanded the removal of all u.s. sanctions. senate minority leader chuck schumer offering rare praise for president trump saying he did the right thing in walking away from the summit without any deal >> a deal that fell short of complete verifiable denuclearization would have only made north korea stronger and the world less safe. it would have squandered the leverage our negotiators have now.

british airways buying up to 42 boeing 777s in a multibillion dollar deal. it comes days after boeing's european rival airbus announced it would stop making its a-380 plane due to a lack of customers. some good news for boeing. that is the news update this hour i'll send it back to you. >> all time high today again sue, thank you three words are catching the ear of wall street and getting more and more attention in washington modern monetary theory championed as an alternative way to fuel the american economy rather than current fiscal and monetary policy. leading proponent of the movement, stephanie kelton, a professor at stoning brook university and ph.d. in economics from the news school and named one of politico's 50 thinkers, and visionaries a couple of years back also joining us, dan mitchell, the co-founder of the center for freedom and prosperity, ph.d. in economics from george mason

university and a former economist for the senate finance committee. i feel like i'm announcing a boxing match or something. let's begin with you what is mmt, what are the principles here, how does it work >> well, the basic idea would be that, you know, mmt is trying to build a better mouse trap. i think that's the way to think about it so right now, we have the federal reserve trying to fight inflation by creating unemployment that's how the fed fights inflation and what mmt would do is use full employment to fight inflation, so a full employment economy and a better price anchor, a better inflation outcome. >> usually, one of the key drivers of inflation that is associated with full employment is rising wages. >> so what we would do is

establish effectively a public option in the labor market so instead of having millions and millions of people locked out of employment who actually want to weigh in, who want to participate, who want to contribute, we would allow them to come in we would guarantee employment at a fixed wage we would say $15 an hour and those people come in and now what you have is a pool of employed people. they're working. they have skills they're employable so instead of having employers compete for people who are already working when they want to hire up in a strong economy, they don't have to they can hire from this readied pool that are employed in public service jobs. >> when this means deficits don't matter, is that the goal you could use? so this would work in countries with their own printing press, a way of saying, there's no

worries of tapping out revenues or anything like that. you simply use the printing press to expand, right >> well, i wouldn't use the language of a printing press that's sort of gold standard langua language if you've got a system that's built so the stabilizers are in place and that's what the job guarantee would do, it would turbo charge the automatic stabilizers to make the fed's job much easier because you're building full employment into the economic system. you're anchoring the wage, which is a price anchor by the government deciding what it's going to pay those workers in that program and then the budget becomes responsive so as the economy goes into a downturn, you automatically catch these people instead of allowing them to become unemployed and all the waste that's associated with unemployment, they find work, it helps to stabilize the downturn and then in the recovery, the

government automatically spends less as people transition into private sector jobs. so the government's budget has to be responsive but certainly not a way of saying that you get unlimited deficit spending it controls itself as the economy goes through the business cycle. >> here's senator perdue from georgia. talking about the fed. he asked powell. >> the idea that deficits don't matter in their own currency just wrong i think u.s. debt is fairly high at a level of gdp and much more importantly than that, it's growing faster than gdp, fairly significantly faster >> as he responded, stephanie, could we even have this discussion if interest rates weren't so low i can't imagine this taking place in the late 1970s or early '80s when you had, you know, double digit borrowing costs and that sort of thing >> well, but that was precisely

the time that you had deficits exploding under reagan and the debt nearly tripling so you had that combination of exactly what you just described. very high interest rate environment, deficits cresting and debt to gdp ratio, what happened nothing. we moved to an area of higher growth, the ratio began to come down so i don't, i think that, you know, what chairman powell is saying when he says i don't believe that it's true that deficits don't matter. neither do i deficits do matter, but they don't matter in the ways that we've been conventionally thinking about them and the way we usually think about a deficit, it's evidence of excessive spending and that's just wrong that's inflation i argue you don't have a deficit problem or debt problem unless you have an inflation problem. >> let me bring in dan mitchell to respond to all of this. dan? >> well, i think two things. i agree with stephanie that

economic growth and job creation is not inflationary, but other than that, i think we have some big disagreements. what she's basically describing is katoism on steroids and whether you can basically finance more government with the printing press or talking about it more on the sense that stephanie is talking about it, where you just have bigger government that supposedly is a perpetual motion machine for the economy and either way, i think we're at risk of at best copying the economic policies of greece and at worst, the economic policies of venezuela. fundamentally, we're really debating should government be a lot bigger and if you want government to be a lot igger, which i don't, then you have the challenge of how are you paying for it and stephanie's promotes a theory rather unconventional, a lot of left wing economists disagree with it. >> anywhere in the world where mmt is put into place? making the comparison to a

