let's just say in the labor market, so it would actually, if you were just moving down the number of job openings so that there were more like 1-to-1 , you would have less upward pressure on wages, you would have a lot less labor shortage which is going on pretty much across the economy. we're hearing from companies they can't hire enough people, they are having a hard time hiring, so that's really the thinking there. these are fairly well-understood channels. interest-sensitive and basically , across the economy, we'd like to slow demand so that it's better aligned with supply, give supply at the same time, time to recover and get into a better, you know, a better alignment of supply and demand and that overtime should bring inflation down, and i'll say again though. we don't have a perfect crystal ball about the future and we're prepared to use our tools as needed to restore price stability. you know, as i mentioned in my

opening remarks, without price stability, you really can't have a sustained period of maximum employment. it's one of our most fundamental obligations is to maintain and restore, in this case, price stability so we're very committed to that. of course the plan is to restore price stability while also sustaining a strong labor market that is our intention and we leave we can do that but we have to restore price stability. >> okay let's go to scott horsl ey at npr. >> thanks and i apologize if this covers some of the same ground you just talked about, mr. chairman. i think i missed some of your answer there, but i have a follow-up question on the labor force. we have seen some gains in the prime age workforce in the last few months. i wonder what you anticipate when it comes to some of the older workers as the health outlook has changed. are we going to see more recent

retirees following tom brady back into the workforce and what would that mean for wages and inflation? >> it's hard to say. what we saw in the last cycle was that over the course of a long steady expansion, labor force participation outperformed expectations, and that was just, it was a tight labor market, it was nowhere near as tight as this labor market but it was a tight labor market and so people stayed in the labor force longer. it wasn't so much people coming back in the labor force after retirement. that's not something that happens in the aggregate very much, but so that's what was happening, and you know, more labor force participation is tremendously welcome and of course our policy does not in anyway preclude that. this is a situation where wages have moved up at the highest rate in a very long time, and people are able to quit their jobs and move to better paying

jobs and the same industry or different industries so it's a really attractive labor market for people, and once as we get past covid, it becomes an even more attractive one so we hope that that will lead to more labor supply. that's a good thing for the country. it's a good thing for people, and it also, we think, will help relieve some of the wage pressures that do put inflation more at risk. that last part is, we'll have to see whether empirically it works out that way, but in principle it ought to help with inflation as well. it's not the only thing we're looking for though from inflation. we're looking for help from another different, a number of different places and most importantly, from our own policy . >> okay, let's go to rich dille r at bloomberg. >> thank you, chair powell. i'm sorry i'm having some communication problems so i

missed some of the stuff you'd said and i apology if this has been asked. since the fomc met last january, financial conditions have tightened markedly, equity prices down, treasure yields up, bond spreads risen, yield curve has flattened a lot and even further today the dollar is up. is that welcome and would you like to see more in order to achieve your goals? thank you. >> so as you know, policy works through financial conditions. that's how it reaches the real economy by just the mechanisms you mentioned, and remember that the financial conditions we had for the last couple of years were a function not only of very aggressive and appropriately-so fiscal policy but also highly accommodate accommodative monetary policy. the monetary policy settings we put in place at the worst parts of the pandemic so it is very appropriate to move away from those and yes that will lead to some tightening in financial

conditions in the form of higher interest rates, and just sorts of things. we're not targeting any one or more of those things but financial conditions generally should move to a more normal level so that because we know the economy no longer needs or wants these very highly- accommodative stance, which, you know, so it's time to move to a more normal setting of financial conditions and we do that by moving monetary policy itself to more-normal levels. >> when you say move to a more normal level setting for financial conditions that suggests to me that you want financial conditions to tighten further from where we are now. am i drawing the right inference from that? >> well, yes. so i would say we look at a broad range of financial conditions and of course when we tighten monetary policy we do expect that they will adjust in sync overtime with monetary policy. it's not any particular financial condition but a broad range of financial conditions. they will reflect to some extent , they reflect any number

of things, but yes. we need our policy to transmit to the real economy and it does so through financial conditions, which means as we tighten policy , we'll remove accommodations so it's less accommodative that broader financial conditions will also be less accommodative. >> thank you, just a little housekeeping note. those of you in this call maybe having some tech issues. if so, i understand the broadcast is coming through clearly on www.federal reserve.g ov. you might go there for the audio. now we'll go to gene young. >> hi, chair powell. i wanted to ask about the balance sheet discussion you had at this meeting. can you give us anymore details? did you discuss whether to cap runoff or whether to increase those caps over what events, if

there were any details? >> yes, thank you for asking so at our meeting today and yesterday, we made excellent progress toward agreeing on the parameters of a plan to shrink the balance sheet and i'd say we're now in a position to finalize and implement that plan so that we're actually beginning runoff at a coming meeting and that could come as soon as our next meeting in may. that's not a decision that we've made but i would say that that's how well our discussions went in the last two days. so a couple things just to add. we'll be mindful of the broader financial and economic context to when we make the decision on timing and we always want to use our tools to support macroeconomic and financial stability, we want to avoid adding uncertainty to what's a highly-uncertain situation already, so all of that will go into the thinking of the timing around this. in terms of the , i would say this. i don't want to get too much into the details because we're literally just finalizing them,

