always getting back to 2%. you were bouncing back and forth between 1.5 and 2. and we wanted them to be centered around 2% that's the approach that we are taking you are right, it's not a formula-like approach. we were clear on that when we announced the framework. was there another part of your question, craig? >> that pretty much answers it, chair powell thank you. >> thank you now we'll go to michael derby. >> thanks for taking my question i wanted to ask you about the reverse repo usage that we have seen lately. i was curious if you were at all concerned about the level of money flowing into the reverse reapo facility and do you believe that the changes in the fed's tool kit today will have an impact on that then in a related question, do you think that fed asset purchases are taking too many safe assets out of the market

right now and creating maybe dislocations in the money markets? >> on the -- on the facility, we think it's doing its job we think the reverse reapo facility is doing what it's supposed to do, which is to provide a floor under money market rates and keep the federal funds rate well win its -- well within its range we are not concerned with it it is doing -- you have an unusual situation where the treasury general account is shrinking and bill supply is shrinking. so there is down ward pressure we are buying assets so there is downward pressure on short-term rates. that facility is doing what we think it is supposed to do sorry, your second question was again? >> the change in the rate control tool kit do you think that will reverse the amount of money coming into the reverse reapos will that have an impact on the market

found the funds rates setting? >> it could have some fact we will to see about that. but it is designed to keep the federal funds rate within the range. and i do think it could have some effect on broader money market conditions below as it relates to the very low rates and the down ward pressures. >> do you think it will lower uptake on the reverse reapo facility or that's not really a focus of what the change was? >> it's not. the funny thing, you would think that it would. but we'll have to see. it's -- it's possible that that would not be the kiss. that's going to be an empirical question. >> okay, thank you. >> we will go the gina smehlik of the names. >> thank you chair powell for taking our questions i was wondering if you could follow up a little bit on your response to rainel at the very beginning and talk a little bit about how we should understand what full employment means in a

world that's as you mentioned all the data has been roiled by the pandemic we are not where epop is going to settle in, where wages are going to settle in i wonder what full employment means in this context and sort of how you are thinking about this wage data. >> yeah. as you well know, there isn't one indicator we can look to there is no one number we can therefore point to we look at a range of indicators it is a very broad range you can count to a high number just quickly but, certainly, it will include things like unemployment and participation and wages, and many different flavors of that so how do we think about it? a couple things. we are all going to be informed by what we saw in the last cycle, which was labor supply outperforming expectations over a long period of time. now, that hadn't happened in many other cycles, but this was

a very long cycle. we are going to have to be alert to see whether that can happen again. it's a different economy we have had a slew of retirements. that may weigh on participation. that effect, though, should wear off in a few years and you know, as you move through that window -- because people would have retired anyway and you will be back where you would have been. so i think we are -- i think the lesson number one is just to be careful about assessing maximum employment and i think if you -- during the last cycle, there were waves of concern that we were reaching full employment as well as 2012 when i arrived at the fed. and, you know, nine years later -- eight years later, we were still creating jobs and you know, it was quite remarkable so we are all going to be informed by that at the same time, we understand

that this is a different economy. you know, the demographics are -- people are getting older. that should have a secular effect, too, of reducing participation over time. so we have to be sensible about what can be done but i think we are going to lean into that and be optimistic. you asked about wages. we are seeing wage increases that's sort of a natural thing to be seeing in a strong economy. and what we are seeing -- we don't see anything that's troubling in the sense of what would be troubling would be, you know, very wide across the economy wages at unsustainable levels without high inflation. in other words, wages in excess of productivity and inflation, by a meaningful amount, broadly across the economy sort of forcing companies to keep raising prices and getting into a wage pricing cycle that's one of the old formulas for having high inflation. we don't see anything like that now. we do see high wages

we see them for people who are mostly new -- you know, entering into new jobs, many of them in low-skilled jobs and we do think -- you have got to think in the labor market right now where supply and demand are not meshed up well. we think it's a flexible economy, and it will clear, there will be a level at which supply and demand meet and that will -- we think that will be happening in coming months so -- the last thing i will say is, again, if you look at the forecasts, we are going to be in a very strong labor market pretty quickly here. there are still a big group of unemployed people. and you know, we are not going to forget about them we are going to do everything we can to get people back in to work and give them the chance to work but there's every reason to think that we will be in a labor market with very attractive numbers, with low unemployment, high participation, and rising wages across the spectrum. so that'sa little bit how we

are looking at the labor market. >> thank you, now the hannah lang at the american banker. >> hi, i wanted to ask about the status of your thinking around the supplemental leverage ratio right now. is the fed still thinking about ways to permanently adjust this to account for the high growth in deposits? do you ultimately believe a permanent fix is needed? any information around the timing on that would be helpful? >> we are working on it. i don't have any particulars on the timing right now but we always -- our position has been for long time and it is now that we like the leverage ratio to be a back symptom to risk-based capital requirements when leverage requirements are binding, it does skew incentives for firms to substitute low risk assets for high risk ones. that's a straightforward thing because of the substantial

increase in reserves, treasuries and other safe assets, it is rapidly ceasing to become the intended back stop for the big firms that we want it to be. we do think it is appropriate to consider new ways to adapt to it the new high reserves environment and we are looking a of the the issue we would also be clear to take whatever actions are necessary to assure that any changes we do make or recommend do not erode the i don't have all strength of bank capital requirements. sorry, i can't give you any more that's just something we are working on >> thank you now we'll go to cnn business. >> hi there. thanks for taking my question. chairman powell, the price jumps we have seen in raw materials, lumber, for example, you mentioned it earlier seem to be easing and it seems like we are in the beginning of

suppliers catching up with demand but i wonder if you are worried at all we are going to ends up with excess supply after the shortages wear off and if we continue this mismatch as we are recovering, getting out of the pandemic economy, and i wonder how that would affect the fed's outlook? >> that is really not the problem we are having right now. people who work in commodities industries are very focused on that because they know that -- you know, they don't want to build capacity and then find out that it's not necessary. really, the problem now is that demand is very, very strong. incomes are high people have money in bank accounts demand for goods is extremely high and it hasn't -- hasn't come down we're seeing the service sector reopening. and so you are seeing prices are moving back up off their lows there. but in terms of overcorrecting, i mean, i think there is a possibility on the other side of

this that -- that inflation could actually be quite low going forward. but that's not really where our focus is right now our focus right now is, we need to -- our expectation is that these -- these high inflation readings that we are seeing now will start to abate. and that's what we think and it will be like the lumber experience, and like we expect the used car experience to be, with things like airplane tickets and hotels, which were the other two factors in the recent cpi report that went up a lot. we expect those factors to get back to what they were, but there is no reason why they would keep going up a lot. if they were, people would build more hotels, there no reason to have a lack between supply and demand in the hotel business there is a lot of uncertainty in the timing in the short-term

the overall story, we think is right and we think the overall data support it. so do many, many forecasters if you look at the forecasts on the fomc, you will see that as well but we don't -- we don't in any way dismiss the chance that it can work out that this goes on longer than expected and the risk would be that over time it does begin to affect inflation expectations and if we see inflation expectations and inflation or inflation moving up in a way that is really materially above what we would see as consistent with our goals and persistently so, we wouldn't hesitate to use our tools to correct that. price stability is part of our mandate, and we would do that. we don't expect that that is not our base case n. that, we are joined by many other forecasters. but there is a lot to be humble about among forecasters.