greece or socialist venezuela but are there countries that have adopted this? >> the united states of america because -- >> we already have in place? >> yeah, it's just a description of how the federal budgeting process already works. we're saying we're not taking full advantage of the space that we have already today with the system that we have to get better outcomes. that's what i'm talking about when i say a better mouse trap we have a system today that does not deliver. crises one after another in this country. 44 million americans who are struggling with 1.5 trillion dollars of student loan debt 45,000 americans die every year because they don't have health insurance. we've got nearly half the population living in or near poverty. >> yeah, no, i take your point let me ask this because a lot of this is coming up, coupled with programs like medicare for all or the green new deal.

$50 trillion over ten years and green new deal, upwards of hundreds would this allow for those plans to be funded >> what i'm saying, in the simplest possible terms is that congress can write and pass any budget it likes and the fed will clear the payments on behalf of the government, okay, so that's just a simple statement of kind of how the government budgeting process works. am i saying that because the government has the power of the purse, it can spend willy-nilly or fund trillions of dollars with new spending without ever needing to remove that spending either by raising a tax or spending in some other part of the budget that's not what i'm suggesting but with health care, we're already spending the money we're spending far more than any other country on earth, so we talk about medicare for all, moving to a system that would allow us to spend less, not

more >> budget aspect of this so if moving to something like medicare for all cost $50 trillion over ten years or $5 trillion more a year, stephanie suggesting that could come from, and i'm sorry to use the term, the printing press what would your response be to that massive inflation or other concerns about that, how it would work on the ground >> well, if we're talking about funding the entire so-called green new deal which is estimated anywhere from $40 trillion to upwards of $90 trillion, if you think that can be funded with the printing press, you're talking about zimbabwe, venezuelan type territory. i simply don't believe you could, in effect, create that much money, finance government just by writing a check on the federal reserve and not having some adverse consequences. but i want to be perfectly fair to stephanie our real debate is whether government should be greek/italian type levels or current levels and fundamentally, if you make government a lot bigger, it's

going to affect and divert resources from the economy whether you do it by taxes, borrowing or by simply running the printing press. >> we have $22 trillion of existing debt. would you suggest using this to write that all down? >> no, no. i'm not talking about creating trillions to fund a new green deal and not offsetting any of that spending. i'm not worried about the $22 trillion in debt because all the national debt is a historical record of all the dollars the government spent into the economy and didn't tax back that people are currently saving in the form of u.s. treasuries. i'm not worried about $22 trillion in u.s. assets being held in portfolios and pensions and so forth it doesn't bother me >> we're getting short on time i'm jumping in, so if interest rates go, right now, very low. the borrowing cost of the deficit is very low and the debt

you mentioned. if interest rates go up a little bit, how do you propose to pay for that just expand the money supply go from paying small single digit number for year upwards of double digit per year, how do you pay for that without shrinking anything to offset that just keep expanding the money supply >> the government pays interest on the debt the way it pays for anything else. the federal reserve will change the numbers on the bondholders account and they will receive an interest income payment. it doesn't work any differently. what it means is the subsidy to bondholders gets much bigger we could talk about ways to avoid having that happen, but that's probably a different conversation >> and i know, you're talking about those, the stabilizers dan, final word before we go how realistic do you think it is that this gains more and more traction and what happens if it does >> well, i think 100% of economists on the right of center don't like mmt and i

think probably 75% to 85% on the left don't like it because you can't expand the burden of government and have it be free and i think that's what at least some supporters of the modern monetary theory want to believe. the federal reserve cannot write checks to finance greek style government because then you wind up with a venezuelan style economy. >> dan mitchell, stephanie kelton, thank you for joining us today. >> thank you. >> thank you. it will be very interesting to see what rick santelli has to say about this he's been standing by listening to thadiust scsion that's next on "power lunch. you have to stand by, that's what we'll do. -driverless cars... -all ground personnel... ...or trips to mars. $4.95.

