right now. you just have to leave that uncertain. we will be learning over the course of the next meeting period much more about that. the same is true for the others. i do not know if you mentioned shutdown. we do not comment on that. it is much more of a macroeconomic effect. energy prices being high, that is a significant thing. energy prices being up can affect spending over time. the sustained period of higher energy prices can affect consumer expectations about inflation. we look at the short form volatility. the question is how long are the higher prices sustained? we have to take those into account as well. i do not know if i hit them all. coming into this with the economy that has significant

momentum. we do have the collection of risks that you mentioned. >> greg torres from bloomberg news. you say that a soft landing is not a primary objective. the economy is seeing supply that can create long-term inflation stability. workers want to work. a boom in manufacturing construction. we have had a different home building. it is coming down. higher productivity. all are good for the feds longer run target of low inflation. if we lose that in the recession, are we opting for the history that we had in 2010? taking this into account as you pursue policy? thank you.

>> to begin, the soft landing is the primary objective, i did not say otherwise. that is what we are trying to achieve. the real point is that the worst thing we can do is to change the price stability. if it comes back, you can have a long period where the economy is uncertain and it will affect growth in all kinds of things. it can be a miserable period to have inflation constantly coming back and the fed having to come back again and again, the best thing we can do for everyone is restore price stability. now, today, we have the ability to be careful at this point. that is what we are planning to do. we fully appreciate the benefits of being able to continue what we see already.

rebalancing the labor market and inflation coming down without seeing the large increase in unemployment which is typical in other tightening cycles. >> hi i am from the associated press, when you look at the inflation has taken place so far, is a result of what economists call the low hanging fruit. the unwinding of supply change snarls or is it the inflation trend that involves most goods and services across the economy. >> if i understood your question, i would see it this way. we knew from before where we left it off, we knew that bringing inflation back down would take the unwinding of

these distortions. for supply and demand that happen for the pandemic response. that is important. monetary policy was going to help. help supply heel by cooling demand off. just in general, better aligning supply with demand. those forces were always going to be important. it is so hard to pull them apart. both of them are at work now. in a way that shows you the progress that we are seeing. >> michael mcgee. you see a 4.6 median funds rate. you have double your growth forecast. lawyered your unemployment forecast significantly, what would justify the last move. it is for lower inflation. given the known unknowns that you face, how much confidence

you have and that the american people having your forecast? >> forecasts are highly uncertain. forecasters have much to be humble about. to get to your question. what has happened, growth is coming in stronger than expected. that will require higher rates. unemployment, you see that the old man unemployment rate is not as high. that is what we are seeing in the labor market. more and more progress in the labor market. we are continuing that trend. in terms of inflation, the last three readings are very good readings, only three readings. well aware that we need to see more than three readings. june, july, august. significant declines in core inflation. largely in the sector to the

housing services and a little in non-housing services. headline inflation has gone way down. largely down to energy prices. some of which is reversing. the economic forecasting is very difficult and these are uncertain forecast. these are the forecasts. we have high-quality people working on these forecasts. just the nature of the businesses, the economy is very difficult forecast. >> given what you have, what justify not moving today, and what would justify moving in the future if you think inflation is coming down. why did you leave that extra die in? >> we have come very far very fast in the rate increases.

i think it was important at the beginning that we did. as we get closer to the rate that we think the stance of monetary policy that we think is appropriate to bring inflation down to 2% over time, the risk becomes two-sided. the risk of over tightening and the risk of under tightening becomes more equal. the natural commonsense thing to do is that as you approach that, you move slowly. as you get closer to. that's what were doing. were taking advantage of the fact that-- isn't it true that these effects are huge and that by the time that we meet in

november it is more like the that we will have a low ece number that will make you feel more comfortable and secondly, the lack of key indicators like cpi and job reports will impact your approach in the upcoming meetings if you will have a government shutdown? i missed the first question, what factors? >> base factors. >> base factors. okay. with that, you can look at monthly readings and see what the response was for the prior months. when you go back three, six, 12 factors, we can adjust for that. in terms of not getting data, we do not comment on government shutdowns, it is possible, if there is a government shutdown that lasts through the meeting, it is possible we would not be getting some of the data we would ordinarily get. we would have two -- i do not

