lending to the british bank. so that's where the funds came from, and it's a loan that's 100% guaranteed by the fdic, so there's no risk in it for us. [inaudible conversations] >> reporter: thank you. chris -- at associated press. the sep suggests one more rate hike as because the change in the language in the statement. and which suggests that you're practice nearing the end of a cycle of rate hikes. do you feel, toe, that if inflation remains high, you'll be able to resume additional hikes as needed, or have you somewhat tied your hands with these signals about rate hikes coming to an end who? no, absolutely not. if we need to raise rates higher, we will. i think for now though we, as i mentioned, we see the likelihood of credit tightennenning. we know that that can have an effect on the macro economy, on

command, on labor market, on -- on demand, on labor market, on inflation, is and we're going on the watching what that is the and watching inflation and the labor market. so we'll be watching all those things and, of course, we will, we will eventually get to the tighten up policy, we'll find ourselves atta place. at that place. >> reporter: hi, chair powell. kyle campbell with american banker. had a aing questions -- a couple questions about the balance sheet. first of all, i'm curious at what point the financial support that the fed is extended through concern extending through the discount window and its enhanced lending facility might be at odds with the objective of recuesing the balance sheet, and i'm also curious what your thoughts are on not just the availability of reservings or -- reserves, but the contribution the of them throughout the

banking system -- distribution of them throughout the banking system and at what buoyant you may be worried about them being scarce. >> let me be clear about how i'm thinking about these recent developments. so recent liquidity provision that has increased the size of our balance sheet, but the intent and the effects of it are very different the from when we expand our balance sheet through purchases of longer term securities. large scale purchases of long-term securities are really meant to alter the stance of policy by pushing down, pushing up the price and down rates, longer term rates which supports command through channel wes understand fairly well. the balance sheet expansion is really temporary lending to banks to meet those special liquidity a demands created by the recent tensions. it's not intended to directly alter the stance of monetary policy. we do believe that it's working, it's having its intended effect of bolstering confidence in the banking system and thereby pore stalling what might be an a abrupt -- in terms of the distribution the of reserves, we don't see ourselves as running

into reserve shortages. we think that, you know, our program of allowing our balance sheet to run off predictably and passively is working. and, of course, we're always prepared to change that if that changes, but we don't see any evidence of that. >> hi, chair. katarina -- with bloomberg news. the minutes of the january-february meeting, the last meeting indicate that you discussed the possibility of runs onion-bank -- on non-bank financial institutions and the unrealized losses on bank portfolios. can you talk a little bit more about that discussion, kind of what was talked about in light of that? and then why didn't the fed, you know, do anything about that at that point to ultimate wily prevent, you know, what happened this month? >> i mean, to be honest, i don't

with recall the specifics of that. it's been quite an interesting seven weeks. [laughter] but i will tell you that we have, there have been presentations about interest rate risk. i mean, it's been in the all the newspapers. it's not a surprise that there are institutions that have, that have had unedged long positions in long duration securities that have lost value as longer term rates have gone up due to our rate increases. so that's not a surprise. i think as you know, as it is now in the public record, the supervisory team was apparently engaged, very much engaged with the bank repeatedly and was questions calculate -- escalating. but nonetheless are, what happened, happened. the review that vice chair barr is conducting is to try to understand how that happened and try to understand how we can do better and what policies we need to change. one thing is the speed of the, i'll come back to that, the

speed of the run, it's the very different from what we've seen in the past, and it does kind of suggest that there's a need for possible, you knowing regulatory and supervise of ifly changes just because supervision and regulation immediate to can keep up with what's a happening in the world. >> can you confirm whether or not the board knew about these escalations by these examiners in san francisco? >> i -- we'll have to come back to you on that. i don't know. >> reporter: simon -- with the economist. thank you very much. the chair powell, you stated twice today that all depositors' savings in the banking system are safe. are you saying that depack toe deposit -- de facto deposit insurance covers all savings? shouldn't congress have a say in that? and are you promising to bail out all of its depositors? >> well, i'm not saying anything more than i'm saying. so, but what i'm saying is

you've seen that we have the tools to protect goesers when -- depositors when there's a threat of serious or harm to the economy or to the financial system. and we're prepared to use those tools. and i think depositors should assume that their deposits are safe. >> [inaudible] >> reporter: thank you, chair powell. greg roth from market watch. i was wondering if you could give us a little more color, you gave just a little color during the first week of the silicon valley weekend, the question you asked how did the happen when you saw silicon valley bank. i was wondering if you could go to the credit suisse merger. wasn't that the big gorilla in the room? didn't you breathe a sigh of releaf when that merger happens? -- relief? thanks. >> sure. so that was really the swiss government. we, of course, were following it over the course of the weekend, and we were engaged with their authorities in the way you would expect, all the ways that you would expect. it seems to have been a positive

outcome in the sense that the transaction was agreed to the, and it has been, the markets have accepted it and it seems to have gone well, and i think there was a concern that it might not go well. so coming into the middle of this this week, yes, i would say that that has gone well. so far. >> reporter: [inaudible] >> reporter: hi. thank you, chair powell. in the summary of economicking projects, the fomc sees the unemployment rate increasing to 4.5% this year. i'm wondering how you anticipate preventing from snowballing while using the admittedly blunt tools at your disposalsome. >> so that's just, that's an estimate of what will happen as demand if slows. and as conditions soften in the labor market. it's a highly uncertain estimate. i mean, there's really -- we

have to bring inflation down to 2%. the costs of bringing it down, there are real costs to bringing it down to % -- 2%, but the costs of failing are much higher. if you read your history, as i'm sure you have, you can see that the. if the central bank doesn't get inflation if back in place, make sure that inflation expectations remain anchored, you can have a long series of years where inflation is high and volatile, and it's hard to invest cappal, it's hard for an economy to the perform well, and that's -- we're looking to avoid that and, you know, to get back to where we need to be, back to where we were for a quarter century and get there as quickly as we can. >> [inaudible] [inaudible conversations] >> reporter: historically, it's been hard to con indiana the unemployment, and i -- the question is do you worry about some sort of snowball effect, and how do you factor that into your projections?

