a high level, but it was really an extraordinarily high level for most of the last two years you see cooling in the private sector in the last report. i think we see that and it's happening at a gradual pace. a labor market, very strong demand for labor, which is really the engine of the economy. people are getting hired, many people going back to work, getting wages, spending money, and that's what's driving the economy but it's gradually slowing, it's gradually cooling. that's a good prescription for getting where we want to get >> still we see a push to raise minimum wage, a lot of unions go on strike or threaten strike, and they come out with agreements like big pay agreements like u.p.s. and the autoworkers coming up. are you concerned about a trend of series of big unions, these contracts pushing wage inflation? >> not for us to comment on

contract negotiations. not our role we monitor these things, and we'll keep an eye on them, but really that's something that's handled at that level -- [ inaudible ] >> victoria? >> hi, victoria with politico. i wanted to ask about the sep which asks you would cut rates as overall and core pce get to around or under 3% i'm wondering is the level of inflation what is sort of important there as you think about getting to 2% and when you might start cutting rates, or is the speed at which inflation is falling also important >> i think you take both into account. i think you take everything into account when you start cutting rates. it would depend on a wide range of things. when people are running down rate cuts next year, it just is a sense that inflation is coming down and we're comfortable that it's coming down and it's time to start cutting rates i think, but there's a lot of

uncertainty between what happens in the next meeting cycle let alone the next year let alone the year after that. it's hard to say exactly what happens there, what's motivating people >> so stubbornly in the high 2s, you wouldn't necessarily cut rates? >> i'm not saying that at all. i'm not giving you any numerical guidance on that we would be comfortable cutting rates when we're comfortable cutting rates and that won't be this year, i don't think many people wrote down rate cuts for next year. several. that's going to be a judgment we have to make then, a full year from now it'll be about how confident we are that inflation is, in fact, coming down to our 2% goal >> a good part of wall street has become more confident that the fed is going to be able to engineer a soft landing and they've reduced their forecast for recession.

and i'm wondering if the staff has changed its view on the likelihood of recession being likely, and if you personally have changed your view in terms of becoming more confident that you can achieve a soft land ing? >> it has been my view that we do have a shot and my base case is that we will be able to achieve inflation moving back down to our target without the kind of really significant downturn that results in high levels of job losses we've seen in some past instances, many past instances of tightening that look like ours. that's been my view. that's still my view and i think that is sort of consistent with what i see today. it's a long way from assured, and we have a lot left to see that happen. so the staff now has a noticeable slowdown in growth starting later this year in the

forecast, but given the resilience of the economy recently, they are no longer forecasting a recession. i just want to note that our staff produces its own forecast, which is independent of the forecasts we as fomc participants produce having an independent staff forecast as well as the individual participate forecast is really a strength of our pro process. there's a lot of constructive diversity of opinion that helps inform our deliberations, helps us make, i hope, better decisions. >> and is the reason for optimism that inflation has come down and you still have a strong labor market, does that add to the optimism >> i wouldn't use the term optimism about this yet. i would say, though, there's a pathway, and, yes, that's a good way to think about it. we've seen so far the beginnings of disinflation without any real costs in the labor market.

and that's a really good thing i would also say the historical record suggests there's very likely to be some softening of the labor market conditions. and consistent with having a soft landing you would have some softening in labor market conditions, and that's still likely as we go forward with this process. it's a good thing to date that we haven't seen that we've seen softening not through higher unemployment, we've seen softening through job openings coming down part of the way back to more normal levels, the quit rate so people aren't quitting as much, participation, people coming in and labor supply has improved which has lowered the temperature in the labor market, which was quite overheated going back a year or so. we hope it continues