know how to say in advance how that would affect the meeting. that affects all kinds of factors i do not know. that is a possibility. you know, yes, we can tell, month by month, what is the reading. i think what we are really looking at, there is a tendency to look at shorter and shorter maturities. they are incredibly volatile. that is why we look at 12 months. this situation, it looks like we have a bit of a turn of inflation starting in june, six months, even three months, really, six months inflation. over that period and over

longer periods. we do not need to be in a hurry about what to do, getting the data involved. >> edward lawrence with foxbusiness. i want to focus again on oil prices. as you mentioned, they will move up, pushing the price of gas, how does that factor nto your decision to raise rates or not, the last two inflation reports, overall inflation has actually risen. >> right. energy prices are very important for the consumer. this can affect consumer spending and gas prices are one of the big things that affects consumer sentiment. this really comes down to how persistent, and sustained these energy prices are. the reason we look at core inflation which excludes food and energy, energy goes up and down. energy prices mostly do not contain a signal about how

tight the economy is. they do not tell you where inflation is really going. if energy prices increase and stay high, that will have an effect on spending. that will have an effect on consumer expectations and things like that. and things we have to monitor. >> they are putting more and more of this on the credit cards. record credit spending. how long can the consumer manage that debt at higher interest rates now? >> to finish my prior thought, that is why we tend to look through energy moves that we can see as short-term loans. turning to consumer credit, we can see the measures of distress from consumers with historic lows quite recently

during and after the pandemic, they are moving back up to normal. we are seeing that carefully. at this point, these readings are not at high levels. moving back to what is typical in the pre-pandemic area. >> hi, jean young with m and then market news. what has been driving the increase in recent weeks, how much is it contributing to the explanations? >> you are right, rates are moved up significantly. it is hard to say precisely. most people do the decomposition. it is not about inflation expectations. it is about other things.

if everyone has models, essentially they are moving up, not because of inflation. and has something to do with stronger growth, i would say, the supply of treasuries. the common explanations i you see in the markets, they make sense. >> kyle campbell, american banker, thank you for taking these questions. two on housing. the shelter cost growth is in the pipeline and it will affect inflation readings. there are questions out there about the way that housing costs are measured. specifically rental equivalence with the homes that rent for in the rental market. the question is how much of the

effort to tame inflation for the broader public hinges on housing supply. in the constraint of housing supply being exacerbated by this locking affect of mortgages being higher now than they were at the historic lows. how will that impact future thinking about taking interest rates to the lower bound in the future? >> on the supply point, supply is various of important over time. in setting house prices and rent. it is structurally constrained. where inflation is going in the near term, as you obviously know, a lot of you are the leases that are running often they are re-signed and released and it will not be that much higher. one year ago it was a lot higher than it was and it might be below or at the same level.

as they are rolling over, we are seeing what we expect which is measured housing services and inflation coming down. your second question was the walk in, how much is that affecting things really? >> potentially bringing rates down in the future. creating the bubble of buying the lock in that will stagnate the housing market. >> i would look at the lock in. the idea that people are in a very low rate mortgage and even if they want to move now, the mortgage would be so expensive, that is one of the explanations for what is happening for the labor market. will that play a role in our future decisions and the future loosening cycle about if we

will cut rates? no, i don't think it would. fundamentally, looking at what rates the economy needs. in the emergency like the pandemic or global financial crisis, you have to cut rates to do what you can to support the economy. that is not something we would be thinking about it all right now. >> nancy marshall again with the marketplace. you mentioned several things that would weigh on consumer confidence and come back consumer spending and high gas prices. when they welcome a decrease in consumer spending? will that help you get inflation to the 2% target? >> i would not say it that way. not the decrease in consumer

