as i've mentioned we see z likelihood of credit tighteninzy we know that can have an effect on the mkc=■ economy and demand and labor marketñr and inflatio and will watch to see whatfá th is and watching what's happening market sow3 we'llñi be watching of i]course, we will eventually get to tight enough policy to bring inflatioç that place. >> hi.ñr >> e1lphi, chair powell, kyle campbelle1 with ameri#w■ banker. i have a couple of questions about the balance sheet. first of all,x#rrzok curious at what point the financial supports that the fed is extending through the discount window and its enhanced lending facility might be atñi odds wit balance sheet and i'm curious e- what yourth$u$oughtçiçó arexl■1-

not just ther reserves but theñi distributionf them throughout the banking system and atñyó what point you might be concerned about it being scarce for certain çóbank >> so when people think of qelp andfá qt about different things] so recentr that hasñai increased h:■ size our balance sheet but the intend is very different from when we expand our balance sheet through purchases of longerq term securities.v large-scale purchases are really meant to alter the position by pushing down -- pushing up the price and down the rates, longer term rates through demand andht channels we understand fairly well. theñi expansion is temporary lending took banks to meet thos special liquidity demands created by."■ the recent i]tens( it's not intended to directly alter the stance of monetary policy. we do believe that it's working. it's having itse1 intended effe

of bolsteringv banking system and forestalling what might have been an outsized and tightening condition so that's working. in terms of distribution ofxdlpi reserves, we=ñ don't seeñr ourss shortages. we think that our program of allowing our balance sheet to run off predictably and passively is working.jf and, of course,ñi we're always prepared tot(e1 changeñi that i evidence that that's 9rz'ged. >> hi, chair. katarina strivel from bloomberg news. the minutes from the uie■ meeting, 4$ last meeting discuss the possibility of runs on nonbank financial institutions and large unrealized losses on bank portfolios. can you talk a little bit more about that discussion, kind ofñ

what was talked about in light of that and then why didn't the fed, you know, do anything about q■ what happene month? >> i mean, to be honest, i don't recall the specifics of that. nteresting seven weeks, but -- [ laughter ] but i will tell you that we have -- there have been presentations about interest rate okrisks, i mean it's been all thejf newspapers, it's not snbsrise thatu■ there are5a■ institutions that have hadok unhedged long positions in long duration securities that have lost value as longer term rates haver 1 surprise. i think as youxd know as it is w in thec public record the supervisory team was apparently engagedxd very muchxde1 engaged escalating but, you know, #e't) happened and so that's really the purpose of one way to think

about the review that vice chair barr is conducting, to try to understand how thatq happened ad how we can do better and what policies we need to change. oneñ2háhing is the speed of -- i'll come back to that. the speed of the run, it's very different from what we've seen in the past andçóçó it does kin suggest that there's a need for possiblee1 regulatory and supervisory qhcnges justi] becae supervision and regulation need to keep up withos$at's happenini in the çóworld. >> can youe1xd confirm whether not the board knew about theseq escalations by theñr examiners san francisco? >> i'llqxd haveq to come back tu on that. i don't know. >> áq thank you very much.fá chair powell you stated twice all depositors' savings in the banking system are sauo insurance covers allt( savings d

by way of example if a bank with less thant( a billion dollars i assets failed are you promising to bail out all of its depositors? >> i'm not saying anything more than i'm saying so-9■ what i'm saying isxd you've seen that we have thee1 tools to protect of serious harm to the economy or to the financial system, and qok use those tools and i think depositors should assume that their depositors are safe.xdq >> thank xdyou, chair powell. greg robb fromxd marketwatch.fá you said the question you guys asked was how did this happen when you saw silicon valley bank. so i was wondering if you could go to the credit suisse r i mean, wasn't that the big gorilla in the room? didn't you breathe a sigh of reliefi]xd when that mergerr

happened? >> sure, so, you know, that was really thetx$]%mm■ government. we, of course, are follow!6■tvj over the course of the weekend andxd engaged with theirçó authorities in the way you woulñ expect, all the ways you would expuxt. outcome in the sense that the transaction was agreed to and it has been -- the marketst( have acceptedoc■ki]ñi it and it seeme gone well and i think there was a concern that it might not got well s"( coming intow3 the midd that has gone well so far.ññi >> hi, thank you chair powell. wt(á)r'd with cnn business.zv■ in the summary of economic projections that fmoc sees theñ unemployment rateq increasing t1 4.5% this year, i'm wondering how you anticipate preventing5a this from snowballing while using the admittedly blunt tools at your disposal?r >> that's an estimate of what

ê as conditions soften in the laborxdñr market and it's highl uncertain estimate and, i mean,r there'sñi really -- we have to bring inflation down to 2%. the costs of bringing it down, there are real costst( to bringg it down to 2% but costs of failing aree1 much higher as yo read your history, you can see that. if thefá central bank doesn't g inflation ex6% anchored you can haveñit( a lon series of years where inflation is high and volatile and it's hard to invest çócapital, it's hard for an economy to perform well and that's to avoidht+at and, you know, to get back to where we need tofá , back where we were for a quarter of aó[■ century !'b get there a quickly as we can. >> historically as far as -- >> the mic, please.

