back 14% from its february high. you can buy it here in the mid 80s. >> we're watching the financials a lot this week. it's been a rocky road >> for the banks >> i'll see everybody coming up on "closing bell." the dow is down 25 "the exchange" is now. ♪ ♪ indeed it is, scott. thank you very much. i'm tyler mathisen in for kelly evans. the latest fed minutes out at the top of the hour. investors are looking for any clues that rate cuts are coming. doubt they'll find any but our market guest says don't bet on it and don't focus on sectors right now, except for one. the brings the names and the stocks she likes in those sectors right now. a double dose of ceos. first, a regional bank you're likely a client of jack henry's. that stock down 8% on the back

of earnings. the coo will join us as questions over the health of that sector linger as rates keep rising and mortgage demand keeps dropping, there's one housing name positioned to benefit from a rising rate environment. the ceo will join us ahead but we begin with the markets and bob is at the new york stock exchange we've been on a little tear lower the past few days, bob >> really the past two weeks so we've been trying to rally midday, that's a typical pattern. then we just move down late in the day. we were positive earlier in the day. take a look at the major indexes. the s&p is down 10 of the last 12 days. same with the russell 2,000. it's down 10 of the last 12 days nasdaq composite is down 6% from its recent highs the dow industrials have been holding up better than the other averages, and that's primarily because it's a little more defensive. it's got some consumer names in

it take a look at some of these names this month you can see amgen has been an outperformer for the dow johnson & johnson, merck, home depot. these tends to be more defensive names. but tech and big banks have been a problem for the major indexes, even for the dow frankly if you take a look here, apple's been down almost 10% this month. salesforce is down 8%. goldman sachs down 7%. and intel's down 5.5%. so those tech sectors in the banks, jpmorgan has also been a drag on the dow, and a real problem for the major indexes. if you look elsewhere today, retail has been doing a little better target doing pretty well, even though the sales numbers were poor, inventory numbers were down tjx had great numbers, so those two names are bringing up the discount sector, so dollar general, ross stores are also stronger today the problem we have here, tyler,

is the lack of leadership. not only is tech underperforming, but former leadership sectors, like energy, for example, and health care, are not really doing too much. consumer staples, which would be a defensive group, are not outperforming either we're hitting new lows in a lot of the big consumer names out there, some of the food names. kellogg, campbell's soup not a lot of new names, but there's some for today but we need some leadership right now. we're just not getting it out of any of these sectors >> hard to expect it in the last two weeks of august, bob, which is typically a low volume time of the year. as we go into what, as you well know, is a seasonably challenging time september, october bob, thanks. > investors are looking for any clues, any about where rates might go, and whether there is any hint anywhere of rate cuts steve liesman is at the federal

reserve with what to expect. hey, steve >> tyler, good afternoon minutes from the last minute set to hit the tape at a time when much debate about the outlook for fed policy markets remain wary of near term hikes that are possible, while they're pricing in cuts for next year take a look at the feds future market 37% chance on a hike in november, each while fed officials on average have forecast at least one more hike. then the story flips on the other side of the chart there where it's red, with markets putting a 60% probability on at least one quarter point cut. and forecasting three points by year end economy at citi writing -- >> all that's true, and good arguments for doves. they want to hold rates or even cut them yet the hawks have gotten support in recent economic data, showing how resilient the economy has been, with third

quarter gdp forecast edging up the data show an economy accelerating, not running below potential. the fed has said that's what we need to do to bring down the inflation. tyler? >> i don't mean to spin the clock forward and get way ahead, but i know something happens next week, and that is the jackson hole meeting what is the outlook there? >> well, i mean, i think we're bracing for what is that statement by powell? he laid down a marker last year about the need for the economy to run below potential, about the seriousness of the fed in combatting inflation at the same time, they have already had a lot of success in bringing down inflation. with an economy that's been really tearing it up i don't know if you saw today, tyler, the latest atlanta fed gdp, which was 5% yesterday because that strong retail sales. it's 5.8 today >> wow that's in atlanta, though,

