know they were talking about it, it was in the minutes from the last meeting, so it is disingenuinous and i think he just doesn't want to relay it now. he's got a pace he wants to go and that comes at the next press conference. charles: thank you both for helping us through this. you can see the market trading in a very narrow range. i'll give it over to my colleague liz claman to take you through the rest of the meeting. liz: thank you very much, charles. the federal reserve setting the stage for march madness. chair jay powell first saying it may begin raising interest rates in march, but just moments ago backing off, affirming that, saying "we're watching the data" let's go back to the press conference. >> it's just we have to accept that it's not over and the risks to it can slow down growth, and that be , that's sort of a down side risk from a growth standpoint. i would point to another risk is just further problems in the

supply chains, which could slow down activity and you see the situation in china as the situation there where that's, their no covid policy may cause more lockdowns, is likely to and that may play into more problems in supply chains. in addition, there's what's going on in eastern europe and things like that so there's plenty of risk out there, and we can't forget that there are risk s on both sides so that's there. that's what i would say. i know you've been all over this issue with my colleagues, craig, on the issue of information. we don't have that information at the board and i asked the inspector general to do an investigation and that is out of my hands. i am playing no role in it, i seek to play no role in it and i don't, i really, i can't help you here today on this issue,

and i'm sorry, i can't. >> okay. >> thank you, we'll go to gina now. >> thanks for taking our questions, chair powell. i wonder if you could tell us on where you're thinking inflation stands today. the last time we saw back in september we saw that you and your colleagues were projecting that inflation would sink back down quite close to target by the end of the year and i wonder if you still think that projection from december is a reasonable one, and if you're thinking its changed at all i wonder how you're thinking about that and i also wonder if you could talk a little bit about the pathway to getting to that, like how do we get from here 7% cpi to where you expect to be at the end of the year. >> so i'd say, you know, since the december meeting, i would say that the inflation situation is about the same, but probably

slightly worse. i'd be inclined to raise my own estimate of 2022 core pce inflation let's just go with that, by a few tenths today, but we're not running down an sep at this meeting but it hasn't gotten bet. its probably gotten just a bit worse and that's been the pattern, that's been the pattern, so i think if you look at the fomc participants, there's a range there, and that range has been moving to the right for a year now, and by the way, if you look at other forecasters essentially all other macro forecasters who do this for a living, you seen the same pattern. so, what do we think about that? well, i think we, you know, we wrote down rate increases in the december meetings. each of us individually and i think to the extent the situation deteriorates further our policy will have to address that. if it deteriorates meaningfully

further either in the time dimension or in the size of the inflation dimension, so that's how we're thinking about it. as i mentioned though, i think part of this will be us, the fed moving away from a very highly- accommodative policy to a substantially less-accommodative policy and then overtime to a policy that's not accommodative in time. i don't know when that will be. those are the things that we're thinking about. that's part of it. another part of it is the fiscal policy provided an impulse to growth over the last two years. that impulse will be less. in fact will be negative this year, and so that's another thing. the other one is we will eventually get relief on the supply side, and, you know, the ports will be cleared up and they will be semiconductors and things like that. now what we're learning is it's just taking much longer so i think longer than expected and that, i think, does raise the risk that high inflation will be more persistent.

i do think we'll come off of the highs that we saw in the early part of this episode in the spring last year but really the question is what is inflation running at and so we'll be watching that, and our objective is to get inflation back down to 2%. it's also to provide enough support to keep the labor market healthy. the labor market is very very strong right now, and i think that that strength will continue there's really a shortage of workers. we see it particularly among production and non-supervisory workers and people in the lowest quartile. you see very large wage increases. i mentioned some of the other indicators, so i think that's what we're looking at, and we're also, you know, we realize i think as everyone does, that this outlook is quite uncertain, and that we're going to have to adapt and we're going to communicate as clearly as we can , but we're going to have to be adaptable and, you know, move

as appropriate. >> thank you. let's go to colby smith. >> thank you, michelle. chair powell, when you talk about being humble and nimble about the path forward for monetary policy, does that also include the possibility of raising interest rates by larger increments than say doing a 50 basis points hike at some point if inflation does not moderate sufficiently and should we interpret this approach as a departure from the gradual pace that we saw during the last taking cycle? >> so as i mentioned, we have not made these decisions. we really haven't, and what i can tell you now though is that we fully appreciate that this is a different situation. if you look back to where we were in 2015, 2016, 17, 18 when we were raising rates, inflation was very close to 2%, even below 2%. unemployment was not at our

estimates of natural rate, and growth was, you know, in the 2 to 3% range. right now, we have inflation running substantially above 2%, and more persistently than we would like. we have growth even in forecasts even in the somewhat reduced forecasts for 2022 we still see growth higher than substantially higher than what we estimate to be the potential growth rate and we see a labor market whereby so many measures, it is historically tight. i think in a way the least tight aspect of it is looking at the unemployment rate which is still below our median estimate of maximum employment. if you look at things like quits and job openings as i mentioned earlier and wages, you're seeing , and just the ratio of job openings to unemployed, you're seeing a very very tight labor market. now, we also know that labor force participation is significantly lower.

