driverless cars. not in new york yet. my time is up. but i do believe neil cavuto is standing by in the next three section. he will take it. wait for it. still my show. 12 noon, it yours. neil: i'm actually sitting. i'm thinking of this driverless car. how would that affect you? you're in the back seat. no one in the front seat, right? stuart: i guess so. i guess so. neil: great. another brilliant segue to our show. thanks, buddy. we are following what is going on. whether we see another hike in this cycle. would be the ninth since all this began in late 2015. expectation, you know the drill by now, that the markets are expecting one more quarter-point hike in federal funds which would bring it up to the 2 1/2% range. we've essentially gone from zero

to 2 1/2% range. we're waiting for the explanation coming from jerome powell, the fed chairman. they might slow the pace in 2019. markets are waiting for that. you know how it goes with expectations met or not met. "wall street journal" global economics editor john jon hilsenrath. do you agree with that one hike, we get up to three next year comes down a bit? >> i think the lingo in the markets is a dovish hike. fed does what is has been telegraphing and raise by quarter point. neil: nine of the 16 fomc members, if he ral open market committee members were looking at three rate hikes next year. how does it go for federal

reserve, same nine out of 16, one is a new mem her do you have to change their posture? is that the official fed posture then or what? >> well, so, you know, each one of these individuals who puts in a forecast is responsible for his or her own forecasts. so jay powell doesn't go around and say, or messer, you have to knock your forecast down. what we'll see is the collective view of the fed. i think there is an expectation that those forecasts for next year might come down a bit. the most important forecast of all is jay powell's. he won't say what his forecast is and you can be sure the reporters in the room will be pressing him. what i think you will get from him a description of a environment that has gotten a little more complicated. global growth has slowed down. inflation has slowed down. oil prices are way off. the fed doesn't feel like it

needs to be on autopilot. they're at a point where they can be fine tuning a little bit, they don't have to do something at every meeting or every other meeting. neil: the president wouldn't be too happy if they hike again. didn't see a reason to do it. tweeted a number of times it would be a mistake to do it. dollar is strong, interest rates, inflation, more to the point is low. he would obviously call them on the carpet for that. >> yep. neil: but by not raising rates today, it would look, even though there might be perfectly sound reasons not to like they were caving, right? >> i think there would be three problems if they don't raise interest rates today. the first problem is they have been telegraphing to the markets for months that they're going to. so they would be confusing the markets about whoo they say when they are going to do something or not doing something. stock markets have been soft.

there is idea in the markets when the stock market false, fed comes in to save the day so prices don't fall too much. if they don't move today, jay powell comes out and says this is my fed put and it is really cheap. i don't think he wants to condition the market that way. the third thing would happen if the fed didn't move today, effectively the fed would be inviting donald trump in the room to help them make decisions. he has been speaking out so loudly about this. the president would declare victory. the fed is trying to not factor in what the white house is saying. i think it would be a stain on their sense of independence. all reasons why they're likely to do something but signal strongly, hey, 2019 is a whole new year. we'll see how things go. let's not forget the economy is in really strong shape. we don't want to do anything to undermine it. we'll play things by ear from

here. neil: always a pleasure jon, we'll watch things closely. >> thanks a lot. neil: the dow is up 256 points. it is always dicey to think what the markets will do and what they ultimately do when they weigh expected quarter-point hike in rates known as overnight fund. we might want to avoid a government shut down. not this is traumatic event for the markets. sadly we've gotten used to these things. third shutdown over president trump. the 10th over last few years. not that the shock value a is there. better accord showing bipartisanship or not. indications they will stave off a shutdown. again is are not dotted, ts are not crossed. we're watching that. we're watching unexpectedly good news with existing home sales in the latest period up for the second straight month, even though year-over-year we were down 7% that represented the biggest drop year-over-year

we've seen in about seven years. europe was picking up steam on this idea that the italian budget has been sort of redesigned to meet some of the eu officials demands. not entirely, but enough to satisfy both parties, kind of. that was big for europe. we had a pickup in asia with good news about japan, that filtered over the rest of asia. more on that in a second. for today, at this time, more buying than selling. get the read from sam stovall, sinter for financial research. sam, first off on the fed, are you in that camp? one more hike and that's it for a while? >> one more hike this year, then probably two hikes next year. but probably happening toward the middle of year. i think the fed wants to put its finger on the pulse and find out from the data what is happening in the economy and whether they should just end it or have a couple more for safety measure. neil: you know, sam, you've always reminded me, and your

late great dad would remind me about the danger after federal reserve that has a august reputation, but it is, it is iffy science here. often times they over play it, cutting rates or raising them. do you think the fact they might have to draw back a little bit on these rate hikes, they fear they might have done just that? the stanley drunkenmillers, others writing about the fed that they might overdone it? >> first off papa is still with us happy to say. he turns 93 in mid-february. thanks for remembering him anyway. no, i don't think the fed has gone too far. historically the fed funds rate is point 1/2 above year on year change in inflation. right now we're still looking at fed funds that are below inflation. we add one more hike in today, and we're essentially equal to inflation. and then when you look to bear markets since 1955 on average the interest rates have been

above cpi by 2 1/2 percentage points. so we're still very far away from the fell strangling this economy and this bull mark kept. neil: all right, so, when these big money manager guys are talking about, now is not the time to hike, were they referring to a decent move, sam, or this idea that, wait a minute, let's sort of step back and see where we stand here? because there have been some numbers that are slowing down. we mentioned housing, despite up in the latest period. the fact it has slowed mightily. auto sales are slowed. there are other consumer sentiment surveys out there now, they're all over the map but the trend is generally not been the friend here? make the federal reserve is concerned about that? >> well, my bat phone to those managers is on the fritz right now. i can assume what they're talking about the fed really does not want to get too aggressive as we move into 2019. i think one reason is, because as the fed rate moves higher, we're also finding that

inflation remains a non-threat. as a result, yield on 10-year note actually has been coming down. as a result of the flight to safety by investors in this most recent correction in the stock market. so, i think what they're saying is, they would rather not see the fed orchestrate an inverted yield curve in which the yield on the two-year notarizes above that of the 10-year. that has traditionally presaged a recession and bear market. neil: what if they're really, really tight though? what if it hasn't inverted but they're definitely flat lining? >> well it is something we worry about but the market has climbed a wall of worry. basically going back to 1960, every recession was preceded by an inverted yield curve in existence average of 11 months. we have yet to see that at all. i still think it's a little bit early to be calling the demise of this economic expansion. neil: all right. sam, i apologize profusely, that was horrible of me.

i don't know what bottom that in mind. please pop guise -- apologize to your dad. >> thank you very much. neil: very interesting read from sam, that the fed might not necessarily doing a reverse pattern here but slowing things down on the belief they kind of hit a sweet spot where they don't have to aggressively keep up with this. the federal reserve will state what its thinking why it decided to do what it did. last time nine of the 16 thought at least a continuing trend continue into the new year. we would see three rate hikes f they have to reverse that all right, wouldn't be a reversal, sort of a draw back a little bit from three rate hikes to two, that would represent a significant, sort of rethinking on the part of the central bankers that, we've done just enough, but little more for the time-being.

more after this.