right? they're always up there out front. >> you are correct, sir. if you look at my twitter feed or x feed, whatever you want to call it, you'll see i have documented the errors there. this far out, 70 days from the publication of the atlanta fed -- of the bea's gdp report they're high usually by 1.7%, 1.8% so there's room for it to come down, but don't let that make you believe that the economy is not strong we are running above potential our cnbc rapid update at 2.2 is a strong number for an economy that the fed thought would be doing 1% this year we have been at or above potential in each of the last three quarters so where is that slack the fed thinks it needs to bring down inflation? raising the question as to whether or not the fed is going to feel comfortable cutting rates next year, if the economy is not showing some signs of weakening, which gets to the story we talked about yesterday, which is no landing may not be

okay for the fed >> all right, steve, thank you very much. steve liesman reporting from washington for us. thank you. one of our next guests says the fed has no reason to hike, another guest says they have no reason to cut. but both say the best way to position is to look for quality. joining us now is julie beale and brian jacobson julie, why are rate cuts not realistic? you heard steve basically say exactly that >> well, if you look at the entire history of the fed, they have only cut rates six times when employment was below 4% five of them were under jay powell the last time is when interest rates was when the fed funds rate was at 6% so it's highly unlikely and difficult to justify rate cuts, particularly when you think about where rates are right now. it's not like we're at some astronomical level we're about 60 basis points over

the long-run average for the fed funds rate so there's more downside for the fed in cutting rates too early than there is upside they've made it really clear that they want to see everything looking better, labor, you know, housing, shelter, all of that, before they're going to even consider cutting rates >> i take your point that rates are not by historical standards high but some rates are high. i mean, you look at mortgage rates above 7% they haven't been this high in 20 years, julie. >> i still think that people are thinking of the last 10, 11, 12 years as standard. it's just not. it's a complete anomaly to be at zero percent interest rates for this long. i think, you know, a lot of people are younger and they don't remember that rates can be significantly higher if you think about, you know, upside, downside, it just makes more sense that we would get down to a place that is more like 2% to 3% than zero. so that limits the upside potential.

>> brian, let's talk about the case for hiking. there is some indication that there's going to be at least one more hike. you say there's no really reason to do that either. >> yeah. so it doesn't seem like there is a good reason to hike, maybe they should just hold, and maybe the longer they hold, that can be like a substitute for a hike. so they can kind of switch through their rhetoric towards instead of how high, about how long if you look at where we are with real yields and break evens, we're basically where we were in the 2004 to 2006 period. and i'm kind of curious if chair powell will channel his inner jim bullard here coming out of the global crisis when rates were zero, bullard said it's zero percent, but the economy is fine, so why do anything just keep it at zero now if you have the fed funds rate at 5.5%, things look good,

why mess up a good thing so perhaps his argument is that things look fine for now so why really mess with something that looks good, at least so far >> so if we're looking, julie, at this hire -- and i saw you nod thing as brian was talking if we are looking at a kind of static or stasis , how much longer is longer >> we understand getting from 10% to 5% inflation was pretty easy but getting us down to 2% is probably going to be harder. i think the language out of the fed has been really all over the place, as far as is it 2% or is it 2.5%? it does make a difference, because you start to get these basis coming into the data i don't think we'll get to this place where inflation kisses 2%, and the fed is like guns blazing

cut rates. i do think they're going to want to see some consistency and some holding before they start to cut. >> unless, brian, there is a marked slowdown in the economy and we don't see any signs of that, really i mean, i guess real estate is somewhat challenged by those higher interest rates. but home builders have been doing pretty well. >> yeah, i was going to say that the only part that somes challenged in the real estate market is with existing home sales. home builders have to make concession on price and things like that, the housing starts, multifamily is at a record level. so you are seeing some cooling there. but for the most part, people seem very adaptable, and the fact is, the economy as a whole, we don't all rise and fall together over the last year, manufacturing was stuck in the mud. if we can find some firmness there, even if we get a slight slowing in services, you can still skirt to recession

>> so julie, in this kind of environment that we have been talking around, where are the sweet spots? what should i be looking at, investigating, researching in terms of equities or fixed income for that matter >> you know, i think because -- if there is anything that we have learned, we all came into this economy this year, thinking oh, my god, for sure, recession. i think it's a real lesson to all of us, it's really impossible to predict the direction of the economy there's just too many factors at play and exogenous events that can happen like the war in ukraine. so the best bet is to invest in quality. if you are focusing on companies that have durable competitive protections, they're going to do well if the economy softens and still participate in the upside. if you were fully invested in the most defensive names, you have missed out on a lot of this rally. so it's important to have balance, but it's not about growth or value, just about quality. >> quality meaning like what give me some examples. i like quality, too.