>> historically it's been hard to contain unemployment and the question is,çó do we worry abou some sort of snowball effect and how do you factor that into your projections and your 5a■thought? >> itxd depends on whether we - re nonlinear so they're very hard to model. the5a■ models all work in afá l way. mo get more of that but when a recession happens, reactionçó wl be nonlinear so wet( don't know whether that3w■ will happen thi■ time. we don't know, if so, we don't know how significant it will be and so, you know, we're very focused on getting inflation down and because we know in the longer run that that is the people we serve. that's how we canq have a long, you know, we've had very strong labor measures through these long expansions we've had, four of the fiveñi longest or three the four longest expansions inì% u.s. history have been really

since the high inflation period and the reason was inflation wasn't forcing the central bank to come in and stop an insip s;u çóor, you know, an expansio. you can have very, very long expansions without highlp inflation and we had several of people.nd they're very good for- you see late in expansion, you see low unemployment. you see the benefits of wages ofq the wage spectrum. it's just a place we should try to get back to. >> hi, chair 'c■powell, jean yo with market news. i justx■ to ask with all the events of the past two weeks, do youi] stillt( se]■á a possibility of a soft landingfá for the u.s. economy? [ laughter ]q >> you know, it's too early tod sayxd really whether these even have had much of an effect. it's hard to see how they would i guess i wouldnm4iáuáu say it' too early to say whether there really have been changes in

that. question w how longçóçó this period is sustained, the longer it's sustained, then the greateri] wd be the likelyxd declines in or tightening in credit standards, of creditw3 availability so we' have &op see. i do still think there's a pathway to that. i think that pathway stillr exists and, you know, we're certainly trying to find it.t( >> nancy. >> hi, chair powell.lp be matters or matters requiring >> how many? i don't know. those are serious. thosee1 are serious regulatoryw particularlyt( immediate attenti and there were six of them, i guess. >> getting to the seriousness of it, how aree1 you going tolp en that banks comply withñi these

citations, take them seriously?? question and right in the ("jrt of what the review we'llq be doing under vie chair barr's leadership, so i think that's what you think sure, but, again, that's not for me to answer today. >> you don't have specific thoughts on that. >> see, if i did, ip,■ wouldn't share them because i lpreally, u ñ going on, 5a and, you know,çóe10l■ i want no other than to find out what happened and why, figure out what we can doçó to doko■ betten implement thoseçóq changes, tha all i want. for me to be givinge1 you my hp formed or partially informed thoughts isn't appropriate. there's a realñiw-óju)áuj revie going on with people all over the federal reserve system not connected to there, you know, to work, not connected to this bank and under, again, vice chair

barr's leadership andñi confide result. >> jennifer for the last question. >> thank you, chair powell.fá e1 jenniferlp shon berger.fá if credit becomes expensiveq enough as you're watching for, would that situation warrant a what situation would warrant a rate cut, and have the bank failures prompted any discussion around changing the implementation of the balance sheet runoff? thank you. >> soi] we haven't really talke about changinge1 the balance shd implementation. that's not something we've discussed yet. as i mentioned we're always willing to change that if we conclude it's appropriate but not seeing any signs there. then the question before thatzv was -- just give me a -- >> curious how youq view financial conditsorj now and if credit were to!u■5a■ tighten enf that would prompt a rate t(cut. >> so, financial conditionsr

to have tightened and probablyq more than the traditional indexes nb■say, because those indexes are focused on rates ani equities and don't necessarily capture lending conditions, so we think that, though, so there are othera5■ measures which if they'rei] focused on, you know,% bank lending conditions and things like that,ñi they show se more tightening, the question for us,c how significant will that be and what will be the extent of it and what will be the duration of it and then, you know, once you know that, there's a fair amount of research about how thd■ witht( broadxd uncertainty bands works uts way into the economy over what period of time so, you know, we'll be lookingw3 to see the first part of that like how serious is this and does it look likexd it's going to be sustain. easily have a significant macro ffect and we wouldçó factor it into our policies.q

i mentioned with rate cuts, rate cuts are not in our base case q and, youó[■çó know,e1 so that's have to say. >> thank you. >> thank you very much.fáñiçó >> you were just listen)l

hopes there is a path to that soft landing. cbs and p500 topped out 40/40.ñk nasdaq up 1%, up 1 point w3 reaction and the marketjf often seesaws backok and forth. at the jeti. conference taken asq dovishñi t the chair was essentially granting that again inflation might become a little more friendly butt( refusing really r say the job is you see when the dollar index ñibounced, that's when it was taken ae1 littlp le dovish and when the stoc backed off. you were watching "closing bell" á the new york stock exchange. liz ann sonders and with me josd brown, josh, good to see you. good to have you. >> i didn't think they wouldp,■

it so we'll start with that. >> you also acknowledged they considered a pause in response to a question. >> yeah these were the two big á standouts for me looking atñi ts tick by tick because why not. it's a big day.ñ he starts off with we don't know the extent -- sorry, he starts off withq the comment aboutjf t banksnb■ and the marketñi light that, you hit the hod, high of the day around 242. right around that point in time i think is when you're gettingq the most dovish comments and best ofok that knee-jerkñi high and two-year yield crashed back down to 4%. not the biggest move we've seen in the last week or so but a

