delete facebook from their phones. some carry facebook preloaded. samsung says says you delete it, we will not collect the data. time's up for me, neil. neil: they are all collecting data. they doth protest too much. we have lot going on here. including shutdown going on 20th day. one more we tied a record. two more we broke a record. goes back to 1995 with newt gingrich bill clinton, and republicans at loggerheads. what that whole crisis started the republicans were deemed to have the edge at the time when it is all started. it is a reminder things can quickly change. the sentiment can quickly change. who is on top, who is getting pr, upper hand, that too can change a little historical point

for basic cable for you america. i pass it along. i show you headlines blow it away from the period that will put it into perspective the president on the latest shutdown, the president going to the border who said what, who meant what, blake burman at white house. reporter: president trump will be at the southern border, mcallen, texas, is where he will land shortly. you're right, this stalemate continues on day 20. both side remain incredibly dug in. as the stalemate continues the president talked about the possibility of declaring a national emergency. as he left the white house here earlier today, the president spoke with reporters and said that his lawyers have told him he has the 100% right to do so and if he decides to go down that lane, the president says, the government has got the money. >> if we declare a national emergency, we have tremendous

amount of funds, tremendous. if we want to do that, if we want to go that route. again there is no reason why we can't come to a deal. but you have another side that doesn't care about border security. the democrats, which i've been saying all along, they don't give a damn about crime. reporter: now the president said, there are quote, various mechanisms from which that money could come should he decide to declare a national emergency. he didn't specify which potential so-called mechanisms though it is believed one way he could bo about it, by tapping the military construction budget for fiscal year 2019. that is north of $10 billion. of course, neil, we have to point out if president trump decides to go down that route, and there are many who think this might be the only way out of it, it would assuredly face legal challenges, probably going up to the top but the president today says that his lawyers have told him that he could do it.

neil? neil: he would have to prove that a emergency exists. conditions worsened to point that emergency action is required on the part of the commander-in-chief? >> the commander-in-chief says there is a crisis at the southern border. he tweeted out within the last few minutes here, former president obama in his own words, saying it was a humanitarian crisis. the president saying when you read through the statute there, there is a couple of them, at which the lawyers could point to, that he feels it is on his side. but i'm sure you could talk to lawyers on the left as well that feel there is a couple statutes that would read the other way. neil: that is the problem talking to lawyers, isn't it? blake, thank you very, very, very much. let's get the read on all of this and what the president is saying particularly about nancy pelosi and chuck schumer on this crisis. >> i find china frankly many ways to be far more honorable than crying chuck and nancy, i really do. i think that china is actually much easier to deal with than

the opposition party. neil: okay. he said china is easier to deal with than chuck and nancy. let's go with that. oklahoma republican senator james lankford. senator, what do you think of that? that he makes more progress talking to the chinese than he does the two leading democrats on capitol hill what do you think? >> i think that is good signal for negotiations on chinese on trade policy. that i take that as good hint we're making progress there. doesn't seem like we're making progress at all with the democratic leadership in the house and senate. they basically said nothing. the president said we're going to do something. we'll see if they can actually fix this. neil: what is the hank-up for the time-being? i know that if we're to believe the reports of the white house that the president walked out of the room, it is his room, he did it anyway, they showed no willingness to address the wall issue, whatever calling it now?

they first claim they wanted to get the government shutdown done before they talked about anything. he goes back to the argument, you wouldn't even broach the subject i thought was at heart of this which is the wall. >> democrats unwilling to discuss fencing any kind of pedestrian barrier. anytime it comes up, we don't need to do any of that. clearly we do in urban areas when you have a quick movement from the one country to the next from mexico into the united states in and urban area you have to some kind of fencing there. this hasn't been controversial in the past. quite frankly most of my democratic colleagues lately quietly said i hope the president declares an emergency with this and they feel like they can just hold out and do nothing and they will look strong to their base, that they held out. the government will reopen when the president declares a national emergency. we can then move on. they're quietly wishing he could do that emergency. they feel like they're stucco posing border security when they really quietly want to do border

security, which their base telling them not to do anything on it. that is not where the american people are. neil: the polls are all over the map, senator. i would be curious what you make of these republicans who are nervous, this is going to zoom them and at least eight house members, republican members want to find a way to get this settled and soon because, it isn't helping the party cause, you say? >> every person will vote for their district. will listen to folks in their state and districts to make the decision. republican members they're hearing from their districts different messaging they will respond back to what it sounds like back at home but the biggest issue we all have to face, we have federal workers as of tomorrow won't get a paycheck. we want to get that resolved. this doesn't need to come to an end. there is a reason shutdowns don't go past 20, 21 days. that directly affects federal workers. neil: this wasn't supposed to happen.

mitch mcconnell had an understanding, he thought he did, with the white house that they would get the government open and deal with the security issues, homeland security, itself separately. the understanding was that that had acquiescence of the president and we know what happened since. >> right. neil: did, did republicans get kind of missed signals from the president? >> i don't think we got missed signals from that. the president has been very, very clear. since last summer he said he will not sign a bill on appropriations at end of the year that doesn't have additional border security in it. he said it over and over. no one believed him. is what really happened. myself and multiple others voted against what came through the senate. this doesn't deal with border security. this doesn't have the appropriations. its not right way to go on it. it passes the senate. goes to the house and house says no obviously. the president said no to it. but i think the president has been very, very clear on this for a long time.

anyone now saying shocking at end of the year president wants border security has not been paying attention this year. neil: we'll watch it closely, senator. thanks for taking time. >> appreciate it. neil: "the hill" editor, bob cusack joins us now. the president hinted more strongly than ever, declaring a national emergency to force this issue. how would that to, do you think? >> i think that is where we're headed. remember martin luther king holiday is upcoming. so i think he is likely to do that because, i mean, neil, both parties are going in opposite directions. one thing with the democrats people are not really focusing on, at initially one point 6 billion. went back to 1.3 billion. now they're at zero. i don't think there can be any deal or small deal, maybe a big deal, that is tough to do. i think trump does this, goes to the courts and maybe get to the supreme court. there are a lot of conservative own the supreme court. we'll see what happens. neil: it is interesting when i was looking at 1995 government

shut down, that holds the record, i was surprised to learn, although i covered it at the time, you would think i remember, started out with republicans having the upper hand. the sentiment was building that americans were aghast at all the spending that was going on, particularly health care-related issues, and they thought they, the public at least initially polled thought they were given the upper hand in that there were more people inclineed to think the republicans were on the right track. it dragged on. it was quite the opposite. it was a historical swing. >> yeah. neil: i'm wondering those who say this will hurt democrats and hurt republicans help democrats, some of the polls are lately showing pretty even who the american public is blaming for this, whether that is accurate or not. what are you making of that? >> well i think, remember, the early 2018 shutdown initially was going to be the trump shutdown. republicans played a good pr

game. it became known as the schuler shutdown, democrats backed down. they were pushing for dreamer language. never got it. you never know. one thing on the whole thing, neil, i think trump and republicans have a lot of leverage at the beginning of the last congress when they controlled everything but republican leaders, including speaker ryan didn't make it a priority, didn't make the wall a priority. now trump doesn't have as much leverage. they should have done this earlier. neil: if they don't make much progress on this issue and the president forces an emergency to get this wall or whatever they're calling it going all it would take is one judge in one district court to put the kibosh on it and whatever they're building would have to be stopped building, right? >> yeah. of course both sides would appeal all the way to the supreme court. neil: my goodness. >> so it will be a long process. i think that is where we're headed. neil: do you really? >> i do. neil: nothing like a little constitutional crisis to stir the pot. always good seeing you, bob.