i'm all for it >> i think everyone defines quality differently. you know, for us, we try to focus on the qualitative metrics of quality so that's really investigating durable, competitive protections. if you think of a company like fico, everyone assumes with all of these new tech companies, that all of their strengths and competitive protections would be eroded away. instead, it's gone by the wayside. it turns out by crawling your facebook data suspect as good for your credit score rating so those are the types of businesses where they can defend their competitive protections and have better returns on capital that we're looking at. >> brian, reactions to what julie just said or any areas, targets of opportunity in your world? >> yeah, the way that we are looking at it here is we do like quality, and we define it in terms of like the peer relative profit margin trajectory so it's not just the level of

the quality, but what is the direction or the rate of change? so if you fold that in, where we are seeing opportunities where you intersect it with valuations, is more of the small to mid cap space in the u.s. and when it comes to fixed income, instead of a bull market or bear market, this might be more like a bull dog market where you just clip the coupons and charge ahead. >> thank you very much both very much for being here today. appreciate it. >> thank you coming up, target's earnings beat overshadowing its cut to full-year guidance but despite today's move, it's still down 13% since the start of the year. we have a look at what's dragging down target and what to expect when walmart reports tomorrow morning plus, a look at the health of the financials with the ceo of jack henry. more than 7500 small banks and credit union rely on them for payment processing we will look at how they are dealing with the ripple effects

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welcome back to "the exchange." target slashing its full year guidance, despite beating estimates on the bot testimony line comparable sales saw the first

decrease in seven years as consumers pull back on discretionary categories the stock is hovering near the lowest levels since july of 2020, middle of the pandemic on the flip side, tjx, all-time high raising its full-year forecast, saying customers are spending big on name brands and home goods, home goods, home goods. my first guest, the next guest says there are better names in retail than the two we just mentioned. let's find out why jay rogers, good to see you, sir. >> good to see you again >> let's talk about target and why you are not impressed there. and then we'll move to tjx and onward >> target gave us a negative five comp, and walmart will probably give us a positive five comp tomorrow. that's a big difference in the performance. walmart is much more discretionary, walmart has huge food business, target's got a small food business.

but all in all, they do compete with each other. and walmart's winning the game we'll see that when they release tomorrow so i'm just not impressed with what target's done the street traded them up, because the expectations were so low. but that was a pretty bad sales numbers. >> what does target need to do you're into this at a level few people in the world are. what does target need to do to improve performance and juice the stock? >> well, target's out of to bes at the shelf level, the stuff that suspect there and can't buy it or high at the moment which means they're having inventory level problems so they have to fix that before we'll be happen dwri with what they are delivering. they have had an inventory problem now for almost two years and fixing it gradually. but it's cost them money each time they have tried to fix it

they're not there yet. will they get there? yes. will the consumer help them some as they become more interested in discretionary goods opposed to vacation probably. but they have a ways to go >> tjx, big numbers there. all-time high or the stock are you lukewarm on it >> well, is'm a little lukewarm on the space walmart, costco, home depot, tjx, some of the best retailers in the world tjx is best in class in space. i worry about that space because it's so overbuilt. remember, 20 years ago, this was a little business. now they are huge businesses and there's not many people left to take market share, and they keep building new stores every day. so i worry about there just not being enough inventory in the world to fill them so i don't like the space.

