numbers all the time, so what do you do to relieve the stress other than interviews like this this >> you know, the usual things. i read light fiction, detective and spy fiction, i exercise, i like to ride my bike, i like to play music, my guitar. >> is riding a bike safe >> it's safe if you stay on the bike [ laughter ] and that's what i try to do. >> you still play the guitar >> i do, i do. >> your hair is awfully short for playing the guitar did you have longer hair when you were younger >> it's too gray, too. >> let me ask you about the issue of what it's like to be chairman of the fed. you can't go have regular friendship kind of dinners or meetings, people treat you much differently than they used to, right? when you go to a restaurant, are people listening to what you're saying or something like that?

>> i've always thought that my jokes were funny, david. but, no, it's -- i've never been a public figure before like this, and it's very different. but you know, it's a great honor to serve but you go to public places, you have to be careful about -- >> again, does the president of the united states ever call you with any advice? did president trump or president biden ever call you? >> i think it's a matter of public record that president trump did used to call me from time to time >> what did he call you? [ laughter ] >> no, i haven't had that kind of -- i haven't gotten any calls from joe biden >> so the biggest challenge you have now is being able to keep a straight face, not telling people what you're going to do in the future, and look at the data, then come up with the right solution, right? >> that's mostly it. i think the biggest challenge we face at the fed is completing

the process of getting inflation down to 2% what i want to point out is that we're seeing disinflation in the good sector. we expect to see it in the housing services sector. and that's -- these are the three parts of the core pce inflation index. there's 56% of the economy, which is the rest of the services sector, the biggest part, obviously. and we're not seeing disinflationary yet. that will take some time we think we're going to need to keep rates at a restrictive level for a period of time before that comes down >> when you made your speech the other day when you talked about the fed discount rate, you used the word "disinflation" 11 times, not that i'm counting, but you were saying disinflation is beginning to appear would you use that word 11 times again with this jobs report, or less inclined to use that word so much? >> i might use the -- i might say -- i would certainly use the

word disinflation, yes, which means declining inflation. and i would call it declining inflation, too >> and today, what about the total debt of the united states, which produces some inflation, are you worried about the total indebtedness of the united states producing inflation or you don't think that's a big problem? >> it's not the level of debt. the thing i would say about the level of debt, first of all, it's not the fed's job, but i would say that we're on an unsustainable fiscal path at the federal government level that's been the case for some time, and it is something we will have to deal with. better to deal with it sooner rather than later. >> many of your predecessors were economists, you're trained as a lawyer. so they spoke in what i call fed speak, which is to say incomprehensible economic language, which was done intentionally. you tend to speak in english is that a plus when you deal with members of congress so they

can understand what you are saying >> i like to think so. i've made it a priority to engage a lot with congress in our system with government, our accountability is to the legislature. it's to the senate and house, and the senate and banking and house management and services committee. it's important to explain what we are doing and listen to their concerns and share with them how we're thinking about things. i think they appreciate that we have this precious independence we can't be removed from office. we serve these long-terms. the other side has to be accountability the way for us to get accountability is to beas transparent as possible and try to reach the people of the united states through their elected representatives. so this is a very high priority, and we'll keep doing this. >> when you testify in front of congress, how much time does it take to prepare for that is that a one-hour preparation session, a one-week session in >> these are supposed to be

monetary policy hearings under the humphrey hawkins act they're on any political issue so it's a poetic stance if you have to prepare for everything that the fed is involved in, and many things the fed is not involved in. so it's a lot of preparation >> when you get questions from some members, you have to bite your tongue and wonder why are you asking a question like that? >> never happens [ laughter ] >> okay, good. today, as you look at the country's economy, what is the biggest worry you have about inflation? is it just that the fiscal policy is not completely under control? what is your biggest worry about inflation today? >> well, it's kind of what i was saying earlier, which is we're just at the beginning of this process, right so we need that process to continue the whole thing began, inflation began with people not being able to buy services, instead buying goods, and global supply chains

