got to do my dividend pick does well as rates are falling >> there we go folks, tough day for the market. oracle's stock, up 11%, one of the few that is up we're done for the day "the exchange" starts right now. ♪ ♪ and that's helping the nasdaq to outperform welcome to "the exchange." i'm kelly evans. here's what's ahead this hour. it's only tuesday, it has already been a big week for big tech first, there was the apple product launch here yesterday. then the multibillion dollar fines for apple and google in the eu and yet, the buzz today belongs to another name in tech, and that is oracle hitting a record high after earnings and announcing those new partnerships, up 11% at the moment is this the way to play ai we'll discuss. one of our guests says it's 50-50 whether the fed cuts 25 or

50 next week they'll go for the half point cut. he's here to make his case and counting down to the first presidential debate between harris and president trump tonight. we'll check in with one trade group on what they need their members to hear. that's all ahead let's start with the markets, though, and dom chu has the numbers. the banks are moving to the downside >> it's a big part of the story, financials and technology. sounds like we're back in the 'ninths with that talk but there's focus on tech and financials today the outperformance in the nasdaq composite, which stands at 16,876, which is flat, only down seven points, is mainly due to the oracle story, as well. but the s&p 500 is down about 12 points, a modest quarter percent decline, but at one point we were up roughly 24 points in the larger cap index and down 34 at the lows so not a huge move, but tilting

towards the downside 5458 is the last trade there and the dow, down 286 points, to 40,5342. now, the banks specifically, jpmorgan, one of the big reasons for that dow underperformance so far today, down about 7% when the biggest bank of america is down 7% people pay attention. the president at jpmorgan chase made some comments at a barclay's conference earlier today telling investors some of the estimates for that net amount of money banks make when they lend out and boario money at the sim ame time is a littleo aggressive, taking down a lot of the other banks. citi group down 4.25% and capital one down 7.5%, so that's the bank trade as for the technology side, apple and alphabet, the parent company of google, apple down about one half of 1%

alphabet up one half of 1% on some of the eu headlines, taxing for apple. microsoft, amazon, nvidia, all churning right now so we'll see whether or not that trade seems to find some kind of stability or footing going forward, a big key to the markets, kelly back over to you >> dom, thank you very much. tech is where we start, and with one name you may not have expected to take the spotlight this week, shares of oracle hitting all-time highs today after posting an earnings beat and a slew of announcements, including a nuclear power data center deidre bosa has more in today's "tech check. deidre, the comments last night indicate the excitement about ai and leaned against the idea that it's over or going through a massive reset right now. >> yeah, think of oracle like the switzerland of ai. it's now got deals with all of the hyperscalers, it's not

developing its own ai model to compete with customers it is neutral and unthreatening. it's friends with everyone that has boded well for the company. it used to compete quite bitterly with some of the big players. customers now include everyone in the space from openai to microsoft bing chat bot. also working in its favor, ironically, is relatively late entry to the cloud infrastructure business. many of the data centers were built in recent years, so oracles were better designed for training ai models it's not slowing down either yesterday, ellison saying it signed 42 additional cloud gpu contracts for a total of $3 billion, another advantage is larry ellison himself. he's founder and executive chair, and he's extremely well connected in tech circles. he's tight with justin wong, that helps when you need to secure gpus.

he's also tight with elon musk keeping its edge could prove difficult for ellison and oracle xai is going to build its own data centers for the next et ration, and its valuation, this is not long ear cheap under the radar ai play. the multiple is closer to those of the hyperscalers now, which have more diversified platforms. it's even quite a bit above alphabet look at the performance versus microsoft and amazon since chatgbt launched in november of '22. it surprised a lot of people oracle has outperformed microsoft and neck and neck with amazon, which is the number one cloud player so oracle might be a legacy name or an under the radar play, but it's burst into the open with this latest set of earnings. >> there's some parlor games about who should be beyond the mag seven, which would be the eighth stock

