strongly think that the regionals and the smaller regionals are an enormously part of our banking system. >> okay. you have been generous with your time. one last question -- are you having a good time? [ laughter ] if so, why? no, no, no. i assume this wasn't that pleasant. but in general, you enjoy your job. >> i would say this, first of all, it's an incredible honor to do this job. every day i feel so fortunate and so lucky and blessed to be entrusted with this. you know, all i want to do is do the best job i can for the public that we all serve. and yes, there's a lot that is enjoyable about it. but mostly it's just so important to get it right. that's what we are trying to do. >> thank you so much, chair powell. [ applause ]

♪ ♪ welcome to "the exchange," everybody. i'm kelly evans. we just heard from fed chair powell speaking at the economic club of new york for about the past hour or so. we saw yields initially moving lower from their 16-year highing and then reversing higher again. the former dallas fed president is here with me. he says the bond market has stepped into the driver's seat and powell ain't in charge any more. we'll get he is reaction in a moment. this afternoon, we have seen the dow hanging on to a gain of 111 points, up a third of a percent, up a quarter percent for the s&p. up a little less than that for the nasdaq. over in the treasuries, that's where the action is. the ten-year yield during powell's q and a portion hit 4.996, that's how close we got to piercing 5% on the ten-year. you can see the 30-year above that level, as well. oil was lower earlier on, on

that news of the u.s. lifting venezuelaen sanctions. that's a 2/3 percent gain. gold as well, now turning higher by half a percent. let's get more thoughts right now, more reaction to what we just heard from the fed chair. joining me isthe former president of the dallas fed, and reporter steve liesman joins us, as well. if i may, robert, just for a moment, let me bring in steve. steve, could you pin point comments that sent yields lower, and in the q&a portion we saw the opposite take place. >> well, there was something for everybody in there, and i thought it leaned just a touch hawkish, but just a touch. if he makes up a plain statement that if the economy doesn't slow down, we may have to do more, and the economy hasn't slowed down. well, you take that the way you want. people took those initial remarks as being dovish, because he did say there were things

that could cause -- that's correct help the fed in the inflation fight, including higher rates and expectation the economy will slow. but then he said later on that there were reasons why the economy may not slow and why rates may not be high enough. i think that caused a spike. by the way, very interesting here. you did see that long yoields went higher and short yields went down. but only 22 points inverted at this point right now. yeah, 21.6 exactly. 22 points inverted right now. we haven't been there in a very long time. i forget how long back you have to go. he talked about rates being higher for longer. but the short rate also came down as did the probabilities of rate hikes. it's the best we can do in terms of the market's bet in terms of

where rates are going. just under 4% probability of a november hike. you're now down around 30%. you were at 38% for november and down around 35%, 36% for the december hike. that had been as high as 50%. so the market backing off saying you know what? the story here is higher for longer, but not higher. >> all right. so let me turn to president kaplan on that note and get your reaction to the most apt phrase of the week, which is the bond market is in the driver's seat. maybe powell's language can give an opening to the market to test as it did today, continually test how high yields need to go. but just explain what the dynamics are that you see here. >> let me just comment. i agree with what steve said in his take on this. i think jay powell did the right thing in that he warned they may have to do more, but also said they're going to move deliberately which sets up if

they decide to skip the november meeting, which i think they should. and so i think he's trying to position the fed to do their job. the reason i say the bond market is responding to other factors, i think the bond market is responding honestly at this point a little bit less to the fed and more to the fact we're running very large deficits, very hi-degh deficit spending. it's not that the bond market -- that we won't buy treasuries. just you have to get paid more. i think the bond market is looking a couple years over the horizon, maybe to a fed funds rate closer to 3.25%, 3.5% over a couple of years at a 150 basis turn premium, and it's getting positioned for that. >> why do you say it might be for instance the deficit situation driving the long end higher when people say we have had stronger economic data, and

this is a good thing. that's why yields are rising. how do we know? >> so debt-to-gdp is now over 100%. entitlements is $75 trillion and growing. as was discussed in this interview, the fed is no longer a buyer of treasuries. it's in fact laid its balance sheet out. the banks are no longer buying long data treasury securities. we just come off a year that just ended where we ran close to a $2 trillion deficit, and people sort of yawned at that, but they need a reminder, post crisis, prerecession, this is, as a percentage of gdp, a historically large deficit. >> yes! >> and prospects are, it's going to get higher. the other thing that's going to happen is the government bond market is going to reprice and we'll go in $620 billion of interest expense this year to

