>> yeah. i do know people who have canceled means to travel in the next couple of weeks because they just don't want to be hassled. >> it is a pain. >> we've got good news; is that correct? good news. i'm very happy to send this over to charles payne, my friend and colleague on the powerful note we've got good news. no lines. ashley: . >> you're known for your optimism. you bet be careful. you're going to ruin your representation. i am charles payne in for neil cavuto. today on cavuto coast to coast is the economy toast? that's the question. we do know the economy is growing me weakest pace in a year and while the growth is growing, how much should web worried? listen to reagan budget chief david and also former fed chief allen, their warning about what's coming. >> for the markets to conclude that everything is all better, that we're moving higher is a

huge error and where i think we're going is a recession. there will be massive panic and selling on wall street. neil: there's a recession coming? >> i would say by the end of this year or next year. >> we're running at the end of this period to the state of disaster unless we turn it around. charles: gary b smith agrees about all of these big problems. but jonathan says, hey, just chill out. be cool. and that's because it's a friday, huh, jonathan? keep optimistic theme from stuart varney going here. >> well, markets tend not to crash, charles. they tend not to collapse. all of these can a ar kassandras are warning about the collapse. and i think a lot of intervention from the federal reserve and the government is going to come home to root in the next couple of months but end in a stagflation like the

japan in the '70s or the collapse that gary is talking about. charles: you know, gary smith, we do have to separate the stock market from the economy from time to time. let's face it. we've had a flaccid recovery and the market has done very well. >> well, look, i agree with you. and jonathan says potato, i say potato. so maybe we're talking about two different things. although at this point at 10% decline in the stock market, which would obviously not be a crash, would, you know, throw the jitters into a lot of people. i look at the two parts of the economy. you've got the corporate part, and you got the personal part. let's look at the personal part. we're nearing credit card debt that's almost $1 trillion. that's the highest it's been since 2008 and remember how well that went. we know consumers aren't spending. look at macy's. look at apple. they're not out there buying. and on the corporate side, charles, we've seen the greatest decline in profits since the great depression.

corporations are not making money out there. so i'm looking around, look, i would like to be optimistic like jonathan. i don't see the bright spot. charles: well, jonathan, let me jump into it with you guys. today if the gdp report it was a tale of two entities if you will. corporate america once again not only not making money, gary b, they're not spending money, not investing money. but on the other side, 17% growth on residential. it feels like we have a housing boom. jonathan, is that sort of thing to offset the negatives? >> well, a boom is not -- a bull market is not necessarily a bubble, charles. and i think there's bullish signs all around you. i mean even look at today's -- charles: on the stock market in the economy, i think we're talking two different things to gary's point. obviously the economy, no one could argue, not even president obama that it's going gangbusters. on the other hand can the stock market rally withstand this continued weakness in the economy? >> yes, charles.

in fact, i think the market tends to lead the economy. and i tell you by the time all the economic numbers start to improve, that's when you start to be worried of the stock market. i think -- and i'll quickly say the big fear moving forward is going to be inflation. and, charles, you talked about the average joe. he and she have not seen their earnings go up. starting to see prices go up. seen medals in the first quarter and a lot of the stock commodities now. oil as well. heading to a period like the 1970s. stagflation, lower employment, higher prices overall. charles: gary, i remember the '70s. and it wasn't a fun period to live through. i know you had a few stocks that did okay. but, again, trying to separate the tune to help the audience here. how do they approach this from an investment point of view, gary? >> well, let's -- a couple of things before we get to that answer. one, the '70s stunk. i lived through it. [laughter] charles: you loved the music. >> true. you talk about the housing market, those new homes,

that's just a small percentage of the market, charles. you know that. it's existing home sales that matter more. charles: they're doing well, though, gary. >> well, it depends on the price range. yes, if you're, like, 200 to $500,000 in washington d.c. you're in great shape. if you're initials outside that, not so good. now, what should people do? i would be in foreign markets for one. because i think they're under valued, and i would also be in bonds right now. i think being totally invested in u.s. stocks is a little bit risky. charles: all right. guys, let's leave it there. i love talking to both of you. have great weekends no matter what. let's keep the optimistic theme going. speaking of optimism, guys, donald trump hoping to capitalize on this weak growth with a quick economic fix. steve moore is among the economists who said to be working with donald trump on that particular fix. steve moore, let's talk about this. the economy, we haven't had 3% growth in any given year with president obama. it looks like maybe this

current quarter could give us that. but how do we get to a sustained three to 4% growth here? what do you think donald trump will do to implement that? >> well, first of all, charles, thanks for having me. if you look at the last six months, you know what the growth rate has been? just a little over 1%. so we have downshifted in the last six months from 2 to 1. and that's pretty scary. because then you're just basically treading water. 0.8% is pitiful, it's pathetic. i think the third quarter is going to be stronger but not anywhere near where we should be four or five. how dorsal get back to 4% growth? i'll give you a one-percentage point right off the top, charles. you know what that is? you do what donald trump said yesterday. you move -- you use american energy. charles: right? >> you use our oil, gas, coal, i have a new book called fueling freedom this week. we estimate that you get $200 billion a year to the economy just by using our energy resources. charles: would that be also

the export. you're talking about exporting also; right? exporting analogous and. >> we're not there yet. but we predict within five years, again, if you have a pro drilling strategy, yeah, in five years -- imagine that, charles. that's a big deal. for the first time in over half a century. instead of buying oil and gas from, you know, opec and saudi arabia and isis and putin, we should be selling this stuff. so that's huge and i estimate you could probably get another percentage of by doing tax reform. cutting the corporate tax, maybe immediate expensing, bringing the small business tax rate down. you do that, i just took you from 2 to 4% growth. charles: are you working with donald trump? i know there are conflictive reports. do you have his ear right now? >> well, larry kudlow and i met with mr. trump about a month ago. we've been working with his policy staff. so it's been fun. now, look. like on the tax plan, he has a

tax plan, charles. he wrote that many months before we got involved, charles. what we're trying to do is tweak is a little bit. find way to refine it and improve it. when we met with him he was very open minded. by the way, these reports that he's backing off his tax plan, those are completely false. completely false. charles: one of your misgivings with donald trump and some of the others -- >> i know where you're going. charles: yeah. let's trade; right? let's talk about this. >> yeah. charles: the populous movement right now is that trade has hurt america, and it's propelled bernie sanders to almost, you know, certainly within striking distance of the democratic nomination. >> yeah. charles: and it has donald trump extraordinarily competitive in those key swing states. >> you're right. so i'm a free trader. you are a free trader. we know that free trade leads to more growth everywhere. not just the united states. but it's mutually beneficial. look, mr. trump has a point, though. and i don't -- i probably disagree with them more than i agree with me with them. but i do agree with him on this point.

the chinese, the japanese, a lot of them major trading partners in asia. they're cheating. they're not abiding by these trade agreements and trump is right that they kind of laughed at us behind our back. and i am sympathetic to the idea, charles, maybe you are. that somebody is going to sit across the table from these chinese and japanese and say, yeah, we're going to give you access to your market but you have to open access to your market, and you have to stop stealing our technology. we send these products over to china and the first thing they do is disassemble them and steal them. so i like that idea, and i think the american workers do too. charles: i think everyone does. there's no doubt we're getting the shorter end of the arrangement than we have to get. how do we make it or level that playing field beyond just having, you know, walking with the tough stick and actually using it are two different things. real quick, this week germany and germany brought back manufacturing. for the first time in over 20 years. here's the rub. it's all robots.

by the time we end up bringing some of these manufacturing jobs back, the fact of the matter, it's going to be a lot of automation. so are there other areas in which we can spark or propel this besides the old school factory jobs? >> well, actually i'm actually bullish on american manufacturing, especially if you do the energy policies that trump is talking about. if you do this, we're going to have the lowest cost electricity and energy of any place in the world. that's a huge advantage to us over especially these european countries that are using green energy that's so much more expensive. so i actually think we can great a lot of manufacturing jobs. and you're right. there is a lot of automation. that's been going on for 50 years, charles. and what happened to the wages and salaries in those jobs? they go up; right? so one other quick point. we could create, in my opinion, two or three million new jobs just in the oil and gas industry. we're talking about truckers, we're talking about pipefitters and welders, and

we're talking about construction workers and engineers. and those are high paying middle class jobs. you know, that's why when hillary said in west virginia i'm going to get rid of the coal mining jobs. that expressed an attitude that she doesn't really care about these workers. we've got to get them back in good high paying jobs. charles: i agree 1,000%. we look at the fracking miracle, what a difference in north dakota and imagine if we spread that across the country. >> you got it. charles: have a great weekend. >> you too. charles: speaking of hillary clinton, she's hoping to move past the scathing state department report. but will she actually suffer a california set back? the polls are this close. we'll be right back okay, ready?