some people suggest it would be broadcom, some think it's oracle broadcom's market cap saturday 680 billion, oracle is $430 billion. so it's punching above what used to be its weight and importance. a couple other comments, ellison talked about how they want 2,000 data centers eventually. they currently have 162. i mentioned the triple nuclear powered one giga watt center they're building out so we're talking about massive spend and huge plans for this technology >> just huge plans again, guy back to the idea that it's been a relatively late comer to building this new infrastructure that's needed in the age of generative ai so if it can continue to do so, of course, the pace of ai spending will have to keep up. that is an open question that's not just oracle but all of the cloud players okayle is now the solid number for or after the hyper scalers

i'm also fascinated tat power generation question of this. larry ellison last night talked about nuclear powered data centers. that's something that amazon, the number one cloud player, has already had its eye on it sort of bought this entire nuclear powered data center earlier this year. it didn't make a lot of headlines, but more than $600 million, all of these cloud infrastructure companies are looking for their power needs to be able to sort of to do this advanced computing, accelerated computing. i think that power is going to be a huge topic in the months, years ahead. >> it is, no doubt deidre, thanks so much deidre bosa joining us while some wonder if oracle is the stealth or maybe not so stealth way to play ai, my next guest says regardless, just go with the obvious one he remains bullish on nvidia, a stock which he says still has massive potential. joining us now is john porter, chief investment officer at newton investment management

john, it's a chip company. would they go through cycles the argument is whether you think nvidia will experience one of the many pullbacks the industry often sees or not, and this is the argument chris made the other day, that it can avoid some of those kind of historical cyclical challenges that the industry has been through. >> yeah, it's a fair question, kelly. and there certainly are some cyclical headwinds to be mindful of right now, if you look outside of ai within the semiconductor space, there's a lot of cyclical headwinds. sometimes it pays to step back and see the forest from the trees. as investors, we often make stories more complicated than we need to. sometimes we just need to focus on the simple, straightforward story. in nvidia's case, i look at what's going on around ai, you listened to the comments last night from oracle and many others i'm in the camp that ai is

transformational technology. yes, there's questions about the use cases that it will take some time to evolve but this is going to be transformational technology. you need to invest in infrastructure nvidia is clearly the most important, the best positioned company as part of that infrastructure rollout to enable ai and when i look at nvidia today, it's trading at 30 times the next 12 months earnings. this is not a bubble stock you would think it is as often as it's talked about but at 30 times earnings, that's not a bubble you look at mutual funds holdings, it's one of the largest. the risk/reward is very attractive in nvidia, despite the hype and attention it's gotten >> that's interesting, because maybe that's the only community. but i just wanted to mention the mas market cap thing you could have looked a at the shares and said it's going to double from there. a lot of investors said i want

to be here for the double. can this company be a $5 trillion market cap? >> it's hard to say. i wouldn't rule anything out i think that's a very fair question, kelly. but a year or so ago when it was a billion, $1.5 billion, the same question was being asked and here we are with a stock on the order of 130% year-to-date, and still only 30 times earnings that a what i would focus on the understanding, the earnings power of the stock is a very complex task it's one of the challenges of focusing on these open-ended growth stories it's really difficult to imagine what the revenue potential and earnings potential is for this company two or three years from now. but i'm confident that the earnings power in a couple of years is much higher than today. i was taught that prices follow earnings i think this stock is going to go up from here. >> i find it weirdly encouraging. you think okay, there is one way

to grow share prices without increasing market cap. i know that's not what people want to hear nvidia's ceo is scheduled to speak at a major conference tomorrow sema is here with more >> we're counting down to jensen wong speaking at the conference tomorrow in the 10:00 a.m. eastern hour the first question is on gross margins. nvidia indicated gross margins would come down to accommodate investments, but by how much the second is on ai spending the biggest risk nvidia faces is lower capital spending in response to a weakening economy. it's worth noting, rival amd's ceo says she's not seeing any change in forecast from the hyperscalers lastly, ai chips are used for training alp ing algorithms and