spending. it's a good thing that the economy is strong and has been able to hold up under the tightening that we have done. it's a good thing that the labor market is strong. it just means this, if the economy comes in stronger than expected, we will have to do more for the monetary policy to get back to 2%. does that answer your question? >> yeah. on the other hand, do you worry that will contribute to the economic slowdown or the recession? >> that is a concern. concern number one is to restore price stability. that is something we have to do so that we can have the economy we want with sustained labor market conditions. that said, of course, given how far we have come with our rate

hikes and how quickly we have come here, we have the ability to be careful as we come here. >> thank you, chair powell. what factors into the economic resilience rate for the degree of rate sensibility in the past. the companies that refinance before last year. what is your thinking about the efficacy of rates? and how that has changed. related to that, how do you think about the distribution consequences, if you are a wealthy household on a fixed rate mortgage, the past year has not been that tough. if you rely on your credit card for supporting your consumption, times are getting tougher a lot more quickly.

>> is fair to say that the economy has been stronger than many expected given what is happening with interest rates. why is that? there are many explanations. a number of them make sense. household balance sheets have been stronger than we had understood. spending has held up in that kind of thing. the savings rate for consumers has come down a lot. is that sustainable? if the date of focus in later. it could be other reasons other than the neutral rate of interest which is higher for various reasons, we don't know that. it could be that policy has not been restrictive enough for long enough. there are many candidate explanations. i feel like what we have right

now, it is a very strong labor market. we are making progress on inflation, growth is strong. by many forecasts, they call for gross to moderate over the course of the next year. that is where we are. we have to deal with what comes. the second question was distribution, can you be more clear about that? >> my point there was that if you have someone who has a fixed rate mortgage, you can endure the interest rates. if you are living off of your credit card, interest rates are punitive. >> yes. the point i would make there, we are trying to get inflation back down. the people that are most hurt are the people who have a fixed income. if you spend all of your income and you do not have a

meaningful savings. you spend on clothing, food, transportation, the basics and prices go up by 7%, you are in trouble right away. even middle-class people have some savings. it is for those people as much as for anybody that we have to restore price stability. we want to do it as quickly as possible. we would like the current trend to continue. making progress. without seeing the increase in unemployment that we have seen in the past. you're right. when we raise rates, people were living on credit cards and borrowing are going to feel that more. they are. people with lots of savings have a much lower marginal propensity to consume and it will not affect them as much.

>> thank you, chair powell. >> in the book recently you can tell that the fed has been surveying nonprofits and community groups about the economic health of americans. two questions about this. are you going to use that data to come up with a quarterly survey of those groups like the senior loan officer survey? the second question is that from your reasoned readings of these surveys, low-end and moderate americans, the thing where the gdp is strong because of wealthy americans driving things? i want to get your sense of the health of that sector. >> i do not know about the quarterly survey, we can take away and think about. in terms of how low and moderate americans -- clearly we are suffering from high

inflation. during the pandemic, the government transfers that happened were very meaningful. the surveys that we take show that they are in very strong financial condition. it is a very hot labor market. we are seeing high nominal wages and real wages are positive by most measures. i think overall, households are in good shape. the survey is a different thing. surveys are showing dissatisfaction and a lot of that is that people hate inflation. they hated. that is causing people to say the economy is terrible. there survey behavior is not what you would expect from the survey. that is not what you would expect the answer might be. there are good things happening

on household balance sheets. the biggest wage increases have gone to relatively low wage jobs. >> thanks very much. live today in san francisco, the fed chair following what is a hawkish cause by the central bank. showing that holding them higher and more restrictive in keeping them longer they are than anticipated. with that, fewer cuts than the market has priced in for next year. as they raise the economic outlook for next year which he talked about. the economy is robust. gdp growth higher than expected. coming more into balance. this is interesting. five times, maybe more than that, they will proceed carefully and will raise rates

