we are going to focus on our folks. that's who we're going to be spending the money on. >> boy, you've got these sports answers down all right, that's avenue's marc lasry. who has the final check? >> boeing. >> cvs >> caterpillar >> all right "the exchange" begins now. thank you, scott hi, everybody. here's what's ahead. the final countdown, the fed's decision on interest rates is just an hour away. will they bow to pressure by markets and the president to cut rates? or do they think the economy is strong enough to stand on its own. we'll find out and should i stay or should i go u.s. companies have a decision to make. we'll have the latest moves from apple and harley-davidson. plus, another retailer warning about prices alphabet shareholders are speaking out, and apparently, dom, adam sandler still brings in a ton of viewers. >> i am shocked that adam sandler still has a big audience

out there. >> away you go >> yes the flatness in the market just tells you what the whole story is today because the dow industrials, the s&p 500, the nasdaq all pretty much, yes, uneventfully flat. but the reason why is because everybody is in a holding pattern ahead of that big fed interest rate decision and subsequent press conference from fed share jay powell will they or won't they bias themselves towards easing rates? one sector to watch, one industry group in particular, the housing stocks itv off by nearly 2% this is the third straight day of declines. it is now trying to bounce off its 50-day average price that more near to medium trend line if you take a look at that, this has already run up by about 35% since the december low so are we rolling over here? that's going to be the question for traders. and then one stock in particular it's not one we often talk about, and it's on the smaller capside. it's about a $1 billion company.

winnebago up 3% here, rving. still take a look at this chart. a massive move higher just since december, it has doubled in stock price after falling 66% since 2017 the end of there so rv'ing, kelly welcome to "the exchange," everyone i'm kelly evans. some positive news on the other overhang for markets robert lighthizer saying that he has a conversation set up with his counterpart in the next day and a half before the president goes to the g20. he said he doesn't know when actual negotiations between the u.s. and china will begin, but the two sides are definitely talking and will meet. let's get more with bob pisani down at the new york stock exchange >> stocks are essentially treading water ahead of air very difficult backdrop for the federal reserve meeting this

afternoon. we have seen equity euphoria over the ecb's dovishness recently now we have euphoria over hopes for future fed cuts. and we have euphoria over china trade talks recently all of this has pushed stocks to less than 1% of an historic high for the s&p 500. all of this recent meltup is on trade and central bank dovishness it is not on fundamental developments powell needs to strike a near perfect tone that the economy remains resilient, but they're ready to cut when the market is going to have a negative reaction. does the data really justify cutting interest rates the markets seem to think so people down here seem to think so but it seems the bond market is it too pessimistic about the global market and thtrade war risks. kelly, the president could start tweeting in the middle of powell's press conference. this is going to be a very interesting afternoon. back to you.

>> bob, why do they think that or do they just think the risk of the president kind of trolling on powell are higher than normal? >> just look at the last couple of days and what he's been saying let's wait and see about what he does i think the risk is -- actually sometimes traders are concerned about things that don't really happen or never do happen. i think the chances are that that could happen. >> bob pisani at the nyse. let's get down to the federal reserve with less than an hour to go until that hotly anticipated decision will they or won't they cut rates, and whaz huawt's the lane investors will hear? and does steve have access to twitter? >> i will have access, kelly we are looking at a pivot from patients to possible rate cuts as the fed meets unprecedented public pressure from the president from markets to ease policy three scenarios. the dovish one says here is a cut. we hear you, we hear what you're saying, we are really thinking

about it the hawkish one is weakness. what weakness? the fedspectations, willingness to cut rates and marks down at least somewhat the inflation outlook and the economic we'll have to see if the fed in its forecast builds in rate cuts for this year and next not a single fed federal forecast in march that the fed would be cutting rates this year, and they forecast rate hikes next year. it's a sign of how dramatically things have changed. we are a small probability away from a cut at this meeting and a much bigger chance away from a cut at the next one. >> steve, because you've followed this so closely, does the lead-up to this decision tell you that if the fed were going to cut rates they would have signaled it better to markets or, no, is the kind of stuff that we've been hearing consistent with, hey, it may happen or did they not fully lay the groundwork >> i think you are right about that, kelly.

