trading at ten times earnings, a 3% dividend yield, margin of safety here. i think management's really focused on their businesses, and i like the stock >> okay. joe, his shot's frozen, but he's choosing cboe. you don't get joe, but you get the name, most important of all. i'll see everybody in overtime look forward to it the schexchange is now. >> thank you, scott. i am brian sullivan. here is what is ahead. it's fed decision. an hour from now, we'll decide if the fed goes three-fourths or maybe a full percentage point higher we'll have every angle covered ahead of that decision what means for the economy, for housing, for stocks, for your money. also, vladimir putin's latest threats as president biden speaks at the united nations. a look at the impact that is

having on the markets today. let us begin with dom chu and your markets an hour away. i know literally you didn't sleep last night >> i got like three hours in too much excitement about the fed day today, but if you look at the markets overall, this is very much like that wait and see, right we're seeing some fractional gains in the market. generally speaking, though, positive the dow industrials up about 100 points, 30,811 3075 is the last trade for the 9/11 similar percentage move for the nasdaq composite, up 50 points, 11,475 one place that's been a big place for investors, the bullish move we've seen for areas of the defense sector that's spending from the biggest defense contractors out there may be getting a boost as we see some of those tensions right now with russia and ukraine. and of course, the comments from president vladimir putin about now mobilization of some of those russian forces the first time they've done that

in some ways since world war ii. keep an eye on those defense contractor stocks. and if you want to check out one name that i can't show you right now, but that will eventually come on your screens at some point, it's got to be general mills. a consumer staples company the sector has been an outperformer so far this year. you and i know this. but what if i told you that general mills stock is up like 7% today after an earnings beat. revenues come in line with expectations, but it raises its full-year forecast, because it actually was able to raise prpric s, pass some of those along to the consumer and consumers were still able to pay it it raises its forecast, cites strong demand for everything from cereal to pet foods watch general mills shares brian, up 7% this is also a one-year chart. if you look at a three-year chart, it's even more impressive and i for the first time is going to do something i haven't done, put a big gold star next to this because this represents a record high in this market for general mills. back over to you >> you know, i guess everybody is always after their lucky

charms >> and cheerios and blue buffalo dog food >> and a bunch of yogurt who doesn't like yogurt? gold star. now to the big number of the day, 4%. that is the yield on the ten-year treasury note, crossing that key number for the first time since all the way back in 2007 why do we care let's go to rick santelli at the cme. what does this move in the two-year tell us and what does it mean? i know we know ten years are for mortgages. why does the two-year matter >> you have to remember, the ten-year is definitely a market-driven rate, as is the two-year, but a whole less market driven. a lot of central bank manipulation that's been going into interest rates since well before the 2007/2008 credit crisis they're tracking the federal reserve's ultimate overnight rate and fed fund futures and two-year note yields somewhat

jive, because fed fund futures are giving you a terminal rate of around 4.5% we crossed over 4% today i'm on the floor home of the vix. and it's guinn us a great lead-in to today's fed meeting a 24-hour vix was down a bit i would consider down a bit important on today and if you look at a two-week chart, it was the 13th of september we had that cpi number you could just see it right in that chart boom it popped up rather dramatically and if you go from the intraday to a daily chart, you could really see how cpi changed the whole tone of the volatility and what is referred to as the fear gauge, which is really option volatility if you open the chart up to the last fed meeting, which was july 26 and 27, you could see right after the meeting, we tapered off. we almost went flatline for a while. and then, boom, we started moving back up and if you look at the extremes of mid-june,

which, by the way, ten-year note yields, just two days ago, finally closed above that 3.48 june 14th high-yield close well, all of this chart correlates to those mid-june highs. whether it was boons, guilds, all sovereign peaked right in mid-june, and you could see it on the charts. what is it going to look like after 2:00 eastern today that's what these traders are all betting on, sully. back to you. >> very quickly, i'm old enough, rick, to remember one year ago i was looking at the fed dot plots, the summary of economic projections at this meeting a year ago not one fed member saw rates, the fed funds rate above 0.75% by the end of this year. with all due respect to the fed, they whiffed it. they were completely wrong at least the current projections. >> it's not about respect, it's about making money, sully. so what's the lesson that you learned from one year ago? that the fed and all central banks are trying hard, but they

