the details, or what would kind of drive the decision on whether or not to do that? >> so on treasuries versus reserves, we have done a ton of work on that. we have talked to supervisors -- it's interesting, if you look at the banks, they're all over the place on the composition of their buffer. so you have to have -- you have a business model and that business model suggests what your stress outflows will be and that suggests what your buffer should be. you see them making quite different choices. some of them have lots of reserves and fewer treasuries and then they change their mind and switch. so it's not obvious that there's one thing happening there. notwithstanding that, we have gone on to try to understand that talking to supervisors. in terms of the tga, you know, we have not tried to pull the tga into this yet. we have taken it as exogenous. i don't know that at some point we won't have those discussions but you know, treasury, we want treasury to be able to have the cash that it needs, and then we

are essentially taking that as exogenous to our work, you know. there may come a time when we talk about that, but we haven't done much of that. standing repo facility, your question is what are we thinking about it? i think we are more focused frankly on the bill purchases, the year end and also the review of supervisory and regulatory issues that we're digging into. because we think, you know, these are structural things, where you could, without sacrificing safety and soundness, just allow the liquidity that is already there to flow more freely, perhaps by making fairly straightforward non-controversial changes. we think there is some of that so we're working hard and fast, but those are the things, you know, they take rule changes, it will take notice of public rule making, it will take three months and things like that.

those things take time. these things that we're working on now, though, like going through year end with the overnight facilities and the bill purchases and the term repo, those are things we have to do right now and are doing. reporter: hi. i wanted to ask, the only change in the statement was the drop in the reference to uncertainties around the economy. you seem very confident or it implies there's a lot of confidence those uncertainties have gone away. what caused you to make that chan change? what were you looking at? >> well, we did actually, if you look at the statement, you will notice that we did call out gold developments and muted inflation pressures later in the statement. why did we do that. those are the things that we have been monitoring all year. we put now in place policies that we think are appropriate to

address those things so we're not revisiting that. but those are just key things and they haven't gone away so we thought it was appropriate to mention them there. still subject to the idea that for us to change our stance, we would want to see a material reassessment of the outlook. reporter: to follow real quick, on the material reassessment aspect, are you worried that that has set too high a bar for potential cuts next year? we were talking about rate hikes, but no fed policy maker seems to foresee any cuts next year. some economists do. does a material reassessment mean you need to see data actually worsen, does it reduce your ability to act preemptively the way arguably you did this year? >> so i mean, one thing that we are mindful of is that we have cut rates three times since july. that's 75 basis points worth of cuts, and we do believe that monetary policy operates with long and variable lags and it

will take some time before the full effects of those actions are seen in the economy. so that will take some time. so that's one reason to hold back and wait. we think we took strong measures, in fact, if you look at more broadly at the treasury yield curve, it has moved more than 75 basis points. we've had quite a significant move in the direction of higher accommodation. in terms of what is material at the end of the day, i would just say whether or not a change in outlook merits a policy response will be a collective judgment of the fomc. there isn't any single factor that will determine our decisions. we'll look at a full range of data and other information bearing on economic outlook. reporter: thank you, mr. chairman. you started out by talking about poll volcker, who obviously cast a long shadow. i wonder if in hindsight that shadow was too long and if in the decades since his tenure and

in particular last year, if the fed was too quick to raise interest rates to attack an inflation boobeyman that didn't materialize. >> so this wouldn't be -- my response will not be about paul volcker, but so you started with paul volcker. if you look back at 2018, i will just take you back to the beginning of 2018, we had an economy growing at 3%. we had inflation at 2%. and we had a trillion and a half dollars worth of stimulus arriving and the federal funds rate was 1.4%. so it wasn't that -- so we moved policy up during the course of the year. we never got policy even at the level of what we thought the neutral rate was at the time. so there was no sense of it being restrictive. we took steps to make it less accommodative and that seemed to be the right thing. it still seems to me to be the right thing in hindsight. the idea that we were trying to, you know, slow the economy down,

we were really just trying to get near neutral and even with the last rate increase a year ago, we were still meaningfully below the median estimate on the committee of what the neutral rate was, so policy was always accommodative during the course of that year. i think what's happened is obviously the facts on the ground have changed. you saw the global economic slowdown began in the middle of last year, gather force and then continue to go on this year, so you have seen a continual weakening. just look at the imf's forecast of growth from, you know, the spring of 2018 and compare them to now. you have had quite a significant -- that does affect us. i think also, the trade situation was just beginning in the middle of '18 and i think it has had, you know, i think there will be very very wide range of estimates of the effect but i think it's had a meaningful effect on output just through the uncertainty channel and to a lesser extent, through, you know, the tariff effects. again, that's not to make a judgment, that's not up to us to

make a judgment about that. but that's what -- that would be my story. reporter: chair powell, to follow up on edward's trade question, could you talk about what you would imagine the economic effect would be if negotiations with china were to fall apart, and how the fed might be able to support the economy in that event? >> you know, i wouldn't want to speculate on a hypothetical. i would say we'll just have to see. we look at a range of factors and as i have said before, we try to look through the volatility in trade news and trade negotiations. we try not to react. we can't react. monetary policy is not the right tool to react in the very short term to volatility and you know, things that can change back and forth and back and forth, as this has happened, as is probably typical of a large, complex negotiation.

