out of starbucks farmer jim >> real quick, i know we're running out of time. wynn resorts two reason one, the reopening is occurring. two, china doesn't matter to this stock it is already out of it. >> quick, steve weiss. >> dick's sporting goods reports in the morning tough comps, but i think they'll exceed and beat the numbers. >> "the exchange" starts right now. ♪ thank you very much, scott hi, everybody. i'm kelly evans, an we have a decision the president says powell will stay as fed chair and promotes brain erd to the vice chair post we look here from powell, brainard and president biden himself, all in the next half hour we'll bring it to you live plus, boring or exciting which is better for your portfolio? old and proven is better than shiny and new my next guest argues and it is leading the way today. and earnings exchange, we

have the action, the story and the we have the story on the three names that were darling buys we begin with today's markets and dom chu is here with the numbers. >> the old and tried and true, think you are being the value side of things, right? we are seeing that tilt as kelly points out a divergence in the marketplace right now, but one that only developed in the last hour or so the dow industrial is up half a percent off session highs, 184 points the s&p, 47.12 is the last trade there. the nasdaq is in the red by half a percent. at one point it hit record highs. it was in the green at one point. to give you an idea of the uncanny symmetry, totally coincidental, but at the highs, the nasdaq was up 155 points at the lows of the session we were down 158 points so a weird kind of simply developing there we are obviously tilted more to the downside there 15,964 many of the growth-oriented

technology stocks have been underperforming. interest rates and the decision given the powell/brainard decision and who will leave the fed in the next four years jpmorgan chase, citigroup is the under perform your, but each of these stocks up. financials the best performing in the sector behind only energy one other place to watch as well in the marketplace right now with regard to the stocks, it is always the time of year around thanksgiving and christmas when we talk about the retailers. it is holiday shopping season, black friday is coming up. best buy is up 2.5%. etsy is down 4%. costco is up 1%. home depot is up about three-quarters of 1% etsy is a crazy move along the line of the tech sell-off we are seeing however, kelly, each of the stocks at one point today s&p 500, consumer discretionary

stocks that hit record highs in today's session. retile always a big focus. back to you. >> especially this time of year. thank you so uch bond yields are rising after the president renominated jay powell as a second term as fed chair. rick santelli with more on the move and rates today hi, rick >> hi, kelly indeed, not only are we seeing rates move higher, and that, of course, happens when prices go down, we are seeing the yield curve flatten. the short maturities highlighted everything a lot clearer if you look at that chart you will see at 9:00 a.m. eastern when the announcement came with regard to jay powell and brainard you could see how rates propped. then again at 11:30 when we had a messy two-year auction which i graded as a d in dog, but it really occurred right after the september 21st and 22nd fed meeting. as you see on the chart, giving you a long lead time in that meeting starting on august 1st but clearly you could see

towards the end of september rates started to get aggressive. we went from 21 basis points to where we stand right now at basically 58 basis points, up seven basis points on the session. and if you look at how the yield curve moved, there's one week of tens minus twos and you see as we approach 100 basis points it is the flattest in three months. finally the dollar index here is an intraday chart of the dollar index easy to see what the dollar thinks of the cohesion of naming jay powell for a second term just to point out, if you looked at europe, their rates were actually quite tranquil. they slept through the announcement that is a good show of confidence for jay powell. kelly, back to you >> rick, do you think the markets are right at face value to say simply they think powell will be more hawkish and brainard would have been more dovish >> you know, i'm not sure it is quite that easy. i think it is more that both may have to be hawkish we see the vice chair and others

talking about moving the taper along so you could raise rates i think most of the differences between the two candidates were more on regulation and how some politics, of course, have inflicted and infected many of the choices in everything, especially the federal reserve >> all right rick, thank you very much with that ten-year 1.61% today. battle tested, that's how my next guest describes the pairing of powell and brainard to lead the fed. indeed, they're up against a big inflation challenge that will have huge political ramifications, especially as the midterm elections approach how should we expect them to steer the economy through this period joining me now is randy crossner, deputy dean with university of chicago booth school of business, and our very own senior economics correspondent steve liesman. welcome to you both. randy, i want to mention off the bat you were correct you didn't think the trading issues would take down fed chair powell here, and they've hardly even come up in the past couple of days >> i think that's right. i think people saw through that. it was hard to say it was jay's

