the income sheet. ladies, thank you so much. it's a historic day and important stuff and great answers. jay powell still speaking and i'll hand over to liz claman and she'll take you through the next hour. liz: thank you, charles. the fed raises interest rates by 75 basis points and jay powell bluntly stated no grounds for kansas city chiefs play makers san seizure disorders for inflation and -- complacency and markets took off when a pause in the upper trajectory is taking points and let's go back to the federal reserve. >> if woe were to fail to do that, that would be the thing that would be most painful for the people that we serve so for now, that has to be our overarching focus and you see that in the sep and level of rates we'll be moving to recently quickly assuming things turn out roughly in line with the sep. that's how we think about it.

>> thank you, mr. chairman. i wanted to ask you a couple of direct questions for the american people. do the odds now favor given where you are and where you're going with interest rates, favor a recession? 4.4% unemployment is about 1.3 million jobs, is that acceptable job loss? and then given that the data you look at is back ward looking and the lags in your policy are forward looking and you don't know what they are, how will you know or will you know if you've gone too far? >> i don't know what the odds are. i think that there's a very high likelihood of a period of what i mentioned is below trend and much lower growth and we're seeing that now and the median forecast for one of my colleagues and me is 0.2%,

chris. that's very slow growth and below trend next year and median is 1.2 and also well below. that's a very slow level of growth, and it could give rise to increases in unemployment, but i think that's -- so that is something that we think we need to have and we think we need softer labor market conditions as well. you know, we're never going to say that there are too many people working but the real point is there: inflation -- what we hear from people when we meet with them is that they really are suffering from inflation. if we want to set ourself up really well to another period of the strong labor market, we've got to get inflation behind us. i wish there were a painless way to do that, but there isn't. we need to get rates up to the point of putting meaningful downward pressure on inflation and that's what we're doing. we don't certainly hope -- we

certainly haven't given up the idea that we can have a relatively modest increase in unemployment. nonetheless we need to complete this it task. >> how will you know if you've gone too far? >> it's hard to h hypothetically deal with that question. the tight focus is on going rate increases to get the policy rate up where it needs to be. as i said, you can look at this sep as today's estimate of where we think those rates would be. of course they will evolve over time. >> i wanted to follow up with what you mentioned about the labor market, you said several times that to have a labor market we want, we need price stability and you suggested maybe there isn't a tradeoff in the long run. but in the short run, there's a

lot of trade with people expressing concern of the high rate hikes and can you explain what about high inflation now threatens the job market when you seem to suggest then that inflation -- high inflation will eventually lead to a weaker job market. can you spell that out a bit more for the general public and how that would work? >> for starters, people are seeing their wage increases eaten up by inflation. if your family is one where you spend most of your paycheck every paycheck cycle on gas, food, transportation, clothing, basics of life and prices go up the way they've been going up, you're in trouble right away. you don't have a cushion and this is very painful for people at the lower end of the income and well spectrum. that's what we're hearing from people is very much that inflation is really hurting. how do we get rid of inflation?

i mentioned it would be nice if there was a way to wish it away, but there isn't. we have to get supply and demand back into alignment and the way we do that is by slowing the economy. hopefully we do that by slowing the economy and we see some softening of labor market conditions and see a big contribution from supply side improvements and things like that but none of that is guaranteed. in any case, our job is to deliver price stability and you can think of price stability as an asset that just delivers large benefits to society over a long period of time. we really saw that for a long time, the united states had 2% inflation, didn't move around much, and that was enormously beneficial to the public that we serving. we have to get back to that and keep it for another long period of. to pull back from the task of doing that, you're postponing -- the record shows if you postpone

that, delay is only likely to lead to more pain. i think we're moving to do what we need to do and do our jobs and that's what you see us doing. >> thank you for take the question, mr. chairman. edward lawrence, fox business. you said that americans and businesses need to feel economic pain as we go forward, how long from here should americans be prepared for that economic pain? >> how long? depends on how long it takes for wages and more than that prices to come down for inflation to come down. so what you see in our projections today is that inflation moves down significantly over the course of next year and then more the next year after that and i think that once you're on that path, that's a good thing and things will start feeling better to people. they'll feel lower inflation and feel the economy is improving

