>>l'y■s. while ther closed aw■ little bit, the compy is goingñ■ to need to restructu■ >>f■ jason >> dardm i like it here. >> joey? >> the çó■fmarket's safety trad >> thanks, everybody i'll see you "closing bell." "the exchange" is now.o■x■ thank you very much, scott hi, everybody.j■ i'm kelly evans. here's what is ahead this hour day two for bank regulators on capitol hill theñi■biggest shocker is that o■ billion was about to leave vabs vab -- silicon valley bank in a single day we'll look at how regulators will address it. and one man who has run a faile■ bank and our market guests think the inflation down trend is about to resume

we'll ask him why he is so sure. and people are piling into treasuries, but has the trade become too crowded one ofo■ñ■ñ■ our guests says yes heç■j■ joins us with what■á he's buying instead.q dom, another pretty nice rally look at the nasdaq >> some people are buying t■ stocks we are up solidly across the board here.i]f there is money pouring into equities right now the dow industrials is the lagger rightt■ now, up about 21■ points theòl■isf■ up about 39 points, about o■1%.t it's been a generally positive day, the highs of the session were up 46 points at the lows, still up 28. so, again, tilting towards the high e1end and keep an eye onx■ 4,013 that's why this level is hovering around here that's the 50-day average price, a level some technical traders the nasdaq up 1.25%. one reason for the

outperformance in that nasdaq trade is technology. specifically that ç■all-importa■ semi conductor trade, we referred to it as a leadingr indicator for the broader tech trade overall.ç■ qualcomm, one ofñ■r for the next sixo■ months. intel on itsl■ investorfá day,up about 6% nvidia up 1.5%.f and so watch these chips,i]tu■ and thee1 stock of the day isñi■ athletict■ apparel, j■lulue■x■ p 13%. they÷■i■come out and say profitn revenue is better than expected and theirjf more affluent clien are still buying the high-end yoga wear. the four-year forecast better than estimates if this is an indication of that power of lulu lemon in the brand right now, the same-store sales

or sales growth at established storew3■locations, 27% higher tn at this point last year. q■ho cr■ulu up 13% >> thank you, dom.w■ congress holds a two-day hearing on the collapse of svb the bankñ■ failures respect that uncommon in the united states. there have been over l@rt■500 of them, 563 in fact since 2001 but what is notable this year is their speed andñr■their size already this ?%■■has had more assets incpçó■bank failuresfá s 2008 and the run on svbo■f■ breathta with $100 billion heading out the door thet■ day it was seized my next guest knows aboutñi■faid banks. joining us nowr co-founder of the ?■■■aventiw■jp john, thank you. steve liesman is here, as well

john, i loved when you sort of spoke to you before hand you had more questions than answers about this whole process. whatx■ strikesw■ñ■i■as mostlpokr as to what has gone down in the last couple of weeks >>f■ certainly, it's the speed which things are happening.(r# o it's fairlyok unprecedented. it's usually very rare foro■ ito happen this fast plan in advance and do things quietly andqsmoothly without disruption, and when you have something move this fast, you have to improvise a lot. >> but you're sort of saying listen, why did the companies fail outright?x■ whyt(■did the fdic set up a brie bank why not sell them immediately? why were all uninsured depositors crotected this is the big question that goes back to this, people are looking at this and

wondering ifktu■makes sense in the middle of the fight or whatever the term is, you throwx but what are some of the biggest oddities to you about what should or shouldn't have been done ñ■ unprecedented and hasn't happened before. to t(■ s&l crisixy■ in ther in the s&l days, it was because of mortgages at 5%, whenj■t■ fighting inflation,q3■interest rates paid thec■ depositors hado go b nto. here the mismatches were in the long-term securities, but it was the exact same thing, that ow7t■ institutions were in big trouble. and so we should -- peopler

should have knownxd■better you know, it's also lack ofxd■1 diversification, and rapid growth i mean, rapid growth is justç■ a red flag to anybody that you've got to look to see if there are problems, andok these twoxd■ those characteristics, justú >> let's take a listen to some of the hearing in congress.t >> you are not running a consultingf■ operation you are running a regulatory operation who can forcei] banks■ follow that advice.ñr■ interest rates go up, interest rates go down. banks, ought to know that,e■ especially when this is not a 100-year event interestme(uqj goxd■@■ñ■ up andn