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you so but shares are soaring had a very big earnings. and if you're a regular viewer of my show, you would be counting my cash. remember i've been recommending that stock since 2014. started at 90 bucks. we call it making money for a reason. 6:00 p.m. eastern time right here on fox business. fall out from that scathing state department report continues. hillary clinton, though, doubling down after the report declared that she broke -- that she didn't break any e-mail rules. take a listen. >> it was allowed and the rules had been clarified since i left about the practice. charles: texas republican congressman blake says denying it won't make the e-mail problems go away. representative, thanks for joining us. it's pretty interesting. she's obviously counterpunching or doing the rope-a-dope if you will. and it feels like she's getting warn down. also you have to warned by the same tone, in the court of public opinion, is this issue

resonating or fading? >> no. i think it's resonating. you're hearing time and time again about what's happening with the e-mails. not only did she violate the policy for federal records, she also jeopardized our national security by not handling classified information properly. charles: this report that came out. no doubt it was scathing. but it also felt like it tried to give her something of an out. it was a long report. 80 some odd pages. talked about other secretaries of state. and even other government officials. even though in a -- folks like the washington post, which i felt was amazing came down really hard on hillary clinton, it feels like all of her -- that they're trying to still give her some back door if you will. >> well, you read the report. they go all the way back to madeleine albright. the e-mail pen outrage within the government was much lower at that point in time. now everything is electronic. so for the past couple of secretaries of state, it's

much more critical. they talk about their view of madeleine albright. she didn't use e-mail. charles: that's a great point. not only that, though, we're talking about someone who is now running for the highest office in the land. and you've got to consider temperament, arrogance and the willingness to go against the rules. because ultimately she knew what the rules were. >> i think that's what you see with the clintons. the rules don't apply to them. i think it's almost a meme with the clintons. we're going to do it our way and convenience is more important than the government and convenience is more important than protecting classified information. and that's not what you need from a leader. you need somebody who puts america first, not their convenience. arles: i don't know if you can handicap this for us, but you've got over 100 fbi agents on the case. the hacker who actually sparked the -- who actually helped discover this, goosefer who has pled guilty.

any connection between the criminal action you think? >> you know, i would be very surprised if we don't see something else happening. the fbi despite what may be coming down from big justice, i don't think they'll stand for this cover up. i think we're going to see something happen. charles: representative, have a great weekend. really appreciate your time. >> my pleasure. charles: coming up, a new government report finding a link between cell phones and. you always knew there was a link. some are saying don't worry. we have the details for you necs

. charles: so if you're opting out of flying this memorial day weekend, well, you might be in luck. nicole petallides has some good news about gas prices. nicole. >> that's right, charles, because 89% of the travelers will actually be driving. and that in itself is a record we're looking at gasoline

prices now. last year $2.74. today? $2.32 so you do see that improvement. and that of course we've had lower oil prices, though. this year, though, we've seen them running up. let's take a look at oil right now. oil went over $50 this week right now at 49.24. but we talk about those travelers, certainly gasoline prices are better than years ago when it was above $3. and we're looking at some of the travel stocks to go along with it. trip advisor, royal caribbean and carnival cruise. you can see up arrows for all three of them. these names are to the downside year to date but the year mostly driving. you did see airlines climb 1%. and it turns out cruises, trains, and buses will see a decrees in that. have a great memorial day weekend. charles: always great when i start it off by talking to you. thanks a lot, nicole. all right. see you. hey, government study, you guys probably heard this. a link between cell phones and cancer. i know everyone at home is saying i knew it.

i knew it. ashley webster going to tell us just how worried we should be. >> this is a major u.s. study. however, don't go running panicking to the hills on this one. there are some doctors that say, look, don't put too much in this. but what they did was put 2,500 rats and myself in a underground lab for a period of two years -- [laughter] i know it sounds like a joke. and they expose them to radio frequencies of the same nature that come out of cell phones. some of these rats were exposed up to nine hours a day of radio frequency waves that you would receive. they did find that in certain cases in male rats only, we have no idea why only male rats, not female rats, that there were two tumors that were noticed. one in the brain and one in the heart. two cancerous tumors. now, is this indicative of the health risks of using a cell phone? not necessarily. there are many other studies out there that say no problems at all.

in fact, the u.s. government's official stand on it says there is the scientific weight does not indicate any, you know, added risk by using a cell phone. charles: now, there are skeptics out there that say a couple of things. a we remember back in the day when there were reports that cigarettes were healthy. you smoke a cigarette before a race or nibe out of ten doctors prefer whatever it was. >> yeah. try. they're great. charles: and we also know that a lot of these other studies -- a lot of times they're paid for by the cell phone industry. so that's -- >> true. now, this was not. this was a completely independent by the national toxicology program overseen by the institute of health. so sponsor free if you would like to say. now, the other question is what does this mean? maybe there's a change. should cell phone operators be, you know, looking at alternative ways to put out these signals that are not harmful? absolutely not. the fcc which oversees safety standards for cell phones says they've seen the report,

they've read it thoroughly. but i don't think there's anything that's going to go come out of it at this point. charles: and you also spoke with dr. siegel this morning. >> we did. he didn't put a whole lot in store of this. they just did a huge study in australia this month following the brain incidences of brain cancer since cell phones were introduced almost 30 years ago. there has not been an increase in brain cancer. charles: well, you know what's next. when we get the embedded chip. >> it's coming. charles: we're getting the embedded chip. we know it's coming. ashley webster, have a great weekend. >> yeah. you too, charles. charles: mcdonald's workers not stopping their fight for $15 an hour. and the ceo of mcdonald's responds. we're going to hear it next. there's no one road out there. no one surface... no one speed... no one way of driving on each and every road.

