unemployment going up -- the median is 4.1%. there's a range of actual forecasts, and i would characterize that, if you were to get inflation down to, you know, on its way down to 2% and the unemployment went up to 4.1%, that's still, you know, historically low level. you know, we hadn't seen rates -- unemployment rates below 4% until a couple years ago for -- we'd seen it for like one year in the last 50, so the idea that, you know, 3.6% is historically low, in the last century, so a 4.1% unemployment rate with inflation well on its way to 2%, i think that would be -- i think that would be a successful outcome. so we're not looking to have a higher unemployment rate, but i would say that -- i would certainly look at that as a successful outcome.

>> [inaudible] -- >> you know, again, we're not -- we don't seek to put people out of work. of course we never think too many people are working and fewer people need to have jobs, but we also think that you really cannot have the kind of labor market we want without price stability, and we have to go back and establish price stability so we can have that kind of labor market, and that's a labor market where, you know, where workers are getting wage increases. maybe the workers at the lower end of the spectrum are getting the biggest wage increases, as they were before the pandemic, where participation is high, where there's lots of job opportunities, where it's just a really -- i mean, the labor market we had before the pandemic was -- that's what we want to get back to, and you see, you know, disparities between various groups at historic lows. we would love to get back to that place. but to get there, it's not going to happen with the levels of inflation we have. we have to restore that, and it

really is in service in the medium and longer term of the kind of labor market we want and hope to achieve. >> hi, chair powell, matthew with bloomberg. as you just mentioned the committee is now projecting a half percentage rise in unemployment rate over the next couple of years and it removed a line from its policy statement about thinking that the labor market can remain strong while it tightens policy. you just mentioned that that is still your objective, though, so i'm wondering if you could explain why that line was removed from the statement, and also, whether this means that fomc is trying to induce a recession now to bring inflation down. >> not trying to induce a recession now. let's be clear about that. we're trying to achieve 2% inflation consistent with the strong labor market. that's what we're trying to do. let me talk about that sentence. clearly it's our goal to bring

about 2% inflation while keeping the labor market strong. that's kind of what it says. it has inflation getting down to a little above 2% in 2024 with unemployment at 4.1%, so this is a strong labor market. this is a good labor market. as i mentioned, there are pathways to do it. but those pathways have become much more challenging due to factors that are not under our control. again, thinking here of the fallout from the war in ukraine which has brought a spike you know in prices of energy, food, fertilizer, industrial chemicals and the supply chain more broadly which has been longer lasting than anticipated. the sentence that we deleted said that we believed that appropriate monetary policy effectively alone can bring about the result of 2% inflation with a strong labor market. and so much of it is really not down to monetary policy. it just -- the sentence -- it kind of says on its face that monetary policy alone can do

this. and that's not -- that just didn't seem appropriate, so we took the sentence out. >> given the new projections for the unemployment rate, could you talk a little bit about what accounts for, you know, such reduced confidence again say a month ago or three months ago that inflation will largely normalize on its own as the supply side issues get worked out? thanks. >> well, yeah, i think you've seen -- again, we have been expecting progress, and we didn't get that. we got sort of the opposite, so i also think the situation really since the, you know, the consequences of the ukraine war become more and more clear, what you're seeing is the situation getting more difficult. look around the world. i mean lots of countries are looking at inflation of 10%, and it's largely due to commodities prices, but all over the world, you are seeing these effects, and so we're seeing them here. gas prices, you know, all-time

highs and things like that. that's not something we can do something about. so that is really -- and by the way, headline inflation, headline inflation is important for expectations. the public's expectations why would they be distinguishing between core inflation and headline inflation? core inflation is something we think about because it is a better predictor of future inflation, but headline inflation is what people experience. they don't know what core is. why would they? they have no reason to. so that's expectations are very much at risk due to high headline inflation. so it's become -- the environment has become more difficult clearly in the last four or five months. and hence the need for the policy actions that we took today. hence our resolution to, you know, to get rates up and ultimately get them to where we think they need to be in the coming months. >> thanks, chair powell. edward lawrence fox business.

talking about cpi going to 8.6%. the retail sales surprised the market by falling and revisions to the previous months were down. are you hearing from contacts about consumers slowing spending or changing their habits? >> so we're of course watching very very carefully for that, and, you know, looking at the retail sales -- the big store numbers and all that kind of thing, and but i think the fair summary of what we see is you see continuing shifts in consumption. you see some things -- sales going down, but overall, spending is very strong. the consumer's really good shape financially. they are spending. there's no sign of a broader slowdown that i can see in the economy. people are talking about it a lot. consumer confidence is very low. that's probably related to gas prices. and also just stock prices to some extent for other people. but that's what we're seeing. we're not seeing a broad slowdown. we see job growth slowing, but

it's still at quite robust levels. we see the economy slowing a bit, but still growth levels -- healthy growth levels. ? as you are raising -- >> as you are raising rates in this economy, how closely are you watching consumer spending? is there another indicator you are watching more closely? >> it would be hard to watch anything much more closely than we watch consumer spending, but we watch everything. you know, we watch business fixed investment which has softened a bit. and, you know, we watch -- we're responsible for watching everything, but, you know, consumption is 60 some percent of the economy, two thirds of the economy, so naturally we spend a lot of time on that. again, there's a lot going on. there are a lot of flows back and forth, but ultimately, it does appear that the u.s. economy is in a strong position and well positioned to deal with higher interest rates. >> thank you, mr. chairman.