2023f■ has its peculiarities, b interest rates, and then the fe■ that's not examining banks to see if they can survive if interest ■> let me bring in steve liesman on thate1c some of the ramifications are going to be if these questions and hearings >> a lot comes downñr■to this notion wlhether or not this wasc uniquel■ failure or r i have been talking to former regulators, maybe someformerc■ colleagues of john, and i've covered a bunch ofy■■■bank failures,ckelly. i think there are three rules in theó[■ regulator's bankfá failu [1%mq9■ one t■is, john said this, identy y■3■ two is get to the■■weekend, and three is sell the bank before you have to close it.p,■nn none of those seem to be the case in this particular case

they weren'tr silicon valley bank was close to failure. in fact, michael barr testified this morning that theyc■ thought thursday morning they could make it through the day $42 billion went out the firslñ■ day. $100 billion was set to be going out the s% day that's when they shut it lr■■■o. so they could never get to thet■ weekend where why did we do all this on the weekend? there's two free days where deposits aren't flowingok out, d they had to shut the bank, they had to sell a shuttered bank that's onec■ of thei] reasons w they -- the cost is going to be so high. and the issue,ç■ i think, for regulators, and maybe john wants to respond to this, ifroj■tk can theñr■t■ regulators can't the weekend, we will be selling more shuttered banks than live banks. so the cost of thesezye■z■ failures may go up in the future >> john? >> yeah, that's a scary thing, and it's going to require a

careful look at how we supervise banks,l■ regulate banks and han■ bank t(■ the fdicl■ expects it to cost t insurance fund t(■22 billion for these two banks.t■x■ that's an enormous amountht■ of money.w■ it's by far the mosta■■■the fdic has had toe■ spend,xgj andl■ it of that is because they protected the uninsured depositors here, becausec■ they were afraid of contagy >> so what would you add to that going forward then,xd■$djohn is this thet(■template the takeaway from the last couple ofqú■5)jz■congress is that therep■■■is no appetite to extend the fdic insurance to back all uninsuredk■■■deposits 2 the country.o■ so what system arec■c■ wexd■in i t something, and there is a good chance theu■■■regulators will do

this, similar to what has been done with the banks over $250 billion in size. after the lastl■ crisis,c■(■tho systemically important banks were required to issuet■r debt that wasv depositors and it created a cushion between -- in addition tomy■ the bank failure wk(■haven't heard about runs and concerns at those banks.é■ the same thing should be applied to mid-sized banks from k■■■150 you have a greater buffer for largeu banks, the important ones that didç■ e1this,q■ they have uninsured mid-sized banks. >> steve >> that is being discussed righ■ now, exactlwó■what johnqis

talking about, is havinge■ additionalç■ capitals■■■cushions whether or not those mid-sizedt$ (t&há■p &hc% some of the rules that some of the bigger banks are,qand the notion that a bank can beñi■ systemic without being big that's a big thing wa you aú hearing. the regulators are up there saying we are essentially implicitly guaranteeing all deposits, saying this to congress, which is likexçm%9 we have usurped thelp powerko■ you reservedç■ç■ forç■ yourself. and congress is okayt■e■ with ts idea congress has said specifically only congressko■ can do. this, are we putting ourselves in a situation co■where, during■ 2008, inñ■ the spring bear ko■

collapse, when w-■ got to the falll■d■thexd■appetite for bail had vanished basically.x so lehman, ñi■)■óñ there was a sense now these institutions have to fail.x we're saying, theseñi■ones got o. the next oneú■ tor point, which is the mistake they made back in 2008. >> we are running thelp playboo■ for the next tier of banks in line so i think you're making a grea■ point, that we need to look ati■ whatw■ is it that was done t@■óp protectñr■that first tier in ñ 2008-2009, and extend some of that to this tier? >> yeah.i■÷■ç■l■x■ we'll leave it there john, steve, thank you botz■ ver much for being here as we conclude the second dayt(■ofq■ s hearing on congress. the seven-yearx■ notesç■ wep for auction and demand was weaì% let's get to rick. what is goinglp on here?