>> well, it depends on where yoe nonlinear, so they're very hard to model. the models all work in a kind of linear way. if you have more of this, or you get more of that. but when a recession happens, the reactions tend to be non-linear. so we don't know whether that'll happen this time. if so, we don't know how significant it will be. and so, you know, we're very focused on getting inflation down because we know in the longer run that that is the thing that will most benefit the people we serve. that's how we can have a long, you know, we've had very strong labor markets through these long expansions that we've had, four of the five longest or three of the four longest expansions in u.s. history have been really since the high inflation period. and the reason was inflation wasn't forcing the central bank to come in and stop an insup cent or, concern incipient or, you know, an expansion. you can have very, very long

expansions without high inflation, and we had several of those, and they're very good for people. you see late in expansion, you see low unemployment, you see the benefits of wages going to people at the lower end of the wage spectrum it's just a place that we should try to get back to. >> reporter: hi, chair powell, jean young with market news. i just wanted to ask with all the events of the past two weeks, do you still see a possibility of a soft landing? in the u.s. economy? >> you know, it's too early to say really whether, whether these events have had much of an effect. it's hard for me to the see how they would have helped the possibility, but i guess i would just say it's too early to say whether there really have been changes in that. you know, the question will be how long this period is sustained. the longer it's sustained, then the greater will be the likely

declines or tightening in credit standards, credit availability. so we'll just have to see. i do still think though that there's a pathway to that. i think that pathway still exists, and, you know, we're certainly trying to find it. >> nancy. >> reporter: hi, chair powell, nancy marshall again, sir, with marketplace. just wondering how many financial institutions have been issued matters requiring attention or matters requiring immediate attention citations at this point in this. >> how many? i don't know. those are serious. those are serious regulatory -- particularly immediate attention. that's, and i guess there were six of them. so -- >> okay. and getting to the seriousness of it, how are you going to the insure that banks comply with these sigh -- citations, take them seriously? how will you enforce them? >> that is a great question, and it is right in the heart of what the review we'll be doing under vice chair barr's leadership. so that's, i they's where,

that's what you think about the what can we do to headache sure -- but, again, that's not for me to offer -- >> reporter: you don't have specific thoughts? >> see, if i did, i wouldn't share them -- [laughter] because i really, you know, this review's going on. and, you know, i want to -- i want nothing other than us to find out what happened and why, figure out what we can do to do better and implement those changes. that that's all i want. for me to be giving you my half-formed or partially informed thoughts, it just isn't appropriate. there's a real serious review going on with people all over the federal reserve system who are not connected to, you know, this work, the bank, and under vice chair barr's leadership, and i'm confident that it will produce a satisfactory result. >> jennifer for the last question. >> reporter: thank you, chair powell. jennifer with yahoo! finance. how do you view financial conditions right now?

if credit becomes expensive enough choking off growth, as you said you're watching for, would that that situation warrant a rate cut? what situation would warrant a rate cut. >> in and have the bank failures prompted any discussion around changing the implementation of the balance sheet runoff? thank you. >> so we haven't really talked about changing the balance sheet implementation. that's not something we've discussed yet. as i mentioned, we're always willing to change that if we conclude that it's appropriate, but we're really not seeing any signs there. sorry. then the question before that that was -- just give me -- >> curious how you view financial conditions now and if credit were to tighten up, if that would prompt a rate cut. >> so financial conditions seem of the tightened, and probably by more than the traditional indexes say because those traditional indexes are focused a lot on rates and equities, and they don't necessarily capture

lending conditions. so we think that though. so there are the other measures which, if they're focused on bank lending conditions and things like that, they show some more tightennenning. the question for us though is how significant will that be, and what will be the the exend and duration of it. extent and duration of it. once you mow that, there's a fair amount of research with how that, with broad uncertainty bands, how that works into the economy over what period of time. so we'll be looking to see the first part of that, how serious is this and does it look like it's going to be sustained, and if it is, you know, it could easily have a significant macroeconomic effect, and we we would fact factor that into our policy decisions. i mentioned with rate cuts, rate cuts are not in the our base case. and, you know, so that's all i can say. >> thank you. >> thank you very much.