michael from bloomberg radio and television. are you targeting headline inflation now or core inflation? in other words, how far would you chase oil prices if they keep going up, if that's going to be the component that drives expectations? would you risk recession for a headline rate if the core rate is holding steady or starting to go down? >> so we're responsible for inflation in the law, and inflation means headline inflation, so that's our ultimate goal. we of course like all central banks do look very very carefully at core inflation because it is a much better predictor, and it is much -- it is a much better predictor of where inflation is going, and it is also more relevant to our tools. as i mentioned, the parts that don't go into core are mostly outside the scope of our tools, so we look at that. but, you know, the current situation is particularly difficult because of what i mentioned about expectations. we can't affect really -- i mean

the energy prices are set by global commodity prices. and most of food, not all of it, but most food prices are pretty heavily influenced by global commodity prices too, also other things, so we can't really have much of an effect, but we have to be mindful of the potential effect on inflation expectations from headline, so it's a very difficult situation to be in. and again, we can't do much about the difference between -- the elements that make up headline that are not in core. >> i just as a follow-up get a clarification on the sep. when the members gave their forecasts, when were they inserted into the record, were they revised after the cpi or michigan numbers came out? in other words, does the sep as we have it now reflect the same factors that led you to go to a 75 basis point move? >> the sep is one piece.

you know, it reflects all of the economic readings and it also reflects the 75 basis point increase. this is important. people had that in hand when their seps were submitted. so it's -- in other words, it's not in addition to what's in sep. everyone's sep reflects their thinking about this rate increase and what's going forward. >> victoria? >> hi. victoria from politico. i wanted to ask about how you are measuring progress especially since you have now started front loading rate hikes more. you have talked about how you want to see inflation coming down over a series of reports, and i guess i'm curious whether you think inflation data itself is a really good indicator, or whether, you know, you might be concerned that it's a lagging indicator or that it might send confusing signals given that as

you have talked about, the sort of supply and demand aspects, and i guess my question is, you know, do you think that inflation will tell you -- inflation data will tell you when you have gone to where you need to go, or do you feel like maybe it is better to overshoot than to undershoot >> you know, i think the role that we can play -- maybe the way to get at it is to say is the role that we can play is around demand; right? and we'll be able to see the areas that we can affect are those that are associated with excess demand, and we'll be able to see our effect on, for example, job openings in real-time, and that would tell us about wages. wages are not principally responsible for the inflation we're seeing, but going forward, they would be very important, particularly in the service sector. so i'm not sure i'm getting to your question. >> is inflation data itself the

best indicator when you are getting to where you need to go, or might it lead you to go too far? >> there's always a risk of going too far or going not far enough, and it's going to be a very difficult judgment to make or maybe not. maybe it will be really clear. and we're quite mindful of the dangers, but i will say the worst mistake we can make would be to fail, which it's not an option. you know, we have to restore price stability. we really do because everything -- it's the bedrock of the economy. if you don't have price stability, the economy is really not going to work the way it is supposed to. it won't work for people. their wages will be eaten up, so we want to get the job done. this inflation happened relatively recently. we don't think that it's affecting expectations in any kind of fundamental way. we don't think we're seeing a wage price spiral. we think that the public generally sees us as very likely to be successful in getting inflation down to 2%. that's critical.

it's absolutely key to the whole thing that we sustain that confidence. so that's how we're thinking about it. >> brian with yahoo! finance. i just want to expand i guess on what you just said now about the general public feeling like, you know, you can g et this done. when you talk about consumer sentiment being down, inflation expectations being up, recession being broadly dinner table talk. does the general feel among american households and also businesses square with your explanation of the economy given that the description of inflation in the statement didn't change between may and june? thanks. >> so clearly people don't like inflation, a lot, and many people are experiencing it really for the first time. we haven't had anything like this kind of inflation in 40 years, and it's really something people don't like, and they're experiencing that, and that's showing up in their -- in

surveys and in all kinds of ways. and we understand that, and we understand the hardship that people are experiencing from high inflation, and we're determined to do what we can to get inflation -- inflation back down. that's really what we're saying. clearly it's an incredibly unpopular thing. and it's very painful for people. so -- but i guess what i'm saying is the question -- really critical question from the per spechtive of -- perspective of doing our job is making sure that the public does have confidence that we have the tools and will use them and they do work to bring inflation back down over time. it will take some time, we think, to get inflation back down, but we will do that. >> chris? >> thank you. chris with the associated press. you have talked about inflation a few times and mentioned oil prices, china lockdowns.

