>> well, just talking about demand for a second. as i mentioned in my remarks, i think you pretty clearly do see a slowing now in demand in the second quarter. consumer spending, business fixed investigationment, housing -- investment, housing and places like that. people widely look at first quarter numbers and thought they didn't make sense and night have been misleading in terms of the overall direction of the economy, not true of the second quarter. but at the same time you have this labor market and there's plenty of experiences where gdp has been reported as weak and the labor market as strong and the economy has gone right through that and been fine. that's happened many times and it used to happen, if you remember, in the first quarter of every year for several years in a row, gdp was negative and the labor market was moving on just fine and turned out to be just measurement error. we don't know the situation, the

truth is that we think demand is moderating, we do. how much is it moderating? we're not sure. we're going to have to watch the data carefully. there are -- there's a great deal of money on people's balance sheets they can spend. the unemployment rate is very low. the labor market is very high. there's many, many job openings and wages are high. it's the kind of thing where you think that the economy should actually be doing pretty well in the second half of the year. we'll have to see. we don't know that because you do see a marked slowing in the second quarter. that is fairly broad so we'll be watching that. of course as i mentioned, we do want to see demand running below potential for a sustained period to create slack and give inflation a chance to come down. >> hi. thank you, chairman. nicole, "cnn business". when does the committee expect to see a slow down in the labor market and how much weakness

will accept with regard to slower job growth and higher unemployment before it pauses or begins to think about cutting rates? >> so i think you're already seeing -- you've seen in the labor market what you've seen as decline for very high levels of job creation last year and earlier this year to modestly slower job creation. still quite robust as i mentioned. you're seeing some increase in initial claims for un-insurance and that may have to do with seasonal adjustments, we're not sure that's actually real. there's some everyday that wagee hourly earnings, they appear to be moderating. not so yet from the other wage measures and we'll be getting the unemployment compensation index measurement on friday, i guess. that's a very important one because it adjusts for composition.

anecdotally you hear much of the sort of level of concern on the part of businesses they simply can't find workers is probably done a little bit from what it was say for example late in the latter parts of last year. it's a feeling that the labor market is moving back into balance. if you look at job openings or quits, you see them moving sideways or a perhaps a bit down. it's only the beginning of an adjustment. but i think most -- also if you look at, i mean, once you start citing these things, you can't stop. look at household survey, you see much lower job creation and household survey can be quite volatile and no jobs created in the last three months so that might be a signal that job creation is a bit slower than we're seeing in the establishment survey. so executive summary i would say there's some evidence that labor demand may be slowing a bit. labor supply, not so much.

we have been disappointed that labor force participation really hasn't moved up since january. that may be related to yet another big wave of covid and there's evidence that that's the case so we're not seeing much in the way of labor supply. nonetheless i would say some progress on demand and supply getting back in line. i think we're looking -- we're going to be looking at inflation as well. now as i mentioned, we need to see inflation coming down. we need to be confident that inflation is going to get back down to mandate consist levels. that's not something we can avoid doing. that really needs to happen, but we do think though that the labor market can adjust because of the huge overhang of job openings, of excess demand really. there should be able to be an adjustment that would have lower

than perhaps lower than expected increases in unemployment. lower than would be expected in the ordinary course of evidents because the ratio of vacancies to unemployed it out of keeping with historical experience and that suggests that this time could be different. >> thanks, chairman. edward lawrence from "fox business". the past may be norrowed to avoiding a recession and how close are we to arecession and forecasting from banks and economist and make a soft landing you talked about more difficult? >> as i mentioned, it doesn't seem the u.s. economy is in recession right now and i think you do see weakening, some slow down. let's put it that way, in growth and you see it across some of the categories that i mentioned, but there's also just the very strong data coming out of the labor market still.

overall you would say that the -- in all probability, demand is still strong and the economy is still on track to continue to grow this year. but the slow down in the second quarter is notable, and we're going to be watching that -- sorry. >> forecast does that affect the soft landing? >> well, you know, we've said since the beginning, i think, that having a soft landing is where we're aiming for. that has to be our goal, that is our goal, and we'll keep trying to achieve it. i do think events at the beginning we said it was not going to be easy, it was going to be quite challenging to do that. it's unusual. it's an unusual event. it's not a typical event given where we are. if there's a path to it, and we think there is, it is the one i mentioned and the labor market

has such a large amount of surplus demand that you could see, you could see that demand coming down in a way that didn't translate into a big increase in unemployment as you would expect in the ordinary course because frankly the imbalance is so much greater and -- but we don't know that. this is a case of first impression so anyone who was really sure that it's impossible or really sure that it will happen is probably underestimating a level of uncertainty. i would certainly say it's an uncertain thing. numbs it's our goal to achieve it -- nonetheless it's our goal to achieve it and we'll keep trying to do that. >> thank you, mr. chairman. jean young with market news. i wanted to ask about the balance sheet reduction program. it's been working for a couple months now and in a different environment than the last time the fed did it. what are you learning about how it's working and how markets are

