>> fiorina followed closely by rubio, i thought. stuart: trump? >> i thought trump stayed the same. see if he gets into details, see if he helped himself. >> think he faded with all the details about foreign policy. stuart: we finished up with five seconds to go. il not take neil cavuto's time i'm going to take all of my time, it's 12:00 noon, it's yours. neil: like i should be thankful! thank you very much, stuart varney, you didn't hear it from me, apparently there is a federal reserve meeting wraps up in the next couple hours, we'll know whether the fed has done something it has not done in almost a decade. hike interest rates. the last go-around when we did this, we had to reverse this, that was back in 2006, things got very, very hairy, very, very fast, and for ten consecutive federal reserve meetings after that, there were cuts, cuts that eventually brought rates down to about 0% and that is where we are right

now. and the expectation today, well, it depends with whom you chat. there was a survey of about 80 economists and they were almost split down the middle. half expect a hike today, the other half do not. then they reached out to the 22 primary dealers who are in charge of issuing debt directly from the treasury. 12 think the fed will not hike 10 think it will. all right. so we've got closure and we know what will happen exactly. melissa francis is here. david asman is here, what do you predict? >> i predict, and i must give credit to melissa, my co-anchor, there will be tweek not a movement. you have a 0 to.25 points, i think they're going to get rid of the 0. what kills me is they're so weak kneed about the prospect. >> what does it mean? >> this is one possibility and one incarnation we heard on the

show, we're going to target 25 basis points so they haven't changed anything, but you take the 0 out it sends a signal without doing anything. you know how they love to send signals without doing anything. it's the best of both worlds. you look like you're doing something but you are doing nothing. neil: i built a career on it. [ laughter ] >> don't they want some certainty? >> pick up on what melissa said, the difference between now and the greenspan era. he was the maestro. you could not figure out what he meant, and every single fomc member is sounding off. jackson hole, comments, we should ray, shouldn't raise, so that signal, that messaging in clarity could actually be the right thing to do that. is to say sending a message to the markets but not making it so crazy that markets just sell off. but i was reading a couple blogs this morning. there were actually traders figuring out that janet yellen

is leo, what is it? a horoscope, trying to figure this out, you mentioned the economist 50-50 as far as their opinions and fed funds futures showing a 30% rate. >> she doesn't strike me as a woman who reads her horoscope. >> they are trying to read it. that's how desperate everybody is. neil: what's a common theme here is the markets, you don't want to rattle the markets, the last 20 or 30 years like another role for the fed. >> it's not their mandate, and you know somebody who didn't give a hoot about how the markets thought about what he did is paul volcker. when he was in there as fed chief he did what had to be done to maintain the value of the dollar. neil: remember he would hike rates a full point at a time. >> and he did not care at all about what the markets thought and how they're walking on eggshells, is the market going to think this? the market going to think that? the point of the federal reserve is not for the market, it's for america, primarily for the middle class. it's lost that mandate.

the middle class is suffering because of zero interest rates. they have savings that are losing their premiums as a result of the interest rates. neil: a mistake to be at behest of the markets? >> i think it shows a lack of confidence. if they raise rates it would be amazing for the housing market. people trying to figure out what to do, we're at the cross point where the value of homes have gone up but interest rates are very low, if interest rates went up, this is it, this is my last chance and jump in, and that would really be a boom to the economy. >> it's not even just about us anymore, you know who would love a fed interest rate hike would be china. the dollar strengthens, the yuan weakens, it leads us in a slightly weaker position because everybody else is cutting like crazy, so that's an interesting piece of the puzzle. >> but you could protest the world that's telling you to do something by saying you're not going to cave to the world's

pressure? >> it could do that. but the problem is now the fed is involved in the worldwide currency war that's been going on. everybody runs to the cheapest currency in order to sell their goods. that is a race to the bottom, and that -- because we've been through this before, see it in history time and again, that bankrupts countries. neil: see what happens, here's a guy who said the fixation in the markets is getting to be a problem. bob shiller says the federal reserve needs to raise interest rates right now because things have gotten bubbley, i'm paraphrasing there, bob. but your view by your valuation says that this market isn't only toppy, it's like feeling like 2000 toppy, right? >> well, i'm trying decide between 2000 and 1998, because in 1998, the russian debt crisis, the market dropped a lot as it did in august this year. but then went zooming back up, so yeah, that's the problem, you can find historical data

that proves either way. neil: bob, we should point out seven other countries over the course of this, you know, post financial free fall, have tried to raise interest rates. every single one of them reversed that. >> right. neil: and i'm wondering if we were to do that here, whether we might follow suit or how we would be different, what do you think? >> that's an issue. yeah, we seem to be -- i call this the new normal boom in my book. because that's the mood, the spirit, it's somehow everything maybe not so much in the u.s. but there's a lot of weakness, interest rates are just rock bottom. it's just amazing, it looks like maybe the depression in terms of interest rates. but then the question is, is that something deep set in the economy, that the economy needs the interest rates low? that's a real concern. still, i think it would be a good symbolic move, if they

were to move interest rates now by some, you're getting them up to 1% in a little while. that would be a healthy thing, wouldn't be that destructive to the economy. neil: for someone who follows the housing industry closely, i want to follow up on something my friend melissa francis said it would get suspected home shoppers off the fence. i better move now because rates are rising, what do you think of that? >> yeah, this is actually important. in 2012, the mortgage rate hit a record low. that spirited a big increase in home prices. people thought, way, they can't stay at a record low very long. the same thing could happen now if the fed announced a rate increase. it might have that effect. neil: if they don't move today and they just wait. they have a meeting in october another one in december, but only do these press conferences every other meeting, so the next opportunity to explain a move would be in december. i so i guess i have something a

little in the weeds here, is it your sense if they don't move today, they do move in december to keep to that view that rates are going to go up by the end of the year? >> i don't know that it's a big deal difference whether they wait to raise between now and december. neil: well, if you could go along with me bob, we're kind of building a show on it. [ laughter ] >> it would help me, but that's okay. >> i would like to do it sooner rather than later, because i think that right now the stock market is calm, and it could take it. i think it wouldn't be any major effect but it would be kind of a sobering influence. i'd like to see it now rather than december. neil: we'll watch and we will know very, very soon. pleasure having you on again. thank you, robert. we've got former presidential candidate tim pawlenty on, keep in mind, the financial service industry

titan, so i'm going to use that part of your expertise to talk about what could affect your members if rates go up. prevailing argument is it hurts them, it hurts their bottom line. do you agree? >> well, neil, the group i represent, the financial services roundtable has a mix of members including banks and asset managers, there's a mix of opinion on this. this isn't a question whether the fed is going do this, a question of when and largely psychological and part practical as well. the mandate relates to employment and inflation, if you look at two measures, good progress has been made, but given some of the uncertainty and anxiety, my view they would be well served and serve the country well by deferring this one more time. they can't defer it much more longer, credibility is at take. >> are you worried? you can always back yourself into a corner when you draw a line into the sand. doesn't barack obama know that when it comes to syria.

it does box you in. the federal reserve is almost doomed to have to do something here, even if the news changes, and i don't know whether a rate hike could be a good or bad thing, that line has been drawn, so if not now, by the end of the year. >> it's really interesting point. i think they boxed themselves in, and they drew the line softly, partly because they wanted to offer this forward guidance. they wanted to have a ramp up and not surprise people and i think there was a lot of economists and others who thought that was a good idea but signal the rate increase was coming quote, unquote later this year, and whether it comes in september or december, doesn't make that big of a difference. i think they're going to have to pull the trigger on it if not in the near at least intermediate term. >> the political fallout from, this and we're talking to lindsey graham shortly is it can help and it can hurt, it can help those trying to gain

the white house back, i.e., republicans, looks like there could be a slowdown, and could hurt in this case hillary clinton if it looks she is the democratic nominee, facing what appears to be a ratcheting of interest rates. doesn't always work out that way. george bush survived the rate hike in the summer of 2004 and got re-elected. is it your sense this becomes a political issue that the economy is slowing down as the fed ironically is raising rates? >> depends on what happens. we're not talking about volcker-level increases, we're talking a quarter point or a small increase, and then taking a go slow approach from there. and i've had a chance to study this as other guests have. there is a case to be made that the correlation between interest rate increases over time, not in the exact moment it gets denounced but overtime in the correlation to markets, it's all over the map as to the correlation. so you can't say the markets are going to tank and stay tanked.