it's a percentage point and a half lower than it was in february of 2020. maybe a percentage point of that is retirements. some part of those retirements are related to covid rather than just regular retirement so there is a pool of people out there who could come back into the labor force, but it's not happening very quickly, and it may not, it may continue to not happen very quickly as long as the pandemic is on. so that's how we think about that. we haven't made, to your specific question, we really have not addressed those questions and will begin to address them as we move into the march meeting and meetings after that. >> let's go to rachel. >> thank you, michelle and thank you chair powell for taking our questions. i'm wondering if you can talk to us about any metrics that the fed uses to assess how

inflation facts different groups of americans, especially in lower income earners, and are you worried that the fed underestimates or can't effectively measure the impact of inflation on some of the most vulnerable households? thank you. >> so it's more a matter of, i think the problem that we're talking about here is really that people are on fixed incomes who are living paycheck to paycheck, they're spending most or all of what they're earning on food, gasoline, rent, heating, things like that, basic necessities, and so inflation, right away, right away, forces people like that to make very difficult decisions, so that's really the point. i'm not aware of inflation literally falling more on different socioeconomic groups. that's not the point. the point is some people are

just really prone to suffer more i mean, for people who are economically well-off, inflation isn't good. it's bad. high inflation is bad, but they're going to be able to continue to eat and keep their homes and drive their cars and things like that. so that's really how i think of it. and to control inflation for the benefit of all americans but part of it is just it's particularly hard on people with fixed incomes and low incomes, who spend most of their income on necessities, which are experiencing high inflation now. >> thank you, let's go to edward lawrence. >> thanks, mr. chairman, for taking the question here. so year-over-year inflation is at 40 year high, the input costs for producer price index, for all of 2021 was the highest

on record. some investors fear that the fed might be moving too late. now you said no decisions were made on the path of rate hikes, but was a rate hike more than 25 basis points discussed today? and as a follow-up to that because i have problems with the mute button, as a follow-up to that you testified that the supply chain issues could be worked out by the end of the year you talked about that today. the ceo of ford though told fox business today that the chip shortage will last into 2023, so today you said inflation will start to ease this year. i want to drill down and get a timeline that you see as to when we could see that relief. thank you. >> so i would not say that i would expect the supply chain issues to be completely worked out by the end of this year. i do not expect them and i have not expected them. what i would say and i have been saying is that i expect progress to be made in the second half of this year, mainly, progress, because we're not making much progress. if you look at a ton of metrics you can find some that suggest that delivery times are shorter, and inventories and some industries moving up, but

overall, we're not making progress, and things like the semiconductor issue are going to be quite a long time. i would think they will go more than through 2023. in terms of, so in terms of being too late. i would just say this. our policy needs to be positioned to address the full range of plausible outcomes, as i said, and particularly, the possibility that inflation will continue to run higher, more persistently than we expected, and we think we are positioned to make the changes in our policy to do that, and we're committed to doing that, and that's really where we are. in terms of your question about the size of rate increases, we haven't faced those decisions. we haven't made them. it is impossible to sit here today and tell you with any confidence what the precise path will be, but as we work our way through this meeting-by-meeting, we are aware that this is a very

different expansion, as i said a couple times, with higher inflation, higher growth, a much -stronger economy, and i think those differences are likely to be reflected in the policy that we implement. >> thank you, let's go to mike mckee. >> thank you, mr. chairman. i'd like to sort of weave some of the strands of your answers together and ask you, as you start reverse policy, what your goal is? are you going to be raising interest rates until you get inflation to 2%? do you want to go below 2% so that on average, you get a 2% inflation rate? and because you said we have to protect the employment part of your mandate, is there some sort of circuit breaker that would stop you from raising interest rates on the employment side? >> so no, there's nothing in

our framework about having inflation run below 2%, so that we would do that, try to achieve that outcome, so the answer to that is no. what we're trying to do is get inflation, keep inflation expectations well-anchored at 2% that's always the ultimate goal, and we do that in the service of having inflation, we get to that goal by having inflation average 2% overtime. if inflation doesn't average 2% overtime then it's not clear why inflation expectations be anchored at 2%, so that's the way we think about that. you know, what was the last part of your question? >> i was asking if you're protecting the employment side of the mandate, whether there's some sort of circuit breaker there. >> nothing like that. i would say you have a tremendously strong labor market , and you have growth this