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>> it's cheaper to buy a $35,000 robot than it is to buy an employee who's inefficient making $15 an hour bagging french fries. it's nonsense and very destructive, it's inflationary, and it's going to cause a jaw bloss across this country that you're not going to believe. charles: that was former mcdonald's usa ceo ed warning protesters, hey, you better be careful what you wish for. mcdonald's ceo steve responded to the protesters saying i don't see it as being a risk to job elimination. ultimately we're in the

service business. we will always have an important human element to hardee's and carl's jr. ceo on whether he agrees on that. andy, it seems pretty obvious to me that mcdonald's ceo right now, it's trying to walk a thin line. and saying, listen, there will always be a huge element. we're got an replace people with robots. but at the same time admitting to automation coming. >> well, if you look at mcdonald's restaurants in france, for example, you go in a mcdonald's in paris and all you see are organized kiosks. and in europe this has already happened and happening more in the united states. there was the cbo, which you know is nonpartisan just came out with a report within the last couple of days that looks at youth employment unemployment for men 18 to 34 comparing 1980 to 2014. and it found that in 1980, one out of every ten men in that

age group was either unemployed or incarcerated. now that's one and six. with african-americans, it's one and three. and they covered the reasons. they looked at globalization, which really feeds into donald trump's message. they looked at slow economic growth, come feeds into things you and i have been talking about for five years. but they also talked about the minimum wage increasing at the state and local level combined with increases in means tested welfare benefits that encourage people not to work. now, this is the cbo. this in a republican report? charles: sure. >> and it credits part of that to the minimum wage increases and an increase in these means tested benefits that discourage work for young people. so it's a bad situation and these people really should think twice about what they're doing. there are solutions to this problem. increasing the minimum wage is not the best solution. charles: would you even go as far then to suggest maybe lowering the minimum wage particularly for younger workers. entry workers. get their foot in the door, learn about the responsibilities showing up, punching a clock achievement,

just getting your foot on the ladder of success. >> yeah. if we're going to increase the minimum wage at all, we've got to keep a lower minimum wage for entry-level employees. shouldn't be shut out of the workforce. we should also have a geographic exception because you can't have the same minimum wage in birmingham, alabama and san francisco. the unemployment rates are significantly different. the cbo came out with a report last year that said you can raise the minimum wage to $9 without much impact to jobs, and you could probably do that. but then you've got to take a look at, you know, in the high unemployment areas, how much can you increase it? and what are we doing if we're looking young americans, 16 to 24-year-olds out of the labor force? i mean that's a very, very serious problem at the moment and increasing the minimum wage is just exacerbating it. charles: yeah, there's no doubt about it. and also speaking of all of these reports that came out, few research on 18 to 34-year-olds living at home. african-americans who have

dropped out of high school or high school graduates are at the highest level. and it's almost a death spiral for life. you know, andy, i want to ask you. you're on trump's national finance committee. you just talked about the globalization aspect of it. you know, mcdonald's to your point, you talked about mcdonald's being in france. they're also going to start 400 table service in the uk. i know you want to be an expansion. you want to broaden your business outside of america. so how do you reconcile what some people feel is more of an isolationist feel of what we've heard so far? >> well, i don't really think we're talking about an isolationist feel with mr. trump. and, by the way, i'm a free trade advocate. but i don't think there's anything wrong with negotiating better deals with countries like china where they want -- they don't respect patent laws. they take technology. they don't let companies enter china unless they turn over trade secrets or confidential information. these are the kinds of things

that could be rectified if we negotiated better deals. i think there's absolutely an important aspect in that. also we're in 38 countries outside the united states. we are growing globally. and i don't see any of donald trump's policies slowing that down. i think what he's trying to do is get better deals for americans, and i think that's a very positive thing to do. charles: on the keystone pipeline, donald trump says, hey, if you're going to run this thing from canada all the way down across the entire american -- america, we should get a piece of the action. you know, this is a unique thinking no one's come up with before. but it makes a lot of sense to me. i mean maybe those are the kinds of things we need to start thinking about, no? >> they are the kinds of things we need to start thinking about. you know, i think the american people view this country like a car on a slippery road heading for a tree. and they -- you know, the first thing you want to do is hit the break. now, the road's slippery. you don't know what's going to happen. but you sure don't want to hit the tree. and i think donald trump is that break. and this country is that car

heading for a disaster if we don't make some serious changes, such as the one that you just proposed. we have been to look at these deals intelligently. we need to look at them for the benefits that americans can get from these kinds of deals and these kinds of -- you know, things like the keystone pipeline. it's a great way -- look at it like a businessman. don't look at it like a politician. look at it in a way that make surmakes sense. charles: thank you very much. keep all the commercials coming. >> good to see you. charles: a trump sanders debate. doesn't that sound salivating? both candidates say they want it. so find out why trump some say he should be careful for what he wishes for. we'll be right back

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all the information was laid out right there. i was able to see the savings that i qualified for. it makes your life so much easier when you have to purchase a car, so i've been telling everybody. usaa car buying service, powered by truecar. exclusively for usaa members. . >> i'm nicole petallides with your fox business brief. stocks are higher for the week, and we're going to take a close look here. some of the retailers that are on the move. starting off with big lots hitting a new high. the stock is up 11.25%. 49.61. the company noted that it had more shoppers in the stores. also the ninth straight quarterly gain of same store sales. take a look at dollar tree up 77 cents 89.14. we've seen these stocks hitting new highs as well. dollar tree and dollar general. another great week for a name like these. these dollar stores. that obviously does well in comparison to some of the

other names such as the big box retailers. the department stores in particular have had a hard time. there's a look at nordstrom year to date is down about 24%. and macy's, down about 9% this year. so that one evident here of the other way to the downside. right now the dow up 37. more cavuto after the break waiter. water. so why would you invest without checking brokercheck? check your broker with brokercheck. poallergies?reather. stuffy nose? can't sleep? take that. a breathe right nasal strip instantly opens your nose up to 38% more than allergy medicine alone. shut your mouth and say goodnight, mouthbreathers. breathe right.

. >> you saw the show last night, you saw what i did for you.

>> you made it possible for us to have a very interesting debate. >> that's right. >> about two guys who look at the world very, very differently. >> i would love to debate him, but i want a lot of money to be put up for charity. i think it would get very high ratings. it should be in a big arena somewhere, and we could have a lot of fun with it. charles: donald trump and bernie sanders exploring the possibility of a debate. bernie sanders asking twitter supporters to push for the debate to make it happen. you're taking a look at it right now. meanwhile trump saying he could court at least 40% of sanders backers. manning says don't be surprised if you see lots of sanders supporters vote for donald trump. i know that they both have sparked very similar -- on the earth if you will similar things with people's frustration with free trade and some of the other aspects. but 40% is a pretty high number. >> it is. and maybe a little over

ambitious. but you've heard the expression the enemy of my enemy is my friend. right now bernie sanders and donald trump are both running against hillary clinton who very easily represents the establishment. the status quo. the way things have been. even participated in the obama administration. so very easy for these guys to present themselves as the outsider candidates. the revolutionary candidates while she represents more of the same. charles: yeah, well, i think that's been a real key to both of their successes. despite the fact that sanders has been in dc for a long time. >> exactly. charles: that independent who really -- he caucused with the democrats and now going to change things around. what is the likelihood you think of a debate? because i think it would be amazing. they probably get in the biggest stadium in this country and fill it up. >> right. and i think the biggest loser in a trump sanders debate is hillary clinton. charles: right. >> because she has refused to debate publicly and they could both beat up on her in some kind of debate like that. but we've got very distinct candidates here. sanders and trump not only have very different explanations for what's wrong with the country and different

vision for the country, but sanders has been higher on honesty, likability, and trustworthiness. and trump has been all around. and of course when it comes to trump sanders, you've got sanders who's very ideological candidate. calls himself a democratic socialist. trump is not an ideological candidate. been very inconsistent in whether or not he wants to limit or grow government depending on the issue in the day. so that might pose a problem for those of us who want to see a moral defense of free market capitalism. charles: on that note, and, again, i find it really interesting that the polls have shown that donald trump would get a significant amount of bernie sanders voters. and yet these are people who come out of these bernie sanders events cheering for more government, larger government, less accountability. those are the exact opposite, the antithesis if you will of what a true capitalist successful businessman like donald trump has done all of his life. and tells the american people he's going to bring to the whole country. >> right. and some ways donald trump

represents some of the worst things that the left has had to say about capitalists and capitalism. so that's my concern when it comes to this debate between sanders and trump. i don't really believe it would represent a battle of ideas between socialism and capitalism. but rather with sort of represent some difference between the candidates when it comes to their style, their personality, their vision for the future. and certainly would represent an opportunity to attack hillary clinton and the way things have been going in our country for too long. charles: and this most recent poll is a public policy poll. hillary clinton has a 2 percentage point over bernie sanders in california. in my mind if this did happen before june 7th, this would take him over the top. now, having said that if it doesn't happen, and he loses california, how does she woo him? how did she get him to ask his supporters to support her? >> well, hillary clinton has been stepping very, you know, an inch at a time further to the left in terms of her policy positions in this election cycle. that's something that i think she should continue to do if she wants to gain the support of bernie sanders supporters.