>> you know, yesterday we ha fin i thought maybe investors were becoming a little moref■ lukewa it doesn't seem to happen with the j■seven-year seven-year yield, theñi■problem was the market wasq■ 3.615, higr more than a basis point.r the other metrics, they wereo■ weak except for direct bidders.ñ you know those big pensions and insurance? you could count on them to be purchasers theirxd■numbers have moved up a bit. remember, a lot of collateral is it doesn't surprise me direct bidders arejf stepping up a bit. as we both talkedwc■(■about, it a nice fit back in the day with mortgages. but with thex■ complexityxd■ no

that has moved a bit on the maturities so it'sñi■not theñi■most popula but it definitely is telling that we can't move paper withxd■ the demand bye1 investgr+■that once did $10 c $120 billion inw3■supply structural changes, rick i don't know, maybe i will be o■ the next auction thank you, rick. now to the latest on the housing front. pending home sales showing no sign of recovery diana has the t■details. t■ still down over 21% fromj■ a ye ago. take a look at mortgage rates. fall highs in december, and then came down sharply in january but boom, shot right back up in february.çó■ó■ these pending sales aret(■basedn size contract duringñ■ the mont so people out shopping withe1 their purchasingw■ power got clipped because of the higher

rates. we canñ■ see xd■t, salew(■erei]p everywhere except for in the west.i rates really hit affordability there. now, we have seen homel■ prices cooling off in the last seven months but they're +■ very high and theçó■surge inx■ sales inñi■ january may have stalled that price drop we have seen some more current reports that showxd■prices movi higher in someñ■ markets in february the ñ■overriding issue, e■w■thos sale, given the continued strong demand kelly? >> diana, thank you. speaking of real estate, the next guest saysñi■housing will lead the economy into a recession, and there's more downside risk ah]■b■ how should you position? he has three words for investors -- bigger is better. after pleading guilty toq■ helping wealthy americans pay taxes,c■ credit suisse is in violationjf of thatt(■x■agreemer

we haveñi■x■details on the two- investigation.t■o■ as we head to break, your session highs, dow is up 257 s&p up to f■4017.fáe nasdaq up. back after this.

the nasdaq leading dhá■■broad track for its bestl■ quarter in couple of years, up almoste■ 14% year to date but my next guest says not so fas]>■ fas]>■ '■÷n inflation is about to x■resume joining me now is paul christopher from wellsq■ fargon institute. paul, good to see you. )jt■howxd■people say they sort ofq■ implicitly maybe you aboutñ■ inflation heading lower, and that'sjf a reason to buy thingst■ like the■ nasdaq do you think that's a valid argument?fáp,■ i think you're getting some be+■ in the tech stocks nowj■ñ■#■r a couple of reasons. one is that there isq■ an expectation in markets that the fed is going to cut interest rates. but if interest rates go lower,c that would be a boost to tech. the other factor is the dollar it'st■ weakened here, a lot of tech companies getq■ a lotof

revenues from overseas.t so a weaker dollar allows them to bring home more dollars per euro earned overseas so that's helpingçó■x■i■ech. but keep in mind, thefá markets are trading in broadq■ ranges since last april and there's still some -- >> why don't you think that the fed is going to cutt(■outá■ñtìá argument is either because inflation falls enough or the economy gets bad enough?+■■■]t(■ >> we're not sure theñr■economys going tox■ get bad enougzó fast enough and the inflation is on its way down, but weh■■■don't knowx■ ift will fallr so the fed hast■ to avoid the t■ mistakes they made ine1 the x■is where theyq■ let inflation off e hook a little too quickly and it came roaring back. that's the biggest fear right now, they said so. so even if they don't hike much more, they willçó■hold rates for longer as inflation gradually falls, that will more and more positive in terms

of inflation adjusted in terms, which will be a negative forl■ e economy. >> i want tob■■■mention the poi of view from larsi]i] christian who said that the fed wast(■too loose, but now they're too flig tight. he sees deflation as the bigger issue. stick with everything elseu want that'st■ levitating? >> definitely not some ofxd■u■■e but we still see some quality characteristics in tech that makes it one of our favorites. we also like health care here, and the energy sector. both of which are going to generate cash for investors. so we likef■ that quality playfr we would be more selective, though.i wouldn't take that whole list that you just ran through. yourj■ advicetf■í is, you can s the market, you just get big and go to quality sectors that you just mentioned

