communities and the people who live and work there grow and thrive. we're proud to call these places home too. they're where we put down roots, and where together, we work to help move everyone's financial goals forward. pnc bank. good morning. i'm carl quintanilla with courtney reagan, post 9 of the new york stock exchange. as powell says, inflation is too high and more hikes could be necessary. we'll talk to cleveland fed president mester at the bottom

of the hour live from jackson hole. the ceos of intuit and affirm are with us. both stocks react positively to those results. the executive director of shein as forever 21 and shein come together in this buzzy deal for fast fashion. we'll take a look at the markets following that speech from fed chair powell. the all are modestly lower. nasdaq is pulling up the drag there, down 0.60%. we had been positive earlier in the session following what was largely expected, carl, from the fed share. powell maintaining his hawkish stance during his much anticipated speech out of jackson hole. powell saying he's still open to further rate hikes. >> although inflation has moved down from its peak, a welcome development, it remains too

high. we are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective. >> joining us, wells fargo chief economist jay bryson. you heard the chair there. i believe you listened to his speech. he didn't tip his hand totally but left the door open for more hikes, if necessary. you believe the tightening is coming to an end. do you still believe that after what you heard from the chair this morning? >> yeah, courtney, we still think tightening has come to an end. clearly the risk of that is skewed to the upside. i think the bar for a rate hike in september, i still think that's relatively high. i think november is a possibility at this point, but if we continue to see disinflation in the economy, if we continue to see things kind of softening up a bit, our expectation is the fmoc is on hold. again, i think the risks are skewed to a modest tweak higher

at this point. >> jay, if we were moving dots today or updating dots, did you hear enough in there to suggest that the committee would be raising their rate outlook? >> no, carl, i didn't hear enough in that. the committee is still looking for if you look at the last dot plot that was released back in june, there's still another 25 basis points in there. i don't think you would see a dramatic change in the dot plot. obviously, the fmoc meeting coming up on the 20th, we'll get a new dot plot there. again, i didn't hear anything that would indicate they think significant further tightening is needed. i think it's more on the tweak side. >> i thought it was interesting when powell was talking about the recent reads on inflation, he seemed reluctant to get too excited about what he had seen there. had some doubt about the recent decline we had seen. what do you read into those comments? >> yeah, i think that's right. if you -- depending on how you slice or dice it, we have seen

it, as the chairman pointed out, we have seen improvement there. if you look at the three-month annualized pace, that's still well above the fed's target. it's above 3% right now. and so i don't think anybody at the fed wants to declare victory. i think the consensus is leaning towards maybe the more hawkish side at this point. again, not slamming on the brakes at this point, but i don't think anyone on the committee is looking to cut rates here in the near term. >> next week's going to be busy, jay, between jolts, we'll get some china pmis, european cpis, jobs friday. i've seen a lot of 170s for a jobs friday. what do you have in mind? >> we're close to that, carl. we're about 160 at this point. that would represent another step down in the pace of job growth. it's something the fed is looking for. powell mentioned that in his

speech here. a big indicator will be the average hourly earnings. we're looking for 0.3% increase, month on month there. we're seeing continued signs of wage deceleration as well. the fed really wants to see some more. a lot of data coming up. it will be interesting to see how that plays out and how the fed reacts to that on the 20th. >> chair powell did make a comment about what's going on in the banking system, saying tighter bank credit standards are slowing the economy. do you agree with that? >> yeah. so, if you look at -- if you look at the bank loans over the last, let's call it, 13 weeks or so, it's essentially flat. bank loans have really flattened out. there's still issuance going on in the corporate bond markets. that's certainly welcome news. credit spreads are relatively wide at this point. absolute levels of rates are high. and so there is some

deceleration in terms of credit in the economy. >> thank you for joining us from wells fargo on a big day for chairman powell. >> thank you. got a deal in the retail sector. singapore based shein teaming up with forever 21. that will see forever 21 products sold on the popular retail site. shein owns a third of forever 21's parent. the partnership between simon property and authentic brands and sparc takes a share. we have an exclusive interview following that deal. >> you told me this was the most transformational deal to hit fashion in the last ten years. why do you think that is? >>. >> because, you know, how fast they deliver and the way their