and also if our projections are close to right, you will see that the costs in unemployment are meaningful and certainly very meaningful to the people that lose their jobs and we talk about that in our meetings quite allot. but at the same time we'd be setting the economy up for another long period. this era has been noted for very long expansions. we've had three of the four longest in measured history since we got inflation under control. that's not an accident. when inflation is low and stable, you can have the nine, ten, 11 ten year expansions and you can see what we saw in 2018 '19 '20 which was very low unemployment and wage gains going to people at the other end of the spectrum and we want to get back to that but to get there, we're going to have to get supply and demand back in

alignment, and that's going to take tight monetary policy for a period of time. >> as a follow-up, what's that economic pain in your mind? job losses, higher interest rates on credit cards? what's that economic bane? >> it's all of those things. higher interest rates, slower growth, and a softening of labor market are all painful for the public that we serve, but they're not as painful as failing to restore price stability and then having to come back and do it, you know, down the road again and doing it at a time when actually now people have really come to expect high inflation. if the concept of high inflation becomes entrenched in people's economic thinking of their decisions, then getting back to price stability, the cost of getting back to price stability just rises and we want to avoid that. we want to act aggressively now and get this job done and keep

at it till it's done. >> thank you, chairman powell. nicole with cnn business. home sales have fallen and mortgage rates at highest level since 2008 yet mortgage demand increased this week and housing prices are still elevated. at the end of your june press conference, you mentioned plans to reset the housing market. i wonder if you could elaborate on what you mean when you say reset and what you think it will take to get there. >> when i say reset, i'm not looking at a particular specific, you know, set of data or anything. what i'm really saying is that we've had a time of red hot housing market all over the country where famously houses were selling to the first beyer at 10% above -- buyer at 10% above the ask before ever seeing the house. it was a big imbalance between

price and demand and housing prices going up at a fast level. the decrease is bringing prices more closely in line with rents and other housing market fundamentals and that's a good thing. for the longer term, we need supply and demand to get better aligned so housing prices go up at a reasonable level, reasonable pace, and that people can afford houses again, and i think we've probably in the housing market have to go through a correction to get back to that place. there are also longer run issues with the housing market. as you know, we're -- it's difficult to find lots now close enough to cities and things like that. builders are having a hard time getting zones and workers and materials and from a business cycle standpoint, this difficult correction should put the housing market back into better balance.

>> shelter made up such a large part of the hot cpi report that we saw. do you think there's lag and we'll see that come down in the coming months or do you think there's still an imbalance that needs to be addressed? >> no, i think shelter inflation will remain high for some time. we're looking for it to come down, but it's not exactly year when that will happen. so it may take some time so i think hope for the best and plan for the worse. on shelter inflation, you've got to assume that it's going to remain pretty high for awhile. >> hi, jean young with mortgage news. you've talked about the need to get real rates into positive territory and you said earlier that policy is just moving into that territory now. i'm curious it how restrictive is rates at 4.6% is that expected to be next year? how restrictive?

>> so i think if you look, you know, when we get to -- let's assume we get to that level, which i think is likely, you know, you're going to adjust that for some forward measure looking measure of inflation and that could be you pick your measure. it could be you -- there are all kinds of different things you pick and what you get is a positive number. in all cases, you will get four inflation expectations in the short term i think that will be assuming that we're doing our jobs appropriately and it'll be significant. you'll have a positive federal funds rate at that point which could be 1% or so. i mean, i don't know exactly what it would be but it would be significantly positive when we get to that level. let me say, you know, we've written down what we think is a plausible path for a federal funds rate and the path we execute will be enough. it will be enough to restore price stability.