no-brainer+■■■case for fixed income maybe you don't think that the fed ise■ going to back off t(■e, but if the market is right, the treasury spectruñ? >>q■ yeah, both é■■■nd let me explain we think that a long-term yield, they back down a little'c■ dq■bt they're going to gogn we think that will be near the peak we have been saying since october that this is a great time for inves :■■■to for diversification but for safevyu■ we also think that going forward, this market has been in such a trading range, going back ñ■ì% can just hold on to that cash if you are an equity investor as the market hitsx■ some new crises, some newb■■■bad news, market comesz■ backlp down 3700, 3800,ñr■that'sf■ where we put se of that cash back to work in our

favoritea■■■sectors. >> paul, tfbw■u■t■)■j■j■ ■(t&há% me today.ñ we'll continue this debate next half hour. fi becoming theñ■ metaverseé■■■mess we'll look at who is spending and what it means for thei] fute of that company. market swings..■ where do you put your money,t■j■ stocks or bonds? our two guests are stepping into the ring and let's look at the p■■■ow intel leading the t■ñ■way, the k surging 6%.çó■c> "the exchange" is +■k after this ™? - i'm a cfp® professional. - cfp® professionals are committed to acting in your best interest. that's why it's gotta be a cfp®.

welcome back to "the exchange," everybody nasdaq leading the way micron one of the names outperforming. the dow up three quarters of 1%. bitcoin back above 28,000, hovering near its highest levels since last june. if you look at the price here, it's handily outperformed the mega caps. you can see this what i'm talking about. some have noticed the trading relationship seems to be the two moving in the same direction here is the correlation between the triple qs and bitcoin over the past year or so. it fell as low as 40% at the lows, and now back up to 70% correlation. pretty striking. it speaks a lot to the liquidity environment that seems to be buoying these trades disney is laying off the marvel entertainment chair.

today's move comes after his recent attempt to have his brand activist join the board, leading to the proxy fight, where he withdrew after bob iger unrai -- unveiled their plan to cot ku -- cut costs. king charles arriving in germany. he will address issues facing both countries, such as sustainability and the crisis in ukraine during his visit to berlin germany's president is expected to greet charles and the queen consort camilla as a symbol of the country's division during the cold war and subsequent reunification. twitter temporarily restricting margeorie taylor gr greene's twitter account after posting a graphic.

twitter says it temporarily limited some account features with futch functionality to be restored in seven days and today marks the 50th anniversary of u.s. troops leaving south vietnam. in the vietnam war, nearly 1,000 ceremony also be held in towns and cities across the country today. >> christina, thank you very much still ahead, it's not just starbucks or disney, rio's former ceo, atwh his return means. we're back after this. this is ge aerospace, advancing flight for future generations. ♪

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welcome back to "the exchange." u.s. banks taking the spotlight on capitol hill the past couple of days. european banks making headlines, too. uvs is returning sergio romani as role of ceo regulators are investigating one trade that could have led to a big drop in deutsche bank shares which fueled a selloff it's been a rough month with european banks deutsche bank down more than 20%. joining me now to discuss is europe's finance editor at "the wall street journal. alex, great to see you again welcome. what's the mood over there is there a sense that well,

okay, credit suisse is credit suisse, or is there nervousness about how much this could broaden out? >> i think there is still nervousness, maybe a little bit less today because of their appointment, you know, he's someone that people just widely respect. he came in and cleaned things up last decade and left there a few years ago on a high note he is coming back in to redo the job all over again of focusing on much larger institution wealth management. but underneath the surface, shares are up again, making people feel better but the prices in bond markets are still down the credit default swaps, which spiked last week and a lot of people pointed to as maybe the cause or an amplification of concern about european banks they're still elevated, and we

see those coming down. i think that's a sign that there are still some jitters out there. >> sure. people say hey, markets are so thin that one big trade can move the market for deutsche bank you know, yes, that's true you were seeing big reactions to this are they justifying concerns about deutsche or are we seeing the market looking for the next institution that might be on the chopping block should we get used to this exercise or does it tell us about vulnerabilities that might exist in the global banking system >> the cds is an easy thing for people to point to and say this is a thin market, this is why things are introuble there are indicators that people are worried. the price of bonds got wiped down and reverberate across the market that's telling investors that the cost of capitol for banks has gone up.