history doesn't support that in every instance. neil: governor, thank you very much. we'll see. keep in mind about 50 minutes away from very special market coverage that commences here. we'll have lou dobbs, maria bartiromo. we'll have anyone and everyone our top talent everywhere, all over, we fan them out all over the world to get a reaction to this because if the fed moves today or doesn't move today, for the first time in about a decade, it is considering doing something that, well, it has not done. raise interest rates. get ready. lindsey graham is next. at ally bank no branches equals great rates. it's a fact. kind of like shopping hungry equals overshopping. hi my name is tom. i'm raph.

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the most liberal guy in the entire house. they started drinking together that's the first thing wrong with this president. we're going to drink more. [ laughter ] >> you know for me, that was the line of the night. that was the first debate, lindsey graham, the clear runaway winner by people who tweet and react and judge these things in a busy night of great oneliners and zingers and all. you got the ball rolling senator. good to have you. you talked both sides have to talk to each other, negotiate, get things done, that is the in the environment right now. >> they should call it marriage. neil: yeah. how would you change things? >> just by being me, i have a good relationship with my colleagues, getting the congress to work together is an effort. here's the secret in town, not very well kept, democrats don't like obama much either, he's a distant guy, not a bad man but doesn't interact at all. i'd be bringing people down to

the wow, bring your kids, grandkids, have a drink, watch a ball game, let's get to know each other, michael reagan came up after the debate and said that's exactly what my dad did. he sat down with tip o'neill and others and found a way to get to know each other. it's not hard. my dad ran a bar. neil: speaking of the bar analogy, there were stories at the time reagan and tip o'neill come staggering out of the private residence and crashed a deal. >> it worked. neil: you kept staying on message when it came to the overriding issue of our time. international security, and to that very point, less than 14 hours later, senator, we're getting word of an arrest of a new york man in new york on charges of providing material support to isis. that's all we know thus far, but you've heard these stories again and again, you mentioned as you did last night that as an overriding concern of yours but doesn't get as much play.

what do you make of that? president doesn't -- he minimizes the threats and oversells our successes. it's hard to break through when you're commander in chief, basically won't level the american people. the program to train the free syrian army, there are five guys left of the 54 we trained and just a matter of time we get hit here again. isil is large, rich, entrenched, they're drawing supporters all over the world because they're thought ofs winners. if i'm president, we're going to add more combat troops in iraq and going after these guys, and you know, we're going to do damage to them we're going to make them small, pouring it on the run. there's a lot to it. neil: your colleagues, senator in the debate and the follow-up debate, they weren't too keen on doing something to that degree, and i don't know if they're reading the political tea leaves or afraid to recommit troops to the region

or there is this war fatigue that's built on. do you think that is a losing issue for you? >> no, not at all. i think what i'm trying do is explain the threat. we can't win this conflict against isil from the air. there are no ground forces left to train in syria. that's pretty obvious now that our effort to train the free syrian army was three years ago, the windows closed. so we've got to get a regional army. the good news is we'll be 10%, and the real good news is the troops we have is a fraction of the past but what's going on in the ground in iraq is not working. we need about 10,000 u.s. forces, not 3500, and regional army to go into syria. if you don't get syria right, you never fix iraq, if syria goes for another year, i worry about lebanon and jordan. i would choose to strike at isil in the heart of the caliphate inside of syria with a regional army. that's what i would do as president to keep them from hitting us here. neil: i don't think i understood the one comment

about donald trump, his approach on these type of issues was cartoonish, explain what you met on that? >> popeye foreign policy, i'm going eat spinach and beat you up. we have to build a regional force. the kurds are not an expeditionary force, they're not going to go into syria and destroy isil. you would start a war with turkey. what donald trump does says things we're going to iraq and syria, invade the countries, take their oil and pay our wounded warriors with the proceeds. that turns everybody in the mideast against us and helps isil. that's a cartoon approach. we have got to understand the dynamics on the ground. nobody left to work within syria. create an army outside. here's the good news, the arabs want to get rid of isil, too. their threat to their way of life and assad is a puppet of iran. neil: what did you think of rand paul saying it's their

fight, their war, let those guys fight it? >> all i can say, that's the biggest difference between me and senator paul. radical islam has three goals in mind, ratify the position, destroy them and protect us. where i did my reserve duty for four years, when we released to the iraqis, he told the colonel i'll see you in new york. they're trying to attack us. it's not syria's war, iraq's war, they're coming to get us, too. their attitude led to 9/11, i'll be damned if we have another 9/11 if i'm president. we'll do everything to hit them over there before they come here. neil: the federal reserve, everyone is waiting to see if it hikes interest rates, something we've not seen in almost a decade. what do you think? >> it's eventually got to happen. inflation is going to hit one of these days and makes servicing the debt more expensive but we're living basically in an odd era of where interest rates are so low

for so long, it can't last. they're going to have to increase interest rates or have inflation one day. neil: senator, thank you very much, very entertaining last night. enjoyed it. continued success, good seeing you. >> i'll buy you a beer. neil: i want to give you an update on other things going on beside the fed. we have a press conference going on concerning this gm settlement, which you might have heard involves a $900 million payment on the part of gm to end the u.s. criminal investigation into that ignition switch probe. gm already made payments totaling $1.5 billion. this settles all things with the justice department. we'll have more after this.

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active management can tap global insights. .. because active investment management isn't reactive. it's active. neil: all right. so will they or won't they? obviously, many have hired sellers in the market, senting on their -- sitting on their hands. we've not seen a lot of action on either side of the ledger

the dow up all of about 18.5 points. the ten-year note is down a basis point right now, but the feeling seems to be that the market, at least the bond market, is telegraphing an uptick in rates. that's not always accurate, but i think this next guy is. john steele gordon follows this stuff very closely, and we were talking during the break that we're overdue for a hike, and the fed's got to send a signal now to start hiking. >> that's what i think, and we'll see what the fed actually does. i think we've had this virtually free money for far too long. neil: it has been a long time. have we ever had a period this long with this low of a rate? anywhere? anywhere? >> not that i'm aa ware of. neil: yeah. and the fallout would be what? when you have to reverse that, the fear is it's going to be painful. >> well, it's going to be painful for some people.

i think the stock market has been buoyed by the fact that there was nowhere else to invest. fine art and real estate have are done great, but it distorts the economy when you have, effectively, free hundred. and the longer you have free money, the more it gets distorted -- neil: you don't think it was ever justified, right? that the argument against moving at all is that inflation isn't a problem, the world is still experienced at best a tepid recovery, if if a recovery at all, so they're justified keeps things allow. -- keeping things low. >> the fed, like all bureaucracies, would much prefer to do something than nothing. neil: did they put themselves in a corner by telegraphing they have to do something by the end of the year? >> yeah, i think they did. neil: but you welcome that. >> yes, indeed. modest increase would signal okay, we're getting back to normal. neil: what's modest?