but aside from rises in commodity prices, such as, gas prices, we're also seeing stickier measures of inflation increasing, such as, the cleveland fed's median and trends mean cpis, how persistent do you see those underlying measures of inflation, and how do you expect to -- where do you see those going in the near future? >> yeah, so as i mentioned, i think in my opening statement, the inflation has started off in quite narrow, very directly pandemic-related areas, and it spread now broadly across the economy and into the services sector as well. it was really in the [inaudible] sector at the beginning. particularly you are seeing in travel now, if you have flown on a plane lately, planes are very full, and plane tickets are very expensive. some of that will be passed through of energy prices, so you are experiencing services inflation. shelter inflation is high, so --

and you see the cleveland measure going up and many other measures are going up, so it is a time when we're not seeing progress. we want to see progress. that's really another part of why we did what we did today, and why the sep looks like it does is that we see it as appropriate to get the policy rate up to restrictive levels which would be in the thinking of the committee somewhere in the range of 3 to 3 1/2 percent by year end, and then after that, you see with the rest of the sep says. i hope that's responsive to your question. >> [inaudible]. >> hi, chair powell, nancy marshall with marketplace. do you still think a softish landing is possible, and how would you define that at this point considering the revised projections for unemployment, gdp, inflation? >> so i think what's in the sep would certainly meet that test. you know, if you see -- you're

looking at getting back down to almost a 2% inflation by 2024 and the unemployment rate is still as low as 4.1%, that would be -- i would call that as meeting that test. do i still think that we can do that? i do. i think there's -- i don't want to be the handicapper here. that's our objective. i do think it's possible. like i said, though, i think that events over the last few months have raised the degree of difficulty, created great challenges, and again, the answer to the question, can we still do it? there's a much bigger chance now that it will depend on factors that we don't control, which is, you know, fluctuations and spikes in commodity prices could wind up taking that option out of our hands. we just don't know, but we're -- you know, we're focused on -- very very focused on getting inflation back down to 2%, which we think is essential for the

benefit of the public and also to put us on a path back to a sustainably strong labor market, like the one we had before the pandemic. >> thank you, from market watch. i was wondering if you could talk a little bit more -- economists are worried that you are kind of hitting the economy with a sledgehammer, and now there's even more risk of a recession than a 50/50 path of rates, so could you talk more about that? what evidence would get you to stop rate hikes and maybe even reverse them? >> sure, so as i mentioned, financial conditions have tightened over the last seven months. that's a good thing, we think. the federal funds rate, even after this increase is at 1.6%. so it's hard to see how that is too high of a rate, and even if

we did another -- you know, so we're going to get here by the end of the summer somewhere in the 2s probably. still that's still a low rate. that's not a rate that is calculated to bring a recession on, and by then, we will have seen a whole lot more data. as i mentioned a couple times, the committee's views are around a modestly restrictive stance, which would be in the 3 to 3 1/2 percent range by the end of the year, but that's, you know, conditioned on that being the appropriate thing to do. if we see data going in a different direction, it will be reflected in our policy, as you see today. you know, we'll be watching if things go in the direction we don't expect, then we're going to adapt. i would say this is a highly uncertain environment, extraordinarily uncertain environment, so again, we'll be determined and resolved, but

flexible. >> evan? >> evan, market news international, thank you, chair powell. i was wondering if the fed has initiated a review of the conduct of monetary policy over the last two years or so, given the inflation, and will that be shared with the public? and then secondly, given the ill liquidity and extraordinarily volatility in the financial markets, are you concerned that qt will make that worse? >> what was your question on qt? >> just given the ill liquidity and extraordinary volatility in financial markets whether a qt will make things worse? >> so of course we've been looking, you know, very carefully and hard at why inflation ticked up so much more than expected last year and why it proved so persistent. it's hard to overstate the extent of interest we have in that question, morning, noon, and night, so -- but you have to

understand the context. really the context is this for, you know, decades before the pandemic and the reopening, you had a world where inflation was dominated by disinflationary forces such as declining population or aging demographics, let's call it that, globalization enabled by technology, other factors, low productivity. and, you know, that's how all the models work is, you know, decades and decades of data. they look at that. it's a very flat phillips curve work and the supply shocks tend to be transient; right? we have experienced extraordinary series of shocks, if you think about it, the pandemic, the response, the reopening, inflation, followed by the war in ukraine, followed by shutdowns if -- in china. the war in ukraine potentially

having effects for years here. we're aware that a different set of forces are driving the economy. we have been obviously for quite a while. these forces are different. inflation's behaving differently, and in our thinking, it really is a question of very strong demand, but you couldn't get this kind of inflation without a change on the supply side, which is there for anybody to see, which is these blockages and shortages and people dropping out of the labor force and things like that, so that's how we're looking at it. and, you know, we've done a lot of work internally on -- and thinking about what all that means. the thing is, you don't know whether those forces are -- to what extent are they going to be sustained. in other words, will we go back to a world where it looks a little more like the old world, or are we really going to be in a world where major supply shocks go on and on? the history is you see these waves of supply shocks, as you did in the 70s, and then they go

away, and, you know, there's a new normal and things settle down. but honestly, we don't know what that's going to be. in the meantime, we have to find price stability in this new world where clearly inflationary forces are -- you're seeing them everywhere. again, look around the world at where inflation levels are. it is absolutely extraordinary. it's not just here. in fact, we're sort of in the middle of the pack. although i think we have of course a different kind of inflation than other people have, and partly because our economy is stronger and more highly recovered, so that's what we're doing. we've done a lot of introspection and work on that, and sorry on qt, you know, we've communicated really clearly to the markets about what we're going to do there. the markets seem to be okay with it. we're phasing in treasury issuance is down quite a lot, quite a lot from where it's been. so i have no reason to think --