particular problem as i had said before, in some sense it was the congress pushing the treasury to have the fed go into new areas that led to some of those issues, but i think jay's trying to take control of that. i think they've moved on >> why do you think the president stuck with him i wonder if the president is quite aware of the inflation risks that are looming and doesn't necessarily want to put his person in as the one who has to immediately grapple with that you know, does it leave powell as the guy who maybe makes his reputation or leaves if this issue is not appropriately handled? >> well, i think the president owns this, whether it is -- you know, whatever fed chair is there, this is something that has become very, very politically salient. i mean we really haven't had inflation anywhere close to this for two or three decades it has now become something that's really going to define i think the midterm elections as well as potentially his reelection or whoever may be

running for the democrats. so this is a very important, very important decision, and regardless of who the fed chair, he is going to own it at least in part. >> steve, can you talk a little bit about the significance of the vice chair post, which is much more than just a number two in command, isn't it >> yes in a lot of ways the -- pardon the sports metaphor, the vice chair is the intellectual pulling guard for the chair, who is the quarterback what you see a lot of times, and i have seen it over many years, is that when the chair wants to float an economic idea, say raising rates a little sooner or tapering a little faster, you send out the vice chair. so what really happened here is an interesting and political economic choice to announce the two together like they are a team so the other thing i think is worth noting is that i have never seen a vice chair openly disagree with a chair when it comes to monetary policy maybe randy will correct me on

that, him having been there firsthand. but in covering it i have never seen it. so the two are going to have to come to agreement on what policy is going to be powell is going to need brainard in charge or in agreement with where he wants to go by the way, i think you have two people who essentially agree on policy maybe brainard was going to be a little bit more dovish, but i think she still comes from the kind of centrist economic school of thinking about fed policy and that the idea is that this stimulus has to be taken back over some period of time, and i think she's on board with that >> i wonder, steve, you know, we could speculate all day long, but just one observation i would make is that the replacement with brainard would seem to move from a tilting hawkish to a tilting dovish stance, wouldn't you say, but it is obviously not being taken by the markets today, which is the opposite impression if anything >> i think that's probably right. i think richard kar probably had a more hawkish view on things.

at the same time he was well on board with a lot of things that had been done. remember, if you look at the graph of powell's tenure, he raised rates 175 basis points, then he took them back 175 basis points he ended the run-off of the fed's balance sheet early. claritin was on board. i think the target is even the playing field between employment and inflation in terms of the fed's main date, so all of those things together -- you know, richard is probably somewhat more hawkish, but i don't see -- i think the irony here, kelly, worth noting is brainard was never the progressive that the progressives were championing, which was sort of interesting to me powell is as progressive and aggressive as a fed chairman, certainly during the pandemic, as we have almost ever seen. >> randy, what should we expect from powell as he faces this inflation challenge? do you think he will ultimately

be marked by action, a faster taper, rate hikes and that kind of thing, or by not acting and letting the issues be sorted out and sort of standing back, and in a year from now maybe seeing where inflation is and not being overreactive >> oh, my goodness if he waits a year from now i think we are all in a lot of trouble. so i think, you know, they're moving to taper and that means that the pace that they're currently at, they would finish the taper by the middle of next year i think there's a reasonable chance they're going to meet a move a little bit more rapidly so they could move interest rates up sometime late in the second quarter i think no matter what they will be moving rates up by the summertime next year i shouldn't say no matter what there can always be some sort of shock that comes, but to get back to what steve was saying, i very much agree. i think there's not a lot of daylight between where brainard

and jay are in terms of monetary policy i think what is interesting is they haven't nominated someone yet for the vice chair for regulation i think that's maybe where the president is going to go with someone who is seen to be consistent with what some of the more progressive parts of the democratic party want. >> what was the impact of -- i'm not saying you're a banking expert per se, randy, but what would the impact be of that kind of shift >> so i think -- so i used to chair the supervision and regulation committee, so i had that role before >> then you are. >> so i think they could have an important effect on things like capital requirements certainly lael was more in favor of trying to build up capital in the good times to draw down on the times of a shock my guess is she will support that my guess is biden would probably propose someone who would be very supportive of that. so i think you are probably -- we don't know who he is going to