the typical scenario is they announce sort of -- use a meeting to create the preamble for the actual action. now, powell in his speech in chicago specifically said we will act as appropriate. i wouldn't be surprised to hear language like that work itself into the -- the statement itself but that would be the sort of preamble and like i said, you want to have the xi and trump meeting. you want to have the june jobs report and then you want to have that second quarter report before the july meeting there is weakness out there, but it's not definitive that it requires a rate cut just yet >> and if the president happens to tweet during this whole event, steve, you guys will know about it >> i think so. and i would not be surprised to see one of the reporters ask the chairman directly about the president's tweet if this happens. i have not heard of that particular risk. you would think the president would not do that, but you would think the president would not have done a lot of things. >> well, we are in that silly

season quite period before that. steve, thanks, we'll let you go and get ready. steve liesman. for more we will be bringing in villary. andrew is also with us he is the chief u.s. economist at citi. and it's great to see you both sandy, from a markets point of view, the european central banks sort of stole the thunder from the fed this week. >> sure. >> these levels and bond yields are insanely low >> you've got the 10-year down at a 208 but the market's been pretty interesting. i think it's really almost price for perfection when you look at what's coming with this cut here in -- well, i don't think we're going to have a cut here in an hour i think the language is going to change a little bit to be more patient. but a 180 from where we were six months ago >> who would you say is more priced to perfection, the bond market or the stock market >> i think the bond market so money just continues to pour in so i think people need to be a little cautious on both,

frankly. >> when you talk to clients to other, you know, colleagues in the market, do you hear anyone saying i'm shorting bonds right now, i'm selling those, i'm not buying them. is anybody in that position? >> no. and what's also interesting, you're seeing cash be one of the larger allocations in a portfolio these days as well people are a little bit cautious on the equity markets and i think that's maybe making me a little bit more bullish the more skeptical people are you can see some complacency in the market >> see a flush, you seen >> i want to see it spike up to the 30s. i think you can see that if something doesn't happen at this g20 meeting on june 28th i don't see some magical deal happening all of a sudden. >> okay, that's interesting because, andrew, look, you guys are not in the camp calling for any rate cuts this year, right >> yeah. so we're one of the banks that's still holding out thinking that the fed can make it without cutting. but like everyone is saying a lot is priced in right now

>> why don't you have rate cuts priced in? do you think the economy is strong enough on its own are you not looking at low inflation and saying, hey, this is a sign that rates are too high >> the interesting thing is there's really not a lot of debate that the economy is strong enough right now that you don't need these rate cuts there's nothing really pressing for a near-term rate cut in the data it's really the downside risks around that data so, yes, should we get another negative payrolls report should we get another negative outcome at the g20, then i think it is a fed that's going to be looking about cutting rates, and you will see them setting the table for that at this meeting but do we actually get there, and we're not there yet, and the likely scenario is that we don't get there. and i think that's what's being underappreciated by markets right now. >> i am stunned by what happened at the march meeting, feds are looking at zero cuts this year and then hikes in 2020 andrew, what do you think is an

appropriate outcome of this meeting in terms of reflecting, you know, kind of some of the cuts that are obviously priced in by the market now some of that concern, but also saying, hey, it's too early to tell on the economy and the g20. >> so i think we will get exactly that kind of central scenario that steve is talking about. the committee is closely monitoring it now. they were patient thinking about maybe hikes a few months ago now it's closely monitoring thinking about downside risk and really important is do we get that language that they are prepared to act as appropriate chair powell's already said that if we get that in the statement, it's a pretty clear signal that should conditions not materialize in a positive way, this is a fed that's going to come in and provide some accommodation. so i think that's kind of the perfect way to split the difference here between you're not cutting here and you're not signaling that you're necessarily going to cut, but you are making it pretty clear that that accommodation is going to come through should it be needed >> you know, that deep sell-off, that vick spike if there was no

trade deal at the g20. >> that's exactly right. >> do you think a similar type thing could happen if the fed is not that dovish today? >> it could. consensus is clearly that they're going to just change, moderate the language. if people are looking forward to july, upwards of 80 and 100% probability of a rate cut, maybe 50, i don't know but i think that you can see if things go not according to plan, you could see a little bit of a spike. but i think this is going to be okay and i am looking forward to next friday, i guess, to see what happens between trump and president xi >> and, andrew, that's tricky because i assume that the federal reserve doesn't want to be left in a situation where a meeting ten days from now or a tweet tomorrow could dramatically change the outlook for the global economy simply if there's a trade deal, right? >> that's part of what makes this meeting so hard because you have all of this accommodation that's priced in and consistent with what y n is saying, it's priced on a pretty negative outcome and i think if you're the fed you really want to was itand see how things develop