it is a highly uncertain business we are very much attuned to the risks and watching the data carefully. in the meantime, i would say, you know, we should, as i mentioned earlier, there is so much uncertainty around this it's just a unique situation, that we need to see how things evolve in coming months and see how that story holds up and act accordingly. >> thank you we'll go to howard schneider at reuter's. >> thanks, chair powell for taking this. i don't want to miss the moment here i noticed that in the statement you dropped the language saying that the pandemicis weighing o the economy. so is this the effective end, in your view, of the pandemic as a constraint on economic activity, even though it's still cited as a risk >> you know, it's continuum, right? what you have seen with the pandemic is sharply declining

cases, hospitalizations, and deaths and that's great and you know, that should continue but you also saw in the united kingdom, which has, i think, at least as high, if not higher vaccination rates -- they have had an outbreak of the delta variety. and it's -- it's causing them to have to react to that. so you are not out of the woods at this point. and it would be premature to -- in my thinking, it would be premature to declare victory vaccination is still -- has a ways to go to get to levels -- it would be good to see it get to a substantially higher level. and you know, that can only help but, look, you are right the statement language is evolving i would expect it to continue to evolve there's a lot of judgment in that but you can expect us to drag our feet a little bit on that. because that's what you do with statement language it's great to see the progress but, again, i would not declare

victory yet. i would say, it is so great to see the reopening of the economy though and see people out living their lives again. who doesn't want to see that it appears to be safe, and i would just encourage people to get vaccinated >> if i could follow up on that. if you view the statement in toto, and the dots, and the substance as well. do you think this is more of a market to market exercise around the improvement in health or around the inflation risks you see developing out there >> i think it's both no, i think clearly, since march, what's happened is people have grown more confident in these very strong outcomes that -- very strong outcomes in the economy will be achieved there is more grounds. we have seen growth better than expected and high labor dmarchds we have also seen inflation

above target, though i think even in our forecasters' case they do see inflation coming back down over '22 and '23 into areas that are very consistent with our mandate. nonetheless, the risk is something that could factor into people's thinking about appropriate monetary policy. the thing is, these are 18 different forecasts. i can't stand here and say exactly what was in all 18 people's minds but that is something i think could factor into thing as well, factor into our forecasts as well. >> thank you. >> thank you we will go to victoria guido with politico. >> hi, chair powell. i wanted to ask a little bit more about inflation to make sure i understand how you are thinking about this. in the projections, inflation is expected to be high this year, and then come back down next year, and then maybe start the rise a little bit again, enough for a liftoff in 2023.

i know that's obviously -- take that with a grain of salt, but that would suggest that you all could theoretically see inflation sustainably staying above 2% so i guess my question is, what would be causing that inflation? what would be -- because it seems like you all now see a situation in which inflation would be rising in a way that isn't caused by transitory factors in the next couple of years. so would that be the result of a tight labor market would that be because this whole situation has raised people's inflation expectations how are you thinking about that? >> what we are seeing in the near term -- our base case is that what we are seeing in the near term is principally associated with the reopening of the economy and not with a tight labor market or tight resource constraints, really. but you are right. when you get to -- in the forecast, all of that, the supply and demand sides of the economy adapt. we have a very highly adapted, flexible economy, more so than

most and by 2023, those increases are really about -- about, you know, rising resource utilization or to put it a different way, you know, low unemployment, or high employment is a way to think about it that's what that's about that's about the kind of broad inflation pressure that results from, you know, a really strong expangs, tightening resource utilization across the entire economy and lifting up inflation. and that's why you would see it then because, by then, you know n the forecast -- it's just a forecast they are just individual forecasts. in people's forecasts, that's what's happening >> so the change in the projections reflect the fact that you all are more optimistic about the economic outlook and not necessarily that you think this will change the way people think about inflation? >> yeah, i think it -- there may be an element of the latter as well because inflation expectations have continued to

move up. it's all in people's individual thinking it is hard to say. it's not something a committee debates in terms what have the outlook is for 2003. so i am a little bit speculating, which i shouldn't do but it wouldn't surprise me if there is an element for some people in you know, seeing the inflation performance that we have had and thinking that i have more confidence we could see inflation above 2%, that it may not be as hard to do that as we thought, and inflation expectations may move up to a level -- they were really at a level that was kind of really below 2% they might move up as a consequence of this, or as a consequence of the new framework. you know, we did see inflation expectations moving up in the wake of the announcement of the framework. but we don't really know that. ultimately, i think it is consistent with both those things >> thank you now we'll go to greg robb at

market watch >> hi. i thank you for taking my question chair powell, i'm just looking at the forecasts one thing i don't think has been talked about all that much is how much you guy -- the fed thinks that the economy is going to slow next year. i mean, are we looking a of the a scenario of a slowing economy next year as with higher inflation? what do you think about that >> we are looking at an economy that will not have the degree of fiscal support, the fiscal support in the forecasts is much less than it was this year but you have still got a very strong growth, well above the longer run potential output of the economy. you've got growth meaningfully above that and inflation is lower next year in all of our forecasts. i think the range of core pce forecasts for next next year is 1.7 to 2.5 in 2022 and 2 to 2.3 in 2023

you are right, you are seeing -- i can't remember the number, but it might be in the threes, three, three and a half percent growth for next year that's a really good year. coming on the back of a 7% growth rear that's a really good year that's a year with a lot of momentum you know, that will cause significant job creation and it will -- i mean, we would take 3.5%. we didn't have a 3.5% growth year, we didn't have a 3% growth year between the global financial crisis and the end of the expansion. so that would be a good year. >> doesn't it seem like a risk of, you know, like stag-flation. you are going to go from 7% and down, that means the economy is dropping we haven't seen that --? >> well, the economy is not -- the economy is still growing and growing at a very healthy

rate our estimate -- different people have different estimates but broadly speaking, economists think the economy has the potential to grow at around 2% per year if you are growing above that, then the unemployment rate should be declining, people should be pulled into the labor force, wages should be going up. lots of things should be happening. businesses should be investing you know, i guess to answer your question a different way, is there a risk that inflation will be higher than we think? yes. as i said earlier, we don't have any certainty about the timing or the extent of these effects from reopening and therefore, we don't -- we don't think that -- we think it's unlikely that they would materially affect the underlying inflation dynamic has the economy has had for a quarter of a century. the underlying forces around the globe that have created those dynamics are intact. those are aging population, low productivity, globalization, all of those things that we think

have, you know, really held down inflation. all that is out there still. you know, when we get through this, we will be facing those same forces. nonetheless, is there a risk that inflation will remain higher than we thought yes. if we see inflation moving above our goals in a time -- sorry, to an extent, to a level, or a persistently enough, you know, we would be prepared to use our tools to address that. >> thank you going to brian chung with yahoo. >> on that point you talked about maybe some of the more structural changes in the last answer with regards to productivity i noted the median projection for r star the longer term interest rate is still the same at 2.5%. but there has been some literature out there that maybe the covid crisis could have changed underlying fundamentals of the economy and changed productivity in addition to

changing with demographic changes that have already been occurring that might effect the r star might be higher what might be the impact of that >> a higher neutral rate would mean that interest rates would run higher by that amount. and that would be a good thing from the standpoint of the economy because it would give the fed more room to cut rates the problem with interest rates being close to the lower bounds is that it really cuts into our ability to react to a downturn for example, a pandemic. if you looked for example, at the european central bank, their policy rate was well below zero when the pandemic hit. we don't want to be in a place where we can't react a narrow neutral point would give us more room and that would

tend to result in better outcomes for the economy over time we -- you can't estimate it with great precision. i think we would be alert to -- studying r star is a whole industry unto itself i think we might be alert to factors that might raise r star, the neutral rate interest. we try to keep up with that. i think we are all thinking about that, and the possibility of that. you know, there are many -- there are a lot of stories right now that could -- that essentially could lead to higher productivity growth and higher r star we don't know which of those stories will come true i will give you an example there are a lot of start-ups a lot of early stage companies is that going to have that effect we don't know. but we will be watching those things carefully >> for the last question, michael mckey at bloomberg tv.