collapsing so you couldn't get goods and prices went up but that is now starting to get better as supply chains are improving, as people are rotating their purchases you move on, though. we're not seeing it in housing service, which is rent or the imputed cost of house ownership. we need that to happen that's another big part of the economy. it should come in the second half of this year. then the biggest piece of it, and what i worry about the most, when are we going to see disinflation or declining inflation in core services the last thing i worry about is just another event it's a risky world out there, the war in ukraine, the reopening of china those are things that can affect our economy and path of inflation. >> so the balloon was not your worry? >> it's not within our ambit >> so today, the federal reserve

gets data from all over the country. are you convinced you get the best data you get, or do you think it's in the as modern as what wall street gets? >> so most of the data that we get are just the same -- you know, we don't collect the data on unemployment, inflation or most things. most of that is just government data, and a lot of that is very high quality the labor market data is very high quality what we get which is better and different from everybody else is what i mentioned earlier, that is the reserve banks putting together the beige -- not the beige book, the -- yeah, putting together the beige book, and also coming in and sharing the anecdotes and what they're hearing, what's happening. each district is different agriculture and energy districts, so that i think -- our anecdotal and just the haul of information we get through

that network is -- i don't think anybody else has that. >> so do you consult regularly with some of your predecessors one is secretary of the treasury now, but ben bernanke, for example? >> i do, i also talk to secretary yellen, i still talk to alan greenspan now and again. >> when you are dealing with your colleagues, and you disagree with them, do you say i'm the chairman of the fed, i have to make the final decision and this is what we should do or you don't quite do it that way >> it's a process of reaching agreement. i hear what people have to say i tell them what i think, and then i'm the one who has to bring a proposal in front of the full committee, not just the board, on monetary policy. and it works we have to reach an agreement, and we get to a place -- i think you can tell today we are blessed with the diversity of

perspectives with 19 people at the foc. but we have a very strong commitment to getting inflation down >> so in some parts of washington, people say if you give me this, i'll give you that, you never do that with the fed when you are come kg up with a decision, i'll do what you want if you do what i want, that doesn't happen >> no, you mean, like a better office or something like that? >> something like, i'll say what you say if you say what i want you to say >> no, doesn't happen. >> if you want to talk to members of the federal reserve board, do you go to their office or do they come to your office >> i like to do both i really don't like too sit in my office all day and just have people come to see me. i like to barge in on people i think it's much better to get up and walk around and see people >> the fed has been pretty good at avoiding leaks of its decisions. how do you do that most people in washington are not so good at that.

how do you avoid leaks >> we have very strict rules around confidentiality we public these things internally, the memos and the teal book and all that the other thing to remember, we're not trying to hide our decisions from the public. in the modern -- in modern monetary policy, we want the public to understand how we think, how we're thinking, and if markets really understand how you're thinking and a new piece of data comes in, the markets will do this it sort of happens organically that happened all last year, as we were talking about raising rates, the markets priced in rate increases before we enacted them we want to be transparent. >> from the time you make your decision on the fmoc, your press conference is at like 2:00 >> 2:30. >> so your decision is made by 2:00, or something like that so you have a half hour, but you

have to avoid leaks during that half hour, because that's very market sensitive information how do you make sure nobody is calling their spouse and say thing is what we're going to do? >> we take this very seriously you're taking your professional life in your hand it is you do something like that. people have a sense of self-preservation. so people are very careful about disinformation this is a period of a couple of hours after the meeting until we announce the decision. but we announce the decision at 2:00 the conference is at 2:30. so it's a fairly small group of senior staff and policymakers that kind of know what happened and what we're going to say. i just think everybody understands that you have to be really careful with that >> go back to jobs discussion. if next month you had another 519,000 jobs created, net jobs, would that be good or bad from your point of view having a lot of people working, but maybe producing more

inflation? >> so we don't -- we don't have the luxury of thinking about good or bad, it is what it is. i would say, again, most analysts, most economists would say to get inflation down from high levels that we have had, if you look at history, there is some softening in labor market conditions that goes along with that that is still very possible and indeed likely here however, this cycle is different from other cycles because of where it came from it's just confounded all sorts of attempts to predict what it would do so it is good that we have seen very strong labor market, but we're seeing wages moderating. wage increases are still very high, but they have come down to a level that's closer to what would be sustainable with 2% inflation. and same thing with inflation. inflation is starting to come down and the labor market hasn't softened we do expect it will soften,

