thanks a lot. we're coming up to the end of the show. as we round it out i want to say thanks very much to lauren and jackie. thanks for your appearance today. by the way we're leaving you as the market at its low for the day. the dow is down 1120 points. the nasdaq is down 652. that is a selloff. time is up for me. neil, it is yours. neil: that, my friend, is an understatement. thank you very much, stuart. mirror opposite what we saw yesterday. a lot of people are reassessing exactly what it is jerome powell was saying when he seemed to encourage the markets that 3/4 of a hike in interest rates next month was out of the question but again as we were indicating yesterday, certainly on fox news he did telegraph the possibility of half-point hikes maybe for the foreseeable future. collectively rates go up, balancing out disproportionately

3/4 point hike or whatever that people are reassessing, they don't like what they're reassessing. dow at session lows, 1164 points. particularly getting hard, technology stocks, particularly chip-makers. no order between chip-makers and big tech names. amd, nvidia, facebook, netflix, amazon, microsoft, sales force. those issues down anywhere from six to 10% today alone. in the e-tailer, retailer community, etsy, wayfair, shopify, ebay. a reflection of consumer sentiment going forward. how much they're inclined to buy. disappointing guidance out of the likes of shopify and etsy, weighing on those issues, anywhere from two to 5%. actually they're coming off some of the worst levels of the day. but that does not apply to everybody. we have the compound fear right now that we've got, you know a

spike in some covid related cases. certainly in china, you heard about, but in the united states in general. nothing worrisome. nothing hospitalizations. certainly nothing worrisome, on the depth side. again in new york, concern enough right now that they are looking at the possibility of renewed restrictions. so when you hear that sort of stuff, the better part of valor is sell, sell into that. let me show you what is also going on the new normally safe haven of treasury securities, which is certainly not enjoying that today. 10-year backs up, continues backing up now a little more than 3.08%. represents a more than-year high in that particular security. it is running almost double where it was a year ago on the expectations that rates could go still higher. now whether this is, emblematic of the way reality is, this big hit we've seen in stocks and bonds, or yesterday, where we saw the mirror opposite is

anyone's guess but what is disheartening for a lot of people who follow the market, look for good technical underpinnings, you normally like a big begin, follow-up gain, certainly not a huge selloff that wipes out the gain you had the day before. let's go to luke lloyd on all of this, the strategic wealth partners investment strategies. look, this is interesting, across the board hit. all 30 dow stocks are down. all sectors of the s&p 500, different components of the economy are down. is this overkill or was yesterday overjoy? how do you define it? >> yesterday was definitely overjoy, neil. yesterday speaks volumes of how bad investors want us to be at at bottom. they want to step in there so badly and buy the bottom, right? then hopefully things are off to the races from there but we aren't there yet, neil. we've got so much farther to go. the fact of the matter is, there is a 75% chance we are in a recession right now as we speak

and everybody is talking about interest rates either rising or not rising quickly but interest rates are rising but the one thing that nobody is talking about essentially is the trillions of dollars the federal reserve has accumulated over the past 10 years on their balance sheet. they are now offloading hundreds of billions of dollars off that balance sheet. nobody talks about that. over the past 10 years, what has happened as they accumulated trillions of dollars. stocks went up. natural for stocks to go down as they off-load that. sometimes things don't have to be rocket science in investing, neil. neil: we're inclined to interpret fed speak any number of ways to suit a particular disposition, i get that, but i was interpreting a lot of what jerome powell was saying yesterday, he seemed to rule out, he almost said as much the next hike will not be 3/4 of a point he did telegraph the next couple rate points will be at

least a half a point. so i'm taking at that, not as if he got his foot off the pedal here, he will pace it out a little bit more, but the variable direction of rates is up, maybe dramatically so. some might say that is medicine we should welcome. i'm wondering whether the markets misinterpreted what he said or the signal he is sending? >> they are misinterpreting it, neil. you hit it right on the nail, the nail on the head, that the rate, the direction of rates is up, right? nobody, it doesn't really matter whether it is 50 basis points now or5 basis point now. the fact of the matter is, we need to get close to 300 basis points, 3% higher on interest rates and market is not really discounting that much yet. again, we pumped all this money into the economy over the past couple years, all stimulus, all the money supply. we have to off-load all of that, pay the price, pay the piper, right?

we haven't really seen an environment like this ever. we haven't seen the quantitative tightening cycle ever. so what i'm looking for right now, where i think the bottom is going to come in the stock market, true capitulation, when people sell the stop stocks. talking apples, microsoft, googles. they fell a good bit. when you see stocks down closer to 2025%, that is when you see true capitulation. everybody selling smaller stocks. top five stocks of s&p make up 25% of index. we'll not see true capitulation until people get worried to sell their top stocks. neil: that is a good point. you were kind enough to stay with us at this hour. we'll go back to you, my friend. appreciate your insight. south carolina senator, sits on the finance committee, tim scott. senator, great to see you. i'm sorry this is the take which we go to you, sir, you have been warning, in fact before many

others about government spending, how that is what is setting in motion some of the inflation we've seen now. we know the white house said probably a lot was propelled out of control by the war, et cetera in ukraine. but it is clearly inflation now that is ruling the roost and fears we're not only behind the curve but it will get worse, it will put a crimp on the economy. clearly might already be happening. what do you think? >> well, neil, there is no doubt if we look what precipitated the russian invasion was high inflation. we saw gas prices up about 67%. we saw inflation around 7 to 8%. we saw 40-year high inflation before the russian genocide. the truth is, president biden's policies, economic policies, led the to worst inflationary effects in our economy in 40 years. that means the average person in our country is experiencing an invisible tax that is eroding their spending power. that means our seniors who are

on fixed income have to find a way to ration either health care, medicine, their energy or food. it means that people who are growing up in households like the one i grew up in, they're now having to make harder decisions than they ever had to make. that's wrong. biden pouring so much money into your economy has caused our economy to explode in a negative way. neil: all right. you might not be surprised the white house has a slightly different view of that. they have fingered other factors here, today, for example, a lot of people are saying part of this is the federal reserve's fault. that it has moved too aggressively, raise interest rates, comes too little, too late. others say just the opposite. now some of the stark measures it appears to be taking to lift interest rates will slow the economy down and won't address the underlying inflation. we got a hint of that labor costs are running at an 8% clip right now. so whatever people are making

they're paying out. it is like a double-whammy. do you see anything changing that? >> i don't, neil. the problem is the government acted too slow too often. they created inflation. now they want to have credit for solve being the problem, when in fact the problem may actually exacerbate the situation. when rates start going up, economic activity starts going down. that makes you get a little closer to recession. the truth while the inflationary effects cannot be stopped right now, the increase in interest rates will slow it down but i don't think it is going to stop it. because too little, too late. the fed does not have enough tools in the tool kit for the economy we have at that, especially since as you know, neil, our up employment rates are significantly lower than is normal in this kind of environment. our labor force participation rate is not actually increasing. that combination is very

concerning. so the interest rates will make it harder for people to buy homes, for our seniors on fixed incomes. they will feel a bit of a bump in resources that they have. neil: you know, senator, it is interesting but this does appear to be a worldwide problem. in britain of course they just raised rates for the fourth time since just december. i think they're in and out of 13, 14-year highs on interest rates. turkey is running 70% inflation rate. argentina 75%. brazil 50%. europe collectively now in excess of 11%. are we back in the '70s here? >> well, i tell you what, i think we are. literally this feels like the carter ear raos, when you think about the explosive price of gas, you think about what it cost to heat or cool your home if you're in south carolina, it is drastic. but more importantly, when you look at global effect, you

remember the days, neil, when venezuela was at 900% inflationary effects because of crushing decisions -- neil: why would you assume i'm that old, senator. actually i do remember it verbatim. >> that was two or three years ago. neil: i hear you. >> so the truth is, that the whole globe responds to the type of economic decisions that we make here at home. that is why our global leadership economically matters so much. we should be foreseeing decisions here at home, like, why not restart our own energy economy, creating six-figure jobs here at home? why not continue the conversation around the keystone xl pipeline? why not have the ppe coming back home? why not use opportunity zones to attract in-sourcing back into america? we -- neil: let's say politically reading the tea leaves here, that doesn't seem likely at least under this administration.

you could argue right now they're really hanging their hats on maybe more spending. they talked about college loan forgiveness and all of that. i just wonder, is their cure, far from what your cure would be, it doesn't sound like anything will happen legislatively if even that is an option here. everything is hanging on the federal reserve. does that worry you? >> it does worry me as we know the federal reserve can only increase interest rates. that is, they can slow of course the start of the process of unwinding their balance sheet and reducing their balance sheet. that will have impact too. they could slow that and increase interest rates but the truth of the matter is our economy needs smart, reasonable leadership at the top. we're not getting that right now. they have fundamentally misunderstood the american economy, pouring two trillion dollars in the first 60 days of the administration. then a $1.2 trillion plan. then they talked about trillions

more dollars. build back broker plan i like to call it. what we're talking about democrats who believe more money from the government is a solution to already hot economy that is antithetical to reality. also of course president biden said he wants to reduces coulds for companies by raising wages. in other words he doesn't understand the private sector. so we need to make sure that we focus on solutions, not things that only exacerbate the situation. neil: senator, while i have you, we're learning of some spike in covid cases, certainly abroad, china, where they're trying to get this under control. they're off the worst levels. they're still, jumping, just not as high as they had been. in new york city they raised the covid risk level amid a surge in the new york metropolitan area with an increase in hospitalizations, possibly not deaths. only reason why i raise it with you, sir, this motion that maybe we're not out of the covid woods and this is partly weighing on

some of the selling and adding to the uncertainty, what do you think of that? >> well there is no doubt when you look at the supply chain coming from china it is going to have impact on the supply chain where people can't go to work because you're on a strong covid lockdown but covid will be, endemic within our community at this point, not an epidemic as i see it. so what we need to do is continue to make the adjustments we're seeing around the country. the good news at home in south carolina our unemployment rate is 3.4%. statewide we have 2.9 in greenville, columbia. charleston, maybe around those numbers. so the good news we're proving we can handle the covid challenges in a right to work environment. i recommend we export south carolina values and dignity of work throughout the rest of the country, especially places like new york and california. i think we have solutions to the problems that we're seeing around those blue states. neil: my teenage son agrees with

you, he goes to clemson. >> go tigers. neil: in summertime it is very hot and humid. you have to admit that. no way to legislate out of that. but, senator while i do have you -- >> you cannot. neil: going on what is going on the markets your name is bandied about quite a few folks as a possible presidential candidate, a possible running mate, but a lot of hopeful talk about you beyond the united states senate. when you hear that, how do you react to that? >> well you know it makes me chuckle. it also tells me god has a sense of humor. a guy who darn near failed civics in high school as a freshman. the truth we live in the most amazing place. what i will say, neil, simply this. america is the solution, not the problem. the more we invest in ourselves, the more we believe in ourselves, the better our future is. not a greater contrast today

with the left leadership and right leadership. we have amazing national leaders from the state level throughout this country to the united states senate on the right. so we have a lot of firepower coming to the table and we have the solutions. they don't. neil: that is a very diplomat. >> and modest answer. finally, senator, i do want to get your take on this idea republicans are well-poised to do well in these midterm elections, take over the house, possibly the senate but that there is growing pressure on the party to sit back and let it happen and not help or do anything to disrupt this. what do you say to republicans who say that's the strategy you should take? >> well, you know, i'm a former football player so i always think you should have the offense on the field as often as possible and our offense should contrast what we did in leadership from 2016 to 2020 while we were in lip. we created 7 million jobs, 2/3 going to women.