supply chain works between vendors, the suppliers. when i say vendors and suppliers, the fabric makers and the -- and then the designers and the -- for us, we design something here in new york city and we send it over, okay, to one of our factories. our factory makes us a sample, they send it back, we approve it, and six months later we deliver it. they do it all in seven days. >> they changed the game. >> they changed the game. if we can actually do that across our portfolio, we're going to know what you want when you want it and i don't want to bring up waste, but they run with 2% inventory. we run with a lot more than that at sparc. i truly believe it's going to change the game from a markdown standpoint, from an inventory

standpoint, from a cash flow standpoint, working capital. there's just so many things that are going to change because of this relationship. yes, i do believe it's changing the game of retail and i think other retailers are going to have to learn what shein is doing if they want to compete because they're just faster and and better, understanding the customer. >> we're always looking at customers, the consumer first. whatever consumer wants, we try to give it to them. we want to go deeper wider and broader. by the way, when david was mentioning indiana, we also have a big warehouse, a big hub there. indiana have quite a few hundred, perhaps going to be thousands of workers there. >> i think that's what's really important is, look, i'm a brand

guy and i can actually say that when i study brands, if you could say how many brands do you know are strictly an e-commerce brand and only an e-commerce brand, they're not a physical brand, my guess is maybe you could name one, maybe you could name two but you probably can't name -- >> they have to be post. >> that you'd be successful. at the same time, i don't think you could name a single brand that is only in physical retail and not digital. so, i think this partnership is incredibly important because it does give physical to shein to test and actually build physical retail and give that experience to the consumer. at the same time, it gives us the ability to do a lot more digital retail because -- >> you're dominant. >> let's be honest. they have the fastest, best

digital platform on the planet right now and nobody is remotely close to how good they are when it comes to digital retail. >> isn't it a risk doing this deal and a deal with the chinese company right now? >> look, i'm glad you asked that question because it's not a chinese question, for starters. not that -- i don't have a problem with china. we do business in china with some of our brands. this is a singapore company. that's who we did the deal with. yes, they manufacture in china. by the way, we manufacture in china, too. so does the gap. so does walmart. so do many other retailers, manufacture goods in china. yes, we manufacture in lots of other places around theworld. but at the end of the day, hein does not do any business actually in china other than manufacturing goods. >> is shein a chinese company?

>> shein was born in china, 2021 we moved to singapore. currently have headquartered in singapore. we do business globally with more than 150 countries and we do no business in china currently. >> no consumer business. >> no consumer business. but we do have significant amount of supply chain in china, although we are -- >> that's no different than we have supply chain in china -- >> but i do wonder -- look, it's gotten caught in the crosshairs of u.s. politics and tensions have only gone from bad to worse with china. companies like tiktok are constantly in the news and politicians want to ban it. do you worry if things get worse, it's going to end up hurting your business in the u.s. and you'll be caught in the middle? >> well, there's a lot of speculations out there, but we believe the u.s. is an open market. some of those issues will be addressed by the people who are

much above my pay grade to address that. but what we do is to be responsible corporate citizens. we want to be a global corporate citizen doing business responsibly. >> what about some of the other criticisms out there, including the ethical concerns around your supply chain? the work conditions. >> so, what -- on that particular issue, number one, we do not source cotton fund china. we use imported cotton to make cotton-based product, which is 4% of our entire business. and the way that we are taking steps to make sure that we comply with the law is, number one, we have code of conduct at every single factory who is a subcontractor of ours they have to sign. that's number one.

the second step is we have international, independent auditors to come in to do unannounced audits to make sure that everything they say they actually do. so, they have no supply chain factories or sourcing materials from the region. so, the first step we're taking is we have -- we have the proceed priority technology, which is tracing where the material is coming from. operational line, from invoicing the financial, the invoicing line, and also the logistics line. those three lines we trace all of those materials, raw materials from where they're coming from. if they see something in the regions, we take them down right away. number four is testing that we use our term, the leading testing agency or company, which

congress and the cdp uses as well to test all of the materials to come into the united states on a random basis every single meal we have. so, these are -- >> i imagine you're doing a lot of explaining of this to u.s. lawmakers. >> yes. and i think the better way, and, you know, mr. simon said, got to do it better, right? so, we're now -- we're just approved today the cotton video. >> and i would add, we have rigorous compliance rules. >> i'm curious, david, how it fits into your strategy as the head of simon property. increasingly we've seen you invest in jcpenney and sparc and this deal going more into retail. how does that fit into your strategy? >> retail is very small for us. my goal is to ultimately, hopefully shein loves, you know, shop and shops, loves the

