quite gradual pace. and, you know, that's a little bit of the finding of the bear if man key paper -- bernanke paper of a few weeks ago which is very consistent with what i would think. >> [inaudible] >> reporter: michael michael mckee, bloomberg radio and television. you said in the past that you don't like to surprise markets, it's kind of been the fed's view markets should have an idea what you're going to do before you go in. you've also said a number of times that it would take a while to bring inflation down. you reiterated that again today and we'd get to the point where inflation could be sticky. is i'm wondering as we go into the next meetings how wall street or others should look at your reaction function. what will you be reacting to, time or data? in other words, if nothing much changes, if we're looking at the same sort of labor market, the same sort of inflation levels many july or in september or

november, will you move? because you've said you feel you need to? if is it time that's going to require additional movement, or would it be reversal with inflation? >> so i don't want to deal with hypotheticals about different ways day data -- data might move. of course, we don't go out of our way to surprise markets or the public. at the same time, our main focus has to be on getting the policy right, and that's what we're doing here. and that's what we'll do for the upcoming meeting. i will say the july meeting will be live, and we'll just have to see. you'll see the data, you'll hear fed people talking about it, and markets will have to make a judgment. >> do you think the inflation is likely to continue coming down based on the lags and based on your threat of additional movement, or are we going to be in a period where we're not going to know what's happening? >> you know, i think if you look at, if you just look at -- i'll just point you to the forecast. so inflation is running, core

pce inflation is running a little higher than 4.5%, and the median fomc participant thinks it will go down to 3.9 percent by the end this year, so that's a pretty significant decline for half a year. that's the forecast. you know, we'll, we do try to be transparent in our reaction function. we're committed to getting inflation down, and that's number one thing. so that's how i think of it. >> [inaudible] >> reporter: victoria guido with politico. could you talk about the balance sheet is and how you're thinking about it? what are you looking for to judge whether we're approaching reserve scarcity, and is treasury issuance going to affect that? also are you considering lowering the rrp rate in order to take some pressure off banks? >> so let me say, first of all, on the treasury part of it, i

can talk about that and then go back to the balance sheet. so on that, of course, we've been very focused on that for a couple of months as everyone has. treasury has laid out it borrowing plans pluckily. i think we all saw it -- publicly. i saw the secretary's comments to the effect that treasury has consulted widely with market participations in how to avoid disruption, that's from the treasury which actually sets the borrowings. at the fed we'll be monitoring market conditions carefully as the treasury refills the tga. the adjustment process is very likely to involve both a reduction in the rrp facility can also in reserves. it's really hard to say at the beginning of this which will be, which will be greater. we are starting at a very high level of reserves and still elevated r are rp to take up, for that matter, so we don't think reserves are likely to

near term or even over the course of the year. so that's, that's the treasury part of the answer. we will, of course, continue to monitor conditions in money markets, and we're prepared to make adjustments to make sure that monetary policy transmission works. was there another part of your question? [laughter] >> yeah. are you considering lowering the rrp rate to help take some pressure off banks? >> so we have a number of -- i would say the rrp doesn't look like it's pulling money out of the banking system is. it's actually been shrinking here lately, so i don't think -- that's not something we've thought about a lot over time. it doesn't really look like that's something we would do. i think it's a tool that we have. if we want to use it, we can. there are other tools we can use to address money market issueses, but i wouldn't say that that'ter: jenelle -- with

bloomberg. have you seen sufficient cooling in the housing market to bring inflation down? for example, how does the recent rebound affect your forecast, and how does it factor into monetary policy? >> so certainly housing, very interest-sensitive, and it's the first place really or one of the first places that's either helped by low rates or that is held back by higher rates. and we certainly saw that over the course of the last year. we now see housing putting in a bottom and maybe even moving up a little bit. you know, we're watching that situation carefully. i do think we will see rents, rents and house prices filtering into, into housing services inflation. and i don't see them coming up quickly. i do see them coming, kind of wandering around at a relatively low level now, and that's

appropriate. >> do you think you'll have to target with further rate increases? >> well, i think we look at everything. we don't just look at housing. so i think, you know, the way with it works is individual participants sit in their offices all over the country, and they write down their forecast. including their most likely forecast including their rate forecast, and they send it in on friday afternoon and we assume late it and then we publish if it for you. so that's how they do that. we'll -- i don't know that housing is itself going to be driving the rates picture, but it's it's part of i. >> [inaudible] >> reporter: thank you for taking the question, mr. chairman. edward lawrence with fox business. i want to go back to comments you paid in the past about unsustainable fiscal path. the cbo projects the federal deficit to be $2.8 trillion in the 10 years, cbo also says the federal debt will be $52 trillion by 20 if 33. at what point do you talk her if

formally with lawmakers because monetary policy cannot keep that that inflation in check with the higher level spending. >> i don't do that. that that's really not my job. we hope and expect that other policymaker ors will respect our independence on monetary policy, and we don't see ourselves as, you know, the judges of appropriate fiscal policy. i will say, and many of my predecessors have is said is, that we are on an unsustainable fiscal path, and that needs to be addressed other time. but i think concern over time. but i think trying to get into that with lawmakers would be, would be kind of une appropriate given our independence and our need to stick to our knitting. >> reporter: is there any conversation then about the federal reserve financing some of that debt that we're seeing coming down the pike? >> no, under no circumstances. >> [inaudible] >> thanks for taking our questions, chair powell.

