describe and the idea trying to better align demand and supply, just say in the labor market so it would actually -- if you were just moving down the number of job openinging so they were more like one to one, you would have less upward pressure on wages. you would have a lot less of a labor shortage, which is going on pretty much across the economy. hearing from companies that they can't hire enough people having a hard time hiring. so that's really the thinking there. these are fairly well understood channels interest-sensitive, and basically across the economy we'd like to slow demand so that it's better aligned with supply. give supply at the same time time to recover and get into a better, a better alignment of supply and demand and that over time should bring inflation down i'll say again, though we don't have a perfect crystal ball about the future. and we're prepared to use our tools as needed to restore price

stability. as i mentioned in my opening remarks, without price stability, you really can't have a sustained period of maximum employment it's one of our most fundamental obligations, to maintain and restore in this case price stability. so we're very committed to that. of course, the plan is to restore price stability also sustaining a strong labor market nap is our intention and we believe we can do that, but we have to restore price stability. >> okay. let's go to scott horsely at npr. >> thanks. i apologize that this, covers some of the same ground just talked about, mr. chairman i think i missed some of your answer a follow-up question on the labor force. we have seen some gains in the primage workforce in the last few months what do you anticipate as the older workers as the health

outlook has changed. seeing more retirees back into the work force, following tom brady's announcement back into the workforce and what would that mean for inflation? >> hard to say over the last cycle we saw over the course of a long, steady expansion, labor force participation outperformed expectations that was just, you know, a tight labor market but nowhere near as tight as this labor market, but a tight labor market and people stayed in the labor force longer not so much people coming back into labor force back after retirement not something that happens in the aggregate very much, so that's what was happening. you know, more labor force participation is tremendously welcome, and, of course, our policy does not in anyway preclude that. this is a situation where wages have moved up at the highest rate in a very long time, and people are able to quit their

jobs and move to better paying jobs, in the same industry, or a different industry it's a really attractive labor market for people, and as we get past covid, well and truly, it becomes an even more attractive w one and hope that leads to more labor supply a good thing for the country, for people, and also we think will rep relieve some of the wage pressures that do put inflation more at risk. that last part is, you, we'll see whether empirically it winds up that way. principally ought to help with inflation as well but not the only thing we're looking for for inflation. looking for help from a number of different places, and most importantly from our own policy. >> okay. let's go to rich miller at bloomberg. >> thank you chair powell, sorry, having some

communications problems so i missed some of the stuff you've said and my apologies if this has been asked since the fomc met last january financial conditions tightened markedly pressure yields up, bond risen, yield curve flattened and even today, dollar's up is that welcome and would you like to see more in order to achieve your goals thank you. >> as you know, policy works through financial conditions how it reaches the real economy. by just mechanisms you mentioned. remember, that the financial conditions we had for the last couple of years were a function not only of very aggressive and appropriately so fiscal policy, but also highly accommodative monetary policy. the monetary policy settings we put in place at the worst parts of the pandemic. so it is very appropriate to move away from those, and, yes, that will lead to some

tightening of financial conditions in the form of higher interest rates, and just sorts of things -- not targeting any one or more of those things, but financial conditions generally should move to a more normal level so that, because we know -- the economy no longer needs or wants these very highly accommodative stance, which -- so it's time to move to a more normal setting of financial conditions, and we do that by moving monetary policy itself to more normal levels. >> when you say move to more normal levels for financial conditions, that suggests to me you want financial conditions to tighten further from where we are now? ami drawing the rye inference from that? >> i say broadly looking a conditions and tighten monetary policy expect they will adjust in sync over time with monetary policy no particular financial condition but a broad range of financial conditions they will reflect to some

extent, reflect any number of things, but, yes we need our policy to transmit to the real economy, and it does so through financial conditions, which means as we tighten policy, remove accomodation so it's less accommodative that broader financial conditions will also be less accommodative. >> thank you just a little housekeeping note. those of you in this call may be having some tech issues. if so, i understand the broadcast is coming through clearly on www.federalreserve.gov you might go there for the audio. and now we'll go to jeanne young. >> hi, chair powell. i wanted to ask about the balance sheet discussion at this meeting. can you give more details? did you discuss whether to cap runoffs or increase those caps