mr. chairman, of course you will shocked to learn that you have some critics on wall street. and i would like to paraphase a couple of their criticisms and get your reaction to them. one is that the new policy framework that you react to actual data and do not react to forecasts, yet the actual inflation data is coming in hot, and you are relying on the forecast that it will cool down in order to make policy. i wanted to get your view on how you square that. another is that you have a long runway, you have said, for tapering with announcements. but if the data keep coming in faster than expected, are you trapped by a fear of a taper tantrum from advancing the time period in which you announce a taper? and finally, you have said the fed knows how to combat inflation. but raising rates also slows the economy. and there is a concern that you might be sacrificing the economy

if you wait too long and have to raise rates too quickly. >> that's a few questions there. but let me say, first, i think people misinterpret the framework. there is nothing wrong with the framework. and there is nothing in the framework that would in any way you know interfere with our ability to pursue our goals. that's for starters. all of our discussions and all of our thinking and planning are taking place in the context of our new framework. we are strongly committed to it. we think it is well suited to our goals, including in this unique time. and i think if you look at the -- look at the forecasts that we have written down, you know, our committee is solidly behind them. and the forecasts are all consistent with that you know, your specific question, i guess, was, will we be behind the curve? you know, that's not the

situation we are facing at all the situation that we addressed in our statement of longer run goals and monetary strategy was a situation in which employment was at very high levels but inflation was low. what we said was we wouldn't raise interest rates just because unemployment was low and employment was high if there was no evidence of inflation or other troubling imbalances that's what we said. that is not at all the current situation. the current situation, we have many millions of people who are unemployed and we have inflation running well above our target. the question we face with this inflation has nothing to do with our framework. it is a very different, a very difficult version of a standard investment -- sorry, a central banking question and that is, how do you separate -- in inflation, how do you separate things that follow from broad upward price pressures from things that really are a function of sort of

idiosyncratic factors in a particular -- due to a particular thing a classic example was, to pick a narrow example was a cell phone price war in 2017. if you remember it, prices were incredibly low and it held down core pce by .3 for a year and then it fell out this is bigger than that it is not easy to tell in real time which is which. but that's the question you would face under really any framework. we tried to sort that out. i tried to explain today how we think about that and we do think that these are temporary factors and that they will wane. we are not certain about the timing and we will be prepared to use our tools as appropriate. your second one was -- oh, you know, we will -- we will taper when we feel that the economy has achieved substantial further progress and we will communicate

very carefully in advance on that and that's what we are doing that's what we are going to do and we will follow through on that there is no -- i mean, we will do what we can to avoid a market reaction, but ultimately had he we achieve our macro economic goal, we will taper as appropriate. the third thing was -- what was the third thing? >> if you raise rates to control inflation, you also slow the economy. and the history of the fed is that sometimes you go too far. >> that's right. and we -- look, i mean, we have to balance the two goals, maximum employment and price stability. often they do pull in the same direction, of course when we raise interest rates to control inflation there is no question it has an effect on activity that's one of the channels where we get to inflation. we don't think we are in a situation like that right now. we think that the economy is recovering from a deep hole, an

unusual hole, actually, because it's to do with shutting down the economy. it turns out it's a heck of a lot easier than it is to create demand than it is to, you know, bring supply up to snuff that's happening all over the world. there is no reason to think that that process will last indefinitely but, you know, we are going to watch carefully to make sure that evolving inflation, and our understanding of what is happening is -- is right and in the meantime, we'll conduct policy appropriately >> thank you, mr. chair. >> thank you very much >> that was fed chair jay powell wrapping up his press conference we have halved the losses on the s&p and eradicated them completely on the nasdaq which is now flat on the day well to the "closing bell. yield is up seven basis points on the session, only up to 1.55

now. why? because the number of fed members expecting a rate hike next year up from seven to 13 of 18 but then a very dovish chair powell there in the press conference kinds of soft bing the blows it it was sara from the press release earlier today. >> yeah, maybe he's taking us a baby step closer to the tapering or scaling back of asset purchases. but, really a baby step. he said that they are going to give a lot of guidance and a lot of heads up when they are going to start tapering. he said that you can think of this meeting as we are talking about talking about tapering and by the way, let's retire that term. it served its purpose in response to ylan moi's question. he told us to dismiss the dots as far as i am concerned all those calls from jones and the

professor -- we are not there. >> they are not thinking of tapering or raising rates. let's discuss this with our panel. michelle myer, and mike santoli, cnbc senior markets commentator. s&p got down to .7% decline. all the sectors were lower now we are seeing a nines bounce, the financials and the tech stocks on the other end. >> the first raw move was infect even in the initial response to the announcement mostly because if you had to say what was the incremental change relative to expectations you would say pulling those dots forward by some other member of the

committee and increasing inflation expectations without really updating the more distant growth expectations. okay, that's incrementally hawkish. if you are inclined to react on that, then you sold. the even has mostly gone sideways into this print. >> michelle, here we are once again where there is tension between the dots, which i think we should explain to everyone what they are. they are the forecasts by all the forecasters on the fed of when they think rates are going to rise. now there are seven people who expect to start hiking in 2022, which is what, six months away, and with what chair powell is saying, there is knots substantial progress to start scaling back asset purchases what is the market supposed to make of that >> the market needs to pay attention to fed chair powell. it has been an ongoing challenge. the dots are individual

committee forecasts. then the fed chair powell will lay out the game plan based on how he sees the risks. it is clear that liftoff should not even be in the conversation right now. all he's trying to do is set the stage for tapering, taking these baby steps, another one was taken today n moving from some time for substantial further progress to a ways away. that's softer. retiring talking about talking about tapering they are talking about they will deliver it at the proper schedule. this is all very much as scheduled and as planned and frankly also justified by the data they are seeing but he needs to see a whole lot more data to understand what's happening in the underlying economy around the supply and demand mismatch. until then i don't think he is going to be giving a clear signal in terms of the path of the interest rates.