>> thank you, mr. chairman you and other fed officials in the past have suggested that you don't need to keep hiking until inflation hits 2%, that as long as you see continued progress. i'm wondering how close do you need to get with the inflation numbers coming down? how many months will give you significant confidence how far does this fight need to go before you're willing to declare victory on it? >> the idea we would keep hiking and going way past the target is not the appropriate way to think of it. the median participant, taken with a grain of salt, people are cutting rates next year because

the federal funds rate is at a restrictive level now. if we see it coming down credibly, sustainably, we don't need to be at a restrictive level anymore. we can move back to a neutral level and then below a certain point. we would want to be sure inflation is coming down in a sustainable way. i'm not going to try to make a numerical assessment of when and where that would be. that's the way i would think about it you would stop raising long before you got to 2% inflation and you would start cutting before you got to 2% inflation, too. >> thank you, chair powell jennifer schlumberger with yahoo finance.

a handful of regional banks, including silicon valley bank failed when you look at credit conditions now given bank of california's acquisition of pac west, does this acquisition suggest the full impact has not been felt, or are you comfortable saying that we've seen most of the ripple effects that may have occurred at this point? and how does this play into your outlook for policy >> i don't want to comment on any particular merger proposal, but i will say things have settled down for sure out there. deposit flows have stabilized. capital liquidity remains strong bank lending was stable quarter over quarter and is up significantly year over year banking sector profits generally are coming in strong this quarter. and overall the banking system remains strong and resilient we're watching the situation carefully and monitoring conditions in the banking sector in terms of the actual effect

on -- if you think of a particular set of banks that were affected because of their size and business model and things like that, that were more affected by the is yoturmoil inh than others, it's hard to tease out the effects on this very large economy of ours from them tightening they may be tightening a little bit more, probably are, than other banks. the sluice has been telling us it's been tightening i can't separate those anymore that's going to restrain economic activity. >> and how is that informing your outlook for setting policy? >> i think that is an expected result of tightening interest

rate policy is bank lending conditions would tighten as well the question is, is it more effective because of what happened in may? i just don't think we know that. i think we're looking at the current data in gdp and a strong economy and we can raise interest rates now for the third time since the march events. it seems like the economy is weathering this well but, of course, we're watching it carefully. and expect to continue to do that >> hi, chair powell. thanks for taking our questions. i wondered on wages if you were concerned about any inflationary impact of wages outpacing inflation, which is likely contributing to the boost in consumer sentiment and continued strength of the consumer we've been seeing.

>> it means real wages are positive again we want that we want people to have real wages. we want wages to go up at a level consistent with 2% inflation over time. nominal wages have been coming down gradually and that's what we want to see that's more of what's consistent over a longer period of time we don't think wages were a cause of inflation the first year or so of the outbreak wages are probably an important issue going forward. labor market conditions broadly are going to be an important part of getting wages down and we need a softening in labor market conditions. >> you mentioned at the start how you're keeping an eye on consumer activity and a rebound there and i'm curious what the fed's explanation would be to families if further interest rate hikes start to hit the

labor market start to drive that sentiment back down. what's the message there of why you continue to keep rates elevated or to raise them? >> we have a job to get inflation under control. the single most important thing we can do to benefit those very families, to get inflation sustainably under control and restore price stability. that is the most important thing we can do now. the people most hurt are on a low fixed income who, when you're talking about travel, clothing costs, food, if you're just making it through each month on your paycheck and prices go up, you're in trouble right away

people in the lower end of the income spectrum have a harder time doing that. we need to get this done and the record is clear if we take too long or if we don't succeed that the pain will only be greater. that's how i would explain what we're doing. >> thank you, chair powell you had said last month this meeting was going to be a live one in event the market had 99% probability to the rate move you announced today. the decision was, of course, unanimous, and the statement was basically unchanged from last month. may i ask to what extent was the meeting a live one was there ever any doubt about what the decision was actually going to be? >> was there doubt, i would say a range of views on the

committee. there's a range of views about what we should do and it's a process we go through. the decision is not fundamentally in doubt some meetings are less uncertain than others. i'll leave it at that. >> thank you, chair powell financial conditions have been loosening at a fairly steady clip in recent weeks the dollar, the stock market, et cetera what does that mean for the fed and being sure that inflation will come down to target >> we monitor, of course, financial conditions, broad financial conditions you're right, it's the dollar and equities we're very focused on rates and our own policy we will -- we're going to use our policy tools to work through financial conditions to get