reacting, and is reaching the minimum revel of reserving still far away? >> we think it's working fine. we tapered up into it and in september we'll go to a full strength and the markets seem to have accepted it. by all assessments, the markets should be able to absorb this and we expect that'll be the case. i would say the plan is broadly on track. it's a little bit slow to get going because some of the trades don't settle for a bit of time, but it'll be picking up steam. so i guess your second question was -- no, the process of getting back down to the new equillibrium will take awhile and it's hard to be precise. the model would suggest it could be between two, two and a half years. that kind of thing and is this is a much faster pace than last

time and balance sheet is much bigger than it was, but we look at this carefully and we thought this was a sensible pace and we have no reason to think it's not. >> hi, chairman powell. brian with fines. finance. we have financial conditions and it's slowed with the ten year mortgage rate coming down and 30 year rates going side ways and finance rates tight enough as you continue to raise rates? >> inflation expectations and break even is coming down, which is a good thing. it's a good thing that markets do seem to have confidence in the committee's commitment to getting inflation back down to two% and we like to see market based rings of inflation expectations coming double figures. broader financial conditions have tightened a good bit. we set our policy and financial

conditions react and financial conditions are what affects the economy. we don't control that second step. we're just going to do what we think needs to be done. we're going to get our policy rate to a level where we're confident that inflation will be moving back down to two%, confident. that's how we're going to take it and of course we'll be watching financial conditions to see that they are appropriately tight and that they're having the effect that we would hope they're having, which is to see demand moderate and inflation pressure reseed and inflation come down. >> thank you, chair powell. greg rob from "market watch". >> i wonder if you can go back a bit in time before there was an outbreak of inflation when the committee put in place forward guidance on tapering asset purchases, i think it was december of 2020. there's a recent speech by fed

governor waller talking about that saying it maybe too tight that kind of condition and put you a bit behind. not his words but maybe, you know, we're kind of late to react to some of that inflation. could you talk about that decision and have you looked at it in hindsight at all? thank you. >> yeah, so we said that we wouldn't lift off until we had basically achieved our dual mandate goals, and the reason we did it in realtime was that the first look at the new frame work that we'd rolled out, plenty of people were saying it's not -- you'll never get inflation to two%. some of the critics who say inflation have too high are the ones saying you'll never get to two% but anyway that's what happened. we thought we needed to really make a strong statement with that. it wasn't part of the frame work. the december '20 guidance was not part of the overall frame work but guidance we put in

place. one, that's not a materially changing the situation. i would have to admit, i don't think i would do that again. i don't think i'd do that again. ultimately the situation involved in a highly unexpected situation for all of us. you know, maybe the learning is that leave a little more flexibility than that. did it matter in the end? you know, if you look at -- i really don't think it d. i'm not sure it would have mattered if we'd been raising rates three months earlier? anyone think that would have made a difference? lots of federal banks were raising rates and it didn't matter. this is a globally phenomena happening now, admitly in the united states but anyway. >> just a lot of people talk about that time and they talk about a taper tantrum. you were worried about the time

that repeating that taper tantrum that you had experienced as a governor. was that part of that? where did that fit into all that? thank you. >> i think we learned there's been multiple taper tantrums and the famous where you know in 2013 -- one in 2013 and what happened at the december '18 meeting and markets can ignore the balance sheets for years on end and suddenly react very sharply. we just had developed a practice of moving predictably and doing it in steps and things like that it's like that's how we did it. we did it that way this time. we were careful to take stems and communicate and all that kind of thing. yeah, we were trying to avoid a tantrum because they can be quite distractive and tighten financial conditions and knock the economy off kilter and when it happens, you have to really in both '13 and '18 had consequences for the economy two, three, four months later and we were trying to avoid that

that was part of it. again, the real issue of 2020 and '21 was trying to understand what was happening with the reopening economy. that was where the big uncertainty was and, you know, our view was that these supply side issues would get better. that people go back to work and labor force participation would come back. everyone would get vaccinated and schools would open, kids would be in school, and labor force participation would jump back up. that was very broadly thought to be the case. the supply side issues would get solved reasonably quickly and they haven't and still haven't. that's the learning i think is around how complicated these supply-side issues can be. we haven't seen this before in a long, long time and so that's really what, you know, what accounts for the pace in which we moved. when inflation changed direction really in october, we moverred quickly since then, i think people would agree.