>> and finally, sandy, when it comes to position, more so than usual? would you stay away from it as much as possible we are trying to be as light as we can in fixed income frankly, we'd like to take some chips off the table in stocks. if things are hitting your 12-month price target today, i think you're going to get a better opportunity somewhere in july and august. >> so, what happens if you don't get that opportunity so let's say there's just not enough of a flush, call it after the g20, and all of a sudden markets pass and the market's kind of gotten away from you, is there a risk of sitting on the sidelines? >> we have a large amount of cash for us. we are sitting on 12 and 13% in cash that's a pretty good cash position for us. but i believe that we'll have an opportunity to stock pick and find some individual stories that are undervalued that is, we are not finding things that are cheap right now. so go to the sidelines and maybe we will wait and see and get some opportunities later in the

year >> thank you both. about 45 minutes to go and the dow is trying to stay positive here's what else is still ahead on "the exchange." coming up, as the pressure from the u.s. continues to mount, we'll hear from huawei's founder. will they retaliate? and his answer to whether or not he'd pick up a phone call from president trump. plus, less than a day after facebook announces its digital currency, the government is already calling for a delay in hearings and the president says the fed is putting us at a disadvantage over europe what will he do if the fed doesn't cut rates? this is "the exchange.anybody e? we know their rates are good,

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today's xfinity service. simple. easy. awesome. i'd rather not. welcome back. we are watching the market closely here ahead of the fed's decision. the dow just turned negative we were up as much as 08 points at the session high. we will keep you closely posted on that. and welcome back as we talk about chinese huawei ceo the company saying it's blacklist from the u.s. will cost it $30 billion in lost revenue. deirdre bosa got an exclusive interview with the company's founder and ceo at huawei's

headquarters in china. >> reporter: we talk a lot about huawei being banned in the u.s., but some of the biggest american companies still don't have access to china. i talked to ren zhengfei about this do you think that it's appropriate for u.s. companies like google, facebook, and twitter to be banned in china while you advocate for access to the u.s. market? >> translator: no. restricting huawei into the u.s. market, well, that is the action taken by sovereign state what does that have to do with huawei >> reporter: you are not advocating for access to the u.s. market? >> translator: no. that will be a waste of our effort >> reporter: yet, wren and huawei are spending a lot of time and energy on the u.s. market they have hired a pr team to even file a lawsuit against the u.s. for its ban against using huawei equipment ren also played down the pressure that it's feeling from u.s. allies as the trump administration urges them to move away from huawei.

>> translator: despite the heavy pressure, they still trust huawei once this pressure is lifted, then there will be a huge significant amount of the request of demands coming from customers. and by that time, our question will be can we have the sufficient capability to answer to all these demands >> reporter: mr. ren, you are already losing customers across the world. australia has banned huawei equipment. >> translator: australia in terms of our business is relatively a small market. it's not even as big as the neighboring city even if they welcome us, we might not go there rxingts europe is a big market and one of your most important there, considering the same measures >> translator: no. no, i don't think so europe still welcomes us >> reporter: in reality, european countries and other u.s. allies are reconsidering their relationships with huawei. and, kelly, another issue that's still out there is ren's daughter who is awaiting extradition proceedings in canada, he maintains her innocence, and i asked him if

he's speaking to chinese officials on her behalf. he said he is too busy back over to you >> wow our deirdre bosa today's cnbc is also hosting our first-ever evolve summit it's an event where top business leaders are gathering to talk about how businesses are trying to adapt and evolve. our courtney reagan just sat down with the executive chairman, and one of the key topics was of course tariffs he said he is on board with the president's hard line on china listen >> i think everybody is very supportive of the goal of the administration to change practices in china and so far the administration has done a terrific job of limiting the impact on u.s. consumers. most consumer products have not been impacted by tariffs, and the impact on that business has been -- in part because the products that have been affected by tariffs we have bought early and worked with our vendors to mitigate damages >> it hasn't been that simple.