suggest, but my guess is by doing this pairing and leaving that -- because he certainly could have put lael into the vice-chairman for regulation, but putting her in the monetary slot, leaving that one open for someone that might be perceived as more progressive by the progressives >> any last word on that, steve? >> yeah, i mean i think it is going to be hard to take back some of the easing that's happened, especially with the medium-sized banks when it comes to capital requirements. i think they may try, and randy is right about that. i would overall look for a relatively modest changes to the capital requirement. the banks are well-capitalized right now and they have pretty high levels of capital requirements on the regulations right now. overall, i would look for relatively smooth changes when it comes to policy, but there could be an acceleration, and i think that's going to be dependent upon not just brainard and powell being approved but i think on the remaining three open slots on the fed governors

and two interim bank presidents. i think you and i, kelly, will be talking about it perhaps with randy over the next couple of months >> we hope so. guys, thank you very much. we appreciate it randy kroszner and our own steve liesman. janet yellen will be on "closing bell" for an exclusive interview at 3:00 p.m. eastern time again, she was the former fed chair. it would be great to hear her thoughts on these announcements. a news alert on the bond market five-year notes up for auction let's get back to rick how did it go? >> you know, today was a double-header of auctions and the fed and the treasury really didn't win either game another "d" as in dog. we had 59 billion five-year notes. the auction yield was 1.319. the problem is that 1.305, so 1.30 1/2 all of the metrics to cover indirects, directs and dealers were all a bit messy everything was below ten auction

average exempt for the dealers and you want that to be below ten auction average. you want them to take less because investors took more. they were still close to 26%, so it is "d" for the two-year auction. "d" for the five-year auction. they're hurrying these auctions through because of the thanksgiving holiday of course, tomorrow we will finish it up with seven-year notes and hopefully find a little bit more demand kelly, back to you >> going to get grounded if they don't get the grades up soon rick santelli, thank you so much coming up, bond yields rising and tech stocks falling as biden nominates powell. what does it mean for your portfolio? we'll explore it plus, inindividual ya' set to report earnings after the bell today look ahead to a pair of retail giants recording tomorrow morning, one of which is up 150% this year. that's coming up on "earnings exchange." we are awaiting president biden, fed chair powell and nominee lael brainard there to speak momentarily.

we will bring it to you live as soon as it begins here on "the exchange." this is "the exchange" on cnbc find out what's strong with you with fitbit charge 5 and daily readiness.

♪ welcome back, everybody. we are awaiting president biden's speech where he will announce his nominees for chair and vice chair of the fed. it should begin any moment

he will be joined by current fed chair powell and fed governor brainard who are to speak. let's talk with david bahnsen with the bahnsen group we are here on a day that is portion of the market you thought was overlooked anyhow, right? >> yes those sectors that are really benefitting today happen to be areas we're over weighed in. i don't think it is that much related to the fed announcement because those things had come off last week. there's a bit of a recovery rally at play. j overall i think the theme is alive and well for anyone worried about increasing hawkishness from the fed, i don't know where it would be coming from, but the worry is not there today, kelly >> ee lab -- elaborate on that

for a minute >> there are things we have done very well, wu there are certain things sometimes you get wrong the thing we have never gotten wrong is this belief that the fed is going to continue be dovish because they have to be, and there are periods of time where markets get worried. well, maybe it is different, there's a bit of media attention and other understandable volatility around potential fed reversals. but they just simply don't play out and they can't play out, and it is not oa greenspan put anymore and a stock market put it is all risk assets that require the lubrication of monetary policy from the central bank >> yeah. >> that is embedded. >> here is the president announcing his nominees for chair and vice chair of the fed. >> before we begin i want to comment on the tragedy that occurred last night during the holiday parade in wisconsin. while we don't have all of the facts and details yet, we know this morning that five families

in waukesha are facing fresh grief of a life without a loved one. at least 40 americans are suffering from injuries, some of them in critical condition, and an entire community is struggling, struggling to cope with the horrific act of violence last night the people of waukesha were gathered to celebrate the start of a season of hope and togetherness and thanksgiving this morning, jill and i and the entire biden family and i'm sure all of us pray that that same spirit will embrace and lift up all of the victims of this tragedy, bringing comfort to those recovering from the injuries and wrapping the families of those who died in the support of their community we're all grateful for the extraordinary work of the first responders from law enforcement, the emergency room doctors who are working around the clock to deal with the terrible consequences of what happened