so in terms of, you know, again, i don't want to get into hypothetical outcomes, if that's all right. reporter: i'm just wondering, you met with the president last month. did you have any advice for him when it came to this, and did you express some concerns about potential volatility and the impact of the economy given all this? >> you know, i'm going to stick with my predecessor's long-time practice of not discussing private meetings with elected officials or other officials, really. but thank you. reporter: thank you. yesterday democratic leaders in the house have launched an impeachment process against the preside president. have you mentioned these developments within the committee today as potentially presenting some risk for the confidence in the economy? >> no. we have not. we don't consider things like that.

reporter: does the fed's dot plot still serve a useful communications purpose, or do you feel that it might be time to retire it or change it in some fashion? >> i think properly understood, it can be useful. but that's been a challenge. i think properly understood to me means looking at what it is and not what it isn't. what it is is an expression of the thinking about individual committee members, about appropriate monetary policy and the path of the economy. remember that we write all that down and we send it in, and it gets compiled but we don't discuss it at the meeting and we don't negotiate -- there's no agreement, there's no plan. i think particularly at inflection points, it's hard to convey the reality, which is that policy's always going to

depend on the economic outlook and changes in the economic outlook and when the economic outlook is changing, the dots are just not a consideration. we are going to do what we think is the right thing for the economy, and if the dots we did six months ago or three months ago don't agree with that, that's not even in the conversation. so it's more -- but it can be useful and i think -- but as i said, it's been a challenge. so i do -- i do like to say if you focus too much on the dots, you can miss the broader picture. reporter: chairman powell, many people seem worried that the framework that you guys are working on is going to be -- the results are going to be less rather than more, and people keep coming back and saying why -- asking why you took off like a 4% inflation rate off the table even when it started, i mean, as you said, going around

the country for all the listen events, i don't think i heard anybody worry about a 4% inflation rate or think that high an inflation rate was going to be a problem, so where does that concern come from? is it members of congress that have said this? >> no. let me say we have been working on this all year and we are just at the stage where we have had a really interesting discussion about the various tools that we have at the october meeting. at this meeting we talked about the way monetary policy affects different groups in the economy so we talked about the fed listens events and some very interesting research. so we are just getting to the stage where we're looking at conclusions. what do we take away from all this. those things, many of those things would wind up as changes, if you will, modifications to the statement of longer run goals and monetary policy strategy. i think that process will take

until the middle of the year. but we want to approach it very thoroughly and very carefully. in effect, that is our framework document. i wouldn't prejudge. i believe we will be able to reach a successful conclusion and make meaningful improvements. i do. in terms of 4%, i think it's premature for people to be saying that this isn't going anywhere. you know, if you define going anywhere as a 4% inflation target, let me talk about the 4% inflation target. so i will go back to the point that just saying words is not itself credible. i think if you said we are raising the inflation target to 4, what would be the effect of that? where's the credibility in that, really? you haven't been able to get it to 2. so i think you need to lower your sights a little bit. i also think is 4% -- you would have to ask the question is that really, you know, price stability. is that really price stability. is that within our legal

mandate. i think it's a fair question. so you know, i think -- i'd like for this review to come out with a set of positive results. you know, meaningful improvements. it doesn't mean it has to solve every problem going forward. we want to have this be a successful exercise where we meaningfully improve our monetary policy framework. these things don't tend to move in, you know, in a lurchy way. they tend to evolve. i think if we do this in a few years again and again and things like that, then at least we are moving in a good direction and i think we will be. i'm confident we will be. reporter: chair powell, you have had a busy year and i'm wondering as you look back what things you might have done differently, and are there any lessons you will take into next

year. >> well, you know, i have to say my total focus is on right now and getting policy right and thinking about next year, thinking about what's the economy going to be doing. i like where we are on policy, as i mentioned. i think my policy stance is appropriate and likely to remain so, as long as the outlook is broadly like this. you know, it's too long of a question. i don't know how to get after that. there's a lot of learning that comes into -- from the economy every year and in the way we do our jobs, and you know, we are always going to try to be learning lessons. reporter: are there any particular surprises, whether it's the economy or how markets or financial -- >> so yeah, obviously, you know, i didn't see and i don't think anybody saw coming the challenges that we faced this year. i think they were a surprise.

i think toward the end of 2018, there was still a sense the economy was growing at around 3% and didn't expect to face the challenges but i think we did face them and i think i'm pleased that we moved to support the economy in the way that we did. i think our moves will prove appropriate and again, i think both in the economy and monetary policy right now, i think we're in a good place. reporter: chair powell, why aren't we seeing stronger wage gains? wages are growing more slowly now than they were toward the beginning of the year. why is that? >> well, wage gains have moved up a bit. if you look back three, four years, you will see wages were growing at around 2%. now you see them moving up, you know, more 3%, 3.5%.