but, you know, it will do what it will do our job is to get inflation down to 2%. >> when the fmoc meets eight times a year, do you pretty much know how the decision is going to come out before you get together because you've been talking to each other? or does the meeting change minds in ways that you might not have expected before the meeting started? >> it depends on the meeting i talk to'm each of the 18 othe participants at least once, and we go through everything, what is your analysis of the economy, how are we thinking about the path forward and all of that so in some meetings, i will say some of the time you get into a discussion that suggests maybe you should communicate differently. and we might take a break in the middle of the meeting and think about that, and come back and make changes

sometimes, though, everything plays out as expected. >> and when you are having these fomc meetings, i assume somebody sweeps the room to make sure there's no bugs and all that >> all that. >> and today, as you look forward as we will going forward for the remainder of this year, you would be happy if the inflation rate got down by the end of the year, the core inflation you think is about 4, 4.5% what would you say >> it's in that range. yes, we expect significant progress on inflation this year, and, again, it's our job to produce it i want to say again, you know, we throw these numbers around, but the reality is, we're going to react to the data so if we continue to get a strong labor market reports or higher inflation reports, it may be the case that we have to do

more and raise hikes more. >> if i wanted to get a mortgage on a house i was going to buy, for example, you would say i'm not going to be any better off waiting to next year to now, because rates aren't going to come down much, so i might as well get the house now >> surprisingly enough, i get a lot of request for advice on those things but i really can't respond >> okay. [ laughter ] >> on the whole to summarize where you are, you are basically saying the jobs data that came out was a little surprising, but in the end, you're taking into account, and you're pretty comfortable with the guidance you gave last time and you're not prepared to give any different guidance than you gave last week? >> well, i mean, this is the world which we've had the labor market report, and i think that does -- i think it underscores

the message that i was sending at the press conference and in the meeting, that we have a significant road ahead to get inflation down to 2% i think there's been an expectation that it will go away quickly and painlessly and i don't think that's at all guaranteed the base case is it will take some time, and we'll have to do more rate increases and look around to see whether we've done enough >> okay. and 2%, prior to that, for most of u.s. history, we were higher than 2%. you think that's the appropriate level? >> we went through this long period where inflation was really anchored around 2%. we think that -- and economists think that's because people start to expect 2% inflation and inflation is, if everyone

expects that prices and wages are going to go up 2% per year, then that will happen. having price stability, real price stability for an extended period of time is enormously beneficial to the public, because you can then, on the back of that, build a very strong labor market. we had a labor market with 3.5% unemployment in 2018 and '19 and we had inflation running just barely getting to 2%. wages moving up at the lower end of the spectrum. so we all want to get back to that place the bedrock is to get inflation under control. >> the unemployment rate hasn't gone up as much as people thought. in part, we don't have as many illegal immigrants coming in do you think immigration is an

issue giving us more labor workers or that's not a factor >> just as a matter of arithmetic, it was a factor. there was little migration across the boarders during the paechl t -- pandemic however, just very recently here, the immigration turned up again. so that may be part of why people are feelingsome what less pressure in the labor market to find workers immigration is a political issue. we do not seek to be a player on this but it's just a fact that right now, the united states has fewer available workers than it has jobs, plus job openings. >> when you increase interest rates, the traditional effect is to -- do you have any concern about the value of the dollar going up too much or something

you don't comment on >> the responsibility for the exchange rate rests with the treasury department and the administration, not with us. that's another financial variable, but we don't look at it as something we're working on >> i think i haven't been able to get you to say anything you didn't want to say so i've known you a long time, i think you've done a great job in a difficult situation. i appreciate your service to the country at $180,000 a year, something like that. so thank you very much for being here and thank you for your service >> thank you, david. [ applause ] fed chair jay powell wrapping up a q and a session in washington, d.c. hi, everybody. welcome to "the exchange." let's get a quick check on markets. i'll call it a roller coaster. the moment the fed chair began speaking with his relaxed demeanor and, again, talking