higher next year and higher the year after, as bonds reprice to these higher levels. those are significant developments, which will test the treasury market. >> and viewers of the show who have watched as we have gotten the treasury auctions in the past week, the 10-year, the 30-year, when they don't go well, we see the market taking a leg lower on that. steve, powell was asked about the dynamics, and he said, we don't focus on fiscal policy. we wouldn't change monetary policy because we think the u.s. is on an unsustainable path -- everyone knows that. we're just going to focus on maximum employment and stage prices. but there is a third part of that mandate, and the third phrase is to focus on maximum employment, stable prices, and moderate long-term interest rates. i wonder if this is the first time in a long time that third part hasn't come in conjunction with getting the first two right. >> that's a really interesting point, kelly. i will say rhetorically, fed

officials have eased up a little bit on their ban about talking about it. they have now started to reiterate this idea of the debt level being unsustainable. when she was in the federal reserve, janet yellen talked continuously about the unsustainability of the deficit. i'm not sure that has helped. i want to make one other point, and i'm interested if robert kaplan would comment on this. he twice talked about reaching this level of sufficiently restrictive level. he said the first time in the speech, we're committed to achieving the sufficiently restrictive level. then the second time, he said we're trying to achieve a restrictive level. it tells you, robert, you know better as well as anybody, about choosing your words carefully. he is not ready to go and say the fed is done.

i don't think it's crazy to think if this economy does not slow, the fed will do more. >> i agree with all of that. and here's the unfortunate reason why they may need to do more. i don't think the organic or underlying economy is that much stronger than it was pre-covid. the real feds fund rate organically is still half to three quarters of 1% real. i think what you've got here -- >> and we're at 2 1/2 percent or something these days. >> what you have got going on right now is deficit spending in size. i know the "inflation reduction act" and the infrastructure act were supposed to be paid for, but so far, the pay fors haven't materialized. we have a few hundred billion of unspent money that has to be obligated by the end of '24 and

spent by '25. that is counteracting the cooling effect of monetary policy. >> think about the impact of what you are saying. as a result, then the fed has to take rates higher than otherwise, which is resulting in the repricing we are seeing of everything from mortgage rates to you name it. >> if it weren't for that deficit spending, with those powerful programs, i think the fed might well be done or might have been done 25 or 50 basis points ago, but if this fiscal impulse is alive and well, which i think it's going to be for all of '23 and '24, the economy is going to stay resilient, not in intrasensitive sectors, but in services. i think they need to be prepared to decide how to deal with it. i think he's right to leave his options open. >> it wasn't necessarily even a sign of the cyclical staying power of this economy or anything, but so much a sign of those parts that are almost insensitive to changes at all.

steve, what would you add before we let you go here? as the market by the way, stocks are near session highs and seem to be seizing -- it's like the stock market is seizing on the idea they might be done and the bond market is in a world of its own. >> yeah, the bond market, robert kaplan is right to point to the issuance right there, as well as the macro effects of that issuance coming down. initially, we were thinking it was going to be a falloff in the fiscal stimulus, and that has really turned around and changed the outlook on a dime. umm, there's this comment that you guys were running below, which is well worth underscoring, the idea that there is no evidence that the fed is too tight right now. that is helpful that the economy could continue to grow reasonably well. i just got to sit back, kelly, and watch the data as it comes in. i feel pretty secure that i understand the fed's reaction function here. if this economy does not slow, i

believe that powell and the fed will have to act to slow it. i don't know when that point is that they pull the trigger and say, i've seen enough here. but certainly, if the fourth quarter comes in above potential again, i believe it will be time for them to give up the ghost on this economy running below potential. i will point out the history of this, you have to go back to not the past jackson hole but the jackson hole before that in 2022, where powell said back then, and reiterated in '23, reiterated at the press conference, and again in this speech, that bringing inflation down requires a period of below trend growth. they haven't got it. at some point, they have to insist upon getting it if they are going to live by that principle that it is what is required to bring down inflation. >> so i agree with everything steve just said. i think the situation, which is going to be challenging is, over the -- let's say the fed has to