>> 25 basis points. neil: fed fund's now around zero, what would be a proper range for interest rates? >> oh, you know, starting, like, 1%. we're not there now, but -- neil: isn't the historical norm 3.5-4? >> yeah. neil: that would be a hugely -- >> oh,. [laughter] things would be ugly on wall street tomorrow. neil: do you think that's where eventually we are headed? eventually? >> yes. neil: yeah. when you say "get back to normal," though, that would be by a steady ratcheting up of rates. >> yes. neil: every meeting? every other meeting? yeah. 25 basis points every couple of months. neil: okay. so we'd have a few years of this. >> yes, it would take a while. neil: we always have ebbs and flows, you know? >> maybe if the economy appears to slow down a bit, they may skip -- neil: slow down a bit. you don't see a hike today, what would your reaction be?

>> i'd be disappointed. i don't think we'd see one til january. neil: okay, we'll see. he does drinking games, you know, and bets and all, but we won't do that. [laughter] in the meantime, you've probably heard this debate not only on interest rates, but on taxes. and the candidates last night were duking it out on taxes. who raises 'em, on whom, how much? interest rates moving up and taxes moving up, what does that do? we debate, you decide. ♪ ♪ but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet?

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neil: all right. you might have heard about this debate last night, bun of the big -- but one of the big arguing points had to be taxes. they all argued not only saying i'm the only guy here, but they were tripping over themselves about who would offer the lowest simplest tax plan. among all of them, except donald trump who has a plan that would call for taxes on hedge fund managers and higher taxes on the super-wealthy. he didn't quite spell it out to a great degree last night, but he was getting some heat for it last night. we're with charlie gasparino wilbur ross. wilbur, you're a rich guy. that argument about hiking taxes on the very well to do, and you're in that category -- >> well, thank you for that. [laughter] neil: congratulations. congratulations. >> it's a good thing, by the

way. neil: and trump has said this, and it hasn't hurt him in the polls. what do you think of a party that now conceivably could support that? >> well, we haven't heard the full details of trump's program, so if he's accompanying that with a lower basic tax rate, maybe it doesn't make an awful lot of difference to anybody. but it seemed to me that's mainly a populist appeal. bankers, politicians, hedge fund people are -- neil: what about the hedge fund guys? they get that. >> well, it's interesting, a lot of the hedge fund guys are backing hillary clinton, and she certainly has that same idea. jeb came with the idea of the higher rate for hedge funds than before but not materially different because he's lowering the basic rates. so i think a lot has to do with what trump's going to do with the overall -- neil: wasn't it a ronald reagan strategy, he had to taxes in the

end, but he left office saying taxes are a lot lower than when i came into office. >> right. but he attempted to bring down rates -- >> right. >> close loopholes. >> sure. >> i think jeb has articulated that, you know, and that's basically his plan. listen, i'll get rid of this very favorable treatment for hedge funds which is hone the as carried -- known as carried interest, but it's a favorable tax treatment. and i'll get rid of that, but in exchange i'm going to bring down these rates, and we're going to make it revenue neutral by closing loopholes. neil: yesterday trump was advocating for this progressive tax system we had when rand paul was advocating for -- >> you know, jeb bush's tax plan is progressive. >> yeah, it does. neil: okay, but i was just saying that trump -- it startled me a little bit to say he believes in this progressive code -- >> well. neil: -- he believes, and i'm just wondering to your sense that, you know, guys like you

should pay a higher rate, maybe even a much higher rate. >> sure. well, first of all, donald is basically a real estate guy, and the real estate is the most tax-protected industry in the whole world. >> right. >> if i sell a stock, i have to pay a tax on it. they sell a building, they have a long time period during which if they reinvest -- >> absolutely. >> -- they don't pay the tax. i think if we're going to get serious about tax reform, it shouldn't just be the fund managers, it should be real estate, it should be everybody. >> right. and remember where donald comes from in his tax plan. a lot of his attacks are, you know, they get the feeling they're personally motivated. he told anthony scaramucci one of the reasons he's going after hedge fund guys is because they're all supporting hillary and jeb. is that a reason why they should be taxed? i would say, no. he went after macy's the other day -- neil: everyone hates hedge fund managers. >> not everyone hates them. neil: even hedge fund managers. >> listen, i don't think hedge

fund managers would mind getting rid of -- if you bring down the rates and make it so you can you know, small businesses can get taxed at a lower rate and there's less deductions, nobody cares about that. i mean, that's what most people agree on. >> right. >> you know when the tax code gets complicated -- neil: which it is. >> then they ask, that's where special interests come in and say i want an exemption for this, and donald hasn't really addressed that one issue. you know anthony scaramucci -- >> no, i know. >> had an interesting meeting with donald where anthony says you know, donald, when all is said and done, i pay 51% tax rate, and donald looked at him and said, you've got to get a better accountant. [laughter] what is that? neil: she took on donald trump on multiple bankruptcies for his companies, etc. you know, answered the hewlett-packard thing about her stewardship there, relating it to the middle of the financial meltdown, she couldn't control that. how do you think she comported

herself? where's she going? >> i thought she handled herself very well. for one thing, she was less well known to the general public than many of these other people. i think she made a very good introduction of herself. she was forceful, she was articulate, she wasn't whiny. i thought the way she handled the trump comment on the women was a real zinger. >> i would say this though wilbur. i think two things out of this. donald's got to transform the energy and passion he has f immigration and, you know, dealing with china and isis, his forcefulness, onto other issues. he's got to bone up. i don't think it's going to hurt him here, but you could tell he just doesn't have the depth of knowledge. these guys, they read everything. they have aides telling them this, and donald's got to do that if he's really serious. neil: keep in mind everyone has offered a detailed plan whether it's jeb bush or chris christie when it comes to social security, they're not exactly rocketing in the polls.

>> i understand. >> there's a real danger, if you put out a detailed plan -- >> i'm not talking about detailed plans, i'm talking about boning up on the issues. donald did not have that depth of knowledge on certain things. and i would say the one negative op carly fiorina, i thought she was brilliant. she's a smart woman, and she's obviously well prepared. she needs to come out with a coherent explanation on what happened at hewlett-packard and lucent when she was there. neil: she just offered it last night. >> it wasn't very good, and i don't believe it. neil: she doesn't need to go into that. >> yes, she does. she let two companies that were -- neil: wilbur, explain -- >> i think the tact that tommy perkins -- the fact that tommy perkins who led her demise at hewlett-packard ran that big ad -- neil: that's right. apologized. >> saying he was wrong. i think host people in the business community, that's pretty powerful. perkins is a very respected -- neil: well, she's rocketing up

in the polls. real quick. quick, quick, quick. >> hillary -- didn't stop barack obama from labeling mitt romney as a murderer over some deal that he did -- neil: bottom line, we don't know. we are going to know in about 90 minute what the federal reserve is going to do. i want to go live to sixth avenue, the avenue of the americas, and you can tell they're on pins and needles. more after this. [ male announcer ] whether it takes 200,000 parts ♪ ♪ 800,000 hours of supercomputing time 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. whether it's building the world's most advanced satellite, the space station, or the next leap in unmanned systems. at boeing, one thing never changes. our passion