before then inflation was coming down month by month and we kind of thought we had the story, probably had the story right but then i think in october you started to see a range of data that said, no, this is a much stronger economy and much higher inflation than we've been thinking and again, we pivoted and here we are. >> nancy marshal with market price. i just want to pin you down a little bit more on the issue of recession. so if we get a negative gdp number tomorrow for the second quarter, would the fed consider the u.s. in a recession and just remind us, what is your definition for the start of a recession? >> so the fed doesn't make a judgment on that. you know, we're focused on the dual mandate and using our tools to achieve maximum employment and price stability. we don't say there's now a recession and that kind of thing. we couldn't do that. we'd look at the day tomorrow and look at it carefully and

draw whatever implications we can. as i mentioned though, you know, if you think about what inflation -- sorry, what a recession really is. it's a broad-based decline across many industries that sustained for more than a couple of months and there's a bunch of specific tests and this doesn't seem like that now. what we have right now doesn't seem like that. the real season is that the labor market is just sending such a strong signal of economic strength that it really makes you question the gdp data. but that's not a decision that we make, and we won't reach a conclusion one way or another on that. >> hi, thank you very much. simon with "the economist cotyledon cotyledon.". >> some softening in the economy was needed and unemployment might be as high as five to six% and higher than 3.6.

what's your assessment and is that coming up in discussion of the committee? >> i think broadly a lot of economists think that the natural rate of unemployment will have moved up to some significant extent above where we think it was before, and the reason is there's, you know, it's the usual matching issue or matching has become less effective and that kind of thing when you have that kind of turbulent downturn and the big switch in demand from services to goods and all that. it could be higher, and my own instinct is the natural rate of unemployment is higher and we can never know where the star variables are in realtime with any confidence, but i would say it must have moved up materially. but the other side of that is as the, you know, as all these jobs get created and people go back to work and unemployment is so

low, i think you could -- in principle you could see if coming back down pretty significantly and that would also by the way take pressure off inflation. that gap, it's the gap between actual unemployment and the natural rate that really is relevant for, you know, the negative slack we have in the economy which in the overtight labor market and you wouldn't observe this. it's unobservable and you could see inflationary pressures coming down if that does happen. we don't control that, but that's something that logically if the pandemic and disorder and labor market caused the match rale rate to move up, as the labor market settles down in principle, you should see it move back down. >> thank you, chair powell. jeff cox from cnbc.com.

same question about recession and most of the polls we're seeing from the public, people believe we're already in a recession or heading for one. economists pretty much the same thing. they're being told by folks like you and the administration that we're not in a recession, we're not heading for a recession. frankly coming from the same people that said inflation was transitory and now saying we're not heading for a recession. what would you tell the public to reassure them you feel confident in your forecast going forward and the fed is ready to respond to a potential downturn in the economy? >> well, all i've really said is i don't think it's likely the u.s. economy is in a recession now and i've explained why that is the case. you see a very strong labor market and i think the public will see that as well. you know, going forward, what we've seen is a slowing in spending as i mentioned. we've seen the very beginnings of perhaps a slight lessening in

the tightness of the labor market, but would only be the beginnings. and i mentioned that i also said that our goal is to bring inflation down and have a so called soft landing, by which i mean a landing that doesn't require a significant increase, a really significant increase in unemployment. we're trying to achieve that. i have said on many occasions that we understand that's going to be quite challenging and it's gotten more challenging over recent months. >> thanks, chair powell. kyle campbell with american bankers. the if, omcs -- fomcs trying to avoid the rapid monetary tightening policy that happened so far this year. how concerned are you that the rate hikes that we've seen thus far might increase risks to financial stability, not just domestically but globally?

>> i mean, there are precedence for the fomc moving very quickly, 1994 and 1980 even more so. we've been known to do that when it's the appropriate thing to do and this year is clearically is. i would say given how quickly we've moved, i'm gratified that while basically markets have been working, they're been orderly. there's been some volatility, but that's only to be expected. for financial stability perspective, you know, asset values are down, which in some sense lowers vulnerabilities. it's when they're really high that you would worry that they're vulnerable to a fall, actually many asset values have come down. i think you've got a well capitalized banking system. households are in about as strong financial shape as they've been in a very long time or perhaps ever given what the money that's on people's balance

sheets and so you have a pretty, from a financial stability standpoint, you have a pretty decent picture. now, macroeconomic, there's plenty of macroeconomic issues that don't rise to the level of financial stability concerns. but financial stability, we think of that as thingings that might undermine the works of a financial system, big serious things and people at the lower end of the income spectrum are suffering from high inflation for sure. they're going to the grocery store and finding that, you know, in many cases their paycheck doesn't cover the food their accustomed to buying. we're seeing actual real declines in food consumption and it's very concerning. it's very unfortunate and that's why we're really committed to bringing down inflation. one of the reasons. >> thank you, mr. chairman. mark with bank rate.

