has no interest in that, nobody has even asked him what tools do you have two fight inflation if you get out of hand, waiting for the question. charles: i have ten seconds, you still see something in terms of tapering talk in jackson hole? >> i think right now that that is still very much patient on the sideline as we heard. i think the fed is buying themselves more wiggle room, the statement said. charles: with got to leave it there. the answer is probably not as i handed over to my colleague liz claman, give them a little traction so far what were hearing from jerome powell. liz: indeed, the s&p charging higher, breaking news the dow has talked no fewer than 170 points off the lows of the session as jerome powell just said rate hikes are nowhere on his radar and inflation will go right back to the news conference live in washington, d.c. listen. >> again with a reasonably high percentage of the country

vaccinated and the vaccine apparently be an effective, we are not experts on this but it seems like a good going in estimate would be that the effects will probably be less, there probably won't be significant lockdowns and things like that, those are not decisions for us or numbers that we would be an expert in. in terms of the channels, for this is kind of speculation. it is just that people, you can imagine school districts deciding to wait a month or two for the delta wave, i'm not saying this is going to happen but it's easy to imagine that, it's also easy to imagine that some people might say i'm just going to wait a couple of months before going back to work, it would not be hard to imagine that happening. if schools don't open the caretakers have to stay home and if people do go back into the labor force in the job growth won't be as strong, those kind

of things. it does not -- sitting here today not being able to really know the future, it doesn't seem as though the effects will be very large but there may be effects and it may be that the effect is to slow the economy down just for a period of months. or not, there's many parts of the country where it might not have an effect, where this would have to see what the economic effects are. >> thank you, now will go to david at mdr. >> think you mr. chairman i was going to ask if you started drafting your jackson hole speech but i'm going to go in a different direction. i'm going to ask you about taking a cue from him and the term transitory if your someone who explain policies and programs in recent months and a real concerned effort to explain to them or can public as a whole i wonder about this term and what you would say to people who don't know definition and don't know what it means and see prices going up and wonder how

long they will have to wait, some broader definition from you i would like to hear what it means or how you understand it and quickly as well you talked about vaccines a bit in your colleague in minneapolis it is quite the mandate of vaccinating going back to the federal reserve bank and i wonder if that is something that you would like to see or expect to see systemwide going forward. >> the concept of transitory is really this, it is the increases will happen, were not saying they will reverse, that's not what transitory means, needs increases in prices will happen. so there will be inflation but the process of inflation will stop so they won't be -- when we think of inflation we think of inflation going up year upon year upon year. that is inflation. when you have inflation for 12 month or whatever of ibm, taking an example i'm not making an estimate then you have a price increase but you don't have an inflation process.

part of that just is if it doesn't affect longer-term inflation expectations then it's very likely not to infect and to affect the process of inflation going forward. what i mean by transitory something that doesn't leave a permanent mark on the inflation process. again, i don't mean that producers are going to take those price increases back, that's not the idea, they won't go on indefinitely. to the extent that people are implementing price increases because raw materials are going up or something is going up, the question really for inflation really is, does that mean they're going to go up the next year by the same amount. you're going to be in a process where the inflation process gets going. that happens because people's expectations about future inflation move up, we don't

think that's happening, there's no evidence that is happening, all the evidence is it's not happening. nonetheless, we have to watch it very carefully because we have two mandates, maximum price stability, price to build a means inflation averaging 2% over time and we've got to be very careful about that. but i think it's a good point, it is a term, what it really means is temporary but then you have to understand it doesn't mean the increases will be taken back. some of them will be but that's not really what it means. in terms of working virtually will be coming back down the road in a couple of months starting to bring people back here at the board of governors in washington and we are going to follow public health guidance and things like that. we really haven't made the fundamental decisions about exactly what that will look like and it will depend on what cdc guidance looks like when we actually do bring people back