is a real world player there nvidia is facing growing competition from the likes of google and meta. investors will want to know what jensen wong is doing to remain the leader in the space. it's basically trading flat today, following some early games. the bullish comments from larry ellison on data centers, it's down 22% from the recent highs >> seema, there was one other comment kim forest said. she said she wants nvidia to behave almost like oracle and that huge sales team >> yeah. it's great to point out that nvidia is not just this pure play on chips. it's trying to be the end-to-end player, everything a client needs from the stats to the technology they want to be the dominant

player they are right now >> exactly kind of leveraging that position seema, thank you john porter, bringing you back in what do you want to hear from wong tomorrow? >> well, i think partnerships is something we would love to hear more of, because as i mentioned earlier, seeing the use cases, there's something that is going to drive the next leg of the story. as you see that partnerships with leading financial services and health care companies, really companies across all corners of the economy, i think that's going to be the fuel that helps answer your earlier question what takes us from a $3 trillion mark to 5, 6 and beyond >> as we leave it there, i know you like to have a view on the macro, but do you have a view on whether the fed will, should, might do a quarter versus a half point next week? >> do i have a view on next week i don't have any real expertise

in figuring out the exact things this is -- you step back and think about the simpler story. interest rates are headed much lower. the next six months, the fed funds rate will be much lower today, and i think that will be stimulative of the economy there's angst about the employment market, i think it's okay, not great. but the fed is modestly behind the curve, but not dangerously so at this point >> i know in a limited growth environment, people like to go back to the growth stocks. any final comment on that? >> i think in those three cases, those are great long-term growth stories. you're dealing with some short-term air pockets, and they had some salesforce executions celsius, a little bit weak serepta had major fda approval

the market is worried about the near-term execution on delivering on the new drug approval i think those pullbacks are great opportunities to invest in i think they're very well positioned >> and you steering clear of commodity rates. john, thanks for joining us today. appreciate your time coming up, we're just a few hours away from the first presidential debate between harris and trump we'll look at the issues likely to take center stage and check in to one of three groups that will be listening tonight. shares of southwest down more than 3% on news that its chair and former ceo gary kelly will step down next year, as elliott management has been pushing for changes at the airline. more on "the exchange" after this >> this is "the exchange" on cnbc

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bring on the good stuff. ♪ ♪ welcome back to "the exchange." we're only hours away from the first presidential debate between harris and trump aemon is here.

still feels weird that's happened between biden and harris over the past month or two. i hear that they're only taking two commercial breaks over 90 minutes of debate. >> this might be the first of two presidential debates this year, kicking off tonight live from the national constitutional center in philadelphia the arrival of harris sets up this dynamic, not only are these two unfamiliar with each other, they've never met. they shake hands in the beginning of this evening, that will be a first. remember, we're not going to see a live audience. the candidates won't have opening statements or have notes with them on stage former president trump told nbc news this morning he's feeling great and suggested he's going to hammer harris for changing her political positions over the years, which he says means she's no longer believable for her part, harris said last week that trump is operating from a really old and tired playbook, and there's no floor for him in terms of how low he

will go. on the economy, it seems clear that both candidates will try to tag the other as worse for inflation, which is the most important issue for voters it's likely both will accuse the other of creating policies that kater to elites. she will say he wants to cut taxes for rich, he will say her trade policy benefits globalist elites at the expense of american workers both campaigns have been matching each other with these proposals after harris matched trump's idea of eliminating taxes on service workers trump wants to eliminate taxes on social security benefits for seniors. both have signaled an openness to that potential second debate, but there's nothing officially scheduled yet. i guess we'll have to see how it goes tonight before they commit. >> you mentioned inflation is that the number one economic issue? >> number one economic issue it's -- when i was at both conventions in milwaukee and chicago, people in both parties

were talking about you do the internal polling, you see inflation at the top of the list every time >> eomon, thank you. my next guest says either candidate could go off the rails but the pressure is on harris. joining me is the director of the center for politics at the university of virginia larry, welcome to that point, inflation is a biggy? policy wise, we're not expected to get any surprises tonight, are we >> no, you don't have time to get into the details of the policy proposal. a candidate that tries to do that will be disappointed and probably punished by the audience that will move to the popcorn maker. i would say reproductive rights is pretty much the equal of inflation and the economy. one for each side, yes, both candidates have something to say on both of those issues. in terms of the balance of the debate, i would expect the power, the emotion of those two issues to be in balance.