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neil: all right. what happens if the federal reserve decides to move interest rates today, decides to commit to hiking the overnight bank lending rate that has not been moved since, what, 2006 was the last hike? what happens? gerri willis has been exploring that to mortgage rates. what happens? >> they've already moved. they're out in front of the fed. if they were to move after a rate increase this afternoon that means mortgage bankers think they're going even higher. so they tend to get out this front. neil: but that is the pattern

when rates go up, right? >> that's true. neil: in fact, it's never been one and done. so how far up is your sense that they go? >> well, we're at 4% on a 30-year fixed right now, and i think we could sit there for the rest of the year, somewhere around that. they haven't been moving around a lot lately. they've already made the move from spring. but i think you're right, i think we could be in for more hikes, and if that happens, they will continue to ratchet higher. when it comes to consumer products out there, the ones tied to the prime rate of interest, your variable rate credit cards, your home equity lines of credit, those are going to go up and go up in lockstep you know, in the next cycle or two cycles, you're going to see that increase right in your will. and, of course, the people who are going to get helped here are retirees who have been desperate for some kind of return on their savings and haven't gotten it. neil: but those rates don't go up right away, right? >> totally true. totally true. look, if you were desperate for

that yield and you're looking around and you're shopping and you're at one of the big banks you're going to have to shop around and look somewhere else in all likelihood. neil: thank you very much, gerri willis. aaron kline here, former aid to treasury secretary geithner, and your argument is now is not the time to hike, right? >> no, now isn't the time to hike. i think the fed is going to wait this one out. they have another meeting at the end of october. there's no sign of inflation right thousand. inflation is running far below the fed's 2% estimate, and there's a growing concern about a government shutdown that could disrupt the economy and growing market turbulence. and it all points, all signs point to waiting a little longer. neil: all right. but you can always make an excuse not to hike, and you're quite right to say the big macro effect. the world's not exactly economically or financially on fire. but that we have seen aic-up in

the job -- a pick up in the job market, in consumer spending. not a great one, but do you want to prick the bubble before it gets out of control? i had a guest earlier say it already is. what do you say? >> you do want to make sure you don't get behind the terms on inflation. but on the other hand, the u.s. is becoming an island of economic growth in a sea of stagnation globally. and the fed is very concerned, and rightfully so, about the impact of the value of the dollar. when the fed starts to raise rates, the dollar -- which has already strengthened 17%, a huge movement in currencies -- is going to continue to take off, and that could slow our own economic growth. and you don't want to end up in the very recession that you're trying to get ahead of by raising rates. neil: we don't have think wiggle room here. in other words, if we were to slip back into something even worse, i guess the federal reserve could, you know, reignite quantitative easing and start buying a bunch of treasury notes, bills, bonds, you name it. but i get the feeling that part of their hoe discuss op ran die

now -- modus operandi is to try to get some extra arrow this is their quivers in case they need to. >> i think that's absolutely right. the way i think about it is the fed is trying to load the gun and reload the ammunition of these interest rate hike cuts, but in the very -- they're caught in the catch 22. in the process of reloading the chamber, they may set off and ignite the very thing they're trying to protect against. it's a very difficult option for the fed. neil: i hear you. aaron, thank you very much. aaron kline. i've got some good news in case you were worried about gasoline prices out of control. opec out with a statement saying that it does not see oil returning to $100 barrel. it's under $47 right thousand. until 2040. really? you actually put out a statement like that? someone is working in their press room saying we need to put out a statement. okay. $100 a barrel oil. yeah, but not until 2040.

is that good enough for you guys? good. let it go. [laughter] really. more after this. at ally bank no branches equals great rates. it's a fact. kind of like mute buttons equal danger. ...that sound good? not being on this phone call sounds good. it's not muted. was that you jason? it was geoffrey! it was jason. it could've been brenda. hi my name is tom. i'm raph. my name is anne. i'm one of the real live attorneys you can talk to through legalzoom. don't let unanswered legal questions hold you up, because we're here we're here and we've got your back. legalzoom. legal help is here. i've smoked a lot and quit a lot but ended up nowhere. now i use this. the nicoderm cq patch, with unique extended release technology helps prevent the urge to smoke all day. i want this time to be my last time. that's why i choose nicoderm cq.

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neil: do you ever wonder what happens if the federal reserve does not hike interest rates? i'm not talking about just today. they don't move in december. they don't move at all, maybe for a while. well, we've got lizzie here, and she's saying it could be a problem. lizzie macdonald, larry glazer on what that could mean if they don't do squat for a while. what's the fear? >> well, you know, this is the superpole for business journalists -- super bowl for business journalists. neil: that's a sad commentary. are we uber-nerds? >> we've been talking about this for six years, since 2009. here's the thing and, you know i've been around long enough to

watch interest rate hike cycles, since 1985, and start anything '87 the fed starting to reverse course. why? in terms of they were set to raise rates in '87, '94 which they eventually did, and in 1998 what were they looking at that made them reverse course? the global economic picture. i'm not saying this is what may push them to hold off right now, but, you know, there was always worries. they got criticized this the past for raising rates and triggering things like the asian debt crisis and the russian debt crisis and currency devaluation contagion. so, you know, will they do it now? they should. historically, the norm has been 4-6% in terms of interest rates since 1994, and so, you know are they too much focused on engineering a soft landing while they're swapping asset bubbles for each other? yes. neil: well, i think that's the thing that they would presumably be concerned about, larry, right? that they're trying to acknowledge, i guess, that we do have an asset bubble here this the bond market, and by

extension, the stock market p right? >> that's right. look, this is shaping up to be a case of the fed giveth, and the fed taketh away. either way, whether the fed raises or don't, the fed is between a rock in and a hard lace. for retirees, they'll say what took you so long? why only a quarter of a point? for those in the stock market, they'll say, look, this is going to deflate the sales that have been driving this economy. autos, housing, all benefiting from low rates, and certainly emerging markets. imf saying don't raise, you know, we don't want to see higher rates because it's going to hurt foreign economies. regardless, that blame is misplaced because the blame on the fed is not the right approach. the blame should be on washington for putting the fed in this position in the first place. >> right. >> they're trying to solve a problem that they didn't create. they didn't make people spend $18 trillion in debt, but they're trying to fix it. neil: wait wait.

they provided the environment that allowed for that, and i guess now you have to dial that back lizzie. when, liz city, did the market get to be their prime concern? >> i think it was the '87 crash. neil: greenspan came in in august -- >> yeah, yeah, and then he -- they were going to hike rates back in 1987. when that happened in october 1987, they reversed course and low arerred rates. neil: so from that moment on -- >> and when they have raised rates, we haven't seen the frightened, fearful 15% correction this the past, and i think the gentleman right here is absolutely right. the problem is we don't have blue collar wages going up. we don't have the capital expenditures in terms of investment by companies in a ricing power environment where rates -- pricing power environment where rate ares are higher. watch this. u.s. household median wages are below what they were -- neil: that's right. >> -- below what they were in 1987. we have economic growth at half

the rate of growth which -- neil: it is a mess. larry, let me ask you on this, do you think that if we had to get back to that norm that lizzie pointed out, let's see the 3, 4 even 5% on fed funds, we're at 0. to get to that would be multiple meeting increases. that would go on, conceivably, for years if you were to move conservatively, a quarter, even a half point at a time. >> right. neil: do you think that's where we're going back, to those levels to get to what is a rational level for interest rates? >> well, i think, you know, the goal here seems to be to move towards normalization, whatever that might be, and move away from emergency levels. you know, i've been out talking to a lot of business owners. i was talking to a cfo this morning, and i said if the fed raises rates by quarter of a person, you have a business that's sensitive to credit interest rates, what happens to bids and your financing cost? he said, no effect. would they want to see higher

rates? no, of course, they like the easy money. stock buybacks benefit from low rates, but clearly the direction seems to be that push and pull. we all know that the wage gap has never been greater, and to fix that wage gap they've got to change the policies. >> yeah. >> and this is the first step towards those policies. neil: all right. >> if we can't handle a quarter of a percent, we got big problems out there. >> right. >> let's start by taking action. neil: we shall see. guys, thank you both. >> sure. neil: the latest view from government primary viewers is they're split down the middle, 12 think that the fed will not hike, 10 think that they will. it goes down to 45-35 who think that the fed doesn't move. so there you go. you've got your clarity. [laughter] all on basic cable. all right, maria bartiromo, lou dobbs, stuart varney. our avengers team is next to guide you to what is next. i will play the role of the hulk. ♪