thank you very, very much. >> thanks, neil. neil: we're following that. we're following president arrive on the border to talk about these issues. we are waiting for jerome powell, taking questions from reporters and regional bankers and the like. this may be the first chance to glean what he meant by go slow, data dependent approach they apparently took at the last meeting, minutes came out yesterday. you might recall the summation of that we were going to see probably all of two rate hikes this year. if that. was that the correct read? we'll find out after this. shield℠ annuities from brighthouse financial

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you'll even get free shipping. get started today at customink.com. neil: all right the president is already saying he will declare an emergency if he has to on the whole government shutdown, funding for the wall, whatever you want to call it, but even his traditional allies are getting concerned. chamber of commerce says businesses are being hurt by this. ceo and president tom donahue was the first to send a clarion call, we have got to do something about this. tom, good to have you. thanks for coming. >> i'm glad to be here, neil. neil: let's get right to it. you were trying to say we have

bigger fish to fry so to speak. let's not lose sight of extraordinary prosperity and peace provided with organizations like wto, you and others, for 3/4 of a century. this is a little different than talk of a government shut down but the priority of getting something done with the chinese and getting that right it matters longer term. this sort of stuff is all, sort of dangerous to that, right? >> exactly and i think the meeting in china recently concluded was a good forerunner to lighthizer picking up on that discussion coming days and i believe the chinese understand they have had some challenges in their own economy and we've had challenges with the chinese

economy that it is time to move forward in our mutual interests and i'm very hopeful lighthizer and his gang will move forward on this and that we can then go on to other trade and investment issues that we need to take care of. neil: so does this whole shutdown over this wall thing just get in the way of that, is it not important, how do you describe it? >> look, this shutdown we had a lot of them overtime with both parties. longest went 21 days. today is 20 days. people start missing paychecks. having problems paying their bills. and then it moves away from what is intended as a stimulus to work on some of these questions, to being a real serious political party problem for both parties when citizens, all of

them, lots of then, have real worries about their personal finances. and i'm hopeful that will sort of bring this discussion to a constructive end. as you know we sent a letter up to the hill and to the white house suggesting they get on with it, take care of the dreamers and we're very willing, right now to help them in any way we can. neil: did you hear back from either side? >> [laughter]. all right. neil: fine, i guess not. is it your sense though, that using the government as a leverage here to shut it down or you know, to force the issue, democrat presidents tried that, republican presidents tried that, i'm wondering if that is part of the drama around fitch investors, the ratings service, putting our triple rating of our country up for review?

that this is the type of craziness not worthy after aaa rated country? what did you think of that? >> what i think is, when you start these debates, and when you implement shutting down the government is the beginning of the story and it has happened a lot of times before, and it seems to work, but right now, we're running into a whole lot of things at the same time of the ones we talked about, those people worrying about their finances, the questions what are we doing in china you thought fully indicated, we're trying to figure out now how to keep the lowest unemployment in our 60-year history. we're trying to keep the economic growth number up where it needs to be so that we make these long-term jobs. we're trying to keep moving forward in a way that we'll then

have the momentum to get approval of the former nafta, now i call it the united states marine corps, the new deal, the nafta deal and all of these are connected and it is time to move forward. neil: do your members, tom, want a wall? >> i think it would be safe to say that our members believe that we ought to have border security. the question of the mexican border from one end to the other is, you know, we have the normal crossing points, we have mountains, we have places that nobody goes. neil: right. >> our members have, don't have a view on that unless there are people that build walls. they want border security at a reasonable level and think the government should get together among themselves and do what's right. neil: all right, tom, thank you very, very much. good catching up with you. >> look forward to seeing you,

thank you. neil: hampton hue, man who heads claim irabout commerce, one of the earliest business-friendly, some would argue republican friendly crowd, saying enough with this craziness. let's get back to work. let's open the government. meanwhile joe lieberman what fellow democrats are doing, medicare for all, higher taxes for the wealthy, you name it, he is on it. joe lieberman next. how did edward jones come to manage a trillion dollars in assets under care? jay. sarah. so i have a few thoughts on that early retirement... by focusing our mind on whatever's on yours.

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(peyton) makes no sense. babies can't even walk. should have been a life insurance policy. plus it would have been a great song. think about it, the lyrics, the beneficiaries... brad, where are you going? >> i have no problem with having a progressive rate that goes higher for super income individuals. neil: are you in that 70% camp? talking of a rate of top rate of 70%? >> i'm fine with looking at that. neil: really? >> the most important point is there is not enough revenue available there to make kind of investments congresswoman ocasio-cortez wants to make. neil: he will be running the budget committee in the house of representatives. of course congressman yarmuth

was saying, even if you wanted to lift taxes on the super-rich to 70%, it wouldn't give you the revenue you need to do a lot things, republicans or democrats more to the point want to do. former democratic vice-presidential candidate, joe lieberman. good to see you. >>, too you, neil. neil: what do you make of the chairman is there, i do believe the rich will have to pay more. he has a proposal to raise corporate tax. >> right. neil: there is only so much you can do. >> absolutely right. the first thing to say we already have a progressive income tax system. i mean last time i looked almost half the people don't pay the income tax because they fall below the level which is fair. so the other half are paying a lot. neil: but even that half part, senator, if you think about it, when i was in grad school it was about 10% were not in that camp. >> yeah. it has gone up. neil: how? >> congresses of both parties

made it more progressive and, okay -- neil: depends on fewer and fewer, paying more and more. >> yeah. if you look, i know some people at the top are making awful lot of money, but if you look at, you accumulate income in the country the big bump is still in the middle class. because there are so many of us, thank god. so, you to the to be careful about raising taxes too high. you have got to be careful about really, i think a 70% tax on high income people is really done for political reasons. it is punitive. neil: is the congresswoman the future of the party in your view? >> no. i, with all respect i certainly hope she is not the future. i i don't believe she is. she has gotten a lot of attention because she is different and controversial. but if you look at the majority of new democrats in the house, they tend to be, i'd say

center-left and not left and that is because they had to be center-left to win some of those competitive swing districts they took from republicans. so that is the hope. incidentally, if a democratic candidate has any hope of winning for president in 2020, they will have to be seen as centerrer-left, being simplistic, not far out. neil: when al gore picked you to be his running mate, i thought it was a smart move on his part but, my only point is that would never happen today, with the political environment the way it is. moderating influence on liberal or moderating influence on a conservative, i don't think that would happen today. i think both parties are captors of -- >> it is unfortunate because i was raised in politics at a different age. somebody in connecticut said to me, you know, politics is about addition, not subtraction.

you can't just stick with your core constituency, you have got to add to it. often for a presidential candidate are or she adds to it choosing a running mate who is different than they are and i hope that happens next time around. neil: good luck on that. you know, you talk about both sides appealing to the respective bases. the rap against president trump his is all about his base and not reaching beyond it and there is a finite number to that. could that hurt him? >> well it could but we'll see what happens but if you look at the exit polling after the 2016 election which president trump was elected, of independents, unaffiliated veriers in the country he did pretty well. he carried that group. you look at it now, they're more negative toward him. neil: what would the effect be, senator, with so many vying for the white house in the democratic party that ultimately, we'll settle on one individual i understand that.