this is something that as you can see, they've moved up and we're going to continue to watch incoming data and evolving outlook and ask yourself if our policy is in the right place as we go. thank you very much. liz: talk about hammering home a point. federal reserve chairman jay powell says we will not stop raising interest rates until the job of cooling off inflation is done. it's really hard to just take a look at the markets and guess exactly what's been happening up to this point. we've seen 600 points of a swing for the dow jones industrials up down all around and right now the dow jones industrials, which had been higher for a good chunk of the news conference reversing now down 82 points. the s&p also turning back to negative, down 2 points. the nasdaq holding onto 11 points of gains and russell 2,000 up about 4 and s&p maybe about to turn negative. don't know that yet.

let's get you up to speed. the fed unanimously implemented third consecutive 75 basis point hike brings the fed funds rate to 3.75% and that's the highest since 2008. financials are extremely sensitive to any kind of rate hike, and i do want you guys to understand that already all different levels of rates are moving up. you had jp morgan and fifth third bank hitting the tape saying they're raising their rate to 6.25% and it's a mixed picture with citi, bank of america and jp morgan and goldman sachs up just a bit here. we have the fed reminding us that rates are a hot air balloon that's climbing in elevation. treasures are reflecting that the 10 year yield with 3.52% had earlier hit another 11.5 year high and bringing back a few basis points and at 3.25% after

hitting -- i keep it tick by tick here, 3.6% we were up and as we continue to watch all of this, look at two year, which during this hour yesterday stood at 3.96%. it took off this morning and has stayed relatively high touching 4%. first time since 2007. jerome powell making it extraordinarily clear as we said he is not going to stop along with the federal open market committee when it comes to raising rates. but you can see, if we show intraday pictures, the markets started to pop up higher significantly when jerome powell was questioned about when we might see a pause in this higher rate trajectory. listen. >> there is a possibility certainly that we would go to a certain level that we're confident in and stay there for a time. but we're not at that level. clearly today we're just -- we've just moved i think into the very lowest level of what

might be restrictive and certainly in my view and the view of the committee, there's a ways to go. liz: all that heard was pause. when i say they, i mean the collective market and the market started moving higher. high of the session we should tell you for the dow up 314 points. we're up just about 99 at the moment and let's bring in our brilliant fed panel for the floor show. chief u.s. economist and private wealth adviser and wall street journal senior writer who will spend years diving deep into the death penalties of fed fink. john, i'll start with you. go inside the committee's heads right now and what specifically do you think drove them to do 75 basis points versus 100 basis points some expected? >> well, two things jump out at me. first, what we're seeing today is really a dance between jerome powell and the financial markets. i think, you know, in july we got inflation numbers that

finally were looking like there was cooling happening and people in the markets were talking about a fed pivot. maybe the fed would back off the rate increases. ever since august in jackson hole, h powell has been saying , no, no. he doesn't want the market to get ahead of itself and hammering home that message and that's what they were doing today. it's pretty amazing to me because the feds fundamental inflation forecast hasn't change that had much since june. now saying rates are about a percentage higher than they expected in june. part is about managing market expectations and the second thing, compelling evidence. that's the key phrase to me. he said the fed isn't going to back you have of this until they see compelling evidence that inflation is cooling. we're seeing some mixed evidence that it is. they're not going to back off till it gets compelling. i think people will need to

start asking him how do you define come compelling. liz: exactly. we can look at longer pictures of oil and oil bob gasoline has come down from june highs where oil was $128 a barrel and gasoline above $5 for the national average. so i think he wanted to make it very clear that the federal reserve is not bolted to tightly to headline inflation that includes highly volatile energy and food prices but tell me, do you think that when he looks at core, what is he going to need to see before we see that elusive pause? >> yeah, he was asked what theyment to see. he was specifically asked that and he sort of dodged it. basically saying it's not a question i want to answer directly. i'm a little sympathetic to that

but i believe we need to know what they're thinking. what we think they need to see is inflation moving in the right direction. call it for at least a few straight months and we think by the end of the year. we think core inflation will actually be in a better place. let's be clear. you've got six handles on corner inflation and by the end of the year, we get into next year we easily can see a scenario where core inflation is back to two handles. it's been a long standing call about it. there's a lot of disinflationary forces in the pipeline and they'll take time to materialize. that's one thing that the fed can't have a lot of patients for that right now. they're going to continue this process of lifting rates. liz: nancy, we're looking at the dow looking like it's about to turn negative once again. we've been bouncing up and down