in. >> thank you let's go to michael with mtv. >> i want to ask you a little bit about your taper timeline in the sense you want a couple more months of data and the statement says the fed is going to evaluate the development in jobs and inflation incoming meetings. does that suggest we would not see anything before september or november in your meetings, i know a lot of people on wall street have basically felt you're going to lay out your taper plans at jackson hole, is that the plan or are we not going to see anything until the fall. >> we haven't made any decisions about the timing, if i said were looking at a couple more months of data, i'm not meaning to suggest anything about a particular time at which we might taper. we really have not made that

decision. all i am saying, were not at substantial further progress. there is a range of views on what time you will be appropriate in those views track back to people's views about the economy and what will happen as we make progress towards our goal. that is really what it is, we will of course we are going to continue to try to provide clarity as appropriate on time, pacing composition. but today i have given you what i can give you because this was the first really deep dive on the issues of time, pays and composition. it was a good meeting but no decisions are made and i'm not in a position to give you much guidance really, any guidance, on the actual timing. but i will say, we are making progress and we expect further progress and we expect if things

go well then we will reach that goal and when we reach in the committee is comfortable and we have reached it the multibrand that point. there is nothing i can say about jackson hole, we are in the process of writing that speech and i will give that speech but i would not want to say what will be in there at this point. >> if i could follow up, several people have recently noted that the fed has got the markets working well and you have bank loans up, otherwise you stimulated demand savers and companies like insurance companies and pension funds are getting hammered by the low rates and i'm wondering if the balance hasn't started to shift away from benefiting the economy to doing more harm than good? >> asset purchases were a key part of our response to the crackle phase of the crisis. they really helped us restore market function to the key

markets which are very, very important to our economy and the global economy. they were a big part of creating a financial condition to support demand. they were strongly needed, it was that commitment to continue asset purchases that provided strong support for the economy and has been a part of the story why the economy is so strong right now. we said we would taper when we achieve substantial further progress, we are going to honor that minute. and again, were talking about it right now, meeting by meeting and moving in that direction. we will taper when we reach that goal and will provide more clarity on that as we go, as appropriate. >> thank you, hanna at the american baker.

>> hi, you've been asked a lot previously if the fed monetary policy at all contributes to inequality, i was curious to know where you think the fed's regulatory policy lands particularly if you think the bank capital requirements have had the effect of penalizing lower income households. basically is impossible to achieve the tablets of a safe baking system with one that also provides equitable loan access. thanks. >> i think strong capital requirements are essential for banks especially for the larger banks. i think undercapitalized banking system as we seen can be a real threat to the economy and mostly, to the greatest extent to people at the lower income spectrum. if you look back, not this previous, not this crisis but the previous one the banking system was undercapitalized. higher capital of requirements

are really a good thing because they allow banks to whether downturns and continue to perform the functions that they form. i think it is other tools that we have and the fed has some of these tools, congress has some of these tools, other agencies have some of these tools to assure or support the wide availability of credit particularly low and moderate income communities, that is cra and were working on a new cra proposal right now with the other banking agencies and we think it will be good. we will support the flow of credit to moderate income households, it is also the anti-lending discrimination statutes that we enforce. it is some of the programs that congress has in place to support the flow of credit to moderate and low-income communities. i think capital standards work the other way. strong capital is what enables

banks to continue to serve their communities and low and moderate income communities. >> thank you, we will go to chris at the ap. >> thank you for taking my question. chair powell, i want to ask about when you were before congress, earlier this month you mentioned something along the lines it won't take too long before we see if you're right about inflation in temporary aspect. you also mentioned learning a lot more in the next six month about the economy. can you tell us a little more what you mean by that, when do you think you'll get a clean reading on inflation with most of the distortions were seen right now. >> with inflation as i mentioned we look not just at the headline, but we look at the components that go into the calculation of inflation. if you do that and look under the hood, what you see is not that widely across the whole range of good and services that are in the economy, were seen

upper pressure on prices, that's not what were really seen. were seen a handful of things that really account for the overshoot of inflation. as i mentioned it is things like cars, new, used, rental cars have moved up in price because of the car shortage in the semi conductor shortage. and housing -- hotels and airfares have moved back up but that is really just retracing the very large downward movement and prices that they have before, that is a big part of why the inflation numbers are so high. those wrinkly do not carry significant applications in the long run for inflation or for the american economy, what i said we are going to see -- we do not need to see everything do what lumber prices have done.