coming up, we are counting down to the fed decision on rates will we get a rate cut or signs of one, and what will fed chair jerome powell signal for the rest of the year there's a lot of stake today the dow is down 12 points. plus, a congressional cksh tbalao facebook's digital currency "the exchange" is back in two.

welcome back to "the exchange." here are some of the movers this

hour adobe is soaring on earnings its results is grown by creative suite business and digital money offerings. the shares are shaking that off in a nice 4% gain. united steel also higher despite that warning that second-quarter earnings will fall short of expectations blaming software demand and lower prices shares are still higher by a couple of percent. and j build beat cloud, and health care. apple by the way is jabel's biggest customer now to sue herera for a cnbc news update. >> an independent u.n. report into the killing of saudi journalist jamal khashoggi says there is credible evidence into looking the investigation. >> there is no way the leaders of that state including the

crown prince were not aware of those violations in fact, there is evidence, credible evidence, pointing to their involvement. what needs to be investigated is the extent to which the crown prince knew or should've known >> entrepreneurs and business owners are gathered in arkansas for the chance to see their products on the shelves of walmart. the retailer's 6th annual open call event is being held today and tomorrow at its headquarters in bentonville everything from bakeware to artwork to electronics is on display. and ford says its all-new 2020 mustang shelby gt500 will produce 7600 horsepower. this would make the car the most powerful supercharged v8 engine in the world it will be in dealerships starting this fall >> what are you going to do with all that horsepower? >> i don't know. my daughter vicky wants a mustang like nothing else, and

she's not getting it >> you say that now. >> she is not getting it she'll have to settle for looking at it. thanks very much here's what's ahead on "the exchange." >> coming up, breakup before they make it that's what shareholders are telling alphabet san francisco takes on e-cigs and city resident juul isn't happy. another earnings reports, another warning on tariff pricing. and the magic of adam sandler. it's all ahead in "rapid fire.

welcome back. let's catch you up on a couple stories that should be on your radar today. it is time for "rapid fire." here to break down today's headlines. >> back where i belong >> in that spot. >> i think you should do a newsletter anyway, that's beside the point. >> i got the book title wrong. yesterday i said you should pick up after gloria vanderbilt passed away, you should pick up the book by her great, great grandfatherer. and now everybody's buying the

f. scott fitzgerald one. >> shall we talk about the alphabet shareholder meeting it's happening right now there are shareholders urging google to break itself up before regulators do. it's one of a record 13 proposals on the ballot at the annual shareholder meeting, in fact realistically, there is no chance of any of these passing google's co-founder control over 50% of the shareholder vote. >> i would say that if they were to get broken up, and even if there is a case that the sum of the parts get broken up are going to be somehow value-enhancing, you can wait until regulators actually show their hand a little bit more activists can say -- but at the end of the day, i would say that alphabet's in a unique situation right now. it's also probably one of the biggest laggards, whereas other stocks like facebook have actually been surging.

and so is amazon and everything else google has been disproportionately affected by some of these regulatory concerns so maybe there isan idea that breaking things up could be a big deal >> i'm not sure that breaking them up would even have any anti-trust implementations each decision is a - >> they are so diverse >> let's face it it's search and then all of sergey and larry's pet projects that they were interested in, that they created to put under the alphabet umbrella. so i'm not sure it would matter. >> or if you have to divest youtube, how much does that get to the dominance of the core search platform? >> and video digital. >> we'll see if anything comes out of that. meantime, san francisco lawmakers have voted unanimously. this is fascinating. they have banned all sales of e-cigarettes in the city the proposal still has to go through a final vote and get the mayor's approval but juul, one of the leading companies in this space, obviously, is banking on a

different ballot measure it filed last month that would only ban the sale of vaping products to everyone under 21 so interesting in a number of ways the but here's my thing. it appears as though the sale of regular cigarettes is still league in san francisco. so this would go a step beyond even that. >> bill, you and i are from california we know that tobacco or anything related to that has been at the forefront of this kind of thing from the beginning >> absolutely. and this is a more nuanced story than the headlines suggest because they're only banning it sort of temporarily. the e-cigs have yet to be regulated by the fda they are still -- to submit their products and their marketing to the fda by 2021 and once they get that regulation, i suspect this ban would go away. what san francisco seems to be saying is if you're not regulated by the fda, we don't want you selling your product.