>> right. neil: but what is your sense how that changes the dynamics? >> it is going to be a winnowing out process. the republicans had it last time. donald trump emerged from it. democrats had it a couple times before during the bush time. neil: right. >> it's, you know it is up to the party and really a key here and it was a key in some of the democratic congressional races last year, in november, to try to get out the moderate democrats to vote in the primaries because, otherwise, if, and presidential, if it doesn't happen, the party will nominate, democratic party, a candidate who is to the left, and then donald trump, who is very good at this, will go back to the independents and moderates hey, maybe i did some things you didn't like, but that candidate in the other party, wow, he is far out or she is far out and that may work. neil: your sense of the environment in washington here?

we're facing a shut down that could break all records, the two sides aren't even close. >> right. neil: do you recognize this washington right now? >> you know it's barely. it is sad to see and it bothers me because he spent 24 years of my life in the senate. i identify with our government, i believe in what its function should be. we depend on it in all sorts of ways and it requires compromise negotiation to get things done, even to keep the government going which they failed to do right now. neil: democrats say well, the president started it. >> then the president can say democrats did that. honestly i hate to say it, i will say it respectfully, they're acting like adolescents or even younger children. neil: like separating my two teenage sons. >> that is what it is like. we need better. the fact they can't even agree how to keep the government operating, basic needs, is

really, it is heart-breaking. it is also infuriating. it doesn't look like they will resolve this. neil: it could be fleeting, right? whoever has the edge, we're seeing in some polls, they're all over the map, senator, i grant you. >> right. neil: used to be getting all trump blame all the time is now, at least in the some of the latest numbers more even. >> yeah. neil: i was surprised to learn in the '95 shutdown that republicans had the upper hand in the beginning and public sentiment changed as it dragged on and on. they looked obstinate. >> you're right. i was there in '95, clinton-gingrich, but democrat republican, about 21 days the government closed. both leaders, both parties suffered. it is fair that both parties suffered. so may have been a slight advantage for the democrats, more people blaming president trump because set president, for the current shutdown but in the end everybody suffers and the public gets more disenchanted

and disgusted with the government. neil: yeah he. >> and they look for, look for a change. in that context, you know don't count president trump out. unless the democrats provide more than, he is terrible, he is is wrong. they have to come up with affirmative agenda. neil: see where a president walks out of the meeting, it is in his house, he walks out of his own house. but he walks out of that, they don't budge, that is the democrats that were leaving. >> right. neil: the president won't budge because they don't budge. >> right. neil: and this thing suddenly looks like it could drag on a lot longer? >> it does. other government is functioning more like reality television than it is like a government. so people do the dramatic act but, they don't sit down and negotiate and compromise. always the way, biggest things have been done. in the ol' days, you know, we all say, everett dirksen would go to the

floor of the senate, castigate lyndon johnson. tip o'neill would to to the floor, castigate president reagan. then the presidents johnson and reagan, invite dirksen and o'neill to the white house. they have a drink. johnson and dirksen dot civil rights act, reagan and o'neill save social security. that is american government at its best. neil: do you think that will happen here? >> no. i just thought of something, neil. don't misunderstand me, maybe our leaders are not drinking enough. neil: i subscribe to that. >> together i mean. neil: i can vividly recall when tip o'neill and late jim wright, president would meet and personal visit to the white house, each side was cognizant i don't want to rub the other guy's nose in the dirt. they were cognizant to avoid that spectacle. >> that is what has gone here. it has gotten personal. there was a certain drama to

government always. let's total, 24 hour coverage but the drama tended not to get into personal hatred and today i'm frayed it is heading in the other direction. save us. neil: i think what ruined us, graphics, packages, loud and serious music. we have a doozy on the government shut down. >> all right. i never thought of the graphics factor. neil: i think that is it. graphics and just the drama. we build the drama. >> okay. neil: i'm trying to extend it to quoting money supply figures, bond market updates. things with a little music and some drums -- >> don't forget the music. music is very soothing. neil: exactly. >> we need soothing music. neil: tie -- remember when we

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neil: you talk a lot to the regular news guys, this is business network you're watching, i always tell them, you know, jerome powell, federal reserve chairman is speaking today. they say that's great, neil, that's great. we're following government shutdown. jerome powell, federal reserve chairman has enormous sway on our economy, world economy, is taking questions from reports today. that's great, neil. that is what i have to deal with, america. indifference to things i think you should know b. fortunately we'll carry remarks, back and forth live, uninterrupted. that is the way we roll. gerri willis is here, phil flynn and market watcher lindsey bell. gerri, the view seems to be he

will stick to the view he kind of hinted at, back around christmastime, when that rate hike might have been seen as the last for a while, maybe not, the entire year but for a while. what's your sense? >> i got to tell you, you see this market, it is in a holding pattern right now. we're essentially flat on all three major averages. these traders down here, they want to hear one thing, data driven, they want to hear measured. they don't want any surprises here. i think you will see a selloff if we get anything else but that. traders feel like the other view we heard from the nos, they think those folks are right, we don't need another rate hike here and they are looking at data out right now. you saw the macy's report, wow, what a tough christmas for the nation's biggest retailer. they trimmed their sales forecast for this coming year. these guys are looking at those kinds of factors. the fact that eps reported next week for the banks, that is up,

those numbers are up in double digits but, for the year we're looking at 6% increase for earnings. they're saying hey, this economy is at risk it. could slow down here. do not do anything with these rates. that is what i'm hearing. neil: lindsey bell, what is interesting about the macy's news, it came with american airlines cutting guidance for this year. and that sent a lot of airline stocks down, as well as did the macy's news, to gerri's point, hit a lot of retail stocks. i'm wondering, if you think about it, lifeblood of the consumer and economy shows what the consumer is or isn't doing, does that worry you? >> what worries me about the reports, how single reports from macy's, delta, took the whole sectors down. neil: yes. >> i think that is something you will see throughout the quarterly earnings season. the market is still up on that. bellwethers like apple, if he ex, they cut guidance

substantially. they took their sectors down when they did that. i think more to come in terms of guidance being cut. 2019 numbers they have come down. for some sectors they have not budged like financials and industrials are two i'm pointing to, are at risk, especially thinking about the industrials. you think about what business? fedex, apple seeing global growth slow down, tradeshowing down, china slowing down, that is not good for the industrials. neil: that is a very good point. phil flynn, fitch investors ratings service seemed to indicate the triple rating we take for granted in our country isn't a sacred right here. they're worried about the ongoing government shutdown. fast approaching mark 2nd deadline on the debt ceiling, enough for them to say you know, we've got some problems here what do you think? >> i think it is -- i don't think traders are worried about that right now. you know a lot of these rating

agencies lost their credibility during the financial crisis. neil: good point. >> even if they do decide to downgrade the united states that is so far off in the future the market doesn't really care about it. they do care about what jerome powell will say in the press conference because we remember just after the fed meeting he sent the wrong message to the market, right? especially we learned that after reading fed minutes yesterday, neil. if you read the fed minutes, it wasn't supposed to come off as hawkish. one of the things i took out of that that said some fed governors looked what the markets are saying, take a pause on interest rates. they decided not to go that way. they voted for a rate hike. but that wasn't the message that jerome powell gave in the press conference. he said yeah, we'll be patient. when he asked questions, are you raising rates and paying attention to the markets? he said yes we are, no we're

not. kind of like what the fed governors were saying maybe taking a pause on rates but at the same time sending the wrong message to the market. today he will have to stick to the script. when these questions come up he will have to -- neil: he will stick to the script. last time he had a paper. he will be cautious about that. left-hand side of your screen, folks, wondering what that is, that is economics club of washington, d.c., where jerome powell, federal reserve chairman will take questions from any and all on everything from the pace of rate hikes and if we see as many as been envisioned i think they're looking for two this years. overall economy and fitch investors report they're worried about the economy itself, i think the gentlemen are both going to get ready here. chairman of the federal reserve responding to these latest crosscurrents including a government shutdown.