but the framework is going to look very familiar to people who are familiar with the last time we did this , but it'll be faster than the last time and of course it's much sooner in a cycle than last time, but it will look familiar to you, and i would also say that there will be, i'm sure there will be a more detailed discussion of our, in the minutes to our meeting that come out in three weeks, where i expect that we'll layout pretty much the parameters of what we're looking at which i think will look quite familiar. >> thank you. let's go to michael mckee at bloomberg tv. >> mr. chairman, since september of 2020 you've been operating on a monetary policy framework that let the economy run hot to bring unemployment down. that seems to be over, but i'm wondering how you would describe your reaction function now. what is it that the fed is

trying to do other than bring inflation down? in other words is it, we're going to keep raising rates until it comes down to an acceptable level? >> yeah, so i want to clear one thing up. again, that is that nothing in our new framework or in the changes that we made has caused us to wait longer to raise interest rates. what we said in the framework changes was, and this was really a reflection of what had happened for the proceeding couple of decades, actually, what we said was if we see low unemployment, high employment but we don't see inflation, then we're not going to raise rates until we actually see inflation. that's what we said and that was the sense of it. there was no sense in which if we got a burst of really high inflation, we would raise rates. that's similarly not in the framework. in fact, quite the contrary. the framework is all about anchoring inflation expectations at 2%, so i do hear this , you

know, that the framework, really , we can't blame the framework. it was a sudden unexpected burst of inflation and then it was the reaction to it, and it was what it was but it was not in anyway caused or related, caused by or related to the framework. so come to today. i think our vision on this , on the committee is very very clear what we see is a strong labor market. we see a labor market with a lot of momentum, great job creation, and we see the underlying economy strong, balance sheets are strong, yes there are threats to growth from what's going on in eastern europe, and but nonetheless, in the base case, there's a pretty broad expectation of strong growth, but inflation is far-above our target, and you know, the help we've been expecting and other forecasters have been expecting from supply side improvement, labor force participation, bottlenecks all those things getting better it hasn't come,

and so we're looking now to using our tools to restore price stability and we're committed to doing that and you see that, i think, in the economic projections and you see that in the decision we make and you'll continue to see it in the decisions we make going forward. >> if i could follow-up by asking i guess what you'd call it as the paul volcker question. you don't think unemployment is going to rise significantly, but if it does, does that temper your desire to keep raising rates? >> well the goal, of course, is to restore price stability while also sustaining a strong labor market. we have a dual mandate and they are sort of equal but as i said earlier, price stability is an essential goal, in fact, it's a pre-condition really for achieving the kind of labor market that we want which is a strong and sustained labor market. we saw the benefits of a long expansion, a sustained labor market. it pulled people back in and

there were really no imbalances in the economy that threatened the long expansion. it just, the pandemic arrived it was just a completely exogenous ehaven't. so we of course want to achieve, you know, price stability with a strong labor market but we do understand also that really, you can't have maximum employment for any sustained period without price stability, so we need to focus on price stability, in particular, because the labor market is so strong and the economy is so strong. we feel like the economy can handle tighter monetary policy. >> thank you let's go to brian chung at yahoo. >> hi, chair powell hopefully no tech issues on this front. wanted to ask just kind of the broad question about how you are communicating what the fed is doing here today to the average american who might not be reading the dot plots or understanding what the fcp is. how is the 25 basis point hike today and then the signaling on

future fed policy going to address the inflation that they are feeling at the stores on a daily basis? >> sure. so i guess i'd start by just assuring everyone, that we're fully committed to bringing inflation back down and also sustaining the economic expansion. we do understand that these higher prices no matter what the source have real effects on people's well being and really high inflation takes a toll on everyone but really especially on people who use most of their income to buy essentials like food, housing and transportation , where we've all seen charts that show if you're a middle income person, you've got room to absorb some inflation. if you're at the lower end of the income spectrum, it's very hard because you're spending most of your money already on necessities and the price is going up, but it's punishing for everyone, so it has been a difficult time for the economy, but we do anticipate that inflation will move back down, as i mentioned earlier.

it may take longer than we like but i'm confident that we'll use our tools to bring inflation down, and you ask about rates so the way that works, i would explain, is as we raise interest rates, that should gradually slow down demand for the interest-sensitive parts of the economy and so what we would see is demand slowing down but just enough so that it's better matched with supply and that will bring inflation down overtime. that's our plan. >> thank you. let's go to joe kent at nbc news >> hi, chair powell, thank you so much for taking my question doing this today. my question is a follow-up to what brian just asked. what is your message to consumer s out there who can no longer afford the basics due to this high inflation? >> well, that is yes, indeed. i mean, as i just said. i think we do understand very much and we very much take to heart that it's our obligation