>> so why are you waiting? why don't you submit your materials to the fda so they can figure out if it's safe. and clearly they just want to keep it out of the hands of people who are under 21. and juul says they'd rather do that than ban them altogether. >> it also means in the absence of superseding legislation that can regulate them, the states can actually perhaps do this or the local municipalities >> of course but my only point is if there are parts of the population right now that would benefit from vaping instead of smoking a traditional cigarette, is that harming the population in san francisco? >> they are just trying to get juul's attention >> it's their hometown they should have their attention. >> well, to get them to submit their product to the fda for approval >> they say they've had three years, i believe, to do it, and they haven't done it yet >> they've given them a long lead time. get busy and submit it >> if you want to know mor about that smoking cessation story, go to our website and

read angelico's story about how she got him to take on vaping and quit cigarettes. >> and his doctor said he wants people to quit smoking but that this is the next best thing. his dad loves his juul >> you're right, they've gotten juul's attention by doing this next up, shares of lazy boy are. we are talking about a 15 percentage point swing here. la-z-boy had missed on earnings and revenue estimates and blame the hangover of tariffs and geopolitical uncertainty that was last night exflt then this morning on the call the ceo said despite raising prices and in response to the tariffs so far they haven't seen a significant change in sales. >> this is a great story because it speaks to the core of that debate about whether or not tariffs will actually have an effect on consumers and whether there is a case to be made for demand elasticity or inelasticity >> the changes are so small. >> that is the ticket item >> for la-z-boy, you're talking $2,000 for a chair if you're going to increase

those prices will people actually pay more for it la-z-boy seems to think that they will. it's not true of other consumer products, but this becomes an outstanding case study about when you can pass on those costs and when consumers will actually pay for them >> and rh the second furniture maker said the same thing and they are selling much, much higher-ticket items because the consumer is willing to put out more money for them. so these two companies seem to think they have the wiggleroom to do this >> the 25% tariffs have just gone into effect so you're not going to see that there yet. and there's no guarantee it's even going to last so we'll see but, yes, so far no big change in consumption patterns. >> which i think is consistent with what best buy told courtney reagan this morning, they haven't seen a huge impact this is from the 25% round i guess the bigger question, too, is when you add it all up, does it hurt consumer spending power in a small way, or are there smaller more anonymous

players, purveyors of a lot of the stuff in was walmart >> it's awesome that you brought up the first thing i saw was not the tariff impact in la-z-boy and whether they can raise prices i'm thinking to myself if consumers will pay those prices, that means us as a collective nation of consumers is maybe healthier than we are giving them credit for. >> well, look at the employment situation. it's the strongest it's been in decades. >> but it's not to say that there aren't mal-affected americans all over the country >> and there is a price difference there, obviously, between la-z-boy, rh and what's being sold at walmart. >> for example, the ice cream that i buy is the same price that i've been paying for years, it just gets smaller and smaller. [ laughter ] >>s that the hershey bar la-z-boy chairs could just get smaller and smaller. >> they better not >> but people won't buy those. >> he wants a recliner >> of course he does next, another company

dealing with the chinese trade tensions is apple. it's thinking about moving 15 to 30% of its production capacity another big u.s. brand might be moving in. harley-davidson is partnering with a local motorcycle manufacturer to make smaller bikes. >> you buried the lead on harley harley's sales in china last year were up 27% they're doing much better over there than they are here that's their opportunity for growth i don't blame them >> they've already gotten heat from the president >> but this is why because that's where their market is that's where they can find their growth >> and it's companies moving for different reasons. apple is doing this to potentially save them money, and harley is doing it to grow because people aren't necessarily buying those bikes in the u.s. also that's a much smaller bike than here >> see, they're getting smaller