why aren't they growing higher -- at a faster rate. it's a couple of things. i think there are a range of explanations. one would be that productivity has just been low. so wages should go up to cover inflation and productivity. productivity has been low and that is very likely to be holding back wages. i also think there are other possible potential explanations such as, you know, globalization, the idea that you can make manufacturer or even provide services anywhere in the world, to anywhere in the world. i think that hangs over the wage setting process and everywhere, pretty much. you don't see -- there isn't the kind of traction in the wage market, that even in a tight labor market. another thing is, though, that the labor market may not be as tight as we had thought it was, and you know, i think there are many, many possible explanations. i will say, though, if you look,

for example, at non-supervisory employees in the labor report, their wages are going up at 3.7%, and so you do see -- and wages are going up the most for people at the lower end. that's been true for the last couple years, lower end of the wage spectrum, so you do see wages moving up. they're not moving up at very high rates and again, at the end of the day, that probably has most to do with productivity. reporter: just as far as the market not being as tight as you thought, are you saying there's still more people on the sidelines who could join the labor force? >> yes, and i would also say that we, if you ask people and we did ask people what do you think the natural rate of unemployment is, people were writing down numbers in the 5s, and writing down numbers in the 4s. unemployment has been in the 3s

for a year and a half and we still see wage inflation, as you mentioned. the level of wage inflation has actually moved down although there may be compositional effects in that number. that may be to some extent about younger workers coming in at lower wages than retiring workers but that shouldn't have much of an effect, actually. so why is it? it may just be that there's more slack in the economy and i think we are seeing that. we are seeing, really it showed up through higher participation. for many years, we thought there's a trend decline in participation. notwithstanding that, against that trend, we have seen prime age participation moving up pretty steadily over the last two or three years, and it's a very positive thing but it does sort of provide more labor supply, meaning a less tight labor market. reporter: hi. anna lang with american banker. thanks for being here today. i want to ask about the community reinvestment act since the fdic and occ may potentially join together for a proposal

without the fed. are you concerned that this might cause confusion and how would the mechanics work if this proposal is finalized without the fed? >> so you know, we think the cra is a very important law and we are strongly committed to the mission of ensuring that banks provide credit to their -- throughout their communities, particularly addressing the needs of low and moderate income households and neighborhoods. we also think it's time for modernization. we have thought that for some time and we worked very hard to try to get aligned with the occ really on a proposal, and my hope is that we can still do that, you know. i don't know whether that will be possible or not. we will just have to see. and if we can't, i'm not sure what the path forward would be. we would certainly not want to create confusion or, you know, sort of tension between the regimes if they do turn out to be slightly different regimes.

so that's something, i hope we don't have to face but we will if we have to. reporter: brian chung with yahoo! finance. before the july meeting, you said something kind of colorful. you said to call something hot, you would need to see some heat, referring to the labor market. to expand a bit i guess on nancy's question, seems like the wage curve has been pretty well explored already but what would you need to see to call the labor market hot in that case? would it be a -- some sort of change on the headline number of gains or the unemployment rate? >> really, wages. i mean, there are so many other measures that suggest that the labor market -- i like to say labor market is strong. i don't really want to say that it's tight. someone asked me a question about a hot labor market. so i will say that the labor market is strong. i don't know that it's tight because you're not seeing wage increases, you know. ultimately if it's tight, those should be -- it should be reflected in higher wage increases. so it does come down to that.

you know, we look at countless measures of labor market. labor utilization, there are so many, it's too many to count, but the one that has -- that is kind of suggesting, it's a healthy number, 3.1% average hourly earnings number is a decent number, 3.7% production, non-supervisory workers is more healthy. ultimately, though, we would like to see -- to call it hot, you would want to see heat. you would want to see, you know, higher wages. thanks. liz: fed chair jay powell closing out his final appearance of the year and you could argue that it was this line that got stocks initially in the green, although we have kind of pulled back on that at the moment. powell saying quote, i would need to see significant persistent rising inflation in order to hike interest rates. now, folks, if you are just joining us, we have to get you

these headlines. here's the first one. the federal reserve decided to stand pat and does not plan to make any more moves for all of 2020 when it comes to interest rates, either up or down, but in an indication that things are not all clear sailing ahead, powell said quote, we've been hearing from businesses telling us for a year and a half now that trade policy is weighing on their outlook. okay, which trade policy? powell was very clear, quote, news on a china deal is what's been moving the markets, not news on usmca, the u.s. mexico canada deal. all right. the decision to leave rates unchanged, unanimous, 10-0, because the labor market is relatively stable, robust, not tight, he just said. i don't call it tight. i don't know why he said that. it is very tight. and he sees gdp, gross domestic product, next year at about 2%. all right. to the stock market. s&p and nasdaq were already up

at 2:00 p.m. eastern when the announcement was first made but the dow jones industrials which had been down, reversed, moved up and are now down just about two points. the s&p holding on to gains of 7. nasdaq pretty strong, up 34 points. let me show you the u.s. dollar. put it on the screen, folks. right as powell showed his hand on inflation, forget a club or an ace. in his hand he had a big dub slapped on the card and the greenback started falling, the dollar index falling to a four-month low with currency traders pretty much perceiving we are not going to see interest rates rise for quite some time and that is bearish for the strength of the u.s. dollar. all right. can we show the ten-year treasury yield? folks, this is no small fall right now. before the announcement, the ten-year yield stood at 1.81%. right now, it has fallen to 1.79%. so if we flip it over to interest rate sensitive sector, that would be financials, which have waited for years to see