another 45 minutes until the close, most of the commentary i've been reading is saying not event, one minor change in the statement. %1%uz the banks but really there wasn'tfá that much here that changes over, may and will, i know that wasw3 one --i >> yeah. >> all right. oing surgery on thelpq wings of a gnat at this point. >> there's only so much and so far that he would go in termsçóf being specific aboutçó the bankg crisis. he did sayqt(fáq deposit outflo stabilized in the last week or ó so. that might have been news in a small way so itq seems as ifxdq we're left with, okay, this isx sort of part of thet( plan, an extension of what the fed is will continue to do which is, xd look, we still we're way above our target on inflation. we have more to go probably. they do have theçó summaryt( of economic projections p,■updated march andñrq essentially they'r %9

weaker than we thought in december butxd then again the economy has been running much >> six minutes into his remaru qjsgujz you first started ÷z tug lower, quote, process of gettind inflation back down has a long it will be bumpy. >> the w(ket didn't like that. they alsoxd didn't like, quote,r %a■ectation when asked aboutçóñe potential for rate cut. >> exactly. so that's, you know, again, as you say we're trading, you know, vocabulary words here is what is wa does go. there's a rethink and another rethink and somebody fades the second one. but it is worth keeping in mind that even by the end of this year or, i guess as a general average for this year thev-áqlp expecting innationlp to be t(3. above target still so when they say there's a long way to go and probably need employment to soften up more and the economy to grow below trend for longer in order to gañ there, you know,

that's, take your medicine. we've been taking it for a year right now. seems as if, though, at this point, the market is holdingxd to this little mini rally we've had in the last few days and maybe it doesn't seem to be a complete disturbance of theñi assumptions we had going. >> gold quicklyi] before we geto the next commentator.b.■ holding on to the rally, gold is clearly benefiting from justi] this idea thatfá inflation is still elevated and now we've got an added set of hurdles inlp th financial systemu■i]i] in the f instability and gold likes both of thoset( things and i'm not surprised to seeíhpis as the best asset class of!/he day even more so than short-term bonds. >> true but it did poke above xd 2000. >> monday. fresh out of powell's press man conference. steve, what are your top line .? >> well, look, there was onlyi]

one question going in, how he was going to handle the tension between inflation still being high, still a need for the fed to address it and what happened in the banking system over the last two weeks and i think hee1 probably got out of it handling it reasonably well and i think z hear how he responded.i] it'st( preserving flexibility i his policy, not committing to a policy down the road in his answer to my question here. >> these eventsq will turn out o be very modest effects on the economy in which case and inflation will continuefvñto be strong, in which case, you know, the pathxd will look -- might lk different. also possible that this potential tightening will ç tightening in creditt( conditio over time and in principle if that means that monetary policy may have less work to do. we simply don't know. >> okay, so how well did he do? rj look at the probabil

for may which are 50/50 for a quarter-point hike and pretty for another quarter-point hike in june so was able to steer it in the middle here, preserve flexibility. hee1 deflectedlp the question a what went wrongçó and th!d fed' culpability to the barr investigation that's going on, the barr inquiry and will come banking system remainsa5■ñrxd relatively sound so, look, you can't say in the next couple of days there won't be anotherq problem. but if thingsçó remainñnp statu, i think the fed chair kind of navigated this tricky obstacle course that eventsñi haveqxd cr here. >> for sure. we were talking during the press conference where when powellr explicitly said, thelp actual e expected effects of that credit tightening that people around the tablee1 and at the meeting wouldçór

noteworthy. spent a year saying we won't anticipate inflation gettinglp better. we need to see it in the numbers. there is a conveyance of flexibility mandated by this momentxd we're in. >> a lot has been written -- there's a lot of economice1>d literature.lpn9probably eight+■ economists at the fedr their ph.d. in the inflationary or growthi] effects of credit tightening. it's a thingp,■ they study a loo there's going to be plenty of inputs to models and this and watch this. see what happens to thefá regiol banks and the smaller banks, which provide quite a bit of lending to businesses in this country. they were already pulling back somewhat and they're going to is goingjf to monitor this. as he said during the pr+y conference this could be something akin to, for example,- tig■ he didn't go on or accept the notion in my question there which is can you have additional firming without a hike?hto cf1 o

but i think you can, right? which is that if inflation falls and the fed remains the same the there's a debate about another quarter from there,!u■ the fed be done after that but then there's another fight to come having priced in substantiallpq% rate cuts from here and powell saying several times, we don't see rate cuts. >> that's right. there's no doubt that he wasnñ verbally today. on the other hand, steve, you know, it's the end of march. you know, the official terms of the consensus of where rates will be next year does imply cuts so as we go through % tid5 i mean it's qcu necessarily like the(qu1 going to grow if, in fact, that's the way it remains, did want to get yourq thoughts on hs comments regarding the balance sheet andlp quantity tative tightening and how he tried to

essenty drawqok some nuance. >> things the fedxd have done a not necessarily quantity tative easing and gone the other way and reversed here.p,■ there's $140 billion loan to th■ fdic to backp,■ up the banks in peceivership. that will goq away at some poin. there is lending over a course of a year to%p'ks trying to shore up their liquidity. that's not going to be the source of additional funding or u(áq on interest rates or at least it shouldn't be and could goñi away relative quickly. i don't have ang idea buying the problem what the fed is doing to shore up the banking sv?áqs is not quantity tative easing. i also, michaellr was pretty sue that of all the things that the fed might do today, halting the roll-off of the balance sheet was really low on the list, the fed does not want to doko■ that. stop the rollout of the balance >> arguably that would be the thing that would convey@ bit of panic about liquidity