and smaller, same price. [ laughter ] >> my whole fascination with this is the idea that is there something to be said that china could be long-term negatively affected because people make long-term plans for supply chains and if these guys are going to move them out, it could be a sea change in the way that chinese manufacturing is viewed around the world if they move to cambodia, thailand, and else where. >> and for apple, it's reported that this change would happen now basically no matter what it's not, you know, if we have a resolution, we will stay but may be bad for china in the long run finally, 31,000,001 of them is bill griffith because he watched the new netflix movie "murder mystery" starring adam sandler and jennifer aniston companies say it's the biggest opening weekend ever for a netflix film they have signed a four-movie deal with sandler, another four

in 2017, and it appears to be paying offhand somly why did you watch it >> because my daughter was home for a few days and i was coerced into it. i'm not into it normally and there's not that much. but this is a light little fluffy cream puff. it's cute. >> the reviews that i saw were not that flattering, but others were a bit more kind it was just entertaining enough to make you think it was actually good. they said an updated but sluggish version of clue >> the hall of fame, though. i mean, "water boy" "billy madison" "grown-ups. >> well, there are about seven other adam sandler movies coming out on netflix >> did you notice though of that 31 million, 14 million was in the u.s., 17 million was overseas so they had a majority of it

overseas >> i believe that his movies have not played as well internationally, which is one of the kind of problems for netflix that they have cracked the code in the u.s. but need that original content abroad. so that would be huge. >> but here's the big thing. we only talk about netflix these days because of original content. when's the last time you talked about the library of movies that netflix had? but that speaks to the strategy, right? >> you talk about that, but most of what people are watching is still the library. >> sure. but it gets so much more attention about the original content. and maybe that's the reason why they are spending so much on it and why everybody else is, amazon, the studios. all of these guys are trying to get content. let's not even mention the jj abrams warner. >> when nbc launches its own streaming service, if it pulls "the office" off, i think that's still the most watched thing on netflix. >> i watch it every night while i am falling asleep. but we know the sleep schedule is important

gotta turn the ipad off, put in the ear plugs, lavender. >> i've got lavender growing in the backyard, it is my proudest moment guys, thank you all. coming up, less than 24 hours after its announcement, congress concerned with facebook's crypto currency plans while lawmakers are demanding on that front plus, why the biggest galel shield's internet company could shield's internet company could beelity it's just $4.95 per online u.s. equity trade. the details right after thisnd . when i reached this accomplishment, it was like, it's here, it's happening, it's now.

we at southern new hampshire university are the ones who succeed. we are the ones who break through.

welcome back to "the exchange." it's only a day old and hasn't even launched, but there's already growing backlash on capitol hill to face facebook's plans for a digital currency what lawmakers are demanding from facebook on this issue. >> reporter: kelly, both parties now want facebook executives to come before congress and testify on libra the top republican on the house financial services committee, patrick mchenry was actually the

first to call for a hearing. he said that he wants to get beyond the rumors and speculation and question the company directly then the chairwoman of the committee, maxine waters, took it a step further. she is calling for a moratorium on libra until congress has a chance to weigh in now over in the senate, the backlash is bipartisan as well on the democratic side we are hearing concerns from warning warner from virginia as well as sherry brown from ohio so, kelly, facebook right now does not have a lot of friends on capitol hill, and this certainly isn't helping. >> the other interesting thing we were talking about too is whether it is a crypto currency, you can't really mine it but it does use the blockchain facebook says it would help the unbanked and underbanked we wonder if it's aimed more at merging markets than the u.s. what are the issues, the concerns really that people have about this, at least in this country going into practice? >> reporter: well, what we heard

from mark warner was this concern that facebook has already faced violations of how it handles user data do you really want to add financial data to that long list of potential areas that facebook knows about your personal life so i think what congress is concerned about is that, as you said, this is an emerging area they're in the mode of educating themselves right now they want to hold a hearing on it so that they can learn about the issues, get answers from facebook, and then decide how to proceed going forward, and whether or not regulators will need to step in and what types of regulations might be needed >> what possibly the bigger long-term story is this call to possibly change the foundational legislation behind the internet. i believe it's starting with josh holly but what can you tell us about that >> reporter: yeah. so this is section 230 of the communications decency act and basically what it does currently is give platforms, tech platforms, legal immunity from any content that is posted on their site.

so if someone posts hateful or extremist content on facebook, google, et cetera, those platforms are not legally responsible for that what holly says is that he wants to change that, that these companies are not upholding their end of the bargain, they are not doing a good job of making sure that content that should be taken off is taken off and removing content should stay on there these companies should be held legally responsible for what's posted on their site and that would be a sea change in the way they do business >> for any company even remotely online, a much, much bigger deal than net neutrality. ylan mui in washington today we're just about 15 minutes away from the fed's decision on interest rates the president once again criticizing jerome powell on this event how will that impact the markets? we'llxpre wn elohewe come right back.