over -- the event, if there were any. >> yes thank you for asking at our meeting today and yesterday we made excellent process towards agreeing towards parameters on a plan to shrink the ball ins sheet and now in a position to finalize and implement that plan so we're actually beginning runoff at a coming meeting that could come as soon as our next meeting in may. not a decision we've made, but i would say that's how well our discussions went in the last two days so a couple things just to add we'll be mindful of the broader financial and economic context when we make the decision on timing, and always want to use tools to support macroeconomic and financial stability. want to avoid adding uncertainty to what's a highly uncertain situation already. all of that will go into thinking of the timing around this in terms of the -- i would say this i don't want to get too much into details because we're literally just finalizing them

but the framework is going to look very familiar to people who are familiar with the last, the last time we did this. but it will be faster, and than the last time, and, of course, much sooner in a cycle than last time, but it will look familiar to you, and i would also say they'll be, i'm sure they'll be a more detailed discussion of our, in the minutes to our meeting that come out in three weeks. i expect it will lay out pretty much parameters what we're looking at i think will look quite familiar. >> thank you let's go to michael mckey at bloomberg p.b. >> mr. chairman, since september of 2020, you've been operating on a monetary policy framework that let the economy run hot to bring unemployment down. that seems to be over, but wondering how you would describe

your reaction function now what is it the fed is trying to do other than bring inflation down in other words, is it, we're going to keep raising rates until it comes down to an acceptable level >> so i want to clear one thing up again, that is that nothing in our new framework or in the changes we made has caused us to wait longer to raise interest rates. what we said in the framework changes was, and this was really a reflection what had happened for the preceding couple of decades, actually. what we said was, if we see low unemployment, high employment but don't see inflation, then we're got not going to raise rates until we actually see inflation. what we said the sense of it. there was no sense in which if we got a burst of really high inflation we would wait to raise rates. that's simply not in the framework. quite the contrary the framework is all about anchoring inflation expectations

at 2%. i hear this, that the framework -- really, we can't blame the framework. it was asudden unexpected burs of inflation and then reaction to it, and it was what it was but not in any way caused or related, caused by or related to the framework. so come to today. you know, i think our vision on this on the committee is very, very clear what we see is a strong labor market we see a labor market with a lot of momentum. great job creation, and we see the underlying economy strong. balance sheets are strong. yes, threats to growth from what's going on in eastern europe, and, but nonetheless, in the best case a broad expectation of strong growth but inflation is far above our target and the help we've gn expecting and others expecting from supply side improvement, labor force

participation, bottlenecks, all of those things getting better, it hasn't come so we're looking now to using our tools to restore price stability, and committed to doing that you see that, i think, in the summer economic projections and see that in the decision we make and continue to see it in decisions we make going forward. >> follow-up by asking what you call the paul volcker question you don't think unemployment will rise significantly, but if it does, does that temper your desire to keep raising rates >> the goal, of course, is to restore price stability while also sustaining a strong labor market we have a dual mandate they're sort of equal. as i said earlier, price stability is -- an essential goal in fact, it's a pre-condition, really, for achieving the kind of labor market that we want which is a strong and sustained labor market we saw benefits of a long

expansion, a sustained labor market it pulled people back in and really no imbalances in the economy. threatening the long extension just the pandemic arrived, just a completely ly exhaustive e. you can't have maximum unemployment without price stability. wep we have to focus on price stability because the labor market and economy is strong we feel the economy can handal tighter monetary policy. >> thank you let's go to brian cheung at yahoo! >> no tech issues here on this front. i wanted to ask the broad question about how you are communicating what the fed is doing here today to the average american who might not be reading the dot plots or understanding s.e.c. how is 25 basis points today and

signaling on future fed policy going to address the inflation they're feeling at stores on a daily basis? >> sure. i'd start just assuring everyone that we're fully committed to bringing inflation back down and sustaining the economic expansion. we do understand that these higher prices no matter what the source have real effects on people's well-being and high inflation take as toll on earn but especially on people who use most income to buy essentials like food, housing and transportation where i mean we've all seen charts that show if you're a middle-income person you've got room to absorb some inflation. if you're at lower end of the income spectrum, very hard because you're spending most of your money already on necessities and prices are going up but it's pricing for everyone. it's been a difficult time for the economy but we anticipate that inflation will move back

down as i mentioned earlier. it may take longer than we like but confident we'll use our tools to bring inflation down. you ask about rates. the way that works, i would explain, as we raise interest rates that should gradually slow down demand for the interest-sensitive parts of the economy, and so what we would see is demand slowing down but just enough so it's better matched with supply, and that brings, brings inflation down over time. that's our plan. >> thank you let's grow to jo ling kent at nbc news. >> thank you for taking my question today my question a follow-up to brian's. what message to consumer who can no longer afford the basics due to this high inflation >> that is -- yes, indeed. as i just said i think we do understand very much and we very much take to