liz: well, until the news conference, this was kind of a, yeah, this is what we expected. but as federal reserve chair jay powell finishes up that news conference where he was pushed hard on a lot of issues, this after the fomc announced raising short-term interest rates an expected 25 basis points, powell made some extraordinarily defendtive -- definitive comments about the banking crisis, and the market response can only be sphwrieb described as many push than now pull. we do have the dow jones industrials down 0 the 8. while he was speaking, we hit a low of a loss about 271. s&p down 17, the nasdaq is losing 26 points. we've got the russell 2000 also down 26 and the transports down about 116. but let me show you some of the intradays here, because they really demonstrate how investors were absorbing and digesting each minute of the day and then, of course, later in the session. stocks opened relatively flat to

the downside and then slipped further ahead of the 2 p.m. rate announcement when the largely anticipate thed 25 basis point hike officially hit the tape, the major averages initial arely surged. and you can see that right there around 2 p.m. eastern time. but hen the when we had the news conference begin, a whole bunch of issues popped up, and jay powell continued to say over and over at the inflation rate that they are aiming for is 2%. folks, we are at 6% right now. if you look by the february consumer price index, consumer inflation, we've got a long way to go there in raising rates can if making borrowing more expensive. and then came the issue about the regional bank crisis. despite the fact that just about all regional bank shares are now in the red, you can see them on the screen -- and, by the way, that includes do -- comerica, it's down about 5.7%, i believe it's the second worst performer

on the s&p right now. jay powell said the recent collapse of silicon valley bank which triggered much of this was an outliier. now, amid calls from around the globe to pause rates, the fed kind of pulled a european central the bank move and did raise rates by 25 basis points. of course, the ecb did it by 50 basis points, but it's a to announced message that sub duing inflation versus pausing rates to calm the banking crisis remains the fed's top priority. the rate hike is the ninth since march of 2022. powell moments ago spreading his hawkish-covich wings by explaining why the ped did not pause as banks foundered but also why new tightening is akin to longer term rate hikes. listen to the how he put it. >> such a right thenning in financial conditions would work in the same direction as rate tightening.

many principle, you can hi of it as being the equivalent of a rate hike or perhaps more than that. of course, it's it's not possible to make that assessment today with any precision whatsoever. so our decision was to move ahead with the 25 basis point hike and to change our guidance, as i mentioned, from ongoing hikes to some additional hikes maybe, some policy firming may be appropriate. liz: treasury yields right now are slipping. we put the 10 and the 2 on your screen because this is where you start to see that yield curve inversion which is, right, andy,s the getting wider which means there's much more of a screaming recession indicator here. 10-year at 3.05%. before the announcement at 2 p.m. eastern, we had 10-year yields at 3.54%. the 2-year at 3.989%. before the announcement we were at 4.13%. now, wall street's fear gauge,

flip it over, the volatility the index had been slightly higher before the decision. yeah, kind of slightly here. we now see it pulling back by 4% perhaps because the market is interpreting certain things within the fed chair's move. maybe this bank crisis isn't as big a crisis as people had a anticipated. look at the collar. collar index -- dollar index falling to the its lowest since february 3rd and that's a against a bass with debt of -- basket of major currencies here. we do have the euro, it takes -- 1.08 to buy one euro. clip ottos are continuing to puff -- cryptos are are continuing to puff out their chests. take a look at bitcoin, higher throughout the session. we just have it moving throughout the session it kind of reversed here, but as soon as the news conference began, that thises' when it started to falter. we do it -- do have it down to

$27,555. it went as high as $28,500. financials under pressure, right now take a look at the big banks, and then we do have a mixed picture. goldman, morgan up. we just want to give you all of these right before we bring in ann key brenner and peter schiff, because there's a pronounced move in gold. it spiked following the decision. it is paring the gains though after powell said that the central bank does not see rate cuts this year. we do still have it up about $25 or 1.33%. and here's silver, or, oil. let's bring in our panel here, global strategist peter schiff and alliance securities, andy brenner. andy, you sat here -- [laughter] the last meeting and said that's going to be the last hike. okay. we're not here to make anybody, you know, squirm. but why kid can he raise and not a pause in this time? >> liz, he was concerned about

the message he was sending. i think he made a huge mistake. there's no question the banking system's in terrible disarray, and it's just going to get worse. the negative arbitrage between going to treasury bills at 4.80 or money funds at 4.5 and banks paying 1-2%, banks are going to continue to lose money and lose deposits. it's just going to get worse and worse and worse. and he did say that six banks are in trouble, or he used some kind of specific fed verb isage to say that.. -- verbage. so i think the banking system's going to get a lot worse which is why you saw the 2 the-year go down to 3.95. i think that's going to continue to happen. and you saw the yield curve right at the beginning to go to -63, and last i looked on my phone here it was -4 of. -- 46. that tells you there's a lot of

problems out there, the fed's going to have to ease, and the markets do not believe that the banking system is solved. liz: and yet, peter, he said ten times because i've got my producer -- oh, now it's 12? 12 times he said that our inflation target is 2%. we're hovering around 6%. are we going to get to 2%? because with he certainly insisted that they are going to keep raising rates until we get to that point. >> no, we're not going to get anywhere near 2%, maybe not even in our lifetimes, that's how far off powell is. you know, the reason that he hiked rates, he's borrowing a trick from a magician, it's called misdirection. with the one hand, he's raising rates, but he's got another hand behind his back where he's returned to quantitative easing. he's actually creating inflation, not fighting it. and one of the most ridiculous comments he made is when he was asked to explain that, and powell denied that the fed was back to quantitative easing.

and the reason he said that it's not qe is his explanation was when the fed was printing money and buying bonds because it wanted to bring interest rates down, that was qe. but now it's printing money and buying bonds, but it's doing it for a different reason, so even thoughst exactly the same, it's not qe. so when you create inflation because you want to, quantitative easing. but when you create inflation because you have to the, then i guess, you know, he retends he's not doing it. but he is creating inflation. and if so what powell is now doing is pouring gasoline on a fire. he's just pretending that he's trying to put it out. liz: and i would think that the embers if not more flames are starting to grow here. and i only say that, andy, because we're looking suddenly at comerica, shares are down. i will say the s&p's turned positive as has the nasdaq. russell still down, i dow jones industrials still down but way off session lows. the dow was down 271, it's down