if you look at lumber prices they went up and then they went down what we want to see do the prices flatten out, do they actually move down, if they flatten out their contribution to inflation become 0 over time. so they're not can shooting to inflation. if we start to see those things happen widely among the things that have moved up quickly then they will all happen at once or happen quickly but we will know our basic understanding of the situation is broadly correct. i don't think it will take a very long time to see whether that is the case. it is probably the case that frankly the overall reopening of the economy is going to play out over a period of time this is a historic world a historical event that the global economy is now reopening, it is not going to happen quickly, it is going to take time and very uneven as we discussed before. but i think we will know when we

know but i don't think it will take that long, i don't want to put a number on it but i do think if we see those things happening we will know we have the story basically right. >> thank you brian at yahoo finance. >> brian at yahoo finance. i'm wondering if you could provide more color how you think about mortgage-backed security, purchases as you inched toward taper and as home prices continue to rise, we heard a lot of people talk about the idea that they would like to cool off on purchases, is that more because of the optics were certain relationships with the committee view between mbs purchases under qe in the hot housing market. >> a number of participants raised questions around mbs and tapering at today's meeting a matter fact, yesterday's meeting.

i'll just say generally speaking i don't think, i think the treasury and mbs purchases affect financial conditions in similar ways, there may be modest differences in terms of contribution housing prices but it's not something that is big. where i think we are, there is really little support for the idea of tapering mbs earlier than treasuries. i think we will taper them at the same time, it seems likely based on where people are now. the idea of reducing mbs purchases at a faster pace than treasury does have some attraction for some people, others not so much. i think it's something we will continue to discuss. >> thank you, let's go to michael derby. >> thank you very much i want to ask you about the standing

facility and get your sense of what do you think it will do for market trading conditions and also in a semi-related point the reverse repo numbers have gotten bigger since she raised the repo rate at the last fed meeting are you concerned to see nearly a trillion dollars a day pouring into the facility? >> on the standing repo facility, what is it going to do, it's really a backstop, it's set at 25 basis points, out of the money it is there to help address pressures and money market that could impede the monetary policy. really it is to support the function of monetary policy and its effectiveness, that the purpose of it. with that purpose in mind, your question on the rrp, we think

it's doing what it's supposed to do, what we expected it to do to provide a floor for money market rates in the federal fund stays within the target range, it is essentially what is happening is it results in lower aggregate amount of federal reserve liabilities and banks in the form of reserves and higher amount of liabilities and money market funds in the form of overnight orp balances, that's a truly happy there. we expected to be high for some time, it's being driven relatively lower quantity of treasury bills and the onset of the debt ceiling in the decline of the pga, we are going to have a problem with what it's doing, it's doing the job we expected.

>> you don't see any issues with disaggregating markets and private money market security that the fed's footprint of getting too big, you don't see any issues there. >> not really, not at this point money market funds are choosing to invest because the rates are attractive. at some points the rates will not be so attractive as the whole rate cluster rises and you see a shrink back down. >> thank you. >> let's go to greg at markovich. >> hi, thank you for taking my question. chair powell i want to go back to inflation a little bit i was surprised by your tone it seems like your warning if inflation gets too high the federal act, isn't it true a little inflation is good for the economy and

somehow maybe we can get the economy out of this place that we will always be close to down, isn't there a good story to tell instead of sort of panicking people. >> i certainly don't have that in mind, we, as you know are targeting a moderate overshoot of 2% inflation for some time. we want inflation expectations to be centered on 2% we feel they may be below that. the bigger picture that would be a healthy thing. this is a different thing this is not that this was the inflation we were thinking about that comes from a very, very strong labor market and a booming economy, that was the inflation but this is something different and driven by the supply side which is not able to handle this big spike in demand that were seen as the economy reopens of vaccinations and