across the flat line all session. you handle the wealth of individuals and of families. no way around it. he made it clear, we're in a rising rate environment for the foreseeable future and widespread perception among investors and i think it's not correct sometimes that if we're in a rising rate environment, stocks must go down. do you believe that and if so, or not, tell us exactly what you think and where the investor might win. >> well, the markets are going up and down all day today because they can't figure out where to hand at this point because -- i thought mr. powell had a great deal of clarity. they did exactly what we all predicted they would do, and the fed is trying to gain credibility and they're very much on target to beat

inflation. investor point of view and client point of view, they're a bit scared and fear out there because markets are very bumpy and you get a huge runoff one day and a huge decline another day. the only thing i have to say based on especially what mr. powell said today is expect more of the same, at least until year end or longer. we have to manage our expectations. the reality is that trillions of dollars were printed and this is not going to be the push of a button where we'll turn it around like that. it's going to take time. liz: nancy, in a time now where the era of really cheap finances and borrowerring is clearly in the rear-view mirror, what do you say about that and what does that mean for the investor?

>> there's a point where this will pause when they feel inflation has been tackled at a certain level. that's expected to be at around 7% by the end of this year and perhaps maybe lower next year and it'll take a couple more years before we see valuations go down. liz: how will that affect growth? gdp, they sharply changed their forecast, did they not? they said two tenths of a per sented at the end of 2022. 1.2% for 2023 and w we can put p each year 1.8% for 2025. that's kind of weak, is it not? >> liz, that's a really important point that you make. one of the things that puzzles me about the way the fed is talking right now, economic growth has already slowed and it slows sharply and the feds forecast reflect that. yet they say that they've got to raise interest rates enough to

slow down economic growth. it already has. inflation has also shown science of slowing and inflation expectations have stabilized and they're indicating there's about another percentage point of interest rate increases ahead of them. i find frankly these forecasts to be a little puzzling or what it indicates to me there's a real risk of miscalculation right now. frankly makes me think a bit back in 2007, the fed was raising interest rates in 2005, 200 a2006 and they didn't raisem very much in the mid 2000s and we got a nasty financial crisis out of that and doesn't take a big calculation in an economy with this much debt to cause new set of problems. strap yourselves in. we've talked about this, the vicks -- this is an era of volatility, and i think we're

still in that and the fed is in -- the fed tends to be very slow to adaptor changing economic environment and i wonder if they'll be able to catch the winds as ashift. liz: look at volatility index. middle to lower. that means no fear earlier in the session and then it spiked 11%. now it has reversed and down for the vicks. tom, we've got to talk about employment or unemployment because the fed also rejiggered its unemployment numbers but powell made it very, very clear. we have to see a cooler employment world. at the moment, it's very, very hot and robi robust and strong r adjective you want to use. listen to what he said about employment and why it's something he fully expects. >> so far, there's only modest evidence that the labor market

is cooling off. job openings are down a bit as you know. quits are off their all-time highs and there's some signs that some wage measures may be flattening out but not moving up. payroll gains have moderated but not much. in late of the high inflation, we'll need to -- in flight of what i just said, we'll need to bring our funds rate a restrictive level and keep it there for some time. liz: tom, what should people expect? >> yeah, look, labor data are slow moving and much of it actually tends to be lagging. the fact that you're already seeing signs, much as he rightly highlighted that the labor market is startenning the process of softening and that's a long grind down. a lot of data are already consist with that. a lot of their summary of economic projections and a lot will not be realized and they'll