there is this poking and prodding at all the usual suspects you know, deutsche bank five years ago is the credit suisse of its time but it had a lot longer to go through its reform program, shrink its wall street presence, cut jobs, get on a more solid footing. what's interesting is to have that big fall last week, and i don't want to make any predictions for the future, but there were people in the market who came and said, hey, this is a bank that has changed. this is not credit suisse. and we're willing to buy its shares there was a bid there, someone willing to buy it. as you and i have both lived through crises before, these things go on for a long time >> you know, this is unfair to ask, but i can't see you and not ask you about commercial real estate you're over there now. there's plenty of things to worry about and back here, we're

saying who has commercial real estate exposure. i don't know if you want to offer any observation, having lived through that episode in 2008 >> yeah. deutsche bank again, despite what you think, still has a high exposure to commercial real estate in the u.s. but the exposures are different, and people say there's a little bit -- there's a lot more equity in the system. but, again, the world has changed in a way, what happened in 2008 is different there's just too much supply, and too much credit. this time it might be a demand problem. the world has changed because of covid. nobody is going back to the office in fact, people are going back to the office less in the u.s. than in europe so arguably, commercial real estate in europe might not be as bad, but things have changed in

the u.s., and some people h-- yu know, land lords are having trouble. >> yeah. as with so many people, it's great to see you again, and somewhat worrying. okay, we're going through one of these periods again. thanks for your time again appreciate it very much. >> great to be here. sticking with the european banks, if you thought the takeover of credit suisse ended drama, think again we have a new investigation into its dealings, particularly with some wealthy american clients. >> the senate finance committee released a new report detailing allegations against credit suisse, the bank that collapsed and rescued by the swiss government and uvs earlier this month. the report alleges that credit suisse has been helping americans hide hundreds of millions from the irs, despite an agreement to cooperate with u.s. tax authorities a decade

ago. senate investigators tell cnbc, they have found 25 american families who secreted away as much as $700 million in the bank in recent years, and they say that reveals a corporate culture at credit suisse that played at least a part in the bank's ultimate failure i sat down exclusively with two former credit suisse bankers who served as key witnesses for the committee's investigation. cnbc has agreed to disguise the identities of the bankers in order to protect them, because they fear retaliation from the bank our interview was conducted in the weeks before the bank failed >> so what secrets did you turn over to the americans? >> you knew the name of the family >> correct

>> and you knew how much money they had >> code words were italian cities in 2020, credit suisse pled guilty to filing false tax returns and agreed to pay a penalty. at the time, the bank pledged to comply with american tax authorities in the future. but today, the senate finance committee says the bank didn't do that, instead engaging in a long-running scheme to hide american assets by switching the nationalities of some u.s. taxpayers to other countries back in 2014, credit suisse executives told senators on capitol hill that they had cleaned up their act >> we have proactively taken steps to require only those u.s. clients who establish compliance with u.s. tax laws can be clients of our bank.

>> how do you know that? >> i see firsthand what they did. >> one of the whistleblowers told me how the scheme worked, by making sure wealthy american clients got second passports so the bank could justify them as counting them as foreign and not american accounts. so you're talking about americans who hold two passports. they open the swiss account in the foreign passport, and they put their irs obligations in their pocket investigators obtained emails from inside the bank in one, an american client, heir to a $200 million fortune, writes, u.s. citizenship renounced. and the american says attached

is a confirmation letter i got in the embassy i just tried to reach you. congratulations, the banker replied. this is a big step for you, and i know it was not easy at all. hear you soon. the heir to the fortune replied, thanks hopefully this should make cs more relaxed, closing with a smiley face. chairman ron wyden told me it's not clear how much, if any, secret american money remains in the bank but wants the u.s. department of justice to take another look at the bank's 2014 plea deal, which he says gave the bank a penalty discount for future cooperation >> it is still going on, as of just the last couple of days, even more money has been found to have been concealed and there are very substantial issues here. i'm not taking anything off the table. but clearly, it's time to prosecute and ensure that there