fiscal support and monetary policy support the supply-side all over the world's your seeing the same thing it cannot keep up in the labor shortages and a lot of places the same sort of thing. there is absolutely no sense of panic i've explained several times here today, my best estimate is this is something that will pass it is a shock to the economy that will pass through and if you look at where forecasters are people write down forecast for a living very, very strongly they see it that way, we are responsible for this so we have to take seriously the risk which is inflation will be more persistent and it might move in inflation up and we might require a response, again we do not see that now but we have to be on the alert for it

and people have to understand and believe that we will react if we need to and we will, again it is not my base case my base case as i've said repeatedly inflation will move back down, we have not at all changed our view and i haven't changed my view that inflation running about 2% moderately above 2% is a desirable thing this is not moderately above 2%, this is well above 2% and it's not the inflation we were looking for this is driven by a supply-side shock. >> thank you. >> we will go to donley at the los angeles times for the last question. >> thank you i wondering if you could talk about wages workers have seen to get good wage gains in recent months what can workers expect going forward and

it doesn't sound like you're concerned about rising wages with inflation, is that right? >> wages have moved up, a lot of that is driven by new hires and a lot is driven relatively low paid jobs in the service industry as people come back that is not troubling. there is a form of wage inflation that can lead to price inflation and were not see that right now we call unit labor price moves up and that puts a move up in a way that is hard to manage where they have to accept substantially lower margins or raise prices. when it happens gradually, we have seen in a long expansion, sometimes labor cost to move up

and put pressure on margins company, the only expansion that has been happening lately expansion that set a problem either, if the happens it away that pushes firms broadly into raising prices, is the wage price spiral, we do not see that now this is something that was a future of the high inflationary era of the great inflation but it's not a future now, of course we will be watching it and this is one of the reasons we are watching so carefully to see whether the labor force and whether people do come back in and except jobs given the very large number of job openings and the large number of unemployed people we would like to see the matching going on so people get back to work we think labor supply would be a healthy thing, wages move it up across the spectrum consistent with inflation and productivity is a

good thing. >> thank you chair powell. >> thank you very much. >> federal reserve chairman jerome powell repeating multiple times these four things, no rate hikes, no tapering of bond purchases, no discussion of tapering bond purchases and no worries some inflation. i know a lot of you disagree, i might as well but he makes his case the fed did not leave interest rates unchanged at a quarter percent but remains basically frozen in place when it comes to tamping down rising prices or taking any action to do so powell playing it down the middle you can see the markets were off the lows for the dow punching higher for the s&p by five points, the nasdaq up 125 the fed seen a strengthening in the economy, powell made that

very clear in improving jobs outlook but not quite there yet but balancing those risks by saying the risks remain because a delta variant threatens to extend the coronavirus pandemic, inflation even as the data shows inflation is only worsening the fed and since rise in prices are still transitory or temporary we have got to talk about the bond buying the $120 billion a month and bond purchases will remain untouched, no tapering and no pulling back but some believe how the economy has made progress towards the fed goals and he and his cohorts will continue to assess progress in coming meetings is clear to market reaction let's take a look at the ten year treasury yield i marked on what it was doing before the announcement the ten year one point to 54 before the announcement we got a little bit higher one point to 52, that is hitting a session high right after the decision

but financials are interestingly gaining ground, not what you would expect because the higher rates boost banks profits but at the moment we are not going to see higher rates on the horizon powell made that very clear, we are all higher we can call it flat, the dollar also gaining ground against a basket of currencies usually rates are going higher were not seen rate higher but you can see most of the major currencies the dollar remain stronger look at the volatility index to me we saw the biggest moves we have been down about 2%, no fear going into this now we are down seven and half% wall street is really copacetic about this feeling very comfortable with the fact were not going to see interest rates rise certainly for the foreseeable future according to jay powell perhaps the biggest hidden signal and what we just