so looking at the sep, it looks like gdp for this year was raised significantly, your forecast for gdp this year. the unemployment rate, meanwhile, was pulled downward. so should we take that as a sign that the committee is more confident about the prospects of a soft landing, at least as it relates to what you were expecting in march? >> you know, i would just say it this way, i continue to think and this really hasn't changed that there is a path to getting inflation back down the 2% without having to see the kind of sharp downturn and large losses of employment that we've seen in so many past instances. it's possible. in a way, a strong labor market is -- that gradually cools could aid that along are. it could aid that along. but i get i want to come back to

the main thing which is simply this: we see, the committee, as you can see from the sep, the committee is completely unifieded in the need to get inflation down to 2%. and we'll do whatever it takes to get it down to 2% over time. that is our plan. and, you know, we understand that allowing inflation to get entrenched in the u.s. economy is the thing that we cannot allow to happen for the benefit of today's workers and families and businesses but also for the future. getting price stability back and restored will benefit generations of people as long as it's sustained, and it really is the bedrock proof the chi. and you should understand -- of the economy. and you should understand that is our top priority. >> just a quick follow-up. i'm a little confused because you said the committee will cowhatever it takes to get inflation down over time, but when i look at the sep, inflation is still predicted to be elevated, but the fed funds

rate is lower than where it is now. can you help me understand that? >> sure. so, you know, if you look two and three years out with the forecast, first of all, i wouldn't put too much weight on forecasts even one year out because they're so highly uncertain. but what they're showing is as inflation if comes down in the forecast, if you don't lower interest rates, then real rates aring actually going up, right? so just to maintain a real rate the nominal rate at that point two years out, let's say, should come down just to maintain real rates. and actually, you know, since we're probably going to, we're having real rates that are going to have to be meaningfully positive and significantly so for us to get inflation down, that probably means -- that certainly means that it will be appropriate to cut rates at such time as inflation is coming down really significantly. and, again, we're talking about a couple years out. i think as anyone can see, a not a single person on the committee wrote down a rate cut this year.

nor do i think it is at all likely to be appropriate if you think about it. inflation has not really move down. it is the not -- it has not so far reacted much to our existing rate hikes. and so we're going to have to keep at it. >> [inaudible] >> [inaudible] oh, sorry. thank you. hi, chair powell. julie -- showed a rebound in may in the black workers' unemployment. is it consistent with the fed's maximum employment mandate? are you worried about that, about this rebound? >> so we are, of course, worried about there are longstanding differences in racial and ethnic groups across our labor market. that's a factor that we don't, we can't really address with our toolses, but we do consider that

when we're thinking about what constitutes maximum employment. it is, for us, a broad and inclusive goal. and so we do watch that. but remember, all unemployment including black unemployment has been bouncing around right near historic lows, historic modern lows here. so we're still talking about, i mean, what is as strong a a labor market as we've seen in, you know, a half century here in the united states. overall unemployment of 3.7% is .3 higher than it was measured to be at the last, you know, a month ago but still it's extraordinarily low. and so it's a very, very tight lay -- labor market. >> [inaudible] >> thank you. i want to follow up first a little bit just on the rent question, on housing. we heard governor waller talk about -- i'll back up. we haven't quite seen the slowdown in rents show up in cpi yet, and we did here governor

waller talk about how an uptick in housing might mean there's not as much relief coming or a shorter bit of relief than we thought. can you talk about how you're thinking about that and how that played into today's outcome? >> i wouldn't say, you know, as a factual matter, that's correct. we do need to see rents bottom out here or at least stay quite low in terms of their increases because with we want, you know, we want inflation to come town down, and rental is a very large part of cpi, about a third -- it's about half of that for the pce. it's important and something that we're watching very carefully. it's part of the overall picture. i say it's the decisive -- i wouldn't say it's the decisive part, with but what you see is look at core inflation over the past six months, year. you're just not seeing the kind of progress we want to see, and that's -- it's hard to avoid that. and, you know, the committee, people on the committee, the median went up significantly so

that the median participant now thinks that core pce inflation on a 12-month basis will be 3.9% this year. so once again every year for the past three years it's gone up over or the course of the year, and it's doing that again. so we see that, and we see that inflation forecasts are coming in low again. and we see that, that tells us the that we need to do more. and so that's why you see the sep where it is. >> could you also talk briefly about your outlook for wages and given the recent slowdown in core services excluding housing, how far you think wages might need to fall in order to get inflation back in mine? >> wages -- in line? >> the wages will continue to increase. what we're talking about is having wage increases still at a very strong level, but at a level that's consistent with 2 if inflation over time. so i think we've seen some progress. all of the a major measures of wages have moved down there from extremely elevated -- not extremely, highly elevated levels a year or so ago s and

they're moving back down but quite gradually. and we want to see that process continue, gradually. of course, it's great to see wage increases particularly for people at the lower end of the income spectrum, but we want that as part of the process of getting inflation back down to 2% which benefits everyone. inflation hurts those same people than anyone else. people on a fixed income are hurt the worst and the fastest by high inflation. >> thank you so much, chair powell. craig roth from market watch. i just wondered if the committee has talked at all about the labor market and the strikes now in hollywood and now the united autoworkers are talking about a possible strike. i mean, aren't workers -- we have system, workers have power now and are are going to be seeking higher wages. does that come up in your discussions? thanks. >> so the topic of wages and the