in the short rub do more. over the horizon, this government spending will eventually dissipate. arca money will get used, and when that happens and we see the real organic economy, you might then see an abrupt about face and yes, we'll get a chance to -- >> so robert, are you saying the fed should let that -- not address it, say thing is temporary -- >> what i would do if i were at the fed, i don't think they have a choice but to address it, given their mandate. while this might be controversial, i would also be in my seat calling out a broader diagnosis of why we're having to do what we are doing. they're not going to want to do what i'm about to say. it would be great, if they believe this, that part of this strength may be temporary, but yes, as he said, we take fiscal

policy as a given. we have to react to it. but i think -- i would be -- i would have to act but i would be torn about explaining this is a very uncomfortable dynamic. >> and then knowing you might have to reverse that as things play out. gentlemen, thanks so much. steve, always a pleasure. our steve liesman. by the way, tomorrow morning, steve has an exclusive interview with the atlantic fed president who has been one of the more dovish members, so look forward to his reaction at 7:30 a.m. eastern. now joining me now is the chief market strategist at jefferies, and cnbc's rick san tell si here, as well. gentlemen, i'm struck, dave, by the reaction where bond yields are near their highs but stocks are near session highs, as well. >> it seems to be a pattern, kelly. the risk asset market in general, credit and equities are

trading really well, even in the face of higher bond yields. the data that we are getting and the fact that this is a strong economy, as jay powell put it, and maybe policy suspect as restrictive as many people thought it was for a variety of reasons you have been discussing with the past two guests as well as those that jay discussed in his presentation. >> dave, you were one of the first people pounding the table on corporate credit. just very tactfully, very specifically speaking, what is it that you think people and investors should be doing as they navigate this new environment? >> look, all year we have highlighted the fact that the debt markets last year, were paid quite substantially to take credit risk over equity risk. i still think that's the case.

you could get some investment grade, single b and double b yields in the double digits, in an economy that was reasonably robust. a lot of people really pushed back on this, kelly, at the beginning of the year. pretty much everybody was calling for a recession. we're talking about policy that wasn't that restrictive. again, kelly, you know, my views are not necessarily in line with the discussion you just had. i don't think it's a lot about fiscal, but much more about the outsized balance sheet at the fed. >> that's absorbing a lot of the blows to the economy. next question i'm going to ask, aren't we resfrrestricted now? i think we had a tips auction, we just keep shooting higher. at this point, we have to be restrictive, no? >> i think we have restrictive rate policy, but do we have a restrictive balance sheet? the ball ance sheet is still $8

trillion. it's absorbed over $2 trillion in lost money, all of that is huge stimuli that exist in the economy and are way above a neutral balance sheet. it's fascinating that nobody asks anybody at the fed what they think of neutral balance sheet is. they won't talk about it, and they don't know. because as ben bernanke said it, they don't have a theory. but that doesn't mean it suspect substantially stimulative. i think that's the big miss across the board. all this fiscal stuff is a sideshow. >> rick, i'm looking at the ten-year tips yield, at about 2.48. >> yeah, you know what? listen, tips are a lot in my mind like 20-year, like the seven-year was. listen, we could look at tips and the break evens. i'm not sure i put the full faith and credit of my brain, assessing those are reflective

where i see inflation rates. i see the constant debate that steve just pointed out and pointing fingers at anybody that talked about a recession is wrong. i don't necessarily believe that entirely. anybody that read beige book yesterday, did anything they state sound like a 3.5% to 5% gdp economy to you? i think the issue is simple. mr. kaplan, i think you win the trophy of the month. just about everything you said made sense from the bond vi vigilante perspective. it's paying people to not necessarily work immediately. all of that is much slower in unraveling than many thought. but there's no doubt that it exists. and when we say are rates not restrictive enough? you know, here's what i can say.