to restore price stability and we've had price stability for a very long time and maybe come to take it for granted but now we see the pain, i'm old enough to remember what very high inflation was like and we're strongly committed as a committee to not allowing this higher inflation to become entrenched and to use our tools to bring inflation back down to more normal levels which are target is 2% inflation so we will do that, and i just would want people to understand that, but the way we do that is by raising interest rates and by shrinking our balance sheet and so financial conditions will become at the margin less supportive of various kinds of economic activity. that will slow the economy while also allowing the labor market to remain very strong. the good news is the economy and the labor market are quite strong, and that means the economy, we think, can

handle interest rate increases. >> and as a quick follow-up to that, obviously the federal reserve walking this very complicated fine line trying to avoid a recession. for the consumers out there who are worried about their jobs and a possible recession, what do you say to that? >> well, you know, i say that our intention is to bring inflation back down to 2% while still sustaining a strong labor market, and if the economy is very strong, if you look at where forecasts are, people are forecasting growth that's strong , within the context of the u.s. potential economic output, so and we expect that to continue and to the extent the data come in different than of course our policy will adapt but we do believe our policy is the appropriate one for this forecast and we believe we can bring down inflation. we believe that we can do so while sustaining a strong labor market. the labor market is, it's not strong in the ordinary sense of

the world. we have not seen a labor market where there are 1.7 job openings for every unemployed person or where, if you add job openings to those who are employed, that's actually substantially a larger number than the size of the workforce and the number of people who actually count themselves in the workforce so this is a situation where demand is higher than supply and when that happens, prices go up. so we need to use our tools to move supply and demand back and we don't think we need to do this alone, there will be other factors helping that happen but we certainly are prepared to use our tools and we will. >> thank you. >> thank you let's go to simon at the economist. >> thank you chair powell. sorry to take you away from inflation for one minute. may i ask about the sanctions on russia and specifically the

freezing of the central bank assets, if that raises a similar risk for others around the world and their biggest companies potentially, any concerns about in the long term how this might affect the dollar status with the global reserve currency and in the past couple weeks, have you had to deliver any kinds of reassurance to central bankers around the world? >> well so of course central bankers around the world are generally very in favor of these sanctions, but let me say this. sanctions are really the business of the elected government and that's true everywhere, so the administration, the treasury department in particular, and other agencies, they create these sanctions. we're there to provide technical expertise but it's not our decisions, and so i'm reluctant to comment on sanctions really much, because again, they're not for us. we have a very specific mandate and these are really the province of elected

governments as i mentioned, so i'd have to leave it at that. sorry. >> thank you, let's go to nancy marshall genser at marketplace. >> hi, chair powell. thanks for taking the question. you've been talking about the rising wages which on the one hand is a great thing, but are we outplacing the beginning of a wage price spiral? >> so the way i would say it is this. first of all, i would agree with the premise. wages moving up is a great thing that's how the standard of living rises overtime and generally it's driven over long periods by rising productivity, but what we have now if you look at these, the wage increases that we have, we look at, we're blessed with a range of measures of wages that all measure different things. right now they're all showing the same thing which is that the

increases, not the levels but the increases are running at levels that are well-above what be consistent with 2% inflation, our goal, overtime, and that maybe, we don't know how persistent that phenomenon will be. it's very hard to say, and that's really, i think, the sense of your question about a wage price spiral is that something that's going to start happening and become entrenched in the system? we don't see that. you can see , for example, in some sectors that got very high, wage increases early on, those wage increases look like they may have slowed down to a normal level, but it comes back to, you know, what i'm saying here, which is there is a miss alignment of demand and supply particularly in the labor market and that is leading to wages moving up at ways that are not consistent with 2% inflation

overtime and so we need to use our tools to guide inflation back down to 2%, and that be in the context of an extraordinarily strong labor market. we think this labor market can handle, as i mentioned, tighter monetary policy and the overall economy can, as well, but yes. wages are moving up faster than is consistent with 2% inflation but it's good to see they are moving up but it wouldn't be sustainable over too long of a period to see them moving up that much higher and that's because of this missalignment between supply and demand. we expect to get more labor supply. we did last time. we got more than we expected during our last cycle. this time we've gotten much less than expected so it's not easy to predict these things but we do expect we'll get people coming back in the labor market particularly as covid becomes less and less of a factor in many people's lives.

something we all wish but so that's how we think about it. >> thank you. the last question, we'll go to don lee at la times. >> hi, chair powell. i think you said to the senate earlier this month that in hindsight, the fed should have moved earlier and it sounds liked to that you don't think that the fed is late and just wanted to get your clarification on that and if it is, if you still think that the fed is behind the curve, how much behind the curve is it? >> right, so we are not, we don't have the luxury of 2020 hindsight in actually implementing realtime decisions in the world, so the question is , the right question is, did you make the right decisions based on what you knew at the time, but that's not the question i was answering which is knowing what you know