really have no idea where markets, inflation, or rates are going to be one year from now. they do their best on the lead-in to it, but i think that's a great point you just made >> i'm not saying that i could do any better. i'm just saying, let's be clear, sometimes projections are not even close to being reality. thank you, rick. so we are less than an hour away for the decision on rates. the fed widely expected to hike rates by 75 basis points, aka, three-fourths of 1% for the third consecutive meeting subis the fed being too aggressive joining us now are steven whiting, and head of u.s. rate strategies i'll start with you. i'm not dunking on the fed they're much smarter than i am i could never do their job it's hard. a lot of variables >> i'm just pointing out that what they said was going to be happening right now one year ago couldn't have been more off. >> that's exactly it

again, what we will be thinking about the economy at this time next year is going to be very different. where we were a year ago, expecting qt to continue, all of these things, you have to realize if you go in 75 basis point increments, they're delivering a full year of monetary tightening in a period of four months if you overmedicate the patient and don't wait for how long this dose it takes to get through the to the economy, you are at risk of creating more damage than you intend it's next year's inflation rate that we'll see that. we could give you data points and show what is happening that is not obvious today where do you see interest rates

one year from now? that's a very hard question to answer, given how, as you pointed out, just a year ago, two-year yields were around 20 basis points last year this time so we're looking at a precipitous rise in yield. but i think i agree with the premise that steve was laying out earlier, which is that i think that the fed is definitely keen on front-loading rate hikes, getting rates to 4% by the end of the year, maybe peak fed funds rate at 4.5% broadly speaking, with i think that as we all know, policy works with long and variable lags they're eager to get rates out to 4% and beyond, but they're going to really need to see the impact broadly speaking of higher policy rates. and you're already starting to see in employment, but you start to see headlines of people laying off workers and seeing that on other metrics on the earnings -- i'm sorry, on the --

on forward guidance from the fedexes of the world so there's still, you know, there's definitely some slowing down in some of the metrics, but at the end, it's too early the economy is still pretty strong the trajectory for rates is probably higher over the near-term. >> would you agree with that, steven probably higher? >> i think it is it's how it's operated probably moving up rapidly, will mean that we will not sustain as higher rates as we would get if they were going gradually, if they were allowing the economy to adjust to it. whether that's good news or bad news for you, that's to be considered but just giving a concrete example for everyone we have had the monthly pace of new home sales from the end of 2020 to now, it's fallen 51% what are construction outlets? what are housing completions minus 2% why? because it takes 6 to 12 months to plan and build a house. the construction base is based on where interest rates were, what the sales pace was when it

was higher and rates lower construction employment is at an all-time high, trying to complete these houses. we're going to see very large, probably double-digit drops in construction-related employment in the coming year and it's pretty obviously and this is going to spread more broadly to the economy it's just an easier example of interest rate sensitivity. so in the coming year, when employment falls, the fed will react to that. and they have and they have even back in the days of paul volcker. >> i just wonder if they're reacting too aggressively or not aggressively enough? because they increase money supply by 40% in the last two years. they drop rates to basically zero in their defense, again, we didn't know what was going to happen with covid and the economies, but pretty much everybody by the middle of last year realized that a lot of parts of the economy were stronger, you know, consumer spending, everyone's buying a car or fixing up their house in your mind, if the fed made a mistake, what would be the mistake that they made >> well, the mistake is that