the markets are forward looking, and they see this coming. i have no reason to think it will lead to ill liquidity and problems. it seems to be kind of understood and accepted at this point. >> last question will go to mark. >> mr. chairman, mark, with bank rate. wonder what your assessment is about the outlook for the housing market given the year's long increase in home prices and now the sharp rise in mortgage rates and all that of course given the heightened sensitivity around the housing market, given the fact that it was a trigger for the great financial crisis over a decade ago. thank you. >> sure. so rates were very low. a good place to start is that rates were very very low for quite a while because of the pandemic and, you know, the need to do everything we could to support the economy when unemployment was 14% and true unemployment rate was well

higher than that, and that, you know, that was -- rates are low, and now they're coming back up to more normal or above levels, so in the meantime, while rates were low and while demand was really high, obviously demand for housing changed from wanting to live in urban areas to some extent to living in single family homes in the suburbs, and so the demand was just suddenly much higher, and so we saw prices moving up very very strongly for the last couple of years. so that changes now, and rates have moved up. we're well aware that mortgage rates have moved up a lot, and you are seeing a changing housing market. we're watching it to see what will happen. how much will it really affect residential investment? not really sure. how much will it affect housing prices? you know, not really sure. i mean, obviously we're watching that quite carefully. you would think over time, i mean, so there's a tremendous amount of supply in the housing

market of unfinished homes, and as those come online, whereas, the supply of finished homes, inventory of finished homes that are for sale are incredibly low, historically low, so it's still a very tight market, so prices may keep going up for a while even in a world where rates are up, so it is a complicated situation. we watch it very carefully. you know, i would say if you're a homebuyer, a young person looking to buy a home, you need a bit of a reset. we need to get back to a place where supply and demand are back together and where inflation is down low again and mortgage rates are low again, so this will be a process whereby ideally we do our work in a way where the housing market settles in a new place and housing availability and credit availability are at appropriate levels. so thank you very much.

>> cheryl: there you have it, the federal reserve, the hawks have swooped in to the market today. they have swept in for sure. federal reserve chairman jerome powell wrapping up the june press conference after the federal open market committee raised interest rates 75 basis points. that was the largest increase we have seen since november of 1994. the new federal funds rate now sitting at a range between 1.5 and 1.75 percent. now, here's what happened in the market. this has been fascinating just in the last 25 minutes. markets initially pulled back from all the gains, the big gains that we had this morning after the fed decision hit the wires. that was right at 2:00 p.m. eastern time. at one point, during the session, the dow had been up 530 points. right about 3:00 or so, he'd already been talking for about a half hour, we were only up about 40 some odd points. look at the dow down, 471

points. we have gained more than 400 points just in the last 27, 28 minutes or so. how about this. now, powell and company acting to bring down inflation. a lot of talk about inflation from 40 year highs. they revised their inflation forecast up to 5.2% for this year. that's a headline number. that includes food and energy. the fed also forecast that at least three 50 basis point increases and one 25 basis point increase through the rest to have year, but really quickly, i have to say here, jerome powell in that press conference, you might have heard it, he did say there could be another 75 basis point hike next month. so that's still on the table. we could get 50 to 75 next month. that's july when they meet. also the fed is not going to change its balance sheet run-off plans. a lot of talk about that, qt, you heard that, quantitative tightening, a lot of reporters asking about that. kansas city fed president was the lone dissenter. she wanted a 50 basis point

hike, but the committee won. she was outvoted. we got 75 today. all right. right now let's look at the 10 year. as you can see, we are at 3.31%. the 10 year treasury and two year are sensitive to what the fed does. the financial sector, that's also a very rate sensitive group, if you will. as you can see, the big financials are higher. to put it plainly, banks make money when rates are higher. okay? but savers do too. there's kind of a mixed bag of positive news in that one; all right? as you can see citi and goldman and b of a, morgan stanley, jp morgan, they are all higher. let's take a look at gold. we have seen, especially this year with the big sell-off that we have had with the markets, seen a lot of people going into gold. they have been cashing out of stocks. they are putting risk down and going i want a safe haven. that's been gold. right now as you can see gold is at 18.42. i mean, you got to remember back

during the 2008 financial crisis when gold was above 2,000. we are kind of inching back to those levels, if you will. the dollar, the dollar's been really interesting. initially it was strengthening, now as you can see, the yen, the pound, the yuan, the euro are actually doing better against the dollar. okay? the strong dollar initially when the dollar was raised during the fed decision, when i was thinking to myself was that's a complication for companies. okay? what does that mean for their earnings? for their projections? because a lot of these companies, they suffer when you have a stronger dollar because of currency swaps. a lot being thrown at you. there's so many implications of this decision we had today that affects everything we cover on fox business. a lot of talk about oil. hey, you know what? he even admitted it a couple of times, not a lot he can do about oil prices. that's a market, independent of the fed. look at crude. we are now down 2%.