ability to talk to their consumer in the physical world and ultimately one day -- >> open stores in malls. >>. >> that's our goal. that's our goal. i'm going to negotiate the rent. you're going to stay out of it. that's the goal. the market -- i call it our extracurricular activity. 95% of our income is on our traditional real estate, bricks and mortar, whether it's office, retail, residential, all the stuff we do, international, but we've been very profitable in this other side of our business. but we don't -- you know, we're perfectly happy where it is. we've created enormous value for our shareholders, but it's not like we're on a mission to grow it. we're on a mission to create

more and more profitability and be opportunistic in some of these investments we have. >> it's very interesting. shein is a fascinating company. there's a lot of things going on there, carl. i think we would be remiss, shein is looking at a valuation of $66 million. this partnership gives sparc a piece of that. d donald tang has moved to washington, d.c., to be closer to lawmakers to explain why they're a good company. they are headquartered in singapore. >> we know real estate is multifaceted and varied, but it's not the worst thing in the world to have a new marginal buyer to come in and say, we want a taste. >> absolutely. sara's point, in the interview you have to have real estate and the digital presence. i think there are sort of efficiencies and expertise in both of these, that these players can learn from each other. it's a fascinating tie-up and i

look forward to see what happens with that. >> good to see simon during a crucial time. >> absolutely. we don't get to hear from him much. we'll go back to jackson hole. first on cnbc interview with cleveland president mester. >> we'll get into why that stock xeoss tersed early lseafr mid outlook.

powered by more than 20% jump in small business revenue on the quarter and momentum on the company's investments in a.i. joining us in an cnbc exclusive is intuit's ceo. it's rallied 100 bucks. >> carl, thank you for having me. you know, we're excited about our momentum. we had a great quarter. we guided to double digit growth for next year. and we're very excited about a virtual launch on september 6th where we're going to unveil a number of experiences that are driven by all of our investments over the years at data, a.i. and gen a.i. simply put, i would say our experiences are shifting us to a world for small businesses and consumers where it's a world of done for you. where we can help you grow your customers and be able to manage your cash flow and having us by

your side, tipping the world in favor, doing the same thing for consumers. we're excited about our current momentum and excited about what's ahead. >> i won't ask you to spoil the surprise in advance of the meeting and the rollout, but i will ask you if you think the street is hungry for use cases and money attached to those use cases? >> i think that's exactly right. one thing i talk a lot about interimly is there's hype and there's reality. first of all, you have to have large unsolved customer problems. you have to have the capability. and you have to have the business model. you have to be able to make money. i think that's where we come in. we've been investing in data and a.i. for over a decade. we've had a ten-year head start. a lot of innovation across the company has been fueled by all of our investments and data and a.i. a couple of years ago we accelerated investments in gen

a.i. what's unique to gen a.i., it humanizes things, personalizes things. it can leverage our customers' data by putting together things like marketing campaigns, helping them understand how those campaigns are executed and propose other campaigns, help them manage cash flow, whether they need a loan to increase their inventory or increase their sales or do a better job of letting us follow through with existing customers to get the job done. doing that automatically is important when you think about small businesses, up to 100 employees, where they don't have the enterprise help we have. we will with data and a.i., particularly now genai be able to provide that perspective for them. the market is looking for that. what are the use cases? does it have a compelling benefit? can you make money and monetize based on those benefits? i think that's a lot of what

you're going to see in our september 6th launch, so we're excited about it. >> i would love to get your broader view as ceo of intuit when it comes to the health of small businesses. obviously really strong revenue you posted from the jump in small businesses, but going forward, what are your expectations? >> a little context for your viewers. we have only 10 million small businesses around the world we serve and over 90 million consumers. i'll start with small businesses. what i would share is their cash reserves is about 90% of what it was this time last year. so, their cash reserves are down but it's actually healthier than pre-pandemic. so they're still healthy but they have to work hard in this environment. generally speaking there's demand for labor. they are still hiring. that's an aggregate. then there are sectors that are very weak. like transportation, real estate, advertising is weak, but

overall there is strength when you compare where small businesses are today versus prepandemic. and i would say on the consumer side, a couple of things. one, if you look back to march of last year, credit scores are down 13 points. credit card balances are up about 30%. and gen z, their bounces have gone up the most. it's up 45% year over year. the good news is we still have a strong job market but consumers are feeling the strain of the current economic environment with inflation. inflation is topped out and we should be headed for a better future. >> well, tell the fed chair. that's been a topic of discussion all morning long. we'll see what the jobs number brings a week from today. great to check in with you. thanks so much. >> thank you for having me. >> we're just a few moments away from cleveland fed president loretta mester following powell's speech. the fed paying a lot of attention to the state of the consumer.

