with the ceo. he will join us live. outlook on the boat regarding the teamsters new contract. these are key issues. how will they continue to be successful? a global slowdown. china slowing down. federal express cutting capacity. where do we stand for ups? what does this mean for investors? do they still feel that stock will fall below $86 a share? i have the opportunity to actually fly one of their 757 flight simulators. glad to say, everyone survived that experience.

ups, $54 billion in revenue. one of the world's largest airlines. another key question for scott davis is to ask what is the future of this world? this global economy. certainly, ups is a definite no whether to where we are headed. right now, checking out stocks. nicole petallides on the floor of the new york stock exchange. nicole: the dow jones industrials down about 28 points. not to off the unchanged line. there is this wait and see mode today. the last trading days have been up more than 100 trading points. the volatility is back.

it has been the name of the game since may 22. we heard that tapering maybe in the future. right now everyone is just waiting to see what the fed really has to say. the language is so key here. everyone is waiting to see. right now you can see that the dow is down just slightly. lori: you summed it up beautifully for us. we will get one of the most federal reserve statements ever and less than an hour. will we get any clue as to when tapering will begin? thank you so much for joining us. what are you expecting to hear from the fed today? >> i expect no change. the statement is key. i will look for the labor market. is this the best that we are going to get?

if, yes, i expect the taper to put off. lori: of course, may 22, bernanke said, you know, tapering could happen in the next couple of fed meetings. do not bet on qe4 ever. is there any expectation on your part that we will get a full plan for exit laid out by bernanke today? >> he has to talk about exit. he cannot put it out there and then walk away from it. the communications have already been a little clunky. more than they wanted. the data has been mixed. i do not think it is good enough for the taper to begin. there is kind of a growing course of market strategies.

it ultimately remove some of the froth. that shows that the market sort of adjusting now to this expect patient that we will not be in a qe4 ever situation. >> that is right. the benefits are certainly diminish after so long. the worries of the cost are there. the possibilities. i think the fed thinks it can talk down away from that and rely on the big gray bank regulators. i think it was inadvertent. lori: let's talk about the economic forecast.

>> a little bit of what we see is what we get. job creation is there. lori: 194 average payrolls over the last month or so. the last target was falling to 6.5%. you do not think where we are right now is nearly enough for the fed to take its foot off the gas? >> by and large, people are dropping out of the labor force. lori: we have real flat marketeer, phil. >> you know, if the feds walk back from the taper, that should be a huge positive for the

market. lori: interesting discussion. thank you for your time. the chairman himself will hold a press conference with economic reporters. you will want to keep it right here on fox business for complete coverage of the statement. it begins at 2:00 p.m. eastern. with that, i will send it over to my colleague, adam shapiro. >> thank you very much. let's talk about google. the banding the visor court ease the gag orders over publishing u.s. data requests. elizabeth macdonald joins us. liz: what google is worried

about, they are trying to call their users. their users are concerned that google is allowing more lives, basically allowing privacy intrusions into their google servers. the requests are lumped in with other federal, state and local request to solve things like robberies or other crimes. basically, google is worried if they are not allowed to break this out, they will lose users of the google services. that is what they are asking in this petition. the guardian newspaper in the washington post misled its readers by falsely and incorrectly reporting.

google is issuing data and we have it for you. google is showing the rising number of government data requests. the pfizer requests are lumped in here. you will see the rising number. they are lumped in here again. at the same time, look at this next chart. google is rejecting more of these government requests. you see more of the trendlines going down. i am going to send it back to you, adam. >> elizabeth mcdonald, thank you very much. this has something that a lot of people upset. i am going to throw it back to lori. we have scott davis coming up. lori: well, thanks. adobe second quarter earnings beating estimates.

over 6%. the company behind photoshop. the ceo richard beating growth to its creative cloud service. new york most iconic building has received a purchase offer. $2 billion cash. the family has already received approval from stakeholders to take the empire state building and other buildings public as part of a trust. the building just received an appraisal. and orange jumpsuits could be the in thing this fall in fashion. big-name designer, dolce gravano, has been sentenced to prison. they are sentenced to one year eight months.

both denied any wrongdoing. up next, heading to the pits of the cme. we approach the meeting less than one hour from now. back in a moment. ♪ at a dry cleaner, we replaced people with a machine. what? custers didn't like it. why do banks do it? hello? hello?! if your bank doesn't let you talk to a real person 24/7, you need an ally. llo? ally bank. your money needs an ally.

lori: okay. the dow creeping back from earlier losses. we are still up 14 points on the industrial average. oriole pulling back after hitting its highest level this year. to fox business contributor, phil flynn, in the pits of the cme. anyone talking about how inflation has not been a factor, all the dogs in the fed, you have to look at oil prices right now. >> there is no inflation, why am i paying four dollars for gasoline? absolutely. listen, there is no dow about it that this rally has little to do with increasing geopolitical risks.

it has more to do with the value of the dollar and what the fed will do on thissannouncement right now. it is difficult that oil should be hitting the highest level of the year when pfizer is just off of its all-time high in the united states. supplies are high. why do we continue to go higher? they may really blink after this. lori: we will see. give us the update on gold. >> they are bouncing back. weak physical demand. some of that is probably attributed to the fed. though gold is looking towards the fed. if we start to taper back, though gold market will probably have a difficult time holding these gloves. if they look like they will back

off, then we can see gold put in a big rally. they are a little bit nervous about how this fed decision will come out. looi: any deflation concerns? >> if you look at europe, you look at some of the data in the other places of the world, it will cause inflationary impact of the emerging market. that is the other key. it is not just about the u.s. it may impact what we are seeing as far as deflation and emerging markets. back to you. lori: we saw a huge selloff in japan not that long ago. thank you very much. let's go ahead and check back on equities. nicole: what will the fed say? in the meantime, here is a book that the markets.

while there are some winners, you mostly have names in the red. the vix has been obviously jumping. we have seen the volatility. we have seen the 100-point swing. today, not really doing much. someone speculate that the anxiety is maybe out of the market, at least for now. we will have to see. let's take a look at the financials. the banking index is to the downside. jpmorgan down just fractionally. lori: thank you, as always. despite concerns about the health of the chinese economy, several are looking to expand. let check the dollar and how it is faring today. the dollar here is weaker against its major trading

