today's selloff in a cnbc special report. it is the fed factor, hosted by our own dominic chu. he has been out talking to these fed leaders all week long, that culminated with a speech today by the fed chair that culminated as very hawkish. tonight they're going to go through all of that. hope all of you have a good weekend. i will see you on the other side. that does it for us. fast money begins now. right now on fast, stocks hammered during a brutal friday selloff after the fed chair forcefully tells the market rates are headed higher and they are going to stay there until inflation is truly under control. should investors brace for a wave of selling in september? plus, crashing the consumer, crushing the consumer. it could be both. will the feds hiking bonanza put the brakes on a two year shopping spree from everything from electronics to cars to

yoga pants. later the crew conundrum. a slowing conundrum should push energy prices lower, but right now, charts are telling a different story. we will go inside the numbers straight ahead. i am courtney in this evening for melissa lee. on the desk tonight, tim. help us make sense of it all, tim. yes, we heard from jerome powell. hawkish stance. we are going to keep things in a certain way for a certain period of time, and before we get to you, i just want to go through sort of what we saw on wall street, tim, because i'm going to ask you to talk us through the reasoning. we started with this deep sea of red on wall street today. we saw the s&p 500, the dow, the naz back really all plunge, the nasdaq composite down about 4%. so tim, what was really the reason behind all of this?

i'm not trying to be glib. i'm thinking about it. we heard the chairman say things we have done so far don't seem to be working. we've got to stick with the plan until we start to see it pay off. why did that surprise us so much? >> look, the plan is to be at this longer maybe than the market was expecting. it's not the level of interest rates for the neutral raiders, but the duration of how long the fed is going to be fighting. all of the rhetoric that we had going into the meeting from other fed officials is very clear, and i will say this, said powell is probably the most criticized fed chairman we've had in terms of his communication with markets and that is something i actually think he was crystal clear on today. bottom line here is we digested a much more hawkish fed that i think the market wanted to pay attention to. the good news for equities is that the bond market was relatively well contained here but without question, the

expectation that the fed is data dependent, which means they don't have a plan in mind. they're going to follow the course of for the data leaves them. >> steve grasso, why did we see things accelerate loss lies into the close one the news came out this morning? did the wall of worry get higher going into the weekend? is it waiting for the monday morning quarterback notes? why did we all put a stop into the selling? >> all of that could be accurate. no one wants to go home long on friday. if you are week on a friday court, you don't want to go home long and risk those saturday -- that saturday and sunday before you get back at it on monday. you want to just cut your losses or just head yourself. so i think that is what you saw today, but to tim's. , we are going to see and mike santoli said this at the end of

the show. we are going to see another jobs data point. were going to see another cpi, and the problem with why the fed surprised the market today is that instead of looking for a plateau where the fed and all the representatives around the reserve are saying that they are going to stay at a certain rate, not indefinitely, but most of 2023. so, people are looking for a pivot, or at least an end to it, where you could say okay, we are going to get softer if we say x, y, or is he. what we are saying now s we -- it does not matter what it looks like. they're going to plateau the rate versus if it. >> it did not seem like powell was worried about the implications of easing too soon could do to the market. what did you read from what the chairman said today and the

markets reaction afterwards? >> i think chairman powell was very steadfast at making sure that he communicate headed to the market exactly what his intentions were. whether or not they are setting themselves up to pivot, and i think the last fed minutes, when they mentioned perhaps doing a bit too much tightening, the read there was okay, perhaps we are one step closer to actually pivoting and i think today we took the exact opposite read which is them saying we are going to reach a level and we are going to sustain that level. given that we are willing to do that, we want to make sure that we don't over tighten too quickly, because we are not looking to pivot. we are looking to stay and plateau at a sustained level, and i think that right there was frankly one of the big pivots again, not to be glib, that was really

there. i would also say just some of the rhetoric that was used today, i think was a bit more bearish. we used terms like pain. he talked about unemployment and wages. talk about households and businesses in the pain that would be there. he also said they were going to need to be there for a sustained level, for a sustained period, so when we are really making the decision between is a growth in his it tamping down inflation, i think he removed any shadow of a doubt that inflation is first, second, and third priority and if there are going to be some negative effects to doing so, he is willing to push through that. now let's bring in senior economics reporter steve leishman. he joins us from jackson hole, perhaps the most important man of the day next to jerome powell. steve, thanks for being here with us. there is no one better to you to talk to about this. words like pain.