cowíktions or something else that was in the plumbing of the fin%6%1m■ and, josh, you know, it's i7=mqñas if the events of the last couple of weeks have kind of thrownt( us back in tima little bit to when we thought the fed might be heading for maybe around 5 plus or mi%]j on the fed funds rate and maybe the market could live with that and this notion thatçó we've been a1 to stay supportive in stocks because maybe the cost wasn't that great offá getting ae1 sliy more dovish or less hawkish fed earlier than we mightu■ have damage to the banking system is only what we know about right now. >> yeah, what's really interesting we'll get q1i] ?i9%9 rolling around right in front of us and even that might not really give us a pictureñi of w1 the extent of the credit tightening we're now going to see in the bankingi] system has wrought. like if you're waiting for data you might have to wait a minute because a lot of this is going to happen quietly and slowly as

to happen quietly and slowly as mostyr'gs u■do.t( so we shouldn't ey those reportst( to get some sen of whether or not the fed has already gone too far. one thing ilbv want to put outuo about today it's actuallyw[iñq) much a muted response. given what we've seen in this tightening cycle, you go back to january 22, we've had nine of these interest rate decisions. in four of them when it was negative, you had an average loss of 2% for the s&p. average, that's a bigxd volatil day and we had four of those. the five positiveñi reactions s a plusi] 2% xdday. today seems almost like nothing happened so that in and of itself is interesting. the volatility of reaction to thesee1 meetings seems to bexde tamped down even with the backdrop of whatever we've been through inçó the last twor >> there's 37 1/2 -- 32 1/2e1 minutes l>q9 >> close it now. >> see how it goes.

one thing he also did say in response to a question about the inflation outlook and whether, you know, çódisinflation is sti under way, he said that story remains intact but intact meaning it's working in some areas but not in others. >> yeah, what's that song, two out of three ain't bad. he's got two things working his way and a third one that accounts for a large percentage of the index notq working his way. i dide1 want to comment on josh saying this is a nonevent.fá i think powell is good in this situation.q we've seen him in a couple of crises and seems to do well here. maybe he has troubleçó with the communications but when+■i@íhin are down and he sat there,i] th is a chairman under anlp awful t of pressure would spent the las( several weekends, i'm sure, on thev counterparts in switzerland over the weekend with his otherxd feq members, as well, with thenb■q treasury secretary, and to get up there and act pretty cool ani maintain confidence in the

banking system, i think it's worth, you know, tipping your hat to how powell performed here but he has to be right and that's not entirely clear, right? has to be right to the issue of raising rates was okay here amid concern aboutr in the banking system, so and as you said, josh, we'll get a feel for i]that.t( we'll watch things likee1 the h coming out giving us insight into what's happening with the banking system. we'll have the senior loan officer survey that tells us what islp happening with credit those are the ways we'll measure 1t]9 we from companies and small businesses. if they can't get those loans ui businesses, should bring down inflation over time. you're right, it willçó unfold slowly but will have@um watch it carefully. >> you know,ñiçó josp relatively measured response to this point is also maybe where we are in a sense of,lpçó okay, were jacking ratesu■ up and --

>> 6 was the new 5. >> -- last year you're kind of around the edges so dob.■ aó[■çr point. maybe we get another quarter in six or seven weeks and feels there's room tow3 navigateq thoq that you shouldn't downplay the uqeu$e economy could showi] cracks but at this point think thew3 process is moving slowly enough that it's not going to?b)j anybody as much. >> i think your point about jus■ we're kind o!ó set back a littl bit, it was like, oh, my god, i can't believe they'llok go toc sometime late february, early march, 6 bczmexd the new 5. people were getting comfortable saying the word 6 out loud and now we're 4o$ there anymore and i think that overall is añi win for equities. i mean justñr look, look at the nasdaq. you had 41% of the nasdaq stocks advancing frx threeçó plus consecutive days going into this, that should tell you allñ you need t!

that a step backñi from 6 to 5 good enough for today.r we don't need rate cuts.vco cf1o >> yeah. and, steve, i mean obviously the projections of where the committee expects unemployment to trend to, there's a ways toe go if they really think you need to get to,jf you know, thee1 mi on the unemploa■úq■ rate in order for their inflation forecast to come toi]ñr be, isç something that wu■ just sort of sete1t( aside andlp not pay muc attention to, or does that end up being a target? >> it's a good quest it's not an end, it's a means to an end,t( mike, i tsxjz is the y to think about it. they don't necessarily desire,p unemployment to rise, but they feel that it has to rise in order to loosen the labor market, reduce wage gains and in that core serviceñi sector thats the one of the threeb.■ areas n guys, if you havefáñi that janu 24jf■d

back there, i want to just exactly what josh is talking about because you 'ç-1 had essentially substantial easing imparted into the market rightío now and içó just want to go through ñithat. it's overq 100 basis points of easing compared to where thew3 market was previously priced to where it's priced right now so you were up atxdt(çó 5.50xd wit saying everybody was rounding it up toe1 xd6. now 4.22 now so that's a lot of easing in the system and then youfá mechanically lost at( qua point because, remember,ñi powe talking last week or so was saying, hey, we're probably going to do 50 here. the market priced for that soxd that's gone and plus the year end rate which everybody feltñy was going up to 5.37 remained the same soe1q there's a lot of easi:÷ and that's whatñr equiti haveñr reacted to and the q?e?q■ is can they count on it? >> right. and would equitieslp welcome th