inflation under control. the implication is we will do what it takes to get inflation down and in principle that could mean if financial conditions get loose or we have to do more, but what tends to happen financial conditions get in and out of alignment with what we're doing and over time we get where we need to go >> if i could also ask about the rate cuts in june. do you expect nominal rates to be cut next year while continuing qt? >> is that consistent with -- if you think both as normalization. imagine it's a world where things are okay and it's time to bring rates down from what are restrictive levels to more normal levels. normalization in the case of the balance sheet would be to reduce qt or to continue it. so there are two independent

things really the active tool is rates, but you can imagine circumstances in which it would be appropriate to have them working in what might be different ways that wouldn't be the case. >> kyle campbell with american banker i have a question about the discount window. if you see signs banks have taken more steps to be proactive in ensuring the facility if they need to. if you have thoughts policies might be appropriate to make sure they test regularly to show that they are prepared to use it >> both sides of that, banks are now working to see that they are ready to use the discount window and we are strongly encouraging them to do that, banks broadly

we did find, as you know, during the events of march, that it's a little clunkier and not as quick as it needs to be. why not in a situation where we're ready in case you need to access the discount window >> you've talked about getting the housing market back into better balance and also that the market might have bottomed where do you see that situation and balance or lack thereof right now particularly with the constrained inventory of existing homes that might otherwise be coming on to market at a time when existing homeowners are reluctant to move and all of that happening with the 30-year fixed rate around 7% on the heels of fed tightening and with what you're talking about tightening industry lending standards.

are we getting closer to balance? what's your sense? >> i think we have a ways to go to get back to balance really for the reasons you talked about. >> they might want to sell in a normal situation, they're not going to they have so much value in their mortgage which means supply of existing homes is really tight there are people coming in, the buyers are first-time buyers coming in with these relatively elevated mortgage rates. i think this will take some time to work through. hopefully more supply comes online and we work through it. the aftermath of the pandemic. >> hi, chair powell. nancy marshall again with

marketplace. russia has pulled out of an agreement allowing shipments of grain safe passage through the black sea and alternative routes could be closed off. how closely are you watching that >> we are watching it, of course, very closely the withdrawal from the black sea grain initiative does raise concerns about food security for poorer countries that import their food grain prices did go up on this news but remain well below their peaks of last spring a significant contribution to u.s. inflation we will be watching that >> you wouldn't say so looking at what we know now. thanks very much >> thank you

that was the fed chair after another 25 basis point hike, the 11th since this began a little more than a year ago is this the last chair powell noncommittal on that they might go in september they might not, he said. as for the statement, our own steve liesman saying it was, quote, a carbon copy of what we got in june. steve will join us shortly let me welcome to you "closing bell." i'm scott wapner live from doubleline capital in los angeles. jeffrey gundlach joins me now for a cnbc exclusive interview it's good to be back here in los angeles with you >> indeed, welcome back. it's been a long time. >> we continue our streak of fed days with you. your reaction to the decision when you were with me in june, you said, quote, i don't think the fed will raise rates again, yet here we are. >> there it is again obviously the bond market was way ahead of this. the work function, which gives you a probability from the yield curve was over 99%

i don't think we've had a meeting really since this all started where there's unanimity of opinion that, a, there was going to be a hike, but there wasn't even a debate if it was going to be 25 or 50 they're obviously slowing down the yield curve remains inverted it deinverted in the aftermath of the regional banking problem with svb and that was a real recessionary sign that was a moment where the markets were getting pretty nervous because the recessionary signals really you watch when the yield curve gets very inverted as was brought up in some previous guests on your network today, when it starts to deinvert that you really get worried, and that stopped happening once the bank crisis calmed down. so the deinversion is what you have to look for and it hasn't really happened. back out about 100 basis points

and really inverted from three month to the ten-year treasury we're watching for that. we're also watching for the gap between consumers' views of the present start to deteriorate and meet up with sort of what they have of the future which is almost always on the pessimistic side they think it will be worse in 12 months. that has started to narrow a little bit but not enough yet. the other thing that's really important, i think, why i thought that the fed wouldn't raise rates, and i think they shouldn't have -- i agreed with david kelly, who was on right before the statement was announced. they have the right to be and a reason to be careful here. we've been talking about this the last few appearances inflation is coming down and the headline cpi went from 9.1 to people say it's 3 but it has a two handle if you go two decimal