heart it's our obligation to restore price stability, and we've had price stability a very long time and maybe come to take it for granted, but now we see the pain i'm old enough to remember what very high inflation was like, and we're strongly committed as a committee to not allowing this higher inflation to become entrenched and to use our tools to bring inflation back down to more normal levels, which are our target it's 2% inflation. so we will do that, and i just would want people to understand that, and -- but the way we do that is raising interest rates and shrinking or balance sheet financial conditions will become at the margin less supportive of various kinds of economic activity that will slow the economy and allowing the labor market to remain very strong the good news is, the economy and the labor market are quite strong, and that means the

economy we think can handle interest rate increases. >> a quick follow-up obviously federal reserve walking this very complicated fine line trying to avoid recession. for consumers out there worried about their jobs, a possible recessio recession, what do you say to that >> i say our intention is to, to bring inflation back down to 2% while still sustaining a strong labor market that the economy is very strong. if you look where forecasts are, you, people are forecasting growth that's -- that's strong within the context of the u.s. potential economic output. so -- we expect that to continue to the extent the data comes in different, of course, our policy will adapt, but we do believe that our policy is the appropriate one for this forecast and we believe we can bring down inflation we believe we can do so sustaining a strong labor market the labor market, it's not

strong in the ordinary sense of the word we have not seen a labor market where they're 1.7 job openings for enunemployed person or if you add job openings to those who are employed, that's actually substantially a larger number than the size of the workforce. the number of people who actually count themselves in the workforce. this is a situation where demand is higher than supply, and when that happens, prices go up. we need to use our tools to move supply and demand back in. we don't think we need to do this alone there will be other factors helping that happen, but we certainly are prepared to use our tools, and we will. >> thank you >> thank you let's go to simon at the economist. >> thank you, michelle and chair powell sorry to take you away from inflation one minute may i ask about sanctions on

russia, specifically freezing of the central bank assets. that is a similar risk for other sovereigns around the world, 9 b the biggest companies. concern how this might affect the dollar status, federal reserve currency and in the past couple of weeks have you had to deliver any points of reassurance to central bankers around the world >> so, of course, central bankers around the world are generally very in favor of these sanctions, but let me say this sanctions are really the business of the elected government, and that's true everywhere the administration and the treasury department in particular and other agencies, they -- they create these sanctions. we're there to provide technical expertise, but it's not our decisions. and so i'm reluctant to comment on sanctions really much, because, again, they're not for us we have a very specific mandate, and these are really the

province of elected governments, as i mentioned so -- i have to leave it at that sorry. >> thank you nancy gensler at marketplace. >> hi, chair powell. thanks for taking my question. rising wages which on one hand a great thing, but are we appointing the beginning of a -- spiral >> so the way i would say it is this -- first of all, i would agree with the premise wages moving up is a great thing. that's how the standard of living rises over time, and generally it's driven over long periods by rising productive pi. productivity what we have now, look at these, the wage increases we have look at, we're blessed with a range of measures of wages that all measure different things right now they're all showing the same thing, which is that

the increases, not the levels, but the increases are running at levels that are well above what would be consistent with 2% inflation, our goal, over time and that may be -- we don't know how persistent that phenomenon will be. it's very hard to say and really the sense of your question about a wedge price spiral is that something that will start happening and become entrenched in the system we don't see that. you can see, for example, in some sectors that got very high wage increases, early on those wage increases look like they may have slowed down to a normal level, but it's -- it comes back to, you know, what i'm saying here. which is -- there is, there's a misalignment of demand and supply, particularly in the labor market, and that is leading to wages moving up in ways that are

not consistent with 2% inflation over time. and so we need to use our tools to, to, you know, guide inflation back down to 2%. that would be in the context of an extraordinarily strong labor market we think this labor market can handle, as i mentioned, tighter monetary policy. yeah and the overall economy can as well, but, yes wages -- wages are moving up faster than is consistent with 2% inflation, but it's good to see it moving up wouldn't be sustainable over too long a period to see them moving up much higher because of miss alignment between labor supply and demand got more than expected during the last cycle this time gotten much less than expected it's not easy to predict these things but we expect people will come back into the labor market, particularly as covid becomes less and less of a factor in