circumstances under which we got that much easing is the secon÷aeññiquestion. how we got there. >> exactly. >> it wouldn't be a great one. steve, thanks very much. >> pleasure. >> great stuff. appreciate it. let's bring in liz ann sonders at charlññ schwab for moret( t( reaction. liz ann, what are your thoughts ñ implications from an investmenti] >> so, you know, when i was penning the note put into the publishing cue a few minutes ago describe it as a dovis hike, but as you got further into the5a■ press conference, t seemedxdjf to be a little less case. i wouldn't say that powell is very hawkish but certainly more so than what thee1 statement re on its own and really interesting was the somewha)o■v simultaneous çórelease from yeln saying that there was not -- they're not looking at añr blant

increase in fdic insurance up to 250 which wasn't in contras$d o what powell said but when asked that question he tried to calm nerves and said we have the tools so ixd think there willçóa lot of>$%ssecting of that uíq(q >> forñi sure.xphr(t&háhp &hc% yeah, it is worth noting as you did there that secretary yellend was speakingw3 at thee1 same tis the press conference and madet( remarks about no real plans toñ broadly guarantee all deposits, which was a reiteration but the áau)qá doesn't always want to hear those sorts of things so i guess where does that leave us?4 on the one hjñ an investo+(ju if you're açó lp trader, well, it looks like maybe they're getting close t being done at the fed and maybe they won't have/w toxd tightenj much more because of the uncertainty introduced by thisl banking credit contraction theyñ but then what you have is thelp uncertaiv(x■ based onjf the cre contraction that we're mean for theñi economy then? >> well, i think it's maybe not as much about uncertainty. i think what the fed understands

is that to the exteni this marks it certainly appears more likely to be the case than a couple of weeks ago, that is inherently disinflationary. they know that. whether they view thisd of justok one last pop inxd the interest of not going against market e1expectations, which ha an 83% likelihood of 25 heading intpe÷ theñrñi meeting, butçó i they understand that the credit crunch isñi disinflationary and probably why he wasc=#át(áu indirectly leaning into this could be -- thi;■] could be it, even though basedxd on what the plot shows it suggests one more hike, certainly left the door next time. >> for sure andxd now i ñiknow, t beenñi thinking in the recession, different parts of he the economy having downturns and recovering, kind of nothing allx

not yet. where are we, do you think,çn that process, for example, things like housing andçó manufacturing have been, you know, in downturn for awhile. have they bottomed yet? are they in the pro##mzez bottoming and what's next?r >> we are starting to s[%÷ stability in the housing data and that it mayñc3ç@eñifá purel short-term reflection of lower mortgage rates, but given thelp carnage thatfá predated the we're seei stabilization in anfá area that clearly has been in recession territory. but we're also starting to see some cracks on the surfaces side signs of disinflation. you're seeing less wage pressure on the services side. we know thatñiñi smaller compan tend tot( have sort oft(jf more exposure to smaller and regional banks in terms of where theirlp deposit base is but wherew3 the go forñi borrowing needs, sow3 think that the potential credit crunch here is likely to have a greater impact kind of down the

size spectrum andxd i think thas part of whyñi you're seeinge1 tn changing nature of leadership in the market with a drubbing like the russell 2000 has taken where there's been moreok resilient u the cap spectrum so a quick shift in let's look at whereçó there's strong capital cushions and balance sheet and interest ge, so i the indexesñi have behaved fair well, the under the surface leadership changes, i think, are telling an important story about what's next for the economy. >> hey, liz anntd it's josh brown, thank you so much for joining us today. were you surprised to hear about inflows or w3outflows stabilizi, that it/t seemed like a toss-upó remark. none of the reporters followed occupien t(it. thate1 seemed to me to be good news that the market didn't giv% you that much a reaction to. what are your thoughts? >> youçó meançó in terms of bal sheet and reserves? >> stabilization comments.

>> yeah, i mean -- >> ie1 think he was talking abo savings deposits. >> savings deposits. you know, we have seen a bit of it's still a little bit of whac-a-mole with additional institutions that arejfe1 annou that might belp in trouble or facing trouble but i think the real tell, not just this week but an ongoing basis is we've come out of thisq environment where we're all obsessed over every inflation pxi3q■ andé@■ t is what captures the headlines. i thinpñr the new piece of to kindlp of hang on waitingçó get will come thursday as it dif last thursday which is5a■ what the kickup in the discount window and use of new funding facilities andok what that mean for the balanceó[■ sheet. so i think that ist( going to b the direct way we can get a sense ofçó whether this pressur is starting to calm down. >> yeah. >> of every week and so, liz

ann, in terms of how the market has digested a lot of this so far, i mean are we simply just depressedi] sentiment and thew3 worst did not come to pass in terms of an immediateçó crumbli of more banks or anythingçó lik that or do you think that the market is lookingñc3çó through period to something a little earnings might not beok down as much as some fear.xd >> well, you know, as i said, yeah, could be the market looking through but let's also remember that what predatedfá ts potential credit crunch has been an asset crunch and assets have gotten absolutely hammered. "át worst pointñi the spec area,xc9eyqqñ or nfts or nonprofitable tech orñr heavily shorted stocks, you were talkiná 70%,fá 80%, 90% drawdowns but is the leadership shifts underb.■ surface that are more important. may ber>qa÷ the case that theq have more of an impact on the