>> and the border has to be a tie for first or second, maybe a close third? >> it will be there, and the usual inflammatory statements will be made i don't know that people are not going to hear a whole lot new unless they don't pay attention to the news. but they're the least likely americans to vote. so it will be a poe pourry, believe me >> people were dismissive of the biden/trump debate back in was it july now, saying how much -- >> june. >> wow saying it doesn't move the needle it certainly did biden is out of the race so e motively speaking alone, are people listening to be persuaded by one policy proposal or the other, or which ever candidate has the most charisma for lack of a better word? >> i think given how polarized

we are and how people feel about donald trump, pro and con, the vast majority of voters know for whom they're going to vote now, a certain percentage don't know whether they care enough to turn out that's where a debate can make a difference just to put a number on it, because i'm a numbers guy, there have been 37 presidential televised general election debates since the first four in 1960 between kennedy and nixon i went through them carefully, and i could only count, and you can debate this, but i can only count seven, eight, or nine that had a lasting effect sufficient to push the vote one way or the other by a point or two. maybe more in some cases so the odds are, since three quarters of them don't do that, that this debate will be in that category but who would have ever believed for the first time ever that an incumbent president would be pushed out of a race because of a debate >> 100%.

that should lend enough curiosity for people to tune in. you say there's more pressure on harris, why is that, and why hasn't she appeared to get this post convention bounce we talk about the numbers, the data i saw suggests she hasn't experienced one. >> she hasn't experienced one, but neither did trump. the truth is that the convention bounce in a polarized era like we're in, in america, pretty much eliminates that bounce on both sides because people are locked in, even if they don't know much about a candidate, they're locked in on the letters, the letters r and d are the two most powerful letters in the english language she got her bounce before the convention so i think what matters tonight is that she communicates more than people know about her, substantively and personally and she has to respond to donald trump's attacks. she has to appear tough, but

fair >> yeah. >> and this is a big agenda for someone who has never been in a presidential debate before trump has had seven of them. >> you mentioned that people are locked in. we know about gerrymandering and polarization, but we know there's plenty of voters that voted for obama, trump, and then biden. it's not as people are completely locked into the r or d. so who is that cohort that might break or go one way or the other? >> you mazed a very good point, because the intense polarization started in 2016, with the first trump race, trump versus clinton. so that was another world, obama versus mccain and versus romney. the group that might be moved really up on both sides, i think you look at women, because they're so important, and they are the majority of the vote they're usually 52%, 53%

but you look at seniors, where do they come down. why do i mention seniors other than being one because seniors tend to vote at a much higher level than others do and that's probably a group that both of them will appeal to in one way or the other they know thfacts. they want the substance. >> look what trump announced last night, that he's going the potentially exempt social security from taxation which if that comes up tonight, i can't agree harris not agreeing we'll leave it there for now larry, thanks for your time. >> thank you, kelly. >> break out the popcorn this election season, we're checking in with different industry groups to see what they're looking for from the candidates today, we're tackling the h hospitality vote in nevada only one candidate is addressing corporate price georgouging

oh, man, this is political before -- so corporate price gouging. the number one issue is inflation. it sounds like your members are agreeing but putting the emphasis on the companies they think are responsible instead of the policies they think would be responsible. >> well, thanks for having me on the polls are clear, you hear id just from the previous guest the cost of living, inflation is a top issue. over and over again with the polls, the real issue out there is that you've got one candidate, and that's the vice president, has actual plan, an actual program to take on the cost of living i want to be able to say this, that our economy was crushed by covid, the biden/harris policies brought the economy back, especially in hospitality, saved

