attention. taper tantrum, let's bring it on. remember, $120 billion a month, they're going to keep buying that for a very, very long time. they're going to be loathe to do anything different. jay powell's running the show, his colleagues have input but, ultimately, he is the man, and he just told us. and, nancy, danielle, you pointed it out, hikes are way off the table. right now the market's hanging in there. liz claman, i think you got one heck of a last hour of trading. liz: yeah, the news conference still going on, confirming what many on the committee have said is happening. inflation continues to rise and the tapering bond purchases may come as soon as the next fed meeting in november with the markets holding on to quite a bit of their previous gains. let's go back to the federal reserve and this live news conference. >> -- various, you know, for african-americans, for example, and also participating rates. we -- participation rates. we saw a really healthy set of dynamics. by the way, we also -- there was

no reason why it couldn't continue. there were no imbalances in the economy, and then along came the pandemic. but we were not -- it was nothing in the economy that looked like a buildup of imbalances that could cause a recession. so i was very much thinking that the country would really benefit from a few more years of this. it would have been -- and so we're all quite eager to get back to that. we also said we wouldn't raise rates just many response to very low unemployment in the absence of inflation. so that was another aspect of it, because we saw that that really benefited, labor market participants in a broad and inclusive way. that's, of course, not the current situation. we have significant slack in the economy and inflation well above target, not moderately above target. so that's really how to we think about it. it isn't just really targeting the headline numbers, but it's about taking all of those things into account in your thinking about what constitutes maximum employment. >> just to follow up, should

there be a significant gap between black unemployment and overall unemployment for structural reasons that are outside of the control of the fed that other people should be doing something about, or should that be, should the gap narrowed if not down to zero? >> well, you've really -- i mean, first of all, ideally there wouldn't be any gap, of course. we'd all love to see no such gap. this is a persistent gap, and it's very hard to explain based on typical metrics. it just, it's quite troubling. but it really is, you know, we, we have, you know, famously broad and blunt tools. i think eliminating it, inequality and racial discrimination, racial disparities and that kind of thing is really something that fiscal policy and other policies, frankly, education policies and that kind of thing are better at focusing on.

and i think we've identified the part that we can do, and we'll do that part. but i have always been clear that it's going to take policies broadly across society to work on these problems. >> thank. >> thank you. let's go to michael mckee. >> -- a plan for dealing with a debt default that included prioritization, that included changes in bank regulations and possibly selling defaulted -- not defaulted treasuries and buying those who are. are any or all of those still on the table? do you think any of those would work, and what would happen to the economy, in your view, should the debt ceiling not be raised? >> so i missed the few words, but i think i get your question. so it's just very important that the debt ceiling be raised in a

timely fashion so that the united states can pay its bills when and as they come due. that's, that's a critically important thing. the failure to do that is something that could result in severe reaction, severe damage to the economy, to the financial markets, and it's just not something that we could contemplate, that we should contempt play. i'm not going to -- contemplate. i'm not going to comment on particular tactics or things like that, i'm just going to say that i think we can all agree that the united states should not default on any of its obligation, should pay them when and as due and, again, no one should assume9 that the fed or anyone else can protect the markets or the economy in the event of a failure, fully protect in the event of a failure to, you know, to make sure that we do pay those debts when they're due. >> if i could follow up, have you discussed options with members of congress? >> you know, i don't generally

ever talk about conversations i have with elected officials or other appointed officials. but, look, you can see that this is a major focus among those who have responsibility for it including elected people. >> thank you. let's go to hannah lang. >> hi, thanks so much. senator warren sent you a letter last week urging the fed to break up wells fargo, i think what she called ungovernable behavior from the bank. i was just curious under what circumstances would the fed actually consider revoking a financial holding company's license and if the indiscretions at wells fargo, in your opinion, warrant with such an action. >> so we're, of course, very closely monitoring wells fargo's efforts to fix its widespread and pervasive problems. they represent a serious matter to us, and the firm is required to remediate them.

and we will take appropriate supervisory action if the firm fails to meet our expectation. we continue with an unprecedented asset cap that will stay in place until the firm has comprehensively fixed its problems, and we're not going to remove that asset cap until that's done. so bottom line is we'll take strong supervisory action if the firm is engaging in unsafe practices or violating laws, but i can't speak to our confidential supervisory assessments of any individual bank. >> thank you. now we'll go to michael derby. >> thank you for taking my question. you noted earlier in the press conference that you weren't aware of the trading activity of the boston and dallas fed bank presidents. as you know, all 12 regional bank presidents just went through the renomination process earlier this year, and governor braynard described it as a

rigorous process at the time. so i want to know did anybody know, did anybody at the board level know about the stock-trading activity, and going forward do you still have confidence in the dallas and boston fed bank presidents to do their job? >> so these -- i don't need to tell you, we file, people file these reports annually, and i think they were just quite recently file for 2020, so i don't have any reason to think people at the board would have known about particular trading that's going on. they will see that, there are people at the fed who see that, you know, see the trading reports when, you know, when they're annually filed, they're annually filed. you know, in terms of having confidence and that sort of thing, i think no one is happy, no one on the fomc is happy to be in in this situation, to be having these questions raised. it's something we take very,