how much pain, economically, is chair powell willing to take on to keep inflation lower? what level of joblessness? what level of depressed economic growth would be okay? >> i don't think we know. it is something were going to have to figure out over time but what is clear is a couple weeks ago at the press conference i asked chair powell, however session would change your policy, if at all. he didn't really answer the question. i asked him again and i think he answered it today, some level of detraction in the economy some level of rise in unemployment would not dissuade the fed from keeping it at a certain level. courtney, i've got to say i'm a little angry at the market today. i met it tim, bono, maybe grasso. i don't mean them specifically obviously, but what were you guys thinking? how much ted fed talk about higher for longer? how many times did the fed have

to say we are not going to cut them immediately the fed said blue in the market said yellow and then we have three guys here . parker and bostic, they're not hawks. these are some of the most dovish people out there telling me 3 1/2, 4%. no raise and then cut. we're going to hike and hold and we kept saying it. i let my story this morning with you can it expect powell to say higher for longer on the market -- i don't know who these guys that went along. i'm a little angry that folks did not protect themselves today and hear what people were saying, and decided to hear their own story or what they wanted to hear from the fed, even though the fed was not saying it. >> steve, you know, this is a market that has been inured on the fed always being them for them. i brought up at the top of the show, i commend powell on being very clear. this is a guy that has been criticized for sending mixed

messages. the pain part of this, my question comes from -- we did not really talk about the job market. >> tim, i'm not mad at you just to be clear. >> i appreciate that. we go too far back, steve, but the pain on wall street, this is why it is an important day and why i think there is a lot of anxiety. i think there needs to be a focus on the job market. that's going to be painful. we had a pce number that came in today that actually showed that labor income is actually growing and that you actually have strength at least in one of the most inflationary underlying and stickiest arts of the economy. >> yes, and that is important. powell's message so far has been we can kind of get away with this perhaps by reducing job openings, not necessarily actual jobs and he is kind of saying we may have to reduce actual jobs here. there is some question about how much unemployment has to

rise in order to solve the inflation problem. i have this crazy idea that putting people back to work may help solve the inflation problem because so many industries are short of workers. be that as it may, but the fed chairman is saying, a couple ways to think about this. you remember that old phrase, the beatings will continue until moral improves? rate hikes are going to continue until inflation improves and i think powell thought, i guess correctly, that there was some misunderstanding about where he stood. go back to that press conference. i'll tell you a little insight reporting story. when the press conferences over the reporters who were in the room looked at the market and saw that it was up i forget how many points, four or 500 points and there was this talk about pivot we all turned herself and said what did they hear that we did not here? we did not hear the pivot back then. there was this comment, and he said it again, that it may be appropriate at some time to slow the pace of rate increases. well, of course. that is really obvious. there never was any doubt about

that. they made you 75, they're going to have a 50. that does not mean they're going to stop the rate hikes. it does not mean they're going to stop cutting as soon as they hit a peak rate. >> steve, before we let you go, i know you are very busy preparing for your special, and forgive me if this seems like kind of a sophomore question, but why is cpe such an important data . removing food and energy, arts those two are the important pieces of inflation, things we can't avoid is consumers? if we are paying for that, it's going to depress what we are able to spend on other things. >> courtney, only graduate level questions, it seems to me. first of all, there is research that shows when you get rid of some of the noisy parts of the data, and there are different ways of doing this, removing food and energy is one way to

do it, is that you have a better guide for policy. if something goes like this every month or every couple of months, it is not a good way to set policy, which as you know, has a long and variable axis. the other aspect is the pce rather than the cpi has a different sort of configuration that is a little more stable, and less up-and-down than the cpa. that's why the gotha cpe. the question to ask yourself is okay, if oil is up 100 bucks one month and down 50 another month is should you be changing policy because of that, and the answer over time is no. you want to look at the core. one other thing is that is the thing that really spoke to the fed. it was not the high energy and food prices. it is when it bled into the core. we talked to georgia today. she said there is this that is

down and that that is down but it seems to still be widespread. until she sees several months of declining inflation will she be confident that they can reverse policy or stop the big rate hikes. >> perfect. thank you so much for spending time with us. we will see you at the top of the hour on the cnbc special, the fed factor. while i have the folks still here with me, let's trade this. >> i don't think steve took a poke at me, but i get what you're saying. i think what he is missing, though, is that traders act on whatever the market gives him that day around their core positions, and by the way, i heard harker say basically that they will stay at a certain level, 3 1/2%, and then they

will sit and wait to see if inflation drops, and then they can be more accommodative. i did not hear that they are going to stay that way and be robotic, or else they are running on a script and not running on data. i will just tie it up with this. no one is talking about quantitative tightening. again, we are doubling in september. there's going to be 100 billion rolling off, so that is tightening, as well. so, i think we will see 75 asis points in september, publicly create a little more volatility in the market and then i think you're going to see a little bit softer, not a pivot, but they will stay the course and we are going to have a nice rally going into j end. >> i hear you. i think powell wants us to stop saying pivot that his message was a little bit more clear today. coming up, a better read on the consumer when best buy reports earnings next week. later on, options action.