heard was not hidden at all jerome powell said he believes the inflation we are seeing a higher prices right now is not here to stay listen to how he put it. >> what i mean by transitory something that doesn't leave a permanent mark on inflation process, again i don't mean producers are going to take those price increases back that's not the idea they won't go on indefinitely when we think of inflation we think of inflation going upon year upon year upon year, that is inflation when you have inflation for 12 months, whatever it might be i'm not making an estimate then you have a price increase but you don't have an inflation process. liz: to our federal reserve insider bill lee served as a senior economist at the new york fed and the former u.s. assistant treasury secretary for financial institutions now at the crawl institute. will all begin with you can you

tell me if you got a true sense of when the fed might taper or reduce its $120 billion per month and bond purchases especially considering those were emergency efforts and right now were looking at what powell said was the strongest economic recovery and a longtime. >> we did not make substantial further progress, that is the keyword they left it out the word progress in the key the operating procedures they have awoke at objective where it's not just maximum employment thereafter if the maximum instant of employment gains people left out of the labor force have to get jobs they have nine and half million people still unemployed and that's the number the looking at they want to make substantial progress in reducing the number the big news they came from chair powell he actually told us the next two meetings they're not going to

touch these emergency steps that have been placed because they still consider an emergency that so many people who have been left out of the labor force remain unemployed that's what were going to have to look for in the market tucked themselves into a panic of jackson hole being the timing of the announcement of qed in chair powell completely put a nail into the coffin by saying we will wait until it's clear to us that there is substantial progress and we are not there yet, that is the key message. liz: you have to make it clear why we are not a big leap versus the inch by inch more meant toward a better situation bill is right we have 9 million people unemployed in this country but i've got to tell you the job opening and labor turnover job opening are at the highest we have seen, i don't want to say forever i could be wrong but their ridiculous

levels because the government is continuing to put checks in people's hands i'm hearing from everybody that i know that is trying to hire people would rather not take those jobs at the moment is the fed about to step in a manhole it cannot see at the moment but maybe we can or am i completely off on that. >> there was a question asked of jerome powell and i think if he answered that i don't necessarily know if i agree but because there is a wage in our challenge that people will not work people are going to have to increase wages, those are not transitory there around forever which is going to cause a challenge of an inflation, what else he does in fact in d.c. later this year raising taxes $1.5 trillion, if you do that are corporations, corporations will pass that on to higher prices to consumers you have inflation that we see today in the other challenges that are non-transitory that are leading

to challenges i think that is what the fed is factoring in and i'm not suggesting they will move to taper and suggest anytime soon maybe not in my lifetime trying to raise rates again, i think we are certainly now and i think the fed is certainly in their meeting and i believe and feel strongly there is challenges ahead of us and perhaps the delta variant that is still unknown all of those things can put together and suggest the fed will not do anything and as bill suggested for two more meetings. liz: here is what jay powell, in case anybody missed it says specifically about when we might see rate increases, let's listen in the bill i want to ask you a question about this. >> we are clearly a ways away from considering raising interest rates it's not something on our radar screen right now. liz: not on the radar screen

right now, bill i'm going to give you data points, corporations are flush with cash because rates are so cheap they borrowed pretty much all that they can possibly stomach municipalities and states are flush with cash let me give you the cpi consumer price index which is inflation that the consumer level up 5.4% year-over-year, manufacture inflation on materials up 7.3% year-over-year. some of the manufacturers are getting killed all material cost, who are they protecting? with the fed. >> it's very clear it's going to be sequential they will be easing off on qe and then we'll worry about liftoff he made it very clear there may be some weird trips unto circumstance when they want do that as far as planning but plan on qe first and then raising rates we won't see the rates go up until well into next year but the key of

inflation chair powell is very specific wages have been going up with a lower wage sectors and productive jobs that can't be filled because these people during covid trained and still have moved on to better jobs these jobs have to go up in terms of wages and price increases are also concentrated, concentrated price is not the inflation that we had in the 70s, that is the key it is not widespread wages were prices and that's what the fed is keeping an eye on once you see wage price increase start to worry so far all the increases are highly concentrated in several sectors and several prices. liz: a lot of these employers, waste management, ceo jim fish was on with us yesterday and he said giving up $7500 signing bonuses, there is a little bit of wage inflation, does jay powell continued to stay at the fed, will president biden reinstate him and continue to