labor market and dynamics in the labor market could, is about as central a topic to our discussions as anything. i mean, it's very -- labor, economics and the labor market are utterly central. it's half of our mandate, so we spend a lot of time talking about that. i think, you know, we -- there are structural issues that are really not for the fed, and so we don't spend a lot of time although we take notice of what's going on, with but we're not, you know, we're not involved in discussions or to debates over strikes and things like that. but, you know, we look and we see what's going on and, you know, we're making judgments about what it will take to get inflation down to 2% in the aggregate. as i said, don't think that was about -- i didn't -- most folks would say it wasn't really about that, about wages at the beginning, and it's becoming more about that as we get into really service sector inflation which is the part of the economy where we have seen the least

progress. >> [inaudible] >> thank you, mr. chairman. mark hamrick with bankrate. wondering what your thoughts are now about systemic risk now that we're about three months past the failure of silicon valley bank. and also specifically, what are the risks associated with commercial real estate as well as nonbank financials, and could you further elevate those risks with higher still rates possibly for longer? >> so trying to think where to start. i'll start with commercial real estate. we, of course, are watching that situation very carefully. there's a substantial amount of commercial real estate in the banking system, a large part of it is this smaller banks. it's well distributed. to the extent it's well distributed, then the system could take losses. of we do expect that there'll be losses, but there'll be banks that have concentrations, and and those banks will experience

larger losses. so we're well aware of that, ask we're monitoring it carefully. you know, it feels like something that will be around for some time. as opposed to something that will suddenly hit and work its way into systemic risk. in terms of nonbank financials, financial sector, there's been t really was the nonbank financial sector where issues really arose and, you know, there's a lot of work going on with the administration in particular leading that to try to address issues in the treasury market and in all kinds of areas in nonbank financial market. but our jurisdiction at the fed is over banks, actually bank holding companies and some banks, so that's really our main focus. you know, in terms of the events of march, as i mentioned earlier, we'll be carefully

monitoring the situation. you know, our job generally involves worrying about a lot of things that may go wrong, and that would include the banks. it might be hard for me to identify something that we don't worry about rather than we do worry about. so we're watching those things very carefully. and as we see things unfold, as we see what's happening with credit conditions and also all the individual banks that are out there the, you know, we'll be able to take to the extent it's appropriate, we can take if there are macroeconomic indications, we can take that into account at rate setting. so i guess that's what i would say. >> do you risk further exacerbating those issues to you get up to the another 50 basis points? >> so that's -- and i guess i meant to the address that by saying as we watch, or we'll see what's happening. and if we're seeing the kind of tightening of conditions that you could be referring to, then we can factor that.

because really we use our rate tool is, you know, it really has macroeconomic purposes. we'll take that into account. of course, we have responsibility for financial stability as well, and that also is a factor we're always going to be considering. thank you very much. liz: all right, here we go. [laughter] this is an interesting one, folks. federal reserve chief jerome powell wrapping up his news conference which, i don't know, i guess you could call it 50 shades of gray. on one hand insisting inflation conditions look better but that there will be no retreat there working to e attack stubbornly high prices. take a look at the markets in the wake of the federal reserve voting unanimously to leave rates unchanged for now, the dow jones industrials down 243 points. low of the session a losses of 428, so we're off that low but certainly not close to what had been the high of a loss of 60 points. now, the markets are in the red,

the s&p down about 3 points off the lows. nasdaq is really kind of straddling that flat line here, slightly lower. russell 2000 getting hit hard here, down 1% or 21 points. and they're heading south in part because the fed's hawkish pause included a prediction to the hike rates two more times, two more times this year, initially taking the wind out of the market's sails, and the market is having a lot of trouble punching back into positive territory. here you see the intradays. the markets actually cropped like a rock after 2 p.m. eastern when the fine print of the meeting was made public. now, since the open and before the announcement, as i said, look at the dow, it had marginally been down, i don't know, 60-80 points, and then you see it fell the a session low of more than 420 points. s&p 500 had gone skyward by 22 points at the high then began to the fall 31 points at the low and now is off those lows, down just about 2 points. the nasdaq was really enjoying a nice rally, up 88 points,

popping to the top there just, i guess, you could say before noon. and then fell to a low of 117-point loss, thousand up again, up 12 points. but that's really definitely a path in motion here, it has not stopped moving. not only did powell say that the pause this time around should not be interpreted as the fed if letting its foot slide entirely off the gas, but listen to how firm he was about the prospect of tap thing the brakes this year. -- tapping the brakes this year. >> -- not a single person on the committee wrote down a rate cut this year, nor do i think it is at all likely to be appropriate. if you think about it, inflation hat not really move -- has not really moved down, it has not so far reacted much to our existing rate hikes, and so we're going to have to keep at it. liz: not a single one of the fomc committee says cut rates this year. he's very clear on that. so here's the bond market reaction. you look at the 10-year yield,

2-year yield, right now the 10-year yield is at 3.81%. and i was keeping score. before we got the news, it wases just around 3.84%, okay? if 2-year yield, 4.73% right now, and we do have the 2-year when we saw it before then at about i want to say 4.76 president. so -- 4.76% coming back down. we have got traders john with najarian and kenny polcari, we also have art hogan, quincy crosby, a chief economist at bnp paribas, but let's dig into the decision to pause rates and the ramifications for your money with euro pacific chief economist peter schiff along with global fixed income head andy brenner. andy, first to you. your gut reaction to this. he kind of calmed the markets at one point and then all bets were off. >> liz, he was waffling all over

the place as far as -- peter was talking about what powell was saying about labor, and and it's really ridiculous. the labor market is softening. we saw it in the unemployment numbers, two weeks ago, and he was all over the place. two years' rally if from 4.78 high yield to 4.69 now as you just said back to 4.72, 4.73, we really think inflation -- can we looked at the ppi number this morning, 1.1% year-over-year? if why doesn't that that factor in in any of the fed's discussions, you know? we're looking at lagging cpi data that even powell said that he thinks that the committee thinks it's going to be 3.9% for pce year-over-year. i think those numbers are going to end up looking very high. i think they're e going to be significantly lower. liz: i thinks this is what's shocking, that the numbers that they put out for the projections which only come, what, how many times do these projections come out?