very seriously. this is an important moment for the fed, and i'm determined that we will rise to the moment and handle it in ways that will stand up over time. i'm very reluctant to get ahead of the process and speculate though about different things, and, you know, when we have things to announce, we'll go ahead and do that, but that's really what i have for today. >> one small follow-up. you didn't have the 2020 forms in hand, but you would have had past-year forms in hand, and at least in the case of the dallas disclosure forms, similar trading activity was shown in years past so that the, in theory, could have been something that came up in the renomination process. >> so, yeah, that's a good question. so, you know, the five-year review that we do under this unusual provision of law where all of the reserve bank presidents are reviewed for reappointment at the same time every five years, that is really a broad review about their leadership of the institution,

their performance on the fomc, all of those things. and if there were a concern, a public concern or private concern about something that someone had done, we wouldn't wait for the five-year -- we wouldn't wait that day if there were concerns. your right though, these -- as i mentioned, we have had a framework for a long time, and it's similar to what other government agencies have only it's a little stricter, and it is that you can trade financial instruments but not specific ones like bank debt, you can't trade during the fomc period and during the meeting, blackout period during the meeting, and then you disclose all this. and we have disclosed it for years, so all of these things -- to the extent they've been going on, they've been a matter of public record. and, you know, but it, nonetheless, so, you know, it was seeming to work just okay, and now you look at it and you see this and you think we need to do better, and we will. but you're right, but it has not been part of the process. and appropriately, i don't think it should have been. i mean, i wouldn't blame the

people who conduct that review, i really think if someone had raised concerns or if we had concerns then it would have been, but it wouldn't have been part of that process, it would have been raised instantly rather than once every five years. >> thank you. >> thank you. let's go to dean young. >> thank you, michelle. chair powell, i wanted to ask how the fed would balance the two parts of its dual mandate. if inflation stays elevated but we still have a labor shortage and participation remains lower than ideal, would you hold off on raising rates or how would you think about that? >> well, let me say one thing, you're looking for conditions consistent with maximum if employment to lift off, and those conditions can change over time. so you're not necessarily bound

by a particular level of the unemployment rate or the participation rate or anything else like that which can change over time. but more to your point really, we actually have a paragraph in our framework and something like this has been there for a long time, i think it's paragraph six, and you're talking about a situation in which the two goals are not complementary, they're somehow if intentioned. and if we judge that is the case, what it says is we take into account the employment shortfalls and inflation deviations and the potentially different time horizons over employment and inflation are judged to return to levels consistent with mandate. so we used to call that the balanced approach paragraph because it had those words, so it's a very difficult situation for any central bank to be -- pardon me -- to be in a situation where the two goals are intentioned. and that paragraph tries to address it by saying we would sort of weigh the equities between the two, how long will it take, how big are the gaps

and that kind of thing. we don't really think we're many that -- we're sort of in that situation, i'd say, in a short-term way, but we think, we do expect that this is sort of because of the covid shock and the reto opening and all that -- reopening and all that you're seeing this temporarily. >> great, thank you. we'll go to edward lawrence. >> thank you, michelle. thank you, mr. chairman, for taking the question. so on corporate debt, what happened with evergrande that we've been watching, is that a preview of what could happen with the amount of corporate debt that's out there? in the past you've said you're watching the level of corporate debt, so what's your level of concern right now? and would you consider the evergrande group issue sort of a warning statement? >> about the united states, no. corporate defaults are very low in the united states right now. corporate leverage with built up over the course of the long expansion that ended with the

pandemic, we were very concerned in the last year or so -- we were concerned in the last year or so and then i'd say very concerned at the beginning of the pandemic that if you've got a highly leveraged company and your revenue stops for an uncertain period as things happened at the beginning of the crisis, we were very concern that there would be a wave of defaults. didn't happen potentially, to a significant extent because of the cares act and the response that we undertook and all that. it was, you know, a much stronger response than we've ever had, and i think for whatever reason now you have very, very low default rates now among corporate debt. you know, the evergrande situation seems very particular to china which has very high debt for an emerging market economy, really the highest that any emerging market economy has had and the government has been working to get that under

control. this is part of that effort. new strictures in place for highly leveraged companies, and evergrande is dealing with those and it's something that they're managing. in terms of the implications for us, there's not at lot of direct united states exposition r pose your. the big chinese banks are not tremendously exposed, but, you know, you would worry that it would affect global financial conditions through confidence channels and that kind of thing. but i wouldn't draw a parallel to the united states' corporate sector. >> thank you. we'll go to brian chung. >> hi, chairman paul. just wondering if you can give us an update on whether or not you've had conversations with the white house about a possible reappointment and whether or not you would like to be reappointed as the chatter kind of builds up. >> i think the phrase goes i have nothing on you for that today. sorry. i'm focused on doing my job, focused on doing my job every day for the american people, and i don't have any comment on that, brian.