and it would also create more contrast between herself and donald trump. but on the other hand, hillary clinton faces some of the same problems that trump faces in the general election that likability factor and the trustworthiness factor where sanders has been the candidate running ahead of both of them in those categories. charles: yeah, has to find a way to incorporate the old centric dude in there. i don't know how, maybe before june 7th. have a great weekend. >> thank you you too. charles: all right. hey, worried about zika? well, i hate to tell you but scientists are also warning about the deadly new super bug, and it's just now arriving in the united states. v

charles: new exclusive satellite imagery of fox news revealing china deploying that drone to the contested islands in the south china sea. something the military is watching very closely and of course we're going to keep you posted. president obama visiting hiroshima today. offering sympathy for bombing victims. spokesman rick granel on the economic fallout of a world without nukes. rick, how likely is that going to happen and what will it mean? >> well, look, first of all, it's a liberal fantasy to think that we're ever going to have a world without nuclear weapons. this is something that the left pushes. that the obama administration has really looked at our national security and put politics first. this idea that somehow we're going to have a nuclear free world may do really well at

the democratic convention with partisans. but practically speaking, it's just never going to work nor should it work. having a deterrent like nuclear weapon is critical in maintaining peace and security. when we look at the security council inside the un and when they consider big pieces of foreign policy crisis, they always talk about the strength and sending in peace keepers with guns. there is a peace through strength strategy that time and time again every world leader understands, except for president obama. charles: what about the the notion of reducing the stockpiles? this is something that's been done before or is that a by gone approach considering all the bad actors who have nukes or trying to get them? >> well, look, it's a very good question and there's a whole industry about arms

control and reducing the level of, you know, nukes that we have in our arsenal. i don't think it's a bad idea to have a negotiation process to reduce the arsenal. the fact is if they sit there for too long, they become old anyway. so i believe that we should have a negotiation process. what happened in this administration, though, with president obama when he negotiated with the russians to reduce, earlier negotiated from a position of weakness. we reduced a whole bunch of our capability. but the russians didn't do the same. so they were -- they were throwing on the table programs that they had already committed to reducing or were no longer relevant. . charles: right. >> so we didn't have a very good team led by wendy sherman when we do these negotiations. i think when donald trump talks about being a better negotiator, he's going to be able to send people in like john bolton.

people who know how to negotiate with the other side. not just give up our side and claim victory. charles: real quick you brought up donald trump and of course during his tour in japan, president obama saying that donald trump is raddling world leaders. i want to take a quick listen at donald trump's reply and then get your thoughts on it. >> when you raddle someone, that's good. because many of the worlds, as you know many of the countries in our world of beautiful world have been absolutely abusing us and taking advantage of us. so if they're raddled in a friendly way, we're going to have great relationships with these countries. but if they're rattled in a friendly way, that's a good thing not a bad thing. charles: i just need a quick response from you. what are your thoughts? >> yes. absolutely true. i've worked in multilateral diplomacy for a long time. you have to keep your enemies, you know, in the dark so to speak. being rattled is good. they're not rattled by hillary clinton because they've already purchased her. they already bought her. they know exactly where she's

going. so i think being rattled is a very good thing when you look at china, russia, cuba, iran, they need to be rattled. charles: rick, have a great weekend, buddy. >> you too. charles: hey, and this news just emerging. a new deadly super bug is in the united states doctor is here with the details. we talked about the zika virus. we've heard about it. we've seen the devastation, particularly in brazil and other places. it's here? >> the zika virus? . charles: yeah. >> the zika virus has been here, there are over 500 places that are affecting people. charles: i thought it was in puerto rico. but it's on mainland, america? >> right. it's in outland america. but in the u.s. it is here. most of them are travel related and being transmitted sexually. but the center for disease control have gotten ahead of this. they've issued guidelines that we need to be watching and aware of. charles: but here's the problem, though. i know washington d.c. they're talking about raising a lot of money. i've heard anywhere from 1 to $2 billion. what would that be used for?

because on one hand the c.d.c. is ahead of the game but by the same token, it feels like emergency in dc. should web thinking about maybe spending a lot of money on this thing? >> when it comes to disease control, this does not come for free, we have to be able to create vaccines. we have to be able to understand how exactly zika is affecting our the children, there's a lot that needs to be known and we're not going to be able to get there with that capital investment. charles: the mosquito that breeds, the breeder mosquito that carries this. from what i've read and of course a lot of this is on going and revolving in front of our eyes. starts to come up through the united states warmer and warmer, maybe even affecting different species of mosquitoes. it sounds like it could be a absolute nightmare. >> well, when it first started hitting, it was in the wintertime. going to see a increase and that's why we have to get ahead of this. we have to understand how

exactly this works. we need to find vaccines for this and follow the center of prevention disease control guidelines. charles: my daughter-in-law is pregnant and she's going to be afraid to get out. you're a doctor will happen. will you tell me women in new york city in july that it's okay to walk around? >> risk for women is low in the country at this time. but we always want to take precautions. we want to protect against mosquitoes with deep repellent. we want to wear protective clothing. we want to do our part to make sure we protect ourselves. charles: earlier i spoke with ashley webster. apparently there's a new government study out saying that, yeah, cell phones can cause cancer. certainly they can cause cancer in rats. now, admittedly with high doses. this is something that sort of folklore if you will but how can there be this much radiation coming out of my thing into my brain and ultimately harm me? >> well, as a doctor, i love the fact that we're talking about this and looking at this. billions of people use cell

phones and radiation is a concern for the cause of cancer but we do not know at this time. and although the fact that cell phone usage has increased, the risk of brain cancer cases have actually decreased. we do not know. it's going to take several more definitive studies. but we need to keep watching and keep a watchful eye. charles: but the antianecdotal of this thing is we've used this for several years and we haven't seen an outbreak. so don't be worried. >> i can't say don't be worried. charles: me and ashley were saying we remember the cigarette thing. hey, smoke a cigarette before you run a relay race or my doctor smokes cigarettes. but at what period do we say okay breathe a sigh of relief? five years maybe? >> it's going to take decades. cancer doesn't happen overnight. we're using cell phones more. it's hardly a time that we can walk across the street and not see somebody using a cell phone. and there's a concern when it comes to our safety. our can ids are using it. what you know i'm saying? if you have a cell phone, try

to keep it away from your ear and keep it off of your bed. charles: and i know people who use it more than rats nine hours a day. >> and rats aren't humans and not all humans are rats. charles: i'll try to remember that. well, we're moments away from a donald trump, in any event, freedom of the presfresno, california. we see images of people gathering around. we're going to go out there and check out the scene. next

:

. >> welcome back to cavuto "coast-to-coast." donald trump is talking and taking on the left coast. look at that crowd, that is fresno, california, his event is about to kick off any moment now, but it's trump, he's not

looking to the june 7th primary. starting to focus and talk exclusively about november and focused how to fix the economy. last hour steve moore confirming he is helping donald trump to come up with a fix. >> i met with mr. trump about a month ago, we've been working with his policy staff, and so it's been fun. now, look, like on the tax plan, he has a tax plan, charles. he wrote that many months before we got involved. we're trying to tweek it a little bit. these reports he's backing off from the tax plan, those are completely false. >> charlie gasparino first to report trump is, quote, more reaganesque. he is along with liz macdonald and david asman. steve moore, we get back to the trade issue because that's where the classic economists like the steve moores and the larry cut lows have had issues with donald trump. sounds like he's making inroads even though he says he likes the idea of pushing tougher

deals. >> i'm sorry i stepped on it there. i said how does he know? no one really knows what's going inside. >> he can only say what he's had from the conversations. he feels confident in conversations with donald trump's people and trump that he's starting to come around. >> he said more than that. he said what the reports that donald has changed his plans are completely false. i will say this. we reported yesterday about how art laffer is behind the scenes heavily involved with trump. these are all the supply side gang. the guys that david knows. was part of that whole crew. >> we should explain, i know them because i used to work at the "wall street journal" edit page. and i keep pushing them, are you sure donald is behind it? >> what they tell me every time they talk about taxes and the notion of supply side economics, where you lower interest rates for the revenues. it worked in the 80s. >> more than the 80s.

>> it's hard to believe he's really committed to anything. >> i just want to refresh the audience, we conflated two things, i was talking about the trade part which is where people have problems. what steve moore said is that donald trump is committed to his tax plan, his lower tax. that's what he was talking about. >> i had steve moore on yesterday and asked him specifically about trade. the one thing the supply siders agree on, you got to have free trade. have you convinced donald trump about that. the idiot idea of forcing apple to manufacture iphones in the united states, which would double the cost, everybody would stop buying iphones and buy samsungs, can you dissuade him of that idea and steve couldn't give me a solid answer. >> neither does art laffer. >> is it your sense, then, the policy compass can be easily swayed and idiosyncratic. >> what do you say? >> there have been 180's. i am not easily suede.

here's the thing. there is a populist movement, and it bothers me when you talk to longtime republicans and you say, to your point, an apple phone would have to cost more, people are telling me, apple makes fewer profits. that's always been a democrat, liberal ideology and i'm hearing people who are life long conservatives okay with apple not having -- >> i haven't heard that one. >> yeah, you have to believe. >> what percent of apple's products come from the iphones? overwhelming majority of profits come from iphones. if iphones doubled in cost, which would happen if they were forced to manufacture them here, everybody would buy these, samsung instead of apple. samsung is not an american company. >> let's be clear here. i've known donald for a long time. i personally like donald a lot but his economic policies are completely incoherent. he says on one hand he wants to

lower debt payments that people who hold our debt, the foreign countries, by forcing them to accept better deals and realizes that would be tantamount to default. he does a 180 on that. he is willing to negotiate rates on tax plan, which we understand that. you don't negotiate, if he wins he's going to have a republican congress, he won't have to negotiate, and then this whole thing about trade, which is incomprehensible we're going to engage in massive trade wars around the world, and that's going to help the american worker. i'm telling you that somebody, and we should just call it as it is. >> charlie, he knows business, and he was in a business, very highly regulated in building things, building businesses. >> not the same as this. >> he has 22,000 employees, the only candidate running, the only candidate running who's employed people, created jobs. >> great, great. >> and he knows how to deal with regulations, he knows how to deal with taxes -- let me finish what i'm saying, charlie! he knows how to deal with the

tax man and knows the absurdity of our tax laws. >> david? >> so he will listen, i'm persuaded he will listen to art laffer and steve moore and others talk about supply side taxes. on trade you are right. >> david, ronald reagan created many, many, many more jobs than donald trump ever has or ever will. that's all i'm going to tell you. >> ronald reagan -- >> what do you mean? >> i'm talking about the 22,000 jobs. we're talking -- let me bring emac in for a minute. here's the thing, sometimes people campaign different than they govern. and i think to david asman's point, donald trump is meeting with the right people. he is listening to the right people, and at the end of the day, you can't do some of these things anyway. some of them are not achievable and we've been hearing this a little bit on a variety of donald trump, the foundation of his campaign, whether it's a complete ban of all muslims temporarily. >> we have to do a broad zoom

30,000 perspective. we had a bad read on gdp again. 0.8%? it's lower than europe. europe is growing faster than the u.s. in the last two quarters. so hillary clinton, we know what her policies are and bill clinton would have rejected hillary clinton's big government. he was the era of less government. so that's the issue. the job creation policy, do you prefer donald trump or hillary clinton. >> what you guys are missing, and i'm going to throw it out there again, perhaps the american public and it kind of scares me to be frank with you, is okay with the government in a patriotic move taking a little bit off the corporate income statement and dispersing it to the american public in the form of jobs. >> i will say two things, number one, point out president obama ran on agenda he achieved. there are no surprises what president obama gave us. ronald reagan did the same. bill clinton did the same for the democrats. >> said he was going to cut the deficit. he did campaign on that.

>> he's checked off a few things in his pocket. >> he didn't lie to us. >> so you're calling donald, you're saying donald is lying. >> he's going to have to lie to us for it to make sense. >> he can't evolve on the issues? he can't say -- >> no other politician has ever lied on the campaign trail? bottom line is who do you trust to create jobs more? hillary clinton? does she know more about job creation than donald trump? absolutely not. she employees 486 people at the clinton foundation and most of those people rely on crony capitalists to chip in the money for that. is that the private sector? that's as close as she comes to creating jobs. donald trump has at least 22,000 jobs. >> bill clinton created a lot more jobs than donald trump. >> thanks to the dot com boom. >> and embracing supply. >> bill clinton moved to the middle and company, but by the

same token, i think a president doesn't create the jobs, they create the back drop. >> create the atmosphere. >> want to bring up the worst-case scenario of all this. the downslide in venezuela. the government is the best example in the world right now. the highest inflation in the world, the highest crime rates in the world. liz, you uncovered dangerous video showing how dangerous socialism is. that is new video. >> yes, this is new video they got. this on the heels of the video yesterday people in venezuela eating garbage. this is people raiding grocery truck that was loaded with rice. so what's happening, this is in valencia, about an hour and a half drive to the southwest of caracas. these are port cities where this is happening. the unrest can be more widespread inland. so what we're talking about here is venezuela, the government here, president

madura hand picked chavez desperately trying to avoid default. and draining gold reserves. it was just standing in line waiting for food stories. now it's a looting story. watch this. bernie sanders has been asked by univision what do you think of what's going on in venezuela and the collapse there? bernie sanders would not answer it. he said i want to focus on my campaign. that shows you the cynicism and the dishonesty when it a won't acknowledge the collapse in the socialist model in venezuela. >> i've got a little show-and-tell. this is the constitution of venezuela signed by hugo chavez. get a close-up of that. when i interviewed him ten years ago he gave me. this the fact is that venezuela. >> are all the pages blank? [laughter] >> no, actually, the problem with laws is you have too many of them. they have hundreds and hundreds of amendments to the constitution, and we're in danger of doing the same thing in the united states already. even without bernie sanders.

we don't have too few laws, we have too many laws, that's what makes it screwed up down there and screwed up here. >> you can't fire people. >> and many of the amendments contradict each other. so if you follow one amendment -- you are violating another. >> you know south america better than almost anyone i know. we say that the worst-case scenario of socialism is the margar margaret thatcher thing, you run out of other people's money. when the civilian unrest comes, they hike the pave the army officers there a few times on chavez and maduro, i'm worried we could see a full-scale civil war, civil unrest. >> you can, the great thing about elizabeth's reporting on this is she has shown us stuff when it reaches the level where persuasion alone doesn't work, you begin to see the violence, you begin to see the force of a dictatorship. that's what we're seeing. >> to david's point, argentina

defaulted at half the debt load that venezuela is facing now, about half. that happened in 2001. people were killed, two dozen people were killed in unrest in argentina, fearing a military crackdown and news blackout in venezuela. that's scary. >> when you take the sound off, i'm telling you these protests in venezuela remind me of the leftist protests that go on in places like ferguson, the leftist protests that go on at bernie sanders rallies. >> these are people who are poor and starving. i wouldn't say they're leftist. opposition to the socialist regime in venezuela. >> what we're seeing in this country is a degree of civil unrest that is mimicked across the world. i've never seen that. this is what helps donald trump make his case. a strong man comes in and restores order. >> let's leave it there. great stuff, appreciate it. we're awaiting -- speaking of donald trump -- to hear from

him and fed chief janet yellen. she could signal that the fed will hike rates, that's been the buzz, all of her fellow fed members said as much and alan greenspan signaling to neil cavuto who he's supporting or more importantly who he's not supporting after this.