higher rates and you know, so have savers who have been waited to be rewarded for saving money in money markets, et cetera, not going to see it. right now we have most of them lower. the big lenders like wells fargo, morgan stanley, jpmorgan, goldman, citigroup are all down. we have bank of america up, just a half a percent. to gold. so i watch what markets are doing across the board before and after the announcement, and then before and after the q & a. gold was about $7.60 up before the q & a session that ujust ended. we jumped to $12.90, bringing gold at $1,480 a troy ounce. let us bring in our team coverage here. the men closely followed on wall street because he is a fixed income guru. andy brenner. then the man who has been on the inside of the federal reserve's working economic world, former dallas fed chief economist michael cox and euro pacific

capital president peter schiff who predicted one year ago exactly that the fed's final rate hike would be that and would start to move to cuts. all right. let us bring everybody in. i will get to andy brenner first. your big thought on what this means, and specifically in my opinion, the big move and that would be ten-year treasury yield is starting to fall. that's a little bit of a safe haven and a fear. >> what we saw today, the ten-year treasury has actually moved about five and a half, six basis points on the day. i think it had to do, a lot of it had to do with when powell did what we think is obvious, the trade deal is still the overwhelming factor and is leading to uncertainty. tomorrow, the president is meeting with his trade advisers and of course, we have the decision on the tariff, increase in tariffs or no increase in tariffs coming up this sunday. the ten-year decided to make a move and we think it's going to run into some kind of resistance around 1.75. but that's what we have right now. liz: michael cox, either he's

not saying that he understands why inflation is so low or won't get up to at least the 2% level, or he's simply at a loss as to why we can't see inflation, for folks who don't know, it's basically pricing power, rising prices, he doesn't know why we aren't at 2%. can you let our viewers know why we're not seeing pricing power for companies? >> yes. i mean, i think there's a fundamental lag here in the understanding about the relationship between growth, gdp growth, and inflation in the economy. i see the fed and i see most people still working, thinking with an industrial age mindset, when the economy grew faster and did drive up prices. the demand curve shifted out and that drove up prices. but that was the material world. this is the knowledge world. in the knowledge world, the way that i get to lower prices is more demand. why is that? because if you and i, if we all go see a movie and the demand is high for the movie, we can each

pay a small price. we each contribute to paying the movie's development costs. there is sector after sector like that in the economy. i could name 100 sectors like that, where the faster the economy grows, the less each producer has to charge. that's the knowledge world. high fixed costs, low marginal costs. if you underestimate gdp growth, which i think the government statisticians are doing, you also overestimate inflation, you underestimate productivity growth, you underestimate real gdp growth -- i mean real wage growth, and you also underestimate how high real inflation is, real interest rates are. interest rates adjusted for inflation. every one of those, if they would just understand that growth is actually much higher than what these government green eye shade statisticians are saying, every one of those conundrums would go away. liz: peter, you were right on your prediction a year ago that the fed would not cut any more -- they would not hike any more, they would have to cut

rates. what's your prediction now? because jay powell just said rates will probably stand pat for all of 2020. never mind that the market is pricing in some type of rate move in september, this coming september. correct? >> yeah. well, i think he's wrong again. i think the fed is going to be cutting rates again, much sooner -- liz: really. >> -- than powell thinks. powell said a lot of foolish things today. it was ironic that he began the press conference by praising paul volcker and now he's going to resurrect the high inflation that paul volcker buried. inflation was never created by economic growth or employment or wages. the fed creates inflation. what's different now is there's been a lag between the inflation that the fed creates and the impact that it has on consumer prices, which year over year is still up better than 2%. but a lot of that inflation is in the stock market, in the real estate market, in the bond market. the lag is what's longer. but that's what's going to change. we are going to be hit with a tsunami of inflation in this

country. we are going to have an inflationary depression. you know what powell just said is really rewriting the playbook for central bankers. he said we are going to wait until inflation gets really bad before we do anything about it. in the past, you know, you wouldn't want to let the inflation genie get out of the bottle. powell is saying we will let it out of the bottle but once it's out of the bottle there's no way to put it back in. we have way too much debt in this country. can you imagine a fed, if they let the official inflation rate get to 3%, 4%, 5%, having to jack up interest rates to 7%, 8%, 9% to fight that inflation, with all the government debt, with all the corporate debt, with all the consumer debt? this economy would implode like never before. liz: well, andy -- >> that's why gold is going up. liz: what about that? can you superimpose this discussion over the stock market, equities at the moment? dow jones industrials up 14 points right now. we have a tiny bit of green on the screen. i found this meeting very confusing. yes, it's very obvious that chairman powell said we will not

touch rates. we have an incredibly strong economy. president trump has touted it. he's right. we have very robust numbers here. so why not at least start to moderate or normalize rates? >> liz, some of the stuff peter said, i agree with. some of the conclusions he came up with, i don't necessarily agree with. we are looking at inflation as well. inflation has been averaging a little over 2% on the moving average. you look at oil, it's up 30% this year. you look at copper, it went above its 200 day moving average. you know, you look at what the fed balance sheet is doing, it's increasing the last three months at a 28% annual rate. money supply is increasing over that same time frame at 11% rate. so we see a lot of problems on the horizon. but the bond market hasn't recognized it yet. while i agree with peter that we are going to go to higher rates, especially in ten years, you know, we are looking at 2%, maybe even 3% next year. we don't see 6%, 7%, 8%.