but if you're going to bet on one of those, tjx is one of the best ever, and burlington is the most improved ever >> so tjx, walmart, home depot and what was the fourth one? i'm sorry? >> costco. >> and costco. those are your four big hitters in the center of the lineup. is there a department store that you would nibble at here >> oh, i'm a fan of kohl's now that they have a new ceo i think if you fix their problems, you're see the stock trade up i love macy's, because they have reinvented itself, and it's a much better business than it was when we came into the pandemic so i do think they'll have a good back half of the year i think kohl's will show improvements and show us some numbers in 2024 as they start fixing some of the issues. >> what has macy's done that has

caught your eye? i have to say, i like going shopping, and i go into bloomingdale's and siit is a much better experience than it has been historically >> macy's done couple of things. importantly, what they have done is change the way they buy the merch merchandise. so buyers are responsible for what they buy. they're running the business like buy it, live with it, sell it out, mark it down so you're fully responsible for that process. and they have a better process macy's didn't have much inventory problem during the pandemic period, they just got better at operating their business and they have new management in place, and they have done a good job of that. now they are about to have another change of management they have changed the fundamental way that they operate the business on the buying side, and they're also

better on the selling side mostly this has been fixing the buying operation >> jan, nobody knows it better than you thanks, man. jan kniffen. coming up, the collapse of the trucking firm yellow sending shockwaves throughout the freight world. up next, reaction from a number of ceos. here's a look at the dow heat map with intel, walgreen's and disney, the worst performers travelers, home depot, chevron outperforming. "the exchange" is back after this rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses

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welcome back to "the exchange," everybody the trucking industry tracking the fallout from yellow's recent

bankruptcy filing. frank holland is at the deutsche bank transportation conference across the river in new york city with what freight ceos are saying about that and the state of the transportation trucking industry generally hi, frank. >> hey, tyler. we spoke to the ceos of rivals of the now defunct yellow. those stocks continue to outperform as freight continues to move to other carriers since issues at yellow surfaced in june other truckers have seen their stocks surge higher. when you look at saia, up more than 20% they put shipments in the same truck, so just yesterday, a mid quarter report was issued with a 6% increase with a double digit volume increase.

the ceo expects the surge for capacity to continue throughout the holidays >> we saw increases up to the disruption, so i would expect probably from where you would see that going forward what you are seeing is that redistribution across all the competitors in the marketplace, and i think the efficient operator, the one that could absorb that capacity consistently, those are the ones that are going to be long-term beneficiaries of this. >> so we have seen a very clear upswing in rates in recent weeks. still negative year over year, but you see the up tick in the last few weeks we spoke with the ceo of old dominion the ceo believes we're still in a freight recession, but he does see improving holiday demand >> suppliers are telling us that their inventory levels are getting low, and they hope to

build those inventory levels back up to be ready for the christmas season so we're hearing positive things from them. we're also hearing positive things from tesla. they're looking at increasing production >> so higher rates and higher volumes. i also spoke about higher diesel prices they have risen double digits over the past month. they expect these prices to be a tailwind for the top and bottom line, but the higher surcharges that could impact demand in the long-term. >> let's go back to the question of yellow freight. what are the ceos saying about acquiring any of the assets, the trucks, the equipment of yellow? >> we talked quite a bit about that i spoke with several companies saying they would be interested in the real estate, and not so much in the equipment. the real estate has a lot of

value. it helps you move containers in some cases or shipments in some cases and gives you a home base, but not as interested in the trucks, not as much demand for the actual road vehicles but the real estate, definitely some interest. >> maybe we should go in on one oh of these big trucks they're going to be out there. >> tyler, let's do it. >> sounds like fun i love it! >> open road, man. >> good to see you, frank. quit programming note. our interview with the ceos of hertz and gm now to pippa stevens for a cnbc news update speaker kevin mccarthy said he believes congress will have to pass a short-term funding bill to avoid a government shutdown sources tell nbc news about the conference call, which highlighted a growing consensus that congress doesn't have enough time to reach a funding deal before money runs out at

the end of september lawmakers have not set a deadline, and they still need to agree on policy terms. amazon is making it easier to find discounts for insulin. rather than have people search and enter coupons for insulin, amazon will now automatically apply the discounts, which the company says could lower the cost of the drug to as little as $35 per month. and a new child labor law for the internet the governor of illinois signed an amended law, allowing teenagers over 18 to sue parents if they were featured in money making social media videos and not compensated properly it's similar to the rights of child actors tyler, back to you >> i'm going to go after my son immediately. pippa, thank you coming up, payment processor jack henry on pace for its worst -- i thought it was an amazon series -- for its worst

day since the collapse of silicon valley bank. that's next, right here on "the exchange." stay with us with gold bond... you can age on your own terms. retinol overnight means... the smoothing benefits of retinol. are now for your whole body. plus, fast-working crepe corrector diminishes wrinkled skin in just two days. gold bond. champion your skin.