i remember when you held your first news conference and vowed to be a very claim spoken chairman and we're thinking today about the impacts of fed policy on individuals as well. what would you say to individuals or households who pay yet lose their jobs in this tightening cycle in the fight against inflation as they try to translate what fed policy means to them and this complicated economic landscape? thank you. >> so, i guess the first thing i would say to every household is that we know that inflation is too high. we understand how painful it is, particular for people living paycheck to paycheck and spend most of that paycheck on necessities such as food and gas and heating their homes and clothing and things like that. we do understand that those people suffer the most. middle class and better off people have some resources where they can absorb these things but many people don't have those resources. it is our job, it is our

institutional role, we are assigned uniquely and unconditionally the obligation of providing price stability to the american people and we're going to use our tools to do that. as i mentioned, there'll be some in all likelihood some softening in labor market conditions. we need growth to slow to below potential growth. we don't want to, you know, we don't want this to be bigger than it needs to be, but ultimately if you think about the medium and longer term, price stability is the thing that makes the whole economy work. it's what can give us a strong labor market and wages that aren't being eaten up by high inflation. if you talk to people, again people who are making, you know, wages, relatively low wages, they're the ones suffering the most from inflation. it's all the more reason why we need to move on this. thank you very much.

>> well, look at the dow jones industrial up nearly 500 points in what has been the most aggressive rate tightening cycle by a federal reserve in decades. the fed pile it had on with the second 75 base rate hike in as many months but fed chair jay powell could not have been more blunt when he declared i do not see a recession right now. the markets are screaming higher on that declaration. the dow up 498. s&p gaining 106, we've got the nasdaq up 473 points. that's a four% gain, folks, and the russell 2,000, a gain of 41 points. the interbase because on a day like this when the fed makes its decisions, that's where yoshi this kind of move. look at right hand part of your screen. right after the 2:00 p.m. announcement, the dow gained respectable 94 points but the

jump gained momentum when the q&a gain at 2:30 p.m. eastern and dow leaders, microsoft, crm, sales force, wal-mart, disney, apple back above the $3 trillion market cap. look at s&p today, it was up 54 points about 2:10 p.m. eastern, same response but the nasdaq is the real rocket ship here. it was already up about 292 points just after the announcement, but growth stock investors heard what they needed to hear from jay powell and have pumped up the tech heavy index by 477 points. let's flip it over to the nasdaq leaders because this is a big move here. nasdaq rock stars of the session, can't be surprised by this jump in alphabet of eight%. it's no. 2, notch one is papal up 12% because of activist investor story we'll tell you in a minute. vidya adp and microsoft a gain

of 6.7%. look at sectors, sectors stock reaction, financials both big names and the regionals, very rate sensitive. both areas are in the green right now. see morgan stanley up about 2.5% and the rest are following with those gains. higher rates mean these big financials and regionals can charge more for customer loans, which translates to bigger profits. but the greek course on wall street complaining that these rate hikes meant to bring down inflation will actually end up shoving the u.s. economy into recession are pointing to what earlier was a worsening yield curve inversion. the gap between the 10 year yield and two year yield bond starts at the moment, call it 20 points just over about 20 basis points. we were already the most inverted in 22 years earlier because before the 2:00 p.m. eastern fed announcement, that gap was 29 basis points. yesterda

it dramatically steepened 10 basis points to 30 year gap and we do have it, if you look at 10 year, it's at 2.41. 10 year yield, 2.77. what we need to basically explain is when shorter data treasury yield more than the longer data ones are yielding, that's seen as a signal recession coming or already arrived. the strong dollar has been a huge focus from microsoft and google and may well be apple reporting earnings tomorrow and rate hikes are dollar positive and last three born that out. right now dollar is just only slightly weakening at the moment. takes a dollar and two cents to buy a single euro. recently it was one: 16789 bigger picture and no doubt all

the rate tightening anticipation and each and every time this year was meeting this year's punched up the vic's 39% since january and down about 6.5%. when powell took the podium and began thrilling the markets when asked whether investors should expect the fed to bring out heavy duty rate hike tool again and refused to open a september tool box. listen. >> as it relates to september, i said that another unusually large increase could be appropriate but that's not a decision we're making now. it's one we'll make based on the data we see and we'll be making decisions meeting by meeting. we think it's time to just go to a meeting by meeting basis. >> ah, but there's so much more as the investment world scrambles to interpret all these developments for the money bets. here to do your heavy lifting and brian west bury and megan

green and quincy crosby with about 1.1 trillion with assets under management. brian, what was the big headline for you because he made some big ones? >> the biggest headline wases one that wasn't made. not one question about the m2 measure of the money supply. >> you got to explain what that is. to our viewers. >> yeah. here's -- milton friedmann taught us, we learned this in the 19 70s that in you print too much money and we measure by m2, the money supply two, it's all deposits and all banks, checking accounts, savings, cds, money market accounts and all the cash in the economy, that's grown 40% since february of 2020. i believe that's where inflation is coming from. yet no one talks about it. all they talk about is interest rates and so what's fascinating

to me is that the world has changed, monetary policy has changed and interest rates are no longer connected directly to the money supply. what he's talking about is raising interest rates and that will, we have seen it: slow housing, we've seen some slower data recently, but that's not what fixes inflation. the only way to fix inflation is stop printing money and that we've seen a little bit of that year -- this year but we're not guaranteed it's going to continue. >> megan. you know, brian just referenced what is working with rate hikes bringing prices down because the whole point of raising rates, everybody, is to cool demand, cool inflation and we've seen some things not work. what we wanted to do was put it on a screen here. here's where rate hikes are working, and you could look directly at some prices that have been skyrocketing all year.

