the market reaction left investors urconfused. >> appeal. home sales post their sharpest drop in years as ownership becomes less and less affordable. plus, mountains of debt. why the white house is now considering acttun onnt loans. a 1.5 trillion dollars issue. those stories andig more ton on "nightly business report" for wednesday, february 21st. good evening, everyone, and welcome. glad you could join us. sue herera has the evef.ng well, the economy is improving. growth is picking up.n inflaticking higher. that's how federal reserve

policy makers describe the economy according to the minutes of the central bank's latest meeting. it signaled that the fed is on track now to raise ierest rate this year. markets agreemented the news with a strong bout of volatility. stocks first spiked higher, and then they fell very sharply as bond yields rose. the dow jones industrial average cloused down 167 points to 24,797, its secon straight day of losses. nasdaq was off 16. the s&p 500 fell 156789 cayla tausche starts us off tonight with a closer look at the central bank's latest plan to keep raising rates. >> reporter: the federal reserve's january mting was the first since tax reform passed. that's one big t reason fed pointed to a stronger growth grout look than before. business may use the money to grow and add capacity even though companies are deciding how to al skate their savings. while the fed of upside risks

from that growth. the white house chief economist doest expect the economy to overheat. >> what we have here is a supply side stimulus which is going to increase supply and i think allows to grow without getting inflation out of control. >> reporter: the feral reserve plans to raise interest rates gradually this year and next and says for now that strategy remains prriate. the market treating the minutes from this fed meeting the first of eight t ts year as leaves for the new fed's direction. et moreestors will information next week. the newly installed fed chair jayowell will be testifying in front of congress twice. >> i think jay powell has to establish his credentials as the new fed chair. i think part of that is to say something negative about the amount of fiscal expansion and to to mention the fed baludget deficit. ee>> reporter: the januaryng took place before tax reform,d efore a jobs report.

earlier, they had found job wage growth to be absent t leadingm to keep their path intact. >> lower dollar and inflation prices are pushing inflation up. i think the feral reserve is becoming more worried about it and you can actually see this in the minutes, is asset prices. reporter: one worry raised by more fed members in january, ba nces in the market thanks to high valuations and high levels of corporate debt. for "nightly business report" i'm caylaausche n washington. why was the stock market reaction to the minutes from the federal reserve meeting so intense and so all over the place? bob pisani takes a look from the new york stock exchange. >> talk about a confusing day. stocks were modestly higher all day until the minutes from the e federal res meeting came out at 2:00 p.m.astern time.

they said there was few signs of a broad range increase in wa growth. the feds saying not we are too worried was greeted as a positive sign. and bond yields initially dropped. but then it all turned around. bond yields med back u from 2.91% on the ten-year to 2.95%.p anddictably the markets turned around and everything went down. what happened? it was widely noted right after the fed minutes came out that this meeting kubd before the january jobs and wage report came out which both were stronger thanted and the meeting also occurred before president trump signed a new budget that contained a significant increaseic in d spending. the bottom line is after thinking about it. traders seemed t agree if the fed held the meeting today it would sound more aggressive when it comes to hiking interest rates than i j did in auary

31st meeting. 's how fast all this is changi changing. i know it sound confusing. >> the central bank is widely expected to rai interest rates next month, the first of what many market watchers could be three rate hikes this year. maybe more.e thresident of philadelphia's federal ss he thinks just two rate increases would be neceary this year patrick harper said he would be open to additional hikes if the economy aows more are needed. that's called open mind. let's turn our attention to the january fed minutes released today. joining us to share his thoughts on the economic outlook is mark zandi from moody's. thank you for joining us. what did you make of minutes that the market at first nd then saw benignly, saw seemingly in a different way? well, i think the fed was just more sure about things, or more sure about the economic growth that's cong. we are going to see strong above potential growth falling on

plimt. and they were more sure about inflation, that we ar going to get back to the 2% inflation target. more growth, more inflation that makes investors nervous about higher interest rates and higher bond