points it's 2.98 and there's big numbers rolling off for the pce, the core pce in the next three to four months it's possible the pce could go down to a three handle on the core level really this come month because there's a big number rolling off and the headline pce, which nobody talks very much about, but it could go down into the 2s, fairly soon. we believe the inflation rate is pretty much where the fed should really be happy with where it's at right now a funny study. this rhetoric of the 2% average inflation rate over time do you know what the core cpi average the last 20 years per annum, 2.0%. it's exactly there so we're exactly there and if you took headline cpi and replaced the owner's equivalent rent, if you replaced it with

actual home price movements from these indices, cpi would not be 2.98%. you know what it would be? zero if you placed owners equivalent rent. i think the fed should take david kelly's advice and try not to -- just be on a programmatic. >> i hear you saying the fed should declare victory and go home, that they shouldn't hike any more because they don't need to >> i don't think they do that was my point of view when we spoke last time i think -- obviously what's really changed a lot is psychology the stock market, particularly the nasdaq, is up a ton. one thing that's interesting, it feels like it's on a nonstop tear the asset class that has the highest return since the last fed meeting, amazingly, is commodities thanks to a lot of the surge in agriculture

it's up 8% the nasdaq is only up 4% it feels like it's up a lot more, doesn't it i think because of the tear year to date for the nasdaq, i think there's an opportunity now for investors to be more value or oriented the nasdaq is up 38 or something like this. >> the dow is catching up. the dow is going for its 13th straight day of gains. >> every day every day. still, i still think there's catch-up there i think the manufacturing prices are looking encouraging. also on the inflation side, scott, i like to talk about certain types of inflation numbers. one of my favorites is import and export prices because they don't have seasonal adjustments. they're just prices and they were off the charts a couple years ago and that's why i said everyone is way underestimating what's coming in inflation people don't pay attention these are down in the negative

double digits year over year one of them is down about 11% or so, one is down 18% or so. that's a real disinflationary type of pressure i think obviously if we just zoom out, when we dumped all that money into people's pockets and encouraged them not to work, it was obvious we were going to have a bulge of economic distortions and one of those would be inflation and that's still bubbling through the system one thing a lot of economists talk about and i think rightfully so is m2 is negative year over year when you start with that, wow, inflation is really going to be shrinking. but one thing people aren't paying attention to is the bulge that occurred in 2020 and 2021 is sort of still with us m2 is negative year over year. the monetary basis is still huge, still money sloshing around from all of the stimulus.

>> isn't that then why powell suggests, and he did again today, that recession is not his base case, that the cushion was so big, as you rightfully point out now, going in that it can provide enough cushion on the back side as inflation, as you also said, is coming down. why does there have to be a bad ending >> i feel like historical patterns, when you have inverted yield curves and credit conditions tightening, i think it almost always leads to some sort of a catalyst occurs and you start to realize why the bond market is susing out the yield curve. i think you need some sort of a shock to the system and that hasn't been happening. it felt really bad earlier this year things have really calmed down

the bond market yield and the treasury market are the same as they were at year end, the same as they were last september. they haven't changed at all. and that's led to a calming effect on psychology it was a stomach turner and led to bad returns everywhere. returns are not terribly high. you have good returns, ccc, corporate, i don't invest in heavily, but they're up double digits it's pretty good done it with not a lot of volatility except for that window of the regional banking crisis >> let me bring in our steve liesman who was in the room as you saw and asked the very first question steve, you heard jeffrey gundlach, and he's not the only one, suggesting the fed shouldn't have gone today. that they shouldn't do any more