many people's lives. something we all wish, but so that's how we think about it. >> thank you the last question will go to the "l.a. times. >> hi, chair powell. i think you said, to the senate earlier this month, that, in hindsight, the fed should have moved earlier, and sounds like today that you don't think that the fed is late, and i just wanted to get your clarification on that, and if it is, if you still think that the fed is behind the curve, how much behind the curve is it >> right so we are not, we don't have luxury of 20/20 hindsight implementing realtime decisions in the world so the question is, the right question is, did you make the right decision based on what you knewat the time? but that's not the question i

was answering. knowing what you know now. if we knew now, of course. if we knew now these supply blockages really and inflation resulting from them in collision with very strong demand. if we knew that that was what was going to happen, then hindsight, yes, would have been appropriate to move arlier obviously it would be. but, again, we don't have that luxury and then so, but that's a separate question from, from your other question, which is behind the curve i don't have the luxury of looking at it that way we are -- we are -- we have our tools. powerful tools, and the committee is very focused on using them we're acutely aware of the need to restore price stability while keeping a strong labor market and what i saw today was a committee that is, that is strongly committed to achieving price stability in particular, and prepared to use our tools to do that.

we're not going to let high inflation become entrenched. the cost of that would be too high, and we're not going to wait so long that we have to do that no one wants to have to really put restrictive monetary policy on in order to get inflation back down. so frankly, the need is one of getting back up, getting rates back up to more neutral levels as quickly as we practicably can and moving beyond that, if that turns out to be appropriate. you can see it is appropriate in the sense, to people's seps, they right down levels of interest rates above their estimate of a longer run neutral rate also a range of estimates, too, you will see if you look at details of the sep thanks for your question. >> okay. thank you all. >> thanks, mr. chair. >> thank you. fed chair jay powell

the first move to fight inflation. what a round trip for the markets. look at s&p 500 now. in rally mode. after the fed chair gave commentary saying expects every meeting to be live in other words, you can see ongoing interest rate hikes potentially at any meeting this year a lot priced in. s&p up 1.6%. fell before pt news conference and rallied back dow also trading higher now. nasdaq as well look atwhat's happened in the bond market, tells the story saw yields shoot up immediately on the back of the statement take that initial seven hikes per year predicted by the dot forecast from the fed came as a surprise fed chair powell started talking yields starting coming lower dollar is weaker overall taken at the market pretty much expecting this joining me here at post nine, former goldman sachs president, gary, welcome. especially after a big fed day like this.

glad to you have by my side. >> thanks for having me. great to be in-person. >> yeah. your take what we heard from powell and the market reaction looked like a little celebration? >> you can take two things out of this. number one, the chairman kind of admitted he was behind the curve and came out -- >> didn't say it said let others -- >> kind of admitted it, i said admitted it saying seven this year four following years put 11 rate hikes on the table to me, that was without everything behind the curve saying, okay got work to do ahead of us but i also think by doing that he has got the market in a position where he is now, as you said, put him in position every meeting is live, but every meeting being live means that he doesn't necessarily have to raise rates at every meeting but is prepared the market for a position where he could if he wants to raise rates at every meeting going forward. >> that surprise could be

actually, they don't raise interest rates >> i think that's the position he's put us in right now saying every meet's live, going to raise at every meeting, put that optionality on the table. how i interpret it and i think how markets interpreted it and i think interpreting this, admitting where we are admitting, in many respects admitting behind the curtain where inflation -- >> why is that good for the market >> inflation number out is not one they can get to. >> expect 4.1% endof the year. >> i don't think so. >> what's more realistic >> help on inflation, because as you know, the baseline is going to get better for them getting into the second half of this year, we started having a lot of wage and commodity inflation in the second half of last year. so when you look at the year over year numbers -- >> comps get bet egg. >> better. >> dramatically better

year over year inflation numberless look better and better whether he raises rates or not >> 4.1 -- >> pretty aggressive he'd be lucky to see something with a five handle probably somewhere high fives, low sexs we'll get and probably haven't seen a peak. a lot of this volatility still in the system has not fed completely through we still have a lot of input inflation. going to see that on the commodity side everyone talks about oil no one talks about the agriculture market that's probably more important -- >> russian wheat. >> more important than the oil market oil market turn on and off planting seasons in the agriculture markets. miss planting window, it doesn't reoccur. oil market is a little different. just talking about, can you ship it ship it to certain places? displacing oil from one market to another market? i think we found that's what's happening and why prices resumed back to where it was sort of