if necessary. he said, based on the outlook, more likely than not that they will raise it at the two remaining meetings. a baseline scenario but that it was still possible. he did call it the primary objective. joining now to discuss all of this, the cnbc exclusive interview. as always as he is on fed day, welcome, good to talk to you today. >> nice to be back again, scott. >> you nailed it. >> what is your take away from it? >> you nailed it with your intro. the word of the day is carefully. he said it two or three times in his statement, he said it many times in the q&a. there is something in there for everybody. this is one of the best fed decisions we've had in a while. that concept is wrapped around the idea that raising rates 525

basis points, pointed out with this statement. prior to the fed decision, it does not get enough play that it continues to happen. they did upgrade the forecasts for next year, unemployment not as bad. i think he's right about all this. we have a lot of indicators. people are looking and making a big deal about the consumer resiliency. it is due to high prices. you see it with credit card gains. it is back up. we see a lot of debt in the economy. another problem with the economy is that there is been so much increased in the interest rates for the federal reserve and interest department. the interest on the debt is

really going up a lot. you'll go up every month that the rates stay at the 5.5 level and it will go faster if there is another hike two. they are contemplating or they have the door open too. hundreds of millions of dollars of increased interest expense. you'll go up with these interest rate levels. the bond supply has been one of the reasons that interest rates have been going on. the good news on interest rates, taxes will get paid here in california. one of the reasons that the deficit is so big, deferral of tax payments. here in california, two years worth of taxes the tax payment and pushing forward. october 15th 2023 and april

15th, 2024 which is two years worth of taxes paid in six months. some people are prudent and plan for that. i have. a lot of people adjust their lifestyles. that has to do with the headwind on student loan payback. a lot of people who were not paying student loans, they spent the same amount of money in the same amount of interest by ramping up their credit cards. lots of crosscurrents right here. they see it in the transition. the data is non-reliable right now. all of the distortions from the government money and payback and the payback of loans, and now we have these strikes showing up. crosscurrents regarding the inflation situation, it is prudent for the fed to have a

wait-and-see attitude. going up 30% since june is obviously inflationary. the shelter component of the cpi is coming down. it lags badly if you look at the zillow rent product industries, it is a flat year- over-year. a lot of crosscurrents going on and it is a appropriate to wait and see for the data. >> based on the outlook, it was more likely than not that they will raise at the remaining meetings. you made the case just last week a few hundred miles down the coast. do you think they are finish raising interest rates? >> the probability of rate

hikes is higher than before this will spike happened. it will be problematic. we know that the base effects and rolloff of the cpi is going to lead to inflation going back up and kind of staying where it is now in a sticky way. the for handle on cpi before it comes down on the shelter component effect. i think the chance of the rate hike is higher because of oil prices, they will be a real problem. my gasoline station over he past few months, the price has gone from $5.50 to seven dollars per gallon in the last few weeks. i will not go down. those things lead to a little bit of a headwind. the idea that the fed can cut rates or stay on hold.

it is appropriate that the fed has downgraded the rate hikes because of the cross current of inflation. >> steve policeman was in the room and asked a question to the chair as he always does. you know, steve, i want to hone in on an issue that you raised earlier. andy point that you underscored in your question with the chair. asking why a more restrictive real rate next year than this, he was explicit where he said, because of the stronger economy. they want your perspective. what i feel is now interesting to talk about. it seems to me that the chairs biggest problem now is not where inflation is, it is where the economy is. he is afraid that because the

economy is much stronger than he thought it would be, inflation will come back. he does not trust that it will remain on the trajectory that it has been. >> let me point out that it is the exact quote that i brought to you here. his answer to that question. i will let chair paolo say what he said. i will comment on the back end of that. >> rather than pointing to the sense of inflation becoming more persistent. we have seen inflation be more persistent over the course of the last year. it is more about stronger economic activity. >> the question is, he surprised me. i was on a show earlier today, higher for longer is what we will hear today. it surprised me from the rate perspective, the fed inflation forecast. the fed becomes relatively more restrictive next year.