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mom. ♪ neil: all right. it is not brave but it keeps the government lights on another few weeks here. the senate is looking at doing something, mitch mcconnell cobbled together with a lot of his republican colleagues to

keep the government open to avoid a shutdown on friday. the latest on this, with louisiana republican senator bill cassidy. senator, very good to have you,. >> thanks for having me. neil: what will this short term measure do. >> a couple things, it funds the government to keep things open, but a lot of good work on spending bills agreed to by both parties. may not accomplished as much as we hope. thirdly it will mess up pelosi's advent if you will. assuming she gets the speakership, instead of working on the big bold initiatives the first part of their house, democrats being in control of house they will have to mess with the budget. so i think it may work to come back and, have an ill-effect if you will for beginning of miss pelosi's new speakership, assuming she gets it. neil: it could also boomerang on you guys, right? keeps things going through february 8th, senator. i'm wondering whether the president blinked on this.

he seemed to make it clear just last week it, was the five billion for that wall, or bust. what happened? >> i think the president is actually concerned about our country as a whole. he is speaks out of his frustration. i share his frustration. we have drugs coming across our border. folks are coming illegally across our border, to have their children become anchor babies and, in effect they do, whether they come here for the purpose or not, which compounds the problem. so the president's frustrated. i'm frustrated on the other hand the president made the calculus, you consider the economy, prosperity of the american people better to have a short term cr. we would like to secure the border and have the country to continue to do well. neil: if this is preview of coming attractions, i'm not blaming you, sir, republicans or democrats but impasses is pretty secure comes to funding on security and issues everyone talks about on both sides,

comprehensive immigration reform that never seems to materialize. is it your sense this is how the next two years play out? i'm not quite sure. remember in the president's state of the union speech last year he offered a better deal than president obama did on daca. he offered twice as many kid to become eligible as did president obama and a pathway to citizenship, in return for securing the southern border. democrats turned that down. a better deal than obama gave but turned it down. as long as they want a problem to talk about, as opposed to a solution to a problem i'm not sure we get any place. the president made it clear he want as solution. neil: all right. the president also made it very, very clear he obviously wants that wall and wants funding for it. they fished around the possibility of reappropriating funds from other departments or other areas like defense. that came up zilch. if he doesn't get the democrats to bend on wall funting, is it fair to say there is not going to be a wall?

>> well, a couple of things. we can secure the southern border in some places without a physical barrier. that is probably the better way to do it because of rugged terrain. >> right. >> on other hand some places a wall absolutely works. i went to mcallen, texas, you put a wall here, it forces folks coming illegally to break this way or that way which helps law enforcement. i hope democrats put securing the southern border, keeping drugs out of the country a higher priority than picking a fight with president trump. >> neil: thank you very, very much. hope you have a nice christmas. if we do have a rate hike, might be nominal one quarter point, starting a steady climb in borrowing costs yet in the middle of this we still have those seeking the white house still looking at more spending. the guy living in the white house doing nothing to control that spending, is that

the problem? after this.

neil: all right. taking a look at the market right now up about 283 points, the dow is. look at the yield on the 10-year note when it goes down a little bit the price has inched up a little bit. at 2.81%. we could find ourselves by day's end with federal funds overnight bank lending rate around 2 1/2%, within that range, not all that different from 10-year paper the government issues for 2.81%. the read on all of this from former senior economic advisor to former president barack obama, austan goolsbee. great to see you. >> great seeing you again, neil. neil: first off on your expectations here. are you in that camp it is another quarter point, go slow next year to see what develops or cut three planned hikes to

two or what do you think? >> fewer as we talked about before i'm consistently of the view that growth is pretty good but not as good what the fed wants it to be or what the fed forecast so when the rubber hits the road they can go fewer times or less high than they think in their brightest moments so i think there is at least some yellow light warning signals that that going to make them rethink it a little. neil: yeah. the president, this president has been jawboning that he thinks it would be a mistake for the federal reserve to height rates in this environment. the dollar is strong. inflation is nowhere to be found. on that basis alone do you think a rate hike now is advisable? >> well, i don't think rate hike are that advisable and i would at least like some stronger evidence but i think, most

people would agree the president should not be doing what he is doing, out publicly jawboning the fed and personally criticize the head of the fed and you appointed and new perfectly well wanted to follow the route that they're following the irony will be if he backs the fed into a position where they have to raise rates so the world doesn't think that the president's bossing them around. neil: you know, when all of this started, reversal of zero interest rates in 2015 barack obama was still president, was there frustration, i know you left the administration at that point, was there frustration there would be a steady climb in rates? this was the way it was going to be knowing where it would end, we still don't? how was that conveyed? >> i don't think there was frustration. i mean certainly in the period

when i was in the government many people were saying we're imminent danger of inflation and fed needs to raise rates a lot. they were saying that in 2011. realistically if the economy starts to improve they should start raising the rates. but until you. until you get past all dangers and seeing evidence of inflation, given the fed is dramatically reducing the balance sheet at the same time, we don't really know what impact will have, that is form of tightening, a silent tightening, i'm a little nervous one of the principle causes of recessions in u.s. economic history since we've been keeping track, is the fed tightening rates. in a world where the fed's forecast is fundamentally deliver the from how the economy is doing, that is a bigger

danger than i think people anticipate. neil: unwinding a balance sheet, it's a double-whammy. you have to sell all the notes and bonds the federal reserve is scooping up. at same time you're hiking rates. it has a one-two potential punch you're trying to avoid. i look at debt created by republican and democratic administrations and the like, picking up steam now, no one seems to want to get it under control. i'm worried about the next entrants of the white house are talking about free community college, free college, 500-dollar a month checks for people, i'm not obviously letting republicans getting off with submitting budgets more deep in the red. this is a big problem, no one, no one addressing containing its growth. on that level does it bother me? >> on that level it bothers me. it is especially a concern that we have never had a pea where

the deficit is going up like this with the unemployment rate is going down. normally in booms you're supposed to be shrinking your deficits or moving to surplus. the thing is, why we pushed a 2 trillion plus dollar tax cut that everyone knew perfectly well was going to explode the deficit, and has, and then we're going to turn around say, oh, the problem is middle class people are getting too much social security or medicare. neil: to be fair, you could talk about that tax cut but you can also talk about the 10 trillion in added spending built into the same budgets, right? >> well, it's true the president added a whole lot of defense spending people had not anticipated. neil: but everyone signed on, what i'm saying that spending, say what you will of tax cuts, we can argue until the cows come home whether that did stimulator not, created revenue or not, but far more damaging the figures that dwarfed that on the

spending side, there a pox on both parties, right? >> to be clear say everyone supported that. everyone did not supported that. the republicans rammed that through over the objection of democrats. neil: but there was no interest in reining in spending on the part of either party exponentially six times the size of that tax cut. yet no one talks about that? >> everyone talks about that. neil, the fact is,. neil: you didn't right? you didn't right there? >> i did. i just told you the president increased the defense budget quite substantially. neil: you immediately blamed tax cut. i'm not apologizing for the tax cut. i find it interesting, you're very good with numbers, i mean you're talking about a couple trillion versus 10 to 12 trillion in added spending. looking at the math i would be worried about a lot more spending? >> you need to check, you need to check your numbers on increase in the spending because the increase in the spending is not that much bigger.

neil: we're going, as things stand now, but as things stand now we'll had 10 to $12 trillion with overall debt as a result of this. >> which was all forecast. you're basing that on aging of population. neil: it is what it is though. but the, the wear with all of the government government to get under control how much it spends is far bigger issue whether it grants tax cuts, right? >> if you're concerned about that, don't go throw away two trillion dollars of revenue. that is what happened. we've known about the aging of the popelation for a long time. we then made the problem demonstrably worse adding $2 trillion in the tax cut. neil: the spending that built up, the spending that built up under your old boss, throughout that process, and i can perfectly understand coming out as we did of the environment that he inherited when he came into office, that had zilch to

do with the debt that was accumulated during those -- >> the spending did not build up on discretionary spending and you know that. neil: wait, wait. >> it had to do with increase of population. neil: did we increase debt 10 trillion or not during that period. >> yes the debt went up 10 trillion, there was deepest recession of our lifetimes. the deficit was cut more than in half after the recession is ended. and now we're going to run the deficit up to something bigger than it was during the recession. neil: is it fair enough to say, austan, that both parties, but is it fair enough to say that both parties shirked their responsibilities to get spending under control? >> not really, no. neil: oh, common, austan. you're a very smart guy. you know this party is blue when it comes to addressing our fiscal resolve big time. by the way i'm not apologist for donald trump. he has botched it big time because he is not leading --