>> we're honored at economic club of washington today, to have our special guest, 16th chairman of the federal reserve board. jerome powell. known as jay powell. [applause] jay, you were nominated to be a chairman of the fed by president trump. you had previously served as a member of the fed as your pre severs had as well, ben bernanke and janet yellen both served as members of the fed before they became chairs. you've been a member and chair. is being chair all that it is cracked up to be? [laughter] >> thank you, david. great to be here today. so i did, i was governor six years and i think i had every job on the board of governors there is to have other than chair and it's a very different job. whereas i was focusing on a million different things, now i'm focused on economy, public communication, monetary policy

and the institution. so it is quite a different thing. yes, it is a great job. it's a great honor to come to work every day. >> you enjoy the job but don't wish you were just a member? >> no, i do enjoy the job. i really do. i'm freight e grateful for the opportunity and enjoy it. >> you find as chairman your jokes are laughed at more quickly than regular member or any putts in golf you didn't get before? >> i guess we'll find out about the jokes. don't play much golf anymore. i think my jokes have always been well-received, frankly. [laughter]. >> last week you had a very interesting interview at american economics association with your two predecessors and at that interview you seemed to say that the fed's position going forward is that you're reasonably comfortable where you are with the fed funds rate. is that the proper interpretation or should people be reading more into what you

said last week? >> maybe provide a little bit of context there. so 2018 was a very good year for the u.s. economy. it was the strongest growth we've had in a decade. by some measures the labor market is very strong. strongest, or lowest unemployment. wages going up and inflation is staying near the target and we see continued momentum for the data right through the beginning of this year. we also see the financial markets expressing a view of concern about downside risks, really associated with global growth and with trade. so how do we put those two different signals together? so i think we're actually in a good place. i think where that leaves us particularly with inflation low and under control we have the ability to be patient and watch patiently and carefully as we see the economy evolving and figure out which of these go narratives is going to be the story of 2019. >> but at the end of last year in december, people thought that perhaps two fed fund rates

increases in 2019 were part of your plan. is it fair to say that is not part of your plan right now today? >> i think better way to think about it there is no such plan. you know, we don't actually vote on a path or a plan for interest rates. we have each individual participant on a fomc submits its individual projections four times a year. we did that in december. two rate increase was median. it was conditional on very strong outlook for 2019, an outlook which may still happen but the good thing we're in a place where we can be patient and flexible hand wait to see what does see involve. meantime we're waiting and watching. >> so i shouldn't anticipate at your next fomc meeting a big increase in interest rates? [laughter]. >> you should anticipate we're going to be patient and watching. waiting and seeing. >> i have no doubt. okay. by the way, fomc, what does that stand for?

>> federal open market committee. >> and who is on that? >> so that consists of all the members of the board of governors which there can be seven but currently five. those are nominated by the president, confirmed by the senate. all 12 reserve bank presidents around the country who are chosen by their boards of directors, subject to the approval of the board. >> have you tout of a better acronym. fomc is hard to say? can you get some other acronym for that? >> we may have to hire a branding consultant and get better thinking for us. for us it's a very basic acronym. [laughter]. >> last, yesterday, the fed released the minutes of your last fomc meeting. now you release your minutes not the day after the meeting. why don't you release your minutes the day after a meeting? >> we release a statement which summarized the decision and language is very carefully structured to express the rationale for the decision and then we actually go back and read the transcript very carefully. we aaccumulate the perspectives

offered by 17 different members. it takes three weeks to go you there process and we publish. we used to publish a couple months delay. now we publish with three week delay. they're meant to amplify what was said in the meeting. >> in the meeting it said there was whether you should increase interest rates, fed funds rates or not but opinion was unanimous. was it fair to say it was, united view of the fomc that you should increase interest rates when it turns out the debate was more divided than maybe the vote was? >> so i would say one of the great things about our system we really have institutionalized diversity of perspectives. 12 different reserve bank presidents each of his has his or her economic staff. at every meeting we have robust discussion, debate, often disagreement over the path of policy. i personally agree that is better way to make a decision. in the end people have to choose

with the vote with the proposal or not. in this case everyone voted but disparate views with were expressed. >> when people don't vote for proposal it is recorded they didn't vote for it? >> that's right. they will dissent and explain themselves and whole thing explain yourself carefully to the public and transparently. we try to put that out on the record for people to see. >> on capitol hill your committee chair said you don't call for a vote unless you know you will win the vote, when you're head of fomc head of federal reserve board is, do you know where the vote will be before the meeting starts no. >> yes i speak to, my predecessors did, i speak to every reserve bank president and every member of the board of governors in great detail before every meeting. we discuss the issues, and i certainly know, you know, what people will support and what they won't. so the proposal gets made generally one that attracts overwhelming support often not unanimous. dissents are not uncommon. >> if you call somebody who a

member of fomc, we'll have our meeting next couple days, this is what i think and they say, think a different view do you try to lobby them or don't do that in the fomc? nobody lobbies everybody else? >> no, i really don't. i respect the right of each individual participant to make up his or her own mind, express the view, put it on the record to explain it. i see nothing but value in that. it is not a question of lobbying. more likely, this doesn't happen, more likely we would adapt a proposal to be something a person would support than me to actually lobby someone. >> your immediate two predecessors had phds in economics. one from i guess princeton and one from yale. >> actually harvard. ben was harvard. ben was mit. >> he was at mit he taught at princeton. janet had hers from yale if i recall. >> right. >> you have a law degree from georgetown.

you practice law. you practice law and is there disadvantage not having a phd and having an advantage to a private equity background? >> [laughter]. you know, i wouldn't say there is disadvantage to having a phd. i've been at the board seven years. i had a been there a long time to learn monetary economics. if you serve on the board, not a phd economist, you have to invest. i have done that part of my career is learning different things and doing different things. i have an interesting story. i know a guy guy, know a guy founded private equity firm with no business degree, no experience and made a success of it. so it can be done. [laughter]. >> sometimes,. [applause] sometimes it is better to be lucky than anything else. so let me ask you this. recently the president of the united states who appointed you, less than favorable in some of your decisions. does that bother you in any way?

>> no. so we're very, very focused on our job. congress has given us a very specific job, it is an important job. we're here to serve the american people, all of the american people, try to use our tools to achieve maximum employment and stable price stability. that is what we're focused on. we don't get distracted by other things. we do not take political factors into consideration. either in our discussions or in our decisions at all. and that is just who we are. >> the president is the head of national economic council larry kudlow suggesting the president will have a meeting with you. have you received that invitation yet? >> no, no invadetics. i will say fed chairs do meet with presidents. i'm not aware of any fed chair in my lifetime who hasn't met the president. meetings tend to be rare. there has only been one or two during my time here. i'm not aware of any fed chair turning down invitation from the white house. nor do i think that would be appropriate. i don't have any news.

>> if you have an invitation you will be happy to accept it, right. >> i'm not aware of anyone not accepting it. [laughter]. >> okay. so let's talk for a moment about the economy. the fed in its fomc minutes pointed out there is disparity a little bit. financial markets seem to be a little bit the the financial markets seem to be a little bit uncertain, but the core economy seems to be doing quite nicely. i do explain why the financial market seemed to be nervous and the economy seems to be growing at a pretty good right? >> so, financial markets begin drop more volatile and it seemed to be a pessimistic outlook in the ongoing trade negotiations. if you look at the incoming data at the end of the year and

beginning of this year come you don't see evidence of a slowdown. we are in a situation where we have factors pointed out different directions. this is something that happens not as frequently. when we have that, what we do is apply sort of risk management principles. we are thinking about what are the risks. we are using our tools to address those risks. in that case, what does it mean? first there is no preset path. there never is, but particularly everything now. it gives us the opportunity to be patient and watch and see what goes wrong. are we going to see the more positive view that most forecasters have of this year or be going to see slowing global growth because if it does, i can assure you it is a common thing for the economy to behave in ways that are not exactly as we expected when that happens, we can flexibly and quickly move policy.