shares of jack henry down 7% today, making it the worst performer in the s&p 500 that's despite reporting a beat on the top and bottom line, but guidance for next year coming in below estimates. the company provides payment processing services for the financial industry, mostly small and mid-sized banks. for more now, we're joined by the ceo. thank you for coming on today. i appreciate it. >> happy to be with you, tyler >> good. you can't find fault with a report where the earnings per share whipped the estimates by 15 cents, revenue was way up, compared to estimates and last year it looks like the nitpickers are picking a nit over your guidance >> i think that's a good characterization what we reported this morning, revenue for the quarter, and this was the end of our fiscal year we just reported the fourth fiscal quarter revenue was up 11% operating income up 0% on a gap

basis. we set a quarterly sales record in the fourth quarter and for the year we set an all-time annual sales record. and our sales pipeline is larger than ever in the history of the company. so really excellent performance for the quarter and the year for our company. there was -- and then we issued long-term guidance this morning. top line, 7% to 8% per year for the foreseeable future and then we shared 20 to 40 margin expansion for the foreseeable future >> so why are those wall street meanies punishing you? >> so a couple of things i think have caused confusion. we'll just have to see how the next couple of days settle out there are two big things in the guidance that has confused people one thing is, we report every quarter on what is called deconversion revenue we rarely sell software, most

everything is long-term contracts. if one of our customers is acquired, they buy their way out of the contract. deconversion revenue is very unpredictable, and it's not a reflection of the operation of the company. so we announced we're going to change the way we report on deconversion revenue, because it's not a reflection of the operation of the company i think that has confused people and they're working through that model. the other kind of significant impact to the guidance was, we announced a program that we called voluntary early departure incentive program, which is a program for long-term employees to leave the company early, retire, and that will produce some expense in the first fiscal quarter of this year so we talked about that. so i think people trying to work those into their models and figure out what does the future look like is what you are seeing today. but as i said, the pipeline is larger than ever

and so things look promising right now. >> i appreciate you coming on today. it's not every ceo that would choose to do that on a day where the stock has taken a swoon. let's talk about the market you serve, or the markets you serve. and they are small and medium sized banks. and those banks have been, well, they've been targets of moody's and some have been downgraded. they've been in the news and there's been sort of an odor that has attended to some of them, let me put it that way how is that affecting you and your business? >> yeah, so it's been an interesting three months i saw you on with frank holland just before i came on. we were talking about this back at that time you know, the good news for jack henry, is we serve almost middle market banks and credit unions

by the way, so we choose not to serve the top ten banks in the country. we also don't serve the little tiny credit unions and banks it's really the mid market banks. if you look at the customers, their performance overall has been pretty good we saw a survey in late april regarding deposits 77% of customers in our space reported no really significant in flows or outflows, and 9% reported inflows of deposits into their institutions. they're well capitalized, well run generally. they're the lifeblood of main stream america and largely unaffected with what happened with the meltdown of the silicon valley bank and the others but they've been penalized a little bit so guilt by association, i guess. jack henry serves those customers and we have been attached to the concerns happening in that space. but our customers are continuing

to spend money, so it's not had much impact on us. >> when we talk to the ceos of mid-sized banks like valley national, they're doing very nicely they're not reporting distress at this point. >> no. and when you think about those customers, if you look at our customer base, 60% of small and medium business loans written in the united states are written by the customers we serve 80% of ag customers are written by the customers we serve. those medium-sized financial institutions are the lifeblood of main stream america so if you look at what is going on as far as a small or medium business, things are good for our customers. and they anticipate that the future looks pretty bright for them right now >> david foss, thank you very much appreciate your time today still ahead, this company swinging from a loss to a profit in its first report since going

public the stock is lower right now, but up 108% since the ipo two months ago the name and details when we reveal the mystery chart my cpa told me i wouldn't qualify for the erc tax refund, so i called innovation refunds. their team of independent tax attorneys will work with your cpa to determine if your company is eligible. [whip sound] take the first step to see if your small business qualifies.