>> you're wanting to blame both sides. you want to blame both side. neil: absolutely i will. >> but you cannot excuse if you know there is aging population, that will lead to higher social security and medicare, why are you cutting revenues by more than $2 trillion? neil: all right. so if you cut that, if you cut those revenues, you don't think we would have anything approaching the debt levels that are building now you? think it is all on the tax cut? >> i think the tax cut added more than $2 trillion. neil: all right. all right. i want to get you back. meantime have a great holiday. but we're all going to hell in a basket with these numbers, you realize that? >> you too. neil: let's get read on this. entitlement reform, to austan's point, whether we will have the resolve to go after spending that is kind of in place. it gets bigger and bigger. that is a problem too. neither party as i said is really interested in dealing with it. ironically, paul ryan outgoing

speaker of the house will make final comments before he stepses down. he opted not to run for re-election and go away into private life. what he does from there is anyone's guess. gop pollster chris wilson on his legacy. chris, we were mentioning the tax cuts and everything else with austan. that was shepherded along by paul ryan but by the same token we're told the speaker is going to lament the fact that he, congress collectively, washington in general was never able to get a handle on spending and that it will be his biggest regret. should it be? >> well, probably. he really came into office with two major goals you mentioned. one was to pass tax cuts. you have to give him full credit for. the second one was getting spending uncontrol, primarily threw entitlement reforms that is the story of past 30 years. tax cuts are difficult to pass. give ryan credit doing so, keeping his coalition together but it wasn't easy.

he had no support from the white house or use of political capital of the white house when it came to entitlement reforms t was dead on arrival, he wasn't able to accomplish his goal. neil: people are saying, he is a globalist and all this other stuff. i still don't know what that means, the fact of the matter under paul ryan we had the first serious effort to rein in just the growth of medicare and related so-called entitlement programs. he paid dearly for it. those commercial were famous for caricature of him throwing granny off of a cliff. that is what trying to rein in entitlements or at least, preset spending gets you. he wasn't cutting it. the notion was that he was trying to slow its growth. there was hell to pay. people get that but i'm wondering whether he regrets that in retrospect, there weren't a lot of other brave souls with him at the time. what do you think? >> it is tough. he wasn't able to do it under this administration. wasn't able to do it under last

administration. couldn't get austan goolsbee to admit they didn't try. the one-time you could have had this accomplished and republican congress and president obama, if there had been any sort of attempt in the obama white house to provide political cover for that. you looked the last time the republicans were able, congress was able to accomplish anything along these lines, gramm-rudman. whenever there was a deal to cut for the parties not capitalize this from political perspective. we have to get ryan for going as far as he did, he took political heat for it. as leaves congress he gets incomplete. got one-half of it done. give him credit for that. entitlement reforms continue out of control. debts and deficits continue out of control as graphic just showed. i have to take issue with austan goolsbee say can't write this off to tax cuts and defense spending. raising taxes cuts and cutting defend spending didn't work for obama administration.

neil: without getting too much into the weeds here it is what it is. i think maybe given paul ryan's experience and the media ripping that he took for just trying to control the growth control one program, tells you all you need to know there is lack of resolve to follow him off the proverbial cliff. >> no one will try again. neil: i think you're right. think you're right. thank you very much. we are waiting to hear from paul ryan at the top of the hour. his final musings as speaker. keep in mind this is the same paul ryan when he came on board he was greeted as savior, both side said this is the kind of guy we need but washington has tendency democrat and republican alike, throw in the media to chew up and spit out a lot of saviors. after this. ory? at t. rowe price our experts go beyond the numbers to examine investment opportunities firsthand. like e-commerce spurring cardboard demand.

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♪ neil: all right. they're still shopping in record numbers. it could be a record holiday

season. jeff flock "first on fox" interview with the ceo of clothing juggernaut lands' end which is helping with that. sir? reporter: iconic american brand, lands' end. look at this. look at this. this is santa's workshop here. i'll tell you, these are the things already been packed. where is that going? can i see where that is going? that is going to louisville, kentucky. i could grab these. this is scanner over here, i want to get to jerome in a second. that is a scanner. they scan them. that tells you where they should be shipped. they are shipping a lot. you can ship your pants. >> ship whatever you like, jeff. reporter: jerome, does not talk to too many people. i appreciate you talking to us. give me a sense. you keep quiet and carry a big retail stick. >> we try. we had pretty good success as of late six straight quarters of

sales increases. five straight quarters of ebitda increases. the company is on a good track right now. reporter: is that because you're smart or economy is doing so well? >> we went back because all the basics of lands' end, made lands' end what is really was meant to be. reporter: this is cautionary tale that try to change it up, you did before you came on board, lands' end tried to get more hip and cool? >> company has a very loyal consumer base. our conversion rates online are some of the best of the industry. that means the customer likes what we give them. over the years we veered away saying we want a different customer. now we don't. we know who our customer is. reporter: that served you well lately. you partnered with amazon for first time. stupid idea, some said. you will cannibalize business, people coming to lands' end to shop, now will get your stuff. stupid? >> it was all about new customer

acquisition. if you look at searches online, more people go to amazon to search for clothing than any place. if you're not there, you're not relevant. reporter: last question, tariffs. a lot of stuff made overseas? fears for you, tariff impact? >> we're extremely well-diversified. we don't have one country where we're over penetrated. even if tariffs come into effect, i think we probably weather the storm. reporter: lastly impact of tariff fears in general on economy. this market is not doing well. you have done great. your stock hasn't done great. what's that? >> this company is really focusing on business fundamentals growth, top-line growth, bottom line growth, outside of that i can't affect what market does on day in, day out basis i tell the guys here do what you can. reporter: 401(k) in the market. >> my care care is in -- 401(k) is the in market. reporter: you almost retired.

>> i did. reporter: lead toomey the big luggage guys. sold it for $2 billion. he knows something. neil: thank you very much, jeff flock and land end facility is. facebook hound itself in a bit of a predictment here. remember when mark zuckerberg said no, no, we don't share information with anybody. a lot of this stuff we get on our customers is not really shared with people whom we share with our business. lo and behold we find that was not the case. netflix, spotify, amazon, microsoft did benefit from some of the data sharing. it is causing a you know what storm in the tech community. and this guy is in the center of it. mark zuckerberg after. inn but i'm relentless too. mbc doesn't take a day off,

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neil: facebook is falling further now on news the attorney general of the district of columbia is filing a lawsuit against facebook for allowing cambridge analytica, a political consultancy firm to gain access names, likes personal data of tens of millions of the social site's users. this of course as the company is facing new charges that it is

sharing data and related information with other big providers like netflix, spotify, amazon, microsoft. it is a mess. scott martin, what do you think? >> it's a mess, go to scott martin. facebook, i thought we were friends. story getting worse and worse. think back to the testimony in front of congress, i think he would stuck to advice how to connect to wi-fi and starting a email address. coming out facebook is knowing more, knew more what they were giving away, knew more about what companies were taking than they let on. the problem is pervasive throughout tech, which is scary for the tech in general. i'm excited about the revenue growth facebook will have next year to the tune of say 20 to 25%. but earnings growth looks like they will tail off with regulations coming in.

some costs ramping up privacy concerns and things they need to do. so the stock here is a tough call. neil: yeah, just amazing. thank you very, very much. scott martin on that. when i saw this in day book of events we follow at fox business, the only flash on it, boring company presser. i'm thinking to myself, which boring company are we talking about, a presser we have to cover it. no, that is the name of the company, the musk company. that envisions a tunnel and the works in l.a. and much, much more. hillary vaughn is keeping track of that and what's being discussed here and another rich guy at the center of it all. hillary. reporter: hey, neil. elon musk's big idea behind this boring tunnel is really is to cut down on traffic and gridlock on the road. the first city that is going to see this transportation network underground is chicago. even though he did just open up the first leg of its transportation loop right here in hawthorne, california.