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now to the cme where rick santelli was standing by very patiently waiting for his turn to weigh in on previous discussion about modern monetary theory rick, i can only imagine >> reporter: you know, it's so hard we're just going to try to make macro points she opened up saying we need to invent a better mouse trap this isn't a better mouse trap and you don't need one if they need this. would be no mice

mice like food the food supply would be tainted. this makes so little sense on the surface but deep down, you know, a couple of days ago when chairman powell was talking in front of both sides of the aisle, i said that the issue now isn't going to be the monetary policy side of the fed it's going to be the regulatory side of the fed because they want the banks to do the heavy lifting. government always smarter than the private sector they discussed a pool of workers that is rubber stamped by the government just go in and you pick your skilled workers. what's the definition of the skill level? but most important of all, we can see what this is the green idea it sounds wonderful. it's not very probable, so how do you pay for something you can't afford when you're already in a spot where you can't afford to do anything new you make the non-affordability issue go to zero you make the deficits go to zero

the notion that you could print your way into prosperity is ludicrous. it makes as much sense as you could become a billionaire selling apples as long as you could sell one apple for a billion dollars. i think enough said. i really enjoy the passion of the politicians getting involved in this. the problem is passion is not synonymous with economic education. >> all right, rick, thank you very much. rick santelli on the cme up next, the ceo of verizon pharma, that stock soaring today on positive results for one of its drugs up about 32% and "power lunch" will be right back you should be mad at airports. excuse me, where is gate 87? you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand

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shares of horizon pharma soaring about 30% announcing positive trial results for its treatment for active thyroid eye disease. joining us is timothy wallburg, the ceo. great to have you with us. thank you for joining us on a day like today. >> thank you. >> can you walk us through what the phase three trial results found? analysts were excited about it

but said it was much better coming to reaching the primary end point than they had anticipated. >> well, thank you for having me and this is a great day for patients with thyroid eye disease. and if you look at this disease, it typically occurs where patients' eyes begin to bulge due to inflammation causing it difficult for them to close the eyelids. they get dry eyes and asking them they say closing the eyes is like rubbing sand paper and making it difficult to sleep and they go on to double vision and on average a patient has three to five surgeries to try to correct many of these challenges with our study today, we had dramatic results showing 83% of patients taking our medicine showed a clinically significant improvement or reduction moving the eye back into the socket versus only 9% for placebo so a very promising result for a

very sick patient population. >> safety profile is consistent with what you found in phase two, also good news according to the analysts before you're criticized for focusing $750 million. people said that was too optimistic do you stand by this it seems that wall street coming around that it might be achievable. >> well, certainly we reiterated we believe greater than $750 million in peak sales. you can see by the stock reaction, i think wall street, the sell side analysts are coming around to understand that with a benefit like we have seen with 83% of patients, getting a significant clinical response that there's great upside opportunity and even more important opportunity to benefit anywhere from 15,000 to 20,000 patient that is get this disease each year. >> that's what i was going to ask you. how many people get it in the united states? how many people have it today?

and how far might you be from bringing this drug to market >> 15,000 to 20,000 patients get active thyroid disease each year, the eligible patient population we plan to submit an application to the fda mid this year and hope to be approved assuming fda moves it through in 2020, where we can rapidly bring the medicine to the suffering patients >> do all of the people who get thyroid disease get this particular disorder along with it >> right so graves disease is a thyroid disease. about as i said 15,000 to 20,000 of that population which is approximately 8,000 to 30,000 plus patients go on to get thyroid eye disease, it is a subset population that actually get the t.e.d. that's benefited

by our medicine. >> tim, you have been focusing on orphan drugs. you have drugs in the rheumatology area and analysts are excited about the acceleration to see in the coming year. what is next in the pipeline, though if this drug for t.e.d. is phase three and roll out, what is the next drug coming >> as you said, we have had a great performance with a rare disease medicines making up 70% of the sales we have one medicine for uncontrolled gout that grew 90% in the fourth quarter to 83 million. with 209 million in sales for the full year. we have several trials we announced under way and another we announced we're beginning in kidney transplant patients who have uncontrolled gout, very difficult to treat type of gout an we are beginning to study -- that patient population in the second half of this year. so we see opportunities to continue to expand with

uncontrolled gout. we also have early stage gout programs, gout is a very difficult to treat disease with over 8 million patients alone in the united states. so we have got three early stage medicines that we continue to develop, as well so significant opportunity there, as well as the promise of others. >> thank you for your time we appreciate it check please is next my experience with usaa

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discussion on modern monetary theory i don't think we solved it for today at all. >> no. we could revisit it. >> want to hear about it reports are that bryce harper the outfielder will sign with the phillies for the largest contract in baseball history, $330 million over 10 years. >> wow "closing bell" is next ♪ good afternoon welcome to the "closing bell." i'm wilfred frost. >> i'm morgan brennan in for sara eisen fourth quarter gross domestic product coming in higher than expected we'll talk to jason furman about whether the growth can tonight. plus william dudley on what that gdp read means for the fed's next move. he is here first on cnbc you don't want to miss that. what are the markets doing, though, right now? 59 minutes left of