affirm with a unique perspective on that. management says the business can continue to expand profitably even in an environment of high rates. max is going to join us in this urho.

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we're now on the lookout for two startups that might file phone an ipo later today. deirdre bosa has the latest in today's "techcheck." >> which would make it three major filings just this week alone after a long winter that the ipo window has remained shut. this could set up as the september when ipos blow up or they take private. instacart is the one to watch here. arm is more of a spinoff from softbank and had a few surprises. instacart is more ofyour venture-backed listing. we don't know much about the profitability or growth in the

face of more competition. i've talked about its advertising business, which could make its economics look better than those of gig peers uber and doordash, but until we get the s-1, we don't know anything about those margins. instacart was at is peak valued at $39 billion. it has since marked itself down internally to $13 billion, where public markets will put its value. that will be key for others in the pipeline. like klaviyo, its ipo could drop today. it's a boston-based marketing startup valued at $9.5 billion in 2021. between the three, this is as much action as we've seen in the ipo markets for a very long time, as i mentioned. i should note, it is not all good action. softbank backed better.com. that company went public via spac. it was an unmitigated disaster, guys. it fellmore than 90%.

halting trade four times in the first 30 minutes. in 2021 at $8 billion valuation and it was at $14 billion earlier this week based on the post-merger full share count in the latest filing, delusion, post-spac and pressure put this company at less than $1 billion. yet it still went out. many people i talked to can't figure out why. but looking broader again. there are reasons, perhaps, to look past better.com for instacart and the likes. one, better.com was a spac and investors have wised up to its structure. two, the mortgage rates are at its highest levels in two decades. not a good time for mortgage origination companies. gig economy may be in less precarious positions but we'll soon see if it's a bullish one. it's starting to feel like 2021 again, guys. we'll see if those valuations follow suit. >> watching uber in light of that, down 2% today. thank you, deirdre bosa. as fed chair powell

maintains his hawkish stance, we'll talk to mester about it. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire from big cities, to small towns, m and on main streets acrossn. the us, you'll find pnc bank.

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we make money from ads, but they don't follow you around showing the millions of people taking back their privacy by downloading duckduckgo on all your devices today. welcome back. on the back of the fed chair's chief, let's get to steve liesman with cleveland fed president loretta mester. >> here in jackson hole with a

person we've had on quite a bit. carl just refers to you as mester. loretta mester, cleveland fed president. let me ask you this -- we talked back in the spring or something like that. how much has your view changed in terms of the outlook? as i recall, you had two hikes built in. still two? >> so, the june sep. >> summary of economic projections. >> of course, we've had two of them. >> hold on, president mester. looks like fed chair powell is taking a walk with christine lagarde and new bank president of japan, whose name escapes me. i can't -- i knew it but forgot it. there's jay powell with lagarde. maybe it's an opportunity to talk about what's happening in europe, too, which is -- they're sort of in a no forward guidance. everybody is coming to the end of the rate hikes, loretta.

>> we're mirroring -- we've talked about this before, getting close to where we need to be, but as chair powell said in his remarks this morning, we have to be very diligent about this. we've come a long way. we don't want to be satisfied, we want to be assured it's coming down in a sustainable way and timely way. >> when you think about what's happening overseas in terms of japan kind of ending yield curve control, does that help us? higher rates over there? >> we've had common shocks, right? the pandemic affected all economies. different economies with different places to start. and what we're seeing -- and very countries took various actions. japan was different because they were in a very low disinflation, deflationary regimes so they started in a different place than other countries. when we started ours prior to the pandemic, we were basically at price stability. so, what we did in our country