brent down -- i don't know what normal is anymore. when you see a stronger dollar, a lot of times you do see a weaker crude story. we are seeing that right now. fed chair powell saying if inflation doesn't come down, this is not going to be the last meeting that we see that 75 basis point mark. listen. >> the next meeting could well be about a decision between 50 and 75. that would put us at the end of the july meeting, you know, in that range of -- in that more normal range. that's a desirable place to be because you begin to have more optionalty there about the speed at which you would proceed going forward. >> cheryl: i want to bring in institute chief economist bill lee and carolina's investment consulting director of economics john silver. there's so much to go through, gentlemen. i'm so glad you are here. bill, your initial reaction to what you have seen from the fed? >> i'm so relieved that chair powell did the right thing. it is a tradition within the fed that we don't want the markets to dictate monetary policy.

i'm glad he dropped that and said we're falling behind, losing the narrative on inflation, our credibility is on the line, the markets have given us the leeway to raise rates by 75 basis points and in fact we did it. that is such a great thing. one of the things that chair powell emphasized was the minute inflation expectations become unanchored, they have lost the game. that's what happened in the 70s. that's the one thing they prevented this time. >> cheryl: real quick york , real quick, you know, we heard the next meeting in july, it could be 50, it could be 75. john what do you think happens at the next meeting? going into this, you were expecting 75. but you were also thinking in your forecasting another 75 in july. >> i think they do another 75. he's talking about getting evidence that inflation is going to moderate. july is only a month away. i don't think you will get enough evidence that you will moderate. i'm doing 75 basis points. i agree with bill that the fed is much more realistic now. raising those federal funds

rates means that yes, you're consistent now with slower economic growth and higher unemployment going forward, so i think this really was a good meeting for the markets overall, and i'm not surprised that the markets are rallying on this kind of -- i think appropriate monetary policy move. >> cheryl: john, do you think the markets are rallying because i mean look, we're now above our session lows for the day. we're at session highs for the day, 591 on the dow. are the markets rallying because they've got faith in the fed? or are the markets rallying for some other reason? >> no, i think the markets are rallying because they now say the fed now understands the problem. they're giving us a realistic vision of growth, unemployment, and inflation going forward. and i think that is incredibly important. the markets now have a higher level of confidence in the fed that the job will get done. >> cheryl: you know, it is interesting too. i was listening obviously bill

intently during the press conference, and nick from the "wall street journal," he and john hilsenrath wrote a piece at the end of last week and one of the things they said is that the fed's credibility is on the line because they are using an old play book to deal with a new problem. you know, it was one thing in 2007 and 2008 during the financial crisis, you know, you lower rates. you throw stimulus into the system. but that is not the play book that the fed needs to take on now. and he asked about credibility. and powell i think gave him a pretty strong answer, you know, bill, and said look, i admit there are a lot of things in this economy that are out of our control. we will do what we can control, but a lot of it we cannot. >> absolutely. in fact, the play book they got rid of was from greenspan, the play book of gradualism, do a little bit at a time, don't spook markets. right now because the fed has been so transparent in explaining what they have been doing, markets have run ahead of the fed and the fed has to recognize where the market

really is and what would and would not surprise markets. if they did 50 basis points you would be seeing the market crash right now. the market was hugely volatile because the fed was so unclear about what its future path is going to be. to say we're meeting by meeting doesn't help. you have to tell the markets if inflation doesn't come back down to our level by this time, we're going to be very aggressive and going to do whatever it takes. so far this meeting has brought back some credibility to the fed because the march fomc meeting they showed we can get this inflation without any revisement on unemployment, without any slowdown in growth, that is a fairytale i'm glad the fed has gotten rid of. this forecast itself wasn't that great also. >> cheryl: no, and again there was a lot of talk, john, about sep. to let everybody know what they were saying summary of economic projections. it is the big three. today was the day we were going to get -- we only get this every quarter. here's our forecast for gdp 1.7% this year. here's our forecast for unemployment for the year, 3.7%.

inflation, 5.2%. john, so a lot of talk about -- they really it seemed to me had to really do a quick pivot after that cpi number last friday, and powell pretty much admitted that during the press conference. >> yeah, it was definitely a quick pivot, and also notice to investors, they lowered the gdp estimate for the next three years. they raised the unemployment rate for the next three years. and they still don't get to their inflation target of 2% over the next three years. so once again, it's a much more realistic vision of what the fed can and cannot do, and i think i will make one more point. it is interesting that he dropped the term model. we're not following a model. we're following the data, and that's something that economists like bill and i are doing right now. we're looking at the data very

carefully. we're not giving a model that we have to follow. >> cheryl: they threw out the old play book. that's what they did today. they threw it out. they said okay, new problem, new solution. bill, john, guys, thank you very much. great analysis obviously of this decision and of course what we just heard from jerome powell. now to these markets, everybody. i mean this has been a wild ride. you're probably used to it if you watch the show every day. here's the alert for you right now. the fear gauge is sinking. that's the volatility index, the vix, we talk a lot about it. there's the markets right there. i will give you that. there's the vix. thanks, guys. down almost 13%. you know, the vix if you track it every day, and i know liz does, it's had an average basically since 1990, the vix has reached an average level of 37 when the market bottoms, but it spikes usually up to about 85 during -- especially we saw this during 2020 when you had the big march 2020 sell off, that's when the pandemic started, but