probably end up being worse. the growth numbers as you highlighted a moment ago, those we'll probably want to gain meaningfulness. those at the peaking rate and holding at 4.4 or more. you can see the unemployment hitting 5% and powell has the answer to the question. the labor map has slowed and started the process of softening and it tends to be a lagging metric and that's pretty compelling in and of itself. liz: i agree and i want our viewers to know nasdaq is now negative and s&p down 7 and nasdaq lower by 4 ands are el l clinging to 3. transports, the past couple of sessions and certainly when last week you had federal express warning that it was going to have a very ugly current quarter. this is what you have. we have had a pretty dramatic picture of a fall and now today

upstarted to gyrate as you can see after 2:00 p.m. eastern and now back up to session highs or close to them, actually session highs just after 2:00 and we're scaling back but still up 16 points. nancy, investors, where should they go? i'm guessing you're not saying technology but go value, sort of growth? tell me what you like here? >> if you're entering now, this is a great entry point because pretty much everything is on sale. corporate balance sheets are still fairly strong and once we get to the other side of all this, hopefully it'll be much better. yeah, value stocks are in bulk and you're getting income to offset all of this crazy volatility. the market doesn't like uncertainty and it's a very great demonstration today where on one hand, isn't there great. mr. powell did exactly what he said he was going to do but oh,

wow, the reality is this is going to be really bad for a little mile longer and the narcotic is react to that today and the data doesn't support all of that. you have to think longer term. >> well, i can tell you guys now, the transports just turned negative. they've given up the form here. at the moment, we just have red on the screen for bit coin of all things. up 2.3%. tom, john, and nancy, thank you so very much for joining us. the closing bell rings in 32 minutes. it's been a very volatile hour. the dow as high as 313 points and dropped 296 at its lows and down 208. up next, floor show traders, they've been trading this roller coaster market. what are they buying and totally

avoiding now that they know how the fed thinks for the next foreseeable future. the cl "claman countdown" is cog right down, next.

liz: the dow during the commercial break hit new session lows. a loss of about 304 points. we're off that now down about 221. a second ago 29 of the dow 30 were in the red. we do have wal-mart, home depot, and goldman sachs clangs to positive games and wal-mart more positively to the upside and they raised rates by 75 basis points that was totally expected, but made it starkly clear multiple times, in fact we should count how many times he said the hikes will continue until inflation is doused. what caused all of this inflation? a number of factors, it's global

and certainly when it comes to global inflation, powell said the war in ukraine added major additional pressures on the global economy. it's been a major topic of conversation today at the united nations in new york city and looking live of the president of [inaudible]. he's speaking at the moment but lots of focus today. president biden is there, of course we expect the ukraine president to also speak. let's look at defense stocks moving higher after vladamir putin of russia accelerated his war effort in ukraine announcing a new campaign that would call up roughly 300,000 reservists to the military while also directly challenging the west over its support for ukraine with a veiled threat of using nebbing nuclear weapons. this was no bluff. those are hides words and earlier president biden addressed the general assembly saying the "the world's blood

should run cold over the invasion and comments about russia". let's get to the floor show with keith fitzgerald. i don't know what's so horrible about what powell said. we want prices to come down and knew they'd raise by 75 basis points and u.s. greenback, the dollar, is incredibly strong hitting fresh 20-year highs against the euro and yen. isn't today a day where you pick up some cheap stocks maybe? >> oh, i am absolutely with you. volatility is an opportunity. you know, it's funny, liz, the market is the only store in the world where people run the other direction when stuff gets put on sale. personally, i think the fed lost the plot months ago. i use days like today clinically and going for stocks that are must have goods and services, especially on days like today. liz: yeah. dow and s&p are actually -- no, i believe -- yep, that is the

session low now. we know our viewers -- session low for the dow is loss of 305 pointpoint-blank layupses. let me be clear. right now we're down 244. keith, the market somehow doesn't like what was said, specifically what do you think that was? >> well, i think that the reality dawned on a lot of people this isn't about rates or even inflation. the fed very clearly wants millions of americans to lose their jobs and they want the cost of everything to go up because that's how the fed thinks is going to get a handle on this. i think the fed has a fiscal problem personally. i don't take what powell has to say with anything other than a huge grain of salt. it was important but they ought to take the microphone away and let the market settle down and the longer they talk, the more uncertainty there is. liz: okay, let's bring in sarge. sarge, just across to the east side there's the un general