last night my administration is monitoring the situation very closely but now let me turn today's announcement 20 months ago the covid-19 pandemic exploded in america, creating the worst economic crisis we have faced since the great depression, wreaking hoff okay not only on our economy but the economies across the world in just two months over 20 million americans lost their jobs and the unemployment rate shot up to 14.8%, the highest ever recorded in america all of you remember the scenes, major cities in small towns, main street that looked like ghost towns, boarded up businesses, empty roads, empty highways, empty airports and empty train stations offices were closed. schools were closed and hospitals were taken to the breaking point when you remember the depths of the crisis we faced it is all

the more amazing the progress that we've made since then we've gone from an economy that was shut down to an economy that's leading the world in economic growth. we've gone from small businesses being shuttered to a record number of new small businesses starting up, and we've gone from a devastating job destruction to record new job creation. don't get me wrong we still have a long way to go to fully recover from all of the pain and destruction caused by the pandemic, and we're still dealing with the difficult challenges and complications caused by covid-19 that are driving up costs for american families i know for a lot of americans things are still very hard, very hard but if you look at all of the facts, all of the facts, you can only come to one conclusion. we've made enormous progress in this country first and foremost, our economy's creating jobs, lots of jobs in fact, we have seen a record

new job growth in america this year, 5.6 million jobs just since i was sworn in on january 20th more jobs created at this point in the new presidency than ever before in american history we have seen a dramatic drop in the unemployment rate from a high of 14.8% in april of 2020 to 4.6% today. earlier this year independent experts were predicting it would take until the end of 2023 to see unemployment that low. our economy is creating new businesses, lots of new businesses in fact, americans are starting small businesses at a record rate of 30% compared to before the pandemic economists will tell you that age crease in new business is one of the best signs of an economy, an economy that's becoming more innovative and more dynamic that's because small businesses

aren't just the heart and soul of america, they're not just the bed rock of so many communities across the country america's small businesses are the primary job creators, innovators and drivers that power our economic progress. that's why it is a powerful statement about -- of the faith that we have in our country, where our country and our economy is heading that small business creation is surging, surging in america today, which is i'm proud to say, if you look at my presidency so far, it is a jobs presidency and it is a small business presidency. so you look at the facts, here is what is record shows. record job creation. record economic growth record new small business creation that's the story that should give us confidence about the economy that we're building, confidence in ourselves, confidence in the future now after years of wages being

flat or falling behind, we are also seeing something else things are getting better for american workers, higher wages, better benefits, more flexible schedules. the balance sheets for american families are better as well. savings are up home equity is up. credit card balances are down. if you continue and combine the wage increases we've seen with the direct relief my administration has provided to middle class families, the typical and middle class families' disposable income has actually gone up 2% this year even after accounting for higher prices that's the kind of recovery just one year after a crippling worldwide economic crisis that's unprecedented, and it takes us -- you know, it makes us stand out from the rest of the world. america is the only major economy, the only one in the world where the economy is bigger today and families have

more money in their pockets today than before the pandemic hit. that's even after accounting for inflation. none of our competitors internationally can say that, none it is a testament to the hard work and perseverance of the american people. it is a testament to the effectiveness of the vaccines and our vaccination effort it is a testament to the economic policies we've fought so hard to pass and put in place, especially the american rescue plan. it is a testament to the federal reserve. but for all of the progress we've made, we know we still are facing challenges, serious challenges we know there's a lot of fear and uncertainty in the country we know, we know it is tough for families to keep up with the rising cost of gasoline, food, housing and other essentials it is not just an american problem. it is a worldwide problem. it doesn't make it any easier for americans, but it is a worldwide problem.

every country is dealing with the same problems emerging from the pandemic supply chain bottlenecks, disruption caused by spikes in covid-19, elevated prices. they're all taking a bite out of our family budgets perhaps no entity pays a more important role in navigating these challenges than the federal reserve, because it is the fed's job to balance two key goals. the first is to achieve maximum employment, to get as many american worker -- america's working -- working as possible the second is to keep inflation low and tastable to meet these goals it is going to require patience, skill and independence that's why today i'm nominating jerome powell for a second term as chair of the federal reserve. i'm nominating lael brainard to take a position as vice chair of the federal reserve.