they kept purchasing assets well into the middle of next year and they were a little bit late, i would say, on starting to hike rates. because they were very clear signs as early as august of last year that inflation was going to run a lot hotter than what they had penciled in. but it took them a while to shift away from their transitory narrative, and sort of switch to a much more hawkish tone and now that they are, they're really starting to catch up and ramp up the pace of rate hikes and now we have to wait to see what the impact of higher policy is on the broader economy. >> and i think we found out that the word transitory should probably be removed from the lexicon going forward. steven whiting, thank you both very much. i know you've got the fed meeting. we'll let you actually do your job. meeantime, this is a huge story, folks i know we're talking a lot about the fed, but russian president vladimir putin is doubling down on the war in ukraine,

announcing that he is mobilizing hundreds of thousands more troops in an effort to gain more ground as the conflict enters its seventh straight month here's what president biden had to say earlier today in his united nations speech. >> calling up more soldiers to join the fight and the kremlin is organizing a sham referendum to try to annex parts of ukraine in an extremely significant violation of the u.n. charter. the world should see these outrageous acts for what they are. this war is about extinguishing ukraine's right to exist as a state, plain and simple. >> scary stuff it also has big implications for the energy market as the world grapples with supply shortages for crude oil and natural gas, all amid the russian oil embargo. it matters a lot for food, by the way. for more on what this all means, welcome in cnbc's contributor,

joined by admiral james stavridis, former supreme allied commander of nato. i'll start with you. i know you're not a markets guy, but i am shocked a little bit at the lack of reaction by the global and united states stock markets when i hear putin say, fight to the death and imply the possibility of a nuclear attack. >> i think you've got to take that very seriously. now, let's put it in perspective, however i think it's unlikely that putin would actually reach for that nuclear weapon he realizes that doing so, even a tactical nuclear weapon, would simply drive away the enormous tranche of swing votes, if you will, in the global south. nations he wants to keep at least neutral. nigeria, south africa, brazil,

india. all of them would depart the vladimir putin pattern if he used a nuclear weapon. so i'm more focused on the mobilization of 300,000 troops i think that's a very significant step it smacks of desperation it will be a very hard lift to get all of them into fighting f form but we ought to take very seriously what we're hearing from putin >> and it's tough, halima, because you know the russian troops are getting decimated, they're being run off, many apparently are rertreating, they're overturneding, it's putin's humiliation, but isn't that where danger zone is? >> i think that's exactly the concern that a cornered putin is a very dangerous putin and we should prepare for potentially very destabilizing escalatory moves from this regime you've pointed out that the market is not reacting to this they're more concerned about powell than putin at the moment. but i think we should really brace for further economic weaponization. he's already turned off the taps

on natural gas the question is does he potentially start pulling back on oil supplies into europe in advance of this december 5th sanction start date. i think there are many more cards that putin can play and i'm not sure he's done by any means on the economic front. >> helima, how long can he hold out? putin does not hold all the cards here with energy >> when we think about oil, i would say, yes, it is the main revenue earner, but there's a volume price dynamic it's not like svladimir putin would go to zero, but he's already facing the prospect of being locked out of europe by december 5th all he needs to do is start pulling back early essentially saying to europe, you're going to cut me off on december 5th i'm going to cut you off now and so, again, i think we should prepare for a potential reduction in russian oil volumes. that does not mean he goes to zero, but he certainly can raise the stakes in this economic game

of brinksmanship >> admiral stavridis, i guess the most depressing part of this from a global perspective, being incredibly depressing for ukrainians, by the way, many poor russian soldiers, farm kids, many from the eastern, more asian side, it almost seems like genocide, by putin, at this point, sending these hapless kids to be slaughtered in ukraine. they don't want to be there. and you wonder if this is going to happen with the 300,000 they want to call up. no one's talking about any kind of an exit ramp, at all. how do we resolve this without this dragging on for three or four years >> i'll give you a short three-word answer, which is, i don't know nobody knows but i'll give you a base case of what could happen here if you think about this in private equity terms, here are two companies that both have f burn rates that are very high. putin's burn rate is people. that's why he's mobilizing 300,000. on the other side, zelenskyy's