keep them? >> when i was treasury i think he's done a very difficult job, very good job at a very difficult time, i think he's worthy to earn a spot back. liz: i think so too i think that's what's going to happen will watch it closely, great to have you, coming up the man who came on the show just a few weeks ago to say the fed is committing malpractice founder and editor of grant's interest rate observer jim grant will join us and what does he think the fed is or is not doing now, jim grant is coming up in just a few minutes you have to hear what he has to say but what the fed is not the only headline investors are really gearing up for facebook and qualcomm to report earnings "after the bell" which is 25 minutes from now earnings have been gangbusters across the board witness apple, microsoft, blockbuster number

yesterday including google, alphabet going nuts in nearly 200 companies in the s&p have reported earnings, here's how well they've done 91% have been earning estimates, 87% have beaten sales or revenue estimates but were talking about inflation could that creep up and reveal cracks in the armor of which companies and should you buy or sell some of those names, let's get right to the floor were joined by phil flynn as security teddy weisberg, go for it where might we see cracks in inflation and the answer may be nowhere because all these companies are doing so well it appears. >> i am hearing cracks over the ice, they are doing great right now because of dealing with inflation but they're not going to deal with a very longer if it goes higher. apple fantastic grenades everything is great and they expect growth to be as big in the next quarter but they also

said tim cook said were starting to get a little bit concerned about transportation cost, the cost of moving goods is going up that is inflation will come to the bottom line of little bit, it's either going to do that or make your prices higher at the plates. make no mistake the inflation threat as we just heard from jay powell, it looks like it's a little bit more sustainable than we thought it was a few weeks ago and the risks are to the upside, if the risks are to the upside of inflation you really have to take the fed at their word and get in the stocks that are going to benefit from high inflation that your good old-fashioned commodity stocks, i love those exxon mobil, valero, caterpillar, although stocks should be very good in an inflationary environment and if that tells us it is here, don't fight those guys. liz: you have got to imagine the

names of the materials like rio tinto, u.s. steel, these are the commodity names that truly stand to do quite well because they have pricing power, do they not? >> yes clearly phil is right in one respect you want to own the companies that have the ability to pass along price increases as abc price increases there are many companies that have the ability to do that, on the other hand if i heard chairman powell correctly i think he address the whole issue of inflation yet again and he still insists it's transitory and he even drilled down a little bit to explain what he meant by that, i guess it's a case do we want to fight the fed or believe the fed, yes right now we have a lot of inflation but it remains to be seen where we will be six-month or two years from now on the other hand what you don't want

to own up or in an inflationary environment are the transportation sectors, the utilities, consumer staples in particular you don't want to be in names where there's a lot of government oversight or government regulation in terms of price and power and in the case of consumer staples there it is a matter of competition because there are so many companies whether the internet-based or otherwise that keep reinventing the wheel when it comes to goods that a lot of retailers cell and like to buy whether constant pressure so they will get squeezed if the cost of good continue to rise. liz: exactly, let me take this out to the broader picture what did you hear from the fed that indicates to you that they are right on track, they are doing the right thing, the market does not want, does not want any rate

increases. but that is just a hissy fit that the market has to get ready to endure because at some point do we not have to start to see rates normalize. >> we do i think i'm going to write will we taper in september because they're going to have to do it, today we are not going to move the bottom purchases we will by the mortgage-backed securities, resetting back two different systems by international bonds and for the near-term that is happening but everybody knows when we get closer to september jackson hole, they're probably going to announce some type of taper because we can't keep buying these things forever, the delta variant. liz: no, he said do not expect anything out of jackson hole for those of you that don't know is