volatility now falling. maybe that's a good thing because again, you are seeing a strong performance in the markets. dow up 564. and then the nasdaq, this is interesting. it is the leader right now. it got battered. down 28% so far this year. but right no the nasdaq is actually -- right now the nasdaq is actually coming back. what does that mean? maybe some of these big cap tech stocks that have gotten really slaughtered this year, maybe those guys are going to be okay. maybe you start to buy them. i want to bring in for our floor show, teddy weisberg joining me right now as well as dutch masters, and teddy, to you first, and then dutch, i will get to you. teddy, your initial reaction on what you are seeing right now? >> well, i think obviously the market likes what they heard, but i think -- i don't think we're out of the woods yet. he mentioned this two or three times, that he has no control over energy and to a certain degree agriculture, and quite frankly, i think the bigger problem for inflation -- the

biggest component is energy, and energy is something that clearly -- that this country can deal with if we reverse, you know, the energy policy that's been imposed since biden became president. energy is a big problem. and the food is a big problem, thanks, unfortunately, to what's going on in the ukraine. so yes, the market likes what they heard today, but i'm clearly not a believer. i think any rally is probably more of a better selling opportunity than a buying opportunity in spite of the fact that stocks have been down hard now for the last two or three weeks. we're not out of the woods yet, i don't think. >> cheryl: fair enough, teddy. i think you are right. the other question, dutch, there's been so much talk about a recession, will this tightening 75 basis points, 50 basis points, you know, as we go throughout the year, is that going to, you know, push the

economy into a recession? to be clear, powell defended the economy on several occasions, but that's his job. >> well, i think we're already probably in a recession here in the beginning of one, he said over and over again he wanted to see progress on inflation. he's not going to see it. the next print is going to be hot again. we're going to be a cpi print of like 8.75, and then we'll probably hit a 9 on the next one. he's not going to see progress on inflation. he's using a tool that won't work for the kind of inflation that we have. and he's crashing markets, whether they are stock, bond, currency markets, emerging debt markets, he's crashing markets all over the place. he said he's watching the real estate market. well, he's going to watch that one crash too because i know that all the speculators in the real estate market are gone, gone, man. so they are gone. what we're entering into here is a period of stagflation. we're going to be range bound in

these markets. i agree with teddy. this is not a bottom. we're going to be range bound probably for the next three to five years. people who are doing index investing or passive investing or long-only investing are going to be faced with a squeeze, and that squeeze is that their accounts are going to go nowhere, and inflation is going to be running 4 to 7 percent for a while, and the fed just admitted that today. so i think the market in its 5 or 600 point rise today on the dow has got this completely wrong. i went the other way. i'm shorting more of it because i think we're going to get -- when the grown-ups come back to their desks tomorrow and see that the fed just admitted that inflation is out of control, and they are going to see another -- two 75 basis point hits, that this market is going to roll over again before we get to a bottom. people are going to have to learn how to use inverse etfs

and technical analysis to trade successfully within a range because index investing and passive investing is going to be done. it won't work. >> cheryl: when the grown-ups come back to the trading desk tomorrow, i can't even add anything else to that. dutch masters, well said. i mean, you got to have -- you got to have a sense of humor when you've got a market that looks like this today. teddy weisberg, thanks, guys, we may need it if you're both right, that this is not the end of these volatile markets. i appreciate both of you. great to have you on, guys. all right. well, again you've got the dow up more than 400 points right now. fox business alert, goldman sachs coverage of private jet company wheels up experience took off with a buy rating on the company. you heard powell talking about airline prices. attractive entry point for the stock.

it is at $2.36. they put a price target of $5. let's take a look at shares of hertz right now. as you can see, hertz is higher by more than 5 1/4 percent. the company announcing a new 2 billion dollars share repurchase program. this is hertz's second buyback program inless than a year. it also announced a 2 billion dollars program back in november. and now to crypto. it's been a few rough sessions for crypto. it's a riskier asset. sometimes it is the first thing you see go. bitcoin, ethereum, light coin, they are all higher now, but in the broader context of things, this is actually still somewhat of a rough read on all of the crypto companies. a lot of these firms are announcing layoffs and cutbacks. they are warning of what they call a crypto winter. [inaudible] is going in a different direction. the crypto exchange announcing they opened positions for hiring. the ceo by the way took a swipe at the competition saying it was

not easy saying no to super bowl ads, studio naming rights and large sponsor deals a few months ago, but they did it. i guess they are having the last laugh on that one. after launching a 1995 internet explorer has retired from its web browsing career. microsoft and as you can see the stock is up more than 3% says that it's not -- no longer going to support explorer, windows users are going to instead be pointed to the newer edge browser when they open up the application. while it's still functioning, microsoft says eventually explorer will be disabled permanently. no, you can't sell it on ebay. netflix is making its hit tv series "squid game" a reality show obviously minus the risk of being murdered. producers say the reality project is going to include 450 contestants competing for a 4.56 million dollars prize, but contestants will not be killed if they lose the game. that's the difference from the