is going to be different than some of the other countries. >> so, let's talk about that second hike you were talking about. is it still on the table? >> so, the way i look at it, think about what's changed in the economy since i wrote down those june projections. we've had stronger underlying momentum in the country. i think growth rates have come in stronger. we've certainly made a lot of progress on inflation. again, it's that underlying inflation rate which remains the -- chair powell talked about core inflation being around 4 -- a little over 4%. that's still too high. we probably have more work to do. and i don't see that much that has changed in terms of my own outlook. we need to be diligent now. we don't want to overtighten or undershoot. it's that balance. it's about risk management now. we are in a restrictive policy stance and it's a question of do we need to move higher? the second question is, how long

do we need to have restrictive policy before we're assured inflation is moving back down to the 2% goal. >> did you have cuts built into your outlook for next year? >> i didn't in june. but again, i'm going to re-evaluate things as we get more data. >> i'm just gesturing over to fed chair jay powell to invite us, but he declined that invitation. maybe next time. let's talk about, did you have cuts built in in june? >> i did not have cuts built in for next year, but we were going to look at all the data. there's data coming in. we have to evaluate that. then we'll have to see where things are. as inflation moves back down, of course, real interest rates, even if we hold a nominal rate constant move up. we have to balance that again to make sure we are setting policy in order to get inflation down. also, not overtightening. that's going to be the discussion later. i think right now the discussion

is, are policy rates in a restrictive enough territory to make sure that we can reliably have inflation move down to 2%? >> i guess i could ask you how you figure that, but i think i know the answer. it's a sustained period of inflation coming down -- >> yeah, we need more evidence to see. it was very good to see the numbers, the recent numbers, but we need a couple more of those readings to be assured. there are base effects in some of the numbers. we know they're affected by movements, and if you think of total inflation, it's movements in some things that aren't affected by monetary policy like energy prices, you know, food prices. so, we just have to be a little bit patient now in terms of what evidence we say. we don't want -- this isn't a game where everyone gets a trophy. we only get a trophy if we get inflation back down to 2% and we're committed to doing that. >> it's not fifth grade soccer, you're saying. i want to go through recent

developments. chairman -- chair powell today talked about the idea that growth is maybe running a little stronger than expected. is that a concern of yours? >> well, it's not a concern but i think it's one of the factors you have to take into account when we calibrate monetary policy. what i wouldn't want to have happen, i have basically inflation getting back down to our goal, right, by the end of next year. and the sep had it a little bit up, 2.2% by the end of next year. i wouldn't want to see that drifting farther and farther and farther out. so, when i'm putting together my next sep, right, i'm going to ask myself, if i want to get inflation back down to 2% in another year, where would i need to have policy? that's the thought process i'm going to go through. i think that's probably the right way to think about it because, you know, this inflation -- high inflation has been with the economy quite a long time now. >> and there's concern it might become entrenched. >> well, there's concern about that, but even if you could say it's going to eventually get

down, the price level, right, is still high. and if we keep having inflation well above 2%, people are actually paying higher prices. >> all the time. >> so, that isn't something i think we want to have perpetually embedded in the economy. >> another development since that june sep was higher long-term interest rates. is that a problem -- is it too high? >> i don't think it's a problem. i think it's actually -- that's going to be part of the calculus. that's a more restrictive stance of policy. that actually helps to put downward pressure on inflation. the other thing to think about there is what does that affect in terms of the financial system, the banks. >> which had problems already. >> i talked to a lot of bankers. we have several large regional banks in our district. you know, and they're all already taking actions to shore up their balance sheets, to put them in a better liquidity situation. so, again, i don't see that recent development. you're right, they have moved up

quite a bit since june, is necessarily a separate factor. again, it's part of the calculus of how restrictive on the policy rate. >> chair powell reiterated again today that bringing down inflation will require a sustained period of below trend growth. he said that last year here. didn't get it. it's been 2% plus and maybe the third quarter is off to the races. do you have to see a period of below trend growth in order to feel comfortable with inflation? >> i think it's very likely that growth will be below trend in order to get inflation back down to 2%. that's kind of what all the models, history have told us. we have made progress on inflation. remember, core inflation is still above 4%. again, we can't over -- we don't want to -- >> i'm sorry, but that begs the question as a policymaker, right, you are not a neutral player as to all of the outcomes, right? you get to choose to some extent