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♪ >> 22 minutes past the hour. i am patty ann browne with your fox news minute. the talks would include the united states, the taliban spokesperson confirmed they will meet tomorrow. karzai also suspended talks with the u.s. over a new security deal. president obama proposed that the u.s. and russia each cut their cold war nuclear weapons stockpile by a third. deputy prime minister said any proposal to do that cannot be taken seriously. the united states is building up missile defense capability. the fbi has ended its search for former teamster jimmy hoffa. he was last seen in 1975. authorities began digging on monday. those are your headlines.

i and patty ann browne. back to melissa and lori. lori: thank you very much. in the meantime, talking about the auto industry. ford opening a plant in china. it is not the only automaker expanding in china. jo ling kent joins us now. >> aiming squarely at the lucrative market in china. the ceo believes 40% of the world luxury vehicles will be sold in china by the end of this decade. it is a staggering statistic. this as cadillac tries to grab 10% of the luxury car market by 2020. it is definitely the right place to be. cadillac is aiming not only at

ranging and shanghai. ford whose focus model is very popular in china is also revving up there. today the american automaker broke ground on a $500 million play. if they are successful, this could mean a fast exit on -- this could mean the fastest four ford. chinese growth continued to be dominated by volkswagen. they are all subsidized by the chinese government.

they are trying to make a dent. still very much dominated for those domestic brands. lori: thank you very much, jo ling kent. coming up next, it is back to adam in louisville. the fedex / ups fight for market share. here is a look at who is up into is down on the dow. we are back after a short break. ♪ [ phil ] when you have joint pain and stiffness...

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it's the little things that mean the most. ask your rheumatologist if enbrel is right for you. [ doctor ] enbrel, the number one biologic medicine prescribed by rheumatologists. lori: how about another edition of stocks now? as we do every 15 minutes, let's head to the floor of the new york stock exchange. nicole, charlie brady points out so far this is the narrowest

trading range in ten months. i wonder why? >> this is really interesting. everybody is saying come on already, let's get on with it. i want to know what the fed has to say so this way they can move forward with their investments the way they want to. meantime the lowest point was 15, 273. we've had the back and forth action but a very narrow trading range. the vix shows, it has been to the downside after we've seen it jumping. this is big deal. everybody is waiting to seeein the 2:00 p.m. hour, basically next 45 minutes, hour 1/2. that will be the action. and the question is which way will the market move? if they taper the bond-buying, is that good news or bad news? they're so gung-ho on the economy. are they taking away the kool-aid. you have to see how people will interpret this this is exciting. lori: that is a such a great point f they do taper means the economy is in good shape.

that is key point, nicole. thanks for bringing it to us. let's head back to adam at ups international air hub and his very special guest. >> lori, thank you very much. scott davis is a former chaarman of the federal reserve bank of atlanta. a member of the president'ss3 export committee. he is also a member of the fix the debt commission. there is a great deal this man has accomplished but most important he is the ceo of united parcel service and joins us for exclusive interview now. he is live. i'm at world port in louisville. thanks for being with us, mr. davis. i want to get right to the question a lot of investors have about the economy not only in the united states but globally. we heard from your competitor fedex about cutting capacity in asia. ups has already done that. a slowdown in china would signal for most of us bad news looking forward with the economy. what can you share with us what you believe will happen with economy in the united states and globally? >> adam, great to be here.

thank you for spending the day at world port today. the economy is abo think we thought 2 would be at the start of 2013. we think it is a slow growth u.s. economy growing about 2%. europe maybeefeels like it is hitting the bottom. still no growth, maybe slightly negative. in the developing world it is still the fastest growing markets for us. i think china rather than growing 8%, may be growing closetory 6 to 7%. but the important thing it is not getting any worse and i do see global trade, cross-border trade increasing. >> okay. that's a good sign if we see trade increasing. but ups guidance in the first quarter, you're still saying earnings per share growth of roughly 6 to 12%. the target is 10 to 15%. has that changed as we get ready for your earnings report in july? >> no. we'll update that, adam first part of july. currency was hurting us.

we had higher pension expense because of the lower discount rates at the end of last year. take that out we would be pretty close to our long-term ranges. we don't see looking into the future that we shouldn't hit that 10 to 15% earnings growth. >> let me bring up an issue you just touched upon, the currency exchange you have to deal with. you're a global player. 220 different countries. we have an fomc meeting where we find out what they think will happen with connie in just a few minutes and here on fox business and then we'll hear from ben bernanke. you're an alumni from the federal reserve system. what do you expect to hear from mr. bernanke and how the monetary policy, the cheap dollar, hurting or helping ups? >> first of all i think chairman bernanke has done a great job of getting us through the financial crisis, getting us to where we are today. you know, he is is somewhat like teaching a child to ride a bike. you hold on too long, the child becomes dependent.

you let go too quick, he crashes into the hedge. the job the chairman has today is that balance. when's the right time? i think that he probably has a bert view of that than anybody else out there. i would expect them to hold on to the child a little bit longer but we do see tapering coming down the road. currency for us is something that we hedge our currencies, probably our biggest exposure is europe and we look 12 months ahead and try to hedge that to protect our earnings over there. i wouldn't say it has a dramatic impact over the long-term. as sort after zero-sum game. >> let's talk about not only monetary policy or fiscal policy right here at home. we see a congress that essentially has failed to act on tax reform. several ceo's like yourselves, have called on congress to reform the tax code and simplify it. how is it hurting ups that this has not been done as of yet? >> well, to that point, adam,

clearly as i said, the monetary policy has been a stimulus but fiscal policy has been a drag for all businesses, not just in the u.s. but around the world at this point in time. it has been very frustrating the last couple years that congress and the administration will not make decisions, they will not compromise. what that means to ups frankly that our customer base, although we have many multinational customers, we have the backbone is the small to medium-sized customers. they frankly are not going to invest, they are not going to hire people until they understand what the policy is. we need energy policy. certainly we need tax policy. we need to understand health care policy. and all those are not understood at this point in time. so that the best thing we could do for our economy is make decisions. whether they like the decisions or don't like decisions certainty will allow people to make those invests and hire people. >> and let's talk about when you mentioned congress and

decisions. the issue of the debt, it used to get a great deal more attention. a lot of, for instance, economists, krugman at "the new york times" says we pay too much attention to the national debt. you would disagree with him i think. you believe we need to fix the debt, do you not? >> absolutely. i think we're heading for a train wreck. we can not kick the can down the road six months at a time. i think there is a little bit of that feeling in congress that the trend have changed somewhat on the deficit so we're okay. the true answer is we're not okay. we need to make decisions that will give us five, 10-year horizon. right now we're not doing that we have at best six months of visibility out there. so we have a debt problem and we have to solve that debt problem, not by looking at it three to six months at a time. >> i want to ask you a couple more questions about not only the trade talks the president has announced but more importantly ups's future. let me get back to ups with you. there has been talk about a succession, a story just two weeks ago, that the average ceo