39 points right now. andy, you just pointed out that he said e six banks, six bank, he believed, were really kind of floundering or under siege. but i do want to play this one particular sound bite. he said that we have the vice chair of the federal reserve, michael barr, who is going to appear before congress this week or next week to give a review of what's going on. but the fed if ea appears to have been asleep at the wheel with silicon valley bank, and he also downplayed that there was any con a today john with. listen to what he said. >> i realized, you know, right away that there was going to be a immediate for a review are. i mean, the question we're all asking ourselves over this first weekend was, how did this happen? these are not weaknesses that are broadly through the banking system. this was a bank that was an outlier in terms of both its percentage of uninsured deposits and in terms of its holdings of duration risk.

liz: an outlier, signature bank no to longer exists because it collapsed after svb, and where's credit suisse today? it had to be bought by ubs. >> i'm not going to go to the credit suisse thing, because that's a whole different venue, but regional banks here in the united states are in severe trouble. svb, you had signature, the fed last week had to put $440 billion into the system, liz, basically that's effectively wiping out the whole qt that they've done the in the last 11 months, and it's going to get worse, worse and worse. just -- i was scanning the headlines today, and you have pacwest bank had to get some outside sources of money. they've lost 20% of their deposits. and as you go on, you mentioned comerica, i'm untiling you this is mushrooming -- telling you. we need to lower rates 100 basis points. forget about -- liz: did you just say 100

basis -- >> 100 basis points. we need to get to 3-35 in order to stop the bleeding in the banking system. that's what we need to do, and powell's not ready to to do that or think about that. but that's what he really needs to do. so, yeah, as far as what do i i think -- i think this, again, it's the last fed hike in cycle, but we'll have to wait. if we get 6% inflation numbers, then he's going to try to do it again. it won't work. liz: peter. >> well, i agree. i think this is the pivot. it's a soft pivot, but he made it clear that he eased his forward guidance. so i think the next move from the fed is going to be a cut. but inflation is going on the much higher than it is right now when the fed does that. so the fed is going of to give up pretense that it ever has a chance of bringing inflation down. i thought one of those foolish comments that powell made is he said he didn't think there was any risk to the fed -- liz: yeah, he said it was an you outlier concern oh, right. >> but the fdic is broke. hay don't have any money.

the only way heir going to get money is if the fed prints it. all of this means more inflation. liz: i absolutely agree. but it also calls for oversight, which we were supposed to already have, andy. and, in fact, we know that mary daly of the san francisco fed, it was the on her watch, right? isn't she the one who was supposed to have her offices be regulating those banks in california? >> well, signature's here in new york, but svb, absolutely. liz: svb, yeah. >> and they were this there, they were looking at svb. they had recognized it was a problem, but they didn't do anything about it. and there were so many better ways for svb, they could have lent their portfolio to the fed. but once they sold their portfolio to goldman sachs and took that multibillion dollar loss, all right, that alerted everyone, goldman said, well, we'll sell your stock for $200 a share. it was trading at 269. the next thing you know it's 106, and the next morning it's

38d. liz: okay, that's call a bank -- >> liz, or you're never going to get, you're never going to get effective regulation by the government. what we want is free market regulation. unfortunately, we don't have that. you know, this financial crisis has been obvious for years. only government regulators are blind enough to miss it. but if the government wasn't there, if banks and hair depositors, more importantly, realized that their money was at risk if a bank with faded, then banks would be acting a lot more responsibly because people would not deposit their hard-earned money into a bank that was taking too much risk. but thanks to the government, no one cares. liz: and speaking of deposits, the pdic insured everybody's in both signature and silicon valley bank, and now there is word that they may have to the take on all depositors who have more than $250,000, which is that limit at the moment. our grady trimble actually caught up just a few hours ago with senator liz warren in the

hallway with. she's on the senate finance committee. you've got to hear what she says about oversight. listen. >> there's got to be a cap somewhere. somebody can't, quote, deposit a billion dollars, get a special keel from the bank and still get backed up by ax pay years that they'll get their money back if the bank fails. that's not going to cut it. liz: i don't understand why janet yellen, the treasury secretary, is saying no taxpayer dollars will be used to insure everybody. >> liz, this is -- >> liz, that's -- >> oh, go ahead. >> that's just politics. yeah, that's just politics. it's not really going to be taxpayer dollars, it's going to be inflation. see, every american whether they pay taxes or not is going to bear the cost of these bank bailouts in this new financial -- liz: we don't have enough money. look on the screen, peter. the fdic has $18 billion -- 12 billion in its -- 128 billion if in its coffers, this would cost