our jobs and brought them back so the economy is in great shape. >> ironically, that same policy, many of those stimulus plans were also what caused inflation. so yes, the members were beneficiaries, but they're seeing the consequence of that, which was a higher price level across the board >> yeah, that's a popular talking point, but we disagree with that. we think that what happened is that the, you know, these large companies, and when you talk about the price of food, gas, and housing, what's happened is you have big food conglomerates, big oil, wall street landlords taking huge advantage of the situation, and that's the price gouging that the vice president is talking about we've been talking about that for a couple of years. in 2022, it was the number one issue when we were talking to our workers and members in the '22 election was the cost of housing to own a home or to pay rent, and just the cost at the grocery store. but my point is this, only the

vice president is saying yeah, we get that. we understand that this -- these prices are too high. we're going to have after these massive corporations for price gouging. but those are all trump's buddies. he has no credibility and you'll never see him saying that. >> for what it's worth on the oil piece in particular, gasoline prices, people on wall street says if trump wins, they could have oil at $50 a barrel they don't want to invest, his oil buddies, because oil will go too low. so you could argue that would be his way of tackling the price issues on the gasoline side. i'm not sure what harris' plan would be >> gas already is down that's a victory for the vice president, and she'll claim it in the debate tonight. it's down, and what's going to happen is that the idea that voters want to understand if you're going to fight for them and she came to las vegas.

she was very clear she talked about the -- raising the minimum wage for all workers. taking on the issue of taxes, eliminating taxes on tips. which is a -- that issue is combined with getting rid of the subminimum wage. but clearly and strongly, she's going after these massive corporations that have jacked up prices that are making record profits. and the administration is doing that right now >> culinary workers, what portion of the group would be affected by that >> well, a huge portion of our members are affected by that, but it's a federal and national issue now. we're unique we have a very large concentration of tip earners represented by a large union we can speak out for tip owners all over the country >> i guess i'm just asking only because it was president trump who first came out with this

proposal will that warm hearts and minds, is that a top income issue in an inflationary time saying except the tax on it? >> well, let's just say this, trump lies and he lies a lot and tip earnings are working class people, they're not stupid, they're smart people they understand that, you know, promises get thrown around but what's happening, the difference is, you know, the vice president is saying, look, i understand that we're going to go after these price gouging corporations trump will never do that he has no plan to actually make that happen. and the idea of going after taxes on tips and the idea of the subminimum wage, she was clear, we're going to raise the minimum wage for all workers, including tip workers. right now the federal minimum wage is $2.13. i think you're heal r she will

take that on >> thank you so much for your time coming up, jamie dimon leaving both stagflation and recession on the table as the fed readies for a rate cut, and the ten-year yield is hitting its lowest level since june of 2023 we'll discuss whether the fed should leave a half point cut on the table after a break. (♪♪) in life, i'm reminded that it's not about the destination. it is truly about the journey. (cheering) (♪♪) (♪♪) (♪♪) (♪♪) (♪♪)

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enroll over the phone. it's that easy! call today and we'll also send this free guide. humana. a more human way to healthcare. welcome back to "the exchange." burnstein is positive on ge aerospace, initiating coverage with an joverrate rating. the ceo has also voiced concerns about the next leg of growth for aerospace and joins us now on a cnbc exclusive with our very own phil lebeau in d.c just checking on the stock performance, ge has basically tripled since this splitup began a couple of years ago. phil, over to you. >> thank you, kelly. there's the good news, the stock has done so well under your tenure but let me get your perspective in terms of the head winds that

were mentioned there specifically the supply chain. how are you feeling about where the supply chain is, and its improvement? which is going to take time? >> phil, thanks for the time today. i think we feel good about the progress we're making. we are in an unprecedented demand environment, that is good th thing. we aren't keeping up in the way we would like to, but we are making progress month by month, breaking bottlenecks where they exist in our own shops or with our suppliers. it's a sequential game we just need a better look every day. so i'm encouraged but work to do >> you have team members, several hundred, who are out with your suppliers. i don't think the public understands you're picking up the phone saying we need more, you are with them trying to figure out what can be improved in their supply chain to help hem produce what they need to.