about the disinflation process being underway, we saw an immediate rally in stocks and plunge in bond yields. but he did make some comments where he said if inflation stays high or rises, they might have to do more rate hikes than what is priced into the market. so a little bit there of a pushback against what the markets are saying something we've been talking about with steve liesman so the dow is up 80 points ten-year vote, 3.627%, so not back to where we were before powell began talking it's rebounding back to the upside let's go to sarah. thank you for joining us what is your knee jerk reaction to what you heard? >> i'm not surprised to see powell generally stay the course until the march meeting, we have two more cp ireport.

the question is how many hikes do we have after march i see two risks going forward. one is the rally we've seen, that is disconnected from economic rally i would expect that to unwind. secondarily, even when we do get that fed pause, what does a pivot mean one is for a recession, and we go to rate cuts. but if they capause and inflati is 2%, they could start hiking again and then we hit a recession. i don't think the market is pricing in all that yet. >> steve has made his way over what are the big takeaways >> i think that finally, powell kind of went out of his way to say -- or answer a question that rubinstein never asked, which is if it gets worse, what will you do there was a dovish take on what powell said. he didn't go out of his way to say if this strong jobs market continues, we'll have to do

more then he sort of did -- i don't know if we have the cut, but he said look -- we don't have it, okay if these kind of jobs numbers continue and inflation doesn't come down, then we will do more. i don't know if that's the moment -- you can put the tick up -- if that's the moment we had that reversal. the question is, what do you do with that? i think the expectation among a lot of folks is this jobs number was anomalous in its size, but perhaps not in its direction and its overall sense of it being still a strong jobs market the question is whether or not you read through the lines of what chair powell is saying. and is he feeling this disconnect between the job market and inflation because we have the wages come down a bit we have had inflation coming down and yet you have this very strong and low unemployment rate

and strong job market. how much is he willing to go with that, and not very much yet? >> a couple of different observations he didn't seem perturbed by much >> he's a very cool character. >> he didn't seem like he was coming there to set the record straight and everyone misinterpreted what i said last wednesday. sarah, i didn't get that vibe at all. i forget who it was on this show who said, the biggest problem was his disposition last wednesday. >> that was larry. >> i can imagine larry is not happy -- again, i'm not sure this is necessarily the wrong note to be striking, sarah, but what do you think? >> i think we have seen this movie before often, the market takes it for a dovish point of view and we see others come out and be more hawkish. i didn't expect him to do anything different than he did last week. we just haven't seen the impacts

of monetary tightening yet one thing i'm worried about is earnings growth. with inflation falling as significantly as it is, the companies need to reduce their prices and that collapses the earnings that's what i'm worried about. secondarily, most of the rally in january was based on lower yields so if we can't rely on yields remaining low, that rally may run out of steam >> i'll just say one thing i know about jay powell -- he does not believe it's in his interest to freak the markets out so he wants to run this thing like an oil tanker long, measured turns he doesn't want to turn on a dime so to the e-- >> did the market jump to the conclusion he was changing and this idea that he would want to get out there and correct

that takeaway, he didn't appear to do so >> i know we have seth coming up, but i think one of the key moments of the press conference is when he acknowledged the problem between the fed and the market was not the reaction function, not the misunderstanding how the fed would react. there was a difference in the outlook. >> sure. >> and if you could, guys, let's do the tale of the tape. the market came in with a very sort of hawkish expectation. you see that dip that dip on the left is the 2:00 meeting. it went flat, and then that rise on the right, that's 8:30 on friday morning so what happened was, the fed didn't say anything. the market took the data, input it into its understanding of the reaction function, and came up with a higher rate on its own. so he didn't change the reaction function, it's just a difference in the outlook the market is a whole lot closer