>> sorry about that. let's grow to greg robb. >> thanks for taking my question, chair powell. i was wondering if in your discussion about the tapering that you said is officials think it's appropriate to end around the middle of the year, if there was any discussion about what happens to the balance sheet then. i've heard some fed officials say that they wouldn't -- [audio difficulty] was that discussed, and what's your stance on shrinking the balance sheetsome thanks. >> so -- sheet? thanks. >> so my thinking on this has been let's get through the taper decision, and then let's turn to those issues. there are a number of related issues. you mentioned one, greg, but, you know, and -- which you need to start to think about, and we'll do that. but i want to get, we want to get through this taper decision and then turn to those issues rather than start, you know, thinking about them now and

having the minutes discuss them and get people think that we are, you know, focused on those issues. we're really not. and we do have the experience of what we did last time. we've watched other countries and what they've done, so i think we'll be able to get to sensible decisions fairly expeditiously when it's time, but it's just not time yet in my thinking. >> thank you. >> thank you. let's go to scott horsley. >> thank you, mr. chairman. you talked a little bit about inflation expectations, and there does seem to be something of a divide between market expectations and the views of professional economists which are pretty much in line with the fomc members and lay people's expectations at least as reflected in the recent new york fed survey. how much weight do you put on lay people's expectations, and what do you think accounts for that divide? >> so within -- let's just take

the household surveys generally. the new york fed survey, let me talk about that specifically, and this is from the new york fed, it's only an 8-year-old survey, and it does, it does seem as though they're looking three years out, and it seems like there's a high correlation between three-year and one-year. for the most part, surveys are showing that households expect higher inflation in the near term but not in the longer term. and that's also what expectations are showing. so there are many, many different inflation measures, of course, and that's why we have this thing called the cie which is, it's an index of -- it's market-based measures, it's professional forecasters, and it's household surveys. it doesn't have a lot of grand theory about it. you put them all in and you measure the change. and also you measure things like

the dispersion and that sort of thing. so you can look at all of that. and it tells the story of inflation expectations moving up. many of the different measures will also show inflation expectations moving back up to where they were in, say, 2013. which was before the really, the drop in inflation expectations broadly happened in '14 and '15, around then. is that's not a troubling thing. but, you know, inflation expectations are terribly important. we spend a lot of time watching them, and if we did see them moving up in a troubling way and running persistently above levels that are really consistent with our mandate, then, you know, we would certainly react to that. we don't really see that now. we see more of a moderate increase the first part of which is welcome, and -- because, you know, inflation expectations had drifted down, and it was good to see them get back up a bit. but, again, we watch carefully.

>> thank you. let's go to heather scott. >> hi. sorry, you caught me off guard. thank you, chair paul, for taking my question -- chair powell, for taking my question. i really appreciate it. again on the taper timing, you say it's going to be middle of next year, but with your concerns about the potential for upside risk to inflation, would you think you might need to have liftoff happen before you finish the tapering? >> that's not my expectation. of course, we can always, we haven't decided to taper yet, and we haven't decided the pace yet, so, so, you know, it's not my expectation that we would have to. we can certainly speed up or slow down the taper if it becomes appropriate though, absolutely. in fact, back in '13 when we tapered, we always said we

weren't on a preset course. i think this'll be a shorter period. the economy's much farther along than it was when we tapered in 2013, so it makes sense to allow the runoff to happen. it's a very gradual taper, it will be when we agree on it, and -- but we certainly have the freedom to either speed it up or slow it down if that becomes appropriate. >> but you wouldn't expect rate liftoff until you're finished with that process in. >> no, it wouldn't with, it wouldn't make any sense to, you know, then lift off. i mean, what you would do is you'd speed up the taper, i think, if that were the situation you were in. we don't expect to be in that situation, but i do think it would be wiser at that point to go ahead and speed up the taper just because the two are then working in the same direction. >> all right, thank you. >> thank you. >> okay. for the last question we'll go to jeff cox.

>> thank you, mr. chairman, for taking the question. i just wanted to check in with you to see if you have an update at all on the efforts to develop a central bank digital currency? i believe that the report was -- [inaudible] this summer and indications it's going to come this month, but seems to be kind of getting louder to see where the fed's heading on this and is just wondering if you could provide some update there. >> sure, i'd be glad to. so we think it's really important that the central bank maintain a stable currency and payment system. that's one of our jobs. we also live in a time of transformational digitization, and we need the make sure that the fed is able to continue delivering to the public a stable and trustworthy currency and payment system. there's extensive private information a lot of which is taking place outside of the regulatory perimeter. innovation is fantastic, but where the public's money is