we've started see gasoline come down just in the last month about 17%. then if you look at corn prices and wheat prices, corn is down about 25% over the past three months. wheat down seven%. then where rate hikes are not working; right. the gasoline picture in the real sore spot for consumers because when they're paying that much at the pump, then they're furious. but that price has definitely come down so that's working by the fed; right. here's where they're not working: cpi consumer inflation, new home prices up 14% year over year and gas and that's going on with russia invading ukraine. talk to me, megan, where do you see it beginning to show in roads and jay powell was pretty clear, he said inflation was still way above their 2% target rate. >> yeah, that's right.

i don't think it's actually fair to give the fed credit for gas prices coming down because, you know, oil is a global market. most commodity markets are a global market. what's going on in the rest of the world is a how long input to that as well. housing will continue to be expensive because of course we measure it according to rents, not to owners so we calculate it based on rents and don't sign a new lease every month and some not every year and feeds into the data with a major lag and that'll continue to be high as well. everything else, i mean, mortgages to be fair are going up. they already have gone up and that should help to lean against the rises in house prices. credit card debt will be more expensive, car debt will be more expensive as rates go up. anything that ties directly to the fed rate and the whole point is to kill off demand. we call it something fancier in economics to manage aggregate demands but the whole point is

to kill demand because supply is constrained and we need less demand to bring the two back into economist lib yum and it's hard to do that without hitting a recession and not worried about the money supply at all. not worried about the fed having printed money. it's not doing that anymore. just reinvesting what's rolling off. what also matters is the velocity of money so how fast money is moving around the economy and rates go up and velocity josh still pretty fast. >> yeah, but rates go up and velocity goes down and it's tied to big structural drivers and demographics not changing any time soon and our society ages and the velocity also slows down. i'm not going to talk about that >> quincy crosby, you're the big investor here. what did you see in this meeting, announcement, news conference that makes you realize what you've been doing is correct or what you'd like to change when it comes to investing and tell our viewers exactly the path you're take.

>> what we are seeing is that the markets, we're in the earning season as well; right. and the market is bisically looking a-- basically looking ahead and the market gets the news first and looks ahead about three months and the market is seeing by the time they get to the september meeting, you could probably see inflationary pressures easing and actually coming down at a faster clip than most people expect and glad people are talking about into and people didn't know what it was and no one talked about it anymore and it's coming down and comes down with a lag. that's important. what we're seeing is that the market is saying, look, we know things are difficult right now but companies are managing. we went into this earning season with tremendous pessimism, particularly about the interest costs, margin compression, and yet companies are managing and the market is saying, okay, if you don't meet the goals, meet

the estimates as long as it's not as bad at the estimates, and the guidance is good, we'll give you a break. that's what the market is doing. the market is looking ahead right now and the market is saying, you know what, it looks as if by the time we get toward november and december, we may see the supply chain challenges ease materially and even at the margins the most difficult ones coupled with inflationary pressures easing. everyone is looking for that second half rally. we may just be able to get that -- by the way, statistically the next two months are difficult months for the market and we'll be waiting to hear what the fed is doing in september. remember, he said i'm not -- now. i think he's tired of it. he's not telegraphing. they're going to go data point by day tafanely point -- data point by day tafanely point. >> the market is looking ahead and to 24 hours from now and we'll know gdp from the second

quarter looking like and second print. here's what jay powell said. listen to this, he's really questioning all kinds of data that he's seen but this was a shocker to us and you get to say whether you see a recession. here's jay powell. >> we don't say there's now a recession and that kind of thing. that wouldn't be something we do. we would look at the data tomorrow and no doubt we'll look at it very carefully and draw whatever implications we (&.k as i mentioned though, if you think about what inflation -- sorry, what a recession really .s it's a broad based decline across many industries that's sustained for more than a couple of months and a bunch of specific tests and this doesn't seem like that now. what we have right now doesn't seem like that and the real reason is that the labor market is just sending such a strong signal of economic strength that is makes you really question the gdp data. >> question the gdp -- do you, brian?

are you questioning the gdp data? are we in a recession or not by this time tomorrow? jimmy graham think a lot of people feel like we are. but that doesn't matter. we're not in a recession. if you look at s&p 500, all the earnings are coming out, we have, i believe, over 30% of the s&p have reported revenues are up 10% from a year ago. at the current environment as well, unemployment is 3.6%. it was 3.9. i hear all these people comparing our economy to jimmy carter, that 10, 11, 12% unemployment. the data says we're not in a recession. then just one quick point on interest rates. you know, from 2008 all the way through 2015, that's seven years, we had zero% interest rate. yet no inflation.