african-americans all-time low, hispanics all-time low. asians all-time low. we were comb passionate. focused on historically black colleges and universities we funded them to the highest possibility. we worked on rare blood diseases sickle sell anemia and others. we had a agenda focused on the american people. we need to go back to the future, 2016 to 2020. contrast to the future right now, foreshadowing bad news, with higher inflation, higher spending, higher taxes versus lower taxes and lower unemployment and good news we can get so much done. neil: i played football, had the cleanest uniform on the team because i never got in. i had discover more and more of these common things. senator, great seeing you again. sorry under these circumstances. senator tim scott, beautiful state of south carolina. it is getting hot and humid there. thank you again. by the way those taking peek

what is happening at corner of your screen, there is a 1000 plus selloff in the dow. the nasdaq is down 5%. that is its biggest fall in better part of two years right now. back to my friend luke lloyd following all of this. luke, it is interesting, when i see a breakdown what is happening to technology issues in general but talk about 5% hit in nasdaq, intuit down 9%, facebook of course meta down about 8%. i could go down with amazon, 7.25%. the nasdaq 100 down about 6%. is that overkill? >> no. this is not just a metric of interest rates and, all the stuff happening from the federal reserve. this is also a big metric of the strength of the american consumer because not only is inflation running ridiculously hot, the cost of borrowing is increasing not only for corporations and businesses but for individuals. so for the housing market,

things like that. which isn't great for near-term market growth. so what is happening a lot of companies came out with earnings report, they reduced guidance by a ton the next couple quarters and over the next year. again that is not good for short-term market growth. it sets the bar a little lower. honestly i would take a look at stocks being cautious right now with all the ridiculous, crazy things happening in the economy, than stocks overly optimistic. if you set a low bar, low expectations it is easy to hurdle over in times of turbulence. if companies set high lured dells. they will trip over the hurdles. rather let this happen. let pain funnel out now, get back to growth six months to a year down the road. neil: that is the whole capitulation argument, the to hell with it i'm out, that is the turning point. i don't know if we're at that. if you look at yesterday and today you could have a argument for not capitulating just yet. what i do note, luke, stocks

benefiting from something like this they're not benefiting and we're also seeing signs even the oil plays if you want to work on higher energy prices they're not benefiting. some of the big commodities players given run up we've seen in gold today, not substantial, but noteworthy, not benefiting. seems like sort of a rapid machine gunfire at everybody. what do you make of that? >> look, one of the biggest things i struggle with throughout my life is patience sometimes but i have learned throughout my career patience is a virtue. patience is so important in this kind of environment. you have to be sure you're being very patient. it will not only affect high growth tech names that will be impacted by interest rates. it is the whole entire stock market. i'm going to throw out the satellitely but one of the research items that i came across is the average s&p multiple from a pe standpoint, price to earnings standpoint, when inflation is above 8%, is

13 times earnings. we're still like, 21, 22 times earnings, right? i'm not saying we get down to 12 times earnings. there is still a lot of leeway to grow, but entire growth names but higher in the market. anytime in investing there is always opportunities out there. one of the areas i'm focused now is mexico. mexico i think will be one of the highest growing international countries over the next decade. because the supply chain completely is messed up over the past year. cheaper and quicker to ship foods from mexico to the u.s. from china. countries are learning you cannot invest in communism in china so they're moving to mexico. there are opportunity out there. you have to be active and look for them, even before the selloff, after yesterday's big gains we had a number of retailers and e-tailers more to the point kind of giving weak guide dance, some earnings or revenues might have beaten the street with the exception of shopify but for the most part, indicating that they don't see a lot of, you know, leeway going

forward. in fact they see the consumer retrenching a bit. that does not apply to a lot of hospitality companies and airlines which would i think the exception of jet blue have been, you know, telegraphing all good times but i'm wondering what you make of that, whether the consumer is indeed retrenching or what these guys are signaling that he or she will be? >> there is no doubt that the consumer is retrenching. not going to be able to keep up what they have been, right? i'm speaking at a conference in las vegas next week about the strength of the consumer. i think this we'll be sighing past couple years is completely unsustainable. i think you will see q3, q4 this start to reflected in earnings reports of companies. but it is not just the american consumer. it is also the consumer around the world. we do have a world economy, right? a lot of earnings in s&p 500 comes pros&p 500 companies. if you look at the past gdp report last week, if you dig into the numbers the biggest

negative came from america's trade deficit which is again a direct reflection of incompetence of politicians in washington pushing stimulus, and stimulus. essentially america has too much money, buying too much products from other companies while nobody is buying american-made companies. this is something a lot of companies are factoring into earnings, starting to get reflected, will see reflected again q3, q4. that is when i probably think capitulation will truly come about. neil: don't wander too far, luke. great having you to digest all this. great to have my friend and colleague charles payne here. charles is warning little bubbles we're building here, underpinnings, giving him some pause. he joins us now, host of "making money" after this show. charles, thanks for stepping by. what do you make of what is happening here? which was real, yesterday or today? >> it was interesting yesterday on the show i had two great guests. i had alicia levine and booth.

neil: right. >> we kind of talked about because i interrupted before i handed to liz, listen, i was expecting a big market rally based on a lot of things and we've seen this before but we also cautioned, what usually happens those two hours after the fomc, people go home. they ghetto sleeping. they think about it, it is not, this is not really, the depth of it maybe is surprise but the idea we went the exact opposite ray is normal, it is really normal. which is real? i think this is a little bit more real in the sense that jay powell blew it and ironically if he had done, if he had 75 still on the table, 75 basis points or even gone5 -- 75 basis points. we would have inverse and massive selloff yesterday and picking up the pieces today and again. neil: that is interesting. >> he came out the gate which is so intriguing, his opening statement was all for public consumption. i'm not talking about main

street, or wall street, it was for main street. neil: soft land something doable. >> we see inflation. we know it is hurting you. we see you, folks. we believe in you. we know it. we just don't learn inflation from the golf course. we know it is hurting you. neil: although -- [inaudible]. >> have you seen the fees, lately? it's crazy, mortimer! neil: i wonder about that, too, charles, i know you listen to every parcel and nuance, well he ruled out the 3/4 point hike, he didn't rule out a series of future half-point hikes. if you get to the same level are you still in the same pickle? >> that is gets us to the word of year 2021, word of 2022, replacing transitory. the word is expeditously. i will break it down on the show. my definition is more than one. he took singular version part of efficiency. if there is so many urgency then

act like it. don't tell us, show us. neil: that was "the wall street journal" editorial, talk a good game but do it. >> that gets me back -- neil: isn't that the fear you will overdo it? >> not here though. not here. neil: okay. >> i'm talking up my show. people have to watch it. i will show you chart of fed funds rate. show you where volcker was, near 20 fed funds rate, show you where powell is. going a quarter of a point to 3/4 of a point. he is a zillion miles away from volcker. neil: volcker you interpret raise rates at a time. volcker did a full point at a time. >> he had to. neil: does it warrant that now? >> it warrants the length, actions are not matching the rhetoric. i think that is what is happening. ironically i think in a way to really assuage wall street because i still think the fed want to, the fed had to pick, they still pick wall street over

main street. that maybe powell thought he had a win-win. again you start this thing out for public consumption. we feel your pain. we see it. he mentioned inflation seven or eight times in the first two or three sentences but then later on give the wall street wink-wink. we got your back. we'll not overdo it. i think he failed both sides on this. here's the thing, powell really wants this in his heart of hearts still to be somewhat transitory. he still believes that as prices go up businesses will invest less and people will spend less, that there will be a natural pullback on inflation. by the way he's right given but depends how long it takes, right? neil: right. >> how long, in his mind, i would like the conversation you and luke were having because we've seen savings rates come down dramatically. now, when the wall street experts get up there tell us $2 trillion in excess savings. people are looking, who has got it? i can't got it.