maybe it would pivot higher. what happened is that it inflation rate is in the same. they took half a point of rate cuts that they had penciled in. scott is right, the stronger economic growth is part of it. there is persistence to the service side of inflation that might be part of it. even though the forecast is more hawkish. the overall for cost is more bullish and i will ake powell at his word that he is careful to get there. just because you have a plan and it is reckless does not mean that they will execute it. the idea they are going slowly to give you comfort even if the direction of travel is one that is more hawkish. >> i was going to ask you that, the idea of those words,

proceed carefully. jeffrey himself raised it very much at the top. why he felt it so necessary to underscore those words? do we the reason is because a look, 500 basis points is an aggressive rate hike cycle. guiding into a point where it is not going to be a recession at this point. a chance to stick the soft landing. no you could take a little bit more time in the idea of a pause this month made a lot of sense. if you look at the probabilities , i have not since the 2:00 announcement. higher for december. they have pushed it ahead. november, it is not even up to 15%. they are done with higher probabilities. the odds on call right now are

if they are done on the focus is now on how high, for how long. today we learned longer. you know what, if i don't have to be, maybe i will take some back. >> i appreciate it very much. our senior economic reporter in washington. back to jeffrey who is clearly with us. your reaction to that what he had to say about the economy being too strong economy being an issue for the fed chair. >> he bought himself some time in the very clever way. he said we are mindful of economic strength, gdp is high and it is a hat tip to that. they make a forecast for the

future, and they leave rates unchanged because they are cognizant because of the potential of the accumulation of this tightening with the 525 on the fund rate and going back to the shadow fed statistics, there was a study done where they said when he we do not do this quantitative tightening and all we did to manipulate the monetary conditions was the fed funds rate, where would have to be to equate the timing to 525. we did not do qt, it shows that they have raised rates, raising it by 700 basis points, that is a lot of tightening. the fed needs to realize, powell said this specifically,

it is continuing. they are not really rate hikes. i will go up to 800 basis points. it is very lever to say that we have the potential for less of the increase of unemployment rates. we will need to buy ourselves times. it was an excellent way to handle this meeting. i agree with steve completely, there is a narrative that will develop with no rate hike in november, they need more data. what i want to tell the listeners about, i always talk about the yield curve being inverted with a warning signal if you will, to put you on watch that the recession is coming, it does not happen imminently. it takes time. it is 14 months to 18 months with the words that you get a recession. that was last october.

that is a year on that one. one way to track this, one of my investors sent me a note the other day that i found very interesting, just look at the 30 week moving average of the 210 spreads. when it converts by crossing back above, it is a 30 week moving average, that is a really strong signal of a recession. that is very close to happening. the unemployment rate is up by 40 basis points off of it slow, it will probably go higher in my opinion. with that, that is the crossover on the employment rate. the unemployment rate will crossover the three year moving average in the first quarter of next year. these are a really strong recessionary indicator. it is starting to pile up. the problem that we have, the government shutdown looming,

taxes being paid, the economy can slow down very quickly. once we get in the next 4-6 months. >> all that said, did bonds become more attractive today? especially on the short end, the two-year is obviously up, stocks are at the lowest at this very moment. if we think that rates on the short end are going to rise for a bit. if your projection comes true when the economy weakens and then rates will go down. did bonds get more attractive to you? >> i think treasury bonds are attractive. i find them quite attractive at this moment. not for the long term, more for the short term. for the economic gyrations, it will be a weaker economy and weaker inflation the people are

pretty tinkered the long term for the interest rates is becoming increasingly unattractive. we have all this interest expense that is piling up. the deficit is that 8% of gdp. it is not a very pretty one. there is 12% of gdp. that is a ton of bonds. we have long secular indicators that have turned twice in my career. the first time they turn is in the early 80s. the nominal gdp. it peaked in the early 80s and fell for four years. that has turned up, between 2016 and 2020. that is an interesting indicator. also the core pce seven year moving average has the same looks. peaked in 1980, bottomed around 2020. that is also going up. the next bond rally that will