>> once a quarter. liz: once a quarter. we got the brand new ones, they look better and stronger particularly for gdp. if you look at gdp, previous was 1% -- sorry -- >> .4. liz: .4%. can we put this up? this is extraordinary. they have rah raised it now to 1% by the end of this year. then the you have for 20241.1% -- 2024 1.1% and now, of course, 1.8% for 2025. so why pause now, peter? >> well, i think powell's actually concerned about the evolving financial crisis that has only just gotten started. i think it's going to the, ultimately, exact a heavying toll on the real economy, on so-called strong labor market. i don't believe that this is a hawkish pause. i mean, powell admitted that the risk to inflation are still to the upside. he talked about how importants to get inflation down to 2% and how far we are from achieving

that goal. he's forecasting two more rate hikes this year. if that's the case, why skip -- why not raise rates right now? if inflation is still a threat and you know you're behind the curve, raise rates. i think powell's afraid of what's happening in the economy. he doesn't want to the hike rates anymore. he realizes that the rate hikes have already been too much for this fragile economy to bear, but he doesn't want to admit that. so he wants to maintain this specter that the fed's still on course. to me, it's like that mid-course correction from 2019. i knew at that final that it wasn't a course correction, it was a course change, and that is exactly what we've had. liz: volatility is dropping. we now have it straddling 4 points. okay, it's -- 14 points. it's been below that the past couple of days as well, but down 4 percent at the moment. seems like the market is comfortable with this. but, andy, there was a point where specifically he stressed, and this was not there yet, we're not there yet. on tackling and killing

inflation. let's listen to how he put that, and then i need your response on that because, like peter said, why then pause? because what you have when you pause is, now you're stopped, and you've to got an inert thing, and you've got to get the energy to start it back up again in july if necessary. here's what powell said. >> forecasters, including fed forecasters, have consistently thought that inflation was about to turn down, and, you know, traditional, you know, typically forecasted that it would and been with wrong. so i think if you, i think if you look at core pce inflation overall, look at it over the last six months, you're just not seeing a lot of progress. it's running, and it's running at a level, you know, over 4.5%, far above our target and not really moving down. we want to see it moving down decisively, that's all. we're, you know, of course we're going to get inflation down to 2 over time. we to don't want to do -- we

want to do that with the minimum damage we can to the economy, of course, but we have to get inflation down to 2%, and we will. and we just don't see that yet. liz: and yet he's pausing. what are our viewers supposed to interpret from that? >> first of all, powell is a dove in wolf's clothing, always has been, always will be. peter hit it right on the head. it's the regional banking system. they're under tremendous distress. sure, it hasn't been in the headlines for the last few weeks, but just look at treasury bills. t-bills are going to be between 5.5-6%. why would anyone in their right mind keep money in bank deposits at 3% or 4% or 1% -- >> what do you mean 3 or 4? they're still at 0 #. bank of america is 0 # on checking and 5 basis points -- liz: apple card isn't, citi isn't, capital one isn't -- >> great points. liz: okay, i get that. but you're right about when you look at the short term t-bills, right? anything from 1-month, 3-month,

we call it the party of 5%. like, six of them up until one year are all yielding 5 plus percent. >> absolutely. liz: why would that go higher? >> and powell is significantly downplaying the risk in the commercial real estate market. this is a crash already happening in slow motion -- liz: why are regionals going down? >> they're all going down because why even keep your money in a bank that might fail? when they bailed out silicon valley bank and a couple of others, they made it clear that it's a case-by-case basis whether they're going to cover accounts in excess of 500 # or the 250 limit. the government has created a run on the regional banks, on the community banks. they are disasters. the only thing is -- liz: all of these regionals are reverting. they had been in the green red. yesterday on this show duke professor campbell harvey who

invented the term yield curve inversion which, by the way, at this point charlie brady, our managing editor, is saying that the yield curve inversion is the widest in three months. it ises a huge gap. and that is a screaming sign of recession, and yet all we see are these so-called points of strength. the fed is pausing. i mean, this looks, like i said is, 50 shades of gray. >> the banks are loaded up with low-yielding, long-term debt whether it's mortgage debt, treasury debt, and they're losing their deposit base because their depositors are not going to take the risk of the bank failing. they can't get any yield. they can just pull the money out and loan the money to the government by buying a money market fund. the fed created this disaster -- liz: too low for too long. >> -- running up a $9 trillion balance sheet. if powell thought inflation was a big risk, he shouldn't have lit the match. liz: andy, andy, andy, do you think jay powell looking at the fed funds futures leading up to