a big event for the federal open market committee people in central bankers from all over the world and everybody goes flyfishing, we've got to run, great to see you the dow jones industrial down 82 points but the low of the session was a loss of 181, it's a nasdaq that is showing the most power up 1% or a gain of 123 points getting closer to the height of the session which would be again of 135 the fed is dominated the headlines today but tomorrow it is robinhood's turn, charlie breaks it next on the online minutes before the world learns the final details of the highly anticipated ipo, where will that price, charlie breaks it next and then revealing one of the biggest secrets to success in my latest everyone talked to liz podcast episode which literally just brought she founded the company and now she's executive

company, she is going to share how she put three years of her life savings on the line no guts, no glory for her gym class started up the aggregating of gym class, back in 2128 short years later is valued at $1 billion, you have to hear how her passion of all things dance helped her master the art of pivot in the business world is available on spotify, google, apple wherever you get your podcast, if you want to hear that listen to it very inspiring the closing bell ringing in 18 minutes at dow is down 72-point volatility is dropping so there is no fear of the very scary inflation which i think is scary i'm paying more for everything, aren't you we're coming right back with jim grant. ♪

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liz: fox business alert quite a wild ride we have been watching all session long from amusement parks, six flags are you ready posted a 2300% year over year surgeon revenue as customers walked back to its parks, the cop was really easy because everything was shut, and sectors at the open later open before six flags dropped along the broader market, it has flipped all the way back to the upside up under 1% at the moment sea world is straddling the flatline it did flip out of the red a few moments ago but slightly lower and we have cedar fear moving higher by 3%. in a perfect example of hope you bought at the bottom chinese

tutoring stocks schooling those who doubted their future after china's crackdown late last week on the for-profit education sector crushed the names for the past couple of days go to make the biggest move at this hour it is higher by 23% towel jumping 53.6% in new oriental is up eight and a quarter% all three stocks going for the second street interest-rate gate enter data games china's ev maker driving out of the ditch at this hour after chatter it could be the next sector targeted and what the widespread regulatory blitz aimed at companies that trade on foreign exchanges but nio, expanding are all ducking the fear we have lee leading the charge by 15 and a 3% the world economic powerhouse tech titan firing on all cylinders after a massive selloff, leading the charge with higher than 15% we have ten sent which really has

gotten hammered over the past couple of days scratching back 5% of its losses katie.com same with ali baba on those names are moving higher at the moment jd gaining eight and a third% and ali baba 5.6% and then dd putting the pedal to the metal on this hour it was the first week, we could go of going public and it just got crushed because china eating its own young, dd is up ten and a quarter% the bounce back is china's internet etf up 14 month lows shares tesla to the west point of may of 2020 yesterday after 22% cut just over four days, gaining back about 10%. by the way thank you to all of you who have been tuning in to watch the color commentary on the market every morning on tiktok, yesterday's video which flagged all of you guys about china stocks and where they were

moving had more than 85000 views, if you want and on the market action you can follow me on tiktok at red fox lives. we now have 216,000 followers, a one minute update everything will morning to an end. robinhood pricing is ipo ahead of the highly anticipated nasdaq debut tomorrow the company coming to market amid heightened scrutiny from financial regulators in the u.s. over the payment for order flow model but robinhood may have a plan up its sleeves to get around this issue, let's get to charlie gasparino i have a bunch of questions about robinhood what are they planning and does anybody know if they think it'll be priced high and low. >> nobody knows i tell you i've heard $35 a share the company was eyeing 38 and 32 there's a lot going on with this, lot of worry going on with this company it could be anywhere from the area.