$17 trillion. >> they have nothing. the fed is going to print it. the fed's balance sheet is going to explode. liz: so concern okay. >> and the value of the dollar is going to implode, and the cost of living in the united states is going to double, triple, quadruple, and it's going to impoverish the vast majority of americans. and they need to know reason they're going to be so poor is because of of the government. it's not because of the free market, because we don't have one. it's because of big government. and powell copped out when somebody asked him, you know, oh, what about -- would you need some help from fiscal policy, and he said, well, we don't want to give any fiscal policy advice. that's b.s.. he should be giving advice when he knows the government is creating inflation by running these huge deficits. it's the up to powell to the tell the government to stop doing that, to cut government spending. liz: oh, that's not going to happen. >> he refuses to stand the up for the american public. he count really want to do his job -- liz: let me get in the here because, andy, the markets don't

really seem to mind at moment about anything -- [laughter] that is sort of dripping fear over all of us here. we've got the dow down about 67, the s&p is up 2. the nasdaq is up 39. russell's down 17, and the volatility the index is not sewing any signs of distress what so far is. it's down 4.7%. what's the trade? >> here it's, liz. on one side you have regional banks, and they're going to stop their lending. heir going to cut down their lending. it's going to hurt commercial mortgages. it's going to hurt small companies, small cities. on the other hand, the fed's going to have to respond by lowering rates. so the markets realize now that rates have to come down. and whether peter's right or not, he's right on, certainly, a lot of things, the fed itself has lost $1.1 trillion in their holdings just because of the way interest rates have gone. but i think the fed's eventually going to lore or rates, and i think that's what equity markets are betting on right now. liz: well, the home builders are

up. peter, andy, thank you so much. we've got this fox market alert, the major averages, as i said, are definitely off session lows. but the regional banks, we need to focus on this, folks. they are continuing to make new session lows. let's flip them over, and we can see that first republic which, of course, has been the one that got a $30 billion infusion from 11 bigger banks last thursday right curl this hour -- during this hour is still floundering. in fact, it has reversed and is now down nearly 10%. let's look at pacwest, another one that had been in the sights of the bears. it is down 12 the.5%. and comerica, as i keep mentioning, this is 1:edenly getting worse on -- this is one that is suddenly getting worse on the radar, a loss of about 33% month to date, if i'm correct, 33 or 35%. joining me now, kenny polcari

and gene goldman. finish kenny, i mean, give me your gut reaction here, and what surprises you about the market action in response to the fact that, yes, the fed did what everybody thought it would do, hiked 25 basis points? >> that's right. and i think the fed actually was right. i think they should have hiked 25 basis points. i didn't hear anything in what jay powell said that was really any different other than he changed some of the language. but in my mind, rates are going to continue to go up at least one more time. why some people think that the fed is going to cut rates and your other guests are going to cut rates by 100 basis points is mind-boggling to me with inflation the way that it is. i actually think that the market responding the way it should. i think overall the market welcomed the hike and appreciates the fact that he's on top of it. now, it doesn't mean we like it, doesn't mean we're happy about it, but it means that they're doing the right thing. liz: gene, do you think investors are responding, i mean, look, the market is a

gigantic voting machine. so right now it feels the dow and the research caps are down -- large caps are down 155 points, that has nothing to do with what happened in the last hour and a half. nike, of course, came out with earnings, a few warning, they're concerned about different aspects of their business, but do you like equities here? or even as jay powell says, don't to worry, silicon valley bank's collapse was a, quote, outlier, you're still a little concerned that there are more shoes to drop. >> yeah. thanks, liz. so clearly, or you know, powell came out, he was dovish. you know, he was pretty dovish in his comments given the fact that he raised interest -- he raised inflation, raised the unemployment rate. again, he was dovish, surprisingly. but i think what we're not considering is the fact that he's not considering about the impact of what's taken place pushing us closer towards a recession. the markets are optimistically saying we price an event 6-9 months in advance, so, therefore, we're price anything

a potential recovery as the fed lowers rates. there's a lot of uncertainty over i feel good about the fact that technology's actually doing well in this environment right now. technology's doing well, so a lot of moving parts, a lot of things going on in the markets, but there's some good things going on out there. one of our favorite sectors is technology, we also like industrials. one area that we're finding more attractive is financials, large banks. large banks' valuations are cheaperrer, there's a rot of m -- a lot of m&a activity. but the fed put is gone. liz: for those who don't the know, it means we're not going to tighten rates once again, right? or do i i have that wrong? >> exactly. >> no, i'm saying they are going to -- [inaudible conversations] liz: go ahead, gene. >> yeah. i think, you know, powell basically -- not sure what he's doing in washington, but at the end of the day he's saying we will raise rates probably one more time. we don't see it that way.

we think that the credit tightening and other recession concerns are going to force the fed to pause, maybe even cut rates, and this is very good -- liz: i don't know. >> -- part for the market. liz: i don't know, kenny. and i say this because he made some comments about disinflation, and he said that, yes, we have started to see some parts of the whole pie begin to the, you know, cool off a little bit, right? disinflation, he said, is still intact. i want to play this sound bite, but he also warned that there are two important areas that are still too hot, and that's why they need to raise rates. listen and hen the you can react. >> goods inflation's been coming down now for six months. it's proceeding more slowly than we would have liked, but it's certainly proceeding. housing services is really a matter of time passing. we continue to see the new leases being assigned at much lower levels of inflation. so that's 44% of the core pce index where you've got a story that's ongoing. where we didn't have in pen and

we still don't -- in february and we still don't have now is a sign of progress in the nonhousing services sector. and that is, you know, that's just something that that will have to come through softening demand and perhaps some softennenning in labor market conditions. we don't see that yet. liz: so how do you get softening? you keep raising rates. so what do you buy, kenny many. >> right. listen, i think -- first of all, the big money center banks, i'm with you. i think there's some great opportunity in the regional banks like new york community bank. i think -- another name that i'm looking at -- liz: why? i ask you, that one's, has fallen about 56% to date. >> that's right, but i think, again, i think it's getting drawn into this overreaction -- liz: unfairly. >> you know that the markets also overreact. new york community bank and western alliance provide an opportunity the on weakness. you're not going to chase them. i let them come to me, right?