year forecast to be well- above potential. i mean, people are forecasting growth. you think potential growth is around two, most forecasts are significantly above that for 2022 and that's even with policy becoming substantially less accommodative so the labor markets going to be strong for sometime. we ideally, what we're trying to achieve is inflation getting back down to 2%, and we're trying to do that in a process that accomplishes, you know, that will also leave the labor market in a very strong position , and no one really knows what that will take. again, i would say that it isn't just monetary policy that's helping inflation get down. it'll be supply side peoples improvements and less fiscal impulse in all likelihood but monetary policy we'll do our job it is our job to get inflation down to 2% in a situation where

the two goals can be intention, is a difficult one, but i don't really think they are here though, because i think a really significant threat to further strengthening in the labor market in the form of higher participation overtime is high inflation, and also high inflation is taking away the benefits of some of these large wage increases that we're seeing now, so we do hope to achieve, and our plan is to achieve both of those goals. >> if i could follow-up. does the danger of tightening too much as policy works its way into the economy would the lag mean that you should go back to being more forecast-dependent in making decisions rather than the state dependency you've been using as a framework for the last year and a half or so? >> dependency was particularly around the thought that if we saw a very strong labor market, we would wait to see actual

inflation, actual inflation before we tightened, and so that was a very state-dependent thought, because for a long time , we've been tightening on the expectation of high inflation which never appeared, and that was the case for a number of years, so in this particular situation, we will be clearly monitoring incoming data as well as the evolving outlook. >> let's go to michael derby. >> thank you for taking my question. i want to ask you, would with the benefit of hindsight and it is what it is, but do you feel that monetary policy and fiscal policy maybe did too much to react to the crisis and that part of the inflation problem that we're having right now is because the government responds collectively was more than what the economy ended up needing? >> so i think it's too soon to

write that history, really, but what i would say is this. if you remember what it felt like at the beginning of the pandemic, literally, the global economy shutting down in large part including our own economy and people going to their homes for weeks on end in masks and there are no vaccines and it could be a really long time to get them, you know, and you have economic activity drops by a shocking amount, so there was a real risk of lasting damage, and i think congress responded remarkably with the cares act, incredibly timely , very powerful, people will always be flaws in these things but in realtime, it was a remarkable achievement and we responded and what we were able to do was stave off a collapse of the financial system at the beginning, and make time for what really needed to happen which was the income replacement and then the recovery that

congress enabled with the cares act, so now that was a lot, and what we did was a lot, and you know, now, so what we have now is we have the strongest recovery of any country and we have a recovery that looks completely unlike other recoveries that we've had because we've put so much support behind the recovery, and we're managing the relatively high class problems that come with that which are high inflation and a labor shortage and these are serious problems, very serious problems that we're working as hard as we can on. was it too much? again, i'm going to leave that to the historians but look, in 25 years we'll look back at this incident, which will be two , three, four, five-year period, and we'll say, you know, we'll have a much-better basis to make a judgment about the actions that people took, but it was all founded though in a very strong reaction to a

unique historical event, and i guess i'll have to leave it at that. i hope i'll be around to see how that looks in 25 years. >> fair enough, thank you. >> thank you, let's go to gene young. >> thanks, michelle. chair powell, some investors are expecting the yield curve could flatten or even invert after rate hikes begin. would that worry you and how important is that risk in the fed's consideration for adjusting policy. >> so we do monitor the slope of the yield curve but we don't control the slope of the yield curve. many factors influence longer term interest rates but it is something that we watch and you'll know that from when we had this issue a few years ago, and we take it into account along with many other financial conditions as we try to assess the implications of all those

conditions for the economic outlook, so that's one thing i would say. another is currently, you've got a slope if you think about twos to tens, two year treasury to 10 year treasury i think that's around 75 basis points that's well-within the range of a normal yield curve slope, so it's something we're monitoring. we don't think of it, i don't think of it as some kind of an iron law, but we do look at it and try to understand the implications and what it's telling us and it's one of many things that we monitor. >> can i follow-up real quick and ask if it did invert, would you tie it to u.s. fundamentals or would it be driven by a much -broader set of factors? >> that's a good question, and in realtime. obviously, the u.s. long term sovereign debt is an important global asset, and the fact that our rates are so much higher

than other risk-free sovereign rates around the world may put something of a ceiling on our rates, i don't know, but it would really depend on the facts and circumstances at that time. >> thank you. let's go to brian chung for the last question. >> hi, chairman powell, yahoo finance. within the context of the broad effort to normalize rates would you describe what you want to do as a gradual hiking and then secondly, within the context of hiking cycles it's often the talking point for financial stability and wanting to make sure that asset bubbles don't merge. is that something that has also factored into the conversation as you start to think about hiking rates? thanks. >> i would describe what we're doing along these lines. this is going to be a year in which we move steadily away from the very highly accommodate ever monetary policy that we put in place to deal with the economic