musk debuted his high-speed tunnel he says will solve soul-crushing traffic by letting commuters ditch gridlock and zip through a underground highway tunnel at 150 miles per hour. musk says the timing when this is operational, depends how quickly the regulators give green light. the boring company is getting the third boring machine ready to launch. stronger, 15 times faster and super efficient and all electric. it simultaneously digs the tunnel and digs the tunnel, works it way through the earth and uses dirt to build concrete slabs that line the tunnel. this lets musk build a system, 90% cheaper than the next best machine out there. musk says they hear from as many as 20 skis a week who want the tunnel in their towns. he is working on different types of tunnels that could change our cities operate. >> we're seeing interest in just

utility tunnels where a municipality, get a big tunnel, put water mains and electricity lines inside of the tunnel and then they can actually service like, water main break, instead of it flooding the main street and city, they can actually go in to the boring company tunnel and fix the water main. so it actually saves cities a lot of grief. reporter: musk says he is building and operating tunnels for the city and handing them over and have the cities have complete control of public transportation running through the tunnels. he is not worried about running out of money into this project. he dumped 40 millions of dollars of his own cash into the company operation. he says it is ridiculous how many investors approach him on a daily basis wanting to invest more money into this company and fund the project. neil. neil: thank you very much, hillary vaughn. i understand we're talking about, it is not a boring company. it is boring into the earth company.

charlie gasparino, what do you make of that. >> lasers. reminds me of two things, dr. evil. when he says lasers. in the graduate, remember, plastics. neil: yes, i do. >> reminds me this guy was smoking pot on a podcast. i'll say this -- neil: i think that is a cool thing. >> if i were a tesla shareholder i would be worried. neil: he is not taking the money out of tesla. >> he is dividing his time between this and space ex-and a company that is not hugely profitable and talking about pie-in-the-sky boring tunnel while he should be worried about manufacturing cars. neil: with that technology, you do that right, and, start giving people alternative cars and all that, might just be a good way to do things? >> maybe. neil: you're a hater, bottom line. >> sounds like he is spending $40 million. not a lot of money to do think, you never cut him slack. >> actually i do. actually i do. neil: ever since he was smoking

in the interview you never forgiven him. >> i liked him for that. he endeared to me smoking pot like that. neil: whatever the promise of this technology or lack thereof, our big issue it is distracting? >> by the way, it is not anywhere immediately promising. if you do any research. neil: saw the exact same thing on johnny quest. no? >> buzz lightyear, right? neil: to l.a. and beyond. >> it's a joke. common. neil: no, no, no. i think this is a neat technology. i don't know whether it pans out. >> it could be nothing. neil: you're too linearly. you're a doubter. >> somebody else done it faster, quicker, sooner other than elon musk who is doing a rocket ship and electric car. neil: the technology is there. >> what technology? neil: digging into the earth and making tunnel as it is going.

>> boring. neil: boring. that is good to know. >> i love the way you say the technology is there. what is the technology? neil: you say it there. >> what is it? neil: bureaus into the earth. there you earth -- burrows. i'm so glad you were not around when we were launching our space probe es. hang it up, guys. the russians have this down! >> what animals bore through the earth? get a million of them. it will go faster. neil: i don't even know. guys like you stopped galileo and copernicus. >> i want you to hang him. he a heretic. look at facebook, as you notice the democrats are ramping up on these guys, these stocks have such regulatory heat on them now. neil: i saw one of the ones fingered possibly benefited from the data getting into their hands spotify, amazon, nothing there there. >> who knows.

neil: it will cast a pall. >> there will be a lot of congressional hearings. do you care you get pumpkin latte spice ads pop up for no reason on your facebook account? neil: no. >> where is the closest outlet for a latte. neil: what happened to you when you ordered very nice christmas present shirt for me, started getting ads. >> it is great. i get ads of animal faces on the shirts. muscles and stuff. neil: it is your business. so is that where they draw the line, say it is a little -- in this day and age -- >> i'm worried that they conflate like russians using facebook and twitter accounts with twitter collating information, making your life as a consume air lot easier by -- neil: did he perjure himself though? when zuckerberg was up on the hill, saying, no this did not extend beyond what i'm telling you now and it's possible, according to "new york times" report that it did or he did --

>> i can't imagine he did that on purpose. he was so lawyered up. neil: right. >> he had -- neil: they will bring him back again, right? >> oh, yeah. neil: both senate and house will do it. house will be undemocrattic control. what i found interesting fair and balanced both parties now hate him. >> the republicans hated him because of the alleged conservative anti-conservative bias. the democrats hate him on privacy issues. the democrats controlling congressmans a lot more hearings by the way. they do a lot more than the senate. neil: absolutely. >> if you're into stocks, why do we talk about this, these are popular stocks, they move markets. they will face some headwinds with all these investigations. who knows what comes up. neil: the stock was already down. we got news that washington, d.c. attorney general is looking into it. it is going to mushroom. >> it is going to mushroom. one big thing for elon musk, he has to make a bond payment $900 million. the stock has to hit 365. neil: but musk will already

burrowed his little -- >> he wilbur -- burrow into a bank vault. neil: italian guys. >> the brinks's heist or something. that was henry hill, brinks, right? neil: i don't know. i'm just saying it's not so crazy. i think you're a doubter. >> i think good for people that smoke a lot of pot. you can go underground to smoke a lot of pot. go from legal area to illegal area. neil: look at the time. thank you very much. you're the best. >> thank you. neil: he is opening at caroline's tonight. don't forget. we have a lot more coming up on the fed decision and thinking of a fed hike today, one and done? >> definitely. we're done. neil: maybe for a while. we'll see. after this.

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neil: all right, and our waiter so from the federal reserve decision was widely anticipated we are going to see interest rates notch up a quarter of a point that might be up for a while. all in what sharon powell says after that when he explains what the federal reserve did and why and what it can do in the next year. markets up ahead of all this now printed out 215 on all of these developments. you're leaving out delancey's strategy is a strategist dare feared what are you expecting? >> so, what everybody is talking about is were going to get the

hike today, but the narrative will continue to change. the reversal last fed meeting, chairman powell to hold different approach. all decided we are hiking and then it was a complete reversal two we are nowhere near our target and starting to see a break. that is the expectation. one rate daycare. i don't think the market can tolerate more than 3.5% federal funds rate going into 2019. i don't think market participants are ready for it. i don't think we built that in a frankly my colleagues talk about if he indicates more rate hikes the downturn becomes more severe. >> is certainly going to be lucky not additional rate hikes in 2019, not three, maybe two. always as he reminded me it's very hard to guess. this would be the ninth increase

if we get one today is the reversal of the 0% interest rate policy started in late 2015. where do you see things in 2019 going? i know it data dependent, but if they telegraph it is going to be too rather than three they won't be so blatant about it. what you expect for them to say? they certainly won't be blatant. i think what we need to look at here there's a couple factors. you have the global scenario, which right now were standout in terms of economic performance. if you look around things are slowing down. we are all interconnected so these things do come into play in the fed needs to look at data and obviously go back to the consumers and say we've got housing. housing is a big problem. not in the way of a lot of people are talking about. it's affordability and it's tough right now. very difficult for the average

american to afford either renting or owning a home. you know, if we do experience a recession for instance in it that made me want, i think that would be a good thing. we are seeing slowing in some areas. the consumer still healthy. energy is helping lower energy prices. it's hard to call, but i do believe the fed really is going to reverse course. i think it's going to be over the next few months a dramatic reversal in continuation of his more dovish stance if you will. long story short i am more in the camp of a lot less rate hikes in 2019, maybe one or two. drink you what's interesting here if it is a reversal in the prior thinking, they've got more hours than when they were a 0% i understand that. but not a lot more. it is still very low historically about half what the norm would be an bank rates and