because they don't need to it's not exactly the tone you got out of chair powell today. >> reporter: no. no, powell is keeping all of these meetings live. he wants you to believe that there is still the possibility of a rate hike he's not ready to say inflation has been vanquished or the fed's job is done. listen to what he said about the possibility of a hike in september. >> i would say it is certainly possible that we would raise funds again at the september meeting, if the data warranted, and i would say it's possible that we would choose to hold steady at that meeting we're going to be making careful assessments meeting by meeting we've raised 525 basis points, monetary policy we believe is restrictive and is putting downward pressure on economic activity and inflation >> reporter: scott, there's a bit of a game. i'm interested in what jeff thinks about it. i'm thinking about powell like a jockey on a horse well known as a closer

he does not want that horse to run, at least not yet, because he does not want the market to believe that either the fed is on a long-term pause or that it will eventually be cutting rates anytime soon it doesn't want to have a dramatic loosening of financial conditions because it doesn't feel like he's really vanquished inflation just yet not that they're consequential necessarily by themselves on a nominal basis for tightening financial conditions but they do, i believe, keep the market from running, and i think that hangs a bit like an anvil over the head of the market, the idea you could get another quarter point down the road. >> jeffrey, what's your reaction to that? >> i agree with that today's meeting i would characterize as being as bland as you can possibly get in that basically he answered every single question data dependency

which makes a lot of sense to me the two-year deal has not gone to new highs ten-year is lower than it was a year ago and so i think the fed should be data dependent and they don't have a preconceived conception, it's quite clear to me they don't want to loosen financial conditions and financial conditions have loosened, if you look at some of these indicators, and it's largely because, like the vix index is down, it's that volatility is down that's what's really the biggest driver why financial conditions are looser so they are pretty loose, if you look at those charts i do agree the fed wouldn't want to get a more overvalued s&p 500 with a big running of the horse. the s&p 500, i mean, people are expecting earnings to go up by 10% or so next year.

if they don't, only go up by half of that, a pretty high p/e even on a forward basis of 21, 22 times that's kind of a lot driven by a mania type of feeling with that burst of the ai, the acceleration of the ai stocks, which reminds me of the dot-com situation. it might be an excellent moneymaker like the dot-com stuff if you held on to it went to new highs. it has this feeling of a chase going on >> steve, you've got a good handle on reading the room, as they say you know the chair well enough and how to read him in not only his language, his body language. do you think this was the last move in this cycle

>> reporter: i thought you were going to ask me if he went to a concert. i could answer that more easily. >> he might. >> reporter: i don't think he's done yet i think he has a committee and the committee was committed -- not committed. they have strongly forecast that second hike in there they may yet do it if the data does turn dramatically the other way and some of the numbers jeff was talking about become reality, a 2% handle on maybe a headline pce, that would be a very big deal, and you could see what would, i think, happen i don't think powell wants the committee to fray and there would be -- if there was enough data, another month of data -- friday, by the way, another day of pce data and the next one will be important the idea if you get a couple of these in a row, scott, they were burned badly and this is very instructive for powell they wept back and revised the

november, december, january that showed that improvement. he's going to be cautious here if you do get a couple good ones in a row, i think he likes this period i wouldn't say he will move in september. even though he wouldn't commit to that i think that's how he wants to do things if the data supports it in november, he would do it if he remains far above target i think he'll hike again he does seem pretty confident about the outcome of being able to bring down inflation pretty sharply and not have a big negative effect on the job market i think he feels good and confident and successful about the idea of this soft landing, scott.

>> steve, i appreciate it. i want to continue that, too, when we visit with you on fed day. thank you, steve liesman you guys don't think that powell will pull this off your deputy thinks we'll have a deeper recession and the fed will have to cut 100 basis points in one fell swoop >> i think what he was saying was simply observing that and this was david kelly again they take the escalator and bring rates up and take the elevator on bringing rates down. when something happens, all of a sudden there's a radical rethink of the economic situation, and the history has been some pretty aggressive rate cuts when those problems occur and i'm wondering about the housing market, which has baffled everybody. you would have thought with mortgage rates going up by 500

basis points or 450 anyway, you would have thought with the home prices up so much and mortgage rates so much, the housing trend would have weakened as it started to but amazingly they've gone up four months in a row and the drawdown on the average median home price is almost nonexistent again. almost where we were the reason that's happening, though, a huge spread that's going on the sellers are reluctant to sell unless they get a really high price that they have in their mind because they have this mortgage at 3% and what are they going to do if they sell their house? you can actually have your 3% mortgage and put in t-bills. you have an arbitrage spread of 250 basis points the sellers are -- the owners are in a good situation but the buyers, they have to confront the mortgage rate on the bank rate as well