today where they got as high as 98 percent for a pause today, young he was influenced by that and that's why he paused? >> i think that was part of it, liz, but i think he was going to to pause regardless. i mean, when he had jefferson go out there two weeks ago and say we're going to pause, that was it, he had already made the decision. and cpi wasn't going to change that no matter what the number was. you know, the problem that they have now is powell had who two people that were ready to dissent, so that's why he tried to sound hawkish why they can did talk about two more rate hikes. i think they're done, done and done. and one last thing -- liz: yep. >> -- with regionalbacks, remember, when you put money in treasury bills, if you live in a high-tax state, that is non-taxable for state tax which makes it even more valuable. >> essentially, inflation is going to run out of control, and the fed is going to have to hike. but the one thing powell could do the that would help is, you

know, to warn congress that they've got to cut back on this reckless government spending, bring down these deficits. that's one thing that might make a difference, but he refuses to go there because he says, well, fiscal policy is not part of what he does. it's exactly what he does because it's the monetization of those massive budget deficits that is root cause of the inflation that the fed creates. liz: dow jones industrials down 269 points, the s&p lower by 5. nasdaq's holding on to a gain of about 3, 3 points here. apple's moving higher. we do have several increases here and up to 52-week highs on the stock market let's get to individual names. andy bern, peter schiff, thank you so much. to the floor show, let's bring in king of the nyse kenny polcari and star options trader jon najarian. if all right, ya marijuana, does this skip or pause, whatever you want to call it, is it cause for

celebration? >> not yet, liz. but i think it's a joke that powell implied his talk rather than his walk, that we're going to see two more rate hikes this year. we are not going to see that. the market will not believe him by the time we get around to the july. and the fact that they've also said out of the the same mouth that they're going to these, that the dot plots predict a 100 basis point reduction in 2024? in other words, heir going to hike twice right now -- they're going to hike twice right now and six months later cut by 100 basis points? that's nuts. that's exactly what the market does not need. so i agree with the previous two gentlemen, we should be, in fact, focused more on this pause extend thing rather than seeing two more hikes this year. i don't think they've got the guts to do it. liz: kenny, you before the announcement, you sent me ab e-mail and you said it's time

for the contra trade meaning contrarian. and the markets had been looking really good. in fact, yesterday we asked the question, is it an unstoppable sort of rally at the moment? there was so much happiness and buoyancy to the markets. thousand to you see -- now you see what's going on, and you said the contra trades were shorting the s&p, shorting the nasdaq 100, i believe you also said short the dow and do vix short-term futures which, by the way, is hitting a 52-week low. >> right. is what i meant by that is that if you were nervous about the market selling off, that's how you protect yourself, by buying those etf which get you short the market. but, look, i think this growth to the sky rally that we've seen has got to come to a stop. i don't see how they're going to raise rates two more times. in fact, i think today's skip is going to lead to a july skip and

to the a holding pattern right through the end of the year. and i agree there's no cuts coming, i think the market needed to hear that because there's a bunch of people out there that think they were cutting, but if you're concernek it's going to back up, i don't think it's going to crash, but i think it's got to back off because the rally's straight up. liz: i need to get to the dow heat map, and i want you to note who's at the very bottom, bringing the dow down mostly 226 points, and this was well before the central reserve, united health group. it's down 6.7%. at one point it was down 8.8%, it was accounting for the biggest point chunk that was turning the dow red. jon najarian, it's it is also hurting humana, and the issue is that they basically warnedded that i guess medical cost ratios are going to affect their bottom line, correct? >> yeah. i think that's exactly correct. and as you accurately said, liz,

the unitedhealth cfo, chief financial officer, made those statements that many of their older coverage factors are going to be going into the doctor and, thus, supply and demand still works. so when you see more demand coming back in because of covid, because they didn't have some of these elective procedures available to the them for a host of reasons, you're going to see that demand push prices up and, obviously, every time somebody dose in for a procedure that is covered that's money out of humana's pocket, money out of unh's pocket, and that really put both those stocks to the downside like that, as soon as ceo spoke those words. liz: can i just ask this question, i guess i'm dumb, rising medical costs, rising food costs, we just had stew leonard jr. on yesterday of course, of the famed grocery here on the east coast, stew

leonard's, continuing to see very sticky inflation and yet listen, kenny, to what chair powell said when specifically talking about inflation saying that conditions are a starting to look like they are lowering. and then i want to hear your response. >> i would almost say that the conditions we need to see in place to get inflation down are coming into place. and that would be growth meaningfully below trend, it would be a labor market that's loosening, it would be goods pipelines getting healthier and healther in -- healthier, that kind of thing. the things are in place that we need to see, but the process of that actually work on inflation is going to take some time. liz: mcdonald's, general mills, pepsi, they've all hiked rates and people are forced to pay them. >> right. right. and i think, you know, there was a lot of discussion about this on twitter, people saying to me as we were talking about ppi coming down, it's better with, inflation -- people are, like,

but with i don't feel it in my everyday life. anything i need, food, electricity, utilitieses nothing but continues to remain high and stay high, and that's the problem is that the majority of the country is not feeling what he thinks is happening, that it's coming down, right? liz: so let's make our viewers some money. you already talked about your contra trades. jon, what are you looking at here when it comes to to some of these momentum plays? advanced micro devices charging higher. of course, the news there is specifically the the report maybe amazon is going to purchase its a.i. cloud chips and that they turned down nvidia. nvidia, of course, has been -- [laughter] hitting record after a record after record. but, you know, you like advance micro devices. how do you play this? and sofi is hitting a brand new high. >> i think you -- and we've seen a lot of upside call buying in both sew fee and advanced micro devices, and we've been talking about it, sharing it with you. i think both of these go, well, in the case of sofi, it's