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. neil: welcome, everybody. this is your "avengers" financial team. take that from you so-called finance networks. we are focusing on something we will get confirmation in about an hour, where the federal reserve for the first part of almost a decade now hikes interest rates. whatever the fed does, gets a great deal of attention, because it hasn't done that since 2006. now that hike, we got up to 5.25% was followed by 10 consecutive meetings where they ratcheted the rates down to the present0. i have maria bartiromo, stuart

varney and last but not least lou dobbs with whom i begin. >> excellent. neil: if you wait that long, is there hell to pay? >> i think there would be. fact is there was hell to pay because they had raised rates right into the teeth of the subprime crisis, and then had to back out. neil: the hike was one of the early triggers. >> i think it certainly contributed. no question about it. but it is also a bright, stark reminder that the prescience of the federal reserve is somewhat limited on more than occasionals. this is -- this hike today that's anticipated that is expected. neil: do you anticipate it? >> do i? neil: i frankly am in the camp that says they've got to be out of their minds because there are so many underlying cross currents. i understand why they would if they do. i also truly believe that this

is not a -- it's nothing but a close call for the fed, and i think that all of the empirical evidence suggests hold because there's nothing to be gained by acting today rather than in october when next they meet or december, when they have a far more information. for example, we're expecting earnings to be lower this quarter. what is the impact? neil: stuart if you could keep it down. do you share that view that the better part of that might be to wait? >> i think we're in a hell of a mess, quite frankly. boxed into a corner, printing money up the wazzu for year after year after year, 0% interest rates year after year after year. is there enough growth in the american economy to merit a rise in interest rates? is there enough inflation to merit a rise in interest rates? how about the rest of the world? is it growing fast and needs to be clamped down on. how about inflation around the world? is it there?

do we need to clamp down on it? of course not. i know they're in a hell of a mess and they're not transparent. neil: well, they created this crisis, then, right? they brought us down 0% to get the rates obscenely low, fueled it with the billions they were throwing at it each month, so the market and everyone else is used to this. >> they sure have, neil. and the issue is they've already pushed themselves into a corner. you say is there back up against the wall? are we already in a bad position? yes, look where we are. this is going to be a sloppy end. most people will tell you they should have raised interest rates about a year ago. nine straight months of declines in factory orders, earnings in the second quarter up .04%. no growth. they're expected to be down in the next quarter. so we are already seeing the impact of bad policies in the u.s. leading to sluggishness economically here, a problem with the international economies, can the u.s. sustain growth when all of our trading partners are slowing?

canada in recession, australia close to recession. we know what's happening in europe. china is china. emerging markets are in a funk. we've already seen the fed push itself into a bad corner. i don't think we're ready for an interest rate hike, i agree with stuart and lou, but the fact is they've got to get away from zero. and i don't think a quarter point would do all that much damage. neil: isn't the fear it starts with a quarter point and you ratchet up. >> shouldn't discount a 12 1/2 and an eighth either. neil: right. >> if you get very fancy. i don't understand where this conventional wisdom has been built to such a fervor that people think we're going to be better off at a quarter of a-basis-point higher rather than quote, unquote near zero. neil: would you have brought us down to zero? >> would i have? i happen to be one of those who credits the fed for the action they took. they were put in an impossible position. i support entirely quantitative

easing. >> then. >> then. >> maybe one and two. neil: i don't know, they supported a market that was built on helium, stuart, and they got the president re-elected. >> unprecedented, a market built on helium. >> you are right about that. the federal reserve financed president obama's weak economic policies. they provided the stimulus for the economy. they provided maybe this 2% growth. they played a role in that. neil: a lot of paper wealth for americans too who spent it and lifted the gdp to where it was? >> not many americans. >> i'm implying that the federal reserve ispoliticized, they deliberately financed president obama's failure. a woman who went to berkeley comes from brooklyn and is appointed the first female chair of the federal reserve by barack obama is heavily influenced by politics. >> watch yourself on brooklyn. she comes from my neighborhood in brooklyn. neil: the question took about

four minutes to get to barack obama. touche. >> i'm losing myself. 30 seconds would have been mine. neil: i did want to get a handle on, maybe help me with, this what is a realistic levelly to return to? if we're at 0%, i heard people say 3, 3 1/2. i don't know what it is, just to get to that level would be a lot of rate hikes. >> a lot of rate hikes but over a long period of time. neil: that would be years. >> 3 1/2 to 4% for several years. we are going to be lower for longer at this point. and my two cents on qe, i think most people would agree first qe 1 worked beautifully, in the throes of recession in 2008. qe2 is argly, qe3 people do not think worked and should have stopped the quantitative easing after 2 or 3. neil: we should explain all of these, the geniuses here on the quantitative easing, forcing the rates down, it worked like a charm. now we've become spoiled, lou.

>> we, i guess it depends on the definition of we. we look at the limited -- neil: i refer to the people who do not live such a plush life as you. >> well, i'm going include those people too because, in my humble view, they're important. our middle class is important, they're not part of the investing class any longer. neil: so that group, you should keep this right where we are? >> i think we should do a lot of things for those people, and among them is get a good clear sight of what is going on with the federal reserve. one is we've got a 4 $1/2 trillion balance sheet for the fed right now. that is unsustainable. that's clear. this rate hike has nothing to do with contracting that balance sheet. it has nothing to do with responding to growth that is excessive in terms of inflation. neil: the only game in town. >> we have federal bank reserves, $3 trillion worth, we're going to add another 25

basis points to the cost of that? what are we doing here? we are still financing banks and the period of time which we're talking about a better than 4% decline in earnings for the s&p 500, we're talking about somewhere between 7 and 10% increases for the banking industry in this country. let's be very clear. the first and immediate beneficiary of this hike will be commercial banking. >> right. neil: and stuart, just to extend that out. if they draw back on this, and you can make the argument that they have kept whatever meager recovery got going, going, we have sent a signal to the world we're about to stop that, right? if not now, soon. what's the fallout? >> yes, i think the main point today is whether or not, of course, whether there is a rate hike today, but more importantly is this the start of a series of rate hikes that takes us down the road. neil: what do you think? >> i haven't a clue, neil. i haven't a clue.

i'm sorry, i'm not joking. i have not a clue. we have a cottage industry of fed watchers who will try to tell us whether or not i'm onto something that is a long-term trend. go to them, please, i flat-out don't know. >> i don't think so. neil: you don't think what? >> i don't think we're in for a long string of consistent rate hikes for the next couple of months. >> the fed watches all over that statement. every word and comma. they will do it. >> the entire industrial economy has collapsed. look at copper and iron ore and oil are. neil: do wean what janet yellen looks at? every fed chairman has his or her. >> this is the crux of the economy and i think lou is onto something huge, the $4.5 trillion balance sheet is incredibly difficult to unwind. that's the issue. how are they going to unwind that in a short-term period. it's going to take years. we're not going to see a string of rate hikes because of the

data. neil: i want to bring in former fed governor wayne angell, what are the rates holding off ironically has been the refugee crisis in europe, and europe is so tight for money and everything else, that the last thing it needs is to be at a currency disadvantage or a financial disadvantage to the united states. it's yet the latest wrinkle in this argument what the fed does or doesn't do. what do you make of that, and what do you think the fed does look at to make its decision today. >> well, i do not believe that janet yellen has the courage to do what she should do. neil: which is what? >> and to me there's no doubt but what low interest rates are handicapping a consumer sector of the economy. low interest rates aren't doing what people think low interest rates do. so i think it's time to get on with the business.