>> paul, i know you were a fan of the framework of the last year or so that said based on what we heard is he at risk of delaying the beginning of tapering a little bit too much >> no, i don't think so. in fact i think what he did today was essentially mark to reality, or mark to market where the fed is in its forecasting process. and i thought he did a masterful job of doing that. and the second thing he did was essentially say that there is a tactical dynamic within the new framework. so the new framework is not a straitjacket for them effectively doing what they need to do on two sides of the ledger, being super accommodative, and taking it back so i think he was very much setting the stage for what's going forward in light of the fact that the economy has been much stronger than we

anticipated. and he expects that to continue. i agree with michelle. i thought he did a really good job of getting fed policy to where it was -- to where it is right now and away from the stale sep from march. >> by the way, the stock market has come back, as we have said, made a little v there in terms of the intraday chart as powell was talking. the dollar held its highs, near the highs of the session, six week highs at the beginning of the session. stay with us ylan moi was in the powell conference, you asked the key question, talking about talking about tapering. >> this is why the press conference exists, it is a chance for the chairman to provide color around the fed's policy statement, aren't its forecast because in particular on inflation what we saw on the policy statement was bare bones. all the fed said in the statement was that inflation had rizzen and that it is

transitory and powell acknowledged during the press conference that sometimes they are going to drag their feet on changing language in the statement itself. during the press conference he was able to acknowledge that higher prices, persistently high inflation is not their base case, but it is certainly a risk. >> as the reopening continues, shifts in demand can be large and rapid. and bottle necks hiring difficulty and other constraints can continue to limit how quickly supply can adjust raising the possibility that inflation could turn out to be higher and more persistent than we expect. >> powell tried to emphasize that he does believe the fed has the tools to handle higher inflation, that they need to be humble about their forecasting, but that's also part of the reason why they are now discussing, discussing tapering because that's really the tool they can use to remove accommodation from the market without having to go to the extent of raising rates. >> ylan moi, thank you michelle, why don't they get rid

of the dots if it is confusing everyone and changing the tone of what powell is trying to say? >> it was an important step in transparency that was put in place under the bernanke world and the dots are very important, you know, at times in the cycle. once a hiking cycle is underway, once there is much broader cons consensus, i think the dots are more important and more refusal. of course, yes they create some challenges i think especially in this environment they are somewhat problematic because not everyone on the committee has embraced the new tramwork the same way. i think, you know, as a market participant, what's important is to really just pay attention to what powell, brainard and claire de in particular are saying. they have embraced the framework. they do want this overheating in the economy they did want a broad based and inclusive

recovery for them we are not there yet. we are going to monitor the data if there are broad signs of inflation, we will react to that we need a lot more time to get through this period of high uncertainty. >> paul, you have questions about the question of the definition of high employment. >> i think the fed chair did a good job of pulling back on the notion of full employment of where we were in february of last year, 7.5 million people. the rate may have come down on a structure basis in part because of retirement. i thought it was useful and instructive for him to note that they are to the exactly sure where they want to go on the labor force participation rate in the quarters and years ahead.

and backed away from the whole notionthat they can't do anything on monetary policy until you get back to the level of february of 2020. i thought that was an important incremental change and it was positive traffic the standpoint of buying the fed flexibility for declaring event ally that we have reached substantial further progress that they are not using that benchmark of february, 2020. >> paul, michelle, great to have you both here on a fed day thank you for weighing in. we only have 20 minutes left before the bell. here's where we stand in the markets. the dow is down 188 points s&p 500 has really come back from the lows where we were just after the fed statement. it's only down one third of one percent. the banks rallied throughout the session. continuing to do so. consumer discretionary strong also david zeshis from jefferies is going to join us josh brown is here when we come back, the ceo of

adidas goes on the record about company's sustainability efforts and push to lower it is carbon footprint. also lennar's first public report what to watch when lennar reports. yields popping follow the fed statement, ten-year yield to 1.56 toe they have come off of the highs. the two-year also reaching the highest level we have seen in some time. .20 is where we are. 1.56 on the ten-year we'll be right back.

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plus some of the lowest options and futures contract prices around. don't get mad. get e*trade and start trading today. the cnbc evolve conference today bringing together global business leaders to talk about the challenges and opportunities facing companies an after unprecedented year of disruption sustainability, near the top of the list i spoke with adidas ceo casper roar stead about his company's initiative to usury cycled polyester and ocean plastic. he tells me he sees his company as a leader, even among competitors.

>> i think we are taking some very, very big steps in the last five to ten years. we have been on the journey 20 years. i don't mean this disrespectfully but european companies we see ourselves as a leader in sustainability we welcome everybody willing to step forward that's why we have taken coalitions with competitors of ours we believe we have a leadership position in this i don't see anybody with this type of shoe or a fully recycled product coming out >> one of the collaborations he mentioned is a tie up with albers, a competitor to lower the corps ban foot print of footwear nike has also used recycled nylon, polyester, plastic and recycled cotton. he said consumers are telling them they wasn't sustainability

in their sneakers. we also talked about how consume remembers focused on the social part of esg including the treatment of ethnic minorities in china adidas has been caught up in that, along with nike, h and m and other brands i asked him when he decides to speak up with social and political issues. >> it depends on which company you are, we are a sports company. you have to pick your battles. there are things that are non-negotiable discrimination of course hate, crime, child letter. you simply can't accept that if you are a global opinion you can have a political opinion about every political system in the world. you need to make sure you do and you can always look yourself in the mirror for what the company stands for i think it should be done less with the personal opinion of the ceo. the ceo represents the company but is not the company he or she speaks on behalf of the company.

in my opinion, that's the most important part, not voicing my personal preferences or lack of preferences. >> on china specifically, he said, quote, it has been and will continue to be a super important market for us. the company reporting a 156% surge in china sales in the first three months of this year. but interesting to get his thoughts on just when and how to speak up considered it more of a company and board discussion than a ceo opinion. >> adidas and nike are both sustainable, one leading the other, or what >> except he says thanks to your pane regulations he thinks adidas is more transparent. >> he wasn't trying to be disrespectful, no digs still to come, more from the evolve summit. and we will hear from carnival's ceo. you can hear from all the guests bcen you look on to cn.com/evolve. and the "market zone" the next

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[triumphantly yells] ♪ you're the best! around! ♪ [ding] don't get mad. get e*trade and take charge of your finances today. ♪♪ >> announcer: the "market zone" is sponsored by etrade trade commission-free today with no account minimums. ♪ with nine minutes left in the trading day, we ar now in the "closing bell" "market zone." commercial-free coverage of all the action going into the close. cnbc senior markets commentator, mike santoli, is here to break down these crucial moments of the trading day. and today would have got pit hotels ceo josh brown. the s&p right now down .4% treasury yields are higher so is the dollar josh, your takeaway? the fed -- chair powell could have take ten opportunity to talk more about tapering and lay

the groundwork more. he could have said we are seeing substantial progress we did not do any of that. said we are still not seeing it even though we are talking about tapering what do you do what does that mean for stocks >> i keep coming back to this idea that, you know, like it's entirely possible that he actually knows what he's doing and the guy writing angry blog posts in his basement is wrong we'll see. right? we'll see, but it is possible. powell's first time as a governor of the fed was during the taper tantrum. like, he understands that there is a cadence to this and a rhythm to the messaging that is necessary to prevent quote, unquote, a market event. by way if we had a market event it wouldn't be the end of the world. but i think they are going outer their way to communicate as much as possible so they don't have one. it entirely possible he might

get it right not everything he says needs the line up perfectly with what you think the fed should be doing, will do, won't do. when i look at the ten-year treasury and i have clients asking, is it going higher what should we do? should we worry about this if you are a bond investor, you should be rooting for higher rates. it is the only way you are going make money we have negative real yields like negative 3% nobody should be hoping that the fed sits on overnight rates and continues to pull down across the curve forever. so we should be rooting for tapering we should be rooting for liftoff. nobody should be afraid of it. when i look at individual stocks and not just the averages today, i see a lot of people are sanguine they are calm. that's how it should be. i'm perfectly happy with everything that the chairman said today. >> mike, at the same time,