neil: right. >> maybe it is out there. back to mortimer he has excess savings. 40 to 50% of u.s. households don't have that. they went through the stimmie money. they have a few bucks there we go through powell's timetable, wait for people to use up all the savings and start to charge things that could be months that could take six months maybe really flush that out. i don't think the economy or stock market can deal with that. that is what the markets are reacting to today. neil: we have mortgage rates hit the highest level since august 2009, 5.27 for a 30-year fixed. you and i of course remember much higher rates but we also discussed it is what you get used to. there are a whole generation right now who find this to be the equivalent of what we remember in the '70s and '80s and they start saying oh, boy, i have to get off this

ride, or not even welcome on this ride because i can't afford it. what do you think? >> home affordability is a huge red flag. ironically, that is one of the things, fed wants to curb the housing boom, stock market boom to a degree and the wage boom. neil: but it doesn't want to wreck the real estate boom, right? that is usually the last piece to fall. >> they need all facets of wealth effect to go a little bit into retreat theoretically. the powell fed is trying something different. the mortgage you can get right now, the mortgage you can get is less than the price of average of first house and that nixes a whole lot of first-time buyers. it has gotten to the point, prices can't keep going the way they have gone. all this will have natural pullbacking. people would have preferred tough medicine now. get it out of the way. by the way if you get it out of the way now some of the excess

savings will be around to help rebound, to get the economy to rebound. the way powell wants to do it, we'll all run out of money. then we'll see eureka. neil: for young people, we keep going back to this, because they were just getting into this whole market, right? that is minimizing what they're doing of course, but it makes them twice shy. the ones who got in, parents went through with the meltdown. they're dabbling in themselves. i can imagine undabbling now. what do you tell them, especially newbie, those looking at this, in a sense is this the time to get in, charles? what do you tell them? >> i'm working on my latest book now. i'm a little bit behind. i think the first line -- neil: if you did a little more work. >> tell me about it. i think first line nobody ever said it was going to be fair. that will be the first line in the book. even before this pullback a lot of the newbies were becoming disenchanted with the whole system a system where it feels

like everything leans against them and the toward the folks with all the money already. they're absolutely right. neil: this will confirm all that again. >> this confirms that but the one thing people do know though, despite the unfair advantages, debate all of the challenges against them, you know, a platform that stops you from trading when you need to trade, those kind of things, they still understand that the stock market is the greatest wealth machine in history. neil: but if they're really burnt by this usually takes a while for that crowd to come back, doesn't it. >> the key is hopefully they won't leave. so that's the key. you know, you must have the guests, almost every single day we have wall street guests who want to see one more capitulation. neil: right. >> the pros want to see the group of people we're talking about get hammered. neil: what is the cap pitlation moment? what is the moment you're looking for? >> i think it has been going on for a year. we've had rolling capitulations

in different parts of the market. now is it is the entire market. i don't think one point we look back in history say x, y, z was point of capitulation. i hope the investors come into the market more recently, stay with the reasons they observed on themselves. you know what? it is the greatest money-making machine in history. more than one way to skin a cat. stocks they told my mom and dad to buy, can't miss, ibm, general electric, at&t, those stocks, they have done nothing, gone down 25 years straight down. neil: amazon, apples, alphabets, going to be latest generation of that? >> i think they have another major run. i think the fourth industrial revolution -- here is what usually happens. when you get something behind like the metaverse, a.i., things things are becoming true but you always get a hype phase where the stocks explode. then you get a phase where reality doesn't meet the hype. usually they will go down. sometimes that can happen for years but then reality begins to

show itself. then all the reasons we bought the stock the first place show itself. the best case study for that is nvidia. nvidia was fuse years ago stock of the year from "forbes," went from $12 to a dollar. stayed there five years. then lived up to the hype went up 36,000%. i want people watching this show, young investors to make sure they're in the next nvidias of the world. neil: down 12%. >> not a lot from the house. neil: i understand. >> i want people to be in the market when those names make this move, when reality starts to meet the hype. we had the hype move. that faded a way i but reality move is coming. neil: you've been very patient. you have to get ready for your show, fed funds, that is the one that the fed is targeting. say there are a series of half-point hikes, et cetera. where are we at the end of the year on this? >> if you do the math we go from 9 trillion-dollar balance sheet

to $8.4 trillion balance sheet. [laughter]. neil: just that. just that. >> it is almost nonsensical. it is embarassment. neil: almost five%. >> bill never get there. we've crossed the rube con on that. neil: i love it, running around on the show running to screens. my staff, you can go to monitor. no, i'm just quite comfortable here. >> you move your tablet around a lot. [laughter] neil: absolutely, absolutely. say thank you, charles. thank you, charles. good seeing you. >> thank you, neil. neil: he is the best. he really cares about passionately involved in this stuff. meantime don't forget 2:00 p.m. eastern time. he puts it all together for you and he has the onus of "making money." that is the title of the show. i sit here. you might make money with neil cavuto. gives bringing gell room for the lawyers. i want to go to kelly o'grady

right now. the other drama is elon musk, the bid for twitter. tesla stock is dropping here. best i can figure, kelly, a lot has to do the with notion he raised he would be running twitter for a little while, maybe a few months. some might have interpreted that, beneficial for twitter as it gets closer to his offering price, maybe not so much for tesla if he takes his eye off the ball. meantime he is lining up financiers and those willing to help him so where does this stand? reporter: yeah. so i think that's a really good point about the ceo piece. there is reports that once he takes over, once the deal closes he will be the temporary ceo for a few months and i think what you see going on with the twitter stock right there, people are excited about that. the fact he has been able to raise i think 7.14 billion in equity i announced today in an sec filing, you're seeing that there's a lot of credibility and people are excited about this, that he will be able to to focus

on moon at -- monetizaton as wel as larger town square of vision you hit on about. i want to mention what you said about tesla stock. that is down 7 1/2%. i think there is a lot of trepidation we saw going back to the beginning of his takeover run back at the beginning of april. he had just come off of this windfall earnings for tesla. the stock was incredibly high. it has lost over 25% since then there. is probably this trepidation that, hey, he is going to be running twitter, dealing with not only monetizing the product, making the product better, but dealing with all the other political fallout we're seeing from this. he might take his eye off the ball. neil: meanwhile he has got some help on the financing front. he got a number of big players, larry ellison among them from oracle fame. i'm always surprised that the world's richest guy got help financially on a deal he doesn't

need help but he welcomes the help but he could be the shrewdest cat in the barn, no? reporter: actually, if we bring up the list of investors i think it is really interesting to think about, because if he, go back to the deal was, right? 21 billion in cash and 25 1/2 billion in financing, in debt financing, he is able to take 12 1/2 billion of that 25 1/2 that he had financed and slash it in half that was pegged against his tesla shares. so that's great. this financing, this equity financing he has gotten from the list here really helps with that. i want to dig into a couple of these folks, right? larry ellison the cofounder of oracle gave a billion dollars. known to be great friends. he made a pretty penny on the tesla stock. the other one binance. that is interesting one. it's a crypto exchange, there is a lot of talk maybe crypto is used as payment on the platform. maybe there will be

authentication using a digital wallet in order to get rid of all those spam bottoms. finally i think the other interesting piece he has been able to convince some investors like the saudi prince bin alwaleed to roll their shares into this new private company and actually the saudi prince originally had tweeted, oh, this takeover bid really undervalues the company. now he is changing his tune. he is going to take that 4.6% share which is worth roughly 1.9 billion. we have the tweet. great to connect with my new friend elon musk and focus on maximizing that great potential. so you're seeing, he doesn't, he is the richest guy in the world, right? he probably wouldn't need help if he were selling all of his assets off but this allows him to build credibility and not have to sell off all of his tesla stock. neil: yeah. i read a statistic somewhere from the restaurant association that rich guys are always comped

at restaurants. they're the last people who need their meal tab picked up but invariably get it picked up. i want to get in on that gig. kelly thank you very much. kelly o'grady, following developments. let's go to dan geltrude, geltrude and company founder. dan, i'm looking for pockets where money might be going. gold a little bit. it is certainly not bitcoin. it is certainly not any of these other plays. even dividend paying those stocks that are more pegged to being something that consumers need like kellogg comes to mind, that stock was climbing when it raised its sales growth forecast but that reminds you that the consumer might, might hold back on auto purchases, the rest, but when it comes to cereal, basic staples, they're not there yet. is there a dividing line on the part of average folks what they will pay for, versus what they won't. >> yeah. i think there is, neil.

when we're talking about inflation that is really now biting at the american people in terms of starting to make decisions of, i'm going to pay for because i need it. i may want this but every to hold back because i really need to be able to pay for the necessities. it is an unfortunate situation that we've arrived here. i said many times, we are in this situation, neil, not because of interest rates. it is due to the fact that we have not had good economic policies. the fed was late out of the gate. we already know that. but it was the administration who really didn't recognize what was happening. inflation subpoena not going to to -- is not going to be transitory. we have too much demand, not as much supply. the administration kept going after the demand side. pump more money in.

pump more money in. that is where we arrived at now. neil: if you can stay there, my friend, i want to bring in the the ceo of hivee supermarkets. they have been benefiting in this market, people looking for value. randy wonderful to have you. we were talking about kellogg out with numbers obviously much better than thought, we're seeing this play out with some basic food staples, that consumers, they got to eat. they can pick and choose what they're going to eat but they're still opting to eat which is a good sign but what are you seeing from your front? >> yeah. i mean, nationally, retail sales were up 2%. we've run ahead of that. we run up over 6 1/2% over this last quarter. there is definitely always a need for our customers to be looking for value. i think that is being intensified with food inflation up over 8.8%, fuel prices up

37%. in the state of iowa wic benefits were cut by almost 40%, $29 million. you will see the need grow. you will see people starting to shift for value need. that is the current shift. i don't think it is about the current quarter we're in from our perspective. in is the quarter queer going into. i think consumer will be in great need over next six months. food, right now we're working through supply chain issues, trying to rebound from covid and that's been very, very damaging to the supply chain but cpg companies, retailers have done a good job rebounding from covid and supply chain challenges but i think you will see some challenging days ahead. neil: you talk about the supply chain issues. they're not going away to your point. given the fact that china cannot get out of its own way regarding the covid cases, they improve a

little bit in shanghai. they pop up in beijing. like "whack-a-mole," regardless where it is popping up, it is keeping a supply chain problem to be a big problem. i'm just wondering, for guys like you it's a matter of getting product to shelves, how do you deal with that? how do your customers deal with that? >> well it is a constant, everyday battle. youing would with your -- work with your suppliers. trying to get stock to our stores. it is not just major label. it is also private brandish shoes. so many items as you look back into the supply chain. it is getting glue to seal crates. getting plastic bottles. getting liz for bottles. i talked to a ceo every day, every morning they get init is a different issue. today it is glue to seal crates we'll ship out the boxes.

