other crypto it's my pick >> i need a name for final trades >> schwab. >> john and jerry, a name. >> iclm. bought that etf today. >> boeing. >> crisper >> okay. i will see all of you in a few hours time, back side of the fed. "the exchange" begins right now. ♪ thank you, very much, scott. hi, everybody. and welcome to the fed-day edition of "the exchange." i'm kelly evans and we're waiting on a crucial decision by the central bank three quarters or even a full-point rate hike and what will fed chair jay powell say and we're minutes away from all of these questions and let's go to dom chu with the latest numbers

>> it's a very much wait and see pattern but doesn't take away from the fact that we're green across the screen and the berd the dow is up a third of 1%. s&p 500 two-thirds of 1% gains and the composite index, aka nasdaq, up about 1.5%. 10,000, 977. interest rates are a key part of the overall market narrative every day. but special on a fed day the two-year note yield is tilking slightly lower and the 10-point note yield -- again, the inversion is not there yet but kind of close. well keep an eye on the 10-year treasury note yield. we're going back to the highest levels since 2011 at this point hear this is going to be a huge thing to watch the 10-year treasury note yield and tech and financials.

a key focus for many am vesters today. the bank trade, bank of america. j.p. morgan chase, both up and apple and amazon, when it comes to big-tech reelated type companies, up two-thirds of 1% and amazon has been hit especially hard during the latest down turn in the nasdaq perhaps a catch up ahead of the big rate decision. >> thank you very much the fed is debating what to do as they continue to point to an economy slowing but not enoughf to bring down inflationary pressures even with the huge spike in mortgage rates, we learned applications rebounded from a 22-week low. we got the empire state index showing a drop overall and the labor market reads we're all very strong. these are parts of the economy the fed is trying to cool.

retail sales dropped for the first time in five months. they're sharing a growing share of their dollars and the price index jumped to the highshest reading in four decades. where does this leave the fed and its decision on how much to hike rates today joining me is at city wealth management and the chief fixed income strategist at jenny montgomery and each one has a slightly different take steve, you're afraid they're making a mistake going too far here >> well, i would just be aware key components of inflation are members of the index of lagging economic indicators. we're in this position now because the federal reserve eased through a boom it's not to say that they should continue that in any way but i'd be aware that just doing

the opposite, creating a monetary policy that sets the federal reserve up to ease in the next recession is probably not the best way we're go tag be able to create sustained downward pressure on inflation so, there's real risk here the federal reserve is taking. thinking about how they're dealing with this narrative. as soon as they floated the ied of a 75-basis point rate hike for a meeting, many say we should do 75 every meeting i think that's the problem y with have yet to see the effects of the beginning of the monetary tightening. but that's what the fed has to do it has to look to the economy in 2023 if you see the leading pieces of the economy that are interest-rate sensitive, they're already showing weakness >> and i'll turn to you and give you props. you've been one of the most correctly hawkish people about inflationary pressures all of this year.

you were one of the first to say not just that this should make them go 75 but we think they will and we'll get conformation in about an hour whether that's true or not. why do you think that move is so necessary right now? >> thank you, kelly. to us, it's really not so much the cpi data but the jump in inflation expectation at 10:00 on friday that really changes everything i mean, that is the big issue for the fed. when that number, iffy with went from inflation being a problem, and they expected inflation to slow eventually was long-term inflation a expectations were still contained. and they can no longer make that case i really think powell needs to have his whatever it takes moment and convince the markets that they actually will do whatever it takes to bring inflation back down. and that means tightening 75

basis points today and for me, one of the big questions is i hope someone during the press conference asks the 100-basis point question and whether they would consider that for are the july meeting i don't think powell can take that off the table he took 75 off the table in the last meeting and that blew up in their face if someone asks that question and again, i think he has to say it's a possibility at least. >> it's the question to ask. and going big now hacks like something bigger if you look at what investors are saying. bill tweeting he would hike to see the fed do at least 75, if not 100 basis points we had jeff last night saying he wants to see them raise it to 3% immediately at this meeting. so, these are guys who know well the market implications of what they're saying what's your perspective of whether it would be better. >> for markets to have a fed, clearly more hawksish, verses