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welcome back to fast money. today, srt sinking 5 1/2% this week the dollar tree, vf corp. and pph to some of the names that lowered at least 7% and check out best buy, down 5% ahead of the report after tuesday after slashing outlook on weakening demand. they now expect same sales from a quarter to drop 13% from last year. have investments come down enough or is there more pain for the consumer not priced in? bond one, what you make of this? it was really a winner, a sort of the last man standing in this electronics space doing exactly what they do with the physical locations but now we

are in is tough time for discretionary spending particularly and i category like electronics that was called off last week by walmart and target and best buy, is there more pain for best buy? >> prior to today i would have said, against my better judgment, you might see a flip in consumer sentiment because there has been so much taken out the stock. they mentioned lower declining same-store sales. they did a very good job in trying to get out and messaging to the investor base. i think now, though, given that they have not liked as many as some of the others, this might be a place where people look to shore up capital and reduce exposure ahead of what looks like the more painful back half of the year. when you look at what they are really into, i think inventories in the inventory level has

heightened price point. if there are any write-downs there, or they're having to make promotional's to move inventory, all of those things could lead to inventory. i tend to be up a bit more cautious here. >> fundamentals are one thing, macroeconomic pressures, but also the way a company is run is important and best buy's management team has long been respected. give them any credit there? is there an attractive entry point for you here now? >> i love what they have done with their total tech offering other attempts to make there be some type of a subscription service. as a consumer, i am happy best buy is still in business. i think it's a great consumer experience. their staff knows what they are doing but that guy down to me is the first of more bad news to come. when we listen to target but specifically walmart talk about a merchandise shift, a lot of what best buy sells, walmart sells, and a lot of that shift i think we're going to see. it's going to be a great time

to buy a new 70 inch tv in the holiday season. i think they are going to be discounted significantly. stock definitely has been resilient at times, but again, if you listen to dollar tree and some of the impact on their gross margins and what we heard over the last couple of days, this is stock that had been significantly outperforming retail at the market, itself. >> okay, coming up, it was a rough day and week for the market. which should be your next move come monday morning? traders layout their playbooks u'r the week ahead. yore watching fast money lives. lives. we are back right after they stood with their 38 million members and said, "enough." and save americans money.

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welcome back to fast money. if you're just joining us, markets in freefall on wall street today after jerome powell said the central bank will not back off of its fight against rapid inflation. with more than 1000 points shaved off the dow today, how do you position yourself for monday? steve, did you make any moves here today? what would you expect o be doing first thing monday morning? >> i did not make any moves today. i didn't want to get sucked in. i was actually going to make a few sales on things that i still have profits in, and i wanted to buy some of the chinese related names, due to that regulatory ruling that we just saw, but let me give you more of a macro view. if you look at the low, we closed on the lows today, so you want to see them opening up. you do not want to see them come out too strong. you want to see them a little bit weak around the opening.

then you want to look at what happened today. the 50 day is 3996 and the s&p cash. keep an eye on that level. if we break that level, then we can go much lower, but i would look at today's low, so 4057 in the cash and the s&p and use that as your benchmarks. for tim, how about you? your advice for monday morning for people that look at the market today and feel a little spooked. >> it was a scary day, and what i say often during days like this is don't cut your flowers and keep your weeds. i think people tend to want to truck companies and be defensive end they are ones that have outperformed on the way down. i would look at your portfolio and assess for the duration and the portfolio is. understand where higher rates for longer are going to be something where i think you may want to be lightening up some exposure. high visible tech is under some pressure. i would be looking for places to be owning your goals and your

almanac amazon send your sites set up about 15% lower. >> i.t. sector was definitely the biggest liger. the nasdaq was the last one. quickly, bonawyn eison, what is your advice for traders monday morning? i think the playbook is a little bit different here. the consensus has been lower and the pain trend has been higher. that is why i think we have seen a lot of purchasing of loggers as traders and investors are trying to right size the returns. i would stay away from looking to buy the dip on migrants that we saw today. i would be more cautious there. >> okay, it is already time for the final trade. today's show just flew by. let's get started with steve grasso. >> as i alluded to, i would be a buyer of alibaba. the u.s. and china house finally reached some sort of

agreement on accounting that takes the cloud over those chinese related stock for being delisted. it is not completely gone, but seems like it's lifted. >> okay, bonawyn eison, what's your final trade? >> arkki would steer clear of right now. >> tim, final trade for you on this friday? >> sob if you look at the debt levels, this is a great opportitfous oniuny r peng. >> thank you for joining it. that does do it for fast money this evening.

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tonight on options action, the fed makes no bones about i .rates will continue to rise until inflation is under control, the markets with a sharp friday selloff, the dow closing down over 1000 points, the s&p 500 dropping over 3% and the nasdaq falling close to 4% on the day. ramifications set to reverberate through rate sensitive stocks like financials and real estate. we will drill down on those