i'm not chasing them at all. but the big money center banks, for sure, i i think there's opportunity there. jpmorgan, bank of america are any two biggest names and in the big tech, amazon, microsoft, nvidia, those are names i'm always in. liz: gene, you are very optimistic about the second half what's driving that? >> so first half we're still seeing market volatility the, uncertainty, be what's going to drive the -- drive the first half is lot of skepticism creates lower expectations. it creates a better opportunity in the second half. better opportunity, lower rates, we've got the recovery, we've got other possibilities. so, you know, oil is down, energy prices are down, inflation we the do think is rolling over. goods prices are rolling over, yes, services is a little stick by -- sticky, but if you think about the income cohort in terms of our population, the lower end tends to be more focused on services jobs, and i think the fed's going to say, okay, let's

relate last part of that drop -- liz: we're talking hotels and all that, that's a services job. restaurant chain stocks, etc., right, kenny? >> yes. but i've got to tell you, you're not seeing any e leaf in foodment and, you know, you go to restaurants and the prices are through the roof. even though there's lots of people there there, the prices are through the roof, and when you go to the supermarket, you're getting zero relief in the supermarket. liz: well, i keep hearing eggs came down, but they're not that cheap still -- [laughter] right? i mean -- >> no. they're not cheap. >> but i agree with kenny in the sense that food prices are elevated, but packaged product foods are still high, but the basics are starting to come down pretty fast. even, you know, we can't talk about individual companies, but major chicken producer, manufacturer, they've announced lay layoffs -- layoffs, starting to close plants. you're seeing it translate through the company. liz: maybe we can get some

grocery stores, i say it, here it comes out there. grocery stores are mixed at the moment, but i've been watching kroger today, and it's been in the green pretty solidly, still up about 1.5%. albertsons up 1.75%. walmart, target down. the dow jones industrials has gone south once again, and it is getting keeper into the red, down 240 points. the low of the session, a loss of 271. s&p and nasdaq are also now red. was that you, gene? you wanted to get in or kenny? >> no, i was going to say i think the market's throwing a temper tantrum because they want to hear rate cuts by the summer, and i don't think they're going to the hear that. liz: he didn't say that. that's true, gene. >> right. liz: he said we're going to keep going. >> we might, pretty soon we may hear some of that. >> listen, i'm going to the supermarket right now. i gotta go shopping to make

pasta for tonight, so i'll let you know -- [laughter] liz: okay, we're going to put the recipe up on my facebook page. look for it later. [laughter] kenny, gene with, great to have you. again, as we continue to watch -- [laughter] not funny, because we -- the vix, oddly, is still down about 1.6%, not showing a lot of fear at the moment. i do want to look at crypto. so bitcoin earlier, if we can show an intraday, and i don't know if that's possible at the moment, but bitcoin had been higher, i was tracking it very closely old school before, during and after the fed announcement, and before the announcement service the up 1.4% or 382 because there has been this perception since the banking crisis began about let's call it march 8th because we saw silicon valley bank go under march 9th. but the intraday picture, you can see, was very bullish here. people piling into cryptos because the per perception at

the moment was and certainly since then have been, well, i don't want anything to do with the banks. i want a ouch theless, seamless move -- touchless, seamless move with my money instead of it going through any banks which could need to be bail out by treasury9 and the fdic. right now it's reversed, it's down about $844 to 27,223. individual stock stories, or we do not want to ignore gamestop the, the original meme stock is soaring right now, up 37.8%. here's the story on this one, it posted quarterly profits for the first time many two years. video game seller and, of course, they sell the hardware too, and that's been the real winner. the very successful in slashing its inventory and costs over the past year. the meme stock darling did the not provide financial guidance for the next quarter but said the company is planning more cost-cutting measures. but the surprise came from the hardware sales. carvana losing some of its earlier gains after bloomberg

reported that bondholders oppose a debt exchange plan that was launched today. still, the online used car dealer is surging about 8.5%, and here's what it said, it expects a smaller core loss from the if current quarter. the arizona-based company says its cost-cutting measures are helping to offset the decline in used car sales. the company has cut more than 4,000 jobs last year alone, they are also trying to restructure their debt to clay some payments until 2028. can we punch up petco? petco is sliding 16.5% after posting fourth quarter earnings that missed analysts' summits. the pet food retailer has beat estimates only once over the past four quarters. the company also offered soft guidance for the full year even though we all love our pets and would spend anything on them and go without for ourselves, right? and i want to the revisit nike. i know i mentioned it, but it's falling 3.7% at the lows of the

session, just around there. is that $120.84. it did beat revenue and earnings estimates for the holiday quarter but reported that it bloated inventory lored their margins. -- lowered their margins. also reported that its china sales fell short of expectations. people were waiting on that particular number. they wanted to see a rebound there. didn't get it as much as they wanted it. the merrick of air jordans said it was benefiting from the star power of younger and older nba athletes and enthusiasm in its running shoe segment. regional banks, let's go back to those. they're at the heart of a lot of what's going on here. they are still mostly in the red although first citizens bank which kenny polcari just mentioned because it looks strongler than the rest and got unfairly painted with the same silicon valley brush last week, they are mostly in the red here. truist, huntington bank shares concern the hold on, yeah,