. charles: janet yellen addressing the economy, and we'll tell you if she says anything that signals a rate hike. in the meantime, trump's event is starting very soon. while he's got the gop nomination in the bag, he's facing resistance on the right. mitt romney telling the "wall street journal" he's not voting

for trump or clinton saying -- and he's not alone, former fed chief alan greenspan also not committing. >> i happen to be a fan of paul ryan, who i think is a very sensible, political, economic type, and -- >> he's not a fan of donald trump. you know he's not committed to donald trump yet. are you surprised? >> i'm not surprised at all. >> are you a fan of donald trump? >> not exactly. >> so if it's between he and hillary clinton, where would you go? >> you're giving me a very tough choice, and i think i'll -- at this stage, i'll not comment. charles: two republican

strategists says a lot of voters are torn between trump and clinton and no one. sarah, we have seen and really to be quite frank, a swift period of time, a whole lot of so-called never trumpers or doubtful trumpers jump on board but there are the holdouts, downing the mitt romney's of the world will come on board the trump train? >> you know, i think they would be wise to. in terms of speaker ryan, he has a district, a very small district that voted him into office, correct? but you have 11 million voters who said trump's our guy when it comes to the economy. trump's entire message is america first, focus on america's overall economic health, the prosperity of this country. over time, they have realize you have 11 million voters saying trump's our guy. charles: to your point and paul ryan's district, the most recent poll has him ahead crazy 73%.

astronomical number. i know people say, remember eric cantor had a 34-point lead as well. >> right. my parents' district. charles: if he's not in danger of losing his district and being removed to washington, d.c., what do you think, what do you think would persuade him? i feel like they're getting closer and closer, do you think he will get concessions from donald trump? >> i'm not sure about concessions, but i think after the republican convention when donald trump is the nominee, and you realize that he actually could win this election, if you're speaker of the house, don't you want to work with the president? he's going to have a huge agenda. so i would think that you're going -- i don't think that you want donald trump to be your enemy. i would think you would come around. charles: no doubt about that, by the same token, a president trump would need paul ryan to get certain things through d.c. we remember the first year where barack obama, they thought they had it all and

nancy pelosi and harry reid, they shook barack obama down a few times and no one foresaw kennedy passing away, they blew in the opportunity, and having said that, what about the theory that paul ryan wants to run at some point and donald trump does not win in november, he'll run on a counterplatform saying that didn't work, i'm your guy? >> that's always possible, right now it's working for trump. this election defies everything that's been normal. so perhaps speaker ryan setting himself up to run, i don't think you hurt yourself when you have the party backing the nominee. i think we're going to have to wait and see how this shakes down. charles: it is nuts that the speaker of the house is not backing or hasn't jumped on board. even if the distinctions have been made between the sort of full throated endorsements and supporting, and a lot of folks said okay, i support the

nominee, which is fine, i'm sure donald trump doesn't care about that. ultimately if paul ryan comes on board, do we need to hear endorsing donald trump as opposed to supporting donald trump? >> endorsements haven't mattered this whole cycle. i don't think it matters. donald trump is appealing to new republican voters, appealing to voters never affiliated as republicans, so sadly i don't think endorsements matter anymore. charles: sarah, thank you very much. appreciate it. >> thank you, thank you. charles: janet yellen talking but is the fed, are the fed, will the fed hike rates? this is what they're worried about and hoping to get clues what the fed will do. we'll see. after this. the e-class has 11 intelligent driver-assist systems.

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holiday weekend, market watchers haven't fastened seat belts for vacation getaway as janet yellen has began speaking, she's been up there five or six minutes in boston, massachusetts. investors waiting to see if the chair of the federal reserve will give any hints whether she feels a rate hike in june is likely. yellen is at harvard university for an event with a who's who of economists. this is a different kind of format that we are used to seeing yellen speak at. in fact, she's receiving an award there today. she will speak for about 30 minutes or so with the revered question and answer with the discussion of yellen's life. we are told mancue will put forth questions regarding current monetary policy. we'll have to wait and see if yellen offers headline-type guidance, keep in mind, this isn't a prepared speech.

we haven't been given scripted remarks ahead of time, detailing what yellen will say. a third of analysts believe a rate hike is on the table for next month. yellen will give a more formal speech in philadelphia on june 6th. the fomc meets the following week after that when a rate hike is possible. caution could creep in among voting members. a week after that is the referendum vote whether britain will leave the european union. this could set the table for a busy month ahead and we are monitoring it. charles? . charles: so many fed officials have signaled, to your point, because you've got one-third of wall street saying this. a month ago it was 1% of wall street. even the idea june would be in place spooked the market, but we're getting data in saying it might be okay. do you think the key will be next friday the jobs report, maybe we can find out would be that the key for them moving in june or july? >> reporter: and i left that off.

the jobs report next friday. the gdp number came in today slightly ahead but less than 1%, at .8%. the white house weighing in on that, several areas of weakness. the dow basically at neutral. several different factors between here and there, it keeps creeping up, investor sentiment as the days go on. what yellen may or may not say here, whether she breaches the topic will play into that. charles: blake burman, appreciate it. more trouble for the energy industry, hercules filing for bankruptcy again. oil companies are slumping with the cost of oil, phil flynn says we could see a big jump in oil prices. phil, we've already seen the february 11th bottom on oil, sort of moderated a little bit, now starting to climb with the drawdowns, but breaking out through 50. how far could it go? >> i think we could see 60, charles. and the hercules story is one

reason why i think that's going to happen. here's a company, a rig company out in front of the drop in oil. they filed bankruptcy early, they went to the creditors and say let's cut a deal, we know oil prices are going to come back. they didn't come back fast enough for hercules, and they're out of business, selling their assets. that story is paid out of the production side throughout the country, charles. we're seeing production destruction that we're going to pay the price for years down the road. and if you look in the short-term right now. u.s. rig counts continue to fall. we just got a report from baker hughes that showed that oil rigs fell to the lowest level since october of 2009. fell another 2. and everybody thought as soon as we saw a tick of $50 a barrel, the rigs would magically appear, doesn't look like that's going to happen. right now, there is a lot of risk to the upside. and one of the things we don't talk about that we haven't talked about for a long time is geopolitical risk because we had so much oil. we didn't care.

the geopolitical risk is starting to ramp up. we lost almost 4 million barrels of oil a day currently due to outages around the globe, this comes at a time when low prices stimulate demand. we have record demand in china, record demand in india and record gasoline demand in the united states this summer. so we're seeing the situation where the low prices are really hurting production in the long run, but demand is coming up. we're planting the seeds for a rally in the future. >> the analysts are saying demand wasn't there, we've seen massive drawdowns in the last few weeks which have gotten us to this point. >> sure have. charles: is that sustainable? >> i think it is. unless have you some type of financial crisis, you know, one of the concerns about me is if you remember greece, that cascaded events hurt

china, hurt demand and set back the energy prices. but i think other than that, if you looked at demand trajectory and the production trajectory, they're going in different directions and starting to cross. when that happens, prices almost always go higher. charles: phil flynn, you are one of the best when it comes to this stuff, looks like it's on the verge of breaking out right now. have a great weekend, buddy. >> you, too, pal. charles: keeping an eye on janet yellen for possible clues that whether or not the fed will hike in june or july because wall street has been bracing for it, but the last few days looks like it wants it? we'll talk about more when we come back. you do all this research on a perfect car, then smash it into a tree. your insurance company raises your rates... maybe you should've done more research on them. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. liberty mutual insurance.