why did stocks do better? because two-year notes went nowhere. as a matter of fact, look at the intraday, and then look at the two day. we're dabbling under yesterday's low yields. but it's the exact opposite of what's going on in a ten-year. that's simple and it's been discussed already, but that is really important because they're not restrictive enough. and, and the fed, listen, our chairman said, and i'm almost quoting, basically what he said was, interest rates are found through supply and demand. well, that's what the market is trying to re-bring out. that's what the market is trying to finally do. rates have been squashed. they have been squashed since qe came. the long end isn't continuing to do the work of the fed, it's doing the work the fed did not do. and it isn't going to stop. and in my opinion, you're going to see term premiums continue to widen, and those are going to start to be restrictive along

with the fact that the duration that is affecting how much it costs to service the debt and steve liesman brought this up and he gets the second trophy, over time that duration is going to change. and other things are going to change for the positive. as bank of america pointed out, all this paper that's under water because of mark-to-market issues, the little loopholes, they're going to slowly continue to see that and hold it to maturity and some of that two and three-year paper is already giving them their full faith and principle, which they're buying t-bills with, which the treasury thought to send them a thank you card because they're gobbling up some of that supply. we can continue to monitor that dynamic by monitoring which side of the $1 trillion the reverse repoe market is. >> do you think they need to try to shrink the balance sheet much more quickly? we all know any day we might wake up and discover we have hit

the limit with only $1 trillion of shrinkage or whatever. >> kelly, i don't like to talk about what i think they should do. investors aren't going to make money based on what they should do, but hopefully what i project they will do, and i don't think they will change the balance sheet policy around. they had the option to go faster, they didn't choose that option for a variety of reasons and they're not going to choose that now. i still think the balance sheet comes down $90 billion next year, taking us back to nor neutral levels. but we still sit in a relatively stimulative position between rates and balance sheet. that explains a lot of why so many people missed the economy's strength over the course of this year, and why they missed the resilience of risk assets on the ed kr it and equity side, as well. >> guys, thank you both. big day. needed to have a very big panel for that. mortgage rates are above 8%,

even more so as the ten-year yield closes in on 5%. and it's putting pressure on home sales and the housing market. let's get the latest from diana olig. >> we got a rough report from the realtors this morning on existing home sales. they dropped 2% in sent to just below 4 million annualized, the slowest pace since october 2010, which was the foreclosure crisis. two years ago, sales were at 6.3 million annualized. two years ago is when the average rate was 3% on the fixed. today, it's 8.03%. not only is affordability getting crushed, but there's precious little supply. just 1.13 million homes for sale, down 8% from a year ago. the lowest supply of single family homes for sale since 1982. adding to higher mortgage rates, the medium price of a home sold in september was $394,300, up

nearly 3% year over year, and we're continuing to see more homes selling at the higher end of the market, because that's where there is more supply and higher end buyers can often use cash. mortgage demand is the lowest since 1995. we learned today that cash sales in september were 29% of all sales. that, again, matches the highest since 2010. kelly? >> just incredible. diana, stay with us. our next guest says that 8%, 30-year mortgage shouldn't be a huge surprise. the upper momentum is hopefully dying down. matthew graham is with us. you know, everyone in rates land, matthew, has been saying the treasury yield is over. i've been hearing this for weeks. it just keeps going. so i hope you're right. >> i mean, you know, we don't know exactly when it's going to be over. but we do hear a chorus of fed speakers, especially last week,

in a very notable way, saying that they are restrictive and that they can wait and see what happens with the policy filtering through to the economy. and if that's the case, then there's only so much more at the long end of the yield curve. >> i beat tweeted the 8% mortga rate yesterday purposefully just to see the psychological response. nearly everybody responds by saying, a crash is coming. now they're saying it's unaffordable, an entire generation is ruined, or a crash is coming. what are your thoughts? >> so many thoughts. first off, what diana was saying about supply is critical. so we need to decide how to define a crash. a crash in home values? because supply is the tightest since the '80s, it's hard to get values to crash.