come with a pavlovian response will not last. the response to the next recession will be the next response that we have had in the last 20 years. slashing interest rates, and probably quantitative easing. this will be an inflationary policy. the deficit is going to get so bad in the next recession not we are going to have radical policy changes. like the elections of the presidency keeps getting wackier every four years, the response from the treasury department and federal reserve will need to be more extreme every time, the dead acts as a tractor pull. will get a bond that does not stick. because the response is going to have to be inflationary. in the eye of the hurricane situation relative to the general trend, i think in bond yields, for the time being, what we have to think about

managing money actively, we have to respect the fact that we are looking at the bond rally. the 10 year treasury yield is double top from where was a year ago. it is a minor new high, but we are at the end of this rate rise on the 10 year period >> speaking of slashing rates, the outlook, we will get fewer cuts coming next year, based on the outlook much more than the piece of paper, not a prediction, obviously, and outlook. you are looking at cuts next year. rethinking the outlook for the rate cuts? >> not at all. it is likely that there will be rate cut in the first half of next year. they are bigger than the fed thinks is this base case. real rally potential.

you want that profit potential is in bonds. the phrase about investment strategy, i would not do that. this type of portfolio in credit. they have high yields in the single digits. this is a market we want a long- term position. the two and three year in the securitized credit market where you get these big yields, you end up with a portfolio that

throws off income that is triple, if not 3.5 times that of the equity market. it is overvalued versus the bond market based on the risk premiums and things like that. a year ago bonds were overvalued. as rich as stocks were when they began the market, they were cheap to buy. that has changed. now bonds are double cheap to stocks. a forward shift. that should be respected in portfolios. 25% for the long-term treasury. 25% in cash, the short-term lower credit stuff. then you want 25% in stocks? at this point, there ight be a case for building a position in

commodities. the moving average that is becoming quite convincing. it is mostly energy. it seems to me like there is momentum behind this movement. >> you read my mind, i wondered how you would break up 100%. if you think it is worthy of having 25%, let's just say, in commodities. what has been dollar strength will be dollar weakness as the economy weakens? >> yes. for sure the dollar is going to weekend in the next rollover of the economy. he will weaken pretty mighty. that is one of the problems that the market is going to have. that is going to happen. what happened recently, we had

strength recently and that has been a little bit at odds with real interest rates frankly. at odds with financial conditions broadly with the deficit. that will change. >> jeffrey, i appreciate it. as always, a good fed day when we have you on the backside of powell. we will see you after the next meeting, i'm sure of that. >> okay, sounds good, judge. good luck, everybody. >> jeffrey don locke who joins us every fed day when he is done with his news conference in, you will hear that again after the next meeting. the result of the question of the day. yummy times will the fed cut rates next year? the majority of you said less than two. maybe you had to rethink that after the outlook for the fed today. coming up next, joining the onset we will get her reaction to the fed and we are getting set up for earnings and over time. fedex's numbers will hit

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power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley. we are in the closing bell market zone. liz young here to break down these crucial moments of the trading day. fred calling to show us what to expect from fedex. liz, i will turn to you first. is this what you expected? >> i did not expect them to raise rates, yes. a lot of these messages are

anti-climactic when we get to the actual meeting. the carrot got further away. it is still a carrot in my view. the expectation in the summary of projection, inflation might be cooler this year, growth a little stronger, unemployment, lower. when they try and play that out, it does not track entirely. the fund rate that we are expecting to be 5.6% by the end of the year. say above 5% by 2024 without hurting the labeler market. chair powell has said over and over again, we need to see a period of under trend growth to fix this problem. and if we have that we will have a rise in unemployment. weakening of demand, and further weakening of margins. this is not entirely tracking. they cannot forecast that there will be eight contraction.

they cannot forecast there will be a recession. >> that is exactly why he thinks that's stocks are wildly overvalued relative to bonds. elevated rates in the economy that will come in as a result. >> the soft landing expectation is taking what is going on today and extrapolating it out into the future as if nothing is going to change. as we know, and was rightfully pointed out, you can point to whatever indicator you want, this is the period where it starts to be a problem. saying that the soft landing will create the scenario where this all continues, i do not think it is likely. will have to inflict pain and that is reiterated by the fed. we have seen a little bit of pain but not enough yet to take care of the inflation problem.