here is about 5.5 years and then moves on. you have fulfilled five 1/2 years. are you prepared now to maybe lay out for the future the succession plans or how much longer you intend to serve in this role? >> first of all, adam, i enjoy the job. as you know we have a great company. so i'm more than pleased to serve as the ceo of ups but at ups we're always looking at succession planning. from the day i step into this job, our board of directors was looking who would replace scott davis, who's next. we take it very seriously not just from my job but all the leadership positions in this company. we have a great pipeline. we've always had a great pipeline at ups but i'm not raising my hand to step down today. >> i will take that as we're not going to answer the question partially because we also have the teamsters vote, the union is voting right now on a new contract the vote will come to an end toward the end of this week, next week. any indication what you expect the outcome to be? >> first of all i think that it

is a good proposed contract for both our employees and for our customers. and think that the teamster union, the leadership unanimously supported this agreement. the vote is out right now. ratification is going on. we hope to heer as early as next week the results of the vote. we're very optimistic the contract will be ratified. >> scott davis, we appreciate you joining us on the fox business network. i apologize we have run out of time and i can't ask you about the trade talks with europe because it is so important to the future of this country and the nation but i want to show you something. this is an original d it ad, this is the device in 1989 your company dived and brought to ups back in the mid '80s. i thought you would get a kick seeing antiquated device. i introduce people to dave barnes, we'll talk about the technological future of your company. all the best. thanks for joining us. >> thanks for having me, adam.

lori: adam, thanks so much. a blast from the past. thanks for showing us a bit of that technology. lots more ahead, including the 2:00 p.m. fed statement and followed by chairman bern keys news conference we'll have all of that. how is the markets setting up against the key fed division in 2010 minutes? you have a selloff slightly. the 10-year yield has come up above 2.21% out the curve. the 30-year is yielding 3.35%. that yield is unchanged. we're back with more after this. it's a brand new start.

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>> i'm jo ling kent with your fox business brief. tesla motors announcing a partial recall of some model s vehicles built between may 10th and june 8th this year. the mounting bracket in the second window seat is weaker than intended. health care system could save $200 billion a year if patients and doctors improve the way they use medication that is according to a new study by the ims institute. it would cut medication overuse, underuse and with care that causes complication and longer than expected treatment. burger chain john any rockets has been sold to sun capital partners for an undisclosed amount according to "the orange county register." john any rockets operates 300 restaurants in 30 states and 16 countries.

that is the latest from the fox business network, giving you the power to prosper.

>> adam shapiro here at world port in louisville, kentucky. ups international air hub. i'm holding in what 1989 was state of the art technology. this is the original diad. it weigh as ton. you could get a workout. that is why ups drivers, men and women are in such good shape. this is long gone. the new device much more efficient and lighter this is one. technical breakthroughs taking place at the ups louisville hub. you may not realize this is technology company. several other companies now rely on ups to do their warehousiig, their distribution and all because ups has an army of software engineers who can write the code that makes inventory,

distribution and essentially running a business something you can outsource and do a lot cheaper than yourself. that is coming up in the next couple of hours here on fox business. i will introduce you to the man in charge of all of that, dave barnes, the cio from ups. lori, i will throw it back to you right now. >> great stuff, adam. as you know of course we're waiting for the fed decision at the top of the hour, followed by federal reserve chairman ben bernanke's press conference before economic reporters. that will start at 2:30. we'll carry it live for you of course on fox business's markets now. let's look how the markets are setting up, starting with stock market. interesting the dow is down 19 points. this is the narrowest trading range for stocks, just a swing of about 40 points so far today in the last ten months. you can call it the calm best storm, wait and see mode but that's certainly where we're at. we're not getting firm indication from any asset class what to expect from the fed chairman. will we hear back on may 22nd, there is chance that

the fed could taper the bond purchases at some point in next couple meetings we'll listen for that. the language is obviously key. oil just shy of the 100 buck as barrel price. gold is up slightly. it has been much lower of late, well below the $1400 an ounce mark. oil is off 13 cents, 94.81. when you have the price of oil flirting with $100, you have to question whether inflation is a factor at least at the consumer level. there is a look at gold, popping up five bucks an ounce. you see the complex of the stock market. indexes. nasdaq is down seven points or one quarter of a percent. the s&p, broad market average, little changed. gold popping up 5 bucks an ounce but clearly below $1400. crude oil is at 98.32.

we have a bit of a weaker dollar. calm before the storm. no clear indication from all of these trading tools, these what to expect from ben bernanke. it is arguably one of the most important fed decisions. the subsequent press conferences we've had in some time. all right. so less than 15 minutes away from the fed statement. keep it right here for complete coverage. first we want to show you some breakdown, the breakdowns within the indexes. here's the nasdaq winners and losers, starting with the winners. adobe systems had a strong earnings report. shares up one half of 1%. nvidia, autodesk news corp up 1%. hat to throw that out there, our parent company. back in a moment.

lori: welcome back. pleased to welcome my partner in crime for now, ashley webster. we're a couple minutes away from the big fed decision that wall waiting for for weeks. we'll get latest fed forecast on the u.s. economy. the big question, will the fed make any changes to quantitative easing? the bond purchases or signal that tapering of these purchases is to come in our near future. that starts at 2:00 p.m. eastern when the fed economic projections are released. 2:30, chairman bernanke himself meets the press. he will answer reporter questions about fed policy and outlook and much more of course. >> and whether he will be looking for a job. lori: perhaps at the end of his term at the end of this year. >> as we wait for the big meeting and results thereof and all the language that comes out of it. let's look at the markets. as lori said a few minutes ago, we're moving sideways, no doubt

about it as we wait to hear from the fed. down .1 after%. staple store on the s&p. nasdaq down a quarter of a percent. oil too spinning its wheels at 98.35 a barrel. we're seeing more money coming into gold. so many people say that the inflation play on gold, forget it. it has blown up. it didn't exist anymore. lori: great, ash. we have all-star panel to join us for expert analysis. we have doug cotetae, from ing investment management. gus foshay. former fed economist, steven you willer in at aei. zane brown at lord abbett. doug to you first, what do you simply expect from the fed chairman at 2:00? >> i expect the fed chairman to stand pat. i expect language to be the same about moderate growth