effects of the pandemic and that's going to involve a number of things. it does involve finishing asset purchases, it's going to involve lifting off and it's going to involve additional rate increases as appropriate and we have, we're going to write down in march our next assessment of what that might be. it's going to continue to evolve as the data evolve. we need to be quite adaptable i think in our understanding of this. the last thing we're going to do is we're going to have a couple more meetings, i think, to talk about allowing the balance sheet to begin to runoff and do so in a predictable manner and that's something that we will also be doing as appropriate, and i wouldn't, i don't think it's possible to say exactly how this is going to go, and we're going to need to be, as i've mentioned, nimble about this , and the economies quite different this time. i've said this several times now

the economies quite different. it's stronger, inflation is higher, the labor market is much much stronger than it was and growth is above-trend even this year, let alone last year, so all of these things are going to go into our thinking as we make monetary policy. and you asked about financial stability and you have concerns in connection with our policy? is that your question? >> yeah, within the context of other hiking cycles it seems like worries about asset bubbles emerging as a result of easy rates has been part of that. i didn't know if that was part of the discussion today. >> i would just say this. we of course have a financial stability framework and what it shows is a number of positive aspects of financial stability but you mentioned really asset prices is one of the four, so asset prices are somewhat elevated and they reflect high risk appetite and that sort of thing. i don't really think asset prices themselves represent a

significant threat to financial stability and that's because households are in good shape financially than they have been. businesses are in good shape financially. defaults on business loans are low in that kind of thing. the banks are highly-capitalized with high liquidity and quite resilient and strong. there are some concerns in the non-bank financial sector around still money-market funds although the sec has made some very positive proposals there, and we also saw some things in the treasury market during the acute phase of the crisis which we're looking at ways to address but overall the financial stability vulnerabilities are manageable, i would say. >> thank you very much. >> thank you. liz: well, fed chair jay powell came out swinging triggering first a powerful rally, when he

declared the economy is showing remarkable strength and that march will be the month for rate liftoff, but then when pushed said the central bank will take it's cues from the data which showing him right now, he said, that inflation is actually worse than it was at the end of the year. that spooked investors who turned, let's take a look at the intraday here first dow jones industrial we just came off session lows, the dow which had popped 517 points around 2:00 p.m. eastern when the news came out that the fed wasn't touching rates for now, but that the economy is strong enough that we will see a rate hike probably in march, turned around and plummeted to a session low of i believe we're right there, down about 389 points. look at the s&p. it jumped as high as 96 points but then reacted very poorly to powell's admission that the same very issue, supply chain snags and then rising wages, have made inflation worse. so you've got the s&p now, down 44 points, and tech was having the best session of all.

nasdaq was up 463 points, look at it now, we are now down 120 points. the about-face actually began during questions about the fed's loaded balance sheet. okay, so we started coming off the highs, when he talked about the balance sheet, which has ballooned as you know to $9 trillion as the fed added unlimited stimulus to stabilize the economy during the lockdown. powell said the current economy means we can move sooner and perhaps faster than we did during the last rate hike cycle back in 2018. so the markets got confused, and then they didn't like that and then you look at the 10 year treasury yield, which was at about 1.78%, just around 2:00 p.m. eastern. you can see now, the yield popping to 1.839%, and just keep in mind, that at 2:00 p.m., that yield kind of dropped just a little bit. look at the fear index, the volatility index before 2:00 p.m., there was no fear at all down 10%, now you see in the

intraday picture here, it is popping up 1.8% so we're looking at 11% swing from trough-to-peak look at gold. gold tends to do poorly when rates are going to rise. gold is extending its losses after the decision down about 1.9% or $35 peeled off the price to $1,819 and before the announcement the dollar index was at a three-week high against a basket of currencies and you can see most currencies are still down as the green-back powers up but let's get to this point. confusion is reigning, make no mistake after jay powell did not commit to raising interest rates in march and sent out a stark warning on rising inflation saying, it actually looks uglier than he anticipated. now here's where the markets really began to plummet on what he said. >> i'd be inclined to raise my own estimate of 2022 core pce inflation let's just go with that, by a few

tenths today, but we're not writing down an sep at this meeting but it have probably gotten just a bit worse and that's been the pattern to the extent the situation deteriorates further our policy will have to address that. if it deteriorates meaningfully further either in the time dimension or in the size of the inflation dimension. liz: okay, we're watching every tick by tick of this market the dow now down just over 200 points so this is a wild session , we're bringing in our fed day panelists, chief investment strategist by an nick with 1.2 trillion assets under management and jon hilsenrath joining us from washington. john i'm going to gibbs begin with you. i don't know what to think here because we started to see a very positive reaction in the markets now you see a complete turn around and are we right it was spooking investors on inflation or something else? >> well so let me say a couple things, liz.