concerned, we need to make sure appropriate regulations are in place, and today there really are not in some cases. so with that in mind and with the creation of myriad private currencies and currency-like products, we're working proactively to evaluate whether to issue a cbdc and, if so, in what form. we have two broad work streams, one of which is technology both at the board and the work with mit, the other of which is is to identify scope and deal with, analyze the various public policy issues. as you mentioned, we do intend to publish a discussion paper soon that will be the basis for a period of public engagement, engagement with many different groups including elected officials around these issues. we think it's our obligation to do the work on technology and public policy to form a basis for making an informed decision. the ultimate test will apply when assessing a central bank digital currency and other digital innovations as are there clear and tangible benefits that

outweigh any costs and risks. we're also, as you know, investing heavily in building a new settlement system for instant payments in the u.s. it'll be the first such major expansion since the 1970s. we found the case for this quite compelling for consumers, businesses and just end suring that all financial -- insuring that all financial institutions have access to the payment system. bottom line, we haven't made a decision about the cbdc, but we will be issuing a discussion paper soon is in order to form the basis of this public interactions that we'll have. thank you very much. >> if i can -- [inaudible] could i get a quick follow on that? thank you. i was just wondering -- okay. are you concerned at all what kind of falling behind in the global race for digital currency? >> i think it's important that we, that we get to a place where

we can make an informed decision about this and do so expeditiously. i don't think we're behind. i think it's more important to do this right than to do it fast. with we have the world's reserve currency, and i think we're, i think we're in a good place to make that analysis and make that decision. by the way, which will be a government-wide decision. we would do this, we would have to have a meeting of the minds with the administration and also probably with congress. we would really like to have broad support for this. it's a very important innovation, and i think we would need that to go ahead, and that's the process we're engaged in. thanks very much. liz: wow. no recoiling, no cascading effect, just a slight -- and i really stress slight -- pullback from session highs. take a look at the markets right now. dow jones industrials still up about 462 points, high of the session was a gape of more than

520 -- gain of more than 520. but the point is that this market has absorbed any kind of shock that would have come from chair powell. now, here are the key points. powell pointed out tapering could come as soon as the fed's next meeting which was, that was already well telegraphedded. but while it's possible we could see interest rates begin to rise next year, chair powell reveal ised that, quote, all but one of us on the committee see rate liftoff in 2023. that calmed the markets. now, powell does insist that the fed does start slowing pulling back on the $120 billion of monthly asset purchases but that it will take, quote, some months. the vote today to leave rates untouched at 0-.25%, this was unanimous. whereas at the june meeting half of the officials expected to raise rates by the end of 2022, june it was seven. now it's nine.

none of this appearing to spark any wild gyrations. but if you look at the volatility index which before the 2 p.m. announcement was down by 11%, it is still right around there at the moment. [laughter] i can't see that monitor. down 14% which means there is very little fear in the market. look at the 10-year treasury yield. as we look at the yield, it's been bouncing around 1.30-1.319 at the moment, and the big financials, well, they're all higher. major beneficiaries -- and these are just the u.s. ones. european banks, they are spiking. when the rates go up or the fed identifies a point on the calendar when they might, that means lending margins increase because they can charge more to borrow money. let's flip it over to the dollar against a basket of currencies, we're looking at the greenback at the moment, higher against all these major currencies. chairman powell said a reasonably good employment

report for september would suffice for him to move ahead on tapering by november, but he also said don't confuse the test for liftoff with the test for tapering. listen. >> many on the committee feel that the substantial further progress test the for employment has been met. others feel that it's close, they want to see a little more progress. there's a range of perspectives. i guess my own view would be that the test, the substantial further progress test for employment is all but met. and so once we've met those two tests, once the committee decides that they've met -- and that could come as soon as the next meeting, that's the purpose of that language is to put notice out that that could come as soon as the next meeting -- the committee will consider that test, and we'll also look at the broader environment at that time and make a decision whether to up taper. if. liz: let's bring in our experts, chris campbell along with the chief public policy economist at the conference board. he was also the chief economist

at the omb under president clinton, the office of management and budget. all right, chris, i'll given with you. did powell make the right move today? and, again, this is the committee, but there's still no precise point about when this federal reserve will start scaling back the $120 billion in asset purchases that were put in place at worst point of the pandemic. >> yeah, i think there's -- there was no, he met my expectations. there's not a lot of news made here. i think what's important to me and i think what's actually, you know, having certainly -- [inaudible] reading between the lines is i believe we're going to start seeing tapering this year. of course he's not going to calendar that, but like i think we're going to start seeing tapering. it may be just depending on where we're at on inflation and as things go the next year and a

half, two years maybe leads to rate increases in 2023. liz: joseph, do we really need this much stimulus right now, and what kind of bubbles do we risk inflating? the home builders have done incredibly well, and yet we're the still buying about $40 billion every single month in mortgage-backed securities. now as an economist know when there is a dangerous moment when it's really perilous. should we have started doing this already? >> there are still risks in the economy, as the chairman always says. we have, we are at the mercy really of the pandemic. that's a risk. we have the congress needing to get over from the current fiscal year to the next fiscal year in just a few days and covering the problems with the debt limit as well and the chairman spoke to that in his press conference also. i think if you put those behind