burn rate is the patience and the willingness of the west to finance this those are two high burn rates. i think in six toeight months, both sides are going to feel the need to come to some kind of negotiation. boy, let's hope so >> is there a chance europe tries to throw putin, and by the way, themselves an olive branch to delay the sanctions, just to give a little wiggle room. >> this is a key question to watch. when you talk about to european leaders, they continue to insist that december 5th sanctions are locked and loaded. and so you're not just going to get an embargo, but the ban on providing services to move those cargos to third countries. hence why everyone is working on this price cap plan to provide some type of release valve that would potentially allow those barrels to move to asia at a discount if that price cap plan doesn't

launch and the december 5 sanctions come into force, that's a major multi-million-barrel disruption. it's an incredibly important story. >> scary stuff, but we're glad you're on it helima croft, admiral stavridis, thank you both on deck, home buyers are higher on new data we'll break down the numbers and what today's fed decision means for your mortgage and your money. and if you're looking for some ways to put money to work in a rising rate environment, our trader has a couple of names, including this megacap name that just hit a new 52-week low. big buying opportunity we'll talk about it. less than 42 minutes until the fed decision on rates. you know they're going to raise rates. how high they going to go? well, we've got to stay tuned to find out

all right. finally a little good news for home buyers as prices are beginning to fall. but how low could they go? and what impact could today's fed decision have on the market. than smaller homes sell in the fall, skewing prices lower

this year, though, mortgage rates shot up in june, crushing affordability. so prices aren't following the usual patterns the median price in august was $389,500 that was an increase of 7.7% from august of last year but if you look at prices from june to august, they're down 6%. prices usually fall during this time, but historically they only fall about 2%. so we're now seeing three times the usual price drop still, potential buyers at an open house in phoenix says will prices may be a little bit better, they're not falling enough to make up for these sharply higher interest rates. >> one of the challenges for us is we currently have an interest rate of 2.875%, so the idea of getting a bigger house is not particularly appealing >> and you can see it in the mortgage applications to buy a home last week, they were down 30%, compared to the same week a year ago, suggesting that home sales

will continue to drop. they've now fallen for seven straight months. brian? >> all right, diana olick, thank you very much. slipping home sales are signaling a slowdown, she sells seashells by the seashore. 30 fixed rate marge hovering, that is up from 3% in the beginning of the year. mortgage rates have doubled in nine months. and in just 40 minutes, the fed is poised to another rate hike, that rates are far more important to the housing market than the stock market. the point we made, george, welcome, was that we're the stock market, but it's a lot more important than the stock market is. things are nervous right now in fact, what we're seeing is a

housing market skating on a knife's edge, trying to determine where the economy more importantly is going to your earlier point and diana's point, rates are up over 300 basis points, what that really means for today's buyer of a medium-priced home, their monthly mortgage payment is 66% higher than it was a year ago. you put that in perspective with prices up 14%, at least listing prices on realtor.com, rent's up 12%. inflation up 8.3%. that interest rate impact on mortgage payments, and most americans buy their homes with a loan really is tremendous. so in a sense, it's not surprising that we're seeing the sharp pullback in demand furthermore, what's really challenging, while homeowners brought more homes to market this summer, we saw that may/june period, a lot of homeowners tried to capitalize on record high prices, and ready to move on, beyond the pandemic. a lot of them seem to have incorporated this fear that they must have missed the peak, because over the last two months on realtor.com data, we've been

seeing new listings pull back. obviously, price cuts, i think, are having also an important, you know, component in the market 20% on listings, on realtor.com, are seeing price reductions. it's a level we haven't seen since 2017, when the market was a more -- was a lot more balanced so clearly, we are in a transition period towards a more balanced market. the question is, with the fed expected to make at least a 75 basis point hike today, are we going to see rates move even higher where already some rates of 6.5%, are moving past 7%. i think in the short-term, yes, upward pressure is absolutely there. >> you said it, not me, 7% is very likely. i'll butcher the number, but i remember it being directionally correct. correct me if i'm wrong, georgia. that every home sold puts something like $50,000 into the