wages have been going up but this recent move back up in housing prices is problematic. i wonder at what point we'll see a shrinkage of jobs in the real estate market. this gap is creating a spread on the home transactions. there's almost no activity at all. this data could be highly misleading as a forward looking indicator. there are so few transactions that if there was a reason that would create catalyst for selling, there could be a lot of downward movement in the markets that have gone up a lot. >> at what point do you say, i'll be darned, they actually pulled it off? they actually pulled off a soft landing. they were able to crush inflation without crushing the economy? >> if we get to 150 basis points

and inflation is at a two handle and not a zero handle, which is one thing i think is plausible here powell has maybe learned from his big mistake of transitory inflation. that's a real egg on the face sort of a thing. they thought it was going to stop at around 4 and it went to 9 on the headline cpi. i think he's learned from that but he needs to focus again on the fact that maybe he's making an echo of that mistake. maybe inflation will go lower the balance sheet reduction. >> do you still like the long end? >> i have the long end, long bonds has not done much this year it feels like it's been a lot of

volatility but only up a few percentage points. i like for the short term, if the economy rolls over, you have to be dancing near the door. it went up another 25 basis points today i don't like the lower tier of that asset class the interest rate risk is so high the yield they have to pay above the fed funds rate are so high i think there's growing defought risk the default rates could be going up as lending standards are tightening and that is something that i think is in prospect for the next, i don't know, 6 to 12 months i still like the asset class particularly the double-b category at the moment the cash flow is really high

compared to where it was even just 18 months ago >> do you think rates have peaked we're looking at treasuries on the screen 483 is where the two-year is today. >> i said, scott, down in orange county back last september, i said the ten-year has already peaked, and i was right. the ten year has been very, very calm and not even -- it's fairly far below where its peak was it's about 40, 50 basis points below. and even the two-year treasury has peaked with the fed raising rates, you know, since the regional bank crisis, it hasn't put it in stress i'm comfortable owning treasuries the higher quality bank loans, i think the dollar has started its weakening trend.

there's a good opportunity for investment that, unfortunately, i think is a little bit late we're down to only about 415 basis points and the average spread has come in a fair amount but what's really come in is the dregs, the triple-c category thanks to the stock market going up so much, the nasdaq from about february or march on, i guess. there's been a rush to lower credit and grabbing at yield >> do you still like india >> i do. it's doing okay this year. not up as much as the united states that's a long-term play. the demographic setup there and the need for reform is very

acute. they need to deal with the same demographic bulge that china was faced with about 30 years ago. you know what happened to china. their gdp went up ten times or more over that time period and now they went from 10% to 75 or 80 i think it will happen in india. it's a long-term play. >> when do we get the first rate cut, do you think? >> i think the first rate cut will come next year, i think we'll get it i think it will be encouraged by a drop in two-year yields and the steepening yield curve and i think we're going to see 2% inflation in the pce

i don't know about the core pce being quite that low, maybe that 3 number i think cpi will be living in a 2 handle and we'll get there in a few months and we're going to stay there oil prices go to 200 or something, all bets are off. i think it can stay there and that's why i think the fed, what you said, i think they sort of have a little bit of a mission accomplished mind-set or at least entertaining that idea this meeting was a lot different than a couple meetings ago where there were dissensions and 25, is it 50, and that was unanimous 25, data dependent, data de depe dependent, data dependent. i don't think the data will be supportive of more rate hikes. >> he's still fixated on the core, as he said today, suggested is still too elevated. >> that's coming down.