pre-ukraine situation. but the wheat market is completely different the wheat market we get one planting season. >> dow up 330 points gary, stay with us. want to get to steve liesman what were your big takeaways >> i would just like to say that i am sure that fed chair jay powell hopes gary cohn is right and they get help from a lot of sources. part of powell's presentation. sara, struck by change in the forecast couldn't help but be struck by that the fact the median fed official now sees restrictive rates next two years. as i said in my question, fed still doesn't catch up inflation still runs according to their own forecast above target two years while restrictive and above the k neutral rate powell hinted at it. you have to be on your mark now. hawkish as this was, the idea a

decision to hike the balance sheet probably is coming in may, powell also was not shy about saying, hey. we might do 50s, go faster take a listen. >> we'll be looking at the data as they come in. looking to see whether the data show expected improvement on inflation, the inflation outlook and making a judgment, and going each meeting is a live meeting and if we conclude appropriate to raise interest rates more quickly, then we'll do so. >> might be by the summer before they conclude that a quick look at probabilities. you see real firm confidence that the fed hikes, the next four hikes, a little less, but really today, sara, those seven hikes in the fed forecast, those are priced in. that december hike was priced in almost immediately maybe gary cohn is right about that they don't get there, that's

where the market's priced now, sara. >> steve liesman thank you very much. >> ultimately how many rate hikes do you expect this year? >> look, i don't know. it's really going to depend on where we head with inflation i still think we got inflation in the system. more concerned about the wage side of the equation look at the data end of last month. still had 11-plus, 11.3 million unfilled jobs. labor market is tight. >> powell referenced that. >> out talking to ceos and see it every day biggest issue is hiring people and retaining people we see in the data every day that's the biggest restain on companies today. also got the supply chain issues supply chain issues are not bringing up anytime soon >> getting worse in china. >> well, with covid going on now, we don't know what's going on but clearly shutting down some of the cities, it of the important cities that export technology in the united states, could be getting worse. >> another thing powell said struck me. said the economy was well

positioned to deal with the rate hikes, and said recession risks are "not particularly elevated." find the economy is strong certainl reas reassuring, is it right? >> i agree. >> you never -- gary texts me every time on saying stop talking about recession. not going into one. >> have i been right >> you've been right. >> good. i might change my mind consumer balance sheets, corporate balance sheets are in really good position look at that look at wage growth. especially bottom quartile very good. jobs are available look at what's going on and look at what's driving the economy, i think we're still in very sound footing. powell was right i think ever going to be in position to deal with increased rates, it is now. believe me it's been telegraphed. the market, you said, opened up talking how the market was

prepared for this, market accepted it. stock market' rallied. rates where we thought end of the day. >> even with, though, the situation in ukraine, the fact russia's cut out of from the global economy, which has stronger ripple effects on europe now risking a third recession in the last two years and will certainly affect us. can we handle it >> we can handle it. clearly will have an impact. we can't discount what's going on in ukraine, a horrible, horrific situation, and no one should discount it or put it to the side, but from an economic standpoint, we in the united states here are in relatively to very good position got supply chain issues, other issues wheat issue. ukraine/russia clearly in the middle of the wheat andic inial issue. a middle of other commodity issues have an effect and all inflationary effects but we're in strong enough position and resilient enough to get through this. >> does that mean stocks are a

good bet now priced in all of these hikes the hikes powell is talking about? you don't see us going into recession? >> that's a different discussion, sara roll the clock back. to when we went to easing monetary policy and zero rate policy very accommodative what happened? >> talking deaths of covid >> before that way before that. go back years. when it first started. what happened? saw companies do very well we saw their stocks do extraordinarily well, because there was no place for people to put their money. saw multiple expansion you could see a company earn the same amount of money year one and year two but stock valley goes up. what happened? multiple of that company went up going up, because there was no real other alternative where to put your money we saw multiple expansion for many, many years we are now starting to see the opposite effect. we started to talk about fed tightening, and starting to see alternative places to put your money, risk-free rates going up.