that is part of the supply chain issues. it is not just the raw ingredients. it is packaging and processing it takes to get those ingredients to us are still a challenge to this day. neil: you know before i let you go, i appreciate randy in middle of all this breaking news juggling with us, being responsive to it, we're learning from burger king, tilly's restaurants they're feeling inflation bite. not surprising. costco benefiting from this inflation bite as people seek out cheaper alternatives and all of that. that i get but nevertheless burger king parent is saying our customers are intensely loyal. so i don't know whether that means they will still pay a lot more for a whopper or a double whopper but there is a limit to that. we're, there are obviously hinting there is not a limit for the time-being. where are you on this? i mean there is a point which people say no mas. i don't think they do anything

crazy, go vegetarian, i hope not, but what do you make of that? >> i think the number lies in food away from home versus food at home. the food at home number is up over the previous years. it has been increasing so maybe people are cooking more at home. that is a good sign for us, a good trend for hy-vee and retailers like this. food away from home is declining a bit. i think that is what burger king is seeing. the economy today tends to be strong. you see employees getting paid more. the average hourly rate now is $17.72. you think about that being a food store, well over the 15-dollar target we talked about quite a bit. people have income, still buying but people are starting to shift. i think you're seeing a shift coming over the next three months, next three months, i think will have lasting impact on our industries and all retail. neil: you know i always said you

stop paying higher prices, my ceiling on ring dings, randy, is $50. they get to be $50 i'm going to quit. we're not there yet but we'll have to see. randy thank you very much. >> thank you very much. neil: randy eedeker, high v. ceo. dan geltrude, i'm talking to all the smart guys, where is money going, maybe today, certainly gold or oil. we'll explore that with jackie deangelis in just a second. i don't know whether this is like capitulation where there is no place to go, no place to hide. so could i ask you your definition of capitulation? >> well you know, neil, i think capitulation for most people right now is to actually do nothing. to just sit back say, there is

so much turmoil right now going on in that balance between fear and greed in the market, that is what i see playing out right now, between yesterday and today. so capitulation to me is do nothing and wait and see how this all plays out. neil: so when i'm looking at bitcoin, a lot of other crypto plays are all getting hammered after bitcoin had a good day yesterday, that haven doesn't appear to be much of one. i get different vibes out of california where they're welcoming such investments but also policing those investments, so double-edged sword. what do you make of that? >> well, yeah, you know, neil, i think there is a lot of people out there that would play the market wrong and basically run out right now. whether they're going to run to gold. they're not running to bitcoin. or they're going to try to move to safety in some way, perhaps even going to bonds, even though i think being 3% over 10 years is not the place to go,

particularly. the way inflation is going, neil. but that is what i see happening right now. i just think that right now there is fear. neil: what about 6% then? that speeds h feeds the argument, explains why stocks are, getting competition for such investments, what do you think? >> well it could be but you know something, the fed doesn't seem to be as hawkish as they were first putting it out there, right. neil: yeah. >> the fact we'll be at 350 basis points, 75 not so much, to me, neil, they're getting quite dovish. i don't believe they have handled this properly from the beginning, but yes if we're going to get to interest rates five, 6%, we're in that category, yeah i think there will be a lot of movement and the market really will feel it. neil: finally very quickly, real estate, that is not part of

this, 30-year fixed rate mortgages 5.25%, that is the highest level since 2009. we remember what was going on back then. are we heading back to that? >> what is happening to real estate is really interesting right now because as interest rates are going up, you would expect that prices would start coming down but supply is so thin we really have a perfect storm going the wrong way for homebuyers in terms of high prices, high interest rates. so i don't know if we're quite ready to go back to what your mortgage rate back in the day. interest rates will continue go up for a while,s that for sure. neil: you throw up your arms, cannabis stocks are getting hammered, people who want to get high don't have a retreat or maybe they do because it's cheaper. >> i never been a fan of cannabis stocks, neil. i said from the beginning, i was

just talking about this yesterday, i don't see a way war cannabis companies are truly ever going to be profitable. i think people got caught up in the high of something new but i actually don't think that is a good investment. neil: i see what you did there, caught up in the high of something -- gnarly, dude. thank you very much, my friend. that is an accountant who gets it, very hip, very hip. also very hip is chad pergram in washington. pressure grows in washington on pressure more often than good days, what are you going to do, washington? democrats and republicans have very different ideas. what's the latest, chad? reporter: we're waiting to hear what they're going to do about inflation. mitch mcconnell, the senate minority leader, he really blasted democrats today on inflation, done that consistently. something mark kelly, the democratic senator from arizona indicated today, that he didn't think the administration had done enough on inflation and this is going to be a key issue in the midterms here.

when you look at polling, talk about the border, they talk about gas prices, they talk about inflation and abortion which is the new issue on the scene, one of the most electric issues in political discourse, but based on the leak came out earlier this week, democrats will try could contour their midterm strategy to get the base out on abortion, whether or not that overwhelms the concerns about inflation or gas prices or something like that remains to be seen. >> i want to tell you, gorsuch, i want to tell you kavanaugh, you have released a whirlwind and you will pay the price. [cheering] you won't know what hit you if you go forward with these awful decisions. reporter: that is an interesting piece of tape from 20720. what happened there, this is something that minority leader mcconnell has criticized schumer and democrats, that was from chuck schumer in 2020

calling out those two supreme court justices by name. now today the supreme court looks a lot like the u.s. capitol did in the months following the riot. fencing went up last night around the high court. fox was told the fence will be there for the foreseeable future. there is worried about the security of the court itself around those who serve on the court. republicans focused most of their outrage this week on the leak. this is why mcconnell was blasting schumer based on those comments about those two justices 20 years ago in particular, neil gorsuch and brett kavanaugh, neil. neil: thank you, my friend. pressing what is happening at corner of wall and broad. the dow jones industrials down 1100 points. jackie deangelis is following this closely. all 11 s&p 500 sectors are getting hit hard. even the oil industry of course, benefiting from higher energy prices in general. what do you see happening? >> we had the conversation before. the market dropped a thousand points. we were up 932 yesterday.

you don't panic. take a deep breath. this is almost like a octopus, the economic problem we have with a lot of different tentacles. we're dealing with inflation. we're dealing what is happening over in europe right now. we're dealing with lockdowns in china. dealing with prospects we may have recessions. recessions are not created equal, right? two consecutive gdp prints negative are respects. but what exactly does that mean. then there is the oil price aspect of it you want to discuss today. that is one larger tentacle on the larger problem. you could say oil prices are driving inflation because of gas prices, prices at pump. they're going pack up. we're going to the summer driving season. they will continue to rise. aaa average for gallon of regular $4.25. oil prices trading higher, up to 110. down a little bit. why is this happening? we have a supply demand imbalance.

demand continues to move up. we don't have as much supply. opec plus overnight essentially said we'll boost our production a little bit, just a little bit less than 500,000 barrels a day but not a ton to make up for the shortfall. neil: they couldn't be less help to us if they tried. >> of course they don't want to help, neil. these prices are great. neil: do they ever look back in history when opec dot really greedy in the '70s it boomeranged on them. whole world went into recession and their business went -- >> it's a good point. a good point. it could happen again. they're looking what is happening in russia right now. it is not our problem to fix what is happening over there it is not our fault the eu will say over course of next six months a year, ban crude oil imports from russia. they're looking at the united states, president biden's policies here saying it is not our problem, biden you're cracking down on your own oil companies of the they know demand will hold up to a certain extent, right? neil: right. >> they're profiting from it. this is one part of the problem. what i'm worried about a little bit going into the summer

driving season, the u.s. consumer right now still clamoring to get out there, still flying on airplanes, still wanting to drive the car. i think prices at the pump go higher. this persist ten inflation problem will end up vainly plaguing the consumer and eventually plaguing corporations which brings us to the other 10 10 tentacle on the okay poe tis, the fed not raising rates enough to tame inflation problem. that is a good thing. that is a pacifier. you gave it to us. they're saying if this will hurt the consumer, if this hurts corporations persistent inflation then we've got another problem to worry about. neil: well-put, jackie, thank you very much. i want to go back to luke lloyd, strategic wealth partners investment strategies. look, it all comes down to jackie's point to oil prices inflation goes, whether you think inflation has topped out, hang around these levels,

stubbornly stick around or get a lot worse or to the earlier point it starts dropping. markets today indicate no, we don't see it dropping, if anything the fed's response wasn't and isn't aggressive enough, opposite mirror from what we saw the market taking from yesterday's action. where are you on this and whether we're over the worse of the inflation thing, even if we hover around here that would be damaging news to investors but how do you see it? >> well that is the key. how long are we going to whoever around, 5% plus inflation. it is not necessarily whether we peaked or not i think we're close to peaking when we saw inflation. might see upwards 10% as demand stays relatively strong. neil: whoa. oning at eight 8% clip you see it up more before it goes down? >> couple more months high

inflation reading but we're near the peak ever inflation. federal reserve hiking interest rates which will naturally kill demand. people are running out of firepower, the question you need to ask yourself, are people traveling as much? are businesses needing to produce as much. the thing about oil, it goes into plastics, asphalt, all kinds of different products out there, right? so if there's lower demand overall in the economy which is naturally going to come down a little bit, i think the price of oil is going to come down as well. that's one factor that people don't talk about, the oil run has already had its run are up. how much is demand going to fall, and i think it's naturally going to fall because consumers just don't have money. neil: dan geltrude, my friend, a lot of people are doing the '70s comparison. i get that, i'm okay with that until we start applying it to

leisure suits, then i say that's it, stop. barring that, dan, one of the things i worry about is whether we appreciate some of the differences too. we're starting from a much stronger economic level than, you know, that particular period saw. does that give you any saving grace there? >> well, i think we're in a better position, neil, than we were back in the '70s. i don't think there's any doubt about that. however, people aren't thinking about the '70s, they're thinking about right now and what it means. and the thing that i really get concerned about related to our economy,we're going to continue to have the feds raising rates as luke was talking about and that starts to take down demand, what about all hose businesses out there -- those businesses out there, neil, that really depend upon debt in order to keep their business going or to be able to grow their business? if their inability to borrow at

a reasonable rate is really going to be problematic for a lot of small businesses out there. and i think that's going to cause a lot of hurt across the board economically. neil: all right. thank you, my friend, very much. dan geltrude following those developments. as we move into 1 p.m. on the eastern coast of the united states, i'm neil cavuto, and this is fox be business network. we are following a broad selloff that is the mirror opposite than the, i guess we called it not so panicked buying yesterday, now like panicked selling amidst a reassessment of what the federal reserve really meant to imply and what jeff jerome -- jerome powell was talking about. back hen there was relief that there was no prospect of a three-quarter point hike in interest rates, at least in the fed funds rate, slated for the next fed meeting. what maybe some forgot is that the fed chairman also outlined the possibility of a series of half-point hikes. where we close out the year is