are penalties that send a strong message. >> we reached out to credit suisse and a spokes perp said credit suisse does not tolerate tax evasion. they describe legacy issues and saying we have implemented enhancements to root out individuals to who seek to conceal assets from tax authorities. and to be clear, the two swiss bankers we spoke to do have a vested interest in what they are saying whistleblowers in the u.s. stand to bring in 15% to 30% of anything the government collects so they stand to make millions and u.s. taxpayer also recover even more. >> it's been an issue as we have figured out what the fate of credit suisse could be could there be an american bank involved probably not so yes, uvs has come in. i don't know, they obviously got big financial help

i don't know what kind of legal protection that might offer or not at this point. >> part of the deal for them to acquire credit suisse included liability funding. so there is a slush fund for extra liability issues that might crop up here presumably, any settlement would come out of that money but the department of justice will have to weigh in. we asked for comment and they declined so we don't know what will happen this is some liability overhang for uvs. the idea of an american bank coming in and bailing out credit suisse or american taxpayers coming in and bailing out credit suisse, a bank which has a discounted history of helping americans avoid paying taxes that seems like a political non-starter. >> great reporting thank you for bringing that to us still ahead, disney just the latest company to abandon its metaverse plans on meta's plan

ctout 20,000 jobs and microsoft shuttering its vr platform what will it take for the metaverse to get its mojo back we have that next.

welcome back headline in "the wall street journal" today has the metaverse turning into the meh-taverse julia, it's easier for other companies to jettison them a little more awkward for facebook to do so. >> it is interesting to hear from facebook that they are investing in ai, which will help not just in their metaverse ambitions but things like advertising. one thing that i think is really interesting, kelly, is to think about maybe we're just redefining the metaverse it was supposed to be ant headsets and vr. now it's more about having a

virtual experience maybe on your phone. so it will be interesting to see what happens when apple introtuss their headset, whether we will see more of a conversation about things like fortnight. maybe you be interact with some of these tools that meta has been investing in, and maybe that can be the metaverse for people without having to buy the headsets >> so, yes i really want to pivot and talk about this letter, but before i talk about the ai letter, one more point to make on this is, the metaverse has not arrived yet, so should facebook keep investing in it? does it need to go deeper into the whole ambitions of the metaverse? >> mark zuckerberg and metaverse's plan is a plan for 2030 so we're talking nearly ten years out. so my understanding is that

though meta, the parent company, has done plenty of layoffs, those are across the board it's not like they cut back dramatically in the metaverse area but they're continuing to investor that ten-year vision. i do think that more near-term will talk about ways they're going to bring the metaverse to life >> yeah. >> redefining rather than moving away from it >> it's the perfect pivot, because what was a lot of hype and looked like it could become a reality is here in terms of ai and has taken all the oxygen out of the room. we have this open letter saying we should stop all ai what can you freeze things like bard and ernie and bing all the rest of the cast of kacharacte characters >> so elon musk and some other

people spoke on some concerns around ai. they said they want to pause all development and put a pause on things saying not that you keep on releasing things that are in motion or keep interacting with some tools, but they want to make sure there isn't enough generation of chatgtb. what's interesting is maybe open ai, the real pioneer of this and really the leader of open ai, said they spent six months testing before they released it. so they are being cautious elon musk for years has been talking about how he's afraid that robots are going to take over the world and we need to be more cautious. i think there's a question of whether or not some pause would be good. but i don't think it will impact the customer experience. we as users aren't going to see a difference it just means perhaps even as

this pause that elon musk is advocating for is adopted, it just means we wouldn't see as dramatic a pace of change going forward. >> i think there's no way it's adopted. it's a huge arms race right now. julia, we appreciate it today. good to see you. former presidential candidate andrew yang andrew yang was one of -- what do i call him, signees to -- significant industries to musk's letter we'll join "last call" tonight still ahead, the two-year yield has fallen a full point during e e bank it your mill and th s&p is up 1% if a recession is looming where should we be seeking returns we shall debate that next. you ok, man? the internet is telling me a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible]