i would like to see them do a rate change that would be noticeable, and 25 basis points, where are you going to find that? 50 basis points is what they should sdposhgsthen stand back and see what happens. that would be my suggestion. neil: okay, well, i don't think they'll take it, but it's possible. what do you guys think of that? >> peter made an important point, qe ended last october, the s&p 500 is back where we were back last october. so it just underlines your point earlier that the market is fueled almost entirely by monetary policy. i don't think a quarter point does much. the markets will anticipate more. neil: jamie dimon is on the way indicating that the fed will not raise rates. the jpmorgan chase ceo. a lot of experts weighing in. >> wayne, i'm just curious, lou

dobbs, good to see you, wayne. the idea of 50 basis points here, what happened to the communication strategy for the new fed. they have not talked anything near that? have not transmitted any signal on that. and point of fact, one could argue they have been very constrained in sending any signal in the weeks leading up to this moment right now for the fed. >> well, lou, of course you're right. they haven't done that. and so i'm not anticipating they will do that. i was simply responding to the question what should they do? and they should get interest rates for consumers up enough that it pays to save. it doesn't pay to save in this environment, and consequently, the slowdown in the economy and a low commodity prices are really being adversely affected by the fed's wrong policy. neil: wayne, i'm curious, where

do you think we'd be with the economy and the stock market if not for this near decade of 0% rates? >> well, i think we would be about where we are now. i don't think that these low interest rates have meant that much. neil: you don't think they created a bubble? >> what? neil: you don't think they created any bubble? >> no, i don't think there's much bubble out there. i'm not worried about that. neil: all right. all right. wayne, i want to thank you very much. the federal reserve, many argue, boxed itself into this when maybe janet yellen said this earlier in the year, and this one is really why we're here today, with continued improvement in economic conditions, an increase in the target rate for that interest will be warranted later this year. someone interpreted that remark

as janet yellen lied in the sand. we know how lines in the sand go as barack obama when it comes to syria, they don't necessarily finish out well. it's a big issue, and for liz claman coming up with us on the floor ever the new york stock exchange right now, is the paramount issue, because the fed boxed itself into making a move some say isn't warranted, but it better do so and soon. stick around, you're watching special coverage on fox and only fox. if you go anywhere else, you are watching the equivalent of the cartoon network. [ laughter ]

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of man hours, and that's time that we can invest in our athletes and changing the world. so jill, i know the markets have taken a hit lately. mmm hmm. just wanted to touch base. we came to manage over $800 billion in assets, through face time when you really need it. it's how edward jones makes sense of investing. i've smoked a lot and quit a lot but ended up nowhere. now i use this. the nicoderm cq patch, with unique extended release technology helps prevent the urge to smoke all day. i want this time to be my last time. that's why i choose nicoderm cq. the only way to get better is to challenge yourself, and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we

can to give you the best experience possible. because we should fit into your life. not the other way around. . neil: all right, do you notice the music is picking up the tempo, the closer we get to the decision. by the end, we're going to be doing lady gaga. just to build up the drama

ahead of that. bottom line, we are waiting to see what the federal reserve does regarding interest rates. we've gotten used to this for a long, long time. many argue by hiking rates possibly setting the stage for that, if not at this meeting at the one in october or december the party and the punch bowl ending. hard to say this much is not. those in the markets who bet on this thing like the fed funds futures very arcane, suffice it to say they see it happening more likely in december than now. these guys aren't experts but liz claman knows them well. from the new york stock exchange, also with me stuart varney, lou dobbs and maria bartiromo. they tell me volume is much, much lighter than normal. obviously waiting on the fed. what are they telling you now? >> neil, i never had so many traders want to offer me food and have a chat what the fed is going to do. they've got pickles, french fries, all sense of what is going to happen.

there's a lot of high-stakes betting going on. this isn't exactly the microcosm of reflection of the retail investor watching right now. but they believe what wayne angell just articulated to you neil, that is there may be a very small interest rate tightening today and then another one in october. highly unlikely. i know that. i've been following jon hilsenrath since i was in utero, clearly everyone sighing that side it won't happen. right here they're waiting to see if she pulls the trigger or holds her fire. they agree that the picture has become a little blurred and more complicated due to the events overseas, in china where we started to see a problem with the global economy. however, going back to what wayne angell just told you, there is no way there is going to be a clear and smooth sailing picture for the global economy. there's always going to be a hot spot. at this point, many of the traders, not all but many of them, the metals traders thought there might be a very small interest rate hike from

15 basis points to 20 basis points. not a quarter of a point too aggressive. >> whoa. neil: what would do that? less than a quarter point? >> that's that's eighth. >> it combines with an october move. but she will wait to see if the economy could sustain that. neil: what do you guys think of that? >> loses credibility. neil: really? >> the fed loses credibility here? [ laughter ]. >> i think it would be further strained in credibility or lack thereof. honestly, i do not understand why there would be this passion apparent passion on the part of the fed to move here. the fomc gets a go again in october. they'll have earnings at that point. neil: isn't the argument against that one, that you wouldn't move in october because there's not a presser after that one? >> i've heard that argument -- [ laughter ] >> and i'm laughing at it.

neil: i heard it on maria's show. >> i asked jon hilsenrath about it, he said don't write off october, the important thing is to watch her signaling today. >> jon talk like the folks he covers. >> exactly. >> so long as she sets it up today. neil: so the statement gets more into it. >> she will signal if things have gotten worse internationally and likely going to happen. neil: liz, what do you make of that? a lot depends on the statement. maria will be covering that right through the end of the day here, that what she says will probably matter a lot more than normal. >> absolutely. but this will be the most watched market event they think any of us combined, i think we have two centuries of experience on the anchor desk. neil: well, a century of that is lou. right? >> absolutely. [ laughter ] >> not me and maria. we're the spring chickens here. as we look at what is going to

happen, every single word she says is going to be parsed and pulled apart. i challenge lou, though, sounds like you think they would lose credibility if they tighten rates. we have a non-emergency economy now. zero rates for non-emergencies are they not? >> zero rates are a transition from the effects of qe3 arguably 4 thrown in there. at this point, there is no, i repeat, no market force, there is no perceptible economic direction that insists upon a rate hike here of any size from an eighth to a half. why is the fed so compelled to even put this into the public dialogue here? are they trying to caution people? because the real issue for many in particular the housing market, and banking is dodd-frank, which is freezing

up credit decisions and many quarters of the marketplace. that's not going to be solved by a quarter point it's not going to be solved by 50 basis points. it's going to be solved by regulators who understand that they've got -- if they have a clear idea, a view of the economy and markets, then they should be attacking those issues that are forming head winds for the housing market. for commercial banking and particularly small banks. >> stuart, they created this. >> the only reason to raise interest rates today would be a statement of intent. enough, says janet yellen, i'm in a corner, i've got to get out. here's my declaration of intent. it may be a .15% interest rate increase. i don't know what's going to happen. but the only reason to raise rates would be a statement of intent. i'm with lou all the way. there is no other reason to raise interest rates at this point. zero. >> me, too. and the reason i think is most important with what lou just

said is dodd-frank because this regulation is dictating balance sheets. ge selling 50% of earnings? the capital is gone, you see folks like carlisle and blackstone taking lending from the banks, it's changed the landscape for financial services on top of environments where they are very hard pressed to make money because of low rates. neil: guys, thank you very much. not that far away, about 35 minutes or so, as we continue to count down with progressively more upbeat if not scary music, depending on the mood. trish regan coming up, this much we know, if the federal reserve were inclined to hike today, banks would take about two seconds to start hiking loan rates. so don't expect that to happen quite as fast when it comes to money market or cd or any of the other savings rates. for guys like stuart who are great savers, maria great savers, you're going to be