i'm wondering if that kind of puts them between the proverbial rock and a hard place. >> it does spirit with kind of become accustomed to this. funny you bring this up because this morning i was looking back at what rates were doing in the 80s obvious leads and even before and after that and all the way up into the 90s. for the rest of the market participants are all trading money at such low rates because this is happening all around the world, it is really hard as a trade partner and someone participating in a global market to have money that cost so much. i don't think that we go much higher from here. the new norm if you will. to .5 if you let a 3.5, four is the new norm unless something dramatic changes. i don't know if that's when at least in the near future. transit will have to watch closely. jerry's, thank you. we are waiting here for paul

ryan. the outgoing speaker of the house, find their marks the speaker opted not to run for reelection back in wisconsin is going to enjoy private life right now. he's been in congress since first elected in 1998. of course he served as the running mate for mitt romney in 2012. and people forget whatever they had against him, didn't do enough to help republicans or whatever. he was among the earliest to take on entitlements whether you see that as a good or bad thing or at least slow and measurable growth and of course he was famously branded as throwing granny up the cliff for that. that was then. this is time now to say his goodbyes for freedom and prosperity. dan mitchell, real clear politics a.b. stoddard. i can remember when he came on in 2015 to take on the speakership oral. he didn't want it.

it was not in an alleyway of things he wanted to do, but he was greeted as triumphant coming to sort of say of congress. like so many predecessors it didn't work out. what happened? >> well, i think it actually worked out exactly as online anticipated a foot in the reason he didn't want the job. the idea of all the hype he could do things differently with the same conference, thinking the same internal politics was really folly. i mean, it was not going to be by the touch of his style a different job. he gave up a lot. from running for president in the near future. >> trey gowdy is getting ready to introduce amsoil want to wanted it to be anonymous. his legacy will always be the deficits grew under his watch.

how will he be remembered leaving congress? >> two things. first he played an important role in getting us to a position where we could get a decent tax reform last year lowering the corporate rate, scaling back into state and local deduction. that's a real accomplishment for the american people. number two, we didn't get entitlement reform, but at least he looked at the issue, took it seriously and propose genuine real meaningful pro-senior citizen medicare and medicaid reform. the sad news if you peer behind a curtain in washington, a lot of us were working for years to push retirement reform on the theory we would have a sympathetic president in 2017. instead we got donald trump and that's where all our hopes are disappeared because he's not in favor of entitlement reform. >> i can remember him talking about that at the time and i said you're touching the third

rail. i don't know whether those ads played into it as kicking granny off a cliff or just trying to rein in the growth of entitlement program was seen as inhumane and cruel. two takers in either party to help them. >> right, that's true. not only was it hard to bring democrats around, they tried to come to some kind of a weaker deal and paul ryan was proposing what was originally called the roadmap. as you write it was a really radical suicidal proposal. a little bit of a weaker measure he might've gotten with john boehner with president obama but it's tough to bring the democrats around. this is really a result of obama in office kind of refusing to deal with a lot of sentiment among the white working class under the economic crash in 2007 in 2008 and refusal by

republican leaders by republican leader stuart knowledge it as well. they were still championed medicare overhaul of, repeal of obamacare. they were against tax cuts to the wealth he and they were free traders. what happened was donald trump figured out that the base of the republican party has radically changed. they don't care about government spending. they don't care about that. they care about the wall. they care about immigration. they don't want entitlement reform. the tax cut didn't help them out so much. the republican national committee all but admitted that in the pulling and messaging before the election. they look at some of the paul ryan and failure of another time. neil: is not ironic? this young guy picked by mitt romney because he was going to balance out an older man to represent the future of the republican party and now the republican party as kicking them on the way out. i just wonder, dan, and the risk

is now means of politicians who even dared get a handle on deficits, republican or democrat or try to address other diet just piles up in the line. >> when he first highlight something that was a real accomplishment of paul ryan. the house of representatives five or six years in a row and with medicare and medicaid reform in the senate. so i think everything was in a good spot. neil: by the way you are very close to major agreement at the time and john boehner at john boehner at the time that fell apart at the last second. we were very close to something that could've been historic and of course never was. >> that would've been trivial. the ryan budget with the right republican president in 2017 could've saved a long-term fiscal future of the country. now i'm terrified we were heading because trump or whatever democrat takes his

place, bad news on controlling government spending. neil: no one wants to anymore. we are going to try and fit in a quick break and then the speaker paul ryan who was among the earliest to say we've got serious stuff to reform that's necessary to take in washington. he lead the charge despite all the detractors, but he also alleged that charge for tax cuts that if you are in such an integral world might've never accomplish despite all the jokes on them by the present of the dates. president trump championed all of that could've been done as a housekeeper at the time not coddle together a coalition of republicans, conservatives alike with liberals and moderates even though it didn't get a single democratic vote. he's tried. what is going to say today in a couple mixes i i gave it my best shot. a little more after this. minimums and fees.

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dream to all right the treasury to impose russia related sanctions over russian interference in this is barely sleeping. blake berman at the white house with more. >> hi there, neil. these fresh new sanctions coming from the treasury department

just a little while ago here at the white house as well also awaiting what will happen with the government shut down as it relates to everything happening on capitol hill right now. there was a fresh lifeline that was thrown potentially by mitch mcconnell, republican leader in the senate earlier today as there was a deal in place, at least devote in place to keep the government open through february 9th or february 8, which would be seven weeks. democrats on capitol hill are saying they could support this. here is chuck schumer little while ago. >> democrats will support this. the president and the house should follow the lead because shutting down the government over christmas is a terrible idea. one of the worst to come down the pike in a very long time. >> this deal would not have funding, which is what the president talked about that he

wanted to have rusty would endorse a government shutdown for the white house building up the argument today that if indeed the president has accepted that he would not be backing down. >> thank you very much. i apologize for throwing another development at you. we will learn more about what sanctions are being considered or actions are being considered. the library of congress paul ryan last official act as speaker of the house state goodbye. >> thank you, everybody. please. [applause] thank you, trey. thank you for being a great colleague and even better friend and more importantly, thank you for combing your hair today, trey. everybody's laughing because you know exactly what i'm talking about, don't you? i see all my friends and colleagues here. i want to thank you all for joining me here today.

i like to think our library of congress dr. hayden for having us here in the beautiful hall. remember meeting her mom right here on this stage not too long ago. you know, any time i come here i can't help but think back to this pivotal time in my life. it was the summer of 2012. i was about to speak at a local chamber of commerce group when i got the phone call right up there in the reading room, which is what many of us go to in the phone call was from beth myers from the romney campaign. at this point i knew that i was being vetted for vice president, but i hadn't heard anything. i didn't know how serious this was. i didn't think they'd take a guy from the house anyway. so that starts to walk me through how i would need to fly up to boston incognito to go through all these logistics of what is about to occur and it

just starts occurring to me that my life, my family's life is about to change dramatically and not call right outside that door there. i go to the reading room and give the speech and then i realize i've got to go vote on the floor. it was the last vote before the august recess. so this very moment when i want to be alone with my thoughts, i walked right into his former colleagues and reporters. it's one of those inflection points. you just remember certain crossroads in your life. this building, that moment, it reminds me right now that your plan, your direction can change in an instant. i have had a number of improbable turns in my life. i don't know what next. but before i go, i am grateful to have the chance to share a few thoughts in to say goodbye.

i am grateful to say goodbye to you, to this job into this incredible institution we call the house of representatives. a long time ago i came here to capitol hill as an intern for once the master in college. the plan was really simple. one semester at washington, learn something, that day. since then, i have been surrounded by some incredible people. the mentors to help set me on the right path, jack kemp, bill bennett, bob woodson. the giants who guided me the things i wanted to pursue, the people of southern wisconsin who gave me the chance to work for them. the staff who always made me better. the president and the vice president for being my partners in government. the colleagues who became lifelong friends.