yields are ticking back up to the 1.57 type area on the ten-year propped banks up, citi down, though the odd thing today is that banks and tech is doing quite well. >> tech is the area that had more catch up to do. i don't want to slice it too thin but the fact that yields shot up and came back in suggested we are not in a disorderly rate rise again the five-year yield custom going to be sensitive more than the ten is up to 88 basis points it was here in late april. it is not uncharted territory. >> why would tech work today if it is all about high yields -- >> it is high within such a narrow band. i don't think it is -- i don't think tech has to take its lead always and everywhere from what the treasury market does if he is a matters they are going to be relatively tame

and amazon has done nothing in eight on nine months. >> dinah olick >> after pulling back last week rates are on the rise. the average rate on the 30-year fixed started higher in anticipation of the fed meeting today. the yield on the ten-year treasury is now spiking with news in a the fed could begin tapering sooner than expected. you don't see it on the charts because mortgage prices chart early in the morning but matthew graham says you can expect to see the average up at least an eighth of a point tomorrow and lennar, one of the largest home builders reports today after the bell. >> dinah, thank for that mike -- lumber has pulled back the fed chair has an ability to ignore pockets of inflation and

dismiss them fairly simply. >> for sure. you can pick and choose. lumber is not a big driver of overall inflation. never really because i think both housing and the intensity of the demand and building activity and pricing of materials is so far off the highs we saw this crescendo of activity >> powell said lumber and car prices. general motors making a new commitment phil lebeau has the details. >> the commitment is one of the reasons it is moving today also about the fact that the company raised its guidance for the second here's the ev game plan they lid out today. another $8 billion bump in terms

of how much they plan to spend on electric vehicles that brings the total to $35 billion through 2035 30 pure electric models. and now they will have four u.s. battery plants for the electric vehicle program. they believe ultimately they can drive the cost of battery packs lower. >> as we introduce the ltm platform the costs will go down 40% from what we are today with the chevrolet volt ev. and then there will be a 60% reduction. that's not the end we have a technological road map to take costs out of the batteries while sbresing density. amongst investors, look at who has outperformed who in terms of the different stocks since february 1st general motors -- i know i am already going to hear from people -- look at tesla over the last year, the last three years. the fact of the matter is, general motors, as it continues

make more investments in electric vehicles, guys, it's getting rewarded by investors who are saying, yes, we think this is the way to a more profitable future. that's what you see today with shares in general motors. >> phil, thanks for that much appreciated. let's get to a market flash on a pair of insurance brockers. contessa brewer has it for us. >> we are looking right now at the justice department has filed an antitrust brief to block the impending deal for aon and willis towers watson it is estimated to be a $30 billion merger between the two the stocks have taken a leg up after the merger was announced it's between the number two and number three biggest insurance brokers creating the world's largest insurance broker now a filing from the justice department we are expecting a briefing from the justice department shortly where we expect to hear more details about why it wants to block this deal from moving

forward. there you can see willis tower watson down 7% aon off 3% i will have more as the call preeds. we have got must two minutes to go in the trading way >> a lot more stocks down than up today it has been a nagging issue. breadth eroded to some degree. a fair number of stocks falling out of their up friends but still mixed activity look at regional banks versus tech software. it has been a toggle, two ends of the see saw both up today. the volatility index spiked above 18 and then came right back down. we twitched higher but not enough to build anxiety. >> down half a percent on the

st. patrick's day. an initial downs during the press conference from the pullback, but slipping a bit more into the close. down 8% on the dow and -- down .8% on the dow and a quarter on the nasdaq. [ indiscernible the ten-year ending at 1.55, having touched 1.58 at the high. gold down and oil down >> welcome back, everyone, to "closing bell. i'm sara eisen here with wilfred frost, and mike santoli, cnbc senior markets commentator, take a look at how we finished up the day on wall street dow was lower 264 points it looked worse after the initial fed statement and the forecasters within the fed moved up their forecast of higher interest rates but then fed chair jay powell really played down that risk

during the news conference and the margaret rallied back. the dow is down 1.3% for week. s&p 500 falling just about half a pores. worst day since may 18th which show you how little of the big moves we have been seeing lately the best performing sector, consumer discretionary thanks to amazon which had a good finish and good day financials up near the top one sector out of the 11 finishing up tech had strength in apple, amazon, tesla, nvidia as well. facebook microsoft and the russell 2000 of small caps down a quarter of 1%. thanks to the regional banks which had a strong day. coming up, earnings from home builder lennar and the first report from jessica alba's the honest company plus, mark mahanay on energy

stocks continuing higher as the economy continues to open. josh brown is still with us. eugene profit joins the conversation first to you mike. on the market close, the fact we had treasury yields higher but they were at three-month lows and the dollar to six week highs but pressured lately. >> the market continued to operate within the guardrails. even the textbook shakeout after the fed announcement took the s&p down almost precisely 1% the dow down 1% as people started to nibble and mitigate the losses certainly because nothing changed about what the fed is doing now they have pulled ahead with the idea that they are going to get tighter down the road sooner than we thought yesterday. i don't think it alters the big picture. loose financial conditions they are as loose as they are going to get and also not a reason to get incrementally bullish even if it

isn't reason to panic out of the market that's why i think we are in a pattern of give and take we have given up momentum as well after this two month period of going sideways. >> josh, if inflation is transitory, do you think growth will be, too >> i don't know what you mean? mean can go we have inflation back off but continue to have economic growth? >> if the market is happy that yields aren't spiking aggressively because the fed is not going to hike because inflation is going to tail off, might that imply that growth is going to tail off, too, and next year we won't have the rebound people are hoping for? >> a lot of people don't understand this. i think maybe partially it is our fault in financial media we talk about interest rates and inflation as though they are literally on a see saw with each other. but that's not actually how it works. first of all, inflation is one of the hardest economic conditions to forecast that exists it's almost impossible nobody is good at doing it

the fed is terrible at doing it, by the way look at their forecasts. i don't think thatwe should just assume that prices are accurately reflecting anything about the future but the second thing that's even more important is that investors in the bond market or traders in the bond market don't actually react to current inflationary conditions in terms of how they move the yield up and down there are so many more factors that influence the yield of a ten-year for example, or a five-year or even a two-year, that just to say this is about inflation is completely inaccurate oil prices have had a huge impact over years. supply demand for bonds, of which right now we know there are huge imbalances, there is so much liquidity it is not just a way to look at what the inflation rate will be. i don't think we should speak about these two things interchangeably as much as we do i am as guilty as everyone else. the value of a ten-year

treasury's yield is not a shorthand for today's inflation dent by the market it doesn't work that way. >> not precisely the question. it was more an outlook for growth and whether that could abate into next yooek. james, i want to know, whether you fear the further we await tightening could employ out in the growth >> i think the chairman did a very good today and the fed is doing an excellent job bringing us in for a soft landing let me comment a little bit on the previous question. i think the interest rates matter in dividend discount model when when you look at technology and growth overall there are more things in play. large cap technology companies haven't moved in a long time even though the market is expands. they are cheaper than they were

six months ago i don't think there is as much impact as we are discussing on a short-term basis with interest rates. i think that basically the fed has set out a condition where the pandemic is slowing but their eye is still firmly on keeping accommodative policy until we are sure we have the pandemic under control one of my major concerns is that even though you are almost in high better nation if you look at -- if you were asleep for a year, it looks like the u.s. is off and running but the rest of the world is still not completely open. because we are a global economy i think that's where some of the slowdown is going to come from as those countries come back on line there is going to be an increase in demand but you are looking at less favorable comparisons. >> so the market, s&p closed down half a president. fed chair jay powell wrapped up his press conference he said the fed is now officially talking about talking about tapering