continuing. seeing strength in retail sales, housing, manufacturing. a number of other indicators, but also inflation, same language. really underachieving his expectations. i think there are going to be concerned with inflation readings being so low. >> gus, let me bring you in. what does the stock market need to hear do you think? so much has been said about the mixed messages and that mr. bernanke is talking out of both sides of his mouth. what do you think markets would like to hear? >> what the markets would like to hear the end or tapering of qe is not imminent. that the fed will continue with current level of purchases into the fall. i think that's what they're expecting. that is what they like to hair. there has been uncertainty recently. if bernanke can confirm that, the markets will be happy. >> are you confident that bernanke can make up for the misstep on may 22nd? or do you agree it was amices

step? if you look at interest rate market, we won't have qe forever. maybe the fed chairman, whether or not he intended to or not took some froth out of this marketplace, zane brown? >> i don't think that was his intent. lori: quickly. >> i think that was a misstep on his part. his prepared remarks were very straightforward and conservative. if was only in response to a question he said something like personally i wouldn't mind addressing it in the next several meetings. i think it was somewhat of a misstep. i think we'll see a change in gdp expectations for 2013 and implicitly, as they move that rate downward, to, a slower level of # growth, that essentially means tapering is delayed. and concern over the last couple weeks is somewhat overdone. >> steven you basically believe that bernanke will come out and say, sail as you are but he will have to do everything he can to calm down the markets merely

because of the suggestion that we're going to tighten monetary policy do you think he will be able to do that? >> i think he will give it his best shot in the press conference. i don't think there will be anything in the statement itself. he will emphasize tapering when it starts will be gradual and second, that the if he ral fund rate will remain at zero for a long time after the tapering begins. lori: gus, one of our economists, pleased to have you joining us once again. why not just put out a plan? why not have the federal reserve just tell us what they're planning to do? or perhaps they don't have that plan yet? wouldn't it be, there was some commentary today, bernanke, rip off the bandaid already, tell us what you're doing? >> well, we had that with the first two rounds of qe and the fed ended it and recovery was not where they wanted it to be. i think they learned from that. they want to maintain flexibility. don't forget there has been discussion about actually

increasing the purchases if necessary. they want to maintain the flexibility particularly given the drag on growth we have from the sequester. >> everybody. thank you. stay where you are. do not move an inch. the fed statement the moments away. full coverage and market reaction, with so much more and the all-star panel coming up next. don't go away. if you've got it, you know how hard it can be to breathe and ma you know how that feels.

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ashley: welcome back, everybody. market anxious to hear the fed plans for monetary stimulus after the fed statement and economic projections at 2:00 p.m. sharp. chairman bernanke will "meet the press" half hour later right at 2:30 eastern time. it is safe to assume he will be asked about anything and everything that reporters feel was not answered in the fed statement which is usually a lot.

let's look at market as we wait to hear from the fed. we're spinning our wheels. the dow is off 15 points. s&p down about .1 as well. of the nasdaq slightly lower. oil pretty much unchanged. more money is going into gold up about $7 at 1373 per a troy ounce. lori: let's rejoin the all-star panel. gus faucher, senior economist at pnc. doug cote. and zane brown the director of fixed income at lord abbett. we're joined by our colleagues nicole petallides at the new york stock exchange and jeff flock at the cme. we'll check back in with you. we're about two or three minutes away from the fed decision. steven ullner, to you, he expected the forecast to be downgraded. what do you expect to hear? >> i think they will be downgraded. forecast for gdp growth this year will be lowered and i also think the forecast of inflation

will be lowered based on what happened so far with growth and inflation so far in the data that we've seen. ashley: doug, let me get to you. i guess my question is, does the economic data right now show the fed what it needs to do? >> well on the moderate growth side which i think he will reiterate is, again retail sales, housing, corporate earnings are fine but, as your other guests said, i'm concerned about inflation especially the fed's favorite indicator, the pce price index. it was actually less than 1% for the last year. and that means deflation. so i don't think, there's, i think there is excessive concern about tapering. i don't think tapering happens until, and the fed always says it, they're data driven. until they see 2% inflation. lori: so zane brown, our fixed income strategist, do you think that rates have come up quite a

bit, right? since early may, we're at 2.21 on the 10-year, do you think that will normalize inflation on its own, see an organic correction or is inflation really an issue here? >> i don't think inflation is an issue. maybe too low of inflation is an issue. lori: that's what i mean. >> i don't think interest rates do anything to normalize that but i do think the fed has to be concerned today about how much interest rates have risen. what that has done to the mortgage market and impact on housing and refinancing, both of which have been key growth factors for the economy. you've really taken some of that away as a result of the 60 basis point movement higher in 10-year treasurys over the last five to six weeks. lori: all right. so we're just about 30 seconds away from the announcement. nicole, give us a quick sum of the markets, just 22nd. >> just shows you how everybody is just waiting. the vix has been to the downside after we've seen big swings for

months and months. today, nothing. everybody just waiting. lori: thanks for that. basically flat. let's send it over to our colleaguu, peter barnes with the decision now just about seven seconds away. peter. ashley: counting them down. lori: yeah. >> no change in current policy as expected. no change. quantitative easing continues at the current pace of $85 billion a month. low interest rates continue, but, we have a new dissenter on this policy. two votes against this policy. this time around jim bullard of the st. louis fed joining weester george of the kansas city fed to vote against this policy. let's get to the economic analysis right now. information received since the federal open market committee met in may suggests that the economic activity has been expanding at a moderate pace. labor market conditions have shown further improvement in recent months on balance but the unemployment rate remains elevated. household spending and business fixed investment advanced and the housing sector has

strengthened further but fiscal policy is restraining economic growth. partly reflecting transstory influences, inflation has been running below the committee's longer-run objective but longer term inflation expectations have remained stable. the committee expects that with appropriate policy accommodation, economic growth will proceed at a moderate pace and unemployment rate will gradually declined towarr a levvl the committee judges consistent with its dual mandate. the committee sees the downside risks to the outlook for the economy and the labor market as having diminished since the fall. the committee also anticipates that inflation over the medium term likely will run at or below its 2% objective. to support a stronger economic recovery and to help insure that inflation over time is of the rate most consistent with its dual mandate the committee decided to continue purchasing additional agency mortgage-backed securities at a pace of 40 billion per month and longer-run treasury securities at a pace of 45 billion per