when our country was hemorrhaging jobs last year and there was panic in the financial markets, jay's steady and decisive leadership helped to stabilize markets and put our economy on track to a robust recovery jay is a believer in what economists call maximum employment that's an economy where companies have to compete to attract workers instead of workers competing with each other for jobs, where american workers get steady wage increases after decades of stagnation, and where the benefits of economic growth are broadly shared by everyone in the country, not just concentrated for those at the top. he said it well last month, and i'm going to quote him he said, and i quote, an economy is healthier and stronger when as many people as possible are able to work if entrenchedinequities preven some americans from participating fully in our labor markets, not only will they be

held back from opportunities but the economy overall will not realize its full potentially those historically left behind stand the best chance of prospering in a strong economy with plentiful job understand, end of quote as chair, he undertook a landmark review to reinforce the federal reserve's mission toward delivering full employment, for making strong progress toward that goal now. i believe jay is the right person to see us through and finish that effort while also addressing the threat of inflation that it poses to our families and our economy jay and i have had a chance to discuss his views on priorities for the federal reserve in the years ahead. he's made clear to me a top priority will be to accelerate the fed's effort to address and mitigate the risk -- the risk that climate change poses to our financial system and our economy. extreme weather has cost our economy over $600 billion over the last ten years

we have to make sure our financial system can withstand climate change and is prepared to transition to clean energy. the fed must be a leader among central banks globally in addressing climate-related financial risk he has also underscored the importance of the fed taking a more proactive role in the months and years ahead in making sure that our financial regulations are staying ahead of emerging risks, be they from innovation and cryptocurrency or the practice of less regulated nonbank financial institutions having served as vice president during the depths of the 2009 financial crisis, having worked with president obama to put in place a stronger financial rules of the road, i understand the stakes of our regulations falling asleep at the switch, regulators falling asleep at the switch jay, along with the other members of the fed board that i will nominate, must ensure that we never again expose our

economy and american families to those kinds of risks i respect jay's independence and i also trust that he will follow through on his commitment to prioritiz prioritize these issues with the skill he has shown and his service to date. now, some will no doubt question why i'm renominating jay when he was the choice of a republican pedestri predecessor. why am i not picking a democrat? why am i not picking fresh blood or taking the fed in a different direction? put directly, at this moment both of enormous potential and enormous uncertainty for our economy, we need stability and independence at the federal reserve. jay has proven the independence that i value in the federal chair, in the fed chair. in the last administration he stood up to unprecedented political interference in doing so, he successfully maintained the integrity and credibility of this institution. it is just one of the many reasons why jay has support from

across the political spectrum. in 2018 he was confirmed with 84 votes in the united states senate his approach as fed chair has earned the respect and support of groups from the aflcio to the business round table, which brings me to one more reason i have chosen to renominate jay. i believe having fed leadership with a broad bipartisan support is important, especially now in such a politically divided nation i believe we need to do everything we can to take the bitter partisanship of today's politics out of something as important as the independence and credibility of the federal reserve. this is vital to maintain public trust in an independent institution like the federal reserve. that is why i am so proud as well to nominate dr. lael brainard, you know, to serve as vice chair of the federal reserve. you know, by promoting lael

today to vice chair, i am elevating one of the country's most qualified and dedicated public servants. she is one of the nation's leading macro economists she spent years at the treasury department representing american capitalists around the world and on international economic issues, and she spent nearly the last decade as a member of the fed, most recently working side by side with jay as the fed navigated the historic economic and financial crises and reaffirmed his commitment to full employment economy. throughout her time at the fed, lael has also been a steadfast voice for tough rules to protect the pensions and savings of the american people. she has led the fed's efforts to make sure the banking system serves everyone in the communities they serve, so that regardless of where you live or your background, every american can have access to credit they need to start a business, buy a home, and just have a fair

chance in life she's done pioneering work in how the fed should account for the emerging risk of climate change to our financial system and, like jay, her expertise and leadership have earned her the respect and support of republicans and democrats alike. i am proud to nominate her to the vital role of vice chair of the federal reserve. beyond jay and lael, i look forward in coming weeks to nominate additional members to the federal reserve board of governors including a new vice chair of supervisions. these individuals will help safeguard our financial system, and alongside jay and lael's leadership help to support and continue the historic economic recovery while jay and lael bring continuity to the fed, my additions will bring new perspectives and new voices. i pledge that my additions will bring new diversity to the fed, which is much needed and long