>> exactly these are complex technologies that are highly engineered, that last for decades so we want to get it right safety first but we have over 550 of our own engineers in the field, collaborating with our suppliers, problem solving, using our proprietary property if you look at the progress, we're making good headway, we just need to make more >> the engine that is the workforce for the 777 x which boeing hopes to put into service next year. they had a setback last year, raising questions whether it goes into service next year and the 9-x, as well what is your thought do you expect that to happen >> we're delighted to be under wing on the 777-x. our engine was certified in

2000 we're familiar with the protocols underway that's why we test with our partners at boeing i'll let them speak to eis, but we know, and i was in discussions recently with the customers who represent the backlog, are keen to put those plans into service >> the prototype behind you, the rise engine developed as part of the cfm joint venture. there aren't many joint ventures that work in business. this one has really worked, though, for more than 350 years. talking about rise and optimism, somewhat are you seeing about this next generation of engine that gives you encouragement that you're on the right track here >> we were together last night celebrating 350 years of the partnership. we have been great partners over time the cfm-56, the benchmark engine

today, the engine is in so much demand today, and what we have behind us is the rise, which will be that next generation architecture probably doesn't come into service until the latter part of the 2030s. but we think we're looking at somewhere close to a 20% step function improvement in efficiency and sustainability. we know for next generation aircraft, it will be largely about sustainability that's why we're pursuing the disruptive investments and excited about the test progress we have made so far >> larry, if i may interject with a question about the splitup of ge into these three companies. the aerospace company has tripled basically in that period of time. gone from $115 to $200, and the health care yuunit, it's a litt more middle class in terms of returns. do you feel vimd ndicated from e

which had been underperforming to these three entities? >> we feel very good about where all three are. we knew it would be a lot of work to work through not only the de-leveraging but the operational transformation of the businesses we did that, let alone battle through the pandemic we knew we had three great businesses and a strong sense the market might appreciate them more if they were on their own bottoms. here we are, proud of all three, but knowing despite our shared history, all three businesses have very bright futures ahead >> larry, thank you very much. ceo of ge aerospace, one of the three that used to be all part of the overall ge. >> a remarkable turn too, a long standing stock about what to do with the former conglomerate thank you both for joining us today. as we head to break, beauty stocks are under pressure. elf is down 2% today bath and body works hitting

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welcome back to "the exchange," everybody i'm tyler mathisen with your cnbc news update at this hour. ukraine's overnight drone attack on moscow was its biggest drone strike yet the strikes killed at least one person, wrecked dozens of homes around the russian capital and forced about 350 flights to divert from moscow's airports. russia says it destroyed about 20 ukrainian drones around moscow and 124 more in eight other regions. so says moscow australia looking to set a minimum age limit for children using social media by the end of the year over mental health and physical health concerns while the country's prime minister didn't specify an age, he said it would likely be age 14 and 16. it's unclear how the ages would be veryified the plans critics say it could drive dangerous online activity underground. sony will release a new version of its playstation

contoc consol for $700. the consol will play standard games even faster. sony hopes the refresh will drive more sales of playstation 5, which have sold more than 59 million units since 2020 one of them belongs to my son. kelly, back to you >> new apple phones, son kolls >> it's expensive. coming up, not just a market divided over a quarter or half point cut, our next guest yssa powell is still torn that's next on "the exchange."

a look at mortgage rates hitting their lowest level since april of last year, giving the home builders another boost. but how is the commercial side fairing? we'll hear from the ceo of one of the country's biggest retail