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call reputation defender at 1-877-866-8555. hey! i live on my own now! i've got xfinity, because i like to live life in the fast lane. unlike my parents. you rambling about xfinity again? you're so cute when you get excited... anyways... i've got their app right here, i can troubleshoot. i can schedule a time for them to call me back, it's great! you have our number programmed in? ya i don't even know your phone anymore... excuse me?! what? i don't know your phone number. aw well. he doesn't know our phone number! you have our fax number, obviously... today's xfinity service. simple. easy. awesome. i'll pass. welcome back. we are just minutes away from the fed's decision on interest rates president trump criticizing fed chair jerome powell this week for not cutting rates. in his recent interview with abc news, the president has said he is not happy with powell >> frankly, if we had a

different person in the federal reserve, then i wouldn't have raised interest rates so much. we would have been at least a point and a half higher. we also have people in there that were -- but he's my pick, and i disagree with him. as you know, it's independent. >> what do you make of the critics that say it's just inappropriate for you to be talking about -- >> they used to speak to the federal reserve often. and it was very much a part of the administration from the standpoint they'd talk and we have no idea how important it is, but i'm not happy with what he's done. i am not happy with the fact that they've done quantitative tightening now he doesn't make that decision himself, but i would think that the head of the federal reserve -- no, i'm not happy. >> and yesterday the president responding to reports that he's even looking into demoting powell >> well, let's see what he does.

i can tell you that the eu, if you look at what's going on with the euro, they have a much different stance than our folks do as you know, we did something today that was very dramatic and, frankly, it helped that par of the world so we'll see what happens. they're going to be making an announcement pretty soon so we'll see what happens. but i want to be given a level playing field. >> joining me now is david wessel, director of the hudgens center on fiscal and monetary policy at brookings institution. david, these are fascinating events to follow for everybody but what do you think it means, practically speaking, for the meeting today, for the decision and for what powell does from here >> well, i think the president has put the fed in a very awkward position on one hand, there is a case that the fed should be cutting interest rates today the economy has slowed somewhat, and inflation remains below their target, and it's not even going the right direction.

and with interest rates so close to zero by historical standards, there's an argument that the fed ought to move sooner rather than later. on the other hand, the fed doesn't want to look like they're caving to the president. they always say, of course, they'll make their best judgment based on the economy and all that and i believe them but they know that if they cut interest rates today, everybody will say they caved to the president. >> right. >> that will hurt their credibility. >> right and you have stan fischer, who also this week said that he thought the economy was strong enough that it didn't warrant a rate cut so the only reason they would do it is for political reasons, basically. >> well, yeah. but i think what -- i think he was saying he's -- the president is making the hard -- making it hard for the fed to look like it's making decisions on economic grounds rather than political grounds, by making this whole stink i think the other thing that's interesting is, so why would you be bloomy about the economy now? one reason is president trump's trade and tariff wars. but if the fed cut interest rates today, and then next week

in japan, the president comes out smiling with xi jinping and saying we called the whole thing off, then the fed is in an awkward position you can't say, oh, we would like to take back the rate increase. >> absolutely. david, i'm going to throw this curveball at you there are people with all of this going on who wonder, why are we waiting every six weeks for thisroupf people to sit down and set rates can't the market just do it? isn't this all getting a little ridiculous >> no. i don't think so look, why do we have an independent central bank why do we have a central bank at all? you know, we ran sometimes in our history when we didn't have a central bank and it didn't work out very well we have a central bank, and in large part because of the financial panic of 1907, and jpmorgan himself saved the system, and the wise leaders of our country decided being so reliant on one rich guy was a bad idea the market is not doing a good job of regulating credit we need a central bank so we don't have huge swings one way or the other or that we don't -- our money supply is not dictated