overdue in my opinion. last year the pandemic shut down much of the global economy now there's a worldwide reawakening, and it is creating both an incredible opportunity and tough challenges as economies across the world come back from the pandemic america is leading the way like every other country in the world, we have to deal with these issues of rising cost, but we should remember we have the skills and tools to get it under control. while other countries are stumbling out of this pandemic, we are racing ahead because so much of the rest of our economy is doing well, because we have created so many new jobs as fast as we have we're in a position to attack inflation from the position of strength, not weakness in times like these we need steady, tested, principled leadership at the fed. we need people with sound judgment, of proven courage to

preserve the independence of the fed, and we need people of character and integrity who can be trusted to keep their focus on the right long-term goals of our country, for our country i'm confident jay and lael are those people i would like to give both jay and lael an opportunity to say a few words. we will start with jay and then i will turn to lael. jay, the floor is yours. you're over on this side >> mr. president, thank you for this extraordinary opportunity to continue to serve the american people. if confirmed by the senate, i pledge to do everything within my power to meet the responsibilities that congress has entrusted to the federal reserve. i'm joined today by my wife, alyssa, and our three adult children, susie, lucy and sam, and sam's wife alyssa. their love and support underpin

and make possible all that i do. i'm also grateful to the exceptionally talented and dead ka my predecessor left the fed in strong position to meet every challenge. i'm thankful for her leadership, friendship and example when covid hit our shores american businesses were ten years into a historic expansion, with a robust jobs market reaching those who traditionally had been left out. the pandemic, however, brought an immediate and painful recession. fortunately, american resilience along with strong policy actions and vaccines that enabled the economy's reopening cushioned the blows and set the stage for a strong recovery. today the economy is expanding at its fastest pace in many years, carrying the promise of a return to maximum employment

challenges and opportunities remain as always the unprecedented reopening of the economy along with the continuing effects of the pandemic led to supply and demand imbalances, bottlenecks and a burst of inflation we know that high inflation takes a toll on families, especially those less able to meet the higher costs of essentials like food, housing and transportation we use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched other key priorities include vigilantly guarding the resilience and stability of the financial system, addressing evolving risks from climate change and cyberattacks and facilitating the modernization of the payment system while protecting consumers i look forward very much to continue to work closely with my colleague of the past seven years, lael brainard, as the fed confronts these and other issues lael brings formidable talent, a

wealth of experience and good judgment to our work inside thefederal reserve we understand that our decisions matter for american families and communities. i strongly share that sense of mission and am committed to making those decisions with objective and with integrity based on the best available evidence in the longstanding tradition of monetary policy independence mr. president, thank you again >> now i would like to give the floor to dr. brainard. >> mr. president, thank you. i'm deeply honored that you are entrusting me with this responsibility at a critical time i'm committed to putting working americans at the center of my work at the federal reserve. this means getting inflation down at a time when people are focused on their jobs and how far their paychecks will go.

it means supporting a growing economy that includes everyone it means ensuring that financial markets are thriving and resilient and the economy is sustainable for future generations. it means serving all americans in every community across the country and ensuring the federal reserve reflects the diversity of the communities we serve. i was privileged to work with chair powell as we made every effort to protect workers, businesses and families from the covid financial shock with the support of congress, and i look forward to working with him in the months and years ahead to build a durable recovery i also want to thank secretary yellen with whom i have also been privileged to work. i am grateful to the many people who have supported my efforts. as a working mom i am especially grateful for the love and support of my three dynamic daughters, kaylen, kira and coco who took the afternoon off from

school, my deeply devoted husband kurt, aunt vivian, my sisters and amazing mother joanne who is here with me today. i'm confident by working together we will see a strong recovery for all americans thank you. >> thank you folks, that's it i hope you have a happy thanksgiving i thank the families of the two nominees for being willing to support their work and what they have to do it is going to be long hours, as you already know, long efforts, and i thank the families thank you all. that was president biden announcing his nominees for fed chair and vice chair, and we heard from both ofthem let's get some quick reaction and analysis on what we have just heard steve liesman is back with us alongside kayla tausche from washington, rick santelli watching bonds in chicago, and