month. these actions should maintain downward pressure on longer term interest rates, support mortgage markets and help make broader financial conditions more accommodative. the committee will closely monitor incoming information on economic and financial developments in coming months. the committee will con its purchases of treasury an agency mortgage-backed securities and employ its other policy tools as appropriate until the outlook for the labor market has improved substantially in the context of price stability. the committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for labor market or inflation changes. to support continued progress toward maximum employment and price stability the committee expect as highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. in particular, the committee decided to keep the target range for the federal fund rate at zero to a quarter% and currently

anticipates that exceptionally low range for the federal fund rate will be appropriate at least as long as the unemployment rate remains above 6.5%, inflation between 1 and 2 years ahead of, is projected to be no more than a half a percentage point above the committees's 2% longer run goal and longer term inflation expectations continued to be belle anchored. again voting for this fomc monetary policy this time, ten-2, with james bullard of st. louis voting against it. according to the statement it says that he believes that the committee should signal more strongly its willingness to defend its inflation goal in light of recent low inflation readings and esther george of kansas city, ben, an inflation hawk was con interpreted with continued high level of monetary accommodation increasing risks of future economic and financial imbalances and over time could

cause a increase in longer term inflation expectations. lori and ashley. lori: peter, thank you. ashley: a lot of stuff in there. basically the same as you are. 45 billion a month in treasurys. they say economic activity continue the to show moderate place unemployment as they noted remains elevated. fiscal policy continues to be a drag on economic growth. but le also say they believe or will target 6.5% unemployment next year in 2014. they also say that the downside risks have diminished but if you look at the dow it is now off 57 points. if anything we've seen gold -- lori: gold reversed. gold lower and the market has taken a firm direction lower. so and it was interesting the fed is saying it would either purchase, increase or reduce its asset purchases. still no clear plan. ashley: not, not at all.

peter, the fed releasing the latest economic projections. what do they say? >> just kind of tweaking those projections, ashley and lori. it is slightly lowered its forecast for gdp for 2013 from about 2.6% in march now down to about 2.5%. it has it going above 3% gdp in 2014 and 2015. let's take a look at the unemployment rate projections. in march the fed was looking at 7.4% unemployment for 2013. now it sees 7.3. again just a slight haircut there. it sees it getting down to 6.7% in 2014 and down to 6% in 2015. headline inflation, a big revision for 2013. it is now looking at 1% for the pce inflation number for 2013. 1.7 in 2014 and 1.8 in 2015. still under the 2% threshold,

the benchmark that it watches. but in march it was projecting 1 1/2% inflation for 2013. we've seen a bit, so that was a big downward revision there. we also have that new handy chart, you know, they give us now of the appropriate timing of policy firming. it surveys all 19 members of the fomc and a slight change in that. just one member thinks that the that the policy should tighten in 2013 and 2014, three, in 2015 in 2016, we saw one member shift from 2014 over to 2015. looks like it got a little bit doveish in terms of when members think they should start tightening policy, raise it, basically, basically raising interest rates from about zero level now for this short-term fed funds rate.

ashley and lori. lori: thank you so much, peter. 2015 is the target to actually raise the target rate. ashley: right. lori: the discussion has been when and if the fed will taper its bond purchases and treasury and mortgaged backs. that looks like it is not happening anytime soon. peter, stick with us. i want to send it up to doug cote, our market strategist to discuss this. do you retreated, off 47 points. gains in gold were reversed. curious your reaction, is that significant or not. >> the statement read almost precisely the same as the prior statement. ashley: yeah. >> what i was surprised with was james bullard of the st. louis fed, why he dissented. he is not a hawk and he actually talked about deflation or too low inflation. i would like to get more insight into that. there is one statement that doesn't get a lot of coverage is the fed chairman said again,

fiscal policy is restraining economic growth. that should be brought up in lights because what it's saying is the fed is reaching out to congress sayiig, i need some help. i need some help on some pro-growth economic policy. i need, we should lower taxes, because that is the fiscal drag. and i think congress need to take the baton and start helping out here. >> in theory that would be great. can they? that's another question. let's go to steven olen you're a former fed economist. what stuck out for you in this statement? i get the sense despite these reports, allegedly leaked, that perhaps tapering could be coming closer, or sooner rather than later, i don't get the sense of that from this statement at all? >> actually, i did. ashley: in what in particular? >> there were two, two-pieces of language in the first paragraph

that i thought were really relevant. the first concerned the characterization of the labor market. the previous meeting statement that said, some improvement. this one said further improvement. so i get the sense that the fed thinks that they are further along with the labor market improvement they would need to see before they could start tapering. so, i thought that was important. the other thing that i thought was important was that theydown played somewhat the low inflation readings, by attributing some of it to transitory factors. i think bullard dissented because he felt this statement was too hawkish. so he is very worried about inflation drifting further below the 2% target. so he dissented against the slightly hawkish tilt in this statement, dissenting on the opposite side that esther george dissentedd >> we'll send it back to nicole. the market is selling off. i wonder if you hear any

surprise that james bullard diddies sent? maybe he is to blame or he is the reason if you will, nicole petallides for example this selloff here? this is the reaction as we see it at this moment. >> people are looking at what is happening. jim bullard, esther george, obviously two dissenters from the federal open market committee but what they're looking at here is the action. the dollar is gaining. treasurys moved to 14-month highs. 10-year at 2.2 #%. some of the traders, i spoke to a couple walking by. one talking about further uncertainty. when do they taper, right? they're not saying exactly when they pull back on the $85 billion that they're doing. another said this was good news for the near term. they kept everything the way it is. inflation is at a 43-year low. it is end the quarter, end of first half. this is basically good news. i got good news. i'm selling. i'm out. i will take a breather on the

markets. i got my good news. i'm out for the end of the quarter and end of the half and then i will rethink it. ashley: nicole, thanks very much. let's bring in jeff flock from the cme. we mentioned gold moved in the opposite direction. kind of coming back. almost flat now. jeff, what kind of reaction have you noticed? >> we got also oil, also been watching oil. i had phil here for a moment. where did he go? did you see phil? way back there? we lost about 20, 30 cents in oil. that rallied back a little bit as well. i'm looking at fed fund futures. i heard feeter -- peter's reference to that. we look at the latest numbers, it is still the january meeting, january 28, 2015 meeting where the first time we see more than a 50% chance of any kind of movement in the fed fund futures and we're seeing additional volume in that contract we haven't seen before. still looking for phil but i don't see him now.