then all of a sudden now two years of zeroerer sent rates and we get all this inflation. it's not coming fent is m2 onlya year in those seven years back after the financial crisis, and it's 40% in the last two years. people don't need to go read milton friedman. he taught us about money and monetary policy. the federal reserve has completely changed the way it manages money today. it's confused everything, and i can't believe no one talks about m2. it's ridiculous. >> okay. >> we just d. we just did. >> yeah, we just did but you're commenting on milton friedman, i'm telling you martin felledstein would say it's all on the fed's shoulders and all about interest rates. we have to move on and markets are screaming high.

brian, megan, quincy, thank you. you really brought your a game here. the dow up 510 points and not even as high as the session at the moment. can we flip to home builders? home builders interestingly enough are in the green right now even after the fed raised rates by 75 basis points. dr horton is the leader here up about four% followed by lenar, toll brothers, nvr, if you check the 30 year fixed mortgage rate, see it's been rising over the past year. right now at 5.54%, that's considerably frothier than the 2.76% a year ago. who knows what will happen next week as the fed continues on the rate hike rampage. joining me now with 401 billion in assets under management, u.s. bank management group, cio eric friedmann and teddy wiseburg. eric, jump on it. what do you make of this market

reaction even as the fed chair says we're still looking at raising rates at least to bring down inflation? >> yeah, liz, i think it's really a sigh of relief honestly in terms of pryor sis. prices. is it a low volume day not to diminish the price action and this has been a pattern on fed reporting days is a significant rise particularly in nasdaq. we are of the mindset, it's a be the like a runner -- bit like a runner running with an ankle injury in terms of economy. we have high prices, high shelter cost and gasoline prices are elevated and the runner we think can endorse some of that and probably not perpetually and there's some good steps and some good points made by the fed chair today, we still think there's probably a little bit of a risk of a slowing consumer as we get deeper into this year. so again some positives, i think the fed was smart not to say, hey, look, we have this all figured out and here's our forward guidance and we want to

leave optionality on the table for investors and there's evidence of improvement and follow-through in consumer and business spending. >> teddy, the market action at the moment and no fear and vics down about 5.5% and interesting to see green on the screen and you have as many screens if not more than i do and financials are looking good and chinese stocks, european banks, insurance, refiners, big tech, department stores, healthcare, oil, restaurants, we could just whip through all of these and it is many different shades of green. >> yes, exactly. the rising tide for today is floating a lot of ships, but we've seen this kind of positive performance as your other guest clearly pointed out on other reporting days, you know, when the fed has begin us their decision. but you can paint me a cynic. i think what i heard is that the

fed is trying to change the definition for example of gdp and as have been the type in washington the last few days, i'm not sure and looks like they're trying to put lipstick on the bit of a pig at the moment. paint me a cynic, i'm not a believe -- up is better than down, i'll take it and happy for everybody including our portfolios but i don't think we're out of the woods yet, not by a long shot. >> eric, in june durable goods came out and big ticket items lasting three to five years and expensive items weather computers or washing machines and they surprise to the upside 1.9% for the month of june and the expectation was to see something like a loss of five tenths of a percent. i'm going to say, teddy is a skeptic and a cynic and looking at a economy, i mean, when brian

wesbury says we're noted in a recession and where do you stand on this? it looks relatively good to me. >> our economic team feels we're not in a recession and we'll have a modest slowdown and probably a bit of a recovery in the second half of next year, which is certainly plausible. one thing i would emphasize and you've done a great job with your team reporting on this and consumers keeping retailers guessing and looking at the apparel side, there's a significant increase in inventories and markdowns and mix shift between accumulating goods and accumulating experiences, and that's been the push/pull to the economy and on the ground retailers are trying to sort that out. i think there's been a nice mini boom of accountivity, which is d thing and we all want that to happen. the question is how durable part of the pun, will that

follow-through be and we of course want to see that in the next couple of months. i wouldn't call us completely glass half empty, but we think there's heavy lifting and businesses have to prover to justify the upside here. >> eric, what are you buying if i can get that picture for our viewers? >> we think the two space interesting are utility and infrastructure and utility being regulated businesses and not economically sensitive. and infrastructure captures the port opening and we read a lot about this, the changing dynamics of energy supply around the world. when you own investing -- sorry, infrastructure assets you're getting ports and infrastructure and that's a place to be here and now. >> teddy, you've loved facebook meta for time and they're up 6.5% and ran a banner on that . annual high at 384 and we're at 169 and change at the moment.