one that says we want to wait and see? >> the old tech adage from a few years ago was move quickly and break stuff. i think from the federal reserve standpoint, that's what you don't want to happen unless you're a hedge fund type with perhaps a lot of cash available. to mr. whiting's point a few years ago, if the federal reserve and taking too afwresive a policy, and we're drifting that direction for good reasons, in the interest of containing the current inflation trend. they're almost certain to thiek recession into the economy by early 2023 at this point there's a couple things going on one is the huge accumulation of consumer savings, which are essentially being burnt on heavy vacation and services spending this summer. come the end of the third,

bebe beginning of the fourth quarter, those savings will be vastly depleted are and that's the last part of the economy providing support. and to the last hurrah of conpsalmer spending and there's good odds we see a material economic downturn into beginning off 2023 >> steve whiting, to turn back to this point. a couple meetings ago we were talking about the soft landing in retro spect, that seems like the wrong debate is it about soft landing or calming inflation? and to the point everyone has made what we hear from the fed is probably more important than the meeting. >> i think they need to level with the public. you can only bring inflation down gradually with monetary policy that you can't solve the problems of a supply shock

this year inflation is rising twice as fast as wages you think this is a wage-price spiral you think if they were to tighten 200 basis points at every meeting this year, trail aing two-point inflation would still be above their target. we have to have a policy we can sustain. and if we discourage producers, convince them the man is going to collapse, they'll never produce to the current level of demand so, you could end up -- if you hack at the sacrifice ratio, millions of unemployed people and the inflation rate could be relatively little difference next year. a lot a of the signs out of the economy, we saw it in good sector first retail inventories are piling up now we're having trouble turning the lights on in services. you're go tag get past this but have to be patient and the federal reserve, i think

in panicking, is not sending the right mestaj markets >> what's your response? and what should investors keep in mind in terms of where the level of the 10 year especially could go >> look, i think we eall would like to see a soft landing scenario and that's what the fed tries to engineer. and unfortunately, again, it blew up in their face. they tried to slow the pace of repricing of fixed income assets and that probably contributed to the unhinging of inflation expectation. when you see this type of inflationary dynamic and i see a positive feedback between unit labor costs and prices and inflation expectations and spending expectations as well. spending expectations accelerate aed sharply. so, there is clearly the positive feedback.

and i think the fed needs to break it i would say that the 10 year should settle somewhere between 3.5 and 4% i have a hard time seeing the yield go high prp -- higher. but probably too soon for pricing the rate outlack >> it's not the levels, it's the speed of change, which is almost unprecedented. mortgage rate ge -- and on the short end especially even the tea bills have been flying do you have any advice for investors? do you agree with what we're likely to see things settled down with regardless of the overnight rate today >> so, heading to the year, we were suggesting to our clients and investors that we maintain a relatively short duration outlook. we anticipate rates would rise but nobody expected it to be so fast or violent.

ib think since the first fed rate hike, with 1 with35 to 130 basis points in the three-month period which is wild. but going forward, the risk return is far more balanced than fixed income at this point, even if rates drift higher, you still have enough income generation capacity from most bond portfolios to provide a good cushion against higher rates so, if they do move higher, i think the risks are balanced at the very least and tilted in favor of extending durations a little bit to neutral. and that outlook i shared on economic growth at the beginning of our session, there's high odds the fed goes into a recession in 2023. at some point it will tile be time to take advantage of the safe haven assets that do good in a downturn. >> what is your advice,

especially putting the global puzzle pieces together we see the dollar at multidecade highs. and making sure -- perhaps more constrained ability to do so and just kind of the people who on the block who say are we supposed to be in stocks or not be in stocks and boil it down now what do you say to folks >> there's a good likelihood that investors, who are going to try to time the market, were down 20 % in the broad market. kwl getback in when it's just right. especially if they try that routine late we're staying with higher quality income-reducing assets more bonds, at least u.s. bonds, than we had for a very long tame we've been underweight fixed income for years we think it's offering two characteristics. a much better return than cash

the federal reserve has to do a lot of tightening to catch up with the bond market and cash yields have led to 150 basis points the peek fed fund rate as. income prodosinucing companies h a central demand we're talking about shares are down half as much. we'll stay boring and safer in quality assets >> you call it boring. and it's making me itchy thinking about it. take your point that's what makes the market is you hooking at that and saying -- >> double the fun. >> for sure. >> everybody, thank you so much for your time. we appreciate it coming up, rocking the foundation as mortgage rates surge past 6%, what impact will today's fed decision have on the housing impact and stocks? plus americans areful feeling

inflation in everything. now president biden is calling on oil giants to increase supply to lower prass what's likely to happen next wale rr explain.