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welcome back, everybody. we've got headlines on fed jaire jay powell coming from the bank hearing on capitol hill. let's get to steve liesman with the details. what's happening, steve? >> reporter: this is coming from a meeting that fed chair jay powell just, we understand, with the republican study committee, and there's a headline out from representative from oklahoma hearn that powell said one more rate hike is coming. our understanding is that's not what he really said. the person in the room we communicated said powell was citing the summer of economic

projections forecasting one more hike he did not say there was going to be one more hike. he said the summer of economic projections says you can see where the may fed meeting is a probability. they had declined more comment there was a little bit of market movement we want to be clear what powell said our understanding is what he said is this is what the sep says he want saying to the republican study committee there was going to be one more hike. >> steve, thank you for clarifying we appreciate it our steve liesman. let's bring in my next guests to respond to this as we see negative stock market sentiment as well has been surge of late chris is chief equity strategy mangosuthubuthelezier and jim is with bianca research. how important is the next fed rate hike or two or three? do you prefer stocks or bonds at this juncture? >> well, the next rate hike is going to be really determined by what is the fallout of this banking crisis

are we going to continue to see some kind of credit contraction because banks cannot credit their deposit bank i happen to be in the case that the deposit base sun sure for the loans and that's going to lead to a faster and broader slowdown in the economy. if so the fed won't hike rates if i'm wrong on that they will overstimulate the economy and they will hike rates and go right to where they were in the beginning of march and look for 6% or more so expect extreme volatility in the bond market which is what we've h.given all of that, i think the thing that's most at risk is risk markets like credit and like stock, and they are going to be really struggling in this environment, even though they haven't been for the last few weeks. i think as we go forward, i think it's going to be a bigger struggle for them. >> would you rather -- if i gave you the choice, you can own the nasdaq, or can you own the two-year, what would you pick? >> well, let's see the two-year has had its worst year ever and still outperformed the nasdaq over the last 18

months now that the two-year is giving me over a 4% yield, i would probably pick that going forward from here because i'm not sure if the economy is ready to turn around if we're facing a credit crunch. >> chris, which side would you be on? >> you know, kelly, good to be with you again i think the problem with taking the bond side here is it's become the consensus bet, so, you know, if the two-year -- although jim is right. the rates have come up over the last 18 months in the last month the two crier has had its best period probably since the 1987 market crash. the ten-year has dropped 70 basis points in the last month, so this is not a contrarian idea this is one that the train has left station everybody is on board. i think actually stocks are the contrarian idea right now, and for that reason there's some bargains to be had in the market. >> do you remain, if i'm not mistaken, somewhat bearish over where the overall economy is heading? i know you were saying just

recently that you are excited about bonds for the first time, but did we just kind of pull forward a year or two of returns into a one-month period of time? >> no. i think to really get on the bond train at this point you would have to believe that jay powell is going to lower rates rather quickly over the course of 2023, and i just don't see that i think the market is anticipating that, and as if he said anything, he's been straight with us saying higher for longer, and we may have a pause, but that's a lot different than rates going down to support an even lower ten-year than we've seen over the last month again it's dropped 70 basis points so i think -- jim and i are relatively pessimistic looking forward on the economy, but i think a lot of that is in stock pricing or at least certain stock prices already. >> have to leave it there. can we do it again would that be all right? gentlemen. thank you very much for your time today that does it for "the exchange."

tyler is getting ready for "power lunch" after this quick break. w.will join him. bu sy over there. wow. what is going on we're back after this. ♪ it's our turn now we'll make it up again. ♪ ♪ we'll build freelance teams with more agility. ♪ ♪ the old way of working is deader than me. ♪ ♪ we'll scale up, and we'll scale down ♪ ♪ before you're six feet underground. ♪ ♪ yes, this is how, this is how we work now. ♪ sfx: [soft beach sounds] c'mon ref, that's a foul! jay? jay's back? gimme a time out. huddle up! i call the time outs. didn't expect to see me so soon, huh? well, i invest in a fund that fuels innovation, like next gen video conferencing, and when i saw your defense in the first half, i had to step in! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. coach, what are you doing?! this thing goes fast. before investing carefully

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good afternoon, everyone welcome to "power lunch. alongside kelly evans i'm tyler mathisen coming up today, markets are higher and investors seem to be over the worst of the banking cries. we've seen high levels of bearishness in the market. so is that pessimism starting to lift, kelly in. >> and if so, do you need to change your investment decisions? we'll talk to the head of the cash cow's etf should you bet on steady cash flow or is the risk-on trade overtaking it? before that a check across the markets with green across the board with the nasdaq and tech leading the way again. let's get caught on the big movers dom chu, we start with y