them, when we put those behind us and when the chairman can see, you know, one more favorable employment situation report as he suggested, we'll see it as time to pull back on that taper. the situation in the housing market, yes, it's positive, it's strong. certainly not like where we were in the financial -- at the dawn of the financial crisis. and we still have those structural problems in labor markets and in the industries where hand-to-hand trans-alaskas are essential. transactions are accessible. so all of those issues are weighing on the economy. the housing sector has correspondingly done better as have certain other sectors including goods manufacturing, so it's an unprecedented, mixed situation, and he's trying to

strike a balance. liz: okay. i just want to point out the s&p 500. high of the session, a gain of 62. we're climbing back up there, we're up 52. the nasdaq is looking very strong at the moment as well. chris, chairman powell has said he wants to avoid any kind of market turmoil. but doesn't that go hand in a hand with just remaining frozen in place and not making any kind of move? and i hate to keep pushing this point, but there are a lot of people who feel this is not a patient who is lying in the e.u., you know -- the e.r., the emergency room. the e.u -- [laughter] lying in the emergency room. kind of walking around now able to kind of take a step outside the hospital. >> yeah. look, you know, the market's obviously what the fed just telegraphed there was going to be prep ifty of money, plenty of liquidity, lots of sugar in the system. what's not to love about that in the markets, right? obviously, unless there's some kind of event or bubble that's

created in the process. but you're right, you're exactly right. this is, the economy is not where it needs to be, where it used to be a year and a half or a year ago, and it's perhaps time to start looking at ways of getting us off that iv, if you will, of liquidity that's been pumped into the markets from the fed and try to return to some level of normal i city. liz: -- normalcy. liz: and i'll say, chris, that today we got a save the date pretty much, november. let's be clear about that, for the tapering. but he was so cautious, delicately tiptoeing over the point that he said we will not take any indication from tapering that will definitely have rate liftoff until, of course, as the clock shows, 2023. but i thought it was really interesting when our own edward lawrence brought up the evergrande situation, this chinese property developer that is on the verge of defaulting, although today it got a little bit of a stay of execution because it says it'll be able to make one of its debt payments

looming on thursday. but i want you to listen to the sound bite where edward asked him about how much that played or did not play into his psychology, and then i want to ask you what could derail powell's plans to taper. listen. >> the evergrande situation seems very particular to china which has, has very high tet for an emerging -- debt for an emerging economy, really the highest any any emerging market economy has had, and the government has been working to get that under control. this is part of that effort. the government would put strictures, you would worry it would affect confidence channels, that kind of thing, but i wouldn't draw a parallel to the united states corporate sector. >> that was definitely a relief for a lot of people because we had a monday market meltdown that is very much in the near rearview mirror at the moment. is there anything here stateside

that you foresee that could derail any chances of tapering in november? >> the pandemic situation is a risk. the debt limit, to me, is the nuclear risk. we really do these to defuse that. its impact on the u.s. economy would -- it's unknown because we've never been there, thank god, and we shouldn't go there. it is. it is.(.ecl)ed to a lesser issue -- it is linked to a lesser issue which is the continuation of operations of the government over the change from the fiscal years at the end of this month. those, to me, are the three big risks. we should get past them. the debt limit is totally within our power, and shame on us if we allow that to derail the

economy. pa the pandemic, we need to keep making progress on that front as well. it's hard to imagine kind of sudden shock out of the pandemic that you could see from, say, the debt limit. liz: yeah. you could see the relief in his face when he talked about that, and he'll be watching at least at the moment because we still need the senate to weigh in on that one. joseph, chris, great to have you both. the dow jones industrials up 396 points followed by big moves in all the major indices. the nasdaq, as i said, up 168, the russell up 39. only the dow transports are lower and just by 23 points. so let's bring in our traders who have been watching all of this. the one, the only floor show, teddy weisberg, phil flynn. phil flynn, i was looking at energy names, they are definitely firm on this, but that could have a lot to do with the exogenous events happening in europe which is a shortage of fuel at the moment. what does the fed's comments, what do they play into when it

comes to sector du jour? >> yeah. i think i was looking at the dollar quite a bit, and i was looking at that impact on commodity prices because the dollar, obviously, is one of the reasons why commodity prices haven't gone up more than they already have have is. and, you know, yesterday we had a big selloff in all the industrial commodities, selloff in oil on the concerns about china, and it was interesting when chairman powell kind of downplayed his concerns that we're going to see that happen in the united states. you know, we saw those commodities get strong. you know, you look at the recovery today and things like copper, platinum, palladium, all those that were getting killed yesterday are coming back substantially. so, you know, it's kind of the best of both worlds. hey, we're not going to have a china conference but, hey, we're probably on the verge of more inflation driven by high commodity prices, and we're, you know, i would ask him is he concerned about an energy crisis because the energy crisis in europe becoming a threat to the european economy, and i'm afraid