now, so i think if we knew now, of course if we knew now that these supply blockages really and the inflation resulting from them in collision with very strong demand, if we knew that that was what was going to happen then in hindsight, yes it would have been appropriate to move earlier. obviously it be , but again, we don't have that luxury and then so but that's a separate question from your other question, which is behind the curve and i don't have the luxury of looking at it that way. we have our tools, powerful tools and the committee is very focused on using them. we're acutely aware of the need to restore price stability while keeping a strong labor market, and what i saw today was a committee that is strongly committed to achieving price stability, in particular, and prepared to use our tools to do that. we're not going to let high

inflation become entrenched. the cost of that be too high and we're not going to wait so long that we have to do that. no one wants to have to really put restrictive monetary policy on in order to get inflation back down, so frankly, the need is one of getting backup, getting rates backup to more neutral levels as quickly as we practicably can and then moving beyond that if that turns out to be appropriate and as you can see it is appropriate in a sense, to people's sep's they do write down levels of interest rates that are above their estimate of the longer run neutral rate, and there's also a range of estimates too as you'll see if you look at the details of the sep, but thanks for your question. >> okay, thank you, all. thanks, mr. chair. >> thank you. liz: well, an aggressive meredith says goodbye to easy street borrowing for the first time in more than three years,

the fed has hiked rates this time a quarter of a point, but when the committee said another six hikes this year, that's when the markets kind of hiccupped. take a look at the dow jones industrials we do have a higher by 342 points, but if on firmer footing after it dipped and now the markets are moving higher pretty significantly s&p up 68 the nasdaq up 375 oil pulling back, let us go back live as we're looking at federal reserve chairman jerome powell on what was a very aggressive statement and as we continue to look at the situation that has happened, we did see that fed chief chair powell said that really, five times, i think he said, we must restore price stability and he and the fed will do it by raising rates six more times this year. markets erased early gains the second the fed released the decision at 2:00 p.m. eastern the dow at one point was up 531 points but look at the intraday of the dow. it fell 153 points after the

statement came out but as you see , we now have gained all of it back. powell vowing to fight inflation but did not expound on why the committee has waited until now with consumer inflation at 7.9% to do so. powell & company have worried about the impact of the war on ukraine and raised the forecast from 2.7% which is obviously way too low to 4.1% inflation by years end. remember wholesale inflation, already at 10%. now at 12:30 p.m. eastern ahead of the main event, let's look at the 10 year yield. it peaked above 2.2%. then it was a bit lower, right now we've got it at 2.16%. rates, by the way, have not waited for the fed. they began rising in september after the august print of 1.28% but since then, the urgency to hike rates intensified as america witnesses the highest inflation in 40 years, first sparked by covid related demand and supply chain snarls and now of course russia's war on

ukraine. crude oil, wholesale gas pulling back but quarter to date oil gushed 28% higher, we do have gasoline seeing a 27% gain year-to-date. now, wheat prices getting immense attention because russia and ukraine export a third of the world's wheat they have seen a 20% or so pop but the commodity today slightly moderating here. we're looking at inflation this year of 38% for wheat. now, the dollar solidifying its place as the world's reserve currency, its muscled 8% higher against all major currencies over the past year right now, we do have it stronger against most major currencies at the moment, now the financials still holding on to gains since higher interest rates actually, i'm sorry, its changed. the dollar is slightly weaker against most major currencies, but powell did not get an all hands-on board issue here. one committee member dissented, and no surprise it was st. louis fed president james bullard who insisted that inflation is so serious that a 50 basis point

move was in order. well the fed projected its fed funds rate will move to a range of between one and three-quarter s percent to 2% by the end of the year there's no timeline on those moves. powell adimate that tackling what he calls "punishing inflation" is priority number one, but he just admitted waiting hasn't really worked. >> but inflation is far above our target, and you know, the help we've been expecting and other forecasters have been expecting from supply side improvement, labor force participation, bottlenecks all those things getting better, it hasn't come. so we're looking now to using our tools to restore price stability and we're committed to doing that and you see that, i think, in the summer economic projections and you see that in the decision we make and you'll continue to see it in the decisions we make going forward. liz: okay but the fool that they started with is a tiny little hammer, joining me now with 1.1 trillion in assets under management, lpl financial senior

market strategist ryan dietrich and co-head of global economics michelle gerard. well, michelle, no surprise except maybe that we will see a fed rate hike every single meeting this year. what else popped out at you that makes this more significant? >> yeah, you're right. no surprise they raised rates today but a real surprise in terms of the number of rate hikes that they anticipate this year, seven in total versus in december they thought it be three and we actually thought it would only move to five, so more rate hikes this year. also more rate hikes next year, so that now you have the committee thinking that the funds rate will rise above two and three-quarter percent. that's above their mutual rate, so you've got a committee saying no it's not going to be enough just to get rates back to neutral to get inflation down we might have to raise rates into restricted territory. liz: well that would have been a shock but ryan are you surprised that the markets are okay with this?