and of course my family. this whole thing started as a family affair. my mom, my brother tobin, my sister-in-law, they ran my first campaign. my mom was my scheduler and so no one would turn down your mom when she calls to ask you to go speak to their group. it was a great setup. but it ends with family, too. i would not have been able to serve as speaker were it not for the sacrifices that chennai, liza, charlie and sam made. being a has-been and a dad is everything to me. so we have come a long way together in this improbable journey. so from the bottom of my heart, thank you. thank you all. [applause] you know, over the years and

especially lately i've always thought about this. i've been aching to myself whether my dad would be proud of me. would he be proud of what i'm doing, what i did question mark i lost about a young young age, before he had a chance to shape my path in life. i don't know what he thought it would make of myself. i was too young. but this was certainly not my plan. not even close. all i keep thinking every time i go back to this is what a country. what a country. were somewhat of an unassuming midwest upbringing gets a chance to be a part of all of this. what a country. you can pursue whatever your passion is wherever it takes you. i mean, that is the american idea, isn't it? the condition of your birth is your destiny. your struggle is in your destiny. it's part of your journey. you know, it's all laid out right there in the first words

of the constitution. before first principles he then, a first mission to achieve a more perfect union. we are conditioned to recognize that we are imperfect, but we are called to do better. so we revere these beautiful founding principles, liberty, free enterprise, can enter the government and then we go to work to apply them to the problems of the day and we build up the country's fundamental resilience, the antibodies that protect us from whatever is going to come our way. that is how we advance the american idea. that's how we built a more confident america. as trey said, as all my colleagues here now, i never wanted to become speaker. i was just a policy guy. i like to think i still am. but what i realize now is you don't really become speaker, at least i don't see it that way.

i don't see us power is something you take for yourself. it's not a price to claim or a trophy to raise. you accept a temporary trust to be a steward of the greatest legislative body in the world and it is an awesome thing. again, just recently the people have spoken and soon the house will become the care of a new majority in what i know will be a spirited republican minority. i wish the next leaders well. but it is precisely because this is so momentary. it is because you are here for just a small part of history that you are inspired to do big things. and on that score, we have achieved a great deal. we have much to be proud of. three years ago when we last gathered in this hall, we began the great journey to saturn nation on a better path, to move our economy from stagnation to

growth, to restore our military might and we have kept our promises. this house is the most productive we have had in at least a generation. today, we have passed 1175 bills, more than half of them with bipartisan support. and because it is my duty as speaker merely to say this, nearly 750 of those bills are still stuck in the united states senate. but the rest of them made it into law and that's an enormous achievement. now we have taken on some of the biggest challenges of our time and we have made a great and lasting difference in the rate of this country. we began an historic rebuilding of our military and our national defense. we enacted new test sanctions on some of our biggest foes. we ushered in a new career and technical education system, something though many of us have been talking about for so long.

record regulatory reform to help small businesses. a long-sought expansion of domestic energy production to be followed by america's new energy dominance. to extend the tide of opioid addiction, the most significant effort against a single drug crisis and congressional his area. criminal justice reform gave more people a chance at redemption, making its way through we are doing this all the way up to the end. a landmark crackdown on human human trafficking that is already yielding results in saving lives. ava with real accountability and finally utter care for our veterans. and after years of doubt coming years of the cynics saying that it could not be done, we achieve the first major overhaul of our tax code in 41 years. [applause]

think about it because i know i have a lot. i see kevin back there. we went from the worst tax code in the industrialized world to one of the most competitive. it's something i worked on literally my entire adult life in something that will help improve the lives of people for a long time to come. it's one of those elusive generational reforms. it's why we do this. certainly one congress cannot solve all that ails us. not every outcome has been perfect. but that's our great system at work. and i am darn proud of what we have achieved together to make this a stronger and more prosperous country. my mentor jack kemp once said that the central task of any political party has to offer people superior ideas of government. ics even more than a task replication. i see it as a labor of love. yes, you can make a career of

criticism. you can deal from that deck all day long. many people do what i certainly don't begrudge them. it seems like an easy living. but well done as always, always a better pursuit than well said, isn't it? in this business you catch slings and arrows. it is a price that i have been happy to pay because nothing is as filling as pursuing an idea that will truly make a difference in people's lives and sing it through from start to finish. to me, that is the ultimate proving ground of politics. it is a great manifestation of this experiment in self-government. i've got tell you the more you get into it, when you choose to truly engage in the process rather than merely endure it, the more you come to see that even our most complex problems are solvable. i've got to say i live here is convinced i was at the start

that we face no challenge that can be overcome by putting pen to paper on good sound policy, by addressing the problems of the day. the state of politics, though, is another question. and frankly that is one i don't have an answer for. you know, we have a good sense of what our politics should look like, a great clash of ideas coming civil passionate discourse through which we debate and resolve our differences. a system of government that doesn't just allow for that. our system depends on that. one side may win. one side may lose. we dust ourselves off and start a new knowing that each one thought in pursuit of their honest ideals. but today, too often, genuine disagreement quickly gives way to intense distrust. we spend far more time trying to convict one another than we do

trying to develop our own convictions. b. and again someone has more currency than being for anything. and each of us from each of us asunder cells operate in on the wrong side of this equation from time to time and all of this gets amplified by technology with incentive structure that preys on people's fears and algorithms that play on anger, outrage has become a brand. and as with anything that gets marketed, it gets scaled up. it becomes more industrialized, more cold, more unfeeling. and that's the thing for all the noise there is actually less passion, less energy. we default to be the litmus test in denunciations. it's just emotional pablum fed through a trough of outrage. it's exhausting. exact meaning from our politics. in urges good people from

pursuing public service. the symptoms of it are in our face all the time and we have to recognize that it's roots run deep, deep into her culture, deep into our society today. and all of this pulls on the threads of our common humanity in what could be rn route during -- unraveling. but nothing says it has to be this way. we all struggle. we are all fighting some battle in our lives. so why do we insist on fighting one another so bitterly? this kind of politics starts from place of outrage and then seeks to tear us down from there. so, key question, how do we get back to aspiration and inclusion restart with humility and seek to build on that. i don't know the answer to that. but what i offer today instead

is something to keep in mind as we all try to navigate through this moment. our culture is meant to be shaped not by our political institutions, but the institutions of civil society, of our community. these are the places we come together with different backgrounds. churches share these teams come at pta meetings where we build up our social capital, currency that, currency to keep this router to where we live and how we live with one another. rediscovering the human connection is one lane on the road back to aspiration and inclusion is the guiding and fluent the public life. as i said, the drivers ever broke and politics are more obvious than the solutions. so this is a challenge i hope to spend more time wrestling with in my next chapter. as i look ahead to the future, this much i know. our complex problems are absolutely solvable.

that is to say her problems are solvable if our politics will allow it. there are three big ones in particular that i think we can tackle in the years ahead of the country. they are challenges that have vexed this country for many years. as they leave i recognize so much more needs to be done and if we get them right, we can be certain that this will be another great century for our country. you all know that finding solutions to help people lift themselves out of poverty is a personal mission for me and for many others. i think we've made a real progress here in a relatively short amount of time. four years ago when our nation marked from the war and poverty we expose some pretty hard truths for all the billions spent, the programs created we've barely move the needle. but we have begun to break their

spirit and opportunity zones will bring more into distressed communities. social impact bonds will push towards community leaders solving big problems whether they're hoping the homeless on reducing recidivism. job training programs and case management approach are things that will help more people move from welfare to work. we've got a long way to go no two ways about it, but this is what i find to be so dynamic about free enterprise. it's not just about creating jobs. it's about restoring the meaning of the job, the meaning of work. it's not just getting people off with the sidelines. it's about helping get people on the path of life and i firmly believe solving our poverty challenges once and for all will require not just a great undertaking, but a great read

thinking of how we help the most vulnerable among us. and it begins with realizing the best results come from within communities, where solutions are tailored and targeted for people's needs. this battle will be won either live. in thank you for showing me that. we've got great advocates for welfare reform our party like my friend, tim scott. i challenge my party here, do not let this issue drift from your consciousness. every life matters and every person deserves a chance to succeed. let us keep advancing ideas to allow people to live lives of self-determination. this is great work and we can achieve this. second, i believe we can be the generation that saves our entitlement programs. frankly, we need to be in diet

knowledge plainly that my ambitions for entitlement reforms have outpaced the political reality and i consider this her greatest unfinished business. you know, we all know what needs to be done. strong economic growth, which we have an entitlement reform to address the long term drivers of our debt. our revenue is about to return to its 50 year average. what continues to plague us as a mandatory spending system that is deeply out of balance and unsustainable. this was the case when i came your 25 years ago and it is the case today. not too long ago few are willing to recognize the scope of the problem let alone engage in solutions. our government wasn't even inclined to examine our long-term fiscal picture. it didn't work that way. we had to go about changing the debate before we could begin to even try to begin to change people's minds.