welcome back one area where the fed's fight against the inflation is being in the housing market. look at these moves since january. as a result, we've seen new home sales falling 17% to the slowest pace since the started of the pandemic a broader range hitting a two-year low today's sentiment falling for the sixth straight month to the lowest level in two years. k.b. holmes, mare tj, lanar, under pressure today as well i'm joined by national association of realtors chief economist and kenneth leon is the director of research and he down graded the housing stock or builder stocks just today. welcome to both of you kwl start with you surprising to see a little rebound last week.

what can you tell us about the state of the market? >> well, the housing market is very sensitive to interest rate changes. so, more than 300 basis point increase in mortgage rate from december of last year with a harm housing market. the sales will come down pending contragcts have been trending downwards one of the home prices is rent and rents are raising very strongly on your computer. >> when i tweeted the mortgage rate, people are shocked to be aware it's gone up to 6.3% i don't think they've quite caught up with the velocity in the moves and what other choices do they have is this going to require paep tool stay involved with the housing market, even if it hurts. >> the consumers need to run the numbers. what may have been $2,000 per

month in mortgage payments for the same house, the number could be 2900 today. one has to run the number toads see whether a person is reaching that limit or mot. and naturally, with higher monthly payments, some people are priced out se, they have to renew their leases what we're hearing in the marketplace is multiple offers for rent some property is listed for rent, five people show up and they're scrambling to get the property so, interesting dynamics >> now the bidding wars are for rents are in generaleral we saw yesterday news from red fin and compasses mortgage brokers that they're laying off 10% of their work force. red fin says we could see a sales slow down that lasts years, not months. the question is whether that means prices are go tag fall or not. what's your gut telling you? >> so, first part is inflation is terrible.

but inflation does provide a hedge for real estate. so, we saw that in the 1970s, early 1980s when inflation was high and when paul walker raised the mortgage rate up to 18%, home prices did not decline on a nationwide basis high inflation, high rent does provide supert but we want to have better vulnerability or lower interest rate anything to bring down consumer price inflation. whether drilling more oil because it's driving up inflation. we have to consider all the supply, oo evan on the macro ecmommic basis so the inflation pressure lessened and therefore mortgage rates can begin to stabilize. >> because in other words, the only way you think housing might get affordable interesting. are we'll check back in soon let's turn to ken leon to

drill down further on the home builder stocks he lowered his price target on four names in the past 24 hours. why haven't we priced in a heck of a lot of bad news here? how much more do you think these stocks could drop? >> actually last month we went from positive to neutral on the housing market and home builders and our action today is looking out over the next 12 to 18 months housing is not one that goes up and down everyege few weeks and months all the key indicators are going to continue to be weaker month over month, year over year home builder sentiment 2 to 57 two is positive or green but traffic to selling communities was 47 that's red the new residential sales from

government show all categories month over month, year over year down except for 750,000 to a million in terms of categories those are likely to stay too so, 6% mortgage rate plus and it will go higher is demand destruction. most of the analysts are bullish over two-thirds. the target prices are way too high we mostly wanted to hold recommendations in the home building stocks. it's from our experience, the 2008 -- this isn't the 2008 housing crisis but it's going to be a tough period with recession. >> you heard lauren say he's not sure if home prices are going to drop people aren't going to be able to get into these properties what's your expectations >> the bulk case is there's a million homes needed in the u.s.

but that's been true for 10, 12-plus years. pricing is lakikely to come dow perhaps 5% when you talk the home building industry, it's pace and product. the entire home building industry, think of back logs and orders that continue to wither or go down so that the comps get to be less and less attractive if you sum it up and let me be the equity analyst, year over year on revenues, home building companies will have 25 to 30% revenue growth in 2022 year over year next year it's only going to be 2 to 4%. and that's what the market is lacking at, where fundamentals are as we go to 2023 >> and if revenue is only 2 to 4% growth, doesn't sound like profits are going to grow much past that. when we get tactical, a name

like nvr often comes aup better situated than the others is there differ engsiation between a part of the market they're exposed to or part of the country? or are they all basically concern for you? >> it's a great point. we only have one buy, which fit in my comment. they're mostly selling homes above 750,000. that will hold up better cnpc viewers don't get into it it doesn't trade well. it's been a mystery to me why it's the s&p 500 they never do earning or investor calls it's a stock to stay away from, ndr. >>ialver -- i'm going to have to take that up with fphil next tie he's on.