here he weighed in on whether the fed is worried about a taper tantrum in the market? we will taper when we feel that the economy has achieved substantial further progress and we will communicate very carefully in advance on that that's what we are going to do -- we will do what we can to avoid a market reaction, but ultimately when we achieve our macro economic goal, we will taper as appropriate. >> he's not in a hurry, mike. >> yeah? he's not even ready to really talk about tapering is what i got out of that. >> right. >> the problem with all of the transparency he said it is not that transparent with the substantial progress is because you can point to a lot of things working this the economy right now and say what more -- this is an economy that's booming. >> there is always something subjective about it. obviously it is going to be eye of the beholder. i think it is fair to say whatever it is, we are not there. until we get closer and the

argument becomes a little more textured and with a lot more grounds for disagreement i think he's happy to sort of defer this whole question and say we can we will get a couple more weeks of data before we have to worry about the dots again and all the rest of it and at that point people will be sick of anticipating a taper that it will be a relief once it comes the thing about 2013 and taper tantrums as i said earlier, we weren't talking about it for a year it was a blindsided move by bernanke, he actually wanted to put the market back on its heels for a bit. >> it wasn't damaging. >> not to stocks for the bonds it was >> again, are we worrying too much about that as well. >> for a sure. >> he has learned from the taper tantrum. he was involved in that, doesn't want a repeat of it but does it mart if he repeats it? for bonds. >> i almost think there is no way you can repeat it because

worry overanticipating it. >> to what is he focusing too much on the market he talks about economy, is he worried about derailing equities when he shouldn't be at all. >> i don't think so at all he feels there is no cost to $120 billion a month let's not just change anything not because the market is going to be happy if we keep status quo but because we think the economy is on the right path let's not do anything to disturb it. >> and he is appointmenting to things that lack progress. the unemployment rate and the fact millions of people are still unemployed and the recovery hasn't been equal he is worried about the variants of covid-19, worried about the fact that the world hasn't been vaccinated although dr. scott gottlieb say jay powell is too pessimistic when it comes the covid. he said more likely we will continue to see low prevalence this summer, perhaps outbreaks in areas of low vaccination, and

risks of new delta variants in the fall there he goes, in answer to jay powell. >> and went on to say he does think vaccination rates will go up significantly awe approach the fall and he did say he thinks powell is too bear ish on the bouncebac from the coronavirus. >> there has to be a question out there whether the fed is risking a policy mistake there are people like muhammad el-erian, larry summer, who think inflation is not a transitory issue right now that think the fed should be more on top of this. >> look, i think people who talk about the fed pessimistically for a living i don't have a problem with that i do some things that maybe people would feel the same way about. but that's just a fact i also think a lot of the people screaming about inflation now being structural, were screaming

disinflation or deflation three or four years ago. take a lot of that stuff with a grain of salt. i think the big picture is you have 9 million open jobs right now and employers going on the 6:00 news talking to local newspapers about how hard it is to find work that is the meme that's circulating throughout the real economy on wall street, right? so the fed can keep rates at zero for the next ten years. they can't retrain a waitress to work on an assembly line for ford so that -- the pace of that, that mismatch, that takes forever. this doesn't give the fed license to hold rates down by $80 billion worth of treasuries and $40 billion worth of treasury bonds forever the fed knows that if you think about 2013 as the only example we have of a tapering of this sort, they started talking about it in june, that summer. they don't actually start doing it until later that year

probably five months later and then they are not raising rates even later than that so that rate hike cycle starts in 2014, goes to 2016. so it is very, very slow pace that we should expect. i think so far that's what's playing out. i think people should rationally allocate assets based on that glacial pace not on the fed trying to put us back on our heels or make some sort of a bigger statement. >> other key distinction is that in 2013 the s&p 500 was trading at 15 times forward earnings today it is trading at more than 22 forward enings. an earnings alert, speaking of, on the honest company. >> shares not moving aton after hours but it is the first report for the company. the company reported a five cent adjusted loss on revenue of $81 million. the expectation was $79.3 million. shares are down 1.7% it is the first earnings report since going public may 5th

the founder saying they saw strong growth in skin care this is a company that sells products that focus on sustainability and clean ingredients which assumers seem to care more about in recent months the call starts at 4:45 p.m., we will be on the call. $81 million, first public quarter for the company. the expectation on revenue had been $79.3 million back to you. >> thank you very much for that. eugene, pivoting back to the broader markets, final comment to you what is your key sector pick for the rest of this year? how fully weighted are you to equities given the run-up we have already had >> i am a strictly equity investor i stay fully invested and diversified across the portfolio. but i think health care is a good risk adjusted sector to be in for the balance year. i think you are going to see procedures going up as folks go

back in and see physicians now that covid receded to some extent and that sector hasn't had a whole lot of growth other than companies that went into the vaccine or dna sequence. health care and large company technology i think are the best two sectors for the balance of the year eugene and josh thank you both for joining us great to see you both, as always. up next, a look at why history suggests investors may need to brace for a second half of the year market swoon. ever corps isi's mark mahanay on what he thinks is one of the best opportunities to ride the economic recovery we are back in 90 seconds.

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cloud first helps you get to value...first (♪ ♪) let there be change accenture stocks took a step back today, s&p closed down half a percent. let's go facebook mike santoli to look at how the s&p 500 is tracking this year compared to historical trends. >> vaguely in line with what ned davis research puts together as the historical composite for this year, 2021. what it does is blend the regular annual seasonal appearance along with the presidential cycle which has strong tends sees as well as there is a ten-year decade long cycle, 2021, along with 2011, 2001 this shows you at least in direction and cadence, if not magnitude that year is tracking along with the way you would expect it to if you believe this is going to be predictive of

what happens also shows maybe a sort of exuberant push into mid summer and then a tougher second half of the year. now a couple things to keep in mind the last two first years of a presidential peerm, 2017 and 2013 were actually great for stocks even though going back 100 years it has been the worst of the four years. you can always pick these things apart but at least it doesn't hurt the toe what the general broad context is for what's going on this year even the annual seasonal patterns say after july, july into september, october, things maybe get dicey, higher volatility in a we will have to look ought for that. thank you. ride sharing is facing speed bumps despite the economic reopening. economic data shows 42% of respondents are using ride share services less than wherp precovid and only 22% are using them

more joining us now, mark mahanay head of ever corps isi's research we are very much in recovery mode for the ride share services. >> i think you are absolutely right, wilf. it's going to be a slow recovery but it is picking up speed and it is a steady recovery. there were two long term data points i found fascinating from this thirst, about a third of people used ride share in the last year of those who used it only about 26% of them used it on a weekly or better or faster basis. to me, i think the penetration, the percentage of people who use ride sharing could double, from 36% to 70% and the frequency with which they use it can go from 26% to 50% or more. i think the value proposition of

ride sharing is broad, when it comes the commutes, leisure travel or social events, all of which are coming back. there is a lot of growth ahead near tirm and over the next three to five years. that's why we are bullish on uber. >> are they enjoying better pricing power than in the past as well? >> that remains to be seen our guess is that there is a fire amount of price in the last -- inelasticity here. in other words, most consumers would be willing to take on $1 extra in price for ride. generally people look at this as a way to save money, time, and it is more convenient than taxis or public transportation i think that gives uber value and lyft, pricing power in the future. >> surprise move from problem to appoint lina kahn as the leader