we can do so significantly as well if that's appropriate. we will always use our tools to try to sustain this expansion and keep the labor market strong. >> currently the u.s. economy will grow in 2019 at 2.3%. i believe that's your number. it previously was little higher, two by 5% last year. he lowered it come is that correct? and are you going to lower it again because of the government shutdown? will that affect the economy in your view? >> there is no official projection. to .3% with a median of 17 participants. half above and half below that. during the year, not infrequently, typically when we submit new projections every quarter, the projections will change. it's very difficult to forecast the economy to that level of precision. we will take into account tightening financial conditions, which we've seen and also lower our rate pat and try to have monetary policy offset weakness

before it even happens. >> the shutdown. what the impact of the economy on your view? >> in the short term of government shutdowns don't last very long, typically not left much of a mark, which isn't to say there's plenty of personal hardship that people undergo. at the aggregate level the economy does not reflect much damage from a shutdown. the longer shutdown is something we haven't had. if you have an extended shutdown and i think that would show up in the data pretty clearly and i would say particularly from our standpoint, one of the agencies that shutdown is commerce, which has the economic analysis and some of the pretty important data that we get is published by then including retail sales in gdp and a bunch of other things. so we would have a less clear picture into the economy if it would go on much longer. >> do you rely and other agencies to give you

information? >> most cases we get it from the rear of labor standards. we get a handful of series that we collect. >> let's talk about the economy going forward. we move close to the longest period of expansion since world war ii and we could break the record. do you see anything on the horizon that would make it likely would go into recession in 20 team? >> i don't see anything that suggest the possibility of a recession is at all elevated. they are most often caused by two things. one is inflation is high enough the fed has to hit the brakes. more common recently in the last several cycles it's really been a matter of mounting financial imbalances by which i mean asset bubbles, housing bubble, or just excessive leverage as you solve in the subprime mortgage. we don't see that either. so we don't see that too causes

of recessions. we don't see those risks. though the possibility is not elevated. >> you're not worried in 2019 about anything close to a recession. >> i don't see a recession. if you asked me what i'm worried about i would say the u.s. economy is solid here there is good momentum going into this year. the principal worry i would have is really global growth. if you look at a shuck on at a show coming here come the seen slowing growth in the question will be how much does that affect us? the tally integrated market we will feel that. >> one of the fed's main jobs is to worry about inflation. when you think it's likely to be for 2019? i think right around 2%. a capital asset we inherited from chalmette and volcker and greenspan is what that means is when the economy is really weak, inflation doesn't go down. so inflation tends to be rooted up 52%.

>> historically when oil prices were high, very high, it's not good for our economy. neither were the biggest producer of oil in the world, is it better when oil prices are $70 a barrel because we grew so much? >> as you point out it's a much closer call. a very large domestic oil industry. still on balance i think there's still a modest benefit overall in the aggregate for lower oil prices. and if you work in the oil industry or live in an area that's heavily leveraged. >> lower than 50 or 60 or any price he thinks an equilibrium for oil prices and our economy? >> it's hard to say. the question would be what is the breakeven for the show producers. >> let's talk about the chinese economy. are you worried about the slowing growth rate and its impact on our economy? >> it is a concern. the chinese economy has low down in it showing up a lot in

consumer spending. weak retail spending, apple news last week i suspect weak sales of their felons in china. you see some weakness there. you also see the chinese authorities are doing repeated rounds of things to support the economy as they can do. just over and over again. different things. i still think the baseline, it is going to be another year of solid growth. there's no reason to think you will be something worse than that. >> keeping the tariffs we've imposed as a good thing for our economy or a harmful thing for the chinese economy and how much longer do you think this can go on before it will hurt our economy. i don't think they care so neither side has had a visible mark on the economy for the united states.

chinese exports and imports in may the 20 plus trillion dollars economy that the montera so far just doesn't show much of a mark. i will say this, if this leads us to a fair lower tariffs environment that would be good for the global economy and our economy. a more protectionist environment where tariffs are hired and mutual novelty to a less productive economy here in the united states and around the world. >> and what about brexit. do you think of that occurs is going to hurt the european economy and therefore hurt our economy. >> our main point of contact has been u.s. financial institutions that have operations in the u.k. and also in the continent.

we have now had quite a long time to get ready for that. and also these institutions as the provision from u.s. authorities, so they are prepared for the full range of possible outcomes. that the main thing we've been working on. i think it is very possible. the new precedent for this event and anyone should have humility trying to predict the consequences would be, but they will be some effect on both the u.k. economy, but it doesn't need to be very significant unless they are real financial disruptions and we don't expect that. >> we are running an annual deficit of about $1 trillion or more were 21 or $22 trillion of total indebtedness internal and external. are you worried about the enormous amount of debt the federal government has? >> i'm very worried about it. we are warily looking at a cycle kind of frame of reference that

isn't something that plays into the next -- asserted medium term that is relevant for policy decision. it's a long-running issue we definitely need to face and ultimately will have no choice but to face. >> as a result of quantitative easing, the fed bought a lot of securities and now you're letting them roll off. is that the correct policy as opposed to selling them or just letting them expire. >> yeah, so we wanted to have the balance sheet return to a normal level which is no larger than it needs to be for us to conduct monetary policy. that will depend from liabilities, specifically currency in the public -- and also preserve another liability. it will be substantially smaller

than it is now. little under $4 trillion. nowhere near where it is before. currency has less than a trillion. >> as you look back at the great recession and what the fed did with its various policies, would you say there's anything and he would do something differently. >> i raise concerns in my early years about quantitative easing. if you look at the record and don't expect perfection, the fed did a very good job the first quantitative easing program were successful in ending what had all the makings of a collapse of the global financial system.

that didn't happen and i think that's because of the people in government, including the fed, but also including the administration at that time. >> what about the unemployment rate? >> right now it 3.9% and we've been under 4% since the last nine months. that hasn't happened since the mid-60s. 50 year low. if we get this baseline growth. unemployment should move down another couple times. something like that. >> fed chairs don't typically do that, but she meet with the treasury secretary regularly are the people at the white house. how do you communicate with them and vice versa? >> it's important we have relationships with other parts of the government including regulatory institutes, congress and the administration. by long tradition, and the fed chair has meanings which wind up being breakfasts and lunches

between secretary of the treasury and the fed chair. that can happen weekly or monthly gets canceled, which sometimes it does. >> at the treasury? >> alternates. we also have the council of economic advisers. >> where is the food better? [laughter] >> treasury. trust me there. so, i meet with the head of the national economic council, board of governors actually meets with the council of economic advisers and these are important relationships become a very important and very standard because we need to have a working relationship that will come in handy. >> of a member of congress as a victim meet with you, what you do? how do you decide? >> i don't decide. i just meet with them. i think it's very important. >> they come to visit you when you visit them? >> we have visitors over for breakfast and lunch in groups and things like that. i can't stress how important it is in our system of government

or accountability to the american people runs through congress. the two oversight committees and also through leadership. all my colleagues spend lots of time explaining what we're doing and why were doing it. we seek transparency and accountability. it's a big part of what we do. >> said speak is to say it's difficult to understand what they're actually saying. alan greenspan would be the master at that. so you don't like to speak and fed speak, so how do you get out of it when you have others said people around you? [laughter] >> what i'm trying to do is explain what were doing and why were doing it in a way that is comprehensible to the interested public. that is what i try to do. economic jargon has a real place. it's the way economists say

exactly what they mean and what they don't mean. it's not appropriate for use in the public because it's just annoying when people start using technical words that don't mean anything to them, it's just you're kidding. so i try hard not to use it. [laughter] >> now speaking of latin, an interesting use of language. you have a skill, which is you can take a word and pronounce it backwards. so you can say that backwards. is that right? >> is something i was born with. i can see your name spelled forward and backward in my head. i've been able to do that since i could read the! any advantage in life to having the skill? [laughter] >> it's been surprisingly lucrative at times. [laughter] >> what else do you do for relaxation? jury guitar player, right? >> i'm an amateur musician. >> do you sing as well? >> i sing badly.

a company people who sing well. >> i've been a road cyclist for many, many years. >> when you're the chairman of the federal reserve board, i'm afraid to go across the street sometimes when they see bikes coming and so forth. does that say for you to do that? >> i do try to keep it in a safe way. i ride around the island over and over again. i read my stationary bike. i don't get out on the streets of d.c. so much anymore. >> okay. talk about the pleasures of the job. what is the least pleasurable part about this job other than the interview? >> i actually enjoy meeting with people and meeting with the public. it's a little bit like your statement. you don't find any deals in the office. so in my case getting out of the

office, going to capitol hill, i enjoyed engaging with people. i met with a group of students from d.c. last week. high school students. it's really a lot of fun. also, i would go back to the fact that it's such a great honor and privilege to do this but i never go to work thinking this isn't a great job in a very special time in my life. >> let's go to your career. you grew up in the washington area and went to undergraduate at princeton. would you study come economics? >> i took micro and macro majored in politics there. so despite my father's request, and i did not become an econ major. >> he then went to georgetown law school. is that right? editor-in-chief of the law review and so you had a great legal career. why then should abandon?