anyone's guess. the feeling yesterday was that the fed was on top of this, aggressive about this and bought on this. today this ea assessment now has many people saying, welsh maybe we got ahead of user ourselves, and and maybe he should have gone the three-quarter point thing. you can't win. does kind of remind me of my hate, great mother-in-law where nothing you do is necessarily quite what people expect or want. so we're following that. this the broad-based selloff here with the dow down about a thousand points. let's go to lauren simonetti on how far and widespread this is and what particular issues are getting hit, because last time i took a look at it, lauren, all the major sectors were down. and even places where you'd sort of find a safe haven, no such haven. lauren: and you know what's even scarier, neil? everything's down, it's a very broad-based rally, a knee-jerk reaction from the relief rally that we saw yesterday, and i

haven't heard anybody say this is it, this is capitulation are. so the market, it doesn't seem, found a bottom yet. so more selling is to come. it's kind of scary when you think about it, but yet, you know, we look at the vix is index, it's up. i make the argument there's not much fear in the -- i see more fear than we have now in the market. i don't know if you would agree with me on that, neil -- neil: definitely a lot of that. and i always wonder, i mean, this is the capitulation, lauren, then what was yesterday? if you combine 'em together, you could say, well -- lauren: a wash. neil: yeah, a wash. it's hard to figure out. when amazon is down 10%, nvidia, you know, all of a sudden 14%, is that overkill? lauren: well, you know, a lot of companies that prioritize growth at all costs are now prioritizing cutting costs because of the inflationary environment that we're in. that has been a theme that's emerged. every company that i know has raised prices, and every

consumer that i know has accepted those price increases for the most part. i was looking at cmn polling in this morning -- cnn polling, and it showed that customers are starting to pull back on two things in particular. two-thirds say they're buying less groceries, half say they're not driving as much anymore. so the consumer's going to start to change. add in higher interest rates because now the fed fund futures are pricing in that 75-point basis is hike. what happened? the translation of what jay powell told us yesterday has completely shifted overnight which means the market is saying that we need to hike rates more to narrow the spread, which is at an all-time high, between the fed funds rate and the cpi, consumer inflation. what you're paying when you go to the store, which is at 8.5%. they have to narrow that. and it might be more hikes than we anticipated to do so. and the consumer keep up with the pain that that might cause them. neil: one pocket, lauren, you

could think of that so far most americans are planning to go on vacations this summer -- lauren: yep. neil: -- and they're happy spending the money to do so. we have all the major airlines, maybe with the exception of jetblue, telegraphing a strong bookings season. i don't know if that's changed. i doubt it based on a couple of days of trading, but that's one thing they're going to splurge on. is that a last bastion of partying sign or what? lauren: i think it's you have that bug in your system, and you might have saved money because you haven't been able to do anything -- neil: right, right. lauren: -- and now you can. i don't know if we can pull up two stocks, airbnb, great report card. we spoke about it yesterday. last i checked, the stock is getting killed today. look, their average mightily rate is up 37% from -- nightly rate. they're popular, i get it. that's a big increase. another stock would be booking.

they should still be in the green, and to your point, they see a solid april, they see european, cross-border demand coming back. so maybe we'll get through the summer travel season, and that is the pocket of the economy that can stand up to all of this. neil: yeah, we shall see. thank you very much, lauren simonetti. in just a second we're going to be talking to my friend, steve forbes, who's taking a look at the federal reserve and whether it is doing more harm than helping here. he's coming up in a second. first to gerri willis right now. mortgage rates right now are at the highest they have been in a few years. you'd have to go back, i think, to august 2009. of course, we remember kind of what was going on around that time, a big old meltdown that had already taken up considerable steam. but what are you noticing on this front? because the fact of the matter is housing has been on fire. and even slowing down by almost any other historical period, still on fire. >> reporter: still on fire,

but i have to tell you this has been the bright spot of the economy, neil, right? so you want with it to continue. and as you know, the knock-on effects of a strong housing market, it fires up retail, it fires up every manner of purchase for those homes, so it's critically important. 5.27%, that's what freddie mac said was the weekly. last week was 5.10%. and let me tell you, january 6th, that week the mortgage rate was 3.22%. we are well in advance of that now, and what does that mean for the marketplace? well, i have to tell you, people out there now will not be able to afford the home they were hoping to buy. and being out in the marketplace out on the street talking to real estate agents, talking to people who are buying homes, we've heard about deals that have already fallen through because of rising rates. you have to believe that people are either resetting their expect aations, or we're hearing

about some who are getting out of the market altogether and, of course, for sellers just a pause in the market like this is not good news either. now, i've got to tell you, sam zell was on "mornings with maria" this morning. she asked him about the marketplace. i want you to hear what he had to say. >> basis points, even 200 basis points over the next year is not likely to put us into a recession, it's just probably right to bring us back to where we should be. whether that's enough to slow the inflation if rate, i think, is a whole different question. >> reporter: so that's sam zell. he is a famous real estate investor known for calling turns in the market. i've also been talking with some experts on interest rates, and they say that, look, unless inflation actually makes a definitive turn south, lower, and we see something that's not on the order of 40-year highs, then you can expect mortgage

rates to continue to go up. because here's the reality of how it works: mortgage rates almost lead the fed. what happens is bankers out there, they say we believe mortgage rates are going to go up, so we're going to go ahead and raise ours. they tend to run ahead of what the federal reserve is doing. so the fact that we have baked in probably at least one more, two more 50 basis point rate hikes means, you know, look, these mortgage rates are only going to continue to go up. one ray of sunshine here, neil, i want to share with you is that we're going to have more inventory the coming on if line over the next 18 months, an excess of 1 million homes, and that could help people out there who are shopping. neil? neil: yeah. that is what you hang on to. thank you very, very much, gerri willis. want to go to steve forbes, "forbes" media chairman, editor-in-chief, very good read of the the markets, finals. a lot of people losing a lot of money because this, is in the

fed's fault? >> it partially is the fed's fault because they're showing they don't know how to fight inflation. they think you slow the economy down. when they use the word soft landing, that's fed speak we hope to slow the economy but not push it into a recession. hay don't realize the best way to fight inflation, keep it relatively stable value of the dollar, let the economy sort the thing out. but when you're manipulating interest rates, that's price controls, and the market realizes what's happening. yes, up 50 basis points instead of 75, well, look at the 10-year. people are realizing all of that is moving up. amazingly, everyone looks at the 10-year, look at the 2-year, now the -- 2.5-3%, as trump would say, that's huge. neil: yeah. and if you looked at, you know, 2, 5, 7, 20, 30, up, up, up we go. so there's really very few

places to hide here. and the normal argument is when you raise rates, you will slow things down. but it's too early to tell whether that will be the case here. but you think the fed has it backwards. what should it be doing? >> what it should be doing instead of trying to manipulate the activity of the economy and this idea that if we have a lot of people doing things, that's bad for inflation because prices go up, it's nonsense. history shows it's nonsense. focus, they should say we're focusing on a stable value of the dollar. we're looking at commodity prices, gold price like for a few years in the late '80 and 1990s, what they called the great moderation. that's what you're going to focus on, stability. let the economy sort it out. a big chunk of this inflation is what we call in this book we wrote is nonmonetary inflation. when you disrupt supply chains, china shuts things down, you have a war in ukraine, that can't control that. but it can control the value of

the dollar. so leave it alone, and they should -- they won't do it, but they should stop manipulating interest rates. let the market set it. neil: well, the market has already been proven proving that the dollar is the currency, the fallback of choice. to you see that continuing? could that address this? >> well, the dollar's gone up because people are fearful, not because they have faith that the fed knows what it's doing -- neil: all the wrong reasons. >> all the wrong reasons. and again -- neil: so this runup would be short-lived, according to you. >> yes. remember, the last year -- everyone's pointed it out -- even though we're recovering from the covid crisis, the fed continues to print $120 billion a month. and what it's done short term is what they tried to do, in effect they're pouring a bucket of water in one end of the pool and took another bucket out of the other end of the pool. they borrowed that money back overnight. there's no overnight short money borrowing in early 2000, reverse

repurchase agreementings. today, 1.8 trillion, going on $2 trillion of money they printed, now they're trying to make sure it doesn't flood the economy. that's gross mismanagement. neil: by that definition, it could be global mismanagement, raise rates for the fourth time, i think december, 13-year highs. i was mentioning, you know, you are key, we're running -- turkey running at a high rate, argentina, 60%. the average mort of 10%, 8% plus in our country, how bad does this get? >> you see, they did the same thing in the 1970s, swiss did well, germans did relatively well -- neil: start throwing on wage -- >> and administration may still deal with emergency before the election coming up, pharmaceuticals and stuff like that, which would just make the situation worse. and, again, participant of this is supply chain disruption. part of that you can't control.