assembly and i'm surprised the market didn't shutter more when putin said i'm not bluffing this time about using nuclear weapons. you have for weeks and weeks said build up on defense stocks. i'm not talking defensive, i'm talking defense like the lockheed martins and rathions of the world. they make our weaponry. are you sticking with them and how does this affect your vision at all? >> oh, sure, this is a winner in my portfolio, this whole area right now. thank goodness i'm strong in this group. i'm in a long lockheed martin and general dynamics and smaller names and not long rathian and all the others, i'm long on those and trying to focus on the names that are higher -- more involved in hypersonic weaponry where the russian haves an advantage on us supposedly. this is where the money will

have to be spent and the department of air force or army or navy are all allocating funds towards these weapons and this is where we have to go right now speaking just about that specific sector. it's a leader today and outperforming the industried group. liz: i'm glad you're wearing a hawaiian shirt because i needed to see something that made me feel better. the dow is down 311 points and the loss -- the low of the session down 314. now we're down 313. please we want our viewers to keep their eyes on the ticker and everything we have on the screen. keith, i don't want to ignore treasury yields. earlier the two-year yield hit 4% and that's the highest since 2007. you've got to go back to 2 2007f you want to see that. what does that speak to when it comes to equities? nancy wasn't asking the question and focused on important things

about the fed and what it had done but why do people perceive higher rates equal walker equities? >> generally speaking, you're looking at opportunity cost of investments and if you got high rates and be secure in investments and bonds and more interested in growth and more stocks and this moved up and raises the cost of leverage that many people on the street are using. this is the part of hidden finance that doesn't get talked about rarely. the rates go up and big selloffs are computerization and de-leveraging and that's the opportunity for retail investors so stocks like lockheed martin, rathian, both of which i own, general mills, those are the kind of plays to look to today because the street doesn't have an interest to fight that battle. you can swoop in. liz: well, if you want to swoop in, we're having fresh lows and i want to get these right, folks, it's really important. the new dow low is loss of 387 and down 381 right now.

new session low for s&p is a loss of 46 so we're keeping our eye very close on all of this and i want to mention because it is extraordinarily important to look at market mentality and look at vicks, volatility index and it was up 11% just as the fed announced the 2:00 p.m. eastern, 75 basis point hike. sarge, keith, thank you very much. we need to get you individual stock stories here. general mills. investors are counting their lucky charms after cereal maker reported better than expected quarterly reports and raised four-year forecast benefiting from higher prices. some companies, folks do do well when prices are high and when rates are high. they also said we've got strong demand for cereals, scene of that accident, and pet foods. general mills up 5.8%. ing with food, beyond meat, it

was trying to recover. it was up more than 6% today after the plant-based meat company announced it was suspending its chief operating officer following weekend arrest but looks like beyond meat lost much of the gains. still up half a percent but, yes, doug ramsey was arrested this weekend after an altercation following a university of arkansas college football game where he allegedly bit someone's nose and threatened to kill him. the company dropped 6% yesterday to an all-time low of $16.49. well, we're below that right now at $16.06. beyond meat also benefiting today from its announcement of a partnership with taco bell's parent company yum brands. taco bell will be launching the beyond carne asada steaks at locations in ohio and yum down 7% and yum brand says consumers looking for other protein

options that are "better for the planet". look at kodi after the manufacturer said it'll double its sale of skincare products by 2025. the owner of such brands like skinz by kim and says there's a big demand for beauty and skincare products despite higher inflation. people will give up a lot, but not their lipstick and skin products. jerome powell not the only market mover making economic headlines at this hour. the nation's biggest bankers peppered with questions about the economy on capitol hill today. wait till you hear what jp morgan chase ceo jamie diamond thinks about the possibility of a soft landing. we have two major investment honchos here to see if they