>> going to law school alumni to practice law. and it led me to seem like they were having more fun. and that led me to other things. >> you ultimately went to dillon read and there you work for nick brady who became treasury secretary. is that right? and you became undersecretary for finance under him, under george herbert walker bush. and then you decided to go back for a while. is that right? and then you decided the high point of her life is if you attend a private entry. so as many people know he joined carlyle and you were there. is there any doubt is the highest calling of mankind? >> somehow the path that made sense to me along the way. it was a great way to make a

living. i really enjoyed my time. >> when he left carlyle, this is the attention of president obama. the bipartisan policy center and you went to capitol hill and lobbied for the increase in the debt limit. a lot of republicans on capitol hill did want that. why did you do that? >> i went to work on fiscal policy. i saw that debt ceiling prices coming and it showed pretty much what would happen with some precision is the debt ceiling. you can look at what bills are due. i started briefing people on this and it went viral. the whole republican caucus in the house and senate and playing a real role in that. the obama administration, and i think john boehner, and eric

cantor had played a real role in turning around the house caucus on not told that to the president in the next thing i'm getting a call from tim guyton or whether he and i would come over and talk about the federal reserve board. >> and he said i don't want to do that or maybe? >> i said i'd love to be considered. >> you are paired with a democrat, so therefore when you got on the fed, did you think the people they are didn't know as much as you did about policy or they knew more than he did. >> i had nine months between getting that phone call and actually walking out the front door and being sworn in. i use that time to study through textbooks and lots and lots of papers and speeches. and then i assume i have a lot to learn. i spent a couple of years hitting the books. i set next to those in say are

you coming out today? i hit it really hard. i have a lot to learn and i did. >> you were there -- [inaudible] >> us and she was nice chair. who was the better chair? >> it is a tie. [laughter] >> when the opportunity came for you to be pointed at the chair, as i recall there were several candidates considered by the president. had you ever met the president before? >> i met him for the first time when i had my interview. >> , did you spend with him? >> less than an hour. i can't remember how long it was. >> after was overuse that i got that pretty well and i'm going to get this job or you didn't know. >> i didn't know. i felt like the interview had gone well. >> so who called you to well? >> i actually don't remember.

but i would've heard from my other contacts. but it was a process that went on and on. various people being interviewed. i had no expectations at that point i would be chosen. >> so today is the fed works generally, if you can revise the federal reserve act, what would you change. >> the federal reserve act -- the fed was founded in 1913. but it was very deeply amended in 1935. which you see involving the presidents and governors, that is the product of the 1935 back and i would say were not looking for any changes. we have guaranteed diversity and having grown up i'm inclined to

believe that hearing opposing points of view debated how to get to a better decision and we get that at every meeting. so i think it works. >> you're supposed to have seven members. for many years we have had five. >> win seven seats and we need to get two more people to fill the hollow. it's really been a case that with title vii. governors tend to serve them leave. before we were at three for quite a while and that was a lot of work. >> in terms of communicating with the fed position is, and in the old days the fed didn't communicate. but now you're much more open. is there anything you can do to be more open than you already are? >> the old theory was we were supposed to be mysterious. 25, 30 years ago they suggest

that actually if you're really transparent and the market understands your reaction, how you react to incoming data account of market and people in business will do the fed work for you. it's generally thought we should be as transparent as possible. chairman greenspan did some have press conferences in laying out framework and we never put that on the record. same thing in bank supervision. we are inviting public comment on the whole way we conduct monetary policy. strategies, tools and communications engaging in all of us are engaging with the public. we have a conference around this this june. and also just the whole effort

to do more on capitol hill and the effort to speak more plainly. >> so today, if the feds shut down because the government shut down or you have your own money? >> the fed is self funding. we mention we have close to 4 trillion in assets, which are government security veteran interests. we also have liabilities offsetting a period we have $1.7 trillion in current you would don't pay interest on. we give that money to congress and pay for an operations. >> why can't you increase your salary and the congress would say it's her business. >> so what is your salary? >> i want to say it's in the range of 180,000 cover something like that. >> okay come you think it's fair what you're doing? >> i do. very fair. >> okay, so today if people want to come see you, let supposed

bankers want to see you, community bankers. what's the best way to get a meeting with you? >> and very easy to find. people can find me quite easily by calling the fed and you'll get put through the public affairs or even to my office. the thing i try to do as i try to make sure i meet with people across the entire spectrum of the american public. i meet with community groups, community bankers and all different interest groups as well as you would expect a meatless market participants. in also academics for that matter. i tried to make sure that i'm meeting and that we reach out to groups across the whole spectrum >> i say your name is jerome powell, the people call you jay. why not use the name jerome? >> my dad was jerome and it was

decided before had a vote on it that they didn't want to jerome or two cherries. another recall my father jerome when he was in trouble. >> okay. you're never in trouble with that title. with that name. >> correct. >> at the time people might say i made a mistake. i'm sorry. how does the fed ever say i made a mistake. how do you actually do that? you don't actually ever admit a mistake if you make a mistake. >> monetary policy is forward-looking. what we do is we try to change course. you've got to judge a decision by what you know at the time. quite often events after a decision will decide whether it looks like a good decision or not. realistically you make the decision based on what you know at the time and then you're focusing on the next decision and as i mentioned, we are very flexible in adapting our policy

so that's how we really think about it. >> i think we'll look back in the pre-crisis era in point out that all bank regulations supervisors so that confession there. >> under the dodd-frank legislation coming of the vice chair for regulatory. and how does that operate? the operate separately in some ways? >> he has statutory responsibilities from what he actually does everyday. it is to recommend he has personally has oversight over the whole supervisory apparatus, which is people to the reserve bank and testifies by statute a couple times a year and takes the lead in negotiating.

lots of the rules we do for banks are multiagency rules so there is negotiation between a fdic at occ occ. it's a very good job. >> today when you testify and members ask you questions you think are not so great, maybe like some some of the ones i map a new. have you politely tell them it wasn't so good that should give a good answer. >> if i did you try to engage with the sense of a people asked. >> some people have been pushing for a long time for the audit of the federal reserve. do you view on whether it's a good idea or not? >> the fed is audited. we have a big four accounting firms that audit says printer business model is very simple. it's simpler than a community bank. we have assets of government securities and liabilities and things like currencies. it's a pretty simple business

model and we are audited from a financial perspective. what the term audit means in this context is a review of policy. there is one area that congress is exempted from the audit and i would be by the general accountability office. everything else can be audited at any time. that means reviewing policy as to whether it was correct and whether it was well handled. central banks and governments around the world have decided to separate monetary policy from that sort of review by outside parties. i think that's a wise decision and one we have made geared >> people would like to know what the fomc is going to do before you publicly announce it. how can you be sure somebody isn't bugging the meeting room are hacking into your computer system. what kind of assurance can you give people that you are as tight as possible in terms of maintaining secrecy which are doing before its public.