♪ ♪ welcome back, everybody. cava off its highs as the restaurant chain swings from a loss to a profit in its first report since going public. let's bring in kate rogers for more >> it was big first report, posting a profit of 21 cents in the first quarter, as a public company on revenues of $173 million. same-store sales soared, up 18.3%. jefferies noting this morning, tailwinds for the brand include momentum, thanks to new consumer awareness. while the company has been compared to higher priced meals like chipotle, the co-founder and ceo sounding like they're

taking a beat on pricing, being mindful of the big picture right now for consumers. >> we're mindful of the headwinds facing us, whether that's the increase in gas prices recently, cost pressures on utility bills we have seen across the country,student loa debt repayment waiting in the wings, and you have a fed hawkish posture looking to ensure that they tamp out any remaining inflation. so we wanted to take that into consideration as we give our forward looking forecast >> but guidance for the full year was strong. same-store sales growth up 13% and 15%. and it plans to open between 65 to 70 new restaurants in fiscal 2023 some of the testing is tij call advertising and reminded me some of the pipeline that chipotle has built out over the years this company compared to sweet green and chipotle, and both of those stocks are some of the

best performers of the year so far. >> so when he was talking there about the headwinds, is he coding that he's concerned that their revenues could decline -- not decline necessarily, but grow slower maybe? >> i think it's more about that same-store sales growth number this quarter, up over 18%. that's a huge number something that we have seen from a chipotle in the past so casting full-year growth between 13% and 15%, a little lower. some investors were wonder yg was that a bit more cautious again, the price point from a consumer perspective out of cava, chipotle, a little more expensive than a mcdonald's or wendy's. but consumers are willing to pay that premium people are seeking out healthier dining options, making companies like cava a win. >> i have to find one.

>> they are on the east coast and in new jersey. so i bet you can find one. >> thanks, kate. kate rogers. coming up, the 30-year mortgage rate above and firmly so 7%. mortgage demand dropping as a result so if you are in the home loan business, that's not a good combo, unless you are this particular company another mystery chart. it benefits from rising rates, the stock up more than 40% this year the ceo will join us, next icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

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welcome back, everybody. high home prices and mortgage rates having an impact on mortgage demand. diana has the latest numbers >> rates are taking their toll on home buyers, but home builders still seem to be betting on growing demand. mortgage applications last week tanked again, with both purchase and refinance volume falling to the lowest level since february. the average on the 30-year rose to the highest since last

october. last october's rate was the highest 22 years i'm sorry to say they have gone higher this week while demand for mortgages to buy preowned homes is down, demand for mortgages to buy newly built homes is rising, up over 35% from a year ago, likely where single housing family stas rose in july as well, up nearly 7% from june and 10% year over year building permits which are an indicator of future construction were flat for the month and just over 1% from the year before but builder sentiment did drop with builders citing higher mortgage rates and lack of land and labor. wild card is multifamily there is a lot of supply coming to the market now and apartment starts are cooling off a lot and rents are coming down a bit, but there are still strong demand. >> let me see if i'm understanding. the buyers of new homes remain pretty strong. so home builders but the existing homes, so-called existing homeowners are staying put?

>> yes so there is no supply on the existing home market and that is why you are not seeing any demand for mortgages because rates are so high, people who might have wanted to sell and move somewhere else are staying put because they don't want to give up a 3% rate for a 7 plus percent rate. >> and then the few that are on sale in my particular town, they are still going way above the asking price because there are so few of them >> exactly bidding wars, multiple offers and people really stretching in fact using lower cost loans like a.r.m. loans, adjustable rate mortgages, that share is actually rising as people try to save money on the mortgage side and pay more for the house >> something we have not seen in a long time, popularity of a.r.m.s. all right. stay right there because while higher rates continue to tinder mortgage demand, they might provide a sort of silver lining to our next guest. shares of mr. cooper group are

up a whopping 41%. so could it be a hedge against rising rates joining us is chairman and ceo of the mr. cooper group. jay, good to have you with us. you sort of have the mortgage market straddled you are a large mortgage servicer but also an originator. which one is doing best and why? >> the servicing business is crushing it right now. we have a balanced business model as you mentioned, both in the origination side as well as the servicing side existing homeowners are staying in their home and that is great for the servicing business so it is doing incredibly well >> and the origination side of the business less well i would take >> absolutely. that business has slowed down dramatically and it is really all do to