one is i'm really glad you and your producers put up that volatility index, because i think that's really the story that comes out of this press conference is market volatility. when you put together everything that jay powell said, he said look, this recovery is not going to look anything, it hasn't looked anything like the recovery last time around. therefore, the plan that they had last time around after the 2008 crisis has to be torn up and thrown out. the last crisis they came out, they raised rates very gradually and they took a long time to do it. they had a very slow unwind of the balance sheet. he says they're tearing that up and going to be having discussions meeting-by-meeting so the fed is uncertain about how this is going to play out in terms of how fast they're going to have to raise interest rates, how far they are going to have to raise interest rates and what they're going to have to do to the balance sheet and there it is, the volatility index, and because of the fed's uncertainty i think the market is digesting

that. it's uncertain and i think that the watch we're going to have for the year 2022 is going to be volatility, which really isn't great news for market values. if i could say one other thing, so that's all kind of what does this mean for wall street. in terms of what does this mean for main street? i think the good news is that the expansion is still going, unemployment is very low, hopefully, they get these supply chain issues worked out, inflation gets under control and this isn't a terrible year for households. i think it's going to be a volatile year for the market and that's what jay powell triggered today. liz: brian, absolutely right. now you look at the nasdaq it's up 20 points, so we are all over the map. a little bit of a comeback at least an attempt to. what did you glean from an investor standpoint, because that's what you do. chief investment strategy over at nuveen, what did you glean that matters most to the investor and where do they go from here? >> yeah, i think investors came

into this meeting expecting the fed was going to hike four times in 2022 and i think they came away from that press conference thinking it was a better chance of more than four, and fewer than four based on what powell said about supply chain issues, lingering for longer, and perhaps the employment situation being already much-tighter than they would have expected so what you see the market do is price in part of a fifth rate hike and remember back in september the fed was fighting whether it was going to be zero or one so we've done a hairpin turn and now the uncertainty is about how quickly the fed is going to go not whether it's going to go at all. march looks like a done deal based on the meeting but if they have to go every meeting instead of every other meeting that's an adjustment and something the fed has not communicated before and something that has not been priced into equity or credit or bond markets so far so that's the adjustment i think we saw during that press conference. liz: okay can i just pushback a little bit on that? i think this was a tail of two

press conferences. in the beginning, he went on and on saying the labor markets so strong and that the economy is looking remarkable, and then, when pushed about interest rates , we did clip this bite. i don't know if we have that interest rate bite ready, but in essence, well let me let you hear exactly what jay powell said which then threw us into a little bit of a land of confusion. listen. >> we'll be asking this question all year long, and that will be are things turning out as we expect. there's a case that for whatever reason, the economy slows more and inflation slows more than expected. we'll react to that. if, instead, we see inflation at a higher level or more persistent level, than we'll react to that, and again, we're well-aware that this is a different economy than existed during the last tightening cycle and our policies going to reflect those differences. liz: brian, i don't know when i hear that, i think he's leaving the door open to stand pat in

march if something happens. >> i think at this point, march probably need to get on with the hike in march. the question is what do they signal about the future, they will have an opportunity through the dot plot at that meeting through different changes to inflation, unemployment forecasts, to signal to the market just how fast it thinks it needs to go. i think that one of the things that is really concerning the fed right now is a lot of these are really beyond their control. they can't control the price of used cars based on a shortage of semiconductors that's spilling down into that market. they can control whether people feel safe enough from the virus to go out and go back into the labor force and that's one of the things that i think is causing them to think they have to hike because the labor force might just be smaller than it was before covid-19. liz: john, i don't pretend it's easy to wear the feds shoes but you've got to tell me at what point does inflation get so bad that they rip off the band aid. don't we need to see that?

i'm looking at all kinds of metrics heating oil at a seven year high, palladium, which is the metal that helps converters convert, platinum nine-week high , dollar index, three-week high, you're now looking at some of the auto loan companies and they're moving higher because they know that this is a possibility where we'd see interest rate hikes but brent oil above $90 a barrel. first time since 2014 we saw that. >> liz, i think you're right, and the thing about the fed is it's a very glacially-moving institution and so in their world, they actually are ripping off the bandaid by moving, i think, brian is absolutely right they are going to be raising rates, interest rates in march, and i think he's also right that there's a lot that the fed can't control. when you think about inflation, prices, it's a result of supply and a result of demand. the fed can affect demand by raising interest rates. it can't really drive supply,

and there's so many supply issues right now with the supply chain problems materials coming out of china, people coming back into the labor force, so they're watching the supply side of this economy and just hoping it goes their way. if it doesn't go their way, they are going to have to do a lot more work on the demand side and it could be a tough year for the economy, if it goes their way they don't have to raise interest rates too much. again, i'm going to come back to this uncertainty question and that clip that you played showed it, again, with jay powell saying, you know, the last expansion was slow and predictable and they built a policy around that. they don't know how this is going to play out and the market today reflects that uncertainty. that's why the vix went over 30. i think it's going to be over 30 a lot this year. one other thing i would just point out. the whole question of you mentioned they have a balance sheet that's over $8 trillion. powell said this a few times. they haven't figured out what they are going to do with that. he kind of hinted at the end