>> you know, i'm sure many of you face similar cyberissues. we know were high profile target and we put an awful lot of resources into defending against that kind of thing and of course we see the building all the time before the meeting for listening devices in that kind of thing. it never feels like you're doing enough. it was feels like no such thing as percept -- we have excellent people working on and very committed people. >> a lot of other expertise in some agencies we tap into that as well. >> if you don't use in certain codewords, there's no special code word to keep things secret? >> i'm not at liberty to. we rely on having communications in that kind of thing. >> when you're pointed comment

it is a 14 year appointment. >> yes. although the terms are running in statute. so you'll be dropped into a term already running. your term doesn't start that day. when i started my term had two years left and i was renominated for a full 14 year term. >> the chairmanship is a four year term. so you can technically be on the board even if you're not a chair, but that's never happened really. >> it did happen in the past that someone who is no longer the chair remain on the board. >> the most famous quote i'm aware of by a fed chair under president johnson and he used to say the job of the fed is to do what i should mark >> take away the punch bowl just before the party gets good or just in the parties getting good. >> you try to take away the punch bowl or that's not what you're trying to do? >> we have the punch bowl lockstep right now.

[laughter] no seriously, there was a time when inflation was not under control and inflation reacted very strongly to the level of slack in the economy. when the economy got tight, it would go up and stay up. that's not this area. we have a different and favorable inflation as i mentioned earlier whereby inflation doesn't react as much to changes in slack in the economy by which we mean high unemployment or empty factories. >> so i want to summarize and conclude. you're very happy with the job of being fed chair? you enjoy serving the country in this way and is there anything that you would rather change about the job that you currently have are right now you're pretty happy with what you're doing? >> i'm very happy with what i'm doing in the great honor of doing this job. >> i want to thank you for coming today. i want to give you a gift. we have a first printing of the federal reserve act, which is i think now 105 years old. i think i have it right here.

this cost less than $50 because you're not allowed to take any gifts of more than $50. this was 4999 i think. -- $49.99 i think. >> thank you very much. [applause] >> all right, thank you. neil: man, how wonderful was that? i don't think i've ever witnessed an interview in exchange so smart, so clear, so funny, so engaging premise a riveting is not one and i've been around a long time. i may not look at. okay so i look at. how great is that? the back-and-forth but david rubenstein, cofounder of the carlyle group. mr. rubenstein is worth a very generous benefactor to the art. john f. kennedy center for performing arts.

much, much more. he's a shrewd fellow. he knew the questions to ask and also to keep that kind of moving and get to some key points and others that got inside the fed chairman said in his thinking about his job were enormous political pressure from the president of the united states who made it clear he's not been satisfied with his choice of the federal reserve. jerome powell certainly in recent history one of the few who's not an economist by trade. he took economic classes. he was not oblivious to that but of course he earned his fortune on wall street as did mr. rubenstein. economic club of washington but a couple quick takeaways ahead of this on why the markets which have been up 75 points are now in negative territory might have to do with this reference to the dat, that it's still a pressing issue to him.

you've heard a good deal throughout them further complicating things on the government shutdown that the chairman things to think will start showing up in economic data if it continues dragging on. edward lorenz on the fallout for all of this. what is essentially saying, be careful what you wish for. whatever your argument for a shot down drags on is a problem on the trade front with what president trump is doing. if he does indeed bring tariffs down, what do you think? >> you also said the third inning on the downside there is the slowing growth in the global markets and how that could affect the united states. the interesting bit on the upside, jerome powell staying on the path seen the federal reserve remains flexible with the next round of rate hikes. the minute show in the voting members of the federal open

market committee believed that muted inflation allows the fed to read before raising rates. federal reserve chairman indicating he told washington d.c. that he does not see a recession in 20 night team. listen. >> we see the financial markets expressing a view of concern that downside risks really associated with global growth and with trade. how do we put those two different signals together. i think were actually in a good place. >> the concern of slowing global growth. powell says the u.s. has a strong economic base and inflation around 2%, their target range. to make sure the market is heard. the federal reserve saw the volatility and is in their monetary policy. >> there is no preset path for rates. second, as i mentioned, gives us the opportunity to be patient

and watch and see what does evolve. are we going to see the more positive view of most forecasters have this year were we going to see slowing global growth. >> the government shutdown your talk about a short closure will not affect the economy significantly. some of the data the fed relies on to set their monetary policy may not come through the congress department. one of those agency shut down. he's very concerned about a long-term government shutdown. sure into what is interesting whenever went so far to go for what he made of the president's criticism getting the wrath saying he overstepped his market and regretted hiring the guy. it was very, very clear that powell would still meet with the president. the president called him up and said i want to meet. he was also making clear in the prior one that if the president resign he wouldn't.

>> is very interesting to that powell made very clear statement when he said that politics plays no role in what the fed does. when the talk of the federal open market committee meeting they are not concerned about the politics at all and that does not way into their decisions. he says they strictly look at the data. at the commerce department is closed down for a long period of time, the data they rely on may not come through. train to thank you my friend gary, very much. this is why we wanted to go nonstop with this. i'm telling you, rare is it a chance you can have a very smart robust conversation and deal with a lot of issues with the chairman of the federal reserve. those are rare moments. you are just treated to something rare and unique to a system where we always have these machiavelli views of the federal reserve, autonomous financial institution that sets pretty much in this country, but

worldwide everything about it. i want to get craig smith, a genius in his own right. it was interesting powell talking about a so-called balance sheet. the concern the fed was pouring a lot of money into the banking system and forcing interest rates down to zero, buying up in a note he could get his hot hands on. he is now undoing not. but he didn't say he would do it to the point of getting down to zero. in other words it started around $4 trillion. he might keep it around a trillion. what did you make of that? >> it's not as low as it was. so somewhere in the middle. sure into a much better description the way you described it right there. >> think about it. if i remember correctly and fox has a ticker. we started coming off the highs of the market. when powell mentioned the

balance sheet, the market went negative on the day. i am convinced about is the biggest joke is that he has. your assessment of his press conference is spot on. this guy was relaxed, confident, at ease. i have suffered since 1979 with google for, greenspan, ben bernat d., yellen, with fed speak. he talked like a normal human being. neil: we also had a very bob newhart sense of humor. i have a little island home -- [inaudible] that was kind of funny but irreverently slapping himself down and making fun of himself that he went into private equity essentially to take money which he did hand over fist. in the way he's going to draw down. but not necessarily to zero.

>> you started up the whole conversation thinking about it. jokes are well received at the federal reserve. it was a wonderful press conference and let's keep in mind what his job is. we are focused on our job. to stabilize prices and moderate long-term interest rates. i don't see a mandate. >> that's exactly right. the reality is there better to prepare themselves. we will have to rate hikes in 2019 that has always been my concern this chairman is doing a superb job. 2.5% interest rate. if we can't make we should find

other work. neil: you're exactly right. craig, i agree with you on all counts here. quickly on drawing down the credit lines that is weak, the balance sheet that he would let notes and bonds mature. that is it. they're off the table. so that is a little bit different than just sort of selling them out right in what he wants to do more is let them expire. >> exactly, they're just going to roll off the balance sheet. this is what you and i talked about a couple weeks ago. i'm concerned liquidity will dry up because the punch bowl is being mocked up and being taken away. i think this chairman despite what the president has said is doing a terrific job. i think he's got a long-term focus on this and i hope he is

our fed chairman for the full or 10 years has been his term. neil: i don't know about that. i will say this. depending on the president by the donald trump now, barack obama before. usually, further reserve heads are in back, you know, very inimitable position to try and ward off a depression, buying up all these bombs and doing something unprecedented. if you think about it, politicians were running around like ernie five-point fingers at each other and it continues to this day. you need an adult in the room and he is not. >> you by money and do extraordinary things. once he gets back on its feet.

we are prepared when we do it the next downturn. at a recession in 2019 but i do see global slowing. i think it will have a dramatic impact on the ballot people should repair forward in 2019. neil: fully agree on all levels here. you like the fed chairman have a remarkable ability to speak english. that's not such a bad quality to have. thank you. i very much appreciated. another guy who speaks english will be joining us very carefully. a guy who closely scrutinizes him. charlie gasparino is here. just learning the president of the united states is passing on davos. charlie gasparino learned that instead i'm not going to davos. i can't be bothered. we'll have more after this. are s to help keep you on track. and closer to home. edward jones grew to a trillion dollars in assets under care, by thinking about your goals as much as you do.