probably due for a break right around 11 or so. this is a move that it's made since $8 a share, so percentage wise a very huge move in just a few days. advanced micro devices, you're right, liz, this is a very positive statement by them, by amazon. it's not a signed deal yet, but it's certainly leaning towards them being awarded that contract which would be huge with the biggest cloud player in the world. and i think overall that stock probably has 145-155 on it by the july time -- liz: it's at 126 and change. but, jon, my friend, year to date it's up 96%. don't we wait for a pullback? >> if -- liz: kenny's nodding. thank you, kenny. [laughter] >> yeah, if the you can, you'd always love to buy on a pullback. you don't always get them. we got that when went nvidia traded at 400, it pulled back to

380, it didn't stay this long. now it's back above 420 again. liz: quick, kenny, your favorite name and your favorite play right here. >> listen, i am -- my favorite name and i bought it today is jpmorgan and bank of america, both bank stocks that i own. i bought more of them because i think those are going to be -- that's part of my conservative side of my portfolio. but i think they're great purchases. liz: well, peter schiff just said all banks in america are insolvent, so -- but, you know, he's got that giant gray cloud above his head. >> yeah, yeah. i'm not -- liz: we love our peter schiff as well. >> he's a smart guy though. liz: jon, kenny, great to have you. dow jones industrials struggle here, down 240 points. fox market alert, let's look at everything here, the s&p 500 which has been up, it has been down. at the moment we do have it down just a fraction. let's call it that. nasdaq is up 21 points. we talked about the health insurance stocks getting hit after unitedhealth disclosed that costs are rising due to an

increase in non-urgent surgeries among seniors. but that news has been very positive for hospital operators. hca health care, well, humana and unitedhealth down, seventeen is down pretty -- centene is down, we look at the hospital names, they're looking better with because more surgeries mean higher occupancy which means higher hospital revenues. and then medical device merricks are also poised to benefit from rising vols -- volumes of elective surgeries. stryker up 4.33, they make the hospital beds among so much other medical device quality stuff. zimmer biomed up 3.7%. intuitive surgical, the name behind the da vinci robotic surgery tool, up 2.25. boy with, they were up a lot higher earlier. okay, let's look at shares of shell. they are on the move after the company announced a new

financial framework that includes boosting its dividend by 15% and keeping oil output steady through 2030. that's good for a 1.5% popped to. in an update ahead of investor day, shell said it will increase shareholder distribution to 30-40% of cash flow operations. shell also did say while it's boosting gasoline production, it's still committed to cut carbon emissions to net zero, that would be natural gas production, my fault, to net zero by 2050 saying it was making, quote, good progress. crude oil for the moment down 1%. earlier it was down just below $70 a barrel, it's now below $69 a barrel at $68.66. nikola, boy, this is -- on any given day it's spiking or dropping. today it is spiking, up 19.8%. investors are putting the pedal to the metal. fuel-cell-powered truck maker

started powering higher after the federal reserve is not ending rate hikes making future capital less expensive for nikola. when we say capital, we mean if borrowing, okay? borrow toking money has been very expensive, and growth names like nikola which actually don't have profits most of the time need to borrow more money. the stock continuing to climb on news that plug power, a hydrogen fuel cell company, is working on a new green hydrogen production facility for trucks in california. plug power down about 1.7%. we talked quickly about nvidia. nvidia, even with the news on this report maybe amazon said no thanks to nvidia's a.i. chips, nvidia's helping the hoist the nasdaq 100. not only is it adding another 3.8% to its gains and to its newly-minted $1 trillion market cap, but earlier it hit a fresh

record high. to stay there, we are there. it just needs to close above $419 and change, it's at $420.72. let's bring in chief market strategist art hogan. interpret what you heard from jay powell especially when the tech sector has found renewed muscle, especially i guess when you look at a.i. and what it's doing to the markets in a positive way for the bulls. >> yeah. i would say that in that's clearly true. the only surprise we got today in the summary of economic projections is the economy's doing better and at the fed's dot plots have two increases for the rest of this year where coming into the meeting the street was marking up one, and that was going to be in july. i think we're not that far apart with the street and where the fed is. but remember, that that dot plot doesn't have a good batting average. you shouldn't use it as a blueprint. my guess is both jon ask kenny are going to be more right than wrong, and the fed 's going to

have enough evidence by the july and september meetings to see that inflation's heading in the right direction. so i think that, i think that the dot plot is something that they have to do because they started that after the football crisis and it could likely go away without anybody missing it because it's got a terrible battle average. liz: is there a sector in particular that you went heavy into at an early level and that the dot plot that you see on the screen -- can i know this looks confusing, folks. basically, the dot plot is the opinion of each of the fomc voting memberses and how they see rates moving. do you get the sense that tech can hold on to this rally that has been pretty muscular, pretty strong and robust over the past couple of weeks? >> it certainly has. what's interesting, liz, is the s&p's progress has been on the shoulders of, you know, half a dozen mega-cap technology names. but what's happened over the course of say for today, over the month of june, that's