economy. that's kind of a t(é@■jfduh, bu doesn't have to have as much of an impact on asset markets on equities because a lot of that pain has alreadyzrort of worked through the system when we went throught( the initial surge inñ rates that hitg segments of the market. now if yougw■a see a calming th see here, i think there's going to be ongoingv think there's some interesting more subtle messages you pick up when you look at some of these leadership shifts under the surface. >> and then at this point what are yourñi preferred ways of ki of 1/2 gating that expectedñi volatility in terms of, you know, the characteristics of stocks that you might want to emphasize? >>xd we're saying still stay upn quality, shorter in duration and applying it to theqñi equity si of things andq that would look fwrtt( companies that have cash flows and earnings in the here and now, not far out into the future.

strength of balance xdsheet, hi cash, low ñidebt, really ñr important, a factor that historically is done really well through most cycles but particularly when you're atten inflekz point or in some sort of ptt especially when you're in a rapidly■3 rising interest rate environment as we've b%qfi] in e past week, so i think the january rally down the quality spectrum, high beta, that to me didn't make sense in this part 9 of the cycle so still lean into quality, lowernb■ duration, str >> ande1 just to go a little fir on that, would quality but lower duration exclude or reduce your exposure to things like the very large techdqájt)j that have6z■ ■ >> for now i think it's inclusive of theñ largenfch careful about monolithic decision-making in investing. even among large tech,ok you're

going to see differences in terms of all oflprjjut factors, so i stillñr thinki you want to ñ approach and notko■ make a monolithic ser approach. that. >> right.ñi and so i know we talked about the rolling recession idea. but withçld the way that the o curve is inverted and all the other things that people are pointing to that leaves a lot of conviction among thosewsz think a real declared recession is going to be hard to avert, are you on board withe1 that idea? >> no, i think recession is highly likely. you know, thelp pathway to alp landing as powell mentioned, i think that's ai] prettyjf narro pathway in light of what you mentioned, the inversion of the yield curveq and 11 months of declines in the lei,xd we've ner seen that h a recession. part of the economy is already in recession as we talked about and the possibility of a credit crunch, i just don't seeq ú

that doesn't point the needle more towardfáxd eventuallyzv)t formally declared recession keeping in mind thatxdi] the nb when they declare it, they then predate it. there's oftenñi a pretty wide sn inçterms of how far they go back to dating the start.i] >> for sure. liz ann, always great to talk to you. appreciate you coming on with us today. >> =ñtwo-yeari] now sub4% andñik kre, very notablyxd just went negative on the day. een drifting lower and this is not how you want to end the xdday. but here we are. >>ó[■ you didñi jinx us about 1 minutes ago. there you go. >> i did. $-/a1qáeu)s the closi. let's just a look where we stand right here. we are backing off a bit,fá dow l 222. you have the s&p 500 off by hali a percent andñi the nasdaq composite modestly lower, russell 2000 underperforming in the two orjf three-day range wee been in for awhile even off the

back to kristina partsinevelos for the key stocks to watch. >> let's talk aboutxd lululemon overweight ratings on the stock, shares up 3%. jpmorganrweñ his target but only to $430 a shareok which is well trading at. both firms believe lulu's inventory levels have improved and we'll see for ourselves when the company's earnings come out next tuesday.çó woof, that's the ticker, look at shares of zv■petco-hitt their lowest level since theyxd returned ine1lp early 2021. it missed estimates in its previous quarter and its full shares down 16 1/2%. turning to ñit(carvana trading higher as itlp expects a smalle loss this quarter. the company also hopes to restructure some of its debt though bloomberg reports that itse1 largest bond holders will oppose the plan, shares losing

steam on the news but firmly higher so now up 9%.+et we'll e club pushes it towards becoming the mostçó expensive sports dea ever.q!u■ the bid would have valued the company over 5 billionw3 pounds. those bids are due by nb■5:00 p eastern tonight. >> all right.ñrñi kristina, thanks very much. for the record, when qpetco cameñi public under woof, there will be a quarter where they q people will talk about that ticker symbol. let's get the results of our twitter question and asked, is this the end of theñr fed'sçó hg cycle.p]"ésp%ority, 64% saying the market for now tends to agree with. we are now in the closing bell market zone. josh brownq sticking with us to break down these crucial moments jpmorganqçó and david one1e1 po%

latest move could impact the banks. we would love your thoughts on what the fed lpdid, what the fe didn't do and whatxd powell hado say about it and i guess how it goes from here in terms of f5) policy and the economy. >> not totallyd what the fed did do in terms of hiking 25 basis points. really trying to thread the needle here between wanting to instill confidencew3 that what they're done to pre banking sy+t■ is going to woón■ and they feel good about the ezezym■ the banking systemhe and want to be acontinue tiff to higher inflation risk. were more concerned lpabout, financial stability versus across, they're stillxd concern about inflation.v what is interesting is that, only oneewpersona5■xd thinks it