within a couple of meetings they are going to start unwinding that too, but there's still talking about that. that's another uncertainty. if i was an investor, and i'm not, i be buying volatility right now. liz: yeah, you're right. i mean, we're looking at volatility climbing, the vix now up 2.5% after having been down around 10% earlier today. brian, jon hilsenrath, thank you very much, dow jones industrials down 261. let's take it right to the floor show and what might be the winners and losers, and i don't know, ryan, is this a new fed, ryan dietrich of lpl financial has 615 billion in assets under management, price futures group phil flynn is with us looking at oil prices not seen in eight years but ryan , what's the market price action telling you about how investors should move forward? >> you know, liz first off we're actually over $1 trillion in assets now so we're a little more than what the note said there but you're right. i love the segment you just had.

volatility, right? this is a mid-term year, as we all know. volatility is normal. in fact, usually, january and february of mid-term year, stock s are actually down. also we've got the rate hikes as we know, the economy, one of the key concepts after a 27% rally last year in stocks, we think as chairman powell said, economies still pretty good. consumer still in really good shape. business is in good shape, but expect a lot of volatility this year, when all is said and done yes we feel these stocks are up close in double-digits. i know it feels like a long way from where we are right now. we think it can happen. it's just mid-term years tend to be this way and it's playing out almost to a tee, almost too good honestly, but it is happening. liz: well what, if you could decipher the message here, ryan, what would you say looks good? i mean, going into this , i with o have thought mortgage lenders might look we could cycle through some of these talking about rocket mortgage, wells fargo, bank of america, sofi, you kind of would have thought

that they be the beneficiaries of this , maybe even the credit card companies. mastercard, visa, discover so what do you think is the great area, and i would also point out that going into this every single sector of the s&p, the majors, was higher and then now everything is negative although i think information technology which involves software and eggnog everything else and hardware clinging to a slight gain. >> listen we like the cyclical value, looked to we know yields are higher a lot of bank stocks financials are actually in the green as we speak here so a lot of bank stocks too liz, they are literally where they were 14 years ago in 2008 so if you think about what's overvalued, we know tech and communications, right? we're more neutral at lpl research but financials and banks are areas we like, industrials and materials like you talked about a second ago as inflation comes in those still make sense and energy is such a small part of the s&p 500, i know it had a huge year last year, but crude

being higher to me says there's still global demand this isn't some big recession we're about to go in. that's a positive side in the midst of a really really rough start to a year so we like energy as well. liz: okay. all right let's not muscle in on phil's territory. let's get to oil right now. crude is up about 1% in the after market here at 86.55 we could show brent which trades on the international market exchange in london, so that is really speaking. we haven't seen that high, well 90 it was above $90 earlier , in 14 years or seven years? 2014, seven years. >> right, right there but you're absolutely right, energy and i'll tell you what, liz. i listen to that press conference and it sounds like smoking mirrors of hey, we're going to be data dependent for the next couple months, listen we're raising interest rates we don't know what to do with the balance sheet. liz: thank you. >> that's bringing prices down but and inflation numbers. he doesn't know how the inflation is going to go and

oil is a big part of that. what we've seen in the oil market going through the roof at the highest level we've seen in years, and we have a significant supply problem when it comes to oil and one that isn't going to be solved overnight. this has been years of under investment. it's starting to rear its ugly head and it's not going to be solved, then you add to that of course the ongoing risk to global supply with the russia ukraine situation. i don't know if powell brought down the price of oil or the talks that we had in paris with the russian minister that said they are going to honor the cease-fire between russia and ukraine, pushing off any immediate cutoff of supply by a couple weeks and hence what the markets is definitely on guard for all those issues and that again is another issue that jerome powell cannot solve. you can print more oil, you can't print more palladium, you

can't print more corn and all of those commodities are in short supply. liz: well that intended is to mean that those could be possible investments, right, ryan? and i know you probably don't go right into physical commodities but we all need to eat and food inflation is outrageous. we do have, as mr. powell mentioned, consumer price index that's inflation at the consumer level, at near-four decade highs i don't know if you heard him specifically mention. this to me he was very right on this. yes, wages are rising, but real wages are now down, because that's when you superimpose inflation, meaning what people have to now spend. wages are actually less when you take that into account, so ryan, there a play there, beyond heartbreaking here for people who finally saw a raise and now they see it eaten by inflation? >> no excellent point there. you know it's all about scarcity if you look at the s&p 500,