rates. we don't really see that returns for, you know, probably until sometime next year and i don't think that rates will go down and so we are investing in our origination platform, we want to be ready for the next cycle. but right now, it is all about servicing. >> and jay, you mentioned a couple months ago that with all the bank consolidation with trying to get out of the mortgage market in a there would be opportunities as you take on some of these assets how has in a played out? >> just like i said. it has been fantastic. if you look at the marketplace today, there is a lot of servicing that is being sold and we've been a big beneficiary of that we would have acquired already this year over $100 billion in servicing. so we think that trend wil continue and don't see it slowing down anytime soon. >> and obviously distress in the mortgage market is next to nothing right now, but as you we see the home builders with high price buying down some of the mortgage rates and buyers

struggling to get into new construction, do you anticipate over the next coming years that you might see some distress in the market because people are stressing so much? >> i think that you could see some distress. like to your point, we're not really seeing anything right now that is concerning homeowners have a ton of equity. but over time, you know, you will see some stress but i think that we're probably a year to 18 months away from that >> i want to talk about yet another thread in your business and that is the home auction business which you are in, right? >> that's right. >> home auctions and i was speaking to a friend of mine from australia and he said almost every home in australia is sold at an a auction where people actually go and bid. talk to me about that line of business for you and do you see that as something that could be a growth avenue for your company? will people become more accustomed to going and actually bidding in an active way at

auction on a home? >> tyler, i do think that it will come. i think that there will be a marketplace where you will actually see kind of retail homes being sold today our auction is predominantly focused on the government programs. so we sell through -- our marketplace is called zone but i do think that you will see marketplace for where people can actually go and list their home and be a competitive bidding process just like you described in australia >> and just looking into your crystal ball, i keep hearing everyone say mortgage rates are high, but we expect them to pull back in the fall and they have literally been saying that for months now you are in the business. in your crystal ball, where do you see rates going in the fall? >> i do not see them going down. the way i think about it personally, i don't think that you will see rates go down until probably second quarter of next

year rates will stay higher for longer if you look at tat the overall unemployment, you know, just the strength of the economy. i think rates are going to stay higher for longer. >> if rates go up -- typically speaking, if rates go up and stay up, you would think that would retard price growth. but it doesn't seem really to have done that in a big way. >> no, you're talking about home prices >> home prices, yes. >> because of the supply like you talked about earlier, there is just not -- millions of homeowners have the 3% interest rates, right and so there is no incentive for them to sell if they did sell, where would they go. so i think because of the supply imbalance, you are not going to see, you know, prices come down in a significant way >> jay, thank you very much. diana, thanks for sticking around and that does it for "the

exchange." coming up on "power lunch," an exclusive interview with two power players, ceos of gm and hertz on the demand for ev rentals and the road ahead for the charging infrastructure. and let's take a look at the studio next door no, we won't take a look at courtney reagan getting ready. i'll wander over there i've lost a step, but i'll be there top of the hour. we got the fed minutes coming. because we know you're picking up the pace, steering life at 10 and 2. you're hitting the road... and we're helping you get there with confidence. so skip the counter without missing a beat. choose any car in the aisle. and be the boss of you. go national. go like a pro.

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gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. welcome to "power lunch. i'm courtney reagan. the fed releasing the latest fed minutes. let's see what we have ahead going into this for the major averages dow, nasdaq and s&p 500 all lower but just slightly.

we'll see if anything changes. it has been somewhat muted day here at least right now before we hear more details on the fed's thinking, will they hike, will they pause, we'll have to wait and see we're going to discuss everything and see if the market can make some moves. of coursed watching the yields and ten year as well steve liesman has the details for those minutes. what you got >> minutes from the fed's most recent meeting show that most of the participants in the meeting still saw significant up side risk to inflation that could require further tightening so at least in that one statement there, pretty hawkish outlook from the federal reserve. but hold on before you make your immediate trades because these minutes are a mish mash. some saw down side risk to the economy and up side risk to unemployment so that kind of sort of works against that but it is a smaller number tha