appropriate in terms of a pause but ten people thinking one more rate hikeñi whether in pay is u for debatet( butxd seven peoplee as december thinkingo$várp+e to goñi higher than 5.1.wio■ this is probably still a fed that has a bias towards r wants to hike. i'm not sure that's necessary seen. >> i was going to that if you thinkq it's necessay because we also are likely in ñi little bit ofe1 at( statisticald lower on the reported inflation numbers, right? the annual numbers.ok and you just wonder if that's something that can kick in that maybe is going to make them a inflation. >> for a period of time you will see that tick lower. back half of the year it will look at the different data we've gotten over the last couple of weeks, cpi, 70% of that came from shelter whichxd the fed

acknowledged is lagging, not their biggest area of concern. when you look at wage growth iì% rolled over and moreover you've seen inflation continues to erode wages for 23 months in ax row so not that consumers have this massive firepower in terms of consumption and when you t look at the fed survey, if you look at university of÷michigan, on both count3■p you'req5a■ seef expe!h"q%=9m■ for one yearxd ah spring of 2021. now you fold in financial more sharply in the last ,o■k or two and that has the recipes there for a fed pause. you know, again, t(irrespectivef some of the banking issues we'v' >> yeah, a lot of focusttzez wh powell had to sayt( about the anticipated effects of this credit çótightening. howoh■pactful do going to be? he said maybe it has been worth or will be worth 1 tightening move. >> potentially -- >>ñiokxd meera, what's the spee

it? howñiçó fast does thw3÷xd work through the system to where wex see it in the data? >> let's recognize the factñiñit credit conditions have already been tightening when you look at lendingehptandards so recent lending standards qó(vey came outxd andñiñi showedlpe1 a dramd tightening so that can feed in faster than we think. i don't think the fed should wait to see if that has gone a little too far so it's the financial conditions, it's the tightening of lending standards we've already seen from existing rate hikes that i think is =5w(y into the system and will continue to do so.lp >> what is that mean for you as i mean, essentially do you fe as if we're kind ofe1 narrowing onto this path too of recession? essentially seemsq to be buildig in that directiond the lending standards, tightening into this as well as what the yield curve has been saying, fixed income volatility :ñ% all the rest. >> we've been of the opinion we'ree1 headed towards a mild

recession. what we've seen over the last two weeks heightened that anñ pulls th!á(xd time line ad forward because when you see that tightening and credit conditions, that's going to mean that will have axd knock onym■ t to consumers and businesses seeing a little bit less loans and spending. so i would say that the recession risks are still present. we've seen that really hot data in january give way to muchñi softer data in february. that more had other things not happened over the last two weeks. as an investor we want to make sure we're bridging the underweight we had for years in bonds even though yields have come downçó a little over the l■ couple of weeks they're still at attractivexd entry points for income and protection from a potential recession.çóñi still want to gear high call and i think in this environment security selection is more important thanxd sector or styl you know, when it comes to the equity market so i would certainly say that bond market is the place to be right now when we think about some of the that have been the best

performing stocks in the market year to date, they seem to have that combination you're looking for. they have the quality. at least the biggest ones do. and thençó they also seem toa5■ a little bit ofrs/h secular gro that maybe doesn't get affected as quickly by what the fed is doing. is that still thu■q right place? hideout. is that still the right maceça■r people to be looking with fresh cash? y isñie1 the right valuation. if we standardize some of th%p÷ valuations versus their own+■ histories, even versus other asset classes this is still one ex the ñimarket, xdjfyeix technolo been morelpv the lasté@■ recession and whené have less economic growth peopl■ look for growth inu■ theirxd portfolios so0l■ what5a■ i will into some of the growth areas terribly far away from pausing, think about the areas that have good valuations as opposed to other areas that still appear stretched. the day worth noting, the s&p

50"ó down aboutq 0.8%, actually below yesterday's low as well so typical pattern offá a bitq of sell-off following the jay shetty powell presser, although the next morning you never know whichñi way it willñixd swing. let's get to david on the regional xdbanks. david, wha out t sexd asñi to whether, in fact, this has been a storm that's passed mostfá of the institutions out there or are there just going to still be mired in the doubt of the stability ofñi their balance sheets? >> yeah, i thinkq we still have another 6 to 12 months to go with this instability and it really boils down to deposits a what we're seeing right now with higher, youfáxd xdknow, in= will putp,■ pressure on and leag regional banks and going to the money centeru■ banks will exacerbate the competition we've

already "n■çóseen, and i reallyk that thisñi is going to lead to this creditt(ñr contraction tha everyone seems to be talking about now because it's real. as balance sleets shrink it will impact how much loans go out"n■e door and thenfá this is also gog to impact net interest margins because banks given this flight% of deposits+■ are takinglp on m liquidity and borrowing that much more and that's getting that much more expensive by the day. so net interest margins will come under pressure and i'm fulling expecting in this april earnings season tox> yeah,ñi obviously just about every bank will haveçó an incentive to say we're calling in risk. we're getting more liquid. we're kind of hoarding cashxd essentially which is certainly contractionary. what do you do as an investor in terms of iouring out which regionalsñi might be punished t too much. which onesjf are still vulnerab.