i mean, look at the nasdaq up more than 2%, we're almost up 3% here, 387 point jump, normally tech stocks might get to be a little squishy and nervous in that kind of atmosphere, but here we are. so what does this mean for individual sectors that you're looking at right now that could do really well? >> yeah, liz, we're not that shocked if you look at what happened the very first day of the first hike of new cycles usually stocks do go up, right? the last six cycles after the first hike the s&p is higher a year later all six times so not too surprising everyone has been worried rightfully so about all the scary things out there, but usually when the fed starts hiking what does it mean? it means we're more mid-cycle. we look at like 30 years on average after the first fed rate hike before the s&p peaks, right so those are some things people need to remember, this is just more normal taking off the training wheels. now where are we, what do we see we still like the same old value names the ones that brought us to the party, i know yields pulled back a little bit here but the yields keep going higher

we like financials in general, energy has had a great run maybe a little more pullback in financials, materials, energy still look pretty good so those are groups we brought to the party and we still stick with them here. liz: yeah, and financials are looking pretty strong at the moment. so are michelle, some other areas that will start to feel the effects of higher rates and that be i'm thinking look, people better get ready for higher credit card interest rates, right? and we're looking at american express, mastercard, visa, discover financial group. they're all moving higher at the moment. when you think about what powell said regarding the pace of rates , i first want you to listen. this jumped out at me, whether he would see , whether they would front load some 50 basis point hikes at certain points versus spread it out in individual chunks throughout the year and then you can comment on what that really means for sectors that are interest rate sensitive. here is powell. >> we haven't made any decisions on front end loading

or going steadily through the year, and as i mentioned, if you look at the sep, a good number of participants do see more than seven rate increases this year, and i can't give you, i'm not going to try to give you a really specific test for what it would take to do that, but i will say this though. we'll be looking at the data as they come in, we'll be looking to see whether the data show expected improvement on inflation. we'll be looking at the inflation outlook and making a judgment and we'll be going each meeting is a live meeting and if we conclude then it be appropriate to raise interest rates more quickly, then we'll do so. liz: michelle i so thought that would spook the markets but it didn't. >> well the thing is, i think the main message from the he said over and over again in the press conference was getting inflation down, not allowing higher inflation to become entrenched in the system is the

main focus of the federal reserve because high inflation is so damaging to the economy and so damaging to purchasing power. you talk about the headwinds that consumers will face. they will face headwinds if inflation keeps rising so if that means that by frontloading rate increases they think ultimately they can get inflation capped sooner such that the total number of rate hikes are less than what would have to be a case at a more worrisome scenario wherein population overshoots, that's their goal so i think that's really what they are deciding is if we can go sooner to get inflation under control, then that's better than dragging it out and ultimately having to go a lot further than we like. liz: we're looking at the financials eft, the big ones and then of course the regionals are looking extraordinarily strong, ryan. what about the home builders? i'm interested to know what you think, because the 30 year fixed mortgage, it has definitely gone well-ahead of the 10 year treasury yield as not in actual numbers, but as we continue to

watch exactly what's going on there. it started to move well-ahead of any kind of rate hike. >> yeah, i mean longer end 30 year, those are breaking out. that potentially can impact home builders, and real estate in general though is reopening keeps taking place we are a little more optimistic on that front. i mean, you got to think about two years ago right now liz, do you remember what happened? it was the second-worst day in the 125 years of the dow, down over 12%, we are two years later we've seen bad times before. the big question is how much bad stuff is priced in. we're bouncing, that sounds hawk ish but we're bouncing today so much negativity has been priced into this market rightful ly so. look at march 2003, march 2009, march 2020, history don't repeat but could we be making another major market low in month of march with negativity off the charts? we think there's an opportunity there and that's probably pretty likely in our view. liz: and i think there's really no fear in this market of anything that happened today. i'm looking at the vix right now

it's down about 10% so volatility doesn't seem to be in this market. ryan, michelle, wonderful to have you on a very, i guess historic day first time we've seen a rate hike in more than three and a half years so let's get down to the floor show traders, teddy weisberg and tom heys. tom, tell me where you see the best places to be salt ing money in stocks at the moment, knowing what we know, six more rate hikes this year. >> yeah, no question, liz. well i watch your show on friday as i do everyday, and you said stay positive on good u.s. businesses, even if they are going through tough times. in that context, what's a more american business than disney? you know, the revenge travel is going to come back this summer we heard from target on the earnings call their top sellers were suitcases and bathing suits. number one destination is going to be disney and you can buy it at a 32% discount off its 52 week highs, they are going to grow earnings at 29% next year, double earnings over the next four to five years, they added