that that could be a precursor of what we're going to see here in the united states if we have a cold winter. liz: but, teddy, if the fed has not definitively said tapering by november -- mean, he as much said that at least, but with we know that rates will remain lowe at least until 2023, so that means borrowing is still very inexpensive. i'm looking at the department stores. may macy's is up 5.25 the %, kohl's up 2.5%. these are big moves here, and i believe that is dillard's up 5.25% which means people will still be charging up a storm. they fear they're not going to get stuck with too high of interest rates on their cards or auto loans. where do you see beneficiaries emerging? >> first of all, liz, i think as far as the fed meeting, he pretty much left the punch bowl right in place -- liz: more. >> yeah. well, it creates a positive back drop for earn -- for equity

markets in general. really there's always going to be winners and losers. and just your other guest's comments about the commodities, i mean, they've been beating the commodities up for the last two weeks and, clearly, if you think the economy is recovering and we'll get back to the fed in a second, you know, there was a great opportunity yesterday and perhaps going into the earlier part of this week because if the economy's going to continue to grow, it's going to be accompanied by higher commodity prices. but as far as the fed, liz, i noticed the minute one of the questions he was asked turned to tapering and he got a little more aggressive about the tapering, the market immediately gave back 100-150 points. so clearly, we're not out of the woods yet as far as the fed if is concerned. i think they're dancing on the a head of a pin. they're trying to do everything they can to keep everything kind

of moving in the right direction. but at the end of the day, i think the message is quite clear to investors. the minute it looks like they're really starting to shift gears, whatever that is, watch out because i think the markets are just basically sitting on the head of a pin just like the fed is sitting on the head of a pin. liz: great point. if we can start pulling out some of the intradays here, and we can really show what teddy just articulated, this is a very jittery market. you can see that dip that teddy's talking about. there were actually two after 2 p.m., but i think the one on the far right is what you're referencing to. but i do think, phil, that there are opportunities in this market whether you agree with the fed and the fact that the fed is still hands on, we don't want to upset is anybody, because a lot of people do feel that we could be formulating some bubbles here. but the fed put -- is it not?

>> it is. and i learned a long time ago, and teddy tell you, you never fight the fed, right? liz: absolutely. >> you know, they are, you know, i think they have a problem building here because they're got goldilocks on steroids here. you've got stuff that is too hot and too cold right now. and inflation right now, let's face it, is too hot. they're basically making their base case that inflation is going to be transitory. if it isn't, they're going to have big problems, make no headache about it. make no mistake about it. look at fedexed today. they're feeling the heat as well. and some of these other companies, ur you're going to be see it's going to start cutting into their bottom line. on the other hand, in august you had weak consumer confidence, so you got -- liz: yeah. and that has got to be, the consumer confidence, and as we look at fedex, by the way, down

8.7%, it's got to be because of the inflation. just for those of you didn't know, fedex had a flurry of price targets as they announced that labor shortages had added more than $400 million to their costs and, therefore, they are looking at an increase in costs, and this is a major issue. this is not a specter of inflation, it's standing right in front of them. teddy, phil, we've got to run because we have a fox business alert. robinhood and amc are playing the heroes in the crypto-sphere. shares of meme mania's favorite trading platform up at the moment right now after the online brokerage announced it will be launching its first user tests of its crypto wallet product next month. robinhood, 8.5% to the upside here. a broader rollout of the crypto wallet is scheduled for earlier next year. that was enough to bring on the crypto crowd. ethereum, bitcoin, litecoin all jumping on the news with ethereum leading the charge up

7.7%, litecoin up about 5.55%, bitcoin jumping nearly 5%. that's a gain of near toly $2,000. what did this good news do for the crypto miners? talk about a comeback, folk, these names some of the hardest hit monday, they're charging back. but in the final hour, they are baking up quite the cake. we've got hive moving higher by 9.7%. marathon digital up 8.8, riot blockchain topping off by about a 5.7%. so it could help those names bake the cake. amc is bringing on the frosting. reddit crowd darling is moving higher by 3.5% after ceo adam aron tweeted out just before 2 p.m. eastern time that a poll he had conducted on twitter on when to accept dogecoin as payment for movie tickets and concessions convinced him to, quote, figure out how to accept it at some point at his

theaters. the meme coin started barking up a storm, and it is jumping 6.3% or doge, as charlie gasparino calls it, doggy. sofi in orbit right now as jeffrey's launched coverage of shares at a buy. that's good for a 10.5% jump here. jeffrey's predicts robust user and have set their target at $25. and it would be a 6 a 5% -- 65% gain from yesterday's close. pot stocks puffing higher pretty much all session after the house of representatives tapped a measure easing bank restrictions on the marijuana industry via an a amendment in the latest, of all things, defense spending bill. tilray jumping 4%, cure leaf up 5% and is sun dial just a fraction of a gain at the moment. from pot stocks to a smoking hot