bonding out. we've got 180 s&p 500 companies that are actually beating the index now. so the advance decline lines look very positive. and i think we have to step back and think about the fact that the fed is close enough to the end of in this rate-hiking cycle that i think investors are going to start to look for those sectors that haven't performedded this year -- liz: which are? okay, so give me those. >> okay, health care, for sure, right? health care. i think industrial metals are certainly going to do well, the industrial complex is going to do well. it hasn't priced this in any of the infrastructure spend that starts next year. and i think energy has washed out of here. and i think to you look at those three sectors, three of the worst performing sectors, i think that's the catch-up trade. i would also offer up that the russell 2000 has outperformed the s&p, i think that continues for the next six months. liz: there was a very interesting moment, because you just talked about infrastructure spending which has, of course, passed, and there's been a lot of spending when it comes to the

actual government. they can't seem to keep their hands off the till whether it's the congress or the administration, but here's when our edward lawrence brought up spending on the government side. not the monetary side, not the federal reserve side. and it almost felt like powell was ready to pounce on that question. let's listen. >> i don't do that. that's really not my job. we, we hope and expect that other policymakers will respect our independence on monetary policy, and we don't see ourselves as, you know, the judges of appropriate fiscal policy. i will say and many of my predecessors have said that we are on an unsustainable fiscal path, and that needs to be addressed over time. but i think trying to get into that with lawmakers would be kind of inappropriate given our independence and our need to

stick to our knitting. >> -- any conversation then about the federal reserve financing some of that debt that we've seen coming down the pipe? >> no. you should no circumstances. under no circumstances. liz: how will that affect the markets if they can't stop spending on the government side? are we ever going to see inflation really come down to 2, art? >> yeah, i think that's a really good point. i think chair powell did a very good job of answering that question. the answer is the last sentence though, right? st the on an unsustainable path. that needs to get sorted out and will be sorted out at the end of the fiscal year when we have to have a budget in the october. the house has floated some idea about how much spending they want to cut, i think the senate will have their version of that. no one's talking about raising revenues, and that's e the most important piece. we have to balance both sides and raise revenues, cut spending to get this more in balance, and we're going to be talking about that from now until the end of the year. liz: all right. i'm continuing to watch the markets right alongside our

friend art to hogan. art, thank you so much. dow jones industrials down 274 points right now. s&p lower by 3. we've got the nasdaq up 20. it's the russell, if you look at the percentage level here, it's taking the hard hit. and we do have it down about 1% or 21 points. the transports up is 1.33 percent or 19 is points. we just heard jerome powell say inflation is actually getting better. i wouldn't say he's at the top of the fence, but he's almost there to straddle it. he sees a long road ahead to that 2% target. charlie gasparino, you just heard what art hogan said too. >> yeah. and -- i like art. i'm not criticizing art, but with i disagree with his assessment of what powell said as being somewhat artful, as being, like, the best way to put it. he was talking about the fed monetizing the debt. they monetized the debt already. he's the full of you know what when he says they don't. and here's why. they don't buy directly at

auction, the fed, but they do buy in the secondary market. quantitative easing, quantitative tightening, buy or sell. when you lower interest rates, you buy security bonds. you buy securities. you buy treasury bonds. you do that generally not at auction, but in the market. if you think about it, there's really no logical difference than buying it directly at auction from the treasury itself or buying it from goldman sachs on its books, right? because goldman -- liz: little bit of a fee that goldman charges. >> no, but i don't mean it like that. they're monetize thing the debt -- monetizing the debt either way. liz: dow is now down 306 points. >> that that's because of me, right? thank you. liz: it's all you. >> i will say one of the things i think he does well is, you know, he's a man of his word in this sense. he was the gentleman, he was the guy who said after the regional banks started blowing up we're going to have a pause. he does not give misdirection to

the market. we have a pause today. he's also the guy who says we're a long way from my inflation target. liz: he said not a single one of them in the fomc policy meeting said cut this year. not a single one of them. >> cut, that's right. liz: no cuts. >> that's right. so every time we keep hearing there people they're going to cut tomorrow, remember, a lot of that is happy talk from, you know, drunken traders on, you know, on the heroin of easy money over the last couple years. we're going to have probably two more rate increases. it's baked in. you can't get to 2 from 4% without more rate increases. liz: you think so? i know that. but do you really think -- >> heir going to do it twice. i mean, he said it, all but said it. i think this is going to be a rocky market. you can't unwind monetary easing of the level, the scale that we've had over the last couple years without sort of a clapback that we're having now.

one other thing though, he says he doesn't like commenting on fiscal policy? if why wouldn't he? i mean, if his dual mandate is inflation and employment, fiscal policy -- liz: he has urged congress in the past saying, you know, we're doing all we can. we can't control congress -- >> right. he's also, he's also applaudedded sleepy joe biden's spending plans over the years. liz: well, donald trump spent a lot too. >> i know he did. we spent on steroids following -- i mean, listen -- liz: there's always an excuse. >> i'm not saying donald trump was a fiscal conservative in that sense, but when joe biden came into office, there was stimulus plan on top to temperature of stimulus plan on top of stimulus plan. he did not say no to that, and that was incredibly inflationary making his job 15 times harder. liz: true. >> this kauai, he's -- this guy, he's a politician like them all. you watch us to sort through hi- liz: my favorite line was when he says at the end of each

statement before the news conference, i look forward to taking your questions. no, he doesn't. jay powell is a very thoughtful guy who would love, i am quite sure, to be away from the cameras and not -- >> i don't know. i don't know, he, you know, you don't take these jobs without, you know, out without doing what he does, and that's getting in front of people can ask talking and being important. i mean, he wanted to be fed chairman. he wanted to be fed chairman sod badly that he basically said nothing about the biden spending plans when he knew service the going to be inflationary. -- he knew it was going to be inflationary. he basically covered up inflation as assistance story, by the way, i'll never if forget, i was at dinner, and i said is inflation transitory? he looked at me and started laughing. i mean, it was an open joke that this thing -- liz: let me give team "claman countdown" a big sort of atta boy -- >> i never do that, by the way.