economy. whether it's the real estate agent's commission, the buyer buying a new couch, painting the home, paying the plumber, whatever it might be so if we see a downturn in transaction volume, it's got to make a hit on the broader economy. >> it absolutely does, paubrian, that's the real concern. we're seeing the impact at the local level. the multiplier impact from the home purchase issignificant an the sharp pullback in housing so far this year is absolutely being felt real estate agents and insurers, mortgage lenders, they're going to be laying people off. my big concern is the broader corporate landscape might react to this monetary tightening a lot more and we might see an increase in layoffs, which could actually put obviously consumers even more under pressure their budgets are already being squeezed from multiple directions, so the threat of

layoffs is enough to potentially pull back on spending, especially as we head towards the tail end of this year and the traditional holiday retail season, which is so critical for many, many retail companies. >> realtor.com senior economist, very interesting and important time in maybe america's most important market, real estate. george, thank you. all right, coming up, the heads of the seven biggest banks are on capitol hill, they're getting grilled, but they're also talking about inflation, the state of the economy we're going to bring you the key headlines and a look at whether they could face stricter regulation from congress that's next. markets up a little bit. fed meeting, 33 minutes. we're back right after this.

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we call it the data bank let's get to the fed numbers, the market numbers, there is, you might have heard about this federal reserve meeting in 20 minutes. i saw tyler mathisen doing push-ups for this fed meeting. ahead of it, the dow industrial average up, let's check some of the sectors ahead of that meeting. sta staples, the sector, not the store. communication services of which facebook/meta is the biggest and most terrible performer is on the downside travel and leisure are among the worst performers in the s&p 500, las vegas sands, royal caribbean, marriott, hilton, down more than 3% and the nasdaq names are getting hit the hard e est. 5.17%. paul amman that's something for paul. he's one of our producers. we're also down about 4% on most of the other names as well

he's done with the push-ups, to the aforementioned tyler mathisen >> i'm going to go into a meditative state new york attorney general latisha james is suing donald trump, if you haven't heard. his company and three of his children for fraud she seeks $250 million in fines and pans on trump and his children from running companies in new york. >> the complaint demonstrates that donald trump false ly inflated his net worth by billions of dollars to unjustly enrich himself and to cheat the sy system, thereby cheating all of us >> a spokesman for the trump organization slams the new york suit as politically motivated and that it, quote, has nothing to do with the facts former president trump making his own response on his truth social media platform. he calls the suit another witch hunt and calls james should be focusing on crime and murder

rates in new york city on the news with shepard smith tonight, putin's latest escalation of the war in ukraine. and how western allies are likely to ramp up their response that's tonight at 7:00 eastern >> still ahead, the countdown to the fed continues. a rate hike is widely expected, could get a half, a full percent, could get more. either way, we'll look at three ways to play rising rates. that is next and all throughout hispanic heritage month, we are celebrating more cnbc teammate and contributors here's my friend, diane >> as latina, it's very important for me to be proud of my heritage and be proud of who i am we are uniquely strong and we need to be proud of that and showcase our strengths in the workplace and at home, from my own upbringing, having to work in my father's tortillary and learning how to understand about

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all right.

welcome back by the way, thanks to everybody across america watching, listening, and maybe having a sausage boat, and i don't know, in iron mountain michigan right now. thanks for watching. we are less than half an hour from the federal reserve decision they are widely expected to raise rates and probably indicate they're going to raise rates again. which all begs the question, what does that mean? what do i do new street adviser ceo and a cnbc contributor i mean, i'm not going to ask how old you are, delano, but it's been a long time since weefb in a raising rate environment there's a lot of people on wall street that have never invested, managed money, or worked in a rising rate environment. even i was 4 years old, kind of, when that happened what's your best advice right now? >> best advice, brian. first, i want to know how much push-ups did tyler do? because i'm actually worried that i would not able to beat him in a competition >> like the fed, he did 0.75 push-ups >> 0.75, all right