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♪ neil: all right. i want to take a peek now at a what conventional 30-year fixed-rate mortgage is going for these days. 3.89%. 15-year, 2.89% neck of the woods. very, very cheap. very, very low. it may end very soon. if federal reserve starts hiking interest rates or telegraphs that move, trish reagan is i saying many loan rates would go up. >> this is part of the dangers and part of the dilemma of course they are facing. there is a lot of different components as we all know to all of this. for example, if you actually did

have higher rates, well maybe banks would be incentivized to helped a little bit more. that actually in some ways could be a silver lining if you're in the camp that thinks they need to raise rates. but most central bankers don't think like that. they are worried making sure they keep the grease on the wheels as long as they can. neil: aren't they required to keep a lot of capital? they might hold on to that tight, that extra can capital they're getting? >> if rates go up can they make a little more on the spread? so i think that might incentivize some of them. >> there are two factors seems to me that influence bankers and one of them is, as you say it might open up lending but they would be in deep violation of dodd-frank in terms of housing loans. they would have all sorts of other problems. the tech problem here is, cost of fund index in the 11th district has been declining, declining over the past quarter

declining over the past year and, and, bank reserves held by the fed they're making money on that. so think don't have to do much here to see a tremendous benefit. neil: i was saying there stuart, if trish is right, this is where they make their money on these loans. if they have to keep more of that money aside pause every year they have to provide a little more, doesn't that put them and their consumers and perspective borrowers at a disadvantage because they will superintendent, oh, now they're more inclined to lend and they have to hang on? >> i think that is good point. if you raise rates by a mortgage point what would that do to mortgage rates? would that put 30 year fixed back to 4%. i don't think that would be a huge problem. >> not at all. >> the problem in the mortgage market, availability of loans, people qualifying for loans and people having money for down payment. neil: trish, young people like yourselves, i talk to them, they get panicky when rates going

neil, i don't want to get a mortgage rate over 4%. we are spoiled when it happens. i'm thinking to myself, telling these guys, i mortgage, we were paying that per day. so perspective everything. for a lot of younger people, those inclined to buy or borrow, they might look at this as they missed their train. >> if you will pay more for your monthly nut because mortgage rates go up, you will not be able to afford as much house. thinking that could potentially depress the housing market. but i think stuart's getting at something that i fundamentally agree with and the scary thing to me here people are not valuing things as they should. they're valuing based am i paying 3 1/2% or 4%. just valuing on monthly rate. neil: what you get used to right, maria? if you're used to obscenely low borrowing rates which these are, this is generational thing. others look at big deal, 4%, 4.25. 4 1/2%. >> i think rate of change. neil: right.

>> quarter point will not do much over the near term. over the near term i don't see a lost disruption. it is expectation of drink of increases that will have impact in your life. i think you want to focus on the energy story here because you've got a number of shale companies that are way over leveraged as rates go higher they will have to redo credit facilities. we'll see the credit facilities redone in november and we'll probably see bankruptcies in the oil sector particularly if oil prices keep going down. that will pressure already fragile economy. it is really what is on the horizon for the federal reserve. neil: trish, thank you very much. you have a special coming up 8:00 p.m. on this and so much more. as we're talking american airlines is having some technical issues that have caused all of this but all american airlines are grounded.

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doesn't always happen that way in summer of 2004. president bush at the time, had a rate hike from the federal reserve. he survived. that got reelected. but for a lot of presidents a start of a trend that doesn't look good. jimmy carter said he did not. implications for hillary clinton right now. all the candidates with charlie gasparino, joining maria bartiromo, lou dobbs, stuart varney. what do you think? >> let's not hyperventilate here those were massive interest rates. maria talking about 25 basis points. my logic says they do it. >> that is not my question. zero effect -- this will not affect hillary. what will affect hillary, in 2016, we have global issues including china slowing down which reverberates around the globe. all economies come down and we get effected. neil: that is the campaign's

biggest worry. >> wall street guys, with hillary, are slowing down. not at massive highs. we can watch underlying problems with the economy. if you do have a slow down which is, i think separate from the debate rate increases. i think they raise rates simply because if they don't it's a signal to the markets that we're in deep you know what. neil: if they don't? >> well, if they don't, what you're telling the markets is that you have big problems in the economy. >> if the fed doesn't raise rates, wall street waiting for the rate increase you as you say, investor will say, wow, u.s. economy must be a lot worse off than we thought given the federal reserve can't move even a quarter of a point. >> think about it. do we have zero interest rate economy based on numbers fed puts out? neil: lou, they don't have to. >> i don't think they have to at all. if they would because they can would create more problems for the fed than they currently have

and they're significant. they're boxed in. the suggestion this is preparatory to 2016 which they will need, quote, unquote tools in their box i think absurd. if that is persuasive to members of the federal open market committee i think we have very big problems indeed. on one hand we're talking about those who were experiencing a slowdown in business or wall street or manufacturing. we're looking at a quarter point to add to the strength of a dollar that is already slowing down exporters? >> purely based on numbers that these guys give us, i know we can debate -- >> these guys being the fed? >> okay. >> the white house and what we refer to every day i always wait for the white house numbers. >> i think they're always dubious but you know they are what they are. they those numbers we're not in zero interest rate economy. there is no rationale based on numbers put out for zero percent interest rates. >> rationaleize for me if you

will. housing, last week, housing starts slow. saw refinance slow. >> right. >> we have -- neil: still up a lot year-over-year. >> i'm sorry? neil: still up a lot year-over-year. >> yes. but the current trend is what they're working against and real ty is -- >> is 25 basis point raise going to affect housing? >> that is not the issue. we're looking at u-6, which is real interest rate as everybody knows. we're looking at same data interpreted by private firms. >> unemployment rate. >> the real unemployment rate that the bureau of labor statistics -- talking about 30 million people still -- >> i agree with you. but fur the white house and you are the fed and you believed in, if you're talking numbers all day and saying the economy is on track, they keep saying getting better and keep us at zero percent interest rates after saying we're on a path to raise

rates, you're signaling to the world this economy is about to take a huge dive. >> it may very well take a huge dive by the way. >> i don't think it's a good thing to do. not only that, the fed has to worry about bubbles in the market. there are bubbles in junk bonds. >> what if they single to go with 1/8 move, something halfway? how would we divide that out. >> funny you say that i thought about that yesterday while i was running, suppose they go up by 20 basis points or something stupid like that. neil: wait a minute. while you're running. not listening to music. thinking about the fed. >> i don't listen to music. >> you have to get out more, charlie. >> i like running without music s that a possibility? >> based on what we're hearing anything is possible today. >> we're talking about janet yellen too, not the most rational send trail banker i believe. neil: that is mean, like trump. >> what do you say that. >> no, it is not.

i don't sound like trump. neil: stuart you think donald trump impression is a good impression? >> it wasn't bad. neil: sounds like james cagney. if you -- >> i will -- i'm on with maria later. when we talk about the fed i will wear my donald trump hat. >> perfect. neil: you will be getting a call. by the way if these guys are talking we're getting a statement on american airlines on plane grounding affecting all american airlines planes everywhere. working to resolve technical issues impacting several airports as quickly as possible. we'll provide updates and more information as they became available. we apologize to our customers for the inconvenience. separately -- >> fed statement. neil: quickly getting other word out, gm will have its own press conference paying a fine to the justice department, amounts to $90 million. could be over a billion dollars. when they're scheduling it?

2:00 p.m. you know when the federal reserve announces their decision one way or the other? 2:00 p.m. are these guys brilliant or what? stick around. more after this.

we live in a world of mobile technology, but it is not the device that is mobile it is you. >> i'm liz claman live on the floor of the new york stock exchange with your fox business brief. a little bit of pickup in the buying right now of the just about 16 mings ahead of federal reserve decision.

dow jones industrials higher by 41 points. we have the zap 500 better by five. nasdaq jumping by 21 points. a couple of things we point out to you, of course the woman of the hour will be janet yellen, head of the federal reserve. yellen will be announcing on behalf of entire federal reserve whether we see interest rate hike or we stand pat on historically low rates. with that anticipation, look at some big movers here. many of them being dow components. saw united healthcare up about 2%. exxonmobil moving higher. verizon is lower on. as we await on number, don't move. you're watching fox business for the big fed announcement.