let's unpack this a little bit robinhood did a roadshow and i know some people that were watching it and because of the roadshow the mixed signals that investors got is hard to price this they are basically can see it during the roadshow that they have to make major changes to the business model as a public company a cannot just be an app that lets you trade that is a go-between that has to be something more in the coming under pressure where they sell the overflow to third parties that make 70% of their money doing that the sec is investigating that practice it may have to scale back, robinhood has to go back and find alternative revenue sources one such source they can see during the roadshow was due their own payment, be their own market maker for their trade, hard to get into is the reason

why virtue is good at this it's been doing it for a long time in citadel they make markets for a lot of different firms all at once it's easier to match those buys and sells when you are doing payment for overflow for robinhood and swab, you get the picture you have more volume and more people, two minutes, give me a break. i said it very patiently. so again. [laughter] i listed all the pop stocks. here's the thing they're taking about 35% of the ipo, allowing it to retail, sounds good because retail maybe can make money off the top, he doesn't pop that much, if you really want to raise as much money as you can the business model change you will have to price it at the high-end you not going to

get that big of a pop. again institutional investors are worried about the stock not the retail, they're worried about payment for overflow eating and in being regulated and that being eating then to robinhood's earnings and revenues we should point out robinhood is not a profitable company right now showing tremendous user growth but it is still not making money. i tell you for all i know this thing is going to $70 a share tomorrow based on the retail people died to get the stock, i see that scenario hedge funds have told me that 19 scenarios where people tell me that this thing can go down to 30 and it's impossible to know how it's going to turn out we just don't know that have gauge sometimes they do in ipos this one i don't have my hands around it. we shall see, back to you. liz: you know charlie is a baby.

jim grants one of the most widely respected voices on wall street is next, will he hammer the fed like he did last time and countdown is coming right back. stay tuned. now it's, "network, network, network." so you need a network that's built right. verizon business unlimited starts with america's most reliable network. then we add the speed of verizon 5g. we provide security that's made for business. and offer plans as low as 30 dollars per line. come to verizon small business days on fridays in july to get a plan that's built right for your business. ♪all by yourself.♪ you look a little lost. i can't find my hotel. oh. oh! ♪♪ this is not normal. no. ♪♪

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♪. >> so it is a world on fire. in fact it is pouring on the flames and the gasoline. liz: the flames and the gas. that was jim grant of grant's interest rate observer after the federal reserve open market committee back in june but now that we know what jay powell has just announced, no move on interest rates and frozen in time on any kind of tapering of bond purchases, let's see what jim grant has to say today. we bring in jim grant of the interest rate observer. great to have you, jim. all right, frozen in time. no move on anything. what do you say about how the fed is doing right now and the decisions they have made?

>> one way of looking at this is two -- house prices up 18, 16, 23% depending which index you look at. the fed is buying $40 billion in mortgage-backed securities to facilitate borrowing at lower rates what otherwise would prevail. you do wonder why. house prices are up faster, more furiously than any in previously recorded -- [inaudible]. the fed is contemplating more mortgaged back securities. this [inaudible] one could change the metaphor from a world on fire to a world in stage deeply emersed emerseda flood and shooting a fire hose and [inaudible] i do -- liz: we're going to flood and the fed is shooting a firearm. i am envisioning that right now.

i don't see any action let alone picking up any kind of weapon although he keeps promising they will do something if they start to see inflation is lasting a lot longer. but it would have to be a lot longer according to jay powell says it has to last year after year after year. we can expect to pay higher prices for now without the fed doing anything. you have to explain to our viewers, what is the danger, jim, not doing anything on tapering and not pulling back at least the mortgage-backed security housing portion of this? >> well inflation kind of keeps in -- and there is no press release announcing now inflation is serious -- [inaudible] that doesn't happen. what does happen is the consequences of rapid money growth -- economy and people pay higher prices get used to paying higher prices.

can't afford to pay higher prices and asset inflation becomes as they say a thing. past two years end in may. [closing bell rings] [inaudible] liz: jim, we got to end it there. that will do it for us. "kudlow" is next. ♪. larry: hello, everyone, welcome back to "kudlow." i'm larry kudlow. so there is news we may just have a bipartisan infrastructure deal? let's go right away to hillary vaughn at the white house. with can you tell us, hillary? reporter: larry this is a 550 billion-dollar bipartisan deal. that is $29 billion less than what the president were hoping for as well. the original offer on the table was 579 billion. this is 29 billion less than that. here is what is actually