there's only 22 energy companies in there. there's not a lot of energy names out there and it's an under loved area so one area that makes up 3% of the s&p 500 so you could find this alpha is the word we use, out performance from energy there, it's still a scarce area, and again, let's just put a bow on this here. when you look back in history when the fed does its first rate hike the last seven times, one year later, the s&p was higher, every single time okay? we are in a midpoint of the economic cycle when the fed starts hiking. i know this volatility is scary. we just had 10% pullback to ever start a year or one of the fastest i should say to ever start a year. that's uncomfortable for a lot of investors who think the market only goes up. it doesn't. it is volatile but scarcity is an important thing and then the energy group and a lot of the cyclical values, that's where scarcity is and why we want to invest there. liz: yeah, it is a misnomer to try and make the comparison that rising rates are bad for

equities. people think that's the way it goes. that is not necessarily true. ryan, phil, nice discussion. thank you very much. folks i am looking at the nasdaq at the moment, and it's down just 16 points, it had been down about 117 at the lows but at the highs up 463, so are you seeing this wild rollercoaster ride? you're in the car with us, okay? payment software company ripple, the one that's embroiled in a major legal battle with the securities and exchange commission has just received a new valuation of $15 billion, following a shareholder buyback. could an ipo be in the cards for ripple and what does that mean for the landmark xrp case? charlie breaks all things crypto , coming up. closing bell, we're about 15 and a half minutes away. what you see on your screen is nowhere near where we were. dow down 230, s&p down 18, nasdaq lower by 25, the russel

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—and the lowered ability to fight them may occur. tell your doctor about an infection or symptoms or if you've had a vaccine or plan to. tell your doctor if your crohn's disease symptoms develop or worsen. serious allergic reactions may occur. it's good to be moving on. watch me. move, look, and feel better. ask your rheumatologist about cosentyx. liz: fox business alert, microsoft investors are still cheering the company's better-than-expected quarterly earnings report which sent shares soaring as much as 7% after-hours. look at it now, the tech giant reported strong demand across all its business segments which led to a 20% increase in yearly revenue, and here is where the markets really started to wake up. that boost to third quarter guidance, in the after market yesterday, when the numbers came out, microsoft fell, but then, as soon as satia nadella came out and gave that outlook, of course microsoft began to move to the upside now we're up about

2% leading the dow today shares at $294.43 meanwhile, boeing opposite. boeing is taking last place on the dow after posting its third consecutive annual loss which the planemaker attributes to production issues that prevented it from delivering its 787 dream liner jets to customers. boeing took a $4.5 billion charge for the delays and it expects another $2 billion additional costs after being forced to slash production of the planes. shares of boeing down nearly 5% at this hour to $194. take a look at shares of glass maker giant corning. yes, ticker symbol glw, right now at the company reported a strong beat on its fourth quarter eps and sales raised it's first quarter guidance the stock is popping 10.75% the new york based company said results were driven by robust growth across the entire business despite challenges related to inflation and the

effects of the chip shortage corning, of course makes gorilla glass, the glass that goes on many smartphones, so that when you drop it, which we all do, it doesn't crack. sports betting royalty draftkings is on pace for its biggest percentage increase in more than a year after morgan stanley upgraded the stock to overweight and announced a price target of $31 it's at $20.31 right now. morgan stanley says the sports betting market very profitable, and draftkings will be one of the industry's biggest beneficiaries. shares right now, gaining 5%. cryptocurrencys also seeing a move right now to the upside, and that's interesting, because lately, cryptos have been following equities and right now with equities down we've got bitcoin, ethererum and litecoin to the upside bitcoin gaining about 1%, ethererum up nearly 4% and litecoin better by 1%. if you look at the bitcoin echosystem, crypto exchange coinbase has had kind of a wild

ride today, okay? it had been as high as $198 a share. now, it's at 179 down three and a third percent, goldman sachs called for a pretty significant price cut from $352 to 288, it's at 178 right now. coin, which is down 23% year-to-date, is probably at least not down more, because goldman held on to its buy call. crypto miner high blockchain and pro shares bitcoin strategy etf we've got unchanged it had been as high as about $2 now it's at 1.85 pro shares bitcoin strategy is flat on the session, and the price of xrp, right now, relatively unchanged at around $ 0.62 but the value of ripple nearly doubling in the last 24 hours after the company announced a series c buyback from shareholders. ripple's latest valuation, $15 billion. a major milestone for the company that currently is tied up in a pretty contentious battle with the

securities and exchange commission. to charlie gasparino with more on what this could mean for the case, and for ripple. charlie: and liz, we do have some breaking news from the company. it's telling fox business exclusively that if they do win this case, and they say part of the reason why they are buying back the shares, the private shares, is because they feel very confident they are going to win the case is that they plan on going public right after the verdict comes in, so they are telling us this exclusively, they believe their chances are very good. obviously, they maybe talking their own book here, but clearly , there's a lot of tongue s wage increasing about why they would just turn around and issue xrp which is kind of their native currency. they say it's not related to ripple but the ripple founders created the xrp cryptocurrency. they are selling that and they are selling that to both pay their legal bills, and presumably to buyback these shares, and it caught the market