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. >> the big news of the day is president obama's visit to hiroshima. take my poll. is he there to mourn the dead or is this an apology tour? we'll talk about it tonight on "making money." we are keeping an eye on janet yellen. will she led on and give clues about a rate hike in june or july? earnings season wrapping up, overall profits for the s&p 500 companies declining more sharply than any quarter since 2009. should we be worried? jack, you are concerned about this market, aren't you? >> well, i'm concerned and i

would be increasingly concerned if the u.s. dollar was to power ahead based on the fed tightening too aggressively, but you're right, earnings, you know, the rear view look, earnings are bad, i think they might turn a little less bad going forward. charles: i think without a doubt the comparisons are easier, what do you make of the fed signaling so much. these aren't just hawks, variety of fed officials signaling a rate hike trying justify a june rate hike. where is that coming from? >> good point to. me the best way to get information from the fed is when you see a dove sound hawkish or a hawk sound dovish. clearly, they want to build up market expectations to that, don't forget about us, we can tighten. you know, i guess i would make the argument if the fed is tightening because the underlying economy is doing okay, that's not necessarily a bad environment for risk assets.

we've seen prior to 2008 when the fed was tightening to keep going slow, equities did well. i suspect we could see the same environment now, but again, the key is the fed's got to go slow. the u.s. dollar can't power ahead. charles: jack, that is the epiphany wall street had with the economic data, particularly housing. this is the best week in a long time. the market's up and we still believe that the notion that the fed is going hike rates june and july, that's increasing. >> yeah, you're right. but again, the point about housing is very, very important because, you know, in terms of gdp, it's not a big part of the economy, but punches above its weight. it flows through to consumer confidence. we need to see the consumer remain tough. we need to see retail sales consumption stay pretty robust. but i think we're in a world, i'm not going to get too excited about the return potential, i don't want to get

too positive or too negative as well. charles: we've had a good run in the stock market rally since the lows of march of 2009 but it stalled and trading in a range, range bound, there's a few winners but losers are severely punished in my mind. what are you doing in this? you're not the average investor, but what are you guys doing? >> we've got our portfolios. i'm on the global bond side. it's pushing us towards yield because i think the way i view things that we're not going to be in a risk-off environment. it's risk neutral or risk seeking, capital is going to gravitate towards risk assets. i think equities are going to do okay. i think as you pointed out it's been a powerful bull market. we've consolidated but to me we're consolidating setting the stage for another push higher. getting the timing right is certainly challenging, but take a little longer term

perspective in there. i wouldn't trade the market. charles: quick, jack, we got word and janet yellen saying at this moment that a rate hike would be appropriate, so everyone on the same page. the dow is up around 31 points when we started the interview. up 11 right now. not panicking. and back to your point. if they can justify this not as contests of wills between the fed and wall street and which one is a tail and which is the dog, maybe wall street can expect it. do we have to wait for the jobs report to understand whether or not the fed is making a mistake here? >> well, i think the fact that she actually mentioned what you just said, i think is very important because the risk with the fed is they don't want to surprise the markets. they're being very transparent. the fact that you have dudley and yellen on the same page in terms of bracing the markets for a rate hike. unless it's a really disappointing employment

report, i would suspect that it looks like they want to move. i'm not still sure if it's a june or july issue you've got to deal with as well. >> then again, it would have to be june or july, i think they would be loathe to do it on the eve of a presidential election. do they have to make it clear, articulate to wall street? because we know wall street is going to whine, complain, sell, do whatever they can to persuade the fed to keep the same articulated. do they have to be one and done? >> that's a good thing, what happened last december when they tightened. they didn't sound dovish after that. they did the trial balloon of tightening four times last year. they have to send a messages are we have to go slow, we don't see inflation pressures. if they don't, the market tends to get ahead of the fed and they're going to price in aggressive cycle.

the fed is going to send a message they're going to go slow. risk assets, equity markets will be okay. charles: jack, thank you very much. appreciate your expertise on this. want to go to blake burman. he is at this event, this is breaking news right now. blake, janet yellen is on board, huh? >> reporter: yes, so she is in boston, massachusetts, harvard university and a question-and-answer session, and didn't necessarily take june or july off the table in terms of a rate hike, saying it would be coming she feels appropriate in the coming months. she's in the discussion with greg mancue, harvard professor, and he joked with her, do you want to move markets? everybody has the three day vacation lined up. anything you want to say about the markets? and she said, and not necessarily quoting here, she said i think it's appropriate to increase in the coming time, and i think such a move would be appropriate, mentioning that if there continues to be gains

in the labor market and so forth. she didn't necessarily, she never said, i should mention, the words june or july, but she did mention she feels if the economy keeps on moving at the pace which she sees fit, that an increase in the coming months would be appropriate. yellen was also asked, i should mention, whether or not she thinks we're doing a better job today versus before the financial crash in terms of regulations, and she said yes. she said one of her more long-term fears is productivity growth. and i'm quoting here, she says at .5% a year. she said quoting that is a miserable pace and historical growth, this is a serious and negative development. the highlight will be the fed will be taking a hike in june or july off the table. charles: the markets not panicking, we were up 32 points, now in the red, because wall street has come to grips with this but one thing to know

something may happen and to think, well, this is it. it's more definitive at this point. so i can understand her tempering those comments but it is impacting the market. >> yeah, you see the move going on there, and i should mention this interaction with janet yellen probably lasted just about maybe 45 seconds to a minute. very short, a softball lobbed up there, you want to say anything about this? keep in mind, when i joined but 15 minutes ago, this is a much more informal setting, there to receive an award, a q&a to talk about her life. she had every single opportunity to say what she did. she could have passed if she wanted to, i'm here for the award, we'll discuss this in philadelphia when we meet in mid-june. but she took a swing saying what she did, and to kind of tip her hand to those waiting to hear what she was going to say.

charles: probably a sigh of relief for her. all right, blake. >> reporter: she was laughing, too. it was funny to watch her, we've never really seen her in this setting. she was laughing, is there anything you want to say? this is something she wanted to get into. charles: had to get it off her chest. she's going to be finally a sigh of relief. it's out there, on the table. no one is going to ask me about it anymore. the market trying to creep back. we'll probably come back to you a little more and talk about more janet yellen after this. it's true what they say. technology moves faster than ever. the all-new audi a4, with apple carplay integration. put under a microscope, we can see all the bacteria that still exists. polident's unique micro clean formula works in just 3 minutes, killing 99.99% of od works in just 3 minutes, for a cleaner, fresher,

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. >> reporter: i'm adam shapiro on the floor of the new york stock exchange. take a look at markets since janet yellen indicated that an interest rate hike would be on the table in june or july. dow is still up 15 point. the s&p 500 also up at this hour because they priced in that potential rate increase. the dow is up 2% for the week as is the s&p 500. nasdaq up 2.3% for the week. now take a look what's happening with stocks as we head into the memorial day weekend, especially barbecue-type stocks. tyson foods is up about, for the week it's up, this year, rather, 22%. kraft is up, and consolation brands, they're up 11% year to date. as we head into the holiday weekend, daily movement isn't

quite as good. we're going to go back to cavuto "coast-to-coast" after this.