peter boockvar, cnbc contributor. let's go down the line steve, i will start with you thoughts >> the first thing i heard and i guess i heard it three times is there was not the political -- i get the word is impatur to battle inflation president biden says we need to battle inflation powell said we need to battle inflation, and brainard said it as well. you know, you like to think of the fed as being apolitical. that's not really true the fed does not exist in a political vacuum the body politic now wants to see inflation brought down, and so nobody can complain when the fed does what it is going to have to do hopefully not too much in the coming months to battle inflation. >> kayla, what did you hear that stood out and what are the main issues that swirl as we await for them -- they do both have to still be confirmed >> notably, kelly, you heard the president talk about stability at the federal reserve and the idea that he wants it to be somewhat immine from politics, but there were politics at play behind the scenes in this

decision i'm told earlier this fall when randy quarrels announced he would be departing the board of governors it armed the president with the ability to make the argument to the democratic party that even if he left chairman powell in place and renominated him for the second term he could make the argument he would be able to pick his own choices for the majority of the gourd of governors. that along with the fact that powell was originally nominated by president obama was enough to sell them on that. i'm told there was also a question, while brainard has enough support possibly to have gotten a full sent at vote to confirm her, there were questions about the initial hurdle of the senate banking committee which has a 50/50 makeup, and one democrat vocally supported powell there were questions whether it would have been an initial hurdle too high to surpass by giving her this vice chair role, it is a number two role, it is incredibly powerful, they

could essentially present a two-for that gave an olive branch to both sides of the aisle. >> very interesting. maybe it is setting her up for future positions of influence at the treasury and/or obviously the fed chair itself peter, does any of it make you itch a little bit about inflation, what kayla was describing behind the scenes >> well, it is certainly here, inflation. it is just a question of how does the federal reserve confront it. right now the strategy is, of course, to taper first and then only after the taper is done do they want to raise interest rates. but throughout this taper they're still buying assets. they're still increasing the size of their balance sheets, so it is not really a serious attempt to deal with inflation now, when they eventually get to raising interest rates, well, how aggressive are they going to be because they have markets that have very high valuations, credit spreads that are extraordinarily tight, how do markets respond to the fed's attempt to control inflation what happens if we reach a point

where markets sell off but inflation is still high? will the fed focus on inflation or will they try to help markets? there's a very difficult situation they have ahead of them, and i'm glad there is some continuity but these are also the same people that voted for the policies that got us to this point as well. >> rick, what are your reactions? >> you know, i don't think there's a huge difference in monetary policy strategy between lael brainard and jay powell there are other issues they differ on, so i do think that continuity is a big deal but i think how i looked at this from the inflation standpoint is it was inflation that most likely led the president to this choice, not making a lane change, not doing anything different at this point when it is such an important issue and we have just changed how we deal with inflation the policies pre-covid were

altered with respect to kind of an average range versus a 2% trigger. i think the president had a good day today. i think he did the right thing i think the markets demonstrate that i think as you look at twos which are at the high yields of the day, you look at tens trading at the high-yield low price today or look at the dollar index making fresh 16-month high close today, i think the markets are now continuing what they started before we all got side tracked with who will be the next fed pick because there's work to be done and the markets want it quicker. >> there's the dollar index, around 96 1/2, so edging higher. thank you for all of you standing by, steve liesman, kayla tausche, rick santelli and peter boockvar we will have more to come. also ahead, zoom historically sees big moves lower after earnings reports, despite beating estimates ten

out of the past ten times. best buy was a pandemic darling as people splurged on electronics during lockdown and it stayed open can its growth continue? dick's sporting goods is up 147% this year, but with 16% short interest could it be poised for a squeeze? all of that and more ahead on "earnings exchange." stay with us i've spent centuries evolving with the world. that's the nature of being the economy. observing investors choose assets to balance risk and reward. with one element securing portfolios, time after time.