credit spreads widening, investors have alternative places to put your money >> nasdaq -- >> seeing multiple compression multiple compression is painful. really is. companies are doing well you see it every day last couple days seen airline industry talk how they could -- saw uber, how them wear doing not hearing about companying telling us they're doing poorly. hear of companies coming on telling you how well, pre-announcements. companies are doing well but seeing this multiple compression, because the fed is starting to go to a tightening policy that means figure out what multiples should be based and where monetary policy's going to be that determines whether you should buy stocks. >> and for instance -- >> tech stocks a generalization. some tech stocks relatively chief multiples, some are very high look at growth rates get back to looking at

individual stocking. where their multiples are, growth rates, historic multiples and u.nderstanding what fair value is. >> heavily invested in stocks? went to cash >> i got out of some of my portfolios end of last year. maybe wrong reasons. maybe right reasons but definitely got out of some of my portfolios. >> great to have you on a fed day. gary cohn. >> thanks for having me. and outperforming the market today. like the sound of higher rates up next, hear from an en investn and best way to invest remember, listen to "closing bell" on the go. following the "closing bell" podcast every day on your favorite podcast app dow up 291 really rallied off the fed news presser by fed chair jay powell. presser by fed chair jay powell. we'll be right back.xpand your .

and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. at vanguard, you're more than just an investor, you're an owner with access to financial advice, tools and a personalized plan that helps you build a future for those you love. vanguard. become an owner.

this is xfinity rewards. vanguard. our way of showing our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these and so many more in the xfinity app.

your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

. up 318 on the dow on the fed day. now in the "closing bell" market zone cnbc market commentator mike santelli trading down the day with me. and financials, and wells fargo takeaway from the fed decision get straight to the market and the fed, and reaction we see saw us take a dip after the fed statement at 2:00 p.m. after the federal reserve forecast seven interest rate hikes this year. six on top of this one mike santoli, climbed back during the fed chair's commentary, during the press conference soothing when it came to talking how strong the economy was and seemed flexible. actual loy used the word "nimble" when it came to

interest rate hikes. what do you make of the reaction >> definitely lip service being nimble did at one point say data comes in from they will adjust basically he walked right by multiple opportunities to seem more flexible or more dovish you do have that committee projection, median six more rate hikes. probably more than expected, but about what the market already priced in. if i'm trying to read the market's mind. one oversold going back to the morning highs. you can always count on switch backs even the day after a fed meeting's no final verdict on the market yield curve flattening significantly basically feeling as if lots of rate hikes maybe going to slow down the economy and they don't necessarily believe they'll get all the hikes in final piece of it is, the committee's projection for core inflation by end of the year at 4.1% yet still only six rate hikes? that's suggesting in fact the committee doesn't feel it's going to have to chase inflation.

operates with a lag. basically maybe one per meeting every meeting live, but not necessarily looking more than that finally market's done tightening already and we've talked a be that for weeks. >> market innovation, etf hammered by fear of rising rates up 9%. still 55% off highs. nasdaq 100 up almost 3% now. still 17% off highs but seeing a big move also in china-related names hammered lately. las vegas up 11% windwind pe 7%. and financial it's, gaining steam since 2018 signals for more and covering the bank at research what do you do with the banks after what we marriheard from te fed? down 2.5%? >> thanks for having me on,

sara in terms of setup, off a strong year in 2021 performance continued so far this year. down a little bit to start the year but outperforming broader market by a pretty wide margin that optimism will continue given the expectation around policy trajectory. six hikes this year. three hikes next, getting baked in history tells you the banks, overweight banks trade typically works through the first four or five rate hikes. the banks typically lag thereafter particularlyin periods of per sif perasp first three, four rate hikes, my preference, however, still to be long rate sensitive plays with

limited credit exposure. best play on that names actually up the most as we speak. names like schwab, lpl financial and morgan stanley wealth management firms that don't have a lot of credit exposure but significant assets activity. >> the best performing financials now you mentioned schwab up, morgan stanley, up 6% explain? what's the link to higher rates and why they do better than bank of america, typically mentioned a big beneficiary from higher interest rates and loans >> look, bank of america certainly rate sensitive as well the challenge, talked about it on the program pearlier. recessionary rates building. concerns about yield curve inversion. these issues collectively suggests recessionary risks are rising, and against that backdrop, you really want rate exposure, but names that also have much more resilient earnings profiles under stress

charles schwab benefits from increased volatility their cash builds in periods where markets are declining. i can make a case they're earnings will improve under greater stress, and other names like lpl and morgan stanley seeing modest pressure, earnings, offsets in the model that hedge along those names avoiding potential recessionary risks or pressure could see like in others. >> doesn't happen intuitively with fed raising rates especially broader economic fears around global growth and even here in the u.s do we need that to work? >> good news, sara, where yields are today are well above the back books for the banks said differently most of the banks reinvested in securities around 125 to 150