look, i'm proud of her euros budget chairmen would pass in the house a roadmap to balancing the budget and that tom price and diane black did the same as well. in this congress, we came within one vote of real health care entitlement reform. think about that. federal health care spending remains the principal driver of entitlement spending. our bill would've reformed two of our major health care programs to make unsustainable and to meet the health care needs of our country. so we have come a long way and we are closer than people realize and ultimately solving this problem will require a greater degree of political will than exist today and i regret that. when the time comes to do this and it will because it must come in the path ahead will be based upon the framework we have laid out to solve this problem.

we can get there. we really can tackle this problem before it tackles us. here is the third challenge but i think we'll have to address. we have to fix or broke an immigration system. right now, we are again locked in a short-term battle over one aspect of this issue and no matter what the outcome is in the coming days the larger problem will remain. the system will be in need of serious reform and no less than her full potential as a nation here is that jake. the right mix of policy solutions as they are. border security for starters, but also a modernization of our visa system. so it makes sense for economy and people so anyone who wants to play by the rules, work hard and be part of our american fabric can contribute. that includes the dreamers. those who came here through no fault of their own in the

undocumented population. in order to fix the system, you have to reset the system. in order to truly enforce the law, you have to get people right with the law. again, we get closer and this congress than people realize. next are the supreme court will make a ruling in both parties can and should go back to the table. in this right is an economic and moral imperative and it would go a long way towards taking some of the venom out of our discourse. if we do these three things come and make progress on poverty, fix our immigration system and confront this debt crisis, we can make this another great century for our country. look, i recognize these challenges are ones we haven't made much progress on in years. but i've got to tell you i'm confident we still have it in us to solve that.

a good friend of mine recently commented to me that amid the frenzy of politics today we've got more faith in our system than ever before. in our system really bad ideas get killed in good ideas they just take time. our problems are small bowl of our politics will allow it. i know it. i have seen it. and a confident america, we don't shrug our shoulders and we don't pass the buck. we roll up our sleeves and we get on with her work. the confident america leads the world too. not with bluster, but with steady principled action. remember, history really does have a way of repeating itself. the democratic capitalist monologue again faces a defining moment in test. much of our day-to-day attention is focused on threats from

machines and radical islamic extremism as it should be. that's sad, i strongly urge leaders in both parties to devote more time and energy to the direct challenge to china poses to the west. china unabashedly offers an alternative in the form of an authoritarian model with a veneer of 21st century capitalism. the sense i get from one of them traveling overseas as speaker is that our allies wonder whether we are doing the game or not. when we showed that our way of doing things still has juice, that we can do the most good for the most people, liberty gains ground. when we get complacent, we risk the more go in the way of autocrats. a confident america stands up to his challengers by committing to the pillars of international relations, by relating. in addition to our military in giving the intelligence

community the tools it needs, this congress has worked to strengthen our security cooperation with our allies, particularly nato in the indo pacific region. good security cooperation goes hand-in-hand with strong economic ties. that's why we need to continue to pursue free trade agreements that open onto american made products. a lot of effort needs to continue. we don't want our competitors writing the rules of the road in shutting us out in a confident america exercises clear moral leadership. we need to continue to work together to promote things like global health initiative, fight human trafficking and be a voice for the voiceless. our economy is strong. our military second to none in american leadership makes the most of both of those things. so for each of the challenges i have discussed here today, there were people of goodwill in both

parties who are ready and willing to take action. everyone does not need to agree on everything. everyone does it mean to disagree on everything either. all you need is enough people of good faith willing to take up an idea. that's a good start. so what comes next? well, we're going to have a lot of new faces around congress next year. i hear a lot of good things about this freshfaced guy from utah. [laughter] so here's my advice to members new and members old. this place is full of wonders and opportunity. but do your best to stay grounded. the way i think of it is either you change things or things change you. so you have to keep your sense of self. work hard at team where you are. it's what i've been praying about literally every morning since i first came here to keep

my sense of self. i knew i took this job and became speaker of become a polarizing figure. it just comes with the territory. but the one thing that leaves most proud of is i like to think i'm the same person now than i was when i arrived. still never forget the excitement that brought you here. remember how awestruck he felt the first time he stepped on the house floor. keep that feeling. especially when they tell you you need to act this way or that way. hone your abilities to advance ideas. sit down with people who know more about something than you do. listen. keep at it. invest in the process. you're going to hit roadblocks. that's okay. give yourself some grace. timing is everything so you have to get it right. you have to be prepared. you may not get too many shots at it, so you have to be ready when the moment for action demands action. and focus on good relationships

with your colleagues. good to know people on the other side of the aisle. get to know a human side of serving people. build personal relationships so it's not just transactions. you want real relationships. having real relationships, that will help you overcome pitfalls and build trust. i see a lot of real relationships right here in front of me. most of all when you give your word come you have to keep your word. it's really important. give your word only if you can keep it. keep a balanced temperament, sense of gratitude, which brings me to this. to everything there is a season and for me this season of service is coming to a close. i have had a chance to do some rain that i love so much for so long, to do my small part to advance the american idea and they leave as they came here, an

optimist to the core. i wouldn't have it any other way. nothing is impossible if you're willing to go out and fight for it. if nothing else, i simply ask you to remember one thing. we are each part of a larger story, a greater cause in what we have here is a miracle. it really is. in this miracle has made us the most free and the most prosperous nation on earth ever. cherish that. marvel at that. always dream big. always raise your. for just as remarkable as what we have achieved is what we have the capacity to do still. so here's to the people. here's to the people's house. here's to possibilities. thank you for everything.

god bless america. [applause] neil: already coming you have been listening to outgoing speaker paul ryan. a great deal of wisdom coming from a 40-year-old man. he was 45 when you send to the speaker's office, 42 when he was among the youngest vice presidential candidate at the time joining the mitt romney ticket. certainly the youngest speaker to personally take himself out of reelection and running for reelection since theodore paul murray back in 1869. but in this young year's come a great deal of wisdom about the rough and tough world of washington, among other things talking about a tax credit which is very, very proud, but also the entitlement reform of which he was not. saying that i believe we can be a generation that saved our entitlement programs and we will need to be. i knowledge my ambitions for entitlement reform have outpaced

the political reality and i consider this our greatest unfinished business. of course this is an issue that has come up again and again as many criticize republicans and democrats alike for not getting serious about entitlement reform or budget deficits to top $1 billion this year and every year for the next three or four years to come. no less than the federal reserve and jerome powell when he comments on what is likely to be an interest rate hike very, very shortly at the top of the hour and he will press the fact that this has been a big concern here. that added that obviously gets pricier even if interest rates go up even a teeny bit. read on all this in the daily color and his foundation chris bedford. i was thinking of the effort it took what do you like guy or not, when he was simply trying to save the growth of medicare, not cut it, but slow the growth and he was pictured throwing granny off a cliff.