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♪ welcome back to "the exchange," everybody it is almost the end of earnings season with 95% of the s&p having reported as of friday, but there are still key names fy there are still he could names ahead this week. we will give you this edition of earnings exchange. first up, zoom video, its shares are down 50% from its all-time high of 588 last october they have broken below 241 that's below the 50 and 200 day moving average they are at a 52 week low. they have never missed on earnings but they still moved lower on results each of the past four quarters is there anything zoom can do to change the reaction today? here is mike santoli to tell the story.

welcome. mike, zoom what can they do to get at positive stock reaction? >> i think they will have to have some clarity about next fiscal year's revenue line right now, revenue is still expected to be up, something between 15% and 20% next year. yet even on that higher consensus sales expectation, the stock, even after all the carnage is trading at 15 times those sales. it is in the situation where yes that's the smallest premium zoom has had because it has been abandoned as people get away from the stay-at-home work from home trade but to me it is about what can they give in terms of vision beyond video conferencings that has been the story for a few quarters hasn't been successful >> sure. delando, what do you think the trade is >> we have been trimming our

position the greta during the pandemic, 366% the topline even though they are beating, the top line is slowing. investors want to see where it is going to be in evaluation range. it is comfortable for investors. if you get under $200 per share it might be more attractive. but i am holding the shares i have, not adding to my allocations. i think investors are waiting to see if the strategies resume going forward. >> it is 241, you would like to go below $200. dlano, i will keep you michael, i thank you let's bring in courtney reagan we don't have a lot of time, it's up 3% today, what is the expectation for top and bottom line >> kelly, obviously, this is a retailer that's going to be looking a of the a quarter trying to comp unwhat was very, very good this time last year when we were all stocking up on electronics to work from home

and do school from home. many believe this company will bring us a nice surprise to the upside with a good expectation for the hello season the ceo holly berry will be on discrete next-- on "squawk on te street" tomorrow >> i think their enterprise side of the business has been growing strong i think best buy hans capitalize on secular strength. i would hold into the trade. >> let's close out with dig's sporting goods, up $150, believe it or not. can they keep the momentum going into the holiday eason courtney, what are we watching for? >> kelly, kick's sporting goods told us last quarter that they

were going to report did start off strong retailers had a good start to back to school we don't think dick's will be any different because remember you had a return to full team sports by kids going to school and adults participating in outdoor activities, health and fitness that bebelieve kept up they own golf galaxy as well as selling golf brands of their own. and national players within their own namesake stores. and they have an expanded partnership with nike. nike has been doing well. >> it reminds me, the putting green in the store is a great way to spend a couple hours if you have young kids. delano, what would you do with the stock? >> they have had an incredible year to date but numbers back it up e-commerce growing 111% against fiscal year 2019 you want trend in the areas where it might be stretched as far as the trend of the stock.

i would hold here. but if they are increasing net store count, omnichannel presence that's really strong. i will hold through earnings. >> still strong, but a lot of short interest we will look for any pop when the results hit the tape guys thank you that was our edition of the earnings exchange. up next, a look at the potential tax hikes facing companies and high earner. next on "the exchange.

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welcome back president biden's social spending bill passed the house late also week if the senate passes it, corporations and high earners will be facing various tax hikes. robert frank here now with those details. >> this house plan includes more than $2 trillion in tax increases on companies and high earners. there are dozens of changes, but there are six that matter most now, on the corporate side, the

biggest is the new corporate minimum tax. that is a 15% tax on book income it applies to companies with $1 billion or more in annual profits. that's going to hit around 70 companies, including amazon, facebook, fedex, and gm. there is also a new minimum tax on foreign profits and several changes to intellectual property and foreign tax credit there is also that 1% tax on corporate stock buybacks on the individual side there is a new 5% is your tax on income over $10 million, and 8% on income over $25 million a. 3.8% net investment tax that right now only applies to individuals, that will now apply to pass-throughs and business income over $400,000 the bill makes permanent the limit on business losses that exceed income for non-corporate taxpayers. kelly, of course the one

potential tax cut for high earners is salt. that would raise the cap from $10,000 to $80,000 but we will to see whether that in fact passes the senate. >> thank you robert frank. that does it for "the exchange," today, everybody thanks for tuning in punch picks up our coverage right now. -- "power lunch. >> good afternoon, everybody, and welcome to "power lunch. i'm tyler mathisen kelly will be over in just a second here's what's ahead. financials in focus. president biden to nominate or renominate jerome powell's second term as fed chief bank stocks are higher best day in weeks there as investors place their bets on the central bank's next chapter. and curb appeal. will housing stocks benefit from the fed's inflation strategy in a closely watched strategist will tell us where he sees the biggest gains. and 'tis the season to