of the s.e.c a prominent critic of big tech clearly impactful for investors. what do you tellthem whether this changes the thesis around regulation >> i think there is -- i think this is a signal that regulatory risk is clearly heightened if you were going to pick one person to run the ftc who has done a lot of ground breaking work, detailed work on the need, the perceived need to regular big tech, it's lina kahn this is the ultimate big tech regulator taking over the ftc. what you know at the least is large scale acquisitions are off the table. this is a long term trend. i think they have been trimmed a couple of turns, a couple of points precisely because of the risk around regulation. >> is there any one stockthat you think, by this appointment, is due a bit more of a pullback

further from where already that multiple has been eroded a bit >> well, with one thing i found interesting in looking at the five bills introduced is that they are highly focused on complex issues, if you own the marketplace, amazon with its amazon marketplace, and google with its ad network, but it is not facebook when it comes to conflict of interest and anti-trust, it sounds like facebook actually faces the least risk i am not sure it traded that way. the portfolio managers are more concerned about facebook in the case of regulatory risk. so is amazon the question is does this impact the p/e or the e, the earnings growth i don't think we are going to see an impact on earnings growth i may be wrong, but it's impacting the p/e, and it has for several years i would argue. i don't think it is going to

impact the e >> really, amazon, even though in the context of this conversation she's the one who wrote the paper, amazon's anti-trust paradox >> you know, this is -- i am trying to make a nuanced point here but i don't think we are going the see a change in amazon's top line growth point, its demand by consumers or merchants for its services, by enterprises for cloud. i don't think it is going to impact fundamental demand for the business is there going to be an increased cost of doing business for business yeah, i think that has already showed up. i don't think the overall long term, you know, where this business model end up three years from now i still think you get a doubling in stock from here because they can sustain 20 to 25% earnings growth which for a mega cap company is highly rare i don't think there is dramatic

multiple risk. i think it is already derated. i stick with amazon. it is our top pick despite the regulatory risk. >> up 1% today mark mahanay always good to talk to you. up next, jefferies david zerbos on the fed's interest rate hike time line. carnival shares were a bright spot also today trading after an optimistic outlook from company's ceo at the cnbc evolve global summit. hear what he had to say when we come back on "closing bell." uno, dos, tres, cuatro! [sfx]: typing [music starts]

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fed chair jay powell answering questions today after the fed's two day meeting saying we can call this meeting the talking about talking about tapering meeting and we can retire the term. he said more data is needed to determine the time line for scaling back i listened to joy powell and i thought he sounded extremely dovish, what say you >> i think he was dovish

compared to what we got in the statement and the sep. i think he tried to temper it. >> the dot plot. >> yeah, the dot plot saying it is good news that we would get to the position where we would talk about tapering or liftoff sooner that means people are optimistic about the economic outcome, feeling good about the economy everything he said he was talking about their expectations for commodity prices are going to be similar to what just happened in lumber i think he made that specific analogy. he talked about how people were talking about full employment back in 2012 when he joined the fed first and it was another eight years of adding jobs with very little inflation, well below target inflation i got a lot of dovishness out of jay's talk and his responses to questions. >> give us a read on what to do now with stock at these elevated

prices that have been paying attention to every word on tapering and bonds as well, which are also at elevated prices >> it has been a -- you can't argue with this year, we are not even halfway through the year, we are up 12 -- 1 with dividends, between 12 and 14%. that's a great six month run the ten-year is -- whether it gets back to 1.80 or not -- we can go with it either way. and it is a optimistic outcome i don't think there is an idea that the fed is out of control the sort of return to the '70s i think a lot of your guests who were around in the laid '70s and early '80s like to talk about that but that's not the story line. we have too many other factors, weak democrat graphs, grants,

excess dent levels they were before covid and they are going to be here when we get out of that and they are the things that were sprez suppressing prices in past and they are going continue do do that. >> you said 12 to 14% return already year to date, does ma mean you are not bullish for the rest of the year for equities or does it allow you to believe there could be another 10% for the rest of the year >> i opinion selled in a good 2 -- i pencilled in a good 20 i like to have a leifered position on the front end as a hedge to my s&ps it has been my bellwether trade at jefferies for over a decade maybe you sell out cover calls

and grind into the end of the year i don't see a runaway 30% year so i am okay with that idea. but i am not -- i am certainly not saying i think this market is fully priced. i think there is a lot of great stories out there why this economy is going to do -- is going to be doing great into the end of this year and the beginning of next year and why a lot of the companies that are in the s&p are just going to have a really good run. it is going to be good for the consumer, too. i think everything is firing pretty well. for me, the story that's the most kind of confusing at the moment and i think is going to confuse a lot of people is the productivity story and the slowness with which we add jobs back i think that's got everybody on their back foot a little bit i think it's actually a positive story. i highlighted that in some client notes by noting that we have higher gdp than we had prepandemic with 8 million less people working, which is an astounding statistic if you think about it

but it just suggests to me that we did a lot of technological advancing on how to deliver the goods and services that we do without the same amount of people it is going to be a slower grind that way in that sense it is a supply shock and somewhat pushes back on the inflationary. >> also trillions of dollars of stimulus into the system, which helps as well. -- >> always important the look at the supply side, too the stimulus was about the demand side getting, stoking the demand, but we still produced -- produced goods and services at higher level than prepandemic with, call it 8 million less people and we haven't -- we had to come up with a way of producing them. i think the ability of the economy to do that is truly one of the most astounding facts of the post covid era. >> do you think commodities have peaked >> look, jay said it today it was funny he kind of envision as

lumber-like chart for most everything out there, not everything but a lot of commodities and what they are thinking for car prices as well. honestly, sara, i think next year we are going to be talking about the base effects of what happened with a .9 core cpi and a .7 core cpi and we are going to look at the base effects and we might actually have negative headline numbers that come in sort of summer of next year on inflation. i think there's a good reason to believe that as inflation is always a lagging indicator, it is definitely a lagging indicator this time. and we are sort of seeing supplies disruptions which will continue to push some of these price pressures higher into the end of the year. but by the end of the year we are going to be through this and we are going to be on to a -- i think a much more disinflationary track than the lastier. >> david, thank you for joining us. lennar's earnings are out. diana olick has the numbers.