. >> it's appropriate, and i've said this in the past, i think, for the fed to gradually and cautiously increase our overnight interest rate over

time, and probably in the coming months, such a move would be appropriate. charles: that was fed chair janet yellen moments ago, signalling what may be wall street -- i don't think, dagen mcdowell. you are with me, in the last few weeks, wall street has been okay with it because the market's been up big and the consensus has been drifting higher and higher that the fed is going to raise rates. >> after the last-minutes came out, the markets were -- investors were a little shocked but seems to suggest the federal reserve is ready to move potentially in june because investors factored in almost zero chance that was going to happen. if they telegraph it well enough and fall back on the data dependent. if the data does pick up we have the revision on the first quarter economic growth. we got new home sales the other day, they're running at an 8-year high. prices there hitting a new record. yesterday we got pending home sales. they're at highest level in ten

years. so the -- she always falls to the job market and loves to look at unemployment rate. if you look at job market, it's solid enough to justify another quarter point hike. we don't need rates this low, do we? is the economy that bad? that precarious that it can't handle a quarter point hike. charles: wall street was never worried about 25 basis points. they were worried about the fed having the battle of wills if wall street -- if the tail didn't wag the dog, so if they do it, they stick to being data dependent because she looks at the jolt report, the highest number of jobs in history. even though the gdp was awful, there was 17% increase in residential investments and look deeper into the mortgages, right now 58% of the mortgages going to people with the highest fico scores, that is going to open up the housing market more. ultimately we may regret that

but this may be real, this housing recovery. >> if you're running the federal reserve, don't you factor in the presidential race? don't you think about waiting? either you go in june or wait until after the presidential election. i know that the entire bank bailout was in september of 2008, but that was something for many couldn't be avoided, but if i think the fed moves, they'll go next month or wait. charles: that's what happened to the papa bush, we kicked saddam out of kuwait and the fed started messing around with rates before the election and people blame the federal reserve for losing the election. they don't want to be in that position anymore, i think. >> i think if donald trump gets elected, janet yellen is out about a year after he gets inaugurated. charles: he wants low rates, too. she wouldn't be out from ideological reasons, she would be out because she's a democrat

and he's a republican. >> the fed is becoming an easy punching bag, she's the head of it. charles: we're talking about all this and the rationale is what's the relationship between the fed and wall street? we can't argue any relationship between what the fed has done, the dramatic actions, 4 million in extra printing on wall street. that's the punching bag. >> unfair because you had horrible fiscal policy in many years, and so it all falls to the federal reserve to try and fix everything for us, when the government's getting in the way of business. charles: so funny you say that, i've seen several interviews where ben bernanke wanted to say that, hinted at that but said we did our job, obama didn't do his. >> he could have been a little meaner. i would have liked illustration of what he would have done to certain people. charles: and show them opening the spigot and him closing the spigot. we got breaking news for you right now.

the verizon strike with the unions it's over. they reached a four year labor agreement. and we're going to get the details and more after this.

. charles: breaking news, fed chair janet yellen saying it's an appropriate time over the next few months for the fed to cautiously raise rates is what wall street is wanting to hear. let's go to adam shapiro at the new york stock exchange with reaction from the floor. >> reporter: the simple reaction would be and ben willis would agree with me, the dow in positive territory, not by much, but was expecting this. >> it was expecting it. the market may have given up a little bit because it wasn't hawkish enough. slightly more dovish than colleagues prior. telling us it's coming, boys, be ready. >> reporter: she said, charles

that the economy is improving and sees it would be adequate or necessary to do this, but you would know better than us, charles, looking at what's happening with volume and outflows from the market in the last 22 weeks, ben sent out money saying the money is taken out of equity markets to a huge amount? >> major outflows continuing. you have the merrill lynch smart money reports that show net selling, outflows of mutual funds. there was a minor outflow into bond funds, small investor is not getting this right yet. those ratings are on the small investor not the institutional or money managers in the market saying rising rates are good for equities, rising rates mean rising equities, don't confies tightening with normal -- >> the signals that they are net sellers tell me this is a time to buy, getting the people

on the phone and say you're making a mistake pulling your money out. you should be in the stock market right now. >> reporter: charles? charles: real quick, ben, the merrill lynch and hedge fund managers have taken out a gob of money, why? >> the high-net worth individuals and people that are moving. but i think part of it is what you've seen is the indecision by the federal reserve to do what they were supposed to do over a year ago, has forced investors to the side line. all the money flows coming out of mutual funds, that money is flowing into the money market funds, so the money is at the ready which is a bullish indicator, not a bearish indicator. charles: now that the tide has turned and janet yellen and the fed officials, whether hawkish or bear or dovish, all seem to be on the same page. what could change that, if they were to change their mind, would that upset wall street, perhaps the jobs report friday?

>> unfortunately not the u.s. data, all the u.s. data gives them what they need to know to charge with the united states, what's giving them moment to pause is the fact they've been watching bank of china, the eu, the brecksit. that's not what they're supposed to be looking at. >> would they hold in june because of a potential rate? >> should they? no, could they? yes. charles: the polls are starting to shift to staying in eu, and maybe that's settled the markets. why was the market so strong this week, though? >> you have a continuation, first of all, i go back to the idea that rising rates are indication of a healthy economy, and stock markets rise when rates are rising, not everybody watching the show has been around as long as i have. i understand that. i was here talking about people happy to get a 14% mortgage

when the prime rate was at 21%. those are indications -- now about what we're seeing with the federal reserve is art form never before seen, we're normalizing rates, not tightening rates. when we get to the discussion of tightening rates, you see the stock market reacting differently. less than one percent to the downside in the equities we had the notion the fed was going to do what they're supposed to do and normalize rates. when that happens, equities rise, they will not fall. charles: you have two, with the economy, and it was illustrated again in the gdp report, businesses are not investing, not building plants or doing anything, a lot of the large corporations are buying back stock. how do you get that part of the economy to move as interest rates go up? will that make it easier or create a sense of urgency? >> because the american consumer is finally coming back because they were left behind. the bailout bailed-out banks

not the consumer. we're waiting for the consumer to come back. starting to see housing recovery, see the consumer come back into the market. while everybody is looking for the money to be spent that was saved on gasoline, they were spending it on health insurance. >> reporter: can i challenge you on that? look at macy's, look at nordstrom, look at durable goods orders. the danger is we're watching cars and car loans. it's been subprime loans driving the car purchases, setting us up for danger and yellen said they have to have maneuverability in case there say problem in the future. >> setting up danger if you believe what happened in the past was a function of defaults by those people that should not have been buying cars. that was not the case. the default in the real estate market came from leverage position. charles: let's leave it, there a fantastic conversation. the subprime loans are starting to drift in the last three quarters. thanks a lot.

appreciate it. and, of course, can you catch much more on "making money," that's my show. 6:00 p.m. eastern time. right here on fox business. lot to talk about. in the meantime, leave it with trish regan here to take you through the next hour. >> donald trump speaking at a rally in fresno, california, right now. trump talking to a packed house as he shifts his focus to the general election and hillary clinton. we're all over this. i'm trish regan. welcome to "the intelligence report." again, there donald trump speaking in fresno, california. we'll dip in and take a part of it for you as trump looks to november. hillary clinton trying to secure the democratic nomination. hillary's e-mail scandal is getting worse by the day, but still defending her actions saying her private account was allowed. we'll discuss whether this affects her chances and whether she will face an indictment.