hopefully i can beat him there i think there's a lot of things that, you know, younger investors, everyone is looking to do in this range. now clients are asking, saying, when will equities ramp up again. i have always pointed to 2023. i know some people think we'll have a ramp-up again this year but a lot of it is actually on the fed's decisions and if that dot plot is looking towards 2023 you can look at the growth in large cap names. such as microsoft, we've always talked about microsoft and a apple, a lot of people have pure play and look at the banks, they seem to perform well in the raising rate environment and you can look at other areas, too dividend players, utilityies an

health care not far behind and consumer staples, that you were talking about a little bit ago those are the first two areas that you want to look at for investors. and of course, those that don't want to stomach some volatility, we've been bouncing around the rates of the s&p for a little bit. they can be in the cash and in bonds, but there are three ways for people to play right now >> timeline's got to be a huge part of this if i'm investing for next year, it's a totally different story >> 100%. and the timeline is a big thing. i always point to longer, but there are people that have short-term portfolios, where i'm using more short-term moves. and if you look at what we've done, the mid-june low, and we usually kind of bounce after the fed decision, there's a pullback in the commentary, you'll see a little bit of a bounce today you have to play your timeline for the shorter-term investors, you'll bounce around that range

and have resistance around 3,700, but in the long-term, for people that are investing for the long-term, whether it's for their kids or for themselves, there is going to be volatility, but it could clear up no six to eight months when we have nor clarity on inflation potentially rolling over and maybe the fed changing course a little bit >> and we're talking about the fed all day and i get it, but vladimir putin is talking about like tripling the number of soldiers in ukraine, he's talking about nuclear war. he's talking about fighting to the death. i don't -- i mean, hopefully somebody just going to take him out, if you know what i mean but i'm just worried about the world right now. the fed is one thing, a ground war in europe may be a whole different thing. >> 100%. and, you know, for us, for investors the last two, three years, you had a litany of things we had, obviously, supply chain issues, we have geopolitical issues so we've seen is gambit. and i think what you have to point to is we've hopefully stronger magic has been able to

see these things and make adjustments, similar to playing football halftime adjustments and they're actually able to get through these things you've seen the worst of this, even if things are wrapping up hopefully we've seen the worst and we're able to get through it execution is important, cash flow is important for a lot of these companies, and you want to be in those companies. >> microsoft, gulf coast my guess is those two companies will be here in five years just wild speculation on my part >> a pretty good guess >> pretty good guess >> thank you let you get back to the push-ups still ahead, we are about 20 minutes away from the fed rate hike will it be full point? maybe they'll cut rates. one economist says it is way too early for any kind of pivot dovish just want to show you shares of dxc technologies they were briefly halted they have just resumed trading the company seem to be tapping advisers after some takeover interests, dxctechnologies up 5.5% ghafr isk e up and we're bac rit teth our clients come to us with complicated situations

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because time marches on, we're now less than 20 minutes from the fed rate decision and while a 75 basis point hike is basically baked in at this point, investors are also keenly watching economic projections for the next few quarters, so-called dot plots. although not an official forecast, it gives us a peek into the fed's mentality and potential of future rate hikes joining us now is annetteta marcow ska with jeffries i was talking at the top of the show, i don't know if you caught it, i was looking at the dot plots from september 21, last one year ago man, they were wildly off where we are now not one fed member saw rates above 0.75 at this point last year so how much faith do we have in the fed forecasts this time around? >> that's a good point and it's sort of why i made the

point that i don't see much value, certainly beyond next year, but i sort of see the sep as the floor, the minimum level of rates, where risks probably skewed to the upside so i expect the median dot next year to basically move in line with the markets, come in about 440, which is what was implied by the forward curve late last week and i would say that the risks are still that they would have to continue to revise them higher >> how much higher could they go before the economy buckles which i think is what they want, to a point it's the only way you're going to bring down inflation, is by slowing down demand, right >> absolutely. and the problem for the fed is not just that inflation surprised on the upside, was when you look at the leading indicators of inflation, what do we immediate to see to have some confidence that inflation is on the right track, you need to see some softening in the labor market, which we haven't seen.