but in this country instead of figuring out how do we remove these artificial bare barriers -- barriers to production, they're piling it on. a few weeks ago hay put on new rules or reimposed rules hard going to delay infrastructure projects, what you have to go through to get something approved. we all mow what they're doing on the energy front. they're making the situation worse, not better. leave the economy alone. fed should focus on the stable value of the dollars they've done in the past, and this thing will work itself out. i think the markets will respond if they felt these people know what they're doing. part of the problem now, do these people know what they're doing? do the doctors know how to treat the patients? neil: a lot of people, the herbert bert hoover solution, we've got to do something, you know? what do we think of that? >> well, herbert hoover, as a lot of historians discovered, did the exact opposite. he boosted spending, substantially -- amazingly --

substantially increased taxes, destroyed the global trading system with a massive trade war. to he went in the opposite direction. if he'd left the economy alone, people forget today going back in time, in 1920-21, we had a depression worse than the first year, year and a half of what we call the great depression. what did the government do? cut taxes, cut spending, cut regulations. within a year the economy was recovering, within 18 months we had full employment again. neil: what happens then, obviously, a midterm election year. i got a sense republicans are just going to watch this play out. they're in the minority, they can't do anything if they wanted to. the democrats are going to rally around some sort of infrastructure, more spending which at least got this sparked to begin with. other things, i get that. but i'm just wondering if you do nothing, what happens? >> doing nothing would be better than doing bad things. if you with want to do positive

things, which in the administration won't do and which reagan did in the early 1980s when they were trying to kill that terrible inflation, was you reduce taxes, you reduce regulations, you have a little bit of spending restraint -- neil: paul volcker raising rates a point at a time. do we need a come combination like that? >> no, because we'd had 12 years where they'd fight the inflation, bring it down, let it come back stronger than before. that's why the fed should focus on the dollar so we don't get to where you have to a raise it to 20%. you don't have to do that. you don't have to artificially depress the economy. and, again, it's not something new for the fed. i keep saying do what you did during the great moderation, and with biden, back off on your far left, you'll be seen as a great president who the economy revived instead of putting all these barriers in the way. it's absolute malpractice. neil you know what i think is also different? you're a great student of

history and economic history especially, the attention we pay to the markets, i don't know if that's a good or bad thing. because they can change. today's a good example of that -- [laughter] 180 degrees from where we were yesterday. i don't remember paul volcker or, for that matter, ronald reagan focusing so much on the initial market reaction. maybe when the recovery started taking hold it was '82 and liftoff from there, but maybe it's owing to 24-hour news and business channels? that is always topical. i feel that so many are basing what they do and even fed policy on what the market is doing at the moment. >> well, and in terms of the market, we know the market tries to anticipate the future. the problem is when the people who are setting the environment many which the economy has to operate which ultimately affects the market, going in different directions, clearly not knowing what heir doing, market's going to be going all over the place. in the early '80s there was so

little trust in the federal reserve. there was zero trust. [laughter] neil: not everyone is lincoln in the moment, right? >> yeah. but in that case there was zero trust. people didn't know if reagan was going to be able to pull it off, so the market reflected that. dow jones got down to 800 and something in august of of 1982. volcker reversed the tight money, and by golly, the market roared ahead. and the economy -- i remember in '83 we'll only have 1-2 president growth, we grew at 8%. so leave it alone are, let it heal. save these people from themselves, if they'd let them. neil: back in the early '80s about i think it was a little over 8ing 3% of the public -- 83% of the public was paying some form of federal taxes. >> yes. neil: today it's under 50%.

i don't negate or dismiss those who pay back in related a taxes, i get that. but that fewer are paying in for a government that's getting bigger and bigger. and i'm just wondering how that plays into this going forward. it's a shrinking pool of tax taxpayers. >> well, you hit on the thing that saves us from that, is the fica, even though we know -- neil: right. >> social security and all that good stuff, people know they're paying tax on day one. and a lot of states are raising taxes. sales taxes have been inching up. all sorts of fees have been inching up. they may not pay formally income tax -- neil: so the rick scott approach for republicans, get everybody to pay something and increase that base, you think it's counterproductive. >> you tell people i don't think you're paying enough taxes. [laughter] neil: the revolution. >> i didn't succeed in politics, but i know you don't do that.

[laughter] neil: well, i think you did. actually, it was the start of a couple revolutions, young man. i want to go to dan geltrude on a couple of quick things actually akin to what steve was just saying, dan, this idea that, you know, washington is going to -- we gotta fix something, do something in response, and sometimes to steve's fine point, sometimes the better part of valor is to do nothing at all. i don't know if washington is going to take that cue. sometimes you get the bigger government advocates, fdr comes to mind, where we're going to go full throttle. and i'm just wondering what you think of of that approach, whether that could be next. >> i think one of the things that government can do -- not that i disagree with a lot of what steve is saying. i think he's on point. but how about we start moving towards energy independence and start having some deregulation related to the oil industry? if i think that's one of the

things that's really fueling this inflation relates to how much oil is costing us. again, because we've decided to push that responsibility to our enemies. if the biden administration would say, listen, with we need to bring down inflation and we're going to do it by starting to take down regulation and allow our american companies to -- neil: i get what you're saying, but wouldn't we still -- maybe not as much, to your point -- but wouldn't we still be in this pickle given the global environment, supply chain disruptions, what's going on ukraine? believe me, i'm not in that camp, but there's only so much that could mitigate? >> yeah. that's not the complete answer, neil. look, there's so many things that have gone into this. look, china's a problem because they're lock proking down. neil: right, right. >> obviously, the war in ukraine, big problem. however, there are things that can be done. look, when washington started to

go down the road of saying we need minimum wage rates to be increased dramatically, well, lo and behold the market just naturally moved wages as it needed to. so that was something that the government could have moved away from instead of trying to force the issue of getting wages to go higher. why? by going in competition with small businesses by paying people to stay home during the pandemic. neil: thank you, my friend, dan geltrude. i still have steve forbes here. steve, i didn't want to chase you away. i did want to get, real quickly, this notion that they're going to want to do something in washington. and i understand what you're saying, go slow or don't go at all, but you know that the native impulse on both sides. i'm just wondering, let's say they do and they start pushing fixes or they start policing

with profit taxes on the oil guys and everyone else, they start coming after the food guys all bets are off. but what do to you see happening? >> well, to the point the guest was making, yes, that kind of deregulation, even jimmy carter got deregulation on the transportation industry back then. neil: yeah, you're right. >> but in terms of today the, governments always end up making things worse. just go back to the 1970s. you mentioned the wage and price controls, the price controlses on oil -- neil: exxon. >> yeah, republican. made gas lines and the like. and so you have these artificial shortages. yeah, you want to see that movie? just turn -- go online and say 1970s. how well did that work out? neil: i just think of the leisure suits, just an awful period. [laughter] don't wander too far, steve, if i can indulge you. i do want to go to grady trimble because there's a separate issue here regarding the deficits. the president was bragging yesterday about bringing them down.

we could posit that, grady, that the level from which we're coming was during the midst of covid when, offing, we were throwing -- of course, we were throwing everything but the kitchen sink at this and dealing with it. be that as it may, that is what he's clinging to and that this environment is what's going to dig into inflation. it seems like a kind of a inconsistent argument, but what are you hearing in. >> reporter: right. and a lot of people, neil, including here on capitol hill among the republicans at least saw it as an unusual time to take a sort of economic victory lap which is what a lot of the speech sounded like yesterday. but he did tout the reduction of the deficit. it's dropped $35 0 billion in his first year in office. it's expected to drop another $1.5 trillion this year, but that needs context. he took responsibility for that, but if you look at the charts of the deficit, to your point, a lot of the reason it's at near record levels right now is because of all of the

pandemic-related programs to sort of prop up the economy and prop up the american people during a time of uncertainty. and then you saw that those programs are now ending, so naturally the deficit is going to fall dramatically and that's what we're seeing right now. so that's the important context. it's also important to talk about what's going to happen in the future. the projection from the office of management and budget is that even after it falls this coming year, it's going to climb over the next ten years or at least trend upwards over the next ten years. and the committee for a responsible federal budget also points out there are a lot of policy proposals on capitol hill right now and at the white house that could increase the deficit. they named things like the china competition bill, the restaurant relief bill. that is not fully funded. and then you've got this conversation over student loan are debt forgiveness which, of course, would add to the deficit as well. so, you know, that's kind of the backdrop to all of this.

but it is interesting, as you mentioned, neil, that the president is clinging to this idea that the deficit fell when really that's not a dining room, dinner conversation right now. everybody is talking about inflation. our polls anticipated, that that fox news poll found about 9 in 10 americans are worried about inflation. that's what people are talking about. that's the number one issue when you with rank things among immigration, crime, what have you, it all comes back to inflation. so that's sort of the backdrop for all of this conversation about the deficit, but until you get a handle on inflation, i don't think that's on the top of most everyday people's mind right now. neil: for hose of you just tuning in, 24 minutes after the hour on the east coast of the united states. we've got a major selloff going on, but it's only 981 points. it had been over 1180 a few minutes ago. this is reversing what happened yesterday. we had huge gains because people pounced on what they were hearing out of the federal

reserve chairman and that we were lucky that he wasn't considering a three-quarters of a percent hike in interest rates at the next fed meeting. of course, they orchestrated a half-point hike, but he didn't rule out a series of half-point hikes, so ultimately if you're fearful, you'll still get to much higher interest rates whether it's done at a three-quarter point single point move or a half-point move, another half point after that, interest rates are higher and perhaps prohibitively so. before i get to my next guest, how it's affecting the consumer. this is probably no surprise to you, but the e-tailers are getting particularly hard hit today. it -- etsy down 7%. it's not the numbers that were bad, but the guidance. wayfair, a similar situation where it's saying revenue already down about 14% from what it was a year ago. so the trend isn't their friend, like now forget about forward

guidance. shopify sinking after earnings report, which wasn't awful, but the guidance certainly was. ebay, i could go on and on but, again, the read from a lot of these players is things don't look good, and even if they do now, they can't guarantee they will down the road. enter kevin hassett, former economic adviser under president trump. good to have you. the idea of figuring where the consumer is, still inclined to book trips, you know, bookings up, you know, for hose trips and for the -- those trips and for the airlines, the hospitality industry very strong is, the guy dance remains very strong. i don't know what it is as of this very second, but the consumer while pressed, is not giving up spending. what do you make of that? >> right. i think it's about to all end. you know, basically there was all this stimulus money that went into people's pockets, they saved it. and even though prices have been

going up much faster than wages, consumption has held up because people have that buffer stock from the money they didn't all spend during the pandemic. yearisposapoesa yr in nt's i dow aosososos us ollf the s stu stu s s s 'sth bat.d i fd getucuc realnc tfhat tte,iz e'st no w consu ctisu su going g t u and he t s s s k ofnknk not t t yeeee a a a a - -1. 1. you leani mo inreyirecir.iririririr co quarterrter gdp clo 0, 0,,,, it's i i ie,e, b ballyallyn rec.on the rn isnsssre'shishi ince, and on and and consumptiontion are e ng up to that. the final fact about this, the -1 minute 4% gdp last year, 94% of the time when we had a number that big or larger it was in a recession since the second world war or at the start. neil: and then the issue becomes