8% rate pose a problem for first-time home buyers, so that is a big issue. but when i think of crashes for the housing market and for the mortgage market, i think of things like 2007, 2008, and we're just not seeing the same sort of dynamics there in terms of risky loan profiles and risk taking behavior among borrowers, and pretty much everybody else in the sector. so i don't think it's a crash. i think it's painful. i think it's ugly. i think that volume is tremendously constrained and it's not pleasant for anybody that's either trying to buy a house or involved in the sale or financing of the house. but i don't see how it crashes the market. in fact, if i needed somewhere to live and i was going to make a monthly payment right now, i would get a mortgage and buy a house. >> diana, i always feel a little dahntay-esque at the month. this is like the bottom of hell

completely frozen over, and we can argue about the figures stuck in ice there. but it feels like more like -- it's almost like activity is grinding to a halt. >> yeah, it's the real estate agents who are in that circle of hell you are talking about. >> i was going to put the policymakers there. >> they say i've never seen anything like this before, i've never seen it frozen like this. we went to an open house and a lot of folks came out, but they were just looking. they wanted to see if home prices were coming down, they wanted to see what the competition was out there, if there were other people look thing their price range. all of them said i'm not going to move right now or make an offer, i just want to see what's going on. that speaks to this very strong demand. i'm also interested in what the builders are doing with the mortgage rate. matt, is this going to pose any risk to the overall housing market now that we see more builders buying to write down the mortgage rates for their buyers? >> umm, all it really does is

sort of artificially prop up value just a little bit, if builders are paying points, you know, with their excess profits to buy down the rate to help buyers afford more house in terms of the mortgage amount. but i don't know that it causes any sort of systemic risk. it's something that sort of nibbles away at the margins of valuations. i wanted to say to your point, kelly and diana, yeah, it is ugly. i don't think anybody in my community of mortgage originators would agree that in my ways this was worse than the great financial crisis in terms of volume and activity. it's definite hi not going to come back in any appreciable way until rates start to come down. i think when they start to come down, thatyou have a healthier level of demand -- >> oh, sure. >> -- and less fear about getting back into the market among the current crop of

potential home buyers. >> to think of the extremes the housing market has been through in 36 months time is unbelievable. we'll leave it for now. thank you both for joining us. speaking of tough stretches, shares of alaska air group were down as much as 2% today before reversing a little higher. the airline is tracking for its 13th straight week in the red, the longest losing streak ever, and high fuel prices are not helping, as we have seen across all of the airlines. let's bring in phil lebeau standing by with the alaska airlines. welcome to both of you, phil. >> thanks, kelly. ben, let me ask you the first question, you miss on q3 versus estimates. you guide lower than the street is expecting for q4. what's the issue? >> well, good morning, phil and kelly. thank you for having me. let me give you context with q3. we finished with a pretax margin

of 11.3%. that is in line with delta. we were facing head winds with the maui fires. 4% of our capacity is in maui. and we were facing higher fuel costs, we're pay ing 30 cents a gallon higher. so we had a solid result for q3. heading to q4, to answer your question, phil, we still have the fuel head winds and from the maui fires. so our full-year pretax margin is healthy at 7%, 8% for the full year. >> ben, it was about a month and a half ago you issued guidance. then you come in with q3 lower. is revenue slowing down? did you notice a shift in terms of demand when you went from august into september?

>> you know, we saw demand not being as strong as it was in previous months. what we are seeing, and the peak periods like thanksgiving and christmas, it's still quite strong. demand is still strong. what we are seeing is the shoulders. we are seeing some pricing moderation in the shoulders. i think the combination of that, i think the combination of higher fuel. again, for usuniquely with hawaii and maui, that's why we reduced our guidance going into the fourth quarter. >> i just listed on the conference that you outlined you are seeing some rebound in demand there. obviously, maui is its own unique situation. but you have so much exposure to all of the islands of hawaii. paint a picture in terms of what the demand looks like. >> so we have 12% of our capacity is the islands.

we have over 30 flights to hawaii every day. about a third of that capacity is in maui right now. i'll tell you, phil, i was there, because maui is my favorite island. i was there vacations when the fires hit. it was catastrophic, and my heart still goes out to the people who lost so much. but it is bouncing back. it was a $20 million impact in q3 for us. it will be roughly $18 million in q4. we are starting to see bookings go from negative to positive for maui. so as it starts coming up, as they rebuild lahaina, we will see an improving trend in maui. >> ben, we're showing your stock chart right now. it's an ugly chart, there's no faith among investors in airlines, including alaska right now. how do you change that narrative? >> well, phil, i think for alaska, in terms of the domestic focused airline, we're uniquely