show. the competition is going to be recorded in britain early next year. netflix is taking applications for contestants right now. again, you will live through this experience, if you want to do it. netflix has had a rough go of it. you know, subscriber projections were rough. netflix is higher by more than 8%. all right. back to the big story today, the federal reserve going after inflation hard, with chairman powell saying the fed was willing to watch the unemployment rate rise a bit in a bid to tamp down demand. edward lawrence is joining us for the federal reserve in washington, d.c. after obviously getting that question out i thought was really interesting about the consumer that you got out to powell. ed, go ahead. >> yeah, very interesting about this. in fact, the federal reserve chairman did say it is very unusual for the federal reserve to sort of change course within that blackout period, within the last week. they were clearly set to go 50 basis points, but ended up with 75 basis points because of the late data that came in. that's what he talked about there forecasting if you look at

that same dot plot at least three more 50 basis point rate hikes with the number of meetings they have, and one more 25 basis point hike. but again the federal reserve chairman says they are going to look at the data. next year looking at possibly one 50 basis points or two 25 basis point hikes before a rate cut in 2024. it is very interesting though is the downgrade they made in the gdp, in the growth. they downgraded growth to 1.7% for the end of this year. that's basically obama administration growth they are looking at. they see that staying from this year to next year, 1.7%. then still under 2% for 2024 going to 1.9%. so the fed chairman says that slower growth in the data they are seeing the late cpi numbers they are saying as well as consumer sentiment which he called eye popping made this decision. listen in. >> i think if you look across that broad range of data, what you see is that expectations are

still in the place -- very much in the place where short-term inflation is going to be high, but comes down sharply over the next couple of years. that's really where inflation expectations are and also as you get away from this episode, they get back down to close to 2%, and so this is really very important to us that that remain the case. >> they are going to try and be more aggressive to make sure that that is the case here. cpi, you see, the ppi numbers there. i went on to ask the chairman as you mentioned about retail sales, and if you are hearing about inflation changing consumer habits. >> you see some things -- sales going down, but overall, spending is very strong. the consumer is in really good shape financially. they are spending. there's no sign of a broader slowdown that i can see in the economy. people are talking about it a lot. consumer confidence is very low. that's probably related to gas

prices. >> he is seeing a brighter future as he's describing there, but he said the fed has the tools and they will use the tools to get inflation down. that's his number one priority, price stability. back to you. >> cheryl: edward lawrence, thank you so much, great job today, sir. we will see you very soon. all right. well the fed has made its move, and it has major implication for anyone looking to buy a house. they ended the press conference on the topic of housing. whether you want a house, you want a car, you need loans, you need credit, how is this hike going to hit the average american? how is it going to hit you? gerri willis has that story in a moment. take a look tat big board. -- at the big board. we have pulled back a little bit. this is the market reaction that we have gotten. volatility still the name of the game. dow up 334. the claman countdown is coming right back.

>> tech: cracked windshield? schedule with safelite, and we'll come to you to fix it. >> tech vo: this customer was enjoying her morning walk. we texted her when we were on our way. she could track us and see exactly when we'd arrive. >> woman: i have a few more minutes. let's go! >> tech vo: we came to her with service that fit her schedule. >> woman: you must be pascal. >> tech: nice to meet you. >> tech vo: we got right to work, with a replacement she could trust. >> tech: we're all set. >> woman: wow. that looks great. >> tech: schedule now at safelite.com. >> singers: ♪ safelite repair, safelite replace. ♪ >> the day you get your clearchoice dental implants makes every day... a "let's dig in" day... >> mm. >> ...a "chow down" day... a "take a big bite" day... a "perfectly delicious" day... >> mm. [ chuckles ] >> ...a "love my new teeth" day. because your clearchoice day is the day everything is back on the menu. a clearchoice day changes every

day. schedule a free consultation.

>> cheryl: we've got 8 1/2 minutes until the bell rings.

the dow and s&p 500 looking to snap their five day losing streaks after the fed jacked up interest rates by 75 basis points. there is the dow right now of 288, s&p up 50. nasdaq is up 255. now, high inflation, nowhere more apparent than in the energy markets. a lot of talk about energy. something powell admitted over and over he can't control. right now the average gasoline -- the gallon of gas $5.01. this is a major burden for americans nationwide as you are look agent the $5 -- looking at the $5 average. a week ago $4.95. it was 3 dollars and change a year ago. oil down 2.61%. okay? oil production has reached pre-pandemic levels. now, in response, president joe biden is calling on u.s. oil refiners to produce more gasoline and diesel, saying that they need to help reduce the high gas prices that are hitting consumers. the president said in the

request to the ceos of marathon, valero, exxonmobil, phillips 66, chevron, bp, shell, exxon responded saying they have been in contact with the administration updating the president on how. real quick, we have been monitoring the white house press briefing and something that just crossed and this pertains to oil, the white house saying that president biden is willing to use the defense production act if it could help oil refining capacity. so that is a new move from the white house and from president biden. now, remember the white house is also -- you know, president biden's going to be heading to saudi arabia, and john kirby, from the defense department said about a half hour ago basically that they are going to be talking about energy and oil production. all right. it's not just gas prices that are rising. the fed's rate hike today will have a very real impact on main street.