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hi my name is tom. i'm raph. my name is anne. i'm one of the real live attorneys you can talk to through legalzoom. don't let unanswered legal questions hold you up, because we're here we're here and we've got your back. legalzoom. legal help is here. neil: all right. this is an suv. and in might be janet yellen. and the significance of this, i was a little slow on the take with my producer trying to understand what is going on. if it's a motorcade, it is motorcade of one vehicle. maybe two. maybe two. but, i guess i was curious as to if the decision is at the federal reserve, which it is she has to travel somewhere else to announce it. and talk to the press. so the destination is different this time because i guess ralph, my producer there, they're doing

some construction at the fed? at one of the fed buildings. so they made their decision. it is done. has left. and she is enroute to said press conference site which is where ralph? okay. k street. somewhere on k street. >> back to a lobbiest. neil: you could argue, you could argue, maria bartiromo, she is probably one of the most important individuals on the planet. >> yeah. neil: she should have better transportation. she should have a motorcade of some substance. this looks like, you know, you're trying to access disney world. >> you bring up a good point the fact she had to move transport to another location. neil: for the presser. >> for this presser, i don't know, tells me she is expecting much bigger group, much bigger number of press. neil: i don't know that. is that true? do we have that, ralph where the presser is? >> it looked empty at first. neil: looked empty. >> it always does. neil: it always does. that's what we're waiting on.

you can cut the tension with a knife. by the way, that reminds me. it is time to take a look outside of sixth avenue. i told you how much of trading world stopped waiting for this. let's look at sixth avenue. life does go on regardless what the federal reserve is doing. people buying hot sauce. >> like new york stock exchange. neil: still buying fake gucci bag. >> is there symbolic importance to a light-colored suv. versus dark? neil: versus dark one. >> this may mean something. neil: go with -- >> analyze everything. neil: used to be indicator for alan greenspan. >> it has reach ad new low. neil: it really has. >> this is your fault. >> thank you very much. >> janet yellen one. most powerful people in the world? neil: what do you have against her. >> i don't necessarily have anything against her but -- >> necessarily? >> she is super dove. i think she should have raised rates a year ago and i think we wouldn't be having this stupid

conversation. >> she -- >> i agree with you, stuart, 100%. neil: a charge against all fed chairman. >> think about it. why is this agency playing such a central role in our lives? neil: because no one else is? >> they're unelected. almost no transparency. neil: where would we be without the fed acting? >> i agree. neil: janet yellen is where? >> should we know a little more about them? neil: she got to where the event. the decision has been made. the decision has been made. >> i think charlie makes the right point thousand, neil. the fiscal policy has been nothing. it has been nothing. and so janet yellen and the fed have become increasingly more important with this, we've been talking about tax reform for how long? and nothing out of washington. it becomes that much more important. >> do you know barack obama stimulus plan works we wouldn't talk about this right now. neil: if not for federal reserve. >> utter failure of fiscal policy under this president. neil: we would not have the conversation.

>> the stimulus plan, it worked. neil: guys, thank you, very, very much. yellen in place. everyone in place. our peter barnes in place. we're about nine minutes away finding out whether history itself will change. that is awful walter cronkite. >> walter i illiminating. neil: big fed decision coming up. we'll keep you posted. the press conference is filling up. tension. more after this. ♪ there's no one road out there. no one surface... no one speed... no one way of driving on each and every road. but there is one car that can conquer them all. the mercedes-benz c-class. five driving modes let you customize the steering shift points

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♪ neil: welcome back, everybody. i've been keeping track with my experts an friends here, charlie gasparino, maria bartiromo lou dobbs and stuart varney, on the reasons for a hike today the reasons against the hike.

just counting this up. very detailed notes as you can see. i have 14 reasons to do it today. i have 15 reasons not to do it today. i don't know what that means. but, set in other countries in sings the melt down have -- seven other countries since the melt down have attempted to raise rates technically since 2008. sweden, norway, israel australia, the european community, at least two different times. each and every time, stuart varney, they had to dial it back. they hike, they cut. >> you could say same thing today. there is no valid reason, if you look at u.s. economic growth u.s. inflation, worldwide growth, worldwide inflation, there is no valid reason to raise interest rates today. and if they did, i suspect we would be in exactly the same boat as those seven countries you mentioned. dialing it back again later. neil: that would even be more of a problem.

>> own reason to race rates is get off of zero so that the market does not see the federal reserve manipulating markets any longer. that is the point. i think you're right. the fed is in a pox. it boxed itself in. it knows probably can not raise rates given the fundamental backdrop of the economy, the global story and yet we're looking at seven, eight years, of free money and people are complaining and markets have been manipulated and just helped rich people and so for that reason alone, the federal reserve wants to get off the zero. >> would be statement of intent. if that is reason i suppose, that is reason. statement of intent. we're getting off zero. that's it. >> if you believe in numbers the numbers the government give us and they theoretically believe in them, if they don't believe in them they have bigger problems -- if they come out to say we don't believe our own numbers, that would be catastrophic for the market and economy. neil: safe to say they won't come out with a statement. >> we don't believe our numbers. >> we don't have a zero interest rate economy according to the numbers. >> are we believing the

participation rate, 38% of working american adults do not have a job or looking for a job according to participation rate. neil: among my 14 reasons to move, 5.1% unemployment which used to be considered full employment. you could make a case either way. >> are we to believe rhetoric coming from the fed, economic growth, paraphrasing somewhat, is gaining ground, gaining pace? this is what they're telling us and they will keep it at zero? seems like absurdity. i'm not saying -- neil: if they pull this off stuart, or lou, get your thoughts, they would be the first to succeed because these other countries tried and failed and had to reverse, isn't that more damaging? >> god knows those countries are perfect analog to our little economy here. i don't believe that there is any correlation between those decisionmakers or the decisions that have to be taken. whatever they decide, you know

quarter of a point, they have flatenned out, the markets flatenned out the yield curve, the fact is that the fed has converted maturity mix so you're not going to see a major impact. neil: we should say, in terms of dollar is getting weaker right now. a little bit weaker. >> that means no rate hike. neil: doesn't really mean anything but go ahead. >> you know one thing we kind of over look here, larry summers gave janet yellen some cover recently. this i think means something to her. you know, larry summers almost became the treasury, fed chairman. he was treasury secretary under bill clinton. almost became fed chairman. didn't make it for a lot of reasons but he is wellee suspected in economic circles and gave her cover saying she didn't have to raise rates. >> so did the imf and world bank. >> but when larry summers says it -- neil: under pressure you almost want to go the other way.

>> were are all these people weighing in. >> larry is fellow traveler with janet on these issues? >> close. a little more hawkish than she is. that givers her more cover not to do it. my logic says they almost got to do it. but when i heard the larry summers thing, okay this is choreographed here. >> the fact is, the fed, if it decides to raise rates and suspended relevance of reason and empirical foundations for its judgments, period. >> why? >> because it is absolutely absolutely unmotivated to raise them. >> fed information says it should raise rates. economy gaining steam and bubbles out there. >> why haven't they raised already? if everything is so great why haven't they raised? >> which metrics suggest the fed must raise rates? >> call peter barnes get the last fed statement. they're the ones who say things

are getting better. up employment is getting better. housing is picking up. neil: we're seconds away finding out whether that is it. >> i'm not saying they should raise rates. neil: we will sigh. now we know. >> no rate hike, neil. no rate hike. the fed is leaving rates short-term interest rates unchanged. the fed is saying that it wants to see further improvement in labor market consist and higher inflation before it increases rates and it is worried about foreign economic and financial markets and possible impact on the u.s. economy. so for now, no increase in rates. but it signal ad rate hike could come later this year. let me read from the statement now. quote, information received since the federal open market committee met in july suggests that economic activity is expanding at a moderate pace. household spending and business