to the fed >> seth, wite are so glad you c be with us where are your thoughts? my head is getting confused, because we have seen yields rise sense the strong jobs report what is the message that jay powell just left the market with >> powell did emphasize the market, you have to make your own forecast to some extent and the strong jobs report caused a selloff in rates so to that extent, powell would be happy with that but he was trying to reiterate what he said at the press conference, that they are serious about getting inflation down he used increases, he came back to that and reinforced that when it came time to interpret the jobs report. so he's trying to show just how serious they are but at the end of the day, he's never going to get away from the fact that they pay attention to the data and it depends on the

data >> rick, if you're ready out there in chicago, what are your thoughts in response to what you just heard >> everyone keeps trying to give the fed a personality in the marketplace. i just don't find it true on any level. the market gets more information, it takes the information, and it assimilates it and spits out an output the output, many times, is different than the inputs were because the information has changed. the jobs report friday was strong the market moved whether it was fed guidance, if the jobs report was minus 519,000, they could have jawboned all day long and all weekend long and all monday long, and mr. rubinstein could have had a much more aggressive interview, but the markets would have been must have different than they are now. the fed obviously, everyone pay

a -- pays attention to the fed, because they pull the levers but if the market doesn't assimilate the information the same way the fed does, you'll get more curve inversions. but the thing that the federal reserve has semantic power or personality drawing investors to think the way they do makes no sense. >> seth, if you looked at the market, left to go have lunch, came back and said did powell talk yet it's almost as if this big event didn't happen, because now we are back to where we were. does that make sense >> you are seeing something of a round trip but part of that is, he started off pretty gentle as steve said, he does not see it as part of his job to shock the markets if people came into it looking for a hawkish reset after the jobs report, they didn't get it initially. he came through and continued to be measured the way he was at

the press conference saying look, we take it very seriously. i think he said we have a significant way to go to bring inflation down so the market ended up getting back to roughly where it started. >> so when we saw the exuberance, he said the feds may have to raise rates more if inflation and market rates stay strong so there's how is the fed going to react to this data? and then that's the data itself. yes, the jobs market was really strong, but senior loan officers say this is recessionary manufacturing has been in recession for months now, consumer spending is flat. leading indicators are terrible. that's why i feel confused here.

is this all just a difference of opinion where half the market seems to think we're -- this economy is roaring forward, but there is this big unanswered question whether we're heading into a recession right now >> i think bulls heard what they wanted to hear last week his comments on disinflation, and the fact that he didn't push back on easing financial conditions that's what makes the bulls really excited what he is doing is, the risk is further out. it's more so how many more 25 point basis hikes do we get? and secondarily, we haven't seen that impact from all the tightening they have done on the economy. that's why the market is in a trading range it doesn't know how to pick a direction. so the market is pricing in an optimistic scenario. so it's tough to move up from

there. >> dow is down 132 by the way. >> first of all, i want to welcome rick's caution it's very important, we treat them like people, but let many ask seth, do you hear any give at all in the connection that powell is making between wages going up and inflation going up? he did note that it's not been the case, and it's a little weird, because that is the central thesis of why he's raising rates and keeping them high is this idea that wages are going up, so the service sector is high, so inflation is going to be high but he noted that is not happening. where do you come down on that, and is there any possibility the fed may come off that idea >> i do think there's a good idea they'll come off that idea. there is a long tradition of people linking wage inflation directly to price inflation.

the reality is, it's nowhere snee near that close. this is where the adjustment that jay powell has been making is important he's focusing more and more on other services other than housing. if you think about it, goods inflation, a lot of the consumer goods in this economy are imported so u.s. wages can't be driving those price increases. and by the way, those prices are falling. housing inflation is primarily done on the markets for leases, rental apartment there's not a wage push component there. so you're left with these other services and even there, the data are much less than crisp and clear about the pass-through from wage inflation to price inflation so i think we are going to be adjusting that over time, as inflation comes down >> with the ten-year back at 365 basically, what is that telling you? the market is a bit nervous.