or coax such outcomes. do you think that you would have to induce this period of below trend growth if you don't get it? would you do so? >> i think that will be a signal that policy is probably too loose to get back to 2% in a timely and sustainable way. so, we need to sort of see the demand falling, moderating to get -- to match to supply. on the other hand, supply is actually improving. supply chain disruptions are improving. and on the labor side, we have seen a higher participation rate. so, there's two things moving. we're moderating demand with our monetary policy and supply chains are improving. i do believe, given all i know about economics, that we're going to have to see growth -- right now growth is above trend. we have to see growth below trend. that's in all the forecasts that we'll see that below trend growth. does it have to be a recession? no. are we aiming for that? no. we're aiming to get inflation back down to 2%. >> right now there's been no tradeoff at all in terms of

bringing inflation down and rising unemployment rate. does that surprise you? >> i think the labor market has been stronger than i would have anticipated given the level of interest rates, but i'm also very cognizant of the fact that the pandemic episode, and we're still having the effects of the pandemic, right, and the aftermath of the pandemic and the policy actions taken that were required during the pandemic, affecting the economy. so, we shouldn't be that surprised that, perhaps, some of these typical relationships are not necessarily being borne out at this time. that's what makes this a challenge. there's uncertainty around. that's why it's important we're diligent. we have to be very judicious about what we're doing and conscientious but we're -- >> let's wrap it up and conclude. we went through the period of the pandemic of very strong forward guidance. you were going to do this for a long time and we weren't thinking about thinking about cutting rates. where are you now?

to a layman explain policy, the modality policy is in now. >> we're looking at data to tell us how much more restrictive, if any, we need to get inflation back down to 2%. that's what's happening now. i think everyone understands that the policy is currently restrictive. it's affecting the economy. we have seen growth moderate. we have, especially in the interest rate sensitive sectors. and now a period where we have to stick with it, right, to make sure that inflation gets back down to our 2% goal. and we'll do that. >> president mester, thanks very much for joining us. >> thank you. >> back to you. >> it is a form of respect, steve. i'm glad you pointed that out. >> i know you meant it that way, carl. nothing but respect from you. >> thank you, steve. i'm also wondering if you have a new line for new song, navigating by the stars under cloudy skies.

>> that's a great line. he's a bit of a musician, powell. >> and you could incorporate it into your performances as well, navigating by the stars under cloudy skies. >> you know what they say, courtney, good writers borrow great writers' steel. >> great to have you with us. affirm showing it can grow revenue in a high rate environment but only a quarter of analysts say buy the stock. ceo max levchin joins us next.

welcome back. profitable expansion and high interest rate environment, that's what affirm says the latest quarter demonstrates. for more let's get over to kate rooney who joins us with the ceo. take it away. >> joining us with a first on cnbc interview, affirm ceo max levchin. great to have you here. thanks for being here. >> thanks for having me. >> i want to start with powell's comments and your reaction to what he spoke about in jackson hole, essentially rates could be longer for higher, talked about a more restrictive policy and inflation still being too high right now. how would that affect affirm's business, higher rates for longer? i just want to get your take on that. >> i think we are prepared for even neutrality, the last 12 months when rates went up at an unprecedented clip have certainly benneen tumultuous an

made our capital markets wonder how to price our products clearly. settles the markets down, makes our job a little easier. certainly makes our ability to execute our mission much, much safer. >> you're prepared to operate in this higher rate environment? >> absolutely. we just showed that we can maintain the target range between 3% and 4% in this environment. whether they go up a little more or stay where they are for a long time, we're quite prepared. >> that didn't seem to surprise analysts on the upside, our ltc line item there. i want to ask about the health of the consumer. you saw a drop in delinquencies despite fears about consumer credit. can you walk us through that? how is the consumer looking from your vantage point? >> it's not an accident delinquencies went down. credit is job number one at affirm. we're keeping an extremely attentive eye on credit

performance. we'll continue executing and everything we must do, growth and expansion included, but credit must remain within the target ranges for us. so, that said, consumer is actually doing all right. it's the same story as last quarter. you can see that some categories are categories are up a lot. travel, ticketing are performing super strongly. folks are trying to get out of town and pay their bills to do so. on the other han, plenty of categories are suffering -- lifestyle and outdoor equipment is quite down year on year. and we're seeing that in consumer demand. generally speaking, the u.s. consumer is still buying things. they're still paying their bills. they're still quite solid. >> outdoor products, that's interesting. i want to ask about the student loan moratorium. you talked about that as a potential headwind going into the rest of the year.