are you still sticking with meta? >> we're getting earnings after they close and as a company they're trying to change their spots. we'll have to see and clearly the jury is out on that and stock is creating a 30 times earning and a value play at current price levels and see what the afternoon brings after the close. >> all right, well, until then with about 14 minutes left till we see the close, the market is on fire. eric, great to have you and teddy as always. teddy wiseburg, our cynic and rock star. with the markets, it's a strong response, a positive one certainly for the bulls as we look at the markets but shares of chipotle, cmg, chipotle mexican grill serving up big gains and burrito chain announces second quarter earnings that beat analyst estimates and the chain saw sales rise 17% in the second

quarter. despite being forced to raise prices. the inflation picture is not a negative for this company. shares up, look at this, $1,524 and change, a gain of 208% or 15% at the moment. ceo said company weathered the prize hikes because the majority of customers are higher household income consumers. block lovers, sherwin williams said demand for indicates and coating peeling away needing to raise prices and price hikes are not working and sherwin williams down 8.7% at the moment and paint manufacturer lower 2022 earning guidance citing slowing demand in the do it yourself market and surging inflation. the materials that go into paint from the start sherwin williams

one of the first to raise prices. people signature around saying let me paint the basement. sherwin is planning a 10% price increase so another one on september 6. so papal, you've seen this rotating at the top of spin tech, at the top of nasdaq 1000. it's up 12.5% right now on reports that activist investor elliot management is in the process of acquiring a large stake and the size of the actual investment, not known yet but papal is ripe for the picking. it's fallen 54% year to date. the payment giant has been firing staff and closing offices, and elliot plans to push the company to speed up the cost cutting measures. dow possibility boeing,. it's been a roller coaster looking at inter-day picture. it was going gang busters at the open after posting second quarters earning miss, yes,

miss. but investors like the orders they got and waiting for regulatory approval to restart deliveries of boeing 787 dream liner. why did it then turn negative? ceo said the company is on the verge of resuming delivery for the wide bodied jet and didn't give a time line. the real problem is boeing expects to deliver fewer 737 max jets this year due to supply issues and delays in delivery to chinese customers. the aircraft maker defense business hit by around $400 million in charges during the quarter. boeing right now flat, slightly higher now, up about a quarter of percent. twitter stock getting a boost at this hour. a jumping about 1.5% following breaking news and reporting that elon musk may get a lower price on his deal to buy the social media platform after all. charlie, fill us in. >> my sources are bankers that are working with him that know him. what they're saying is this.

it's pretty simple that he doesn't feel confident about winning a chance in court against twitter. his end game is to appeal, whatever happens, and essentially to buy twitter at a lower price. he's still interested in it, and he believes that twitter's board will relent at some point at a lower price. what is that lower price be? i don't have those numbers. no one knows, you know, twitter is going for the 5420 or $44 billion full enically la data committee from musk but if they win the first round, he can appeal. the appeal could take six, eight months and could be going on for a year. in the meantime, the stock price could get crushed. as that happens, this is musk's gamble and it's a gamble, he thinks they'll come back and agree to a lower price. we asked charles ellison at the university of delaware, an expert at the court.

he actually thinks musk -- they'll sell for a lesser amount of money like four% off the 44 billion, do your math. his number was four % and appeals could take a long time and appeal to what he said was the supreme court of delaware gets it after chancery court. apparently this thing has a couple legs, musk is a gambler. the gamble is this, according to to people close to him telling bankers that are close to him, that he thinks that they'll settle for less price. he knows he doesn't have a strong hand in front of chancery, he knows he'll probably lose that, but thinks time is on his side and time is not on twitter's side because this is a company that has real issues: advertising issues, revenue issues, don't make a lot of money. >> and the cloud overit as this thing continues to go. >> that's his game plan. we'll see. it would be nice if he tweets something out about this story. it is moving the stock.

>> here's my question, if you're quoting bankers, my question is the court has been very court and this particular judge has also made a recent ruling saying to some other company and it was a smaller purchase price, sorry, you're stuck with the purchase price. you promised the target company. too bad. i don't care what your problems are and they were forced to pay it. >> i think he knows -- according to my sources, he know he's going to loose. >> he's banging on the time it's going to take for them to appeal. >> play a long game and bs till you can't bs anymore and try to get the numbers down and, you know -- >> that four% about what, $1.76 billion cut off that $44 billion price? >> sounds about right. did you do the math or someone up there do the math? >> i did it in my head. then it went somehow into my

ear. >> charles ellison said the four% number and it's completely plausible and he's an expert at the university of delaware, law professor, he knows his stuff. i can tell you my banker sources are solid. they're not just people speculating, they're solid. no one -- let's be real clear, no one really knows what's going on in elon musk's head. he got hit with two things all at once. twitter price went down and no one believed it was at 54 and nasdaq sold off as well; right. and tesla stock price went down. now he had a double whammy and needs to renegotiate. he wants to pay less. >> here comes the dance. dance. at least he's not shirtless. >> you know -- >> that's the ceo that would be fun to work for. >> i don't about work for but party with. i think he needs to hit the gym a little bit, don't you think? too many -- >> okay, charlie.