that friday's job report is going to prove the notion that maybe the lowering of inflation air pressures is going to be bumpier, less lyinear. but i continue to think that the baseline notion of most investors in the equity markets, as expressed by their trading and how markets have moved, is that we are beyond, we're past the most intense pressures of inflation. i think right now, it is the most data dependant i have seen the market in a long time. you can include the fed in that notion or you don't have to. i'm pretty sure that many of the best traders in the world could be put in a room and never hear one comment by any fed official and still deal with the marketplace in a very efficient fashion. >> we're pretty much at new session lows for the dow, down

228 points >> i was expecting powell to say what he said it just took 35 minutes for him to say it. i was confounded by the moderator not asking him directly, and what is interesting, what tells me that powell meant to send this message is he went out of his way to say it at the end we have the sound. >> let's play it >> note, before you listen to this, he's not asked a question about this >> the reality is, we're going to react to the data so if we continue to get strong labor market reports or higher inflation reports, it may well be the case that we have to do more and raise rates more than is priced in >> that was the key phrase you saw markets almost a mirror image of what we are looking at. we basically drop about 400 points to where we were before all this

rick, what is interesting, we can put the two-year back up th there, if you go back to last wednesday, that seems to be this idea of low rates, the economy is okay soft landing today, we have higher rates, market betting on a consistently strong labor market. i don't quite understand, but stocks are down. what has changed since last wednesday? >> i don't know that anything has changed. once again, i think it's action and reaction in the equity markets. you are mixing pre, non-farm payroll trading positions. there is a digesting process after such a big number, and preparation for today's comments by the fed i would say by tomorrow's close, you'll see the markets calm down a little bit in the end, any type of a close in a ten-year today above 366

means we're going to trade at 3.08%. so today's close in reference to that line coming down, today's close will be very important >> saira, just real quick. you take a step back, and we're at $360 or whatever rick said on the ten-year, it ain't that bad, right? even on the two-year being whatever is not that bad we are not suffering, or at least we don't have the tightest possible conditions given the inflation concern that's out there. do you agree, sair snaa? >> i do. the high data rally that we saw was hanging on the fact that he didn't push back on that that's an issue the fed has to deal with. you look forward, this is a

sticky part of the inflation that's eventually down the road where we are going to have to pay the piper in terms of impact on the economy i'm watching pricing power for companies very closely essentially, with inflation falling, they'll have to bring down prices and we'll see more broad cracks in the employment market, not just the technology industry >> that's an idea that profit margins have been part of the inflation problem, and that profit margins coming down, which is typical for the stock market, is part of the inflation solution >> seth, final word here what do you say when your wife says what happened with jay powell today >> i will say that he tried to reiterate the message he had been trying to make, which is they're committed to bringing inflation down i think the market reaction sometimes is looking for an excuse to rick's point, a

positioning component to everything that goes on. i do think in the very beginning, he was asked, would you do anything if you had had the jobs data? he punishted on that. what he wanted to do was to be measured he's trying to lean against the dovish interpretation, but i don't think he's trying to shock markets right now. >> we'll leave it there. thank you so much. seth, saira, rick, and steve still ahead, it's a very busy hour, because we just had a report from microsoft. we'll bring you the headlines as we countdown with microsoft's ceo. but first, another view from the ceo of royal caribbean that joins us we'll ask how sustainable demand is and here is a look at markets. dow down 189

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welcome back, everybody. the dow has been up, it's been down we are currently lower by 140 points first, dom chu has the numbers >> just like in that chart you saw behind you, it's been a roller coaster ride for markets, though not in a dramatic fashion. we're not talking 3%, 4% moves up or down, but big moves in the s&p. right now, 4104 is the level for the s&p 500, down six points at the lows of the session, we were down 15 at the highs of the session here, again, up around 51 points

here so take a look at just that move that we have seen. tilting more towards the downside the dow now off by 155 points. nasdaq, flat on the session. during the remarks from jay powell at the economic club of washington, interest rates are a key focus. we're watching the two-year note yield, by a lot of traders are using for a proxy for the direction of shorter term interest rates 4.4 right now, just about the middle of the trading range. as you can see, over the course of the last couple of months, here is where we are trying to figure out where the direction of future interest rates are, so we're watching that two-year note yield also, on the corporate headlines front, zoom video, the latest company to announce job cuts, roughly 15% of their workforce, up 6% for the stock there. it continues this trend about tech and tech-related companies