how should we think about people's ability to pay these loans now that they have to start repaying student loans as well? >> it's already entirely priced in, if you will, in our forecast. it is long incorporated into our underwriting models. we know what we have to do to make sure that does not impede our growth and profitability but we do think there will be a modest percentage of folks that will be impacted within our consumer base. >> the debit card got a lot of buzz on the analyst call. people were focused on that. when will it start to meaningly add to the bottom line of affirm? >> it added to our growth this year. we showed our direct to consumer business accelerated quite a lot, and the majority is from the card. i have my prop right here. i'm so proud of the card. it took a long time to get it right but it is probably the

first innovation in card products, credit, debit or otherwise in the last 30 or 40 years. it allows you to separate pay now and pay later so you don't have to revolve on the things you don't want to resolve on. people are loving it. i get lots of investors and consumers telling me what they want to see. so just very excited to work on it. >> is something like a debit card enough to accelerate growth? it's down significantly from sort of the covid area, 60% growth. can some banking products re-accelerate growth? in terms of growing volumes at the pace you once were. >> i think so. i think we have a lot to keep taking in the market. in my letter i pointed out that

we have taken less than 1% for this company so we have lots to go before we start running out of ideas. we have excellent growth with our platform partners. there's a lot to do and we're excited to do it. >> i wanted to ask you about artificial intelligence. does it have a role for affirm? >> we use machine learning everywhere within our underwriting. we've been in the game since the beginning. we use generative ai, which is different to enhance the productivity of our engineers and make sure we don't make any mistakes to help our servicing

productivity and customer service. we have a whole collection of efforts and have been taking advantage for quite some time. >> max, quick last question. apple getting into buy now, pay later. what's your thought on the competitive landscape out there right now? >> 1% of the market taken by us and probably more by everyone else. so much available. greenfield is not concerned with it. ten years ago we were laughed out of rooms when we said we're not going to charge late fees. apple kind of put their stamp and approval, buy now, pay later, you're not going to pay late fees. that's been positive for us. >> thanks for your time today.

courtney and carl, back over to you. >> kate rooney with max. the markets are trying to find their sea legs, digesting the fed chair's comments. back in the green even as the two ye harits a one-month high. back in a moment.

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we are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident inflation is moving sustainably down to our objective. >> that's chair powell in the last hour remaining hawkish and saying there's more work to be done. we did hear from fed president mester who was essentially on the same page that the fed has more effort to do before bringing inflation back to target. that said, the market was kind of anticipating this. the s&p down one point. yields have changed a little bit. dollar a two-month high. >> absolutely. and the vix still below 17. wti trading around where it was before, just around $80. a little bit below there. we were both taking notes and i kept writing down when powell said things like substantially farther to go, concerned the economy is too strong, substantial ground to cover to

get back to price stability. not tipping his hand but at the same time not taking a victory lap at all, it didn't seem. not to me. >> no. did argue in some areas that the economy has not yet felt the force of prior rate hikes, that drag does exist. i think the word optionality got tossed around a lot today, leaving his options open, something for everybody. if we go out unchanged, it will be fascinating. meantime, next week we get j.o.l.t.s. on tuesday. the fed pays attention to that picture. china pmis, european inflation, our own pce, and then jobs friday where the estimates are still coming in around 170 but not above that 200k level which would make the fed nervous. >> more data to put into its forecast to determine where to go. september is largely off the table at least by the market standards for another hike.

what a lot of action from the fed on a friday in august. nice to have that. >> everybody is paying attention to the speech, one of the last major catalysts of the month. next week we can talk about volume and whether or not everybody is on vacation before we really get back to work. >> that's right. september right around the corner. >> courtney, great to have you. to post 9 and the judge. carl, thanks so much. welcome to "the halftime report." i'm scott wapner. reaction to the fed chair's speech what it means for the markets and your money in the months ahead. the investment committee debating all of that. joining me for the hour today, karen firestone, joe terranova, jim lebenthal, rob sechan. let's check the markets. we've been all over the map. the dow is positive. the s&p is fighting it out, up 1.5. the nasdaq is negative. yields have since moved higher. i think i saw 4.25 on the ten year. joe, we're parsing every word. we knew we would. what's