>> a beat. adjusted earnings of 2.95 a share. it is unclear if those estimates are comparable to what the estimates were revenues came in at $5.98 billion, beating estimates on the back of a 32% jump in new orders and 38% jump in backlogs. the ceo said in the release a combination of strong personal savings rates during the pandemic, strong stimulus from the government, and a developing return to normalsy continued to drive the economy forward while bringing the housing market to new heights. back to you guys. >> he summed things up nicely for us thanks for bringing that to us. the honest company ticking lower after their first report since becoming public. we will speak with an analyst who has a hold rating on the

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welcome back time for a cnbc news update with shepard smith. >> from the news on cnbc, here's what's happening the house expected to take up a bill today to make juneteenth a federal holiday. the senate unanimously passed the bill yesterday if enacted it will make june 19th a federal holiday commemorating the ends of slavery. the legislation is expected to pass the house with ease and then head to the president's desk for his signature. the education department reports it will extend discrimination protections to gay and transgender students the agency expanding its definition of title ix

protections after a ruling from the supreme court. and triple digit temperatures from california all the way to south dakota a record-breaking heat wave on the move more extreme heat on the way an estimated 40 million americans are expected to feel temperatures topping 100 degrees this week. tonight, takedown of a group of ransomware attackers overseas targeting the united states. what they have done, and seeking justice, on the news, right after jim cramer, 7:00 eastern, cnbc sara back to you. >> shep thank you. we will see you then. still ahead on the show, the honest company just reporting a sales beat for its first quarterly results as a public company. up next, find out what one analyst wants to hear on the company's call. carnival's ceo speaking out at the cnbc evolve global summit, pretty optimistic. shares rallying on the news. we will bring you his comments

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♪ indeed, you and me are we ♪ ♪ me and you singing in the park ♪ ♪ me and you, we're waiting for the dark ♪ the honest company out with its first returning report since going public, beating revenue, seeing 12% growth over last year

we bring in an analyst who has a hold on the stock. >> better revenues and it all flowed through it seemed they didn't have to spend more on marketing to get better ruls. there was a bounceback in retail we thought the digital mix would say consistent, but the move back to buying in retail is happening faster than we thought it would. >> is the product widely available across the country. >> they have opportunities for channel improvement. they have a relationship with target, and costco we see lots of opportunities for more channel expansion

they haven't guided to that, though there are plenty of retailers who don't sell their products. >> competitors in the diaper space, p and j or kimberly-clark -- i get why they are likable, they are in the sustainability model, but at the end of the day it is a die first and wipes business, in the a high growth area what do you do with the stock? >> you are correct but what i like about honest is they are pricing the product at 10 to 20% premium n. an inflationary environment, one of two things can happen, they can raise prices a little bit. number two, they will gain share because the premium they are pricing is not above that 10%. we think young mothers want a

natural project. if they can get it for a slight premium they will be inclined. they are growing internationally and they want a big push into the beauty space in q3 let's see how aggressive they will be. right now it is a hold rating because they are lapping all the growth from covid and we expect to see decelerating growth unless they move one of those three levers, beauty, growth, or channel expansions. up next, one wall street firm is getting bullish on crews lines as the world's travel arge a push from reopening. we will have the ceo of carnival crewslines "closing bell" back in a couple.

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by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley. wolf research getting bullish on cruise lines. saying the group is seeing groffing book asking pricing trends with cumulative for 2022 higher than 2019 levels. carnival, norwegian and royal caribbean finishing higher on the day. carnival's ceo arnold donald appeared on a panel with the ceo of hyatt hotels earlier today at

cnbc's evolve smimt and gave an optimistic outlook. >> it is going to be choppy and bouncy as we start, but we are excited about it we robust bookings and pent up demand we are not where mark and the resorts are yet because we don't have the ships out sailing yet but we are looking forward to being nlg a similar position very soon. >> here more from arnold donald as well as interviews from earlier sessions by registering at cnbc events.com/evolve. nothing new in that sound bite but clearly an ongoing bullish outlook for the sector as whole. we will have to see if it continues. they are a bit behind the hotels and -- >> the challenge for them has been the regulatory front not the demand he has said the bookings are there, we just need to prove we

can do it safely, carnival a winner today on the down market. still ahead, coca-cola shares ticking ahead, looks like it could be due to soccer super star kriniano ronaldo. and the dow is down more than 200 points following fed chair jay powell's press conference

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shares of cure va c plunging in after-hours trading, meg tirill with the detail >> surprising results from curevac must-anticipated vaccine study, they are citing an unprecedented number of variants circulating while running this trial, 13 variants detected in the study population that could have effected the results but this is an mrna vaccine and they hoped for strong efficacy based on other mrna vaccines and on the global

need for covid vaccine, stock down 56% on this news is very disappointing, we continue to dig into the reasons behind it guys >> particularly relative to other alternatives out there with much better efficacy. thank you. it's been a busy day for investors following j. powell conference and president biden meeting with russian president putin. we look into tomorrow. next going hybrid with ibm. a hybrid cloud approach helps them personalize experiences with watson ai while helping keep data secure. ♪ ♪ ♪ from banking to manufacturing, businesses are going with a smarter hybrid cloud, using the tools, platform and expertise of ibm. ♪ ♪ ♪ this is the sound of change. it's the sound of low cash mode from pnc bank giving you the options and extra time

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coca-cola's market cap taking a bit of a hit, the companies soccer superstar christian ronaldo who is outspoken about healthy diet, moved the coca-cola and held up water coca-cola saw sharepoint drop 1.6% to $55.20 market bill dropping $4 billion. they have of course are a sponsor of the european competenting the stock fell again today consumer staples under performed overall on higher years. >> interesting thing ontop of it is he brought in his own

water which had no markings on it he took off the label. >> not even dasani, further in insult. >> he's such a marketeer, doesn't endorse either of the products, didn't want it in front of him yes i'm sure it was a health kick too but he didn't allow the label remain on the water because he doesn't endorse that water. >> and he said it in a disgusting way. >> scored two goals yesterday. >> in a total disapproval. it does raise questions about the sponsors and whether they're resonating with the athletes and fans, maybe they should have just put the dasani bottles out. >> it's not a concern for coca-cola, the company recognizes it has to diversify it's product portfolio but it's a bit of a mismatch. >> by the way he is 36 yesterday he scored two goals for portugal and became the highest scorer in

european championship all-time. >> we needed all of this soccer knowledge. >> you did >> really? >> and the games continue to be scheduled. the best ones at 3:00 p.m. east zbrern watch it on replay. >> anyway, after the break we look ahead to tomorrow's -- no, this is, sorry, this is the look ahead read. let's look ahead to tomorrow we have an exclusive interview tomorrow with kroger's ceo. >> we do, rodney mcmullen joining us which will be great because inflation will be a hot topic. >> and mike we'll see the reaction to today's fed chair reaccess, the immediate reaction tomorrow should be the real judge. >> it should be. nothing changes about the inputs except it puts people on alert that there's a time limit to

when we can assume status quo policy it's not going to be forever, the good news on the economy, i think it still is, but i do think that you have to be aware of the fact that the market itself has just lost a little bit of energy and altitude so a model pull back from here will be read by traders as a little more critical than normally would because you've been churning for a bit. >> i think we also have to watch the bond market. the two-year yield broke out, we're back to levels since 2020 on that. and if you look at the stock market performance and sector break down, utilities, staples, they were hit pretty hard today, real estate, that's the high-yield play, interesting that tech held up, even with the higher yield so you wonder if this is as good as it gets on the monetary stimulus and all of the accommodation, know powell was dubbish does it change the tide on yield. >> yields look like they should

be prime to rebuild higher >> everyone thought that in the last few months. >> that's true and i think people are still positioned too much against the bond market but i think you have to be alert for that big tech cap is cheaper than it was. >> gold continuing to slide. >> and the s&p down half a percent. that's going to do it for us on fed day on "closing bell." have a good evening. "fast money" begins now. live from the nasdaq market site over looking new york city's time square, this is "fast money", i'm courtney in for melissa lee. tonight's trader lineup tim seymour, steve grasso, brian kelly and guy adami. tonight on "fast" a wake up call for the market as traders digest the fed decision we break down all of the market fall out straight ahead. plus charged up. shares of gm zooming higher as the company doubles down on ev ambition