basis points those same proxies are now 100 basis points higher, but where yields are to me is less relevant in a vacuum you have to look at the shape of the yield curve. that matters far more. seeing flattening today. if we do end up seeing inversion at the 210s where i'd be more concerned. that's where i'd lighten up more aggressive on the bank stocks. >> and thank you very much mike, such a divergence, some of these bank performances so far year to date some names up 18, 10% to 18% some regionals in particular down for the year. what do you think of the strategy to go with brokers on rising rates, and hedge your risk there for recession or weaker economy >> the cleanest way to do it right? talking customer balances. earn the rates on that the reason stock's moving. others in that general category, too. the custody trust banks, bank of

new york, state street northern trust a little different wealth asset and asset management component as well it is a kind of the playbook in terms of general bank valuations at start. outset of the last tightening cycle 2015 much cheaper then. overall bank group probably just isn't as cheap, therefore, might not have quite as much leverage purely to the rate story as we, whether right or not, talking being in a late cycle environment for the company. >> financials third best performs and large cap names selling briefly after the fed announcement and bounced back. nasdaq hitting session highs up more than 3% joining us evercore head of research mark mahaney. an interest rate strategist. gary cohn saying not like fundamentals of the company changed but valuation, boy, have they been whacked. how do you interpret the fed

outlook as far as what it means for your coverage? >> right, sara the most negative i've seen for growth equities since end 2018 and similar setup there. if we get real conviction, confidence in the rate of interest rate increases, then growth equities and tech stocks can work again i don't know that may require another fed meeting for that, for the market to really gain confidence in that so i'm going to be, continue to be defensive in a sector really doesn't have a lot of defensive names but stick with the names like amazon, google, the two best, highest quality names in the space, and buy them on sale. particularly amazon. i think there's wonderful fundamental cast talysts later n the year and ben die graham names. high quality and clear recovery names. names like expedia and booking.com or booking holdings.

>> mike, mega cap tech names hit. meta rallies more than 4% move have investors distinguished between defense ive names and le technology and other growthier places where does that stand? >> i think obviously market made some distinctions in terms of who's outperformed on the down side more. apple held up pretty well. i think still kind of holding its own better than some mega cap names before that and i of, balance sheet story, a stability story microsoft had too good a run last year and more to give back. at that not really in some kind of pronounced down trend meta look at it again i see going on today, a bit of a, a sign investors felt under invested going into a market

holding support. going to try to rally. going to feed off oversold levels and areas hard hit are getting better benefit really just the reciprocal math of hardest hit most upside today. >> and probably the ones you want to stay away from ultimately you like the defensive names like google and amazon what don't you like within your tech universe? >> high multiple future growth sorry. high multiple stocks, under pressure i don't know about the bottom in nasdaq range of corrections witnessed over the last couple decades, this would be kind of a, a relatively short correction. i could see it getting steeper and lasting longer hope that doesn't happen, but that's what history would seem to suggest at some point the next couple of months a chance to get into growthier name wes like, roku, spotify, like shopify, too

for now high multiple especially shopify, high malt follow future profit stocks s hard to have sustainable gains the next couple of months next year, fine. if that's your investment horizon, i got great picks for you's not the next three months. >> you brought it up not me a brief on spotify, pounding the table on this name not where the market is now. those kind of stories. >> right a company that's waiting for gross market captainist. out there. saying it for a year haven't seen it yet, but i think levers are out there more advertising revenue spend by artists and labels and starts scaling up against all the podcast content that they've got on the site. to me one of the best examples of a company under earning spotify's gross margins in ad, 10% 11%. no other company that low.

misexecuting or extremely aggressively up front investing in content i think that's happening's see the gross margins work up and i wanted to be long the stock before that's clear to everybody else. >> sticking with it. down 50% in the last 12 months 8% mv higher, mark mahaney, thank you. the tech theme, chip stocks outperforming broader tech sector currently up 4%. micron the leader, upgrade to outperform and bernstein firm saying while macro concerns prompted a sell-off. doesn't see the russian/ukraine conflict affecting them. signature pick on data momentum and potential for nvidia to xpant. investors getting a good deal with chip stocks hurt lately on concerns around everything from inflation to higher rates to

russia/ukraine europe's slow down all of the above. >> better deal, you can see. well off highs nvidia well off highs. earnings forecast this year up for both companies since beginning of 2022. that tells you it's all been about reallocation of equities out of growth. about multiple compression and probably digestion of a really good couple of years coming in suggests it's not the worst opportunistic call to say things look okay here i don't know the right price poor nvidia over time growing into a power and now 40x times forward earnings range way less of a nose bleed level than traded in recent memory. >> nvidia, 6% down 17% on the year a look at the chinese tech stocks like alibaba, jd.com, bas