i am with jeffrey on the idea that we will see cuts before the market thinks we will see cuts. i do not think it is sustainable to expect rates to stay at this level and expect the yield curve to stay this inverted and that verything else will carry on its merry way. >> even the fed chair would not call it his baseline scenario. he knows the lag effects that are still to come. by keeping real rates higher into next year, the economy will slow. it will come in his words into the integrated balance. the question is, what are investors to do with all of that? >> their forecasting ability, is no better than the markets collective ability. what he did say, he is willing to allow himself and the fed to get lucky if that is the way it goes and do not necessarily tried to actively short-circuit

the economy from here. very indifferent about the potential for another hike this year. that is what the committee projects. that means one meeting out of two. beyond that, he will make use of all of the latitude afforded to him by the rates are up around where they need to be. the economy is stronger than they anticipated. and perhaps energy prices are doing the job that others might seem to do. a colicky response, it does go higher to go higher for longer medicine being applied. this was not a game changer today. he did not wanted to be a game changer. the project and is for it to go above 4.2% next year. it is a step down for the gdp growth. the fact they do not have

inflation going for the target gives them the ability to stay patient. the market is that you have to see what happens at the close. >> the real question is valuations. stocks are relatively overvalued when it comes to bonds. relative to where rates are. where the economy is headed. earnings may come in relative to expectation if stocks are overvalued. you decide how much the level of treasury yields matters for the equity valuations were not. something that is on everybody's mind. i do not think that is a clinching argument. >> liz, real quick to you, will the dollar weakened? as you sort of broke it down, 25, 25, 25, bond, stocks,

commodities? >> dollar strength as it continues to rise. where oil prices are and expectations are, inflation comes in at or above expectation again, next month, the following month, or a while here. it strengthens be for it weakens, the dollar does weekend as the economy shows the signs of stress. >> that is exactly what jeffrey expected to happen too. shares are outperforming u.p.s. here is more on that. what are we expecting? >> one of the most important things, outperforming u.p.s. in the market. supporting the transformation plan that began a year ago. keeping a watch on this will be

the call of any commentary on new business. fedex announced the rate increase next year and surcharges for this holiday season. comments about winning business from u.p.s. estimating that they lost over 1 million packages during those negotiations. any volume from fedex freight, the largest carrier in the nation. the influx of volume in both areas at higher prices will give margins a boost. evercore raised the estimates for fedex, they could also raise theirs. >> thank you very much for that. what are your expectations here? >> this management has not been shy about calling out the macro challenges when they see them gold positions in the past

quarters. i would like to hear the characterization of the macro that will pass along fuel costs. what is that doing to demand? the ernie expectations have come down pretty significantly in loss several months. the market kind of expects them for the latest print. >> let's turn back to the markets. not sure where we are now. let's focus on these two words i took providence today. proceed carefully. investors want to use to choose their view if there will be hikes, if any. proceed carefully. something to hang on there? if you want to see things more positively? >> we get the plot if you look over time what it suggests, it is not good at predicting what

they are going to do. it has risen over time. we would be undershot where rates ended up. carefully is the right word to use. it just makes is data dependent as them. we are watching the same data come in, they are watching the same data coming. as we move through fall, another hike is possible now because of what consumers are dealing with and because of the persistence of inflation. i do not think another 25 basis points will change as much. will send the message they have not given up the fight. that is the important message. >> if that changes the appetite for the growth stocks. not the number one factor, it is an important one, the nasdaq is down a couple points. the rates are up. it is a factor, it is an important one. >> short-term since the nasdaq

has bottomed, up 200 basis points in terms of fed funds since then. it matters, we will see if that is more excuse than reason. >> stocks will go out and there are the lows of the day. the nasdaq as i said is the biggest loser. i will see you back here in san francisco tomorrow. welcome to closing bell over time. coming up this hour, we'll talk to the former economic adviser chair for their first reaction to chair powells comments. >> another