debut, investors are saying cheers to to toast. shares opened this morning at $65.26. that is a more than 63% jump above its $40 ipo price which was also above the original range, i believe, of about 34-36. the restaurant industry software provider's trade thing debut netting it a valuation of more than $32 billion. off its highs right now, still up 54. and while off session lows, facebook shares still at this hour under pretty significant pressure after the social network admitted that it has been underreporting the impact of apple's privacy update on its ads business by as much as 15%. the update, of course, gives ios users the option to block apps, including facebook, from tracking user activity which makes it a lot harder for these apps to target people with ads, and that is so much of their

revenue. facebook down 3.7%, apple higher by 1.7%. talk about raining on crypto parade if, sec chief gary gensler telling "the washington post" that he doesn't see cryptocurrencies as a viable long-term business, citing the history of wildcat banking in the u.s. and you just heard fed chief jerome powell saying we don't want to look at a central bank cryptocoin at the moment. let's bring in charlie gasparino. cryptos are still holding on to gains. >> yeah, they are. you read dependence her's give and take -- gensler's give and take with the washington post? that's where all this came out. if you're a crypto place, you know, own a business there, it's kill whiching for you, andrd be -- chilling for you, and it should be. he is really saying he has the shut authority to crack down on a vast matter of the products that are out there. he thinks most of them resemble securities, i mean, like a stock or a bond. there's a legal way that you

count it as a security, and he's going to come after you, is what he's saying. we want all this disclosure. you have to come in from the cold and come in under our oversight. and, you know, it's the opposite of why people get into crypto. this is something that's outside the government that's part of, you know, it's not controlled. you can't -- it's hard to debase the currency of bitcoin because you have to mine it. jerome powell prints money every day. the u.s. currency, that's the theory, so you to can't do it with those cryptocurrencies, he's saying a lot of these frauds. my view is this, and i think this is the sort of common view you're getting from academics that look at this, and gary gensler used to be an academic -- liz: mit. >> -- mit. lawyers and even crypto people, they need a set of rules. and right now, you know, it's all over the place. nobody knows who's doing, what's doing what, i mean, who has the authority here.

and he's also going to run into pressure from hester peirce, i mean, his own is sec commissioner who's taken, essentially, a 180 from where he's looking at this like a total crackdown because she's board about innovation being stifled. people forget it, we sit around and talk about bitcoin being, where are wherever it's trading, around $43,000. ethereum's trading at a alternative level. what is cool here is they have blockchain, the peer to peer -- what is that called? peerpeer-to-peer lending, theres all these sort of catch words, but that technology which would make transaction seamless and cheaper is what we're talking about here. and we sit here and we start, like, cracking the whip on rip aring, you know, and bringing them under control seven years after the fact, this one, that one, all that innovation will move overseas. and i think that's what hester's worried about. i will say this, liz, we're going to have problem -- and i don't want to say his name -- a

major crypto guest on your show tomorrow that will shed some light on the battle that's going op here between the crypto industry and gary gensler. clearly, there's an inflection point going on about regulation. they're up and in arms, they're going to fight back. this guy -- and when we nail him, that he's agreed to come on, we'll say who it is. but it'll be key. if you're in the crypto industry and you don't want fox business particularly tomorrow but throughout because we're devoting a lot of resources to covering this, you are crazy. the ground has shifted under your seat, and we're the only ones covering it. you're not going to get it out of cnbc. they're all for the establishment, they're, you know, they tout the line of the sec, of the established players. not us. we are covering this broadly and tearily ask and across the board. liz: balls and strikes. >> and, by the way, if i find fraud in crypto, i'm going after it bigtime. liz: just like there's fraud in

the greenback, right in money laundering -- >> by the way, there was fraud in the internet. liz: of course. >> guess what? in 1995 do you know who committed some of that fraud? firms like goldman sachs. you know, when they were pumping up certain stocks that turned out to be crappy plays. do you know who worked at goldman sachs? liz: gary gensler. charlie gasparino. okay, thank you very much. our closers on moves you should be making in the final hour from the housing sector to, yes, china stocks. closing bell ringing in 11 minutes. the dow has now lost measure 100 points. -- more than 100 points. we're still up 365. don't move. ♪ ♪ als. strengthening client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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before we talk about tax-smart investing, what's new? -well, audrey's expecting... -twins! grandparents! we want to put money aside for them, so...change in plans. alright, let's see what we can adjust. ♪♪ we'd be closer to the twins. change in plans. okay. mom, are you painting again? you could sell these. lemme guess, change in plans? at fidelity, a change in plans is always part of the plan. ♪ liz: seven and a half minutes before the closing bell rings, so at the session highs the dow had been touching a gain of 520 points.