you're mr. gear gym head. >> i worked out earlier today and got it out of the way. >> bob dole was working out portfolios for his client. buff, very buff. closing bell, standing by, seven minutes away. looking at the markets at the moment. we have really strong rally, all though eric friedman pointed out, it's thin volume. dow is up but off the highs of the session. 448 points and. liz: 280 billion-dollar chips and science bill did pass the senate today. now it goes back to the house for a vote tomorrow. it is expected to pass. this will be very solid money, 52 billion for the semiconductor industry. all of them are moving higher but look at qualcomm, a gain of 2% and tomorrow right here you guys cannot miss this. we have the ceo of qualcomm how important the chips act is to the semiconductor leadership

that the united states has kind of lost to china. there was word that qualmcom and amd weren't so thrilled with the chips act because it didn't help them as much as it helps names like nvidia, some other intel possibly but he may change his mind here because it is certainly helping all the stocks. tomorrow right here on "the claman countdown." head of qualcomm. head of tomorrow's gdp read, chair powell headlined why he doesn't think the u.s. is in recession no matter what it comes out at. >> the reason is, there many areas of the economy are point too well, i would point to the labor market in particular. as i mentioned it is true growth is slowing, reasons we mad, the growth was extraordinarily high last year, 5 1/2%. we would expect growth to slow. there is more growth slowing. look at lable door market.

payroll jobs averaging 450,000 jobs per month. that is remarkably strong level for this state of affairs. unemployment rate at 30-year low, 4.6%. all measures we track are running very strong and this is strong labor market, that is not consistent, 2.7 million people hired in the first half of the year, doesn't make sense the economy would be in recession with this kind of thing happening. liz: let's bring in bob doll, what investment sense he is gleaning from the statements fed chair powell made and 75 basis-point hike. he is at crossmark global investments. bob, you joined us after the may 4th meeting on "the claman countdown." market was oversold. everybody is piling in at the moment. where do you see opportunity knowing what powell said and fomc decision? >> the fomc said there is not a

ton more interest rate increases in front of us. that inflation is beginning to roll over. that the economy is slowing and it is going to do the work for them. i think that is part of what encouraged the market. i don't know that the economy is looking okay. you just mentioned labor. i fully agree, liz, you talked a little bit earlier about the durable goods number today, it has gotten nearly enough attention, that was good number. merchandise trade deficit is pretty good. i don't think we're in recession. slowdown, of course, maybe we'll fine tune it quibble over little details but i think economy is okay, market is saying look at those second-quarter earnings. they're less bad than feared. put that all together and the market's having its rally off the june 16th low. liz: look at june jobs report, how can you say when in the last month of the second quarter 372,000 jobs were added. sure, we may see unemployment tick higher.

that's pretty much expected but bob, what is the trade knowing what we know, as we spin it forward to tomorrow, gdp, we've had a whole bunch of voices saying meh, the data, doesn't really matter what it is, not a recession yet? >> agreed not in recession yet. in terms of the market we had a nice practically. this is the fifth double-digit percentage rally since the bear market started. we've not yet seen capitulation. while i want to play this rally i do in the think we've seen the low. some chance june 16 was, had better action during that period but i think one needs especially into weakness a better buyer of stocks. i think second half of this year, june, december 31, stocks will be up. maybe not a lot. a lot of meals to get there but i think the worst of the bear market is behind us. liz: you like intel you liked last time around, cigna, all

state. talk about intel, broaden that to the tech picture at the moment, a lot of green, whether fintech or chip sector. intel has been ugly here to date. why are you sticking with this one? >> that is a lot of the reason why. the stock is 50% almost low last year. five-year low. 4% yield. p-e ratio is barely in the double-digit territory. they win from the chip bill you talked about a couple minutes ago. it is a long-term story. they're doing a lot of investment but i'm betting with them. liz: we have ford earnings after the bell. when you think about the chip picture as it pertains to the auto sector what do you predict, what do you think is going to happen there? >> look, i think we went through a long period where car companies couldn't get the chips, so they couldn't get cars off the line. we're having somewhat better supply now. so they're doing a bit better. those stocks have gotten hit hard. i think that is another place to

do some shopping. liz: bob, it is excellent, impel len commentary to have as we wrap up unbelievably wild session. thank you so very much. [closing bell rings] wild because the dow looks to close up 400 points. was up 90 points right after the fed decision. with the chair saying no recession, we have a rally on our hands. ♪. larry: hello, folks, welcome to "kudlow," i'm larry kudlow. so jay powell's fed when ahead raised their target rate 75 basis points to 2 1/2% as the world expected, no big surprise. in fact the stock market increased 500 points, 434 points at the close. bonds basically flat. 10-year, 2.79. gold up a little bit 18 bucks if he had a little more hair on his chest he would have done 100