liz: we constantly, constantly a year and a half ago said there is no way inflation is transitory. and it's just logical and here's why with. prices are quick to go up and very slow to come down. >> well, you know, one of the great things about this show is that it's at the end of the trading day, right? and you prepare people for the next trading day. and i think you do that great. and you're right, this show in particular was very hard on this not being transitory. and if you follow that lead, you probably made some money. or save some money. liz: thank you, charlie. charlie gasparino. and here we go, closing bell, six and a half minutes away. right now fed funds futures, okay? this is what is the fed going to do at the next meeting in july, pricing in a 61% chance of a quarter-point rate hike at the july meeting. that in and of itself is pretty shocking. i would expect that it would have been higher because fed chair powell was pretty clear on that. but he says july, no one's made

a decision. listen. >> we didn't, we didn't make a decision about july. of course, it came up in the meeting from time to time, but really the focus was on what to do today. i would say about july two things. one, the decision hasn't been made to -- i do expect it will be a live meeting. liz: okay. live meeting means we don't know, but no decision's been made. well, let's bring in, joining us now $1.18 trillion in assets under management, quincys crosby and bnp's paribas' -- we're looking at a market that is in the red are after several days of pretty decent gain. you've to got to tell me if this is a time to scoop up some stocks at a discount or wait. >> we'll probably have a better entry point. i think the market has to digest various comments from powell. was it suddenly no rate hikes

coming up or was it, wait, we're going to stay -- he kind of tried to balance it on both sides of that equation, both sides of that ledge arer. the market has to figure it out. small and mid caps figured it out. and by the way, those big tech names saw a major push higher because they have become the defense names for traders and investors that are worried about what just happened, what just transpiredded. they just zoomed in there. we might have a better entry point over the next couple of trading sessions. liz: earlier i thought this was pretty interesting, the s&p etfs, and we're talking about the ivv and the spy, they were hitting 52-week highs. people were piling in. and i thought that was pretty significant. you can see with the volatility moving lower right now at 4.33%. people like to just simply to go into the broader market instead of, you know, adding all of the -- that involves picking

individual stocks. and yet, i don't know, can we show those two etfs? because i think that that's a pretty important to see, what kind of highs they were showing. and then, of course, they would retreat at the moment. do you get the sense, quincy, that it's better and more safe to go into fixed income? whether it's treasuries or to buy the full market? >> yes. well, right now i would definitely take advantage of the fact that the yields went up. the 3-month, the 6-month, those yields are hire. go in and lock that. and the fact of the matter is you can wait it out. granted, you don't want to be there if the fed starts lowering rates or the market decides that the fed is pushing us into a recession, which it doesn't look like now. but you can go in there and do well. also, i would take a look at those preferred on the big money-centered banks. they are going to opt for a nice return. the mayor kwan stanleys, the

jpmorgans, you know, underpinned by tremendous regulatory, you know, requirements, and that is fairly safe. so you could do that as well. and also the investment grade -- liz: right, right. >> investment grade corporates. they're attractive as well. liz: yeah. yeah, as you say, the good quality ones. you don't want to go for the junk at this moment. >> not now. liz: the fed was very clear, he was very clear that that especially through simply the numbers, the upgrades in gdp that he and the fomc expect for not just this year, but next year and 2025 make it rook like the economy -- look like the economy is strong. from where you sit as the chief economist at bnp paribas, is the u.s. economy strong? >> i think it is a more nuanced picture and, ultimately, that may mean that the fed does not deliver the rate hikes that

they're signaling with the latest dot plot and economic projections. of course, we can see the median dot is looking for two more rate hikes this year, and there are even a couple of individuals, three in fact, looking for even more than that. our expectation is that while we're seeing a lot of strength and resilience in the labor market which i think is a big driver in the change of the fed's forecast as they're assessing the near to medium-term outlook, we have some concerns that stresses in the banking sector, the lagged impact of previous tightening which is 500 basis points of tightening, as more of this shows up over the course of the next several months -- liz: okay. >> -- i think they'll find it prudent to continue tightening policy in july. but i think by the time we roll around to the either the september or innovate if meeting, we will have seen enough deceleration in the economy. at that point probably the labor market has caught up -- or i should say caught down --

liz: well, liz: carl, quickly t, 5.6%. >> my rate is 5.5 and i don't think they'll deliver that second rate hike liz: quincy, looking at markets and the dow, sure, it's in the red but not by too too much at all and percentage looking at a loss for percentages and nothing really great here and three quarters of a percent. do you go in tomorrow with a positive bullish sense about equities? >> well, yeah, i do. having this pull back was healthy and moving into overblot territory and let the market just digest those gains and start going and looking again. what he said is not going to destroy the economy. we're at 2.2% so far for this quarter. it's solid. liz: great to have you both. quincy and carl, that'll wrap you are our fed coverage. the dow lower, s&p