12 million subscribers to disney plus in the last quarter taking total subscribers of disney plus , hulu and espn to over 200 million. we continue to be bullish on america and on mickey mouse. liz: well 30% cheaper, exactly. this is precisely, maybe even yesterday or the day before was precisely the time, but teddy, you know, the markets have shown they can deal with what we're looking at at the moment, and that is a rising rate environment, but they were coddled and warned and stroked well-ahead of time. hey, everybody this is coming, but what worries you in this atmosphere? >> well, what worries me, liz, is that the fed doesn't admit it publicly, clearly its been behind the curve when it comes to inflation and i think that the relief today is that it wasn't 50 basis points but only 25 which they telegraphed, but he also said if they had to be more aggressive at least that's what i heard, going forward,

depending on what inflation does , they could be. i think the inflation trade is still with us. i don't think anything is really changed. i think investors need to gravitate to the financials, to the insurance stocks, to the energy stocks, to some of the commodity sectors, to be in areas that can take advantage of inflation because it's going to take at least as we heard today, at least one year and possibly two years for the fed to get comfortable and get the inflation genie back in the bottle and it's going to be a lot hotter i think than the fed and everybody else think s. liz: well dow is up just under 300 points at the moment. i don't know, look, if we can, show three year charts, precisely to your point. you guys are all okay, oh, the markets have been scary over the past month or so. over three years, the dow is up 31%.

the s&p up 53%. the nasdaq up 73%, and i believe the transports were up crazy, yeah, bounced back 100 up 89% over three years, and this just shows that people have been not necessarily forced but they've been pushed to find yield in the stock market because treasuries were simply not doing it, and i think, tom, that it's time to kind of turn down the heat on some of this , and the fed is realizing this now, so are there any other areas that you think are poised to race higher? >> well believe it or not if you look back at the data liz over the last four hiking cycles , cyclicals, banks, energy , materials, actually out performed in the six months up to the first rate hike and after the first rate hike in the following six months, the top two performing sectors which is counterintuitive are re it and technology and everyone has been dumping

technology hand-over-fist and we think there maybe some opportunity in some of these beaten down tech stocks, it's contrarian and counterintuitive but when you look at how far facebook has fallen some of the high-quality businesses even the value tech like intel et cetera there maybe opportunity here for some bargain hunters. liz: oh, well yes and we've been trying to say that, the time to go in is when there is the most fear. today we're not seeing that. we've got meta, amazon, alphabet , apple moving higher apple seeing a 2% gain teddy what the are your picks? >> well, you know, it comes back to the financials. i mean, i like some of the big banks like bank of america and charles schwab is a terrific way to play higher interest rates against some of the energy names , occidental petroleum, i like the exchanges because of all the built-in volatility, we seem to be experiencing and they take advantage of that, something like intercontinental exchange. there are a lot of places to go, liz, i think other than where we have been for the last four or

five years in terms of what has carried the heavy order for the stock market but if you go back to the spring of 2009, the dow was 6,600 and here we are at dow 33,000. the market has had an enormous move on the backs of easy money. the easy money is off the table. it does not speak well in my opinion for the overall market. i think you've gotta get really cautious and be really specific. there are good things to do here but it's not going to be a ris ing tide floating all the ships. liz: teddy, tom, i'll tell you something, easy street as we said at the top of this show, easy street is over if you're talking about borrowing money. thank you both so much. you want to see a complete turn around guys fox business alert. foreign listed shares of chinese companies are whipping around doing a 180 after the chinese government stepped in and promised to keep markets stable by supporting overseas listings

and ending its crackdown on tech stocks soon. so take a look. these names were all imploding yesterday, but now, everything from baidu, up 55%, taken incredible beating lately up 35% , investors were fretting about the impact of china's alliance with russia after its ukraine invasion but now, no fears at the moment and i mean, i'm just stunned by this , didi up 42%, and if you look at the crane shares, csi china internet eft, or the invesco golden dragon china portfolio this has all those stocks they are on the move. the china internet stocks up 39% , and the golden dragon up 32 %. now stateside, amazon is brushing off any covid-19 lockdowns in china saying it will counter any disruptions by diverting freight from impacted chinese cities and ports to warehouses in unaffected regions

stock of amazon now powering higher by 3% it's a good move for amazon. changes at the top and bottom at starbucks have a great move going for this stock. we've got starbucks up 4%, although off the highs of the session, ceo kevin johnson will step down and whose going to grab the reigns of the leadership of the coffee chain? founder and former ceo howard schultz. it is going to be temporary, for all you schultz fans who are thrilled to see what he had done for starbucks, but the java jolt is giving investors an unexpected desire to buy stock and the stock is down about 25% over the past year. schultz says his pay as interim ceo will be $1 but starbucks is jacking up the hourly pay for its baristas starting ranges will be $15 but all the way up to $23 an hour by this summer. that's what the union might do, so starbucks baristas will soon

be getting paid $23 an hour. look at kohl's stock it is popping on takeover, hopes it'll become a little more solid over the past couple hours. the wall street journal reports the equity firm sycamore partner s and canadian department store operator hudson's bay plan to submit a bid in the high 60s for share of the company. kohl's is up 25% already this year, as investors see the retailer as a prime target for sale. it's up 17.6% right now to $ 63.17. and we've got to check out amc entertainment. ceo adam aron mugging it up in front of the hycroft mine in northern nevada. of course yesterday, amc announced it had purchased 22% of this gold and silver mining company yesterday. its been a wild couple of sessions for hycroft which ended up 9% yesterday after doubling on value on word of the deal but it's pulling back 9