positioned. there's a lot of talk about the customers shifting to a premium product. we have over 300 airplanes in our fleet. 25% of our seats are either first class or premium class. we offer a saber affair, as well. we are part of a global alliance with one world. we have partner lounges across the world. so we are uniquely distinguished from our other domestic competitors. we're more closely aligned with a network carrier. so i feel strongly that our business model is well positioned and resilient to take advantage of the recovery here into 2024. >> ben, i know it's not been a good stretch. we appreciate you joining us on the day you report earnings. kelly, i'll send it back to you. >> great reminder of the impact that devastation in hawaii is having. thank you both. coming up, rising rates are front and center for the buy now, pay later companies.

how worried are they about consumer tldelinquencies. and discover financial shares are plunging after posting a big earnings miss on higher loan loss provisions. they saw net writeoff surge 200 basis points versus last year. shares are down 7.5%. let's look at the sectors, as we see tech, communications and industrials leading today. you heard rick santelli say that could be because two-year yields have backed off after powell's speech. the worst performers are real estate, financials and consumer discretionary. back after this. >> and now, cnbc trend tracker.

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welcome back to "the exchange." markets are well off session highs now, but they're well off session lows as the ten-year has been inching towards 5%. dom chu has more. >> earnings is driving ae iing the action. we'll start on the big evenings movering from this morning,

starting with at&t. if you look at those shares, we saw some momentum building there. currently up 8% after the telecom giant beat on profits and revenues because they added more subscribers and boosted their full-year forecast for a key metric of operating profit growth. so at&t shares up 8%. also watch what's happening with american airlines. we just spoke about alaska airlines before, but american airlines is up 2% right now. a mixed report, better revenues were a miss. the forecast was maybe a little more tepid. but the ceo basically telling cnbc today that they see the holiday booking trends better than last year, so american airlines accentuating the positive, up 2%. from last night's close, two of the bigger ones are netflix, up 16%. better than expected profits. revenues were a bit of a miss. but subscriber growth knocked

away all estimates. and tesla shares down 9%. revenue and earnings miss, and higher rates affecting demand from ceo elon musk. and one more thing to keep an eye on with regard to the overall picture, check out the action we are seeing overall with some of these names. i'll send it back to you. >> thank you, dom. let's get to tyler mathisen now for all the big news of the day. >> thank you very much, kelly. humanitarian aid from the international red cross and the world health organization is ready to be delivered to gaza. the two organizations say they have about 100 tons total of aid to dlifer to the region, but neither have secured safe humanitarian access. the red cross says its said includes urgently needed medical supplies. california governor gavin newsom plans to travel to china to discuss climate action. it will include stops in beijing, hong kong, shanghai and

various provinces where he will sign on to some climate initiatives. he said in a statement that california and china are two of the world's largest economies, which makes a climate partnership between the two a necessity. pfizer will price its covid drug paxlovid at a little less than $1400 for a five-day course when it shifts to the commercial market later this year. that is more than double what the federal government was paying when it offered the treatment for free. there's also the list price before rebates and other discounts to insurers. and don't miss "last call" tonight on c nbc. leading up to and then taking live joe biden's speech on the growing geopolitical risks abroad from both israel and ukraine. he will make those remarks live from the oval at 8:00 p.m. eastern time, kelly. back to you. >> tyler, thank you. coming up, las vegas sands rebounding from an 11-month low after q3 results of net

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welcome back to "the exchange." shares of las vegas sands are higher today by nearly 4% after they reported a beat in profits as sales more than doubled in the third quarter, noting a tourism recovery in macaw.

and they announced a stock buyback program. joining us is contessa brewer with the las vegas sands ceo. welcome to both of you. >> thank you very much for that. rob, great to see you today. i'm reading through the analyst notes from yesterday, and it's sort of like they were all breathing a collective sigh of relief, saying it wasn't as bad as we feared. there's been so much speculation about the power of the chinese consumer. give me a sense of what you are seeing in asia. >> i think the results say it all, don't they? we did almost $3 billion in revenue. retail performance is higher than ever in our history. our mbs results were among the highest in our history at 490. we understand the concerns of macro china and macro economics. but i think we have proved that we can make quite a bit of money in this environment, and the numbers reflect that yesterday.