democrats abandon them, it is a thankless task and isn't it? >> absolutely is a thankless task. it's a difficult issue for republicans to push. a lot of the older voters who lean republican are really freaked out by may and the attempt to touch social security or any other a program they have that they rely on in their lives. it's not a popular issue. it's a complicated issue and an extremely important one. you can't help but wonder how disappointed paul ryan is to have left such an impressive career, such a young man, but to a washington with the republican party who has completely different aims and goals and talking points than the one he tried to create with mitt romney a speaker. neil: it is interesting that old guy who had them on his ticket as the new incoming utah senator. though there is a bit of a twist of irony there. what can we expect in paul

graham's future now? he goes into private life. not much private experience. he has been for the better part of 20 years now a key washington figure. if you think about it, he came to the hill in his upper 20s. what can we say? >> will be hard to know which direction he goes. there's been rumors aei would like them to become the new president but there is of course pushed back. neil: american enterprise institute. be my guest, conservative think tank. what they want someone leaving the republican party that's in the minority and is so closely linked to a political party. there've been talks about that. i don't know if he's been except that, but he could make a lot of money if he wanted to join the swamp as well. congressmen leaving who are very divisive. paul ryan could talk to democrats or republicans. neil: what about his political future? what i look at his age i have ties older than this guy.

he's got a future or does he? >> he would have a difficult time on the national stage with the future. the republican party of the vice presidential candidate with mitt romney is largely gone. the entire focus of the gop has changed and he's young enough you might see a swing back the other way but i wouldn't expect it in 2020 or 2024. neil: chris coming thank you or image. build roads on this. we're waiting to hear from the federal reserve. of course many federal reserve board members weighed in on the hype breaks echoed the sentiment of jerome powell that this debt we've got building and the inability of congress under republican and democratic front to do anything about it does concern them in their making it more difficult by hiking rates in the cost of the dead were prohibitive. how do you see this all going? >> first of all and i predicted this at the beginning of the year. we're going to see a rate

increase today. you might have a positive beginning of the year but we will see one or two next year because the fed needs ammunition in the sense of what they would do in case we run into a recession at the end of next year or the beginning of the following year. there's a lot of pressure on powell and the board not to raise rates, but i think that they're going to be data driven and will get a little better idea when he gives his press conference. remember, we've had 10 years of the major central banks for the world starting with the fed putting trillions of dollars of stimulus into the market, both in the sense of dropping interest rates and a quantitative easing. in starting to real bad back and that's going to affect the economy. we are lucky here in the united states with the growth we have. i just heard the end of paul ryan and i give him a lot of credit for what he did on tax reform. i think he's a great american. i think he did a good job

considering all the odds against him as speaker. one of these days we'll see him back again. neil: he was talking about the tax cut in the house and that was tough because among republicans not a single democrat voted for it. but he did say again paraphrasing here that we don't have a problem getting money into washington. we have a problem with all the money out of washington. i am wondering whether that is lost in washington today. does that worry you? >> i think we're building up the deficit that is something we've got to be concerned about. that is one of the reasons why the fed i think we'll continue to raise rates until they see that the economy has been affect it here. remember, we also have to look at the rest of the world. europe is slowing down big-time. i just got off an airplane from beijing and the chinese economy slowing down. i was at the head of the central bank over there discussing this and they are pushing a lot of money there to keep the economy

moving. we have this trade issue on the table. the chinese want to deal. there's no doubt in my mind i spoke with some of the most senior people in the government of china. they want a deal. the question is how long it's going to take are the real question we have a china long-term as intellectual property. >> akamai hear you. phil grove, thank you very much. pressed for time as we await the decision. jerry baker -- jerry baker is connected to everyone and they all appear on his show. what a rolodex this guy has. very good to have you. the message is the federal reserve seems to be poised to hike rates, but maybe to signal a ball slows down next year. you agree with that? >> there's been some speculation in the last couple of days with rising concerns about recession, stock market having a really bad month they may possibly hold back her that's really unlikely. [inaudible] >> they do in a dell.

what they don't want to do is give you the impression the market is going to determine -- they don't want to give that impression either. they are looking very hard with the economic data. there's some signs of concern overall may be that consumer confidence may be just edging down a bit. but it's been pretty solid shape the sort of central tendency is for continued growth in 2019 so they want to raise rates and keep on the path of raising rates of normalizing monetary policies. that said, there is no doubt the growth is slowing, that will have growth next year, that this expansion is 10 years old and there are some issues and concerns about the rest of the world, trade, what may happen is you been talking about with government deficits and challenges that may pose. there is a rising concern, so i think they will want to signal today that they're no longer on this path of corporate rate

increases a year and they will look closely with data and act in accordance with the data rather than committing to continuing rate increases. neil: you know what worries me and this goes all the way back to when we were hosting a presidential debate together, this notion that no one really cares about deficits. no one cares about all this spending. where the hosts of democratic senators thinking about $500 a month courtesy of the government, free college, all the rest. republicans are hardly any better continuing to squander opportunities when they run the entire show to help you slow the growth of government. so i don't see the political will dare to do the things that we have to do. >> it's very striking watching paul ryan gave his delicate airy speech there at the house. he very much his entire political career was entitlement reform. it is the growth of entitlements that is responsible for so much.

neil: was he doing a few years back? you think about it trying to rein in the growth of medicare. to slow its growth. >> what we've done is we've expanded medicare, drug coverage. we've actually expanded medicare. we've done nothing about social security at all, which is a looming threat to the public finances. as has been pointed out, something like four fifths of government spending is control of congress to decide or, of the house of representatives to decide. so until you get to grips with that, it is really hard to see how you're going to get to grips with the longer term challenge of the physical position, i completely agree with you, neil, is a real challenge and the chances are next couple years we get into trillion dollars deficits, it will be 5% of gdp

as we head into recession next couple years it will probably go higher. people will have real question marks about the sustainability of that debt. neil: do you hear from anyone that the federal reserve is pausing on all of this because the debtedness. alice rivlin, former fed chief worrying about corporate debt, this debt thing is out there, other politicians talking about student loan debt, this is like a ticking time bomb? >> i think it's a concern but as you pointed out what do you do? neil: yeah. >> like worrying about addiction saying what we need to do is give people more of the same. the world has become addicted to low interest rates for the last 10 years. it has been a driver of growth. it has produced so much liquidity. it has driven stock markets. driven a lot of investment, spending, people have more money in their pockets with interest rates so low. at some point the rate have to return to normal. when we do that, we'll see amount of debt taken on,

relatively serviced easily with rates at 2, 3%. the interest rates go back four or 5%,. neil: exponentially. >> the conundrum for the fed, risk hiking rates, making debt service much more expensive to create a crisis or they say we better hold off on rates give the people amazing opioid they have had for the last 10 years. neil: dewean them from it. gerry baker, "wsj at large." who do you have on? >> we have john hickenlooper, one of the 273 democratic candidates for president. neil: i thought it was 274. we'll look at that, gerri. thank you very much. connell mcshane to get ready for the fed announcement one way or the other. connell: welcome to "making money," i'm connell mcshane filling in for charles payne. the breaking news as i'm sure you know we are seconds is away from the highly anticipated

decision for the federal reserve. they are expected to raise rates fourth time this year. what we are looking for is the statement. what they say about the future. at bottom fed chairman news conference with jay powell. here is the decision with edward lawrence. reporter: the federal reserve raises interest rates a quarter%. we're in the target range of 2.25 to 2.50%. the federal reserve sees two rate hikes next year, down from three. one more in the year 2020. the fed changed one word in the federal open market committee statement. the one word is some, gradual rate hikes. they will see later on. federal reserve sees long term newt tall 2.8%, down from 3%. federal reserve expects to reach neutral by end of 2019. during the meeting, three federal reserve members moved their projections down. that is changes some of these. the federal reserve