initial jobless claims last week on a nonseasonally adjusted basis hit the lowest level since 1969 so then you look at the leading indicators of employment, job openings they haven't even begun to roll over they actually ticked up in july, as soon as energy prices came down and then you look at the leading indicator of labor demand and job openings, which to me is profit margins, and they have not even begun to roll over. so there's really nothing to point to at this point, that suggests that inflation is on the right track. so that's why i think that risks are still skewed to the upside for rates. and until we see evidence that margins are starting to compress, that job openings are coming down, it's really going to be hard for the fed to pause. >> i just wonder how much the statement going to change. everything goes through the old statement, the new statement, cross out the old words, add the new words. what are you -- what's key to the language from the fed? >> so the last statements

started with a pretty downbeat statement. since the last statement, things have actually gotten better. growth momentum has picked up, even sentiment has picked up and i think gdp is on track to accelerate pretty meaningfully in the third quarter they have to acknowledge that activity is improving, sort of moving in the wrong direction. i think the inflation language will be interesting. there's a good chance that they take out the reference to energy prices, pressuring inflation higher and i actually think that they might acknowledge now that inflation is largely demand driven, as opposed to supply chain driven i think if you look at the latest round of cpi data, we actually saw an acceleration in core goods inflation so i think that puts in question this assumption that a lot of economists have been making that supply chain pressures are easing and inflation is going to ease

retailers are still raising prices aggressively, simply because they can, because consumer demand is too strong. >> annetteta marcowski, appreciate your views. if you see that rich handler guy, tell him to get to work still ahead, diamond, fraser, moynihan, the ceos of the street's biggest banks started their first day of capitol hill testimony we'll have the headlines, coming up we'll take a look at these markets and key-moving stocks. financials are mixed fed, 13 minutes away stick around

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welcome back the ceos of seven major banks testifying in front of the house financial services committee leslie picker has had the moderating that hearing. joins us now you're waiting, bated breath. >> the candy that you got me to keep my sugar and energy levels high certainly has been working. >> is it working how many are left? >> not many left, but i did share with my producer, just to be fair. >> okay. >> but to your point, this hearing is about to enter its fifth hour now

the lawmakers currently on recess should reconvene shortly, but so far much of the questioning of the country's seven largest consumer facing ceos involve the state of the economy. wells fargo ceo charlie scharff said the firm plans to retreat from its mortgage business. >> we do operate within businesses that are susceptible to market conditions, volumes go up and volumes go down the changes that we've seen in the mortgage business are the most significant changes we've seen in the shortest amount of time, given the moving rates, and so we, like all other mortgage companies, have had to take a look at our own infrastructure and ensure that it's sized properly. >> and jpmorgan ceo jamie dimon gave his updated take on the state of the u.s. economy saying, quote, we are paying the price of too much fiscal monetary stimulus. >> i think the sooner that the federal reserve gets their hand around inflation so we avoid

stagflation, that is the worst outcome sin flakes with no growth, and unemployment and that hurts the most people and the most businesses, et cetera, and, second, to make sure that a secure energy policy so that oil prices don't skyrocket energy is precarious if we see it at 150 we'll see a bubble recession. >> in his prepared testimony he said the upward to jectry of american capital requirements on the fortified largest banks is itself becoming a significant economic risk because underrepresentative capital requirements erode paining's ability to meet customer needs brian. >> i mean, the comments 150 on oil, global recession. i mean, he doesn't mince words, dimon. >> he did earlier speak to kind of the chance of a soft landing. he said there is a small chance that we do have a soft landing while also noting that we have some sort of mild recession and a chance we have a more severe recession. he didn't put numbers on those probability weightings, but it does appear that at least kind

of relative speaking he puts the smaller probability on that soft landing at this point in time. >> leslie picker, save a couple sour patch kids for me. >> you better hurry. >> good grief. thank you. that does it for us on "the exchange." "power lunch" and cnbc picking up coverage of the big fed rate call, fed decision and rate outlook next