should they wait for the smoke to clear or before valuations get hot. and let's get a check on markets. 34 minutes until the fed's decision dow hanging on to a 156 point gain a tree weathering a storm? (thunder) lions? nope. (lion rumbles) we do it with our people. if you invest in the s&p 500 your portfolio may be too concentrated in big companies. this can leave it imbalanced and exposed when performance varies. invesco's s&p 500 equal weight etf, rsp, is spread equally across the s&p 500, which reduces potential concentration risk and helps keep your portfolio in balance. stay in balance with invesco's rsp. ♪♪

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cap names. he mentioned amazon off the top. up 4%. apple up 1%. the commerce names are are getting a boost. chewy, doordash, wayfair,etsy all in the green social media names are popping, led by pinterest and snap. twitter and meta in the grown as well all are down between 7 and 16%. >> the week. match and bumble up 5 or 6% today. down from their recent highs we're seeing a bid on some parts of the market that have been more reopening geared and that's what's working ahead of the fed. still to come with half an hour to go until the decision on rates. what does the market want? a half point hike or a full point surprise and stocks my next guest laikes

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welcome back to "the exchange." we're less than a half hour away my next guest says regardless, rates are still going higher so, how should you invest? joining me now is the vice chair and head of the investment group. it's great to have you we heard our guest, top of the hour, say even the hawkish one things it's going to 3 or 4% from here.

you think that's right >> only 4% is quite a move when you and i were on, in august of 2020, the 10-year was at 50 basis points so, to go from 50 basis points two years ago to 4% would be a massive hit to the bond market even another 50 basis points is something like six bond points i think that's about right i think in the low fours is the number i've been pointing at that makes sense in this environment. we still have artificially low interest rates >> it's odd. i sort of need you to explain it for me, if you will. we are have investors saying because of this inflationary environment, you have to own equities with yield. and on the other hand, we see equity yield proxies getting crushed because they can't keep up with what's knowing on in the bond market. do you want exposure to the names or not >> you don't

there is some overlap. people worried about the economy will go into defensive industries like utilities, which do have higher dedividends so, there's a couple of effects going on but fundamentally the bond substitute stocks got over prasep priced when people were stretching for yields. stretching yield is one of the mistakes they make so, no, we would not be recommending people buy div -- high-dividend yielding stocks today because interest rates are going to keep going up >> it leaves people with what options? let's say i got out of high valuation. i raytried to go to safety and you're telling me they're still not safe so, where are they supposed to go cyclical >> yeah, nobody's going to do well focusing on the mnext coupl

of months when they're panicking and they are the market is crushing a stock considered economically sensitive. the market is baking in, in our opinion, close to a 75% chance of recession i will acknowledge it's close to 50/50. you have my list of the names. they're if wing to be great in the long run you can't try to trade this short term >> goldman's trading at less than book. several msge paramount lately and the success of "top gun. a couple of the nomsames you li are in the energy space. are these still stocks people can own if they have to chase what's already been a period of substantial returns and they have mow this political risk coming from washington

>> yeah, apache changed its name, and it's trading five times earnings people think there's go tag be a recession. and demand for oil will come down in the long run, it could be down 80 or 90. mosaic is the fertilier company. they increase their value in inflationary times and that's what obviously we have right now. and the market is assuming a recession. mohawk is trading to less than 10% earnings we think there might be a short-term demand. but longer term housing is very strong they're if we tag improve homes with better vinyl tile, hard woods and carpeting and mohawk is going to be fine in the long run. >> final comment as someone who has seen so many different fed and market cycles

and well aware of the risks they're running. would you like to see a half point hike air on the side of caution or a quote unquote surprise >> the fed is so behind the curve here they're doing the wrong thing. inflation is not here because we have an over heated economy. the economy got softer it declined. probably only up 1% in the second quarter it's too many dollars chasing too few goods. they am creased the money supply by 42%, which was insane the worst thing we can do is send the economy into a recession that's just going to be stagflation they're so far behind. i'm disappointed in the fed. >> doesn't matter what they do today. the goose is cooked? >> inflation is here and a 75-basis points isn't going to make a difference. putting the economy in a recession would put pressure downward on inflation. that's a big price to pay for their mistakes in the past

what they should do is taking cash out of the system instead they're cooing a tiny tightening of $15 billion on a $9 trillion balance sheet. they're looking at the wrong factor >> maybe you'd like to see them lean more to the balance side. thank you. good to see you today. coming up, it's not just the rate hike that could be more aggressive than expected one expects hawkish sentiment elsewhere. as we go to break, two big interviews coming up after the fed decision counsel director on closing bell at 3:00 p.m. then at 4:00 p.m. eastern on overtime, jeffrey gunnedlach is calling for a 200 basis points hike today that's the one with the amazing camera? yep! every business deserves it... like one's that re-opened! hi, we have an appointment. and every new business that just opened!