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welcome back real estate is the best performing sector today you heard guests lately talking about how it's not the rate sector of old. it's better. it's new and improved and it's up 1% amid talks of a rate cut next week. diana oleic spoke with one of the industry's biggest players. >> reporter: kelly, of course the fed potential rate cut is front and center for this b of a conference i spoke with one of the nation's largery retail rates retail is no longer a four-letter word and the potential rate cut could be an outside boon in general and his business in particular. >> hopefully that will change investor appetite in real estate investment trusts. because we are rate sensitive. and so when we refinance typically our unsecured bonds, obviously when the rates cut start coming down, it will improve the growth profile >> reporter: kimco stock outperformed, up 28% in the past

quarter versus 19% for the broader real estate sector, while the higher interest rate environment has hit all of real estate in valuations and deal making the grocery component has been the darling of the sector because it's so necessary. kimco also got an upgrade from finch to a-minus, flin said is a game changer. >> it gives us, i think, the flexibility to be able to be weathering any type of storm and also gives us access to capital, improves the debt capital we can access with a unique group of investors. >> reporter: flynn cited the potential kroger and whole foods expanding again. trader joe's and sprouts growing as well as ethnic grocers seeing more demand in offering a whole new merchandising mix. a bright outlook for this sector, kelly. >> diana, thank you. my next guest expects a quarter point cut next week, he is not ruling out a bigger one,

specially if the tone hold around 50/50 in the days before the decision christian is here, vice chairman of ever core isi great to see you so a last-minute call, you think? >> i suspect that chair powell is very conflicted coming into this meeting my hunch is his own instincts may go more in the direction of the bigger 50 basis point cut, though there seems to be a lot of inertia on the wider committee. and more likely than not still i think it goes to that so-called dovish 25, so 25 promise to step up in future meetings, if needed but i do not think this is a lock and i don't think we should read those comments from williams and waller on friday as communicating a decision that's more or less been made i suspect that that decision, that call from powell, still lies ahead >> i've always wondered when you

think they make these decisions. because on the one hand, real people want to respond to the latest information on the other hand, they have big staff. they have to make presentations to fellow board members. like preparing for any big meeting. you usually do it in advance >> well, sure. and look, my experience, including worked at the fed, is that these decisions are almost never really made on the day they would tend to take a harder shape really this week ahead of the decision next week so it's really -- it's game time now. i think certainly the general bias on the committee has been -- may well still remain to follow gradualism to begin with. but powell promised -- a reaction function is forward leaning where they would go out to fairly aggressive in managing downside risks

it seems to me on the merits that it really is a no brainer at this point. i don't think any fed official would be particularly troubled if they went to bed tonight, woke up tomorrow morning, found out that the fed fund's rate was 4.5, not 5.5 and the argument for getting on with it i think is quite compelling you don't need to believe the labor market is about to crack right now. i don't think it is. to think that it would be prudent to take out a bit of insurance at this point against those more adverse labor market outcomes and the cost of doing that in terms of inflation is really pretty limited at this point w. how persuasive are those arguing that declining bond yields and swiftly dropping commodity prices are pressuring the fed to go bigger so as not to fall behind >> well, there's arguments that can be made in both directions, right? there's certainly people making the argument you just presented. you have some folks on the hawkish side saying what's the

rush the market has been doing a lot of work for us maybe those 10-year yields fall more than we think is necessary to shore up the self landing my own sure is that the market has shown the fed the way. and the fed has to be careful to make sure it's loosely validating the basic beliefs that are embedded in those market prices. that doesn't mean outsourcing your decisions to the market. >> right. >> the fed would never do that but i don't think you should be too dismissive if you're on the fed about what you're seeing on the market, market pointing you towards what may be required to lock this soft landing, which the fed clearly wants to do. >> absolutely. your comments make me think that tomorrow's cpi is a live number, so to speak, that could influence decision making one way or the other i have to leave it there, krishna. >> it shouldn't in a sense this is supposed to be a call based on labor risk. but certainly, you know, it

could weigh if it's a very weak or strong number. >> indeed. krishna, thank you we appreciate your time today. "power lunch" after e ea thbrk. (♪♪) in life, i'm reminded that it's not about the destination. it is truly about the journey. (cheering) (♪♪) (♪♪) (♪♪) (♪♪) (♪♪)

♪ good afternoon, everybody. and welcome to "power lunch," alongside kelly evans, i'm tyler mathisen glad you could join us on this tuesda