how bad a recession, is it a mild recession, a severe recession? what do you seesome. >> yeah. i see a severe recession, you know? biden was out there bragging about the deficit reduction and, you know, the thing about it that bugged me the most, by the way, was just add to the side that if build back better had passed, a lot of that wouldn't have happened. the score from the cbo was that that it would increase the deficit by $3 trillion. it's like a guy who asks a bunch of girls out on dates and when they all say no, he brags about his chastity. [laughter] neil: were you following me in high school? [laughter] >> no, but i can guess. neil: jerome powell when president trump criticized him for raising rates too soon and then he kind of fingered the guy for being clueless. they had to reverse verse -- reverse that and all. here we go again, the rationale is address inflation, but now

the irony being he might be responding too late. where are we in this and what the fed is doing, and do you have confidence or is it too late now to correct that? >> right. you know, neil, you're really good at making charts and putting real data in front of people, and one thing i can say is you make a chart, say the inflation rate from the consumer price index and the interest rate and just look at it over the last 50 years or so, then you'll see the inflation rate never starts to go down until the interest rate is higher than the inflation rate. neil: wow, that's scary. >> yeah. and so, like, that's why like what the market's doing today, frankly, i think it's an underreaction to the fact that we're probably in a recession, and we've got really high inflation. you know, it used to be that an overheated economy caused inflation, but now we've -- the helicopter dropped, and now we're getting recession. and this is really territory

i've not seen before, but i'm extremely anxious about this. i'm usually an optimist -- neil: i know you are, that's what's worrying me here. so i did want to step back and say would china be in the weird position of helping us all out? i say this perversely but with a point, that given the shanghai disruptions and the shutdowns and the, you know, technology activity virtually halted there and as a a result spread to the world, that the longer that lingers the more depressive that could be on this activity and actually lead to the kind of slowdown that would, in fact, bring rates down? what do you think? >> yeah. you know, i think that the interest rates are going to go up 50 basis points a meeting, and it's probably going to happen until you have not an orderly retreat in markets, but, you know, a slaughter. and then that'll get everybody depressed, we'll have -- the recession will get pretty darn deep -- neil: there's no soft landing in

any way, shape or form, you don't see a soft landing under my condition? >> no. and, in fact, think about it, we just had a -1.4% quarter, and we've got a fed chair who says there's absolutely no sign of recession. if you have two negative quarter in a row, it's a recession. gdp right now is close to 0, and the first quarter was negative, the idea the fed chair is saying there's no sign of recession means that policymakers are in denial. the biden administration has been calling everything transitory, but this deficit reduction, you know, that really is transitory, and the way you not is that they're not saying so, right? they're wrong about everything. and the reason it's transitory is we're going into a recession and revenues, profits are going to go down, taxes are going to go down, and the government's going to have to spend more on unemployment benefits and so on. so the definite story is

about -- deficit story is about as temporary as you can get, and it's the one thing they're saying is permanent and claiming credit for. neil: kevin, you succeeded in getting some numbers right and making me actually not feeling like lunch. kevin, always good seeing you, my friend. [laughter] the top economic adviser to president trump, but he was in office. we're going to take a very, very quick break, just want to update you on the broad-based selloff, double-digit losses in one day obviously for virtually all the dow components, not double digit, i should say, but all done -- all down. semiconductor, facebook, i extend that out to netflix, amazon, microsoft, salesforce all down anywhere from 8-16%. among the retailers, etsy, wayfair, shopify, ebay, as i said, down anywhere from 4-7%. all sectors of the s&p 500 are down. and down a lot, including the

energy sector in the face of higher energy prices not benefiting them as all. as i said, they too down. all averages down. we'll have more. ♪ ♪ ay be too concentrated in big companies. this can leave it imbalanced and exposed when performance varies. invesco's s&p 500 equal weight etf, rsp, is spread equally across the s&p 500, which reduces potential concentration risk and helps keep your portfolio in balance. stay in balance with invesco's rsp. big game today! everybody ready? alexa, ask buick to start my enclave. starting your buick enclave. i just love our new alexa. dad, it's a buick. i love that new alexa smell. it's a buick. we need snacks for the team.

alexa, take us to the nearest grocery store. getting directions. alexa will get us there in no time. it's a buick. let's be real. don't make me turn this alexa around. oh my. it's painful. the buick enclave, with available alexa built in. (vo)sk “alexa, tell me verizon business unlimited is going ultra! get more. like manny. event planning with our best plan ever. (manny) yeah, that's what i do. (vo) with 5g ultra wideband in many more cities, you get up to 10 times the speed at no extra cost. verizon is going ultra, so your business can get more. we hit the bike trails every weekend you get up to 10 times the speed at no extra cost. shinges doesn't care. i grow all my own vegetables shingles doesn't care. we've still got the best moves you've ever seen good for you, but shingles doesn't care. because 1 in 3 people will get shingles, you need protection. but, no matter how healthy you feel, your immune system declines as you age increasing your risk for getting shingles. so, what can protect you? shingrix protects. you can protect yourself from shingles with a vaccine proven to be over 90% effective.

shingrix is a vaccine used to prevent shingles in adults 50 years and older. shingrix does not protect everyone and is not for those with severe allergic reactions to its ingredients or to a previous dose. an increased risk of guillain-barré syndrome was observed after getting shingrix. fainting can also happen. the most common side effects are pain, redness, and swelling at the injection site, muscle pain, tiredness, headache, shivering, fever, and upset stomach. ask your pharmacist or doctor about shingrix. shingles doesn't care. but you should.

neil: all right, down about 950 points on the corner of wall and broad, and that selloff the opposite of what we saw yesterday. all 30 stocks on the dow, no matter what sector, in fact, all the s&p 500 sectors, even those all think would be a place to park some money like energy and relatedded, all under selling pressure. i want to get to some developments concerning boeing. grady trimble in washington apparently looking at a new home, huh? >> reporter: yes, right here in the d.c. met row area, and they would be moving from where that they've been headquartered, chicago. this would be a huge loss for

chicago and the state of illinois, of course, and a huge gain for virginia. in this all is according to "the wall street journal" right now. boeing is itself has not made it official. in fact, a source tells crane business in chicago that it depends on the ceo, dave calhoun, who took over amid the 737 max crisis and has been navigating through the pandemic and, of course, the loss of the commercial side of air travel business. but moving to the arlington area where they already have a presence, by the way, would put boeing right around all of the government contractors who are already in the d.c. area. one of the criticisms though of boeing over the past several years especially through the 737 max crisis is that they're too cozy with regulators. so from an optics perspective, this could sort of reiterate that viewpoint, that they're right across the state line from d.c. over to arlington, virginia. so that is one criticism. but from a business perspective, you know, it's a lower tax

state, virginia is, compared to phil. -- to illinois. that makes a lot of sense, and in terms of the defense business and the contractors they work with, that makes a lot of sense is. of course, this would be corporate offices, neil. we're not talking about moving production which is still predominantly in the pacific northwest, but it is a huge move for boeing to go from the midwest where are they've been for 20 years to arlington, virginia, if this is there true. "the wall street journal" is reporting that boeing could make it official as soon as next week, and i've heard already murmurs here on the hill that this has been something that's been in the works for several years now. so this is certainly are something that has been discussed. we will have to wait and see if the company makes it official. neil:ing all right. thank you very much. grady trimble. bringing attention back to wall street right now, this selloff took hold in this country almost right after the opening bell here after europe had a relatively sanguine session here

and his what, of course, responding to the thought that maybe in the u.s. the worst was over. and it still might very well be. as i'd like to stress here, we don't try to characterize things and assign permanence nance to it based on a single day trading versus yesterday's trading which was a mere opposite of today. we are looking at a lot of issues hard down dramatically from their highs, a lot of technology stocks deep into bear market territory. more than half the semi are down in excess -- the s&p 500 are down in excess of 50%. so sometimes that masks the severity of what's happening under the major tidal levels of the s&p, the nasdaq, certainly the dow. we're keeping an eye on that are as are steve forbes, "forbes" media chairman and editor-in-chief, susan li joining us right now. you're just back from the milliken conference, so obviously they keep one eye on what's happening in the markets, right? and their view, i mean, how were they laying out the landscape?

>> reporter: well, they're obviously concerned. but you heard chairman powell yesterday in that press briefing when they raised interest rates. he doesn't think that they will get into recession this year. he thinks we have a good chance of avoiding it. that's because you look at the labor market, still strong. companies still have a lot of money on the balance sheets, but a lot of these big corporations and big hedge fund managers asset managers, they think that the fed has a really tough job right now -- neil: are they in the soft landing camp? are they optimistic he could be right? >> reporter: i'll show you this, because yesterday you heard chairman powell say they're not even thinking about a 75-point hike, today the fed funds future there's a 75% probability heir going to have to go -- they're going to have to go 75 points in june. neil: why do they pounce on that? he also said half-point hikes aren't out of the equation, so whether you get there via a three-quarter point hike at the next meeting or there and then

some with a series of half-point hikes after this, you're still getting much higher rates. >> yeah, because it's steepening so quickly taxer that's the main concern. you saw the product about numbers today, dropped the most since 1947, and that means you have to pay people more in order to work. labor costs went up almost 7% in the first quarter, the the highest since the early 1980s. neil: it's one thing if they're getting more done -- >> reporter: but extrapolate it. if you're paying your workers more than double the target inflation rate at the federal reserve, you're not coming back down anytime soon to those 2% levels that the fed wants to get inflation to, right? if. neil: yeah. >> so that's a concern for them. that's why they might have to raise interest rates a lot more quickly in the short term and steepen much faster than anticipated. neil: seems like they would drive us into the recession heir trying to avoid, steve. >> that's right. they're driving on an ice icy road, and instead of slowing down, they're picking up speed.