would we prefer a stronger economic environment? of course we would. however, yesterday proves the staying power of great properties, great resorts, top tier accommodations and gaming that can produce quite good results. $1.1 billion in the current environment doesn't seem to bad. >> probably the most lucrative conseeno property in the world. and you were looking at your retail shops coming in at like 150% of pre-pandemic levels. it's impressive. i'm curious, your competitor, bill hornbuckle, the ceo of mgm, last week said we just got through golden week. the five most profitable days in our company's history in macaw. he said they're taking market share. are they taking it from you? >> i don't know if they're taking it from us.

we don't believe so. our numbers speak for themselves. we keep reinvesting. our venetian has always been number with unin the market. we're in a different place than our competitors. we have 13,000 sleeping rooms, huge amounts of retail. so our business is very diversified and top tier. with all due respect to the competition, we've been number one in that market in gaming revenue, retail sales, hotel revenue for many years. i think that is going to continue. again, we spent $15 billion reinvesting in macaw to make sure we're number one in the market. yesterday, we did $630 million. it's only been open for eight months. the great thing about macaw, the trajectory looks very good. it took singapore about a year and a half to get to where it was yesterday. macaw is halfway there. so we're very confident in what we have done in macaw in our size, scale, and product and quality there is top.

>> kelly mentioned the buybacks which get shareholders excited. you said last night $5.6 billion is your pile of cash. and you talked about all the ways you're planning to spend that. how much of that is a message to the decision makers in new york state about this gaming license that you have been so intent on trying to win for years, proving that you can follow up on the promises that you have made to long island and the resort that you plan to build out there. >> yeah. we have never been more excited about any opportunity than new york. the people of nassau have been great to us. we control nassau coliseum, 70 acres, and we're going to build a top tier resort of the highest order. lots of jobs and opportunities. but something that's a true destination resort. this is not a two-acre small projection, but meant to be very extravagant proposition.

we want something that speaks to who we are. we don't build small resorts or casinos. we build large casino hotel resorts. we'll have multiple resorts, an arcade venue, convention space. this is one for the ages and something people in new york will be astounded by. and we're very excited. the process that we are undergoing, we have control of the property, we are approaching the zoning requirements very seriously. >> and it would give you a presence, again, in the united states since you sold out of las vegas. >> we did. >> rob goldstein, thank you for your time today. >> thank you, contessa. always a pleasure. >> there's a lot of computation over those gaming licenses and a lot of sharp elbows out. >> we look forward to seeing what develops there. let's turn to the race for speaker of the house. congressman jim jordan backing a plan to empower temporary house

speaker patrick mchenry, but he's not giving up his quest for the gavel. emily, what's happening? >> hey, kelly. republicans have been meeting now for almost three hours in a room, trying to hash forward what they will do next. jim jordan was prepared to take a third vote today, but he would likely lose that one again. so now, as you mentioned, he's back thing idea of temporarily empowering speaker pro-tem patrick mchenry to pass legislation until january, so that would give them time to move on israel funding, keeping the government open. but there's a lot of division among republicans right now on what the best path forward should be. i talked earlier today with congressman mario, and he said congress needs to get back to work and if empowering mchenry is the west way to do that, that's what they should do. >> here is the bottom line, do we want to move the republican

agenda forward or allow the administration to have an absolute green light to do whatever the heck they want to do? we need to find a way to get the agenda moving again. and i'm willing to support initiatives that will get us there. >> reporter: now, the catch of this is, it's very likely that if republicans did decide to move forward with empowering mchenry, they would need help from democrats. democrats have shown that they are open to working together with republicans on it. but of course, that's a turnoff for a lot of republicans. i spoke with congresswoman margorie taylor greene who said firmly that republicans need to elect a speaker. she does not support what they are talking about with a pro-tem. >> our republican voters worked very hard to give us the majority. this conference is broken because republicans work with democrats and put us here. so what's required for serious people that want to do their job is people need to put their egos down. we need to unite behind a

speaker. that's what our conference needs to do now. >> reporter: kelly, it's just not clear at this point exactly how republicans will be moving forward today, whether we're going to see a vote, what we're going to see a vote on. and then, of course, there's the question if democrats start coming into play. they have a couple of asks in exchange exchange for their vot including making sure the government is kept open and votes not only on israel funding but aid to ukraine pap lot of uncertainty here on capitol hill, but at this point there's no path to getting someone into the speaker's chair at this point. >> thank you for now. emily wilkins. still to come, nearly three quarters of buy now pay later users have a household income of less than $75,000. with interest rates pressuring spending we'll speak to the ceo of klarna one of the names used about the consumer trends he's seeing. we're back after this. i'm sam morrison. my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10