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and you can find her, and millions of other talented pros, right now on upwork.com all right. welcome, everybody, to "power lunch. i'm tyler mathisen along with seema mody weary just minutes away from the release of the fed decision on interest rates the central bank expected to deliver now its third straight three-quarters of a percentage point hike to fight inflation. >> we are watching the markets very closely stocks ahead of the decision are losing steam the dow is currently up about 152 points s&p 500 rising 25, nasdaq composite still holding on to a gain of .7 of 1%

the bond market clearly and focused. the yield on the ten-year treasury note touching 4%. >> we've got about four minutes until the news comes out meantime, let's welcome david kelly, chief global strategist at jpmorgan asset strategist and k.d. nixon with asset trust wealth management and the manager at morgan stanley investment managers. a lot of brain power here. david kelly, i remember when we began this cycle, forget whether it was april or may, and you said something the typical problem with fed policy under these circumstances is they start too late, they go too high and then stay there too long is that still your fear? >> yeah, absolutely. the fed i think will raise rates 75 basis points and i think in his comments chairman powell is still going to sound very hawkish and pave the way for another 75-basis point hike this economy is slowing down to a

crawl. inflation is going to roll over, maybe not as fast as the fed would like, but i think the fedded is in grave danger tipping this economy into recession by being more hawkish than they need to be right now. >> jim, do you agree >> i think david brings up some really good points the thing is that the fed is behind the curve and that, you know, we all know that monetary policy works with a lag and we have to know -- have to try to figure out when they are going too far, but right now we see inflation pressures as welly topping but also broadening out, so i think they have a lot more work to do and are very likely to sound hawkish and probably signal another 75-basis point move again at the next meeting. >> katie, the rapid rise of the two-year note above 4% what does this tell you about how investors are positioned ahead of the decision? >> investors are expecting 75 basis points, and i think investors are expecting the kind of scenario outlined by the prior two guest. the fed is going to hike further than we thought and will stay

there longer than we thought as well so investors are positioning for that, but what you see in the yield curve is interesting is investors are also coming around to the fact that this is going to slow down the economy, so you've got this inversion. you've got this problem in the yield curve that's reflecting a lot of uncertainty about the economic outlook, so we're going have to deal with that next year. >> jim, i'm going to come back to you, because david is worried that the fed may go too far and stay there too long and really damage the economy you seem to have a more nuanced view of that i've got 45 seconds. explain why you are less worried about the economy seemingly than david is, quickly. >> well, i think that we're likely to have a mild recession. there's no question about that it's just that the idea that the labor market is as strong as it is, it's very hard to have a deep retractive recession when the labor market is so strong. it's not that the fed won't hike rates for too far and keep them there too long, they probably will it's a question of how much of an impact does that have on the

broader economy and how much of a recession most likely does that cause and how deep will that recession actually be, and i'm in the camp that it might be a little more on the mild side, even if we have one. >> right well are in a complicated time, both in terms of the economy and in terms of geopolitics and the rest we've got about ten seconds now until we can go to steve liesman for the news, and let's do that right now. >> reporter: the federal reserve raising interest rates by three-quarters of a percentage point to a new range of 3.15%, the highest rate since 2008. ongoing increases will likely be appropriate in the funds rate and they say inflation remains elevated it's sharply raised. the median forecast of a federal reserve visual sharply raising the outlook for the funds rates for this year to 4.4% from 3.4%, so a full percentage point by the way, that is a little higher than the market was going into this meeting here for 2023