come back to us and we'll get his take on the oil market. ashley: jeff, thank you very much. the 10-year yield hit 2.25%. that is the highest level in 14 months. lori: absolutely. i want to go back to gus faucher and pick up on the unemployment and fed target that it will fall to 6.5% by 2014. we know from earlier fed statements and commentary that is really the target to start tapering back the asset purchases. can we sort of connect the dots here, gus, 2014? >> the 6 1/2% target for the unemployment rate, that is for increases in the fed funds rate. they haven't set numerical targets on cutting back -- joy understand that sorry to interrupt you. i'm wondering if that is the fed's way of communicating that is really the get-out-of-jail-free card if you will? >> it's tough to say. i'm not quite sure, you know, looks like conditions for asset purchases have changed much. lori: got it. >> it will be a qualitative

rather than a quantitative decision of i think we'll likely see the fed cut back later this year but doesn't to me look like it is anymore imminent than it was best announcement. ashley: we're seeing the dollar rise against most of its rivals as well as a result of this statement. we mentioned the 10-year yield up 2.25%. that is highest intraday level i should point out in 14 months. the zane brown, from lord abbett. do you expect to see a lot more of that? i guess depend on what we hear from mr. bernanke in ten men's? >> hopefully that will calm markets down. 2.25, 2.28 is really an overreaction what essentially was pretty much the same statement although we do need to keep in mind, bullard was dissenting because he was more doveish. not because he was more hawkish. that is one thing. the second thing is, they did pull down their estimate for gdp

growth this year anddthat would suggest tapering can be postponed, not sped up or brought forward. ashley: yeah. >> when we look at the statement as a whole i would not necessarily consider it more hawkish. i think they really sent a message, we're not interested in tapering anytime soon. doesn't look like it can happen over the next couple meetings. from an economic standpoint, if anything it may be delayed. oddly enough when they talk about improved labor markets, we saw 200,000 a month from november through february and since then it has been less than that. i'm not sure where that improved labor market or additional strength in the labor market comes from. it certainly doesn't seem to be supported by the most recent data. manufacturing also a little weaker. consumption weaker and none of those were addressed in the commentary of the fed. a little bit surprising. >> peter barnes, back to you, look under the hood for us if you will. we're discuss question of tapering. this is a very doveish report according to many of our guests but again it's not necessarily that the fed is going to

continue buying this 85 billion every month in assets, correct? it could actually change that amount or sort of slide it depending on what the economic indications call for. was there anymore color on that you could add? >> lori, i think you will hear the fed chairman say this is all data driven. they want to be flexible on that and that's why they're keeping language of up or down on asset purchases. i do like going into the weeds and looking at the wording as steve was doing a minute ago because that's where you look for clues of their thinking and there is one other seth change in the wording. from the may 1st statement, in the may statement, they said committee continues to see downside risks to the economic outlook. in today's statement, that has been rewritten to say, the committee sees the downside risks to the outlook for the economy and the labor market as having diminished since the fall. you know, to me that sound like they are trying to start to

create some distance between the start of this latest round of quantity quantity, create some space for it, again, probably more to give them, you know, the options to, to ssart to cut back on bond purchases, if they feel the data shows that the economy is, recovery is sustainable, economy is getting stronger, job creation is getting stronger. i will throw that back, that slight change in wording back to the team and see what they say because i have to go into the press conference. lori: we know. peter, go take your seat. this is fascinating discussion. we'll continue for the next 15 minutes until the fed chief's press conference begins. so once again, thank you to our all-star panel, doug cote, gus faucher, steve ullner and zane brown. jeff, nicole, stick around. thanks for expertise. ashley: let's take a break. fed chairman bernanke meets the

press in 15 minutes or thereabouts. plus ongoing reaction to the fed statement and its projections. >> as we do every day at this time let'' go ahead and check how oil is trading. get reaction. the fed up slightly ten cents a barrel. everybody is talking about the low rate of inflation. oil is high. core inflation might be very weak, headline inflation, volatile food and energy costs, those are up there. we're back after this change makes people nervous. but i see a world bursting with opportunity, with ideas, with ambition. 'm thinking about china, brazil, india. the world's a big place. want to be a parof it. emerging markets ishand single countries.fs. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus,

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lori: welcome back, everybody. we basically heard from the fed, the decision no change the market reaction, very tame. we're waiting for the press conference by the federal reserve chairman to begin in ten minutes. we'll have that for you live. fox business of course, the place to be, the place to watch it. we'll bring you market reaction, expert analysis. let's go ahead and check the bond market, how it is reacting. interest rates ssot up after the statement. the yield on the 10-year is 2.26%, up eight basis points. treasurys are selling off. stocks interestingly are down as well. we'll show you 30-year if there is any movement. usually the two year and 10-year are highly correlated to actions from the federal reserve. action on the long bond, pushing

the yield up to 3.83%. it was a report, as many expected. hold the course. no tapering of asset purchases anytime soon despite the may 22nd misstep many characterized it from the fed chairman himself. that is where we stand right now. ashley: meaty stuff will come in nine minutes when we hear from mr. bernanke. market reaction from nicole coal at the new york stock exchange. and jeff flock. and what they would ask him given the chance, michael cox, former dallas fed chief. michael jones, riverfront investment group chief investment officer. and "the willis report" host, wills will -- gerri willis joins us here in the studio. we dropped 50 points on the dow, nicole. we're coming back a little bit. i'm sure it is in anticipation of what we hear from the fed chairman? >> the truth is, people feel

like whatever he says now, they got at least the first part of the news which is much of what they expected. they kept things the same for the most part. you did see that the economy is improving some. the talk was moderate. it really did, you did get a sense from the language that ben bernanke and the team there at the federal open market committee feel like they're carrying the economy on their back because they're not getting help from fiscal policy over in washington. i thought that was key. we saw the dollar jump. we saw treasury yields moving to the upside. now markets are coming back. don't forget we were in an uptrend in the market. maybe some people are saying hey, i will take money off the table and take profit where i am. ashley: nicole, thank you. lori: we're doing a little tap dancing. we want to make sure we arrive at the press conference right on time. we'll begin with all-star panel in a moment. we will see the fed chair in about eight minutes. we'll set you up for that. stay with us.