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welcome back to "the exchange." buy now pay later payment plans have exploded in popularity in the last couple years. so much so that emarketer estimates americans will buy $72 billion worth of goods using those payment plans alone. and that could grow to $125 billion by 2027. joining me now for an exclusive interview is sebastian siemiatkowski, the co-founder and ceo of klarna. welcome. good to have you here.

>> thank you for having me. >> this is a time when we see people saying, you know, loan losses, provisions are getting worse, discover is one of them i think maybe kind of in your sandbox. one thing we know for sure you have not had to go through high inflation or a recession yet. are you prepared for both or either? >> the fact is the company, i was part of starting this company when 23 and unfortunately that was 18 years ago, so it's been a while. i did go through the first crisis of '07, high inflation less so, but financial turbulence for sure. what is sometimes misunderstood, what buy now pay later is, the way we do buy now pay later, it happens to be especially in the u.s. this attracts a different type of conscious consumer that really, you know, is fed up with credit cards an how they lure you into too much high interest rates revolving debt.

we've seen losses 30% below credit card industry standards because that consumer is also, you know, usually, you know, being able to go better. >> i'm shocked that you guys have been around since 2007. that's interesting. how does it work? we know normally credit card debt maybe you fall behind and you have to catch up. how does it work? what happens if you miss a payment or can't make a payment or you lose your job? how does that work out? >> if you don't pay it's not that different from a credit card eventually will have to go to some kind of debt collection pro process. it's more how. one of my favorite shows, i'm not sure i'm allowed to advertise netflix, credit cards explained, the bad tricks banks have been applying to maximize the balances people build. an average balance is $5,000 in the u.s. the total debt from credit cards is a trillion dollars. it's all built on maximum

interest, revolve as much as possible. this is built on installment, fixed term, always pay off. people carry a balance of $150. that's just carries a different type of behavior that you use credit occasionally and debit for other purposes. >> so many questions and 90s seconds. i want to ask you about the ipo but let me ask you, you have been around and through a couple cycles and have experience. newer players have not. where should we as investors be looking for spots of weakness your competitors might have that you don't? >> if you look at some of the competitors, especially the ones listed be we get grouped into buy now pay later, but a lot of those are basically second, third layer financing products where basically it's more about buying a bed, mattress on installments, where the interest rates -- one of our competitors has over 50% of consumers deep

subprime charging an interest rate over 30%. sometimes these get, you know, put together but the truth is they're have different. >> why are you different? >> sorry? >> you guys don't do as much high ticket. i see you do a lot of clothing and accessories, technology, health, beauty. >> our idea when i was a kid that worked at burger king you would swipe your card like this press one for debit, two for cr credit. that made sense. they would do debit and credit for smp 35% of our volume is debit. credit card companies stopped doing that because people weren't building balances and borrowing as much if they didn't put all their spending on the credit card so at the end of the month they had a bigger bill and likely to revolve. like we're just trying to build a healthier better product and our loss levels prove that. a lot of people portray themselves as buy now and pay

later but not everyone is offering the same type of products. >> i remember press one press two, and it went away. we have about 15 seconds. are you going to ipo this year? >> this year would be tough. it's going to happen. we have fantastic growth in the u.s., over 35 million consumers now so biggest market revenues. we're excited about the progress and excited about the prospects in the u.s. as well. makes it more interesting. >> very fun checking in with you. hope we can continue the conversation throughout the cycle. sebastian siemiatkowski is the ceo of klarna. that does it for us, but it's a busy hour on "power lunch." shares of tesla down 9% after their earnings miss and we'll hear from one of the most bearish analysts on the restet. tyler is getting ready and i'll see you on the other side of this break. but the same ai-powered security that protects all of google also defends these services for everyone who lives here. ♪

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