right now we're up 355. s&p up 43, high of the session for the s&p had been a gain of 62, but these are still pretty bullish numbers at the moment. let's bring you in a few more of the day's biggest movers. stitchfix posted a surprise profit on better than anticipated revenue. active users for the online fashion service jumping 18% year-over-year in the company's fiscal fourth quarter. stitchfix up 16%. folks, tissuing fix stuff is -- stitchfix stuff is not cheap. it's not uber-decipher, but the economy must be doing well enough if that kind of jump in users and revenue is happening. that stock up now $5.86 to 41.34. ford moving higher after announcing it's investing in redwood which is, by the way, currently run by tesla. the move in part a ford plan to invest $30 billion by 2025 to

develop evs and build up its battery capacity. ford is seeing a gain of 3.6. tesla also jumping 1.6%. workhorse, though, losing its juice after suspending deliveries and recalling 41 of its electric vans. the truckmaker saying it made the move due to a series of enhancements it has identified regarding the truck's design and payload capacity. no enhancement to the stock here, workhorse is down 9.5%. general mills, despite seeing an end to pandemics baking craze, a boom in pet food demand -- remember when you couldn't get a little packet of yeast at the height of the pandemic because everybody wanted to make bread? no, neither do i. [laughter] 'cuz i can't -- i tried one, and it was a disaster.

the chinese debt crisis making waves in the global market this week. remember monday, manic monday? a slew of housing data also giving the markets a lot to think about. let's bring in sandy villere and simona, street global advisers senior economist. simona, tell me what you're seeing and what do you think, what are you guiding the investors at your companied to do knowing what the fed has just said? >> first of all, i think this was another successful press conference for chair powell. he managed to signal quite a bit in terms of the fed's thinking about the chi and the path -- the economy and the path for policy. and not only that a, the message was delivered, but it was the right message because it is time to move past peak accommodation. i think as much as we may want to delay that moment, the time is right, and the fed is recognizing that.

growth looks great, still into 2022. and, you know, i thought as i was listening to the press conference the two words that really resonate9ed with me -- resonated with me were cumulative progress. it's not this idea that every step along the path has to be of equal length, but that it's in the same right direction. liz: yeah. >> and we are progressing in that direction. it's time for the fed to move a little bit liz: i definitely agree with that. he was very cheap to say they would ladder in this accommodation very slowly, meaning scale back and slice off some of these big bond purchases as the months go by. he did say, sandy, it would take some sometime, don't expect any kind of rate liftoff to be inferred from what happens during tapering. tell me, sandy, what you feel is the best move for clients, knowing at some point we're going to see rates move higher? >> yeah. and he did a great job of

basically decoupling the taper from the fed hike and that is what he set out to do and i don't think anything is forecast more clear lie, he will look november 2nd, 3rd, taper by the end. year. we are telling our clients, september, beginning of october. i think it will be volatile. there is a lot of things still rattling around, including the delta variant is still with us, could still spike a little bit. as people get into the colder months and they're huddled inside, et cetera, evergrande is another issue, makes me very excites that i'm more after domestic small cap manager. that i don't have exposure to china. liz: to that, sandy, what names do you like. you have paloma, porch in your suggestion list. why? these are both with housing exposure and if we start to see rates rise, might we not see a little bit of cooling off when it comes to the homebuilders and

homebuilder division? >> sure. with porch in particular, it is such a unique business and these guys are just in their infancy, which is what i love about these smaller companies. in 2017 the total addressable market for these guys is 12 1/2 billion. they have added so many lines, it is 18 billion, something like that. i think there is a lot of growth. porch is one of those companies the worst thing anyone can do is move. these guys offer the software to basically be a concierge, offer homeowners insurance, just a great relationship with the inspectors, basically they're involved with 30% of them. i like porch a lot. i like palomar technology which is a insurance company. really great technology that lets them get extremely granular on their underwriting. a really fast growing company. both will treat us well. the one i like is sees --

caesars, has no exposure to macau. that is reopening play. liz: chair powell was very clear the chinese situation with evergrande, which gave the market heart palpitations on monday is ringed sense, committed only particularly to whine. china, that is what chairman powell says. a lot of stocks were beaten down, started to come back. i saw green on the screen for some of the bigger names today. do you feel china is still a dangerous place to be in at the moment? >> i think china is still a very attractive place to be despite the risks. i think that is the balance every investor needs to strike but again, the policy response to this matters greatly and i'm quite confident we will see the right policy response -- to the situation and for long-term

investors you really have to keep in mind what happens, not just today, not just next month but in five years, in three years, in 10 years. you cannot not be in china. [closing bell rings] liz: thank you very much. the bulls continue to run. the fed chair says save the day for tapering in november. ♪. larry: hello, everyone, welcome to "kudlow," i'm larry kudlow. i have a potpourri of points for you this morning. first off we'll revisit the china story where xi xinping is morphing in mao tse-tung, cracking down on all chinese businesses, rejecting 40 years of market reforms in favor of pure socialism. it's a blockbuster story and i'm going to talk later with former deputy national security advisor matt pot