cutting jobs and seeing a stock boost. zoom video has been on a longer term down trend, losing 42%. speaking of technology, many of the ai related stocks, artificial intelligence, a key focus for investors near term, because of the momentum we have seen and the big microsoft announcement shares of alphabet and microsoft up baidu, up 10% don't be fooled, kelly, in the near term, on a year-to-date basis, beaux of those ai and autonomous robotic related stocks are up massively, giving back some today. back over to you, kelly. >> dom, thank you very much. now to all the big headlines so far. microsoft's ai event is wrapping up steve is here with the highlights, with jennifer.

k and kate rooney joins us. steve, i'll start with you this is a -- okay, so much of this is about bing bing is so boring, though, shouldn't they just relaunch it to do something? you tell me. >> here is what they are doing, they are jazzing it up whether the name has an ugly connotation or not, the idea is now it's cool and you will start using it forget about chat tv, this is taking -- it's not chat tv being glomed onto bing, but we are having chat tv technology being used to give you better answers in a bing search one example, you can ask bing something like, can i fit this certain brand of love seat in my car? what it does is, it takes different parts of the internet and says this model has this dimensions, your car has this dimensions and gives you the

answer it's not a chat bot in what we have been used to. they're also incorporating this into their edge browser that replaced explorer. they want you using edge as a minuscule market edge compared to google chrome, and they think it's clear what they are projecting not only can this give a lift to bing, it can give a lift to their own new browser. >> and they announced this technology is coming to office >> correct what these companies are doing, including google announcing theirs yesterday, they're starting with search bing has been around forever this is a more natural way to use this technology. ask questions and get the one answer you're looking for, no matter how weird those questions might be that's what this new version of bing is going to be able to do that's what google intimated

yesterday they want to do with regular google search, as well >> it makes sense that this is where the internet is heading. so yes, let's back up for a second, because we barely had a moment to digest what google announced. the name is landing with a thud, bard is worse than big, ing, i think. but what are they doing to catch up >> we reported this a week ago that the name was going to be bard even then it fell flat with people as far as having a catchy name attached to what is supposed to be a sort of sexier conversational technology. but essentially what they did is they confirmed our reporting that was they're launching bard, powered by their large language model. this is supposed to be a new powerful model language for artificial intelligence that will power a bunch of different

applications the company wants to build a suite of products, so that developers, small businesses, and other partners can launch their own products based off of this yeah, like we mentioned last night, we reported that the ceo issued this large rally cry for employees that basically everyone is going to test this we need to get behind this it does seem urgent. it's sort of a race to see who can launch what first and whose will be better >> and now we are seeing ai in your name, the stock price goes up not everybody has really fully developed to these offerings, but many people have legitimate uses to offer consumers and businesses right now >> in 2018, you could put block

chain on the name of an iced tea company and the stock would rally. dom went through some of the stock performance, and there is just this investor appetite to get in on anything that hat dot ai, but dan nathan said that there is this investor hype, but one way to look at it is just google search trends if you look at searches for that just on google, it's come down significantly. and then you look at the searches just for ai so you are see thing consumer interest trap translating over o stock prices the difference on the technology side, this is really tangible, something that you can use and a consumer can interact with still, it's probably still years away from being something that -- other than trading the

currencies associated, it has not kept up with the hype in some of the prices that we have seen >> steve, let me give you the last word. we will be interviewing him here in a couple of minutes final highlight message to the markets? >> we're going to be frame thing as positive. >> we're going to be framing this as a google vs. microsoft debate these companies already have huge animosity toward each other. i think what's also getting lost in this conversation, the foundational technology for chatgpt which is captivated everyone, comes from google. the t in chatgpt stands for transformer, a technology developed by google in an open source way so real questions not only for microsoft, why couldn't you do this in house. second of all, google, why did you let your rival take this and why did you make this open source so someone could come in and eat your lunch and undercut you? now we have this arms race going on and we have like jen just said, we have sundra prachai ringing alarms throughout google

headquarters, we've been sitting on this too long, let's get it out the door >> one trying to front-run the other. >> exactly >> listen, it's kind of fun i will say we'll leave it there for now steve cove avp, kate rooney, jennifer elias tons more great reporting on cnbc.com don't miss satya nadela in a first on cnbc interview 2:00 p.m. on "power lunch." shares of royal caribbean higher after posting better than expected results on top of that 40% gain they've already posted this year and they're seeing a record-breaking busy winter season stnae,ask if that demand is suaibl what it means for prices and wages it's all coming up next.