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ashley: welcome back, everybody. we have heard from the fed. the news conference with bernanke just over three minutes away. let's bring back our all-star

panel. you are front row center. what would you ask bernanke? >> i am concerned about the future of fed independence. you will love their monetary policy. it scares me a lot to see what they will do when they get their hands on the printing press. tracy: the statement went right out to washington. can you comment to that? >> sure. i think fiscal policy is what the fed needs. i think the private sector, through housing and autos, has been recovering nicely.

i think we have kind of had a goldilocks, not too hot, not too cold environment. you cap growth slow enough. ashley: let's bring in gerri willis now. gerri: we have been watching for this a long time. if you are an individual investor and love bonds, think about it twice. we have the delay today. someday, somewhere, somehow maybe we will see this policy turnaround. the fed will tighten up. rates will go up.

you need to position yourself in front of that. tracy: watching for the fed chairman to approach the podium and take questions in just a moment. what is the impact in the commodities market? jeff: it has backed off another month. i have been talking about it with phil flynn here. do not expect it anytime soon. what about commodities? we are back $0.30. >> the oil traders are saying that the job market is getting

better. they are also saying that the gdp will show explosive growth over the next year. we are seeing improvement. if you look at the long end of the yield curve, we put on almost over a half of a point. the bond vigilantes are having their day after this statement. tracy: the chairman is approaching the podium. thank you very much. >> good afternoon. they concluded a two-day meeting earlier today. based on its review, the committee sees the economy continuing to grow at a moderate pace.

the labor market has continued to improve with james and private payroll employment. job gains have contributed to increases in consumer confidence . however, at 7.6%, the unemployment rate remains elevated. overall, the committee believes the downside risk has diminished since the fall. we will continue to evaluate economic conditions and risks as they evolve. inflation has been running below for some time and has been a bit softer recently. the committee believes that it reflects transitory factors. the committee expects inflation to move back over time. we will, however, be closely

monitoring these developments closely. in conjunction with this meeting, the seven board members and the 12 reserve bank members, submitted individual economic projections. as always, each participant productions are based on his or her own view of monetary policy. they expect moderate growth picking up over time and gradual progress towards unemployment and inflation. participants projections for economic growth have a central growth. the tendency for the fourth quarter of this year is 7.2- 7.2-7.3%.

before turning to today's policy decision, let me say a few words about the federal reserve strategy. in the minutes of june 2011 meeting, the committee said for the principles that they continue to follow. as part of prudent planning, we have been reviewing these principles in recent meetings. for today, i will note that in the view of most participants, it remains applicable. one difference is worth

mentioning. while participants continued to think that in the long run the federal reserve's portfolio should consist of countries securities, a strong majority expect the committee will not sell mortgage-backed securities during a process of monetary policy. i emphasize that giving that outlook, these are likely to be relevant to policy for quite a while. let me turn to current policy issues. with unemployment still elevated , the committee is committing its highly accommodative policies. as you know that use monetary policy. however, the target range cannot

meaningfully be reduced further. first, by communicating to the public, the community's plans over the near-term and second by purchasing and holding treasury securities and mortgage back securities. let me discuss a few key points. first, the committee reaffirmed its expectation that the current range for the funds rate will be appropriate at least as long as the unemployment rate remains above 6.5%. as i have noted frequently, the phrase is important. the economic conditions we have set out our thresholds not triggers. for example, a decline in the

unemployment rate to 6.5% would not lead automatically to an increase in the target. it would indicate that it is appropriate for the committee. the more patients it would likely be in making that assessment. moreover, so long as the economy remains short, inflation remained near our longer-term subjective. consistent with the committees balanced approach and pride stability objective.

the purpose of this guidance about policies, monetary policy will continue to support the recovery. importantly, as our statement notes, there is time that will pass between. the second policy tool being deployed by the committee is asset purchases. with our program of asset purchases was initiated last september, they stated the goal. they noted it would also be taking account of the cost of the program.

although the committee left purchases unchanged at today's meeting, it has stated that it may vary the purchases as economic conditions evolve. any such change will reflect the incoming data. going forward, the economic outcomes the committee sees most likely supported by moderate growth as the near-term restraint from fiscal policy. we also see inflation moving back towards our 2% objective over time. if the incoming data is probably consistent with this forecast.

in this scenario, when asset purchase come to an end, the unemployment rate would likely be in the vicinity of 7%. a substantial improvement from a .1% unemployment rate that prevailed when the committee announced this program. our policy is in no way predetermined. if conditions improve faster than expect it, it could be reduced somewhat more quickly. if that outlook becomes less favorable or if financial conditions judge to be inconsistent, reductions could be delayed.

it is also worth noting here that even if a modest reduction occurs, we would not be shrinking the federal reserve pootfolio. this will continue to put downward pressure on long-term interest rates. i will close by john again the important distinction between the committee's decision and it forward guidance.

to return to the driving analogy, the incoming data is able to sustain a reasonable cruising speed. we will gradually reduce the purchases. any need to consider applying the brakes is still far in the future. in any case, no matter how conditions may evolve -- thank you. i would be glad to take your questions. >> i would like to ask you to clarify something. [inaudible] >> what is that? is that an intention?

>> we had a good discussion of that issue today. obviously, there is no change in policy involved here. simply a clarification helping people think about where policy will evolve. future policy statements, it is not a policy change. i am just trying to explain. >> there is no consensus on that? could you give us some information on substantial?

are there other factors involved? is it substantial compared to the fall. we look at a variety of things. the 7% unemployment rate is indicativeeof the kind of progress we would like to make in order to be able to say we have reached substantial progress. >> mr. chairman, there is optimism in your forecast and it is the case that the fed has overestimated the economies growth rate.

we have gone through a period in the first half the year with pretty subdued growth. i would like you to explain where this optimism comps from. >> the fundamentals look a little better to us. obviously a support to growth. state and local governments who have been a major drag are now coming to a position where they now have to lay off large numbers of workers. the main drag, the main headwind through growth this year is, as you know, federal fiscal policy which the cbo estimates is something on the order of growth.