and again, they're confusing and mixing inflation, rising prices that come from things like what's happening in china, ukraine, dumb things we're doing with our government here at home which slow things down. but the federal reserve can control the money. they can control the dollar. focus on that and tell the public we can't cure what's happening in ukraine, but we can make sure you can trust the dollar again. that would go a long ways, but they still have this belief -- it's called the phillips curve, named after an economist, not the baseball pitch -- that if you want low inflation, you have to raise unemployment. they see a trade-off between the two. it's absolutely false. >> reporter: yeah. and just talking about china also, i just heard your interview with kevin hassett, remember back in 2008 in order to avoid any of the pain from the global financial crisis you had china really turning on the spigot. they spent $680 billion back in to stimulate the economy. they haven't done that that necessarily this time around, so there is this opportunity --

neil: but are they able to. >> reporter: well, they have, they still have cash, and they can -- neil: they still have covid cases spiking, right? it's sort of like whack-a-mole where they get it under control in one area, it's still a problem. doesn't that linger a while? >> and they've been reluctant to cut interest rates as well. for some reason, it's a blunt instrument they haven't wanted to tap as quickly or easily as back then. but i think there's an opportunity, especially if they want to ease up on the clampdown on technology companies which employ the majority, by the way, of workers in the big cities of shanghai and beijing. a lot of people are saying there might be a case made that china may step in to spend all these billions of dollars again, and that might help cushion some of the global economy. neil: the covid spikes that they've been seeing, now, i know they're off the worst levels presumably in shanghai, but they can't seem to get a handle on it. i mean, should that be a worry in apart from all of this other stuff going forward, that this is a reminder we're not over

this? >> reporter: they also have a zero-covid policy. we're talking about new cases in the 10s, 20,000 numbers for a country of over a billion? neil: well, that could be -- i don't believe -- >> reporter: okay. neil: they would say we grew at like a 10% clip. it was like the jon love vet thing, really? >> reporter: exactly, right? neil: i didn't buy it. >> reporter: okay, here's the thing also, president xi jinping, this is a very important political year for him, as you know, a re-election year, per se, so he needs to keep people happy, employed, ped and putting food on the table in china, so i think this is important for him, and he probably wants this clampdown just to get rid of the cases now so he feels less of the pain later on this year when it's closer to those re-election days. neil: steve, i'm just curious, when you advise young people on investing many of whom are new entrants to this market over the last year -- certainly post-covid -- and a lot of them

remember how their parents were burned in the last financial meltdown, they liked being involved, they loved the runup, it was unexpected, what do you tell them now? >> always remember emotions, when you come to investing, emotions are your enemy. you feel good, don't. if you feel bad, do it. in terms of investing, keep putting the money many your 401(k), ira whether it's monthly, weekly or yearly, whatever it is, keep those payments up. each if the market goes down, you have plenty -- you're, of course, buying more shares, and dollar cost averaging you leave it alone, have a little cash reserve, but leave it alone. over time you'll do better in the market. if you're 20, 30, 40s, even early 50s, ride the thing through within a period of time. even though the terrible '30s, terrible the '70s, the market came roaring back, and you ended up standing pat,s putting money in, you ended up far ahead --

neil: but long term, to me, sue, is the next two weeks. [laughter] >> reporter: younger people. neil: that a may be crucial to watch -- >> but for younger people, younger people say who has ever called the market consistentliesome show 'em warren buffett, 91. charlie munger, 98. these people have made a few bucks over the years. did they do it by going in and out? no, stay steady. you stay calm. stay away from cocktail parties so you don't hear stories from neighbors or idiots that you know are dumb but they seem to do better than you, stay away from that. >> reporter: think about the people that graduated just before 2008, so they've lived through a global financial crisis, covid for the last three years and now this unforeseen inflationary -- >> graduated in 2008. market, 7,000. what's the market after today? neil: that's a very good point. a very good point. here we are at 33. >> reporter: is inflation-adjusted? [laughter] mortgage rates at the highest

since 2009? i think that's going to be toug- neil: you're a young person, you have young friends. what do you tell you in. >> well, we talk about crypto a lot. [laughter] so i would love to hear what steve forbes has to say about that. but, you know, crypto is coming down along with other risk assets as well. neil: way down. convinced the easy money's already been made and that bump is down? going into cannabis stocks now? [laughter] >> reporter: no, they're not doing that. you saw yesterday with elon musk changing his picture profile, and that's because the nft market, it has been down about 90% of so in sales, so maybe that uneducated sense of people just flooding into the crypto markets and nft space, maybe that a era's done. but it also gives you the opportunity that people that know what they're doing, that have long-term beliefs can actually now build and make things sustainable for the future. neil: steve, i kind of touched on it a little earlier, this

idea of capitulation, when do you know it? when do you see it? >> when everybody says the world is coming to an end. the economy is going to be disappointingly slow and the kind of rhetoric we saw in the late '70s, really '80s even after the federal reserve eased up and you could see interest rates plummeting, you know, great news back then -- neil: yeah, it was. >> even then council of economic ad visors, oh, in 198ing 3 this is so bad, we're only going to grow 1-2%, grew 6-8%. so when it was all doom and gloom, that's when you should say if everyone is out, everyone's feeling bad, that's a good time to move in. and, by golly, warren buffett got out of the market back in 1958, and we interviewed him in 1974, said what are you doing now, and he used something that's pretty create -- politically incorrect, so i won't use it here -- [laughter] >> reporter: what'd he say?

>> he, in effect, said i'm in, i've never seen anything like this, a polite version of boy in the candy store. and he was right. everyone was so doom and gloom. that's when you get in, when everyone else is jumping ship. neil: well said. >> can i ask one question though? warren buffett said over the weekend he wouldn't touch any oe bitcoin in the world for $25, he would not touch it. do you agree with him? >> for $25, i might. >> reporter: that's a $1 trillion asset class, and he and he says no -- neil: what'd charlie munger say, 98 years young, it's a scam! >> reporter: that's right. [laughter] >> crypto to look at is stable coins. i'll make a prediction since no one's going to remember -- [laughter] neil: oh, we'll remember. >> in five years stable coins are going to be so easy to use for commerce, they're going to be a real threat to government currencies. neil: wow. >> stable in value, that's what people are going to be looking for. neil: bombshells right before you leave.

[laughter] take care, guys, i'm outta here. all right, we're going to take a quick break here. the dow down more than 1,000 points, weep wiping out yesterday's -- wiping out yesterday's gains. to steve's point, you can't extrapolate from this a statement on where the markets are going any more than you could 24 hours ago when they were going the opposite way. whether that represents capitulation today, what do you call yesterday? we're probably not at that point where everyone says, the hell with it. not yet. stay with us. ♪ ♪

. . kidney disease affects one in seven american adults and costs our health system over one hundred billion dollars per year. xortx therapeutics is leading the development a first

in class therapies that focus on slowing the progression of this debilitating disease. the company is poised to initiate late stage clinical trials for two novel therapeutic treatments targeting chronic progressive kidney disease and acute kidney injury, and advancing on the path to fda market approval in the u.s.. xortx therapeutics.

>> it's a strong economy and nothing about it suggests that it's close to or vulnerable to a recession. now of course given events around the world and fading fiscal policy effects and higher rates, you could see some slower economic activities. neil: all right. but that was really the remark yesterday from jerome powell, chairman of the federal reserve really got the buying going. the notion we could have a soft landing, nothing that would indicate anything worse than that and that we were going to return to strong times, you know, kind of intimating the trend would be our friend. nothing about transitory here. danielle dimartino booth, with us now, former dallas fed advisor. danielle, that was yesterday. a different interpretation

today. which is real, the reaction of the markets yesterday liking what he said and today maybe second-guessing what he said? >> i think they are second guessing. it doesn't help start out the trading day productivity declined the most since 1947. neil: did they know that yesterday? when do you guys get the numbers? >> typically 24 hours in advance. neil: he would have enacted on this knowing that number, wit might have explained his not going cuckoo or nuts, right? >> possibly. the productivity falling so much, wage pressures increased that more. he needs to be more vigilant trying to control inflation on behalf of the american workers. neil: you think he is too late? >> i really do. when he reiterated over and over again if financial conditions warrant, he was really placing his bet with investors as opposed to the talk that he gave for average working men and women in america who are really being harmed by inflation.

neil: so, let's say as a series of half-point hikes. everyone, not going to be 3/4 hike, i think boeing when and how you get there might be immaterial but leaving that aside you have to be north whatever the inflation rate is right? so we have to be a eight times higher than we are. >> we are a debtor nation. united states is debtor nation. servicing debt of $30 trillion and counting that doesn't work if you have short-term treasury bills you have to refinance at 8%. we couldn't afford the interest bill as a country. neil: how do you play that without getting -- >> this is very fragile. this is the price the fed es going to pay for hesitating last year when it could have been tightening into a much less treshruss situation than what markets are reflecting today. neil: so for technology stocks,

all sectors are feeling this. >> yes. neil: are they overreacting, are they overfear-mongering the way they were overjoyed yesterday? in other words, what's the happen medium? where are we here? >> if you look truly at valuations, price to earnings ratios they're still appreciably higher than they were in 2018. neil: so still a rich market? >> despite the fact, even netflix is still a rich stock which is very hard to believe considering that it has been taken out to the woodshed but that is simply how much speculation that we've seen pour into, i mean last year we were talking about the "faang" stocks. they were teflon. nothing could, nothing could happen to them and yet now we're seeing that when one individual stocks comes down it comes down so hard but again i go back to valuations being still where they are. neil: what about the consumer? >> gosh, help the consumer. they're being, you know, yesterday he said he couldn't control energy, he couldn't control food inflation.

okay, i will give him that. but they sure have gotten a better handle on inflation. neil: consumer plans to take trips, plans to vacation this summer, is that the final hoorah. >> in cash they're spending 17%? they don't want to stop spending but can't afford to keep spending the way they have been with inflation where it is. neil: when you were on the fed in dallas, how closely did you look how markets are responding to what you did? >> i mean i was there during the ben bernanke era, he believed fully wealth effect trickling down to robust consumer spending. now we're seeing the back side of that, but that philosophy was very much ingrained at the federal reserve. neil: so looking at this environment now, and you're the fed chairman now, there is no wealth effect today, how closely are you monitoring that? >> with the wealth effect going in reverse that is very

dangerous for the fed this is a 70% gdp consumption economy. the u.s. consumer is 17, one, seven% of global gdp. neil: wow. >> we have to have consumption hang in there. neil: danielle, thank you i think. she has been saying this. she was been uncannily prescient on all of this. >> thank you. neil: charles, i did my best. we are down exactly what we were two hours ago. i tried. charles: one of the best helping you. good afternoon, folks. i'm charles payne this is "making money." breaking right now after sleeping on it the street decides maybe jay powell did not save the day for wall street or main street. meanwhile the biggest hit to productivity in 75 years getting very little financial media attention. i think that my triggered this monster selloff. now there are important decisions every investor must make every day but especially today and we've got your back. also after unleashing the strategic petroleum reserve to stop