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we're three minutes away from the fed decision with major

firms like goldman, wells fargo and barclays all calling or expecting a 75 basis pointed hike today wells warning that tightening won't just come from a hike. and they're lacking for a meaningful shift joining me to discuss is chief economist, jay bryson. we forgot about the dots what are you looking for there >> the dots are very important because it's forward guidance. for it's what the feds are thinking in march was between 175 and two. a median dot and going to end up between 325 and 350. that implies another 175 basis points from here spread out over four meetings. that will be very key for our view and where the fed is going forward.

>> where are they going? are where are they going you think they're going to 4%? >> you could definitely see 4% does it happen this year you're going to see a 4% number early next year. again, right now the market is priced for say 375 at the end of the year the median dot goes to four and that's not our expectation i think that would be a very hawkish signal >> the last guest says he's a long-time investor says heed with prefer the fed to do more on the balance sheet or quantitative tightening side than interest rate hikes what would you prefer to see and what do you think trade offs are between each of those tools. >> the problem with the balance sheet is effects aren't understood with rate hikes we have a long period of rate hikes and cuts we eprovide how much effect that

has on the economy it's more unknown. could we see is a balance sheet run off today or increase in the run off today? yeah i don't think that's likely because the last meeting said here's our plan. we're going to stick tathis plan i don't think they're knowing to really surprise the market with the run off in the balance sheet. turring the press conference today, chair powell could elude to it that if a question comes up about that. >> there's recent research that said 2 trillion there of balance sheet tightening would be equivalent of a .3 to .9% rate hike in other words, it's not that much do you think that's broadly right that it doesn't pack as much of an interest rate snunch or could it? we've only been through this once before and that ended with the reapo crisis >> if you think about that range there, .3 to .9.

you're right but that's a pretty big range when you think about it. already there's significant amount of tightening in financial markets. credit spreads have widened. the stock market or most major stock embassies are in bear market territory these are signs of financial tightening already if you throw on top of nat an acceleration of the shrinkage of the balance sheet, you can have a lot of tightening whose effects are not well known >> is there any reason for the fed to go slowly as it raise ares from the current .75 to almost 1% range, which we can acknowledge is low for the economy, to something upward withes of 3%, maybe 4% what is the case for doing it 50 verses 75, verses 100 basis points at a time >> i think the case is -- the

way the fed thinks about it is the so-called neutral funds rate they need to get into a restrictive territory right now. some folks would say the faster you get back to neutral, the more you slow the economy, the more you can potentially take inflationary impulses out thch economy. you're going to end up with an ineven higher inflation rate we're go tag look like the 1970s again. and it was significant tightening that put us in a deep recession. if you can get in front of it right now, hopefully the recession isn't as deep as if kwou have to do a more tightening hater on. >> jeff says they should raise it to 3% today >> all due respect, i don't think that's go tag happen today

and i don't think you want to go that fast. but 75 sounds like the right clip right now and i think it will be interesting to see if they're talking about already in the pres conference, if they're talking about another 75 in july >> what is most important to listen for from the fed chair as he begins his presser? >> when he's talking to the press, he'll be speaking on behalf of the committee, not just himself if he comes out talking really hawkish, then that tells you the consensus on the committee is to continue to be hawkish, continue to raise at an aggressive pace the more hawkish language he uses tells me that's where the other members are right now. >> and real quickly. do they need the unemployment rate to go higher from here, basically e, to slow the labor market down to get a handle on inflation? >> so, that's the trick. how much higher does the rate have to go from here

it probably does need to go higher here to take some of those wage gains or decelerate some of the wage gains we've seen recently. >> jay with 13 minutes to go, we thank you for your time. we let you go. jay of wells fargo telling president biden they need to tell oil companies to brace the burden is there a ban on stock buybacks next - super excited to open up my diploma from southern new hampshire university.