d badu, surging today. beijing set it would support the stock market on base for best day ever. basically erasing losses from the past week. with us, doing digging why, christina, might not be an all-clear for these names. interesting move what just two days after jpmorgan called the group uninvestable? >> downgrading 28 separate companies. first time china addressing it pub luckily saying going to support a lot of chinese firm it's not providing details how to do that talked about the stocks being high above 30%. look year to date. many in the red, down 15%. what are we seeing kweb, and s.e.c. wants many of these u.s./chinese listed firms to provide audits backing up financial statements they don't dough so within the next three years are delisted. maybe can work through that. second risk, the fact gdp growth in china slowing down. fully priced into these stocks zero covid policy.

point lthree. could see further sell-off tech lumped in in these chinese stocks and concerns penal say, it's not true, but united states told nato china was willing to provide economic military aid, western sanctions. could be a big question mark could hurt the sector as a whole. still a lot ofrisks for this group despite china. >> moving forward. >> got it. thank you. stocks broadly rallying here nasdaq up 3.5% almost into the close. and bring in a senior market global strategist. what did you take away from the fed? scott? think average and happy as the markets seem to be >> tell you, sara. you used the perfect word "soothing. i thought jay powell did a good job. in the past from time to time he's said a few things probably shouldn't have or the tone was maybe not all that great for the market.

i think he was soothing and i think that the market fully expected the series of rate hikes. obviously market expected 25 basis points you could tell initial reaction when you look at dot plot and basically more of their projections were showing a greater magnitude really out this year and for the next two years. so i think that was why initially the market pulled back and was negative very briefly, but overall, i think, he's right. labor market's great interest rates probably aren't going to go up yield on the ten year, a heck of a lot higher than it is now. consumer spending should be good we lowered our gdp number recently, but still over 3%. i think there's a lot of good things going on, and having the fed funds rate up higher, that's not going to kill the economy, i don't think. >> well, it says a lot, scott, that you think it's soothing to hear every meeting is a live

meeting for interest rate hikes and that the fed talked about significantly shrinking its balance sheet and that's okay with the markets i guess it speaks how far the market has gone into pricing. >> yes,yep. >> pricing this all in do you trust -- >> if we would have -- you know, i think so s sara, you know we like tech. clearly tech has been an underperformer we like communications service an underperformer as well. we see good profitability there. it's been a relative under performer. we would call it an opportunity. i think you do need to take advantage of this, and one of your previous guests just said, if your views out more than 12 months, this is a good spot to buy in we agree with that if you're time frame's three or six months, well, what's putin going to do next we don't know. probably going to affect the next three to six months when you look out 12, 24,

36-plus months you have to take advantage of relative underperformance and absolute underperformance and 10% often all-time record high haven't done that for a while. been lower for us the market's higher end of the year. >> scott, thank you for joining us with your first pick. a solid 2% gain for s&p 500. nasdaq up 3.5% about two minutes left to go in the trading day. ten-year yield, mike what do you see in entern. >> up yall day. heave absolutes of volume looking 5-1. not bad in terms of that ratio a pretty good front tire here. compared to health care. basically offense verse defense. offense caught up week to date and overtaken by a little bit. leading defensive sector for this year, which is, volatility

index staying at positive metrics. stayed above 30 level a couple weeks. cracked below it now under 27 history of when the vix stays above 30 a while comes back down, forward returns for equity tend to be good. clearly the market is able to rally against what i would argue was not really a soothing or dovish message from jay powell i think took every opportunity to see more resolute inflation called the labor market tight to an unhealthy degree. i actually think shows you how much the market was spring-loaded to rally and a little catch-up. still needing to improve 43-50-ish around the borderline reflux bounce or move to the upside >> show you what's happening to the bell a minute left to go and dow is sharply higher up 488 points. third in a row dow is higher positive for month of march.

the dow first since back in february s&p 500 higher 2.2% gaingain. everybody else up. tech in the lead financials doing well. materials doing well cyclical groups, all-inclusive rally except energy and utilities. that does it for me and "closing bell. thanks for being with me on the most important hour. send it over to "overtime. >> welcome i'm scott wapner heard the bell just getting started fed spoken in a few minutes top investor in the world, jeffrey gundluck with his say and what happens now talk to the tape brave new world for investors. more money goes from here. what a finish for the day. familiar faces, josh brown and courtney gib