% now, and it's not a good picture it's $1.38 a share, so any bump it got from theatre chain buying a gold miner, kind of dissipated here. charlie: good synergies though, right? liz: public companies announce managers could be required to follow a new set of rules when it comes to climate change disclosures, sec chair gary gensler preparing to release details on this as early as next week, and you heard him off camera, off stage. stage right, charlie gasparino. charlie: do you like my tie? liz: no. charlie: okay. i just want to know, is adam aron going to sell popcorn at the gold mine? liz: you know, you are on point on that story yesterday, because a lot of experts and market watchers are slack jawed over this. they do not understand. charlie: well it makes no sense. why it makes no sense, liz, if you have a business that is thriving, or is coming back in the way that he keeps saying it's probably going to come back because he's been touting it,

you know, you want to put your money into that business. not into a gold mine. liz: there's been a meme of him panhandling for gold. charlie: it's incredible. liz: but this is a guy -- charlie: what is that country song? liz: he ran vail resorts he's run many companies and he owns the sixers, right? basketball. charlie: he doesn't own the six ers he worked for the owner of the sixers. liz: no he's a part owner. charlie: okay so but he worked for josh harris trust me. liz: trust me he's a part owner. he's from philadelphia. everyday. charlie: josh harris, you know josh. liz: oh, we're bff's. we're like this. charlie: what was that song, my wife got the gold mine, i got the shaft? liz: [laughter] charlie: it's kind of like i got the gold mine, maybe my investors got the shaft? i mean, this is --

liz: it might play out and he may look like a genius. charlie: well there's a lot of may. if my aunt had you know what? she be my uncle. liz: that's so eloquent. charlie: [laughter] someone just said we can move on before we get sued but i hope aaron, by the way he's a smart guy doing a good job. liz: you're caveat of everything charlie: in a very difficult situation he's doing a good job. a guy who might not be doing such a great job is gary gensler i know he's your friend and comes on your show, he doesn't return my phone calls, but you know, what's interesting about gary, is that we have all these issues affecting small investors that are really affecting small investors so what is he going to do next week? we have meme stocks maybe over valued, pump and dump going on in the market, people pumping up stock and investors getting lured into the crazy investments from message boards but gary

gensler next week is going to unveil, from what i understand, details on proposals on how asset managers and corporations can help reduce the world's carbon footprint. okay? so this is kind of where he's going. now we should point out that this is an incredibly ambitious agenda that he's got going on top of this , he's looking at crypto, he's looking at private disclosures for private equity, looking at payment for order flow, and we're going to get this thing, some sort of thing that corporations must follow, public companies, how they can reduce, how they disclose tok investors because investors are just dying to know how exxon is going to start building windows in 10 years or something like that. it really bog eled the imagination on where his priorities are but this is what sources are telling us he's going to be doing next week. look for , and from what i understand is this and this is a key point here. all these rules he's putting out there's a motherload of them, huge proposals.

he's looking to get this done soon while the sec has where the democrats who are in control of congress right now, have the oversight over the commission, not the republicans who are likely to have oversight after next year, so that's part of what's going on here, and you know a proposal like this if the republicans can control the senate and the house, gary gensler will be given a lot of testimony on why investors need to know this , liz. liz: charlie, thank you. charlie: thank you. liz: oh, thank you, very nice. charlie: did you like my -- liz: i don't like the tie. charlie: what's wrong with the tie? liz: it's a little conservative. just looks so -- charlie: like wall street. why would i ever listen to that? liz: well the nasdaq is at session highs up 413 points, a full 3% higher, as tech is one of the big leaders in a broad based rally, after the federal

reserve says you'll take seven rate hikes this year and you'll like it, and the market seems to be okay with that. hike one, done, but how many more does the fed have in them, our countdown closers are up next, on what they expect and where they're putting their, yes , billions to work. closing bell 12 minutes away we're coming right back. every business is on a journey. and along the ride, you'll find many challenges. ♪ your dell technologies advisor can help you find the right tech solutions. so you can stop at nothing for your customers.

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[limu emu squawks] woo! thirty-four miles per hour! new personal record, limu! [limu emu squawks] he'll be back. only pay for what you need. ♪ liberty, liberty, liberty, liberty. ♪ liz: we have some breaking news regarding vladimir putin. a couple of developments both involving a fox business reporter, edward lawrence, and a fox news reporter jacqui heinrich. the kremlin spokesperson has just come out and said that in response to jacqui heinrich's question about whether vladimir putin is a war criminal, that biden's comments saying yes, he's a war criminal, are unacceptable and unforgivable rhetoric. now, before that, edward lawrence asked jay powell about

vladimir putin and what he thought of him and jay powell said he's a war criminal. now, the news agency putting this out of course is a state- sponsored agency in russia , but yeah, vladimir putin is a little upset that basically , jay powell and president biden have said exactly what he is, a war criminal. okay. closing bell eight minutes away, the nasdaq hitting session highs , just moments ago the gain of 439 points, we are right there. let's see if we can tick up even higher so we change that, there we go, 441. fed chair jay powell of course talked a lot about why we need to see seven rate hikes this year and it was specifically about the toll that higher inflation is taking on ordinary people that he said is punishing them and their daily life and the fed has got to work >> that we're fully committed to bringing inflation back down and also sustaining the economic expansion, we do understand that