uh-huh. and we've got u.s. bancorp also done along with key corp.. the federal reserve chair, jay powell, just said the fomc is, yes, investigating the collapse of silicon valley bank which triggered the belly up of signature bank as well. but whatever the fed is doing, will it be enough to stanch contagion? let's bring in charlie gasparino. and you heard jay powell say that silicon valley bank was a, quote, outwith the liar. that was a pretty gutsy statement considering we haven't found out exactly how big the cracks are in the system. >> i mean, they're all outliers when you're the fed. [laughter] let's be clear, when you don't want to cause contagion, is first remix an outlier? i should point out you had had that spirited discussion on the fed rate hikes, a couple ceos including one you know very well that has been on our air. i'm not going to say his name because we were speaking on background, end recent little old until me he believes this is going to be at least two more of

these, maybe three. food is still way too high, as kenny said. so just remember are, if you're banking on rate cuts, the consensus largely is going on the, you know, man for at least one more coming, one more rate hike coming. let's talk about the banks. i think if there's one thing that i think powell confirmed is that there is, like, massive stress in the banking system. you know, not 2008 stress in his words, but it's pretty big. and he does confirm that the banking system has some issues. again, as we reported, liz are, 25 mid-sized banks have been identified with the same sort of issues that first republic had, signature had, silicon valley had. i it's not the thousand that got closed down during the thrift crisis, but banks are more concentrated or i should say deposits ands assets are more concentrated, so that's a pretty big hiccup. again, we should point out still there is no keel to sell first republic. why is that? because its balance sheet is not very good. there's a lot of loan pros that

are underwater, apparently, according to my sources who are close to the matter, close to the discussions, the jpmorgan-led bailout. again, as we reported yesterday -- and i noticed how bloomberg picked this up after watching "the claman countdown," two hours later, there is talk about having the government step in and take -- in exchange for giving first republic -- liz. liz: which is down 17% right now. >> they watch "the claman countdown," and they know the government is stepping many doing something like they did with aig, it's not very good. so, again, banks are reluctant to bid on first republic. they're reluck ant to bid on first republic because of that balance sheet. that's why jamie dimon and the rest of them are manning the phones, and if paris if are republic -- first republic goes down, that's not good for the dow. here's the rock and the hard place for the fed. rate increases, obviously, are

exposing the folly of three years of massive rate cuts and printing of money causing people not just investors that buy, bought amc at $70 a share to go out on the spectrum, the risk spectrum. now, we should point out amc, its common stock is trading below 5. but bankers supposedly sophisticated bankers did the same because that's the way you incentivize them to do so. those loans right now in this environment are facing problems. and because their assets are backed up, risk-based assets by treasury securities which are highly interest rate sensitive the, down in price from when they bought it, guess what? you've got a real problem, a mismatch between the two. and if you're losing money and people yank money out of your bank, you're going to be in trouble. so that's what we have right now. i think this is what has to happen, liz, and i think it will happen. i think you've got to get the

smartest risk ad visors on wall street, get a dan loeb who understands markets. get a larry fink who's been through this a hundred times at blackrock -- liz: is that what we're heading to, charlie? that long-term capital management moment? i know that was a lot of central banks -- >> well, no, no, that was a lot of bankers. i think you need something like that, a consortium of the smartest people, stop beating up on bankers all the time. get jamie dimon in the room, brian moynihan and try to figure this damn thing out -- liz: they're in the room right now. they had a 2-day meeting in washington d.c. it was a pretty busy schedule -- >> i think we need much more of a concerted effort -- liz: well, this is hitting the tape right now, charlie, that jamie diamond is meeting with lael brainard -- >> there you go. liz: biden's white house economic council who was the vice chair of the federal reserve. >> right, right. absolutely. yeah, i mean, you know, listen, he knows what he has to do. i think larry fink, from what i

understand, is in all these meetings, constantly talking to them. remember, larry has been like jamie, they've been through this rodeo so many times before. they've seen long-term capital, they saw the mexico can peso crisis, they obviously saw the 2008 crisis. they were integral participants of trying to get us out of those things -- parts of trying to get us out of those things, and this is what needs to be cone right now. if lael brainard was smart, she'd bring everybody in the room. and she is smart, i should say. she needs to bring everybody in the room and figure in this out. kevin what are, who was on the fed board of governors during 2008, wrote a really nice column in the "wall street journal" which basically said this: the leadership from yellen, from powell is very disjointed, from the white house, it's very disjointed. they need to come up with something concern. liz: charlie, we've got new session lows, i do just want to point this out -- >> thank you. i'm not trying to do that. [laughter] liz: we'll blame you anyway. so easy to blame you.

if we can look at some intradays of the dow, the nasdaq and s&p, right now we have a brand new session low -- >> liz, let me ask you this, why are people like your former guests, and i'm not talking about kenny, the other gentleman who i don't know -- liz: gene goldman. >> why do they think they're going to cut rates? there is nothing here that suggests this. liz: not going to, have to the. >> maybe 2015 -- i don't know. by 2050 they may have to, but i'm not saying, let's talk about the next year. what -- if you have food prices that are still this high -- liz: i'm with you. i understand. >> -- it's a tax on the working class, and, you know, you're really going to screw the working class. liz: well,ing that's why jay powell better start taking lessons from nick what eleven ca, because he is going to have to walk a very thin tight rope between two of the tallest buildings in the world, inflation right now and, of course -- >> recession. liz: concern scary, sort of a shaky banking system that he

insists is fine. >> and a recession. listen, jpmorgan is fine. but if those other banks are core as well, they can cause losses and push us into a recession. liz: okay. we've got some breaking news we need to bring you. the securities and exchange commission has just i sued chinese crypto entrepreneur justin son and three affiliated firms, accusing him and other defendants of illegally selling crypto securities. the sec is apparently also charging eight celebrities for illegally promoting crypto securities without kiss closing that they were paid. this goes back to the kim daughter dash january situation where she ended up having to pay a million collars -- kim kardashian. celeb is include lind are say lohan -- [laughter] jake paul, austin mahon, kendra lust, lil' yacht i the, neo and akon. tell me i got that right.