agree and how to position your portfolio post-hike. closing bell 17 minutes away, dow 378 and s&p low -r by 45 and nasdaq down more than 1%, everyone is down more than 1%. russell down 1% and transport down half a percent and they'd been higher and we're watching every tick of this market, don't go away. ♪

liz: folks, breaking news, the dow just hit fresh session lows of down 454 points now. we are just barely off that at the moment. the rest of the equity market is following to the downside. there's green on the screen. we need to get you that. look to crypto, the securities and exchange commission has been keeping mum on how it believes ethereum should be regulated. let's bring in charlie gasparino. >> they're keeping mum as to whether it's a security, whether it should be registered. whether the heads offs ethereum and the block chain and people that issue the ether crypto coin, where they fall into the same bucket of you know what that the guys at ripple did by not registering xrps. we're getting some daylight on that. i don't want to say that this is

positive that the sec is bringing lawsuits against ethereum. there was a filing yesterday against crypto influencer. in that filing, the sec specifically suggest that it could regulate stuff on the ethereum platform. combine that with what gary gensler said that changes at ethereum. they're changing their business model of the block chain from something that resembles -- used to be just like -- liz: proof of work. less expensive. less energy intensive. >> but it centralizes stuff more and that is one of the sort of tests that you give when you think something could be a security that the enterprises centralized like a company that issues stock. it should be registered if you issue something and it centralizes something he said. put those two things together and there's a lot of worried

people in the crypto space right now that gary gensler is going after ethereum next after ripple. we're reading tea leaves a bit here. you have to look at this case here that came out e cently against a trip toe -- recently against a crypto influencer that he was doing fraudulent stuff on various platforms including ethereum and take that in isolation and go out and look at what gary gensler said about proof of state versus proof of work and business over at ethereum and on their black chain, that's where it has people worried. again, these are tea leaf readings. i will say again and i've said from the beginning and on junior show a lot of times, there's a ton of money. the reason why we're doing this story, there's a ton of money. ethereum -- there's essentially three big digital coins, bitcoin, ethereum, xrp. xrp is under investigation -- liz: you're forgetting the doggy

coin. >> oh, yeah. the case is against xrp and if sec wins that case started by jay clayton, trump appointee and going way forward with gary gensler, that's a security issue and essentially the ripple people broke the law, that's where the bets will really be on whether he goes after ethereum. liz: don't you think it's interesting, everybody was saying that cryptocurrency was moving in lock step with equities and flightenned by the fed. today it's up while the dow is down 388 points? >> it's under 20,000. that's always like a kind of little barometer for me. if you see bitcoin go below 20,000, people get nervous. liz: yeah, but it's above 19. >> what's ethereum doing? liz: it is up. >> it's up. who knows. why something changes in a day, i can't tell you. let's be clear, in a inflationary environment,

sometimes people buy crypto. okay, there's that theory out there. you know, it makes risky assets less inviting and we're up 420 points. liz: there was a big drop when the fed announced. >> yeah, by the way, the market -- here's how you know the market is crazy today. "the wal"the wall street journa" changing lead headline on the factor about five times going from stocks are up, waiverring, down, stocks are wavering, stocks are up. liz: it's like the airplane, he's up, he's down. >> one thing i do know is that i don't know why, you know, if you think the fed is raising three more times, that is not good for stocks. liz: there will be some winners though. dow down 409 points. we are seeing acceleration to the downside and closing bell in 6.5 minutes. this is still a live -- what do you call it?

liz: 40 minutes since fed chair jerome powell wrapped up his news conference of the at one point the dow was higher significantly 300 points. we've seen a swing from peak to tough to 773 points. america's largest commercial bank ceos in the hot seat on capitol hill today. you need to hear this. house financial services committee held a hearing called, holding megabanks accountable. jamie dimon, jpmorgan, bank of america ceo, wells fargo, truist, were quizzed about whether the banks can make it through recession without needing bailouts. the old question again are you too beg to fail. jpmorgan chase jamie dimon was asked about how bad he thinks the economy could get. here is how he responded, predicting economic out comes is a challenge for even the most experienced financial experts. >> forecast the future properly. i look at probabilities, i think