liz: look at the russell rebounding. the transports definitely rebounding. this is intraday. peter, before we get to you, michael cox, we have people watching saying why aren't my wages rising. now, that is an excellent question. if the labor market is so darned tight, we just heard jay powell attribute that to, what did he say, he said maybe productivity is low, who knows. he also pointed out that perhaps we are looking at no wage acceleration because i don't know, globalization is holding it back. this is really a conundrum, is it not? >> not if you believe that the price level is overstated because the government has left out a lot of things that are free or worth a lot more to us than we have to pay for them. e-mail is free. the use of search engines is free. getting on the internet is free. many of the things i buy today are getting cheaper and cheaper. the price of computing power. yes, i can tell you some things that are getting more expensive

but the cost to me having a nice life, you know, ordering food almost for nothing from door dash or shopping online at amazon using that service for no charge, that is virtually free. so that means that real wages are actually higher than you think they are. because if the price -- if the price level yoifis overstated because a lot of things are left out of the price index we are understating gdp growth and understating real wages. that's where we are. liz: peter schiff, the last thing i want to ask you is when do you see a rate cut? you are arguing a rate cut. most people are arguing nothing, then a rate hike. >> well, again, i don't think the fed should cut rates but they will. i don't know the exact timing of it. it's going to take another drop in the stock market or some more weaker economic data. remember -- liz: stronger dollar. >> no. the dollar is going down. you mentioned that we had a strong economy. we don't.

we have a bubble economy. the only thing keeping the air in the bubble is the fed. the reason the fed had to start cutting rates was because last year, the air really started to come out of that bubble. so the fed had to blow some air back in. so this is not a strong economy. it's never been a strong economy. liz: what should rates be, peter? what should interest rates be? >> well, i have no idea. they should be much, much higher than they are now because we have no savings in this country, massive amounts of debt. obviously interest rates should be a lot higher to encourage more savings and to cut down on all the borrowing. i don't know where the real rate is because the fed has been artificially manipulating them for so long but this has created massive economic distortions. that's why we are headed for a much worse financial crisis than the one we had in 2008. the fed is powerless to do anything about it this time because the next crisis is going to be centered in the dollar, in the bond market, the sovereign debt market, not just the mortgage market, and the chickens are going to come home to liz: michael cox, wrapping it

all up for us, as we watch this market moving very tentatively it's almost like the market, if it had nails it would be nibbl ing at them. we are, though, at session highs , right at this moment and we do have the dow jones industrial is up 26 points, s&p is up 9, nasdac up 38. all right, when we talk exactly to what's been happening with the markets let us bring in our traders. ira epstein what market move caught your eye during chairman powell's press conference and is there a turn in move that investors watching should make in response? >> two moves. actually three. i like the break in the dollar. i like the fact that interest rates stalled out, and i like what gold did, so i'm looking at those three elements to the market and saying the santa claus rally is right in front of us, watch the end of the year, you'll take off.

liz: i want to get to chris robinson and then should investors watching start to tweek their portfolio? >> well at the end of the day, we're at record highs within two or 300 points of record highs in the dow and i'm not concerned about 80 point moves and some are out there between now and the first quarter and we'll have a 5% move that's 1,500 points in the dow, 150 points in the s&p and the s&p could drop back down to 3,000 and that's something i'd look forward to and how do you do it? you want to be, if you were trying to catch an opportunity to buy that dip, you need to be taking profits here at these all-time highs. now just listen to ira, it makes me want to run into the pit and buy calls if we're rallying, but i always think a good defense, everybody has made a lot of money in this rally. artificial or not, so the first things first. protect that rally, and try and get yourself in a position where if we do have a correction, and we will, that you instead of pulling your hair out, you can say oh, i'd like to buy these

stocks. liz: any mud wrestling going on in that options pit? i want to hang out in there. one of the things that jay powell said was, well i guess in essence, in the statement, they removed the word "uncertainty" meaning how they used to say uncertainties remain in the outlook, they took that out. >> i don't know what he is looking at but there is always uncertainty. liz: always. try december 15. we don't know if we're going to see more tariffs on chinese goods coming into this country, right? >> yeah, i think that they removed the word uncertainty from many things that has to do with the economy and certainly the stock market is probably but everybody is entitled to their own interpretation of these things, but you know in terms of a santa claus rally, liz i think this whole year has been a santa claus rally, and the one thing of course we want to avoid which was last years debacle, december