okay, got it. so cool. sec says the celebrities apart from soulja boy and mahon without admitting or denying, and that's why you are seeing a lot of the crypto completely race all of the earlier gains. bitdown down 1,251, e etherium is down $77, litecoin down just about -- is that a buck? all right. so, guys, need to go back to those intradawes days because charlie interrupted. now we are down nearly 380 points for the dow jones industrials. this is the session low. s&p down 43. the nasdaq down 117. mark the clock here, we have lessen than 8 minutes before the closing bell rings. here is an important question for investors: does the stock market stability hinge entirely on a full government -- i'm talking about the federal reserve, fdic, treasury -- a full government backstop of all u.s. bank depositors?

investor kyle bass thinks so. bass is now telling we me exclusively that treasury secretary janet yellen's insistence that that, quote, only banks that post systemic risks will be rescued is not going far enough. bass, you may remember he made a fortune shorting subprime mortgages ahead of the 2008 financial crisis. he's telling me a full deposit guarantee is now necessary but must be paired with much more rigorous bank regulations and stress tests. so what is the trade? now that jay powell has said raising rates takes the priority, not dropping them to calm a situation, what's the trade of some form of what both janet yellen and kyle bass along with jay powell are now saying comes to pass? joining me now with $#.1 trillion under management, chief global strategist quincy crosby and omer sharif. quincy, we still do not know the extent of the fissures and outright cracks cousins of

regional -- dozens of regional banks might be facing. but as we hit new session lows, the dow down 431 points, where do investors believe they can find growth? >> well, they're still going into the treasury market for short duration even though those yields are coming down. the treasury market is telling you that the fed is not going to be raising rates that much longer. and as those yields come down, you even wonder if the treasury market is looking at a real big slowdown, deeper than initially expected. but you still get duration, you're still getting a safe yield. the other thing that we're looking at right now because the regional banks are down, all the banks are down, are preferred on the banks. st the offering a compelling valuation right now, and we think that you can also have a nice return there. but in terms of the equity market, we're still looking at industrials because bolstering

industrials has been the defense stocks. and they have been doing very well because this is not a safe global environment. you've got the europeans coming you also have a bigger, a defense budget under biden. that may be cut a bit, but it still will be very strong. that is helping industrials all along. so has machineries. the world is not going to collapse. you see all of it, even in this country, machinery, in motion, infrastructure spending is picking up, though economy will not collapse but i can tell you right now the fed stayed to that mandate. he wouldn't move from that mandate, the stability, price stability mandate. because he doesn't want the market to think they're ready to pivot. the market is saying something different.

you know what? you will be cutting before you know it. liz: a market has been wrong. i want our viewers to understand something, the guy we paired you with omar sharif. globally, people follow you on twitter because of your expertise in inflation. let me play what jay powell just said, you translate it for me. i have trouble understanding it. how he sees inflation and moves needed to quell it. listen. i let you determine. >> we anticipate that ongoing rate increases will be appropriate to quell inflation. instead we now anticipate some additional policy poll firming will be appropriate. and our policy decisions will reflect that assessment. >> okay, if you can decipher that, explain to us where we

stand on inflation. how bad it is, whether you think the fed will have to pause? >> yes, i think that particular segment you played, he is basically tied future rate hikes directly to credit conditions. you know, chair powell said at one point, we'll watch the data, in particular look at our assessment and our expectations what will happen to current credit conditions. less loan growth. less opportunity for people to buy hopes and cars. that should work, to squish inflation down. some work the fed was planning on doing with additional rate hikes began, some of that is absorbed by potentially by credit conditions. the bottom line they don't really know how this will play out. he frankly said, look, the we need to focus on the words may and some when he talked about rate hikes. so they're going to watch credit conditions. see what is going on with loan growth. fed balance sheets, how much tighter are the conditions. if they're very tight, they may not do anything further. that will help to bring

inflation down. however he also said, if credit conditions, this doesn't really impact anything, things are moderate, remember they were already planning on increasing rates more than the terminal 5.1% when they had inflation at 3.1, 3 1/2% to the core. today they have it at 3.3 on the headline. 3.6. higher inflation, necessitated more rate hikes, about, two weeks ago. that is effective what he said. now they're going to wait and watch. are very conditions going to take a big hit. if they do, that will do a lot of work for them they believe. liz: that is what jay powell said. he also said the val sal bank issue, the collapse was an outlyer, even though it took down signature bank with it. right now the only name in the green on the dow heat map, proctor & gamble. i'm talking barely. it is up eight cents. the dow earlier made a new session low. that would be a loss of 493 points. quincy, should investors be

avoiding all exposure to the financial sector right now? >> they should be very, very careful. i do think that they should just pull back their times to just wait it out and they should wait this out. going to have a lot of conferences, supervision, regulatory questions about the market and, that is going to change the perception of the financial scenario. but you know you also have to take a look as these rate hikes moved so quickly, what about the banks that have a lot of commercial real estate. let me, what about the other parts of the market that are vulnerable to higher rate hikes, staying higher for longer? pointed out earlier by him, because of very low risk. that is still sitting on the books. >> indeed. i'm with you. we don't have an