these higher prices no matter what the source have real effect s on people's well being and really high inflation takes a toll on everyone but really especially on people who use most of their income to buy essentials like food, housing and transportation, where i mean , we've all seen charts that show if you're a middle income person, you've got room to absorb some inflation. if you're at the lower end of the income spectrum it's very hard because you're spending most of your money already on necessities and the prices going up, so but it's punishing for everyone. liz: yeah, and it's punishing for a long time. corn year-to-date up 23%, soybeans up 21%. this gets flooded out through many different areas of the economy, but we're here to tell you how to invest, what's the trade, here to weigh in co- america wealth management cio john lynch with 185 billion in assets under management and chairman and chief economist at hugh johnson economics, hugh johnson. hugh, i'll let you take it first

where's the trade? >> well, you know, he painted a very pretty picture, he painted a picture of an economy which is in good shape, is expanding, he's very worried, he must have said price stability at least 20 times in his comments. liz: i stopped counting at five. >> yeah, he's talking about really a perfect world where the economy is going to continue to expand and the federal reserve is going to be successful bringing inflation down although he does expect inflation to come down in the last quarter of 2022. i might add though, that if you look carefully, liz, at the dot plot, and you see what the group , the federal open market committee, the members of his committee are forecasting for the economy in 2022, they are talking about it coming down from that roughly 5.7% from 202. now that's well-below what the consensus is so it's hard to reconcile that forecast of 2.8% if i've got it right with his

forecast statement that the economy is in great shape, so believe me, he painted a very very good picture and that explains why the market, to some extent, the market is doing as well as it is doing in response to his comments. liz: well, nasdaq up 445 points, john, where do you see the opportunity and i would imagine that with that many assets under management, all those billions you are already making moves ahead of this. specifically, where? >> thank you, liz and good afternoon. liz: hi. >> i think today's activity is really not reflective of the longer term trade. tech leading today just simply tells me that the market is grasping on to the fact that rates are going from historically-low to ridiculously low, so we're seeing technology move on that but i do think the longer term trade, when you look at the overall trends and the global economy, when you look at the overall trends in pricing, whether it be housing, wages, commodities and energy,

we look at global growth, we still maintain that global cyclical recoveries in play, and we are looking at the value space over the growth space, quality over profitable small caps relative to large, and we're also looking at cyclical sectors namely energy, the industrial space, you know, the industrials have been struggling but keep in mind your investors should pay close attention to the fact that it's counterintuitive but the dollar tends to strengthen going into the first fed rate hike and then declines the six months we think that will be a good opportunity a for industrials and b, further sustain the commodity trade. liz: the commodity trade i do believe it will take a while for that to work its way through because so many much of that has to do with the supply chain snarls we have seen. hugh, when goldman sachs says there is a bigger chance of recession by the end of the year

do you believe that? >> yeah, in some ways i do. they put the number 35% chance. i think sure, the chances of recession are certainly increasing particularly because we're seeing a lot of problems in the economy. you have got ukraine. you have got china shutting down ports now in response to a little more covid or concerns about covid. you got that forecast of 2.8% which i mentioned before. so there are reasons to be concerned about the economy. but you know, frankly, liz, 35%, that is a very high number. if you take a hard look at the yield curve, what you can use the yield curve to try to quantify the probability of a recession, believe it or not. it is probably around 10 or 15%. so 35% is a little bit high. i think we're not going to have a recession in 2022 or in 2023, 2024 might be a different story. nevertheless i think we're fine in 22 or 23. it will be correction in ongoing

bull market. not a bear market a companied by a economic recession in 22 and 23. liz: speaking of correction. it was not jay powell. it was president biden, specifically, only specifically, who said that vladmir putin was a war criminal but, anyway, that said, john, with the war still on and raging in ukraine do you have a sense of whether defense stocks, anything like that is an area that should be looking at or is that too short termism? >> no i think it is very much in play the industrial space not only for recovery but also for their exposure, aerospace, defense, within the industrial sector. hugh makes a good point. we don't believe there will be a recession this year. we have full employment. we have two trillion in consumer savings. that is a pretty good backdrop. i suspect we'll have a mid-cycle slow down next year. but nonetheless we still think over the next, 12, 15, 18

months, still very much a value cyclical play, energy, industrials, materials, financials benefiting from higher rates as well. liz: john and hugh, thank you so much. [closing bell rings] the dow popping up now 510 points. nasdaq up 483. s&p up 94. well here comes the rate hike system in play. that will do it for the claman "countdown". larry: hello, everyone, welcome to "kudlow," i'm larry kudlow. so the conclusion of his stirring speech to congress this morning ukrainian president zelenskyy exhorted president biden to be the leader of the world and then zelenskyy went on to say, being the leader of the world means being the leader of peace. now mr. zelenskyy basically applauded president biden's actions regarding military and economic assistance but i think

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