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neil: alright from air force one arriving in mcallen, texas. trump has blood is no davos was off. he just doesn't feel like now is the time to do it. transitions on border security and the great importance and safety to our nation. i'm respectfully canceling our very important trip to davos switzerland for the world

economics form. my warmest regards to the world economic forum. i'm getting this crazy internet thing. that is a twitter -- >> by the way, i.c.e. cube retreated me yesterday. he is looking to buy -- [inaudible] neil: nice to know. charlie gasparino, when you make of this? charlie: rumba laster he went, the davos did not pose -- toast to davos, jamie dimon and the head of jpmorgan and the mucky macs that are so enthusiastic, just gave them a pile of cash. but since then, guess what happened. sort of like the globalist mac, right? he is launched into a trade war. so the reception he was going to get this year was going to be much different than what he got last year. he was going to be much more skeptical crowd than he had last

year. charlie: which politicians? [inaudible] >> his poll numbers aren't too great. and i think the globalist mac i would this year be less receptive. neil: i think the whole -- it lost its impact when you start going. >> i spotted him a contract. i'm doing milk instead. think about it. beverly hills, nice weather, california women versus eskimos endowed us. sure into okay. i don't know quite where to go there. you have said they shut down drugs on here. the president is using not, but i don't think now is the time to go. this could go on a while.

>> you know, he kind of boxed himself in. if you know anything about how the wall and came out. i gave him the idea. not exactly the deepest thinkers in the world. sam nunn birkin rogers tone. it was kind of like okay we have to go to the right of ted cruz on immigration. so let's do that would play to your strengths. deal with this for a minute. no one ever really took it seriously that he was going to build it. it was kind of like what used this as a rhetorical attack on crews to get more right wing than him on immigration. and now unfortunately he's stuck with it. he wrote it out. it worked in the campaign in the primaries. i'm going to put no trespassing signs up? he's got to do the wall. by the way, i hate to say it at some point he's going to have to show how mexico was paying for

it. more than some sort of weird juxtaposition with the nafta deal. that doesn't make any sense. i think he stuck with it. i don't think this is such a big deal for the economy because i know the powells and was amazed in. >> you don't think it's going to get this thing or what? the mac i doubt it because both sides are entrenched. he wants it, they say no. what do they call it? national emergency. what happens if he does that? neil: i've no idea. >> the first judge appeals that -- [inaudible] neil: thank you very much. the president said repeatedly i did a cursory study of this 37 times he has said just not. i'll elaborate on map right after this.

-- i will elaborate on that right after this.

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and, if you have medicare and medicaid, a humana plan may give you extra benefits - like dental, vision and hearing aid coverage. an allowance for over-the-counter healthcare products. even home delivered meals after an in-patient hospital stay. so if you have medicare and medicaid, call a licensed humana sales agent now to request this free guide. and learn about plans that could give you more benefits. call now. >> a longer shut down is something we haven't had. if we have an extended shut down and i think that would show us in the data pretty clearly. >> i have the absolute right to declare an emergency. i haven't done it yet. if this doesn't work out, probably i will. i would also say definitely. sure into two different things

on the shut down as the president arrived in mcallen texas where he goes to visit the border. he said he might declare to merchants if he doesn't make much progress it is not making any progress right now talking to democrats. the fed chairman indicating a conversation back for us that the longer this drags on the more problematic it will be for the economy. texas republican congressman brian dobbin with us. good to see you. happy new year. >> thank you. happy new year to you, too. neil: are you worried whatever your views on the wall, the funding, that this is getting pretty dicey with the economy the longer this drags on? well, you know, let me just put it this way. we voted as a republican conference. we voted to fund the government and we put in five points have been billion dollars for border security. we wanted to keep the government open. the other side decided they would rather shut the government

down and to find border security. they are even denying there is a crisis, humanitarian security crisis on the border. so it is absolutely time to fish or cut bait. while i think that the president has the absolute right to declare a national emergency, this dating could be fixed in 15 minutes if they would come to the table and get some honest offers to negotiate. it absolutely is necessary 60,000 illegals every month trying to get in. [inaudible] neil: they say was the president who continued funding for the government. had he not done that, to deal with homeland security and the separate budget issue that even hide then put up for a vote in the president at the last minute giving demands from his base was not good enough.

>> but the disingenuous because they have not come back with any meaningful negotiations and quite frankly this is a contrived problem down there. neil: let me ask you this. the vice president plans you don't have a wall, you don't have a deal. we might be dragging this on for, right? >> weave our disdain the president. he's becoming much more amenable to working a deal. he used to say we wanted a border wall for 2000 miles. and now . i was also in the san diego where they had the wall prototypes. the steel barrier he was asking for, you can see through. this is what the experts want. walls are very effective.

fencing is very effective of the fence at san diego is 95% cut down on illegal crossings there. and this is what we need to have in strategic places at our, at our border to funnel these illegals hitting our border at 60,000 a month. it is a humanitarian crisis. i'm a health care provider myself. there is, there is tuberculosis, there is a lot of communicable diseases coming off. 50 people a day are needing emergency medical care down there. neil: are you worried, serving your country and your family and the great work there, on, someone who has done your best you know to honor the, serve medically and help those that, this isn't helping anyone what is going on right now? >> right. neil: what the real danger seems to be for republicans that, if the democrats were to flip it around and they have in the past and said, this legislation or this matter is so important to us we're going to shut the

government down we don't get what we want, do you worry, you make a very passionate defense of doing this, that, it is just going to continue a pattern where depending on administration, party in power, government will be held has hostage to that? >> neil, when you raise your right hand and swear your oath of office to uphold the constitution of the united states, do your duty and that is to national defense, of our people, of our borders, our sovereignty, that is the most important thing that we can do. and which have 500 texans who are in their graves today because of illegal aliens have murdered them. and this is a crisis that has is of great proportions and it absolutely needs to be done. neil: but congressman, a lot of those texans, i'm glad you brought this up, those tragically killed, but a number of texans along the border are not keen having their land taken for a while or something like that, because they said that is

the government strong arming us, you say what? >> i say they're, we're not talking about a wall going full 2,000 miles, neil. the president has become very, very amenable to having this down to few hundred miles, strategic miles to funnel illegals into the ports of entry so they don't keep coming in illegally. and they're so overwhelmed by family units right now there is not enough beds or facilities. neil: is your sense, congressman if the president gives an inch on this it will do more harm to his re-election chances and more harm to republicans? >> i do not agree with that, not at all. i think that we can make a first, very important step to securing this border with barriers -- neil: you shouldn't give an inch, you're saying he should not give an inch on this. >> he has already given. he has gotten a lot more reasonable. neil: wall or bust, right, wall or bust?

>> barriers or busts. border security or bust. nancy pelosi, chuck schumer, i don't know what you don't understand about a real crisis on the border but you need to come to the table to let's get a deal done, open the government back up, secure other border. neil: congressman, thank you very much. here is charles payne. hey, charles. charles: neil, thank you very much. that was a fascinating interview. good afternoon, everyone. i'm charles payne. this is "making money." stocks lost a little steam after the interview. fed chair jerome powell echoed pledge to be patient with future rate hikes but expressed worries about the global growth situation we're in. just moments from now, president trump will hold a border security roundtable in texas as the government shutdown hits day 20. are republicans and democrats further apart on funding than ever? i will ask congressman sean duffy. after disappointing christmas numbers should we be worried about the american consumer?