was a terrible month last year, and a lot of people got hurt pretty badly. now we're not done with the month but so far so good. i think what we heard from the fed today is pretty much what has been mimicked by a lot of senior economists around wall street. i've heard this in three or four climate meetings, everybody has predicted what we heard today and as far as the stock market is concerned, quite frankly, if it's not quite nirvana economic ally it's pretty close and if it's not broken, why fix it? i think the back drop for equities remains positive, sure there will be a sell-off in here, nothing goes straight up but i think we're going to see the markets go higher and i think you'll want to stay long. liz: let me just say to our viewers that 10 years from now, we will look upon this time as certainly for stocks, i'm not saying it's not going to get better in the future. it may very well and we believe

in american business, but boy i'll tell you something this has been a 2019 gentlemen thank you so much. so, what did i say? uncertainties, that word was taken out but trade uncertainty with china and ongoing trade talks are two of the biggest concerns of fed chair powell. let me get to edward lawrence, who asked that very important question to chairman powell, edward you rushed in front of our cameras. let's talk about his response to that, because he did say that he's been hearing from businesses for a year and a half that's the problem, but he specified the chinese trade problems. reporter: it's very interesting. you talked about the jobs report , jobs are doing very well the economy is very strong. consumer spending rising at a solid pace but the other part of that is that business investment is weak and that's weak because they've been saying for a year now, because of uncertainty, part of that uncertainty is the trade relationship so yeah with usmca now set for or going

towards a ratification vote in the house it looks like the senate will do it also, mexico and canada seem like they're on board with this and that removed that piece of uncertainty so my question to him was so does that mean business investment then picks up as this uncertainty removes itself? listen to what he says here. >> of course it's not our role to comment on particular trade policies, or criticize them one way or the other or evaluate them but i will say though that getting, if the deal were to be enacted then it would certainly remove some of the trade policy uncertainty and that would be i believe a positive for the economy. reporter: a positive but he went on to say that a china trade deal, look at the markets. headlines over a china trade deal moved the markets more than headlines over usmca, maybe the markets have it baked in a little bit so it seems like that's the big uncertainty elephant that's in the room there, the chairman is saying that should a china deal then remove that uncertainty, maybe

more business investment would then sort of clear itself up. one more point on-the-jobs. he did say there's more slack in the economy. he says that he believes this job market is tight, but this job market is strong, but not tight, so there's slack in it so that comment there he believes maybe more people on the sidelines could come in that unemployment rate could even drop further as this economic expansion keeps going forward, so very interesting news conference here. liz: i agree. i agree. you know it always gets more interesting edward? when you get to ask your questions. >> [laughter] thank you. liz: but i thought it was really interesting where he said what mays the news is not, of course, usmca but definitely is right now, the china trade deal. edward was way out ahead in breaking the u.s. news on the usmca trade deal that it was finally ready for a vote in congress. he broke that monday, right? so he really had that. so congratulations, we've got

major stock alerts that we need to tell you about just a moment but in the meantime investors have now found something else to fret about. whether a phase i deal with china will get signed before sunday, the looming sunday deadline, that's when $160 billion worth of chinese goods and materials coming into the u.s. will get hit with tariffs of 15%, to jerry baker the wall street journal at large host whose fresh off the train just back from washington d.c. all right, jerry. what are you hearing about sunday and whether we will see any movement on phase i before that trade sort of deadline. >> well, we're hearing mixed things as you'd expect these negotiations often go down to the wire, the president very much wants it to be on the table , that these new tariffs or extended tariffs will go into effect on sunday. at the same time the chinese are making it clear that they're not afraid of another round of tariffs and they are willing to

do it but there still is a momentum on both sides to show progress so that's the key thing here. doesn't end the trade war at all if these tariffs go into effect but it does show progress. the president would like to demonstrate progress that he's getting china to do the things he and the rest of the administration want them to do. the chinese actually want to get this issue settled so i think there's a good chance that we will avoid the tariffs. liz: you have a very clear eye and a fair eye on what's going on with this trade talk. you've also been critical of the other side here and you look at what has just been released by the national bureau of economic research i don't know if you saw this so i want to let you know. the bureau said that tariffs slapped by china on the u.s. , these were the retaliatory tariffs maybe we can put this up on the screen, the products of that cost the most effective communities here in the united states billions of dollars specifically in lost auto sales in 2018 as the hit to local

incomes undercut household spending, and then they went on to say the most exposed communities which would be the midwest lost additional auto sales worth around 2 billion and that would be nationwide about 7 billion. we've got to get something done here. >> that's the ripple effect exactly what they are describing from tariffs particularly on agricultural communities on the farmers hit very hard by chinese tariffs on soybeans and corn and various other agricultural products, exports that hits those farmers and the communities those farmers and then that ripples through to car sales and other sales and people don't spend money, so yeah, there is damage. there's no question there's damage. now obviously the trump adminitration has brought in some compensation to help some of those communities which obviously doesn't meet all of the costs that they are facing, and more broadly, the economy is doing quite well as we've seen from the jobs report and from other economic reports, but there's no question that particular communities are being hit hard by these tariffs, which

is not any economic effect but will be worrying for the president in the context of next years presidential election because some are in states which were only a few thousand months left on. liz: i found it interesting the federal reserve has removed the word "uncertainty" there are quite a few not to mention sunday and what we're expecting there but tomorrow, boris johnson the prime minister of the uk decided to pick my birthday for the parliament election, and right now, i saw there were some opinion polls showing his lead into a general election has been chopped by more than half, other polls are not as dramatic here but he put out this commercial, on the love actually movie where he's showing big cars et cetera, now we're seeing things like hashtag lies actually and people are not happy, there is still that crew that feel the uk should remain in the european union. what do you think happens tomorrow? >> well happy birthday tomorrow , liz. liz: thank you.