by how much gold is mined in south africa in a given week so, no i think that, you know, we've gotten a little bit more drama than we need and i think that the fed has gotten itself in a awkward situation, because today we'll have the dot plot, which may or may not show a rate cut in the next coming months and then we'll have the chairman speaking, and he may or may not be saying what the dots imply and everybody will be trying to figure out which one should i listen to. the dots or the chairman. >> well, that will all begin in just a couple minutes' time. david, thank you, as always. always appreciate it. >> you're welcome. >> david wessel, brookings institute. that does it for "the exchange today. don't go anywhere. so much more is coming up on the other side experience the style, craftsmanship and technology "power lunch."

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welcome to "power lunch. i'm melissa lee along can kelly evans. we a minutes away from one of the most anticipated federal reserve decisions on interest rates in years. will the fed hold? will we get a cut? what language will they use in their statement? let's get a collect of the markets as we head into this fed decision the dow down just slightly by ten points s&p 500 down by 1.5. financials and health care the leaders. the russell down by 1.5.

taking a check on the ten-year note, below 2.1%, no surprise on the ten-year yield 2.0864%. let's bring in our chief strategist of the melon investment management. david kelley with jpmorgan funds and john bellows, portfolio manager at western asset, part of leg mason i'll start with the panel in-house alicia, what are we expecting? >> we expect no cut. we expect the fed to drop language about being patient, which then puts optionality on the table for a july possible cut. and i think the fed has a difficult time here to kind of walk the tight rope between not something too nervous about the economy, and not being quite so ready to jump in with insurance cuts. >> we are talking before the show actually started about what seems like the huge chasm between market expectations in terms of fed rate cuts this year and what the fed has outlined so far. >> well, i think this is a

permanent bias i think what's really interesting about this meeting is their communications policy forces them now to say where they think rates will be at the end of the year. and i do think we will see a cut in the expectations of members one cut at the end of the year, a signal we're into an easing cycle. >> how different is the setup now in the post mario draghi discussion from earlier this week he already sent global bond yields to insanely low levels. >> well, unfortunately, it does add a little more competition here this is nothing to do with interest rates this has everything to do with exchange rates and what draghi is trying to do is push the euro down, and, of course, that gives the fed another reason to try to push the dollar down to try and combat that. >>ohn, same question to you. what sort of pressure does -- not just from the president, of course not talking about that but from central banks around the world? >> you know, i thought there were two important things about mario draghi yesterday the first, he's flagging downside risks, global in nature

they're about trade, slowing global growth. so if mario draghi is worried about those, i can guarantee jerome powell is, as well. the second thing about mario draghi, he's concerned about low inflation and falling break-even inflation in particular. again, that's very true here in the united states. the one thing that's changed materially since the may meeting is break-even inflation is lower. so draghi was dovish yesterday i think jerome powell is going to be dovish in his communication today. and i think especially the thing that watch for is how he talks about inflation. inflation has been falling, it's been too low i think ultimately, that's going to be the reason the fed will cut rates. and i think today they're going to lay the ground work for that with a focus on inflation. so that's the thing to focus on. >> 2.08% on the ten-year the dollar the other main one to watch, especially with everything that's happened already this week. it was down about a quarter of a point going into this. >> so, you know, what we think today is that ultimately, if the fed winds up with a dovish tilt, which is probably going to

happen, it's going to be pretty bullish for the market in the short rub, because the market is pricing this in. and if not, set up for a negative surprise here because the market -- >> if the key -- if patient isn't in there. >> if patient isn't in there, it's good. >> all right that decision is coming down the pike let's get to steve liesman in washington steve. >> no change in the federal funds rate the federal reserve retains the funds rate at 2.25 to 2.5% however, removed the word "patient" from the statement the fed said uncertainties have increased. the statement says the federal reserve will, quote, act as appropriate to sustain expansion. they will closely monitor implications on the outlook. the st. louis fed president wanted to cut rates. on rates, a major change in the dot plot or the outlook of the fed officials for their rates. a lot of disagreement. eight are now forecasting a rate cu