there is chance of a small landing there is a chance of a mild recession, a chance for harder recession, and because of the war in ukraine, the uncertainty that causes in global energy supply and food supply there is a chance it could be worse. i think policymakers should be prepared for the worse. liz: yeah. banks should be prepared for the worst too. nuveen investment strategist brian nick. the region's chief investment officer, alan mcnight. government is looking to regulate banks. because they're able, what the fed just did to raise their prime rates. a whole fury have been hitting the tape including jpmorgan and fifth third bank. tell me exactly where financials stand in the greater picture of investing in them? >> first of all from a balance sheet perspective they're in much better shape than the financial crisis that might be

cold comfort to people that saw what happened to financial stocks during the financial crisis. banks have gotten their act together with the help of the fed. when the yield curve is inverting flattening or inverting with the two year yield up, 10-year, 30 year-year-old is down that is not good for operating models for banks. that is not one of our favorite sectors. when you see economy slowing down because of rates rising that is not a good opportunity for banks. >> i don't mean it sound like a broken record, and i don't mean to, alan, how are you positioning your portfolios to embrace or deal with, make some yield in this rising straight requirement? -- rising rate environment. >> that is the trillion dollar question. how do you invest with the fed racing rates. inflationary trend continue, ppi hotter than cpi.

we look at it one, we still want to remain domestic. we think the u.s. is the best house in a bad neighborhood on equity basis. when you look out our peers in europe and japan u.s. has far fewer problems than some of these peers. on the fixed income side of the house, remain shorter duration. that is bit more challenge in the rising rate environment, but, and this is a big but, particularly for savers out there and you're picking up yield now and getting to a place where you're generating real income again after being zero bound for quite sometime. it is no easy task but we think there are some bright spots out there to pick and choose around. liz: brian, fed chair powell made it extraordinarily crystal clear, saying that this is it, we will not stop until we have slade inflation because the bigger mistake would be, well, let's listen to exactly how he

put it. >> slower growth and a softening labor market are all painful for the public that we serve but they're not as painful as failing to, to restore price stability and then having to come back and do it, you know, down the road again and doing it at a time when actually, now people have really come to expect you know, high inflation, if the, if the concept of high inflation becomes entrenched in peoples economic thinking about their decisions, then, then sort of getting back to price stability, the cost, the cost of getting back to price stability just rises. so we want to avoid that. we want to act aggressively now, get this job done, keep at it until it is done. liz: now is the question, do we see a recession? the fed says by the end of this year growth will not be negative, it will be .2 of a percent but the two and 10-year inversion of the yield curve is now at 51, minus 51.

that is a huge gap, is it not? so alan, brian, rather, tell me exactly what that speaks to as far as the broader market where we are now down about 183 points for the nasdaq. dow is down 462? >> sure. well the fed's message was hawkish enough to which that outcome about with the long-term interest rates actually falling on the outcome even though it was overall more hawkish message. the concern the fed goes a bit too far tip us over into the recession. powell admits he doesn't know exactly where that line is. he is determined to keep walking up to it, cross it if need be in the interest of getting inflation back down. allot ultimately the market verdict on the meeting after this -- [inaudible] liz: alan what will be the best investment going forward? >> we think you will be better served on the domestic equity side of house. we think there is more vol and to brian's good point the fomc,

fed chairman said we'll not be all hat, no cattle. we'll actually continue on the path regardless where that takes us even if there are some bad data points coming along. liz: okay. >> but the reality is it will be hard. we think there will be more volatility to come. [closing bell rings] liz: we see it now. markets are closing at session lows as the fed does exactly what it said it would do. ♪. larry: hello, folks, welcome to "kudlow," i'm larry kudlow. earlier today i hosted a fox nation special on the totalitarian dangers of socialism and why that system always fails and instead i made the case for free-market capitalism and a free economy is the surest path to prosperity. free-market capitalism is a triumph of human power. socialism is a catastrophe from state or government power. the problem with socialism and state cent