>> many many happy returns. right now the polls are suggesting fairly consistent, throughout the campaign a six week campaign that the conservatives would win. they have a sizable lead. now that lead has narrowed there's no question and what you just described it is exactly right in the last couple of weeks in particular, the majority that the polls indicate he will get in the house of commons, and then now indicating it'll be much smaller but the polls do still indicate that he will get a majority. the key thing is turnout, it's a wintry, cold miserable day in britain tomorrow, it's forecast to be that could hit turn out quite badly. liz: it's at $1.32 buys a pound it was 131 this morning am i looking too much into it? >> i think taking a longer term view so before the brexit referendum was around 1.40 and its collapsed after the referendum back down into the teens actually has come back steadily and the reason your right, there has been a slight

upward movement, people are becoming more confident the conservatives will get a majority and if they get that they will end the immediate brexit uncertainty by taking britain out of the european union and after three and a half years of back and forth if they do get a majority, they will take it out in january and move into another round of discussion s about trade but that lingering uncertainty to go back to your point about jay powell, about whether britain will or will not leave that will be removed. if they don't get a majority tomorrow, expect even more uncertainty. liz: and that could in turn effect our markets. jerry was not just talking trade when he was in d.c. an hour ago, or however long it was. he was doing an interview with u.s. attorney general william barr. that will air on wsj at large friday at 9:30 p.m. eastern only on fox business, thank you very much. >> thank you very much again and happy birthday. liz: yes, thank you, it's my ten th anniversary of the 28th birthday i think. >> okay.

liz: we've got major stock alerts we need to get to you right now specifically about saudi aramco. did you know that the stock spiked 10% during its first day of trade giving the oil giant a $1.88 trillion valuation, here is the news. it could hit 2 trillion as early as tomorrow. why? well aramco stock watchers say during the debut in the last 24 hours the 10% surge hit the maximum permitted by the stock exchange where it debuted and that, they say, is a very bull ish sign. so a $2 trillion for aramco you could compare that to our biggest, apple, whose market cap clocks in at 1.2 trillion still the iphone maker hitting an all-time hyatt this hour, we're up about $2.09 on apple to $ 270.57 on very bullish holiday sales forecasts, those pricey earbuds. yes, those are going to be a hot holiday stocking stuffer. now for some dow dogs, chevron

announces a $10 billion write down, in natural gas assets, specifically shale and then we've got home depot missing a sales forecast, chevron is down 1.25% home depot losing about 2% , boeing this is a major story getting dragged through a house hearing at this hour, after a whistleblower and the faa testified there were 737 max issues before two deadly crashes that boeing was well aware of, and right now the stock is flat. tesla roaring to up fourth straight day folks of gains on a report the electric car maker plans to increase prices of imported three vehicles in china starting next month. the stock intraday is off its highs of the session but it's still up 1% to $352.75. can we see u.s. apparel retail shares they are in the red after american eagle outfitters missed on its holiday quarter forecast.

it's still up about the moment slightly about 1% or $3, so it has managed to turn around there to video game retailer gamestop, it is tumbling after recording third quarter results late yesterday. gerri willis on the floor of the new york stock exchange, this is supposed to be the big big motion, and movement right going into the holidays. gerri: this is brutal for the stock. trading lower, double-digits as we can see. why? that report that you described guess what sales fell 31% the worst performance in a decade. the stock down 15% is trading at 5 and change look at that. new game hardware, that's what was in focus, those numbers down 46%. here is the deal. gamestop relies on hardware sales for 20% of their business. it's down, down, down. why? xbox and playstation consoles are coming out next fall. no reason to buy them now.

you can see the results here. they have been closing stores as you know 180-200 stores closed this year, they have some 5,000- plus. let me tell you this has been a troubling year for gamestop, the stock down 56% liz what do you hear for this company having a very tough time indeed. back to you. liz: but that is an interesting stock. it plummets and then it rises if you look at the 10 year picture you will see that, gerri good to see you thank you so much. all right, mark the clock here, we have 10 minutes left before the closing bell rings. dow is up 11, we do have green on the screen, up next, citigroup among the wall street firms firming up the spot before the new year, you know how they do that? maybe no christmas bonuses for everybody. in fact some are getting pink slips. charlie is about to break that story on citi next on the clay man countdown, stay with me. on, it's got all my favorite shows right there.