our judgment is, the economy is still moving ahead at a moderate pace. we will see how that evolves. obviously, we have not seen the full effect yet of the fiscal policy changes. we would like to see how it evolves as we get through the fiscal impact. we will obviously be very interested to see if the economy doesn't pick up a bit and continue to reduce unemployment as we anticipate. one thing that is very important for me to say is if you drop the conclusion that i just said that the purchases will and in the middle of next year, you have drawn the wrong conclusion. if the federal reserve makes the

same error, our policies will adjust to that. if it does not come true, we will adjust our policies for that. >> thank you, mr. chairman. financiaa conditions have tightened in the last few weeks. particularly, given the mortgage rates, could that affect the recovery in the housing market? >> yes, rates have, some. that is in part due to some more optimism. it is in part due to receptions of the federal reserve. the forecast, the minutes

subjective for this meeting were done with full knowledge of what happened with financial conditions. rates have taken some. other factors have been more positive. i think as far as the housing market is concerned, we will want to watch that. one important difference now is people are more optimistic about housing. that compensates to some extent for slightly higher mortgage rates. in terms of monthly payment on a house, the change we have seen so far is not all that dramatic. yes, our forecast to factor that in and iffinterest rates go up for the right reasons, that is

both optimism about the economy and an accurate assessment of monetary policy, that is a good thing. it is not a bad thing. >> mr. chairman, yoo have always argued that it is the stock of assets that the federal reserve holds. how do you reconcile that with a very sharp drive with real interest rates that we have seen in recent weeks? thank you. >> well, we were a little puzzled by that. it was bigger than can be explained by changes in the ultimate stock of asset purchases within reasonable ranges. so, i think, we have to conclude that there are other factors that work as well.

including some optimism about the economy. maybe some uncertainty. i am agreeing with you that it seems larger than can be explained by a changing view of monetary policy. it is difficult to judge whether the markets are in sync or not. generally speaking, though, i think that what i have seen from analysts and market participants is not wildly different from what the committee is thinking. i think that most important thing is it is important this state, that date, this time. it is mportant to understand that our policies are economic dependent. if financial conditions move in a way that makes this economic scenario unlikely, for example, that woold be a reason for us to adjust our policies.

>> thank you. on monday, president obama said in an interview that he believed you had stated your position as chairman for longer than you wanted to and maybe longer than you were supposed to. do you agree with that assessment? >> well, we just spent two days working on on a kerry policy issues. i would like to keep the questions on policy. i do not have anything for you on my personal plans..3 >> greetings mr. chairman. i would like to push for a deeper explanation. the forecast and the mysterious dots kind of do not map into the unemployment forecast.

we see more gradual rate rises going out into time. unemployment will fall to 6.5% in 2014. also note that labor force participation -- you in fact have been a big believer that a lot of the exits from the workforce is related to wheat demand, not structural factors. here is my question. can you explain a little bit more, you know, is the threshold too high? i will point out that the vice chair into other people used to work here have done significant research on not letting the unemployment rate fall much lower. can you expand on that? >> it is a great question. what you pointed out, the difference between the dot in the forecast illustrates the

point. the 6.5% is a threshold, not a trigger. will we get to that point, we will been at that point begin to look at whether an increase in rates is appropriate. among the things he would take into account, first of all, is inflation. inflation is very low and expected to stay low. secondly, we would take into account is that him claimant rate rough like -- maybe it is not representative of the state of the labor market at that point. since it is a threshold and not a trigger, we are entirely free to take that all into account. that is what the diagram

suggests. it will be at 6.5 in late 2014 or early 2015. in terms of adjusting the threshold, i think that is something that may happen. if it did happen, i think it would be to lower it, not to raise it. >> following up on that. i understand 6.5% is a threshold. you talked about wanting to see substantial improvement in the labor market before you did suspend those. has something changed in your thinking about the value of asset purchases?

>> substantial is in the eyes of the beholder. i think going from 8.1% and a stagnant rate of improvement to 7% and stronger economic growth is a substantial increase. i think it is important to explained we view ourselves as having two tools. asset purchases are a different kind of thing. they are unconventional policy. our intent from the beginning is to use asset purchases to achieve some near-term momentum to get the economy moving forward. eventually, to allow the low interest rate policy to carry us through. let me just make two very

important points. our target is not seven, it is not 6.5. our target is maximum employment. most of the people on the committee think it is between five and six unemployment. that is what we are trying to get to. we will be shifting the mix of our tools as we try to land this ship in a smooth way onto the aircraft carrier. sorry. the other thing i want to say is that stopping asset purchases caught when that happens, i think we are still some distance from not happening, when that happens, that will not involve ending the stimulus from asset purchases. we will hold onto that portfolio. if it is correct, which we believe it is, holding all of those securities off of the

market and reinvesting and still keeping the, you know, rolling over maturing securities, we will still continue to put downward pressure on interest rates. between our commitment, we will still be producing a very large amount of stimulus to bring the economy smoothly towards employment without incurring a necessary cost or risk. >> hi, chairman. you acknowledge that inflation readings have been low. you maintain that inflation expectation and that it has remained stable. is that of any concern and if not why? what would you need to see for

the committee to start being more concerned that longer-term expectations are in fact falling? >> this is something that we watch very carefully. the affects of the sequester and medical payments, the fact that nonmarket prices are extraordinarily low right now. these are something that we expect to reverse and we expect to see inflation, pay bid. first, on inflation expectations, it is true that the breakeven from the inflation index bonds have come down. to this point, they still remain within the historic range that we have seen over the past few years. moreover, other measures be it forecasters. whether it is measures from

firms or households. they are pretty much in the same place as they were. as i said in my opening remarks, we do not take anything for granted. one of the preconditions for the policy pack that i described is it began at least gradually. if that does not happen, we will obviously have to take some and we are certainly determined to keep inflation, not only -- we want to keep inflation near its objective, not only of avoiding inflation that is too high, but we also want to avoid inflation that is too low. >> peter and then donna. >> mr. chairman, given the volatility we have seen in the markets that links to which you are stressing the forward guidance here today, it does suggest that there are some out there your word are not getting

the message right now. i am wondering, to what extent do you think now that your exit strategy is going to be that much more challenging? even in this small amount of time we have not done all that much we have seen the standard reaction. >> well, it is important for us to communicate. it is particularly important when we have an unusual economic situation where i think the standard relationships are not applying the law that have, where we are using unconventional tools are for guidance. so i guess i agree with you that our communication is going to be very important. we hope that the -- again, the key point i tried to make today is that our policies are tied to how the outlook calls. that should provide some comfort to markets because they will understand my hope, that we will be provided whenever support is necessary. if the economy does not improve

along the lines that we expect to we will provide additional support. if financial conditions involved in a way that is inconsistent with economic recovery, we will provide support. in that way we hope to increase confidence both among market participants, but also among investors and private consumers and other people in the economy. so again, i mean, your point is well taken that we are in a position where this simple adjustment by 25 basis points in the federal fund rate seems like a long ago experience. we are in a more complex type of situation, but we are determined to be as clear as we can. we hope that you and your listeners and the markets will all be able to follow what we're saying. >> donna and then we will go to peter. >> donna with american banker. next month will be the 3-year anniversary of the dodd-frank