by surprise yesterday. we were probably the only major outlet that reported this , we were first to report it yesterday, and it values the company they say at 15 billion which is a good thing , but people are looking at this a lot of different ways saying oh, maybe they are buying it back to limit their liability to outside investors if they should lose the case when we asked ripple they are like no, no, we feel very confident. we believe, we're buying it back because we're confident in our position and guess what? as soon as we win we're going public. ripple does have an all-star team of lawyers. everybody from mary jo white to professor grunfest, they got them and major firms, you name it, they're there on ripple's side to fight the sec case which essentially says the xrp that they issued or sold, early on to build-out the ripple platform was sold as an unregistered security therefore it's illegal therefore you owe us a lot of money for doing this. how the judge decides all this i can't tell you, but it is an

interesting thing that they went out and essentially bought all the private shares from different investors as they fight this case, liz. it's interesting stuff going on in crypto right now and obviously, i can't say this enough. the ripple case is probably the most-important milestone right now in crypto. if ripple wins, that will set sec and regulatory, the regulatory pressure on crypto back, significantly. we'll say that the sec has limit ed powers on these cryptos, especially the most-established ones like ethererum and definitely bitcoin. if the sec wins all bets are off , gary gensler could go after ethererum and he's mentioned that in the past and ethererum is a big crypto. i don't see him going after bitcoin. he was maybe like a step too far , but it opens the flood gates if the sec wins. so that's where we are right now , fascinating by the way, for all sorts of risky assets. if you notice as soon as powell

started opening his mouth, what turned into a positive day in the markets turned very negative the markets come back a little better now, but the meme stocks sold off it was very interesting back to you. liz: thank you, captain obvious. i'm totally kidding. charlie: you can call me anything you want, i don't care. takes a lot to, you know i tell people i have feelings, all 1.1 of them. liz: oh, my gosh. you are so thin-skinned. so touchy. charlie: if you're going to kill me you better use like a stake through my heart and it better be metal. liz: noted. charlie, thank you. closing bell, ringing in four minutes, after the bell we've got two tech titans expected to report quarterly numbers tesla and intel ahead of their releases do we have tesla and intel moving higher tesla is better by 1.4% and intel quickly checked that here, we have it up

just under 1%, joining me now, investment management chief investment and joe murphy, sorry, joe mcclain, intersect capital managing partner with a billion. get right to it at the very moment. we do need to find out what you think of investing in the climate post-federal reserve meeting? >> i thought it was interesting today, jerome powell reached into a tool box. he pulled out a tool that i think doesn't get enough attention in the market, that is jawboning. when you look at the pace, the level of rates they signaled, the balance sheet was very much in line with what the market was expecting. but the jawboning, the language that he used was more hawkish. i think we're seeing that reaction in the markets today. but i think that is the fed doing its job, right? bringing in inflation expectations without actually having to raise rates.

liz: joe, how do you invest as the fed jawbones as cara aptly puts it? >> this is exaggeration but i feel like i heard the word volatility 100 times over the last two hours. as an investor i have to remind everybody there is some certain things you should really focus on, right? things that really matter to you and things that you can control and the interseconds between those two we should focus on. so as an investor don't just operate inside of a vacuum. i love january because we can plan. so ask yourself three questions to get ready to be an investor. one, what did it cost to be you in 2021? bimonthly, annual. second is, how much money did i make and lastly, how much of that did i save and invest? so as an investor going into 2022 we have to ramp up the

percentage we're saving and investing because we'll hear the word volatility all the time and typically we want to start responding with, that's an opportunity because i'm controlling how i'm investing, how i'm saving and i will be focused and unemotional. liz: well, cara, you find opportunity and you find it in energy and leisure. why? >> so energy is one of the few sectors that actually has a pretty reliably good track record in inflationary environments. so we think there is some underlying forces because of this inflationary environment that will help buoy the shares. we have some near term tactical issues like shortages in europe, particularly cold weather. we have nuclear power coming off-line. you have political trouble in russia. there are a couple of near term forces that are conveying to support that sector. i do say that with a word of caution because in non-inflationary environments energy has a pretty poor track record. so you have to be very nimble in

here. that is not one where you can really overweight and leave it there for a very long time. now leisure is a different story. that is little bit more of this getting back to pre-pandemic rolls. [closing bell rings] liz: there is that bell. we have to wrap it there. there it goes the nasdaq positive on wild day. see you tomorrow. kudlow -- ♪. larry: hello, everyone, welcome to "kudlow," i'm larry kudlow. beg headline today, justice stephen breyer is going to retire from the supreme court. look it i will not speculate on specific names, it is not my zone but i will say this, i am offended by president biden's woke promise to appoint an african-american female. he made that promise all during the to -- 2020 campaign. mad sam saki