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liz: a trifecta of the biggest names on the street may be preparing for 2020 by channeling the grinch charlie gasparino? charlie: yeah, we have been just looking around because like at the end of the year companies generally do this stuff. don't ask me why. i think it's heartless, it's holiday time. liz: terrible time. charlie: it would be nice if they lay people off the summer might be the best time to go to the beach do you know what i'm saying? and this is holiday season. anyway, msnbc yesterday announced significant layoffs and we now hear there are other major companies that are at least eying major layoffs and some of them have begun calling around the edges. the names that we are hearing are citigroup, viacom, cbs and general electric. let's go threw each one at a time. viacom/cbs has launched what we understand the merger-related cuts. they have to get $500 million in cost savings out of the merger. some of it's going to come from

cuts we understand those cuts have begun. we understand people starting in the finance department, that's where there have been recent cuts, expect more. i can't tell you how much they tried to down play it, the ceo, at the town hall last week but there's going to be some so it's starting right now. liz: call them synergies. we call them layoffs. charlie: anyway, cbs/viacom that's begun. we heard the finance department. the second one is ge. larry culp made it essentially a goal to basically take down the company particularly at what's known as the corporate level. the corporate level he believes was too bloated about 10,000 people there. we understand he's eying significant cuts there. we're talking possibly a thousand. it's a lot of cuts that he's looking there. we understand some of the cuts, they haven't begun yet but we understand likely to begin soon.

corporate division. the third one is citigroup, and this is where it gets a little tricky. there has been some cuts around the edges at citigroup from what we understand. not significant cuts. we understand if they're going to cut and they are still eying it, it'll be next year and it could be along the lines of morgan stanley. a couple of comments here, citigroup tells us there are no planned cuts for the rest of the year so whatever they have done they've done. we continue to grow and add talent strategically across the company, we're still working on 2020 planning anything rumored about the next six months is conjecture. i'm hearing it just so the conjecture is from people pretty close to the matter. i got so go through this. ge declined to comment but referred to background stuff that mr. culp made where he's talked about the corporate division needing to get synergies in various levels. synergies again as liz pointed out another sort of euphemism for job cuts, viacom and cbs declined comment but would not deny the matter. liz: charlie thank you very much

let's bring in our all-star closers with three minutes left in the show. retirement planners of america ceo, we've got main stay capital ceo and people's united advisors chief fixed income strategist, okay, folks. the fed and we are still very low at 1.5, ken i want to begin with you. you look at folks who have retiree, status what do you make of this and where are the best investments? >> well, i think it was what was expected and so we're going to continue to see the interest rates that we earn on our money-market funds remain low. we look at investments as a tool that you use so if you want to put nails in you need a hammer, so you use the right tool for that job, so money-markets are good for emergency funds and the liquidity but if you have too much in your money-market funds you have too many hammers that what i would suggest is you look at paying down mortgages, paying down credit cards, any dollars you spend to pay down a credit card will be an earnings that is

higher than what you're getting in your money-market funds, so use the right tool for the right job, get rid of high debt, use the low debt money to pay for it liz: david your investment strategy knowing at least that the fed says it won't move on rates for all of next year. >> yeah, they're not going to move on rates next year. if they do anything they will lower rates, but what we do know they are doing is they are injecting liquidity into the system, to the tune of $60 billion per month, and whatever this repo rate, the re purchase operation continues to be through, the end of this year into next year, so with that, with liquidity going into the system we go back to don't fight the fed. we're constructive on stocks, you need to be investing in stocks going forward into 2020 and depending on the investor, how aggressive or how balanced a portfolio you want to have but we're still constructive on stocks going into next year, no recession, constructive on the stock market liz: yeah you're right do not

fight the fed for 20 years that i've been covering business news , that has been the case. carissa, you have kind of a guts y call here, triple b rated bonds, which blackhawk has called the lowest tier of investment grade. >> yeah, well this is important to remember we've had an amazing 2019 for risk assets, but we see a picture in 2020 where earnings are continuing to improve. you don't necessarily have the fed behind you any more, in terms of further cuts. there may be one more cut, but this whole space has been where companies really levered up, and now they're looking to fix their balance sheets to improve their credit profile so that they don't fall into junk, so we still see some opportunity for spread compression here, even despite the rally that we had over 2019. so we think again, take risk in the equity part of your portfolio, kind of dial it back

a little bit but triple b still represents an opportunity here. liz: thank you so much, folks. it looks like the bulls are coming out on the win close to session highs. we're up 39 for the dow. >> [bell ringing] >> green on the board the federal reserve keeping interest rates steady signaling no hikes through 2020 so if you look at how markets close the dow ended we'll call that slightly in the green there snapping a two day losing streak i'm deirdre bolton in for melissa francis. >> hi, i'm lauren simonetti in for connell mcshane this is after the bellment take a look at the s&p 500 as well as the nasdac also ending the day in positive territory. fed day. and any minute at the white house, the commander-in-chief is set to sign an executive order as inspector general michael horowitz testifies on capitol hill over the fbi's investigation into president trump. we have fox business team coverage, edward lawrence is at the federal reserve, gerri willis is on the