1.8 is rolling off in the next month or so and could drop another percent. that could be in the 3s, below 3 1/2. this year. before the end of the year i think if you have the core pce below 3 1/2 and headline cpi, our base case, i just don't think there's any reason to hike at all >> he suggests it's going to be more sticky than people would suggest. >> i think it was obvious inflation would go up higher than the fed thought in 2022 and everything that we're looking at we think will be the trend remains in place for these lower inflation prints i think jay powell is afraid to buy into that.

if it doesn't happen, he has a problem. >> you have to take into consideration, too, what liesman suggested and maybe you did as well, words versus action. they have to talk the way they are, he has to say the things he is saying whether the actions follow the words >> but nobody is even pushing b back the fed says we might raise, we might cut. the market is completely accepting of that. >> well, don't you want that why wouldn't you want that >> i'm not saying it's a bad thing. i think they were being increasingly calm at that we're slowing the pace up from 75 to 50, 25 to nothing and now at 25. the trend is fairly obvious here and the market moves ahead it discounts it's amazing

last march everybody thought the bears, all-time bearish reading. a big rally and the fed is feeling good things don't stay stable indefinitely it's just been a good run of economic statistics. we will make that the last word and we will look forward to speaking with you in september >> yes, we have two jobs reports, two rounds, and i think they will be such that the fed won't be raising rates don't hold me to everything. >> you would be in the hall of fame if you were a baseball player i appreciate you having us back. jeffrey gundlach the dow is up about 40 or so points as i suggested at the top going for its 13th straight gain the results -- >> right before the crash. >> believe me, people hear '87,

they get nervous if gets 14 days in a row, i think you have to go back to 18-something we'll cross that bridge when we get there. jeffrey gundlach having us here at doubleline. the results of our poll coming up, we asked followers was today's fed rate hike the final one? the majority of you said no. it was close, but the majority of you said no up next, we'll talk to new edge's cameron dawson. her take on the hike what she thinks powell's next move will be setting you up for the big earnings meta and chipotle, the key themes to watch there. we'll do that, of course, in "the market zone." oing to cost . to this day i only paid what i had to pay for the device... when i go back everything is covered. there's so much you're missing by not having hearing aids. we'll find you a hearing aid that fits your lifestyle and budget at one of our over fifteen hundred locations.

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we're now in "the closing bell market zone." cameron dawson with her reaction to the fed decision, plus we do have two key earnings reports coming out in "overtime. julia boorstin on what to expect from meta and kate rogers. cameron, was this the last move by the fed, the last hike? >> as you heard from powell, it is still very data dependent which means if we get a hot inflation print some time in the next couple of months, it may not be the last hike but if the current trajectory in inflation continues, then, yes, it is the last hike. we don't think that the fed wants to take a victory lap on inflation just yet as steve liesman talked a bit today they've been so burned by calling disinflation too soon which means this will remain a market that's hypersensitive to

incoming inflation data and probably hypersensitive to good data coming in from a growth perspective, we could still be in this good news for the economy is bad news for markets. >> well, what happens now to the rally? the market certainly doesn't seem to be upset by what it heard today, either the bond market and the stock market might suggest that this was the last one >> yeah, and what we've seen this year the fed hasn't mattered for markets really at all. we've seen the pricing for the terminal rate go up quite significantly through the course of the year and we've seen the push out of the start of interest rate cuts and we've seen market valuations continue to expand. you have the s&p up 20% in its p/e valuation, nasdaq up 40%, which just tells you that the pricing of the fed's expectations this year really has not mattered for markets and what matters more is positioning becoming deeply underweight, moving to be more overweight, things like ai boosting

optimism if that will matter at all for markets, it remains to be seen >> you've been pretty cautious, right? too cautious, i think, you would have to admit at this point. are you starting to come more positive on the market >> well, we have been cautious in the sense that we haven't been expecting the big lead in the speculative parts of the market to be the leaders as they have this year you can see things like meme stocks up 70%. we weren't expecting that with a fed that was continuing to remain tight now we stayed invested through 2022 and into 2023 by focusing on quality, focusing on those names we want to own for the long run the question for us is then where do we find value in adding new capital today? in june we started talking about how the equal weight index was