good level of tangibleq book value when you fair value book loans and the securities, you look for the ones that have more insured deposits versu gñ to see how much is priced in as well as from a credit qualityok perspective. more and more investors are concerned about commercial real estate and what a contracting economy does on credit quality ñ looking back to the financial crisis 15 years ago and we woulf highlight the ones that have performed wellñr through variou the key theme here.ñrfá >>b.?hspv!e a couple of names t mpá thi? >> ñyeah, comericat( performed y well through the financial crisis, but th%)'s many factors to keep in mind,ñ i mean first republic performed exceptionally well through thele financial crisis and see what's going on

with them today so there's several factors to keep in mind but those are some of the names that performed well through the financial crisis.q >> appreciate w3that, a5■dave, s very much for coming on. >> thank you.5a■ñr q so we are at the lows of te day dow down 427.e1 josh, where do youxd feel we ar tactically at this point? sentiment looks prettyxdñi deprd at this point. hadáüm■ rally. it's been kind of narrow. everybody got excited about jusd the breadth push we got in january. @r(t&háhp &hc% >> yeah, but t do think a lot of issues we're wrestling with do get alleviated with falling yields and today was a continuation of what we've kind of been going through for the last coun,# of weeks and the lower yields fall, the less people areehtorried about balane sheet issues as they re at least treasuries so that's an interestingt9 certain areas of the banking market, you know, i wouldn't go so far as to say commercial real

estate or fintechs, butxd certa areas of the bank startñi to ge brokers, so i think that's something that maybe tack likely you couldfá do butq strategical everything is pointing in the ñ a slowdown and a late fedñi and maybe a fed who's done too much to make up for being ñilate. today doesn't change that narrative. that's the bottom line. >> that's been thee1 story for n u range. meera, you did< ■ mention you w to rebuild exposure toñi fixed income. what about on the credit side? are we bracing for accidents there or do you think there's value? >> we should brace for some accidents on the credit sideu■ especiallyfá whenlp weñi think high yields. we've seen spreads moderate and not near txe2i■ nonrecessionary peaks letp,■ al■n■ recessionary peaks soçóok we have to be cognt while some areas of the public high yield market do look better than they had perhaps in prior eras at the same time the pricing is not there, we tendñio

see spreads flowçó out when we embark upon a recession and i don't seeok why that would belp different thisñi time. so gearing towards much higher quality. >> in response tot( a questione powell did point and this is just standard, you know, conventional wisdom that recessions tend to be kind of nonlinear and i know you say we expect the moderate recession. i think they're mostly always considered that they'll be moderate going into them so what are we at least going to be on alert for that itqlp could be >> the good news we've seen some issues within the banking secto$;ñ a lot ofqt)!■ have been contained to specific companies, but the fed, the government has stepped in to protect the system that is a good e1thing. we areu■ attentive to the risks from thexl2=i■ market as well and seen a market that held up well bute1 despite the structu laborq shortage that we are experiencing that doesn't mean we're not still going to have cyclical patterns of unemployment so do have to5a■q cognizant we could see negative

job growth by the end of the year. >> sure.'c■ josh, if i could just throw out, you know, the sortt( of bull ca is, listen, we've been kind of añi what we're expecting foud over year now, in other words, you're z rally when the fed starts to triton.hen the fed we started to fatfs apart in th stock parke well before that. we went downñii] 27% when earni were still at their peak. bottom in october. you get this rebound and now we're in to sort of]/> better seasonal period. have we pricedçó in something,ç maybe not éñeverything. so how do you kind of navigate that typeokñrt( of thing? >> the fed is talking aboutlp seeing unemployment rising to 4.5% by the end of the year. above where we are right now. and thençó they talk about 2024 which gigantic graint( ofq saltw quickly can i dissolve that. think just tookçó gdp growth forecast from 1.6 down toi]t( 1o so if you're in the s<

market, the question is not what is the im#= summer because you're already braced for that. all the sentimentjf surveys and all the positq nobodyi] is bullish. how soon can we get to 2024 and not on a calendar basis butokçó think about 2024. that's what i think the equity investor is going to start being able to do thisa5■ summer, so n it's just awkward phase. we have to get from here to the official last ratezv■ hikeñrxd whatever theçó credit crunch go to next and then get to thatxú÷ moment. we're not there.5a■ it will take six, eight ñiweeks. we'lli] be talkingu■ about4ñ'24 enough. >> right around midyear is when all of a sudden you có.÷ sort o revamp your qmodels. meera, thank you very much. josh, ase1 well. ñ1% gain in the nasdaqv 1? little bit of an all bets are off after that fed meeting. it seemed like while there was a

dovish interpretation largely at the beginning of the press conference much!u■ has dissipat. the u.s. dollarxd index actuall cracked pretty hard, v;uçó down to about 102 at the lows today also bouncedñi so obviously indecision because of the great uncertainty of the outlook given the effect of the banking crisis on overall economicñzgrowth is out ñithere. market breadth prett!dxdeqdslop. it was strong to start the day, not so much right now. would point out the s&p 500, 3950 3950ish. at 3800 and change monday lowjfp buckling and not only that we were atçó 3992 the day before tt happened so essentially very much range bound but giving back any bullish interpretation of what happened at the beginning of that press conference. taking a look at treasuries, the two-year note yield has gone back to low 4%, the marketfá

resolutely pricing inq much mor easing thanok the fed has been willing to acknowledge it is anticipating right now and that is now alsoday. but winners stay i am jon fortt with morgan breaking down the fedt( decisio and the impact going forward on your money. coming up we'll get reaction fromñi former economic advisers% who say there is one keyñi messe chairman powell conveyed inxd h news conference. >>