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welcome back, everybody. nine minutes and change until the big fed decision on interest rates. that's at 2:00 p.m. eastern time and we get the projection or the dots we were talking about a moment ago then we have a half an hour break and that's when the press conference with jay powell begins it could be just as consequential and he'll lay out there the bank's future intention and goals when it comes to the infla antion and markets. let's take a look at the energy space where we're seeing wti crude down 1.7%, and the natural gasoline up, and keep an eye on

natural gas prices here up 5% today as we're seeing russia cut supplies to italy and germany through the pipeline and uk, gas prices are jumping over 30%. the european benchmark up about 30% as well. in the u.s. we are oversupplies and export facilities are shut down and our prices are up 5%. >> the dow is up 142 points and the s&p up 31 and the nasdaq up 173 into the meeting and we're coming off almost ten-week string of losses and there has been a significant correction into this event. the ten-year note 3.414% and the session high yesterday was around 3.48 if memory serves, not quite 3.5% and we're watching this in a couple of minutes' time and we will pick up jay powell after this quick break. stay with us

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♪ ♪ and welcome, everybody, to "power lunch." i'm tyler matheson along with kelly evans. the fed decision on interest rates just minutes away and will they hike by half a point and up three-quarters of a point and something the fed hasn't done in 28 years the central bank's response to surging inflation to impact every corner of the economy. frankly, kelly, for financial nerds like us, it doesn't get any bigger than this >> it is a biggie. here's a quick check on markets up to the event and the averages hanging on to gains and the dow is up 215 points and the s&p up 41 and the nasdaq is up 200 points and there's the ten-year, 3.4% >> let's welcome our pre-decision panel, david kelley with j.p. morgan asset management and john bellows and

we'll get to your decisions of what the fed could do and lend the voices of many others we've heard from today mona, i'll ask you how americans should feel. my wealth is down. i'm not as rich as i was three months ago p prices are up a lot and i'm spending more and they're talking about recession. can you make me feel better? >> it's not an easy time for most americans and most consumers broadly, not only in america broadly and globally, it's been an inflationary challenge and what i will say is you have to take a step back and in recent history since the last financial crisis since 2009, this market has been extremely resilient. on average it's been up 13% so yes, we are going through an economic cycle and any long term investor will tell you that market cycles and economic cycles are a natural part of

being an investor and yes, we are down 20% and what we will say is the good news is the market seems to have discounted a lot of economic pessimism here, and if we do look forward, we think we're in a later stage in this economic cycle and if we do get a downturn, we do expect it to be a prolonged or deep one by any means and the upside downside by any levels should give you comfort yes, painful time, but keep in mind you've had a good run and perhaps you're starting to think about coming out the other side here >> that's helpful. that's positive, mona. let us put you on the record that three-quarters of a point is where you are john bellows, where do you see the fed going? >> we think the fed will hike three-quarters of a point and perhaps guide to a similar size hike in july although i'm not sure that matters and their credibility is in question the bigger issue for investors is the risks around policy after that so september and beyond. we've been in an environment where it's been a string of hawkish surprises. i do think that going forward

the risks are more balanced. growth is decelerating as mona just mentioned yields are quite high right now and should we get a moderating inflation which we think is building on the data and we'll see much more balanced risks and we'll see a more hawkish fed by the end of the year. less hawkish into the year >> we've got one minute, david what do you think? i want to hear you talk about the fed's credibility and its reputation everybody says they were behind the curve. they got it wrong. how do they restore their credibility and reputation >> i think they have to be adults about this. i also expected they would go 75 basis points i think that's a mistake because if you look at the summary of economic projections they'll put out in a few minutes i think they'll show economic growth slowing toward the end of this year and next year i think they'll show inflation coming down anyway we have massive fiscal drag and the dollar is up 10% hurting exports and it is up 2.5% since

the start of the year hurting housing. this economy will slow and inflation will come down anyway and to restore the credibility, they'll be able to push back, and you have to hike, hike, hike to deal with inflation now and they'll take a long term view and inflation will come down anyway the goal here is to avoid pushing us into recession. >> i think that's a very interesting point. i want to come back to it. you're basically saying they'll get it wrong again meantime, let's go to steve liesman with the fed decision. >> 75 basis point, the federal reserve open market committee raising the funds rate by 75 basis points to a new target range of 1.5% to 1.75% first time they've had a rate increase since 1994. it plans to continue its plans to reduce the balance sheet as laid out in the prior month and anticipates additional increases in the funds rate. to wit, the new forecast from the federal market committee show that they see the rate outlook for 2022 at 3.4%