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welcome back if we're looking to travel in leisure to support the economy right now, royal caribbean is certainly delivering they just reported a smaller than expected loss and strong full-year guidance but is all of the good news priced in already? just this year shares of royal caribbean up 45% norwegian up 40% and carnival up nearly 50% for more on how sustainable this rebound is let's bring in royal caribbean ceo jason laverdi along with our own mody. >> jason, welcome to cnbc. >> oh, thanks for having me, seema, and welcome to anthem of the seas, where we have 4600 passengers and we're at purp load factors >> we can hear them. clearly a lot of interest in

price. your ability to price cruise packages above 2019 levels how sustainable is that, jason >> well, we really have seen since late summer that our booking activity has been accele accelerating and since november that pace has picked up more we've had seven, soon to be our eight of our largest booking weeks in our company's history and that's really forcing he very strong demand from new to cruise and first to brand looking to go on our three incredible brands. >> when asked about strong bookings you referenced the resilience in the jobs market on the conference call. i just wonder how much of this rebound that we're seeing in travel spending, how much that hinges on a strong jobs market we just heard from jerome powell who mentioned he expects the job market to soften at some point does that worry you? >> well, what we really look at the and obviously what we're talking to our guests every day, what i would refer to as our addressalable market, not only

is our addressable market for those that are looking to work employed, but they're also sitting on trillions of dollars of savings and i think for us it's not just the combination of the strong job market but it's a combination of them not being overlevered, them having strong savings and people shifting their preferences from buying stuff to buying experiences. >> you're on board a packed ship as i can see, as you pointed out to us 4600 people. i believe north america made up about 70% of total bookings. but with china reopening how does that number change over time, jason? >> yeah, well, china was a little over 10% of our sourcing precovid and of course we have great ambitions for china as it reopens up and certainly as that market comes back up and running. and when that market comes back up and running which could be later this year or into 2024 that would be another accelerator for demand onto our businesses >> and is there a reason to wait until 2024 to get back into

china? >> well, i think a lot of it is china opening up to outbound group travel, opening up to cruising and then also our chinese consumer goes to places like japan and south korea and making sure that everyone's opening to that regional travel activity taking place >> well, really interesting to watch this revival in the travel sector, specifically the cruises which you could argue really needed it. enjoy the cruise, jason. anthem of the seas thanks for joining us today. that's jason liberty, ceo of royal caribbean. >> seema, our thanks to you and jason as well. dow's down 180 points. right now stick around because coming up on "power lunch" satya nadella himself, the man of the hour microsoft's stock still positive he joins us first on cnbc on the heels of their big a.i. event. and all of these announcements we were just talking about i'll join tyler mathisen for that after this quick break. (vo) businesses nationwide are switching to verizon business internet. (woman) it's a perfect fit for my small business. (vo) verizon has business internet solutions nationwide.

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welcome to "power lunch," everybody. i'm tyler mathisen alongside enkelly evans. two big events to talk about today. first we just heard from fed chair jay powell he says deflationary progress has begun. markets liking the sound of that first we'll break down his comments and the big market future >> in the meantime microsoft holding their big event focused on a.i ceo satya nadella says it's going to reshape everything in the software space it's already reshaping search for them he joins us in a few minutes to talk about this revolution and we have a great panel assembled to talk about both of these big events steve kovach along with oppenheimer analyst tim horan, kate rooney, herb greenberg and jennifer elias will be joining us to talk about microsoft >> and on the fed and the markets we have hear from bill lee and steven denicholo but before we get to them let's get to our own dom chu to see how the markets are reacting