really cheap if you looked compared to the cap weighted index which was being boosted by just a couple of tech names. so we still find value in pockets of this market we remain valuation disciplined because we are long-term investors and that's where we look to things like value, maybe not focusing so much on financials and equal weight to put new capital to work. >> speaking of tech, meta is going to report in "overtime" tonight. julia boorstin, what should we expect >> meta will accelerate revenue growth after the 147% gains this year with 83% of analysts still rating the stock a buy the social giant has been struggling with the same ad market weakness the whole industry has seen but meta has the advantage of massive scale and new revenue drivers including better monetization of reels and also ai as a tool to improve ad targeting and measurement. analysts are expecting the company to grow revenue 8%

accelerated from 3% in the prior quarter. thanks to cost cutting earnings are expected to grow 18.5% there are some other key issues to watching including, of course, threads with the question whether it's held on to users after its big launch and after youtube reported 4.4% advertising growth and google had better than expected results, a number of analysts expect meta to follow suit back over to you, scott. >> cameron, is there any reason to believe that this trade is not going to continue to work? we got some numbers yesterday from some of the mega caps we'll get this now we have apple and amazon coming next week, too >> yeah. i think what we've seen so far is that strength in other parts of the market haven't been coming at the expense of leadership and tech names. maybe there's consolidation, mostly because we have seen so much valuation expansion if earnings deliver then the trade can continue

what encourages us the most is what we're seeing outside of just the tech names, names like union pacific and boeing today in the cyclical industrials. it's likely we start to see industrial activity recover and re-accelerate which just points to a broadening out of the market which then if you look again that supports the equal weight look of things where you aren't paying top dollar, top valuation and can continue to see a catch-up trade and rotation >> we'll have another closely watched earnings report in "overtime. julia boorstin, thank you very much kate rogers, to you now on chipotle >> scott, analysts are looking for $12. 1 adjusted on revenues of $2.42 billion same store sales is an important metric projected to increase 7.5% a few key things will be of note this quarter, commodity inflation, and if it's cooled at all for chipotle with two high-priced items in beef and avocados, any color on consumer

sentiment will be notable. chipotle has been able to hang on and even grow traffic in the face of higher prices over the last year and the ceo has long touted the brand's pricing power. there's been little resistance from customers finally, more details on its international expansion plans. we reported chipotle signed its first franchise partner in the middle east. any details on what might come next will be of note one of the best performing names year to date up 50% so far back over to you >> all right, kate rogers. thank you very much. we'll see what the numbers are cameron, the consumer has been hanging in for how long, i suppose is the question >> i think the consumer will continue to spend as long as they have jobs as long as the labor market remains tight, we can see resilient spending a little bit of pushback you heard from kimberly clark that they're raising prices at

about 8% but is coming at the expense of value the consumershave jobs we're seeing an uptick in defaults in consumer loans it's getting back to prepandemic levels we think we have a fair amount to go before we get to a point where the consumer or an income perspective gets pinched >> we have about two minutes to go before the close. the dow is positive going for its 13th straight day of gains, something it has not done since 1987 on that note, cameron, it's been carried by these lagging sectors. i'm wondering if you think we'll see a continued catch-up trade from some of the more cyclical and lagging areas like financials, maybe energy you tell me. >> i think that is the story for the second half of the year. as we continue to see this better economic growth that you should see cyclical sectors do better

energy move higher, energy move higher we also know that we have had a big flow of positioning into tech and out of the cyclical areas like energy which just means as we see that positioning there is an opportunity for rebalance, repositioning and that catch-up trade to continue. >> things like the transports have done well that broadening out of the market has people feeling better about where the market is as it's continued its gains it hasn't been just technology >> that is very supportive of the rally continuing and what we would look for, you see earnings as the recession -- [ inaudible ]

>> it's so loud on the floor i can't even tell if cameron stopped talking orrin. cameron dawson, thank you very much the dow up into the close. again, that's the longest streak since 1987 we'll set you up for meta and chipotle after the bell. to "overtime" with morgan and jon. we'll take it. you heard it from scott, the dow closing higher for the 13th straight day the longest win streak in 36 years. thanks largely to boeing that's the scorecard on wall street welcome to "closing bell overtime." i'm morgan brennan with jon fortt. chairman jay powell said rates could hold steady at that september meeting. >> investors are set for another huge hour of earnings. all set to report results.