gerri willis live in new york city with more. >> hi there, cheryl. that's right. jpmorgan chase behind me here, fifth third bank in cincinnati, they are already raising their prime rate. that's the basis for a lot of consumer interest rates. you thought interest rates are bad. wait till you see rising interest rates. it will clobber people who have variable rate debt, like credit cards, home equity lines of credit, and of course adjustable rate mortgages. listen. >> even if you are not in the market to borrow, but you already have debt, such as home equity line of credit, that cost is going up right alongside every federal reserve interest rate hike. >> and hardest hit will be credit card holders, people with variable rates, credit card debt, as we know, that number nationally has gone to a new high, 841 billion dollars, and we're going to see that continue to rise as these rates go

higher. understand the way this works is that you will get these rate increases over one to two credit cycles, and experts say you need to pay that down as fast as you can, if you revolve that debt, another idea, transfer your debt over to a low rate balanced transfer card. that will help ease your way into higher rates. now, we want to tackle mortgages as well. we have already seen mortgage rates go up nearly 3% this year, a stunning move for mortgage rates. we will see them continue to move higher. those mortgage rates have already killed about half the business this year for mortgage loans. and the current rate now 5.23%. but look, if you are determined to buy this year, you might think about getting an adjustable rate mortgage. i would just caution you, those mortgages have changed in the last few years. the rates now reset every six months instead of every year. so read the fine print. know what you are dealing with, and prepare yourself for a more expensive future. cheryl, back to you.

>> cheryl: gerri, i agree with you on arms. i don't think now is a good time to look at arms. you are absolutely right, thank you very much for that report. all right. well the fed's move will definitely impact real estate. we talked a lot about housing today. you want to watch the prime real estate block tonight, mansion global, that will be at 8:00 p.m. eastern time followed by new episodes of my show, american dream home, 9:00 p.m. eastern time. we're going to kentucky tonight by the way, during the whole hour, that's a good market. you can still get good deals in kentucky. you want to watch my show. well, the fed walking a tight rope between its mandate of bringing down inflation while not shoving the economy into >> not trying to induce a recession now, let's be clear about that. we're trying to achieve 2% inflation consistent with a strong labor market, that is what we're trying to do. let me talk about that sentence. clearly it is our goal to keep about 2% inflation while keeping

labor market strong. cheryl: joining us with 225 billion ins sets under management. creative management ceo peter maloof, and portfolio manager jordan kimmel. jordan, to you first, instant reaction comment from the white house they will use the defense production act to increase production. you like the oil services sector? >> the oil service sector have been on fire. so are the oil stocks. we also know they're public enemy number one to the administration. they want to jawbone them, do anything they can do to put a bad mark on somebody else who created this problem and the problem being inflation and, frankly it was oil companies that did this, it was policies, and frankly cheryl, it's a tough time for the country. it's nice to see a bounce but you know we've been in a bear market for a while now.

we are basically already i think in a recession and that is not the worst thing in the world. as long as you were prepared for it and good valuations are already showing up, but they have to blame somebody. they certainly don't want to point the finger at themselves. cheryl: they also got to do something because the midterms are coming up. i think that is kind of creeping into the conversation. peter to you, how are you advising your clients right now as we go into a higher rate interest rate environment? >> i look at what is sustainable and what is not sustainable. if we look at energy, i agree that, we're looking for somebody to blame here. if you look over the long run, there is not really a great macroeconomic story for energy. it turns out we have technology been able to find more than we thought we could find. we reached oil we didn't realize we couldn't reach before and rotating away from it car, planes, everything else faster than we thought. when you see the spikes in

energy they're usually not sustainable. they're due to geopolitical issues. they have been short term in nature. hopefully that will be the case there. i don't see going into looking how it has done i want to put a my legs in that wasket i would not advise my clients to do that. if you're looking being retired for 20, 30 years, it might be a little upsetting to watch your bond portfolio down a little bit here but in the long run this is great news. if you went to the bank, bought bunch 2, 3% cds, you would not be upset because when you get your cd matures you get higher rate. math has not worked for people that rely on portfolios for a long time. they might get an opportunity here in the future, to stretch out duration and lock in higher rates. cheryl: look, again the banks are going to do well. hopefully will do a little bit as well.

jordan kimmel, peter maluch thanks for joining me. we're up 303 on the dow. the dow, s&p snapping a five-day losing streak. the fed did it, 75 basis points. [closing bell rings] that was the hike. we thought it would be 50. 75 it was. we'll see what happens tomorrow when markets open once again. p that's it for "the claman countdown". larry kudlow is now. ♪. larry: hello, folks, welcome to "kudlow," i'm larry kudlow. so all eyes on the fed today and they raised their target rate by 75 basis points as everyone expected because they leaked it to "the wall street journal" on monday but here's the worst economic news today by far, retail sales unexpectedly fell, okay? they just dropped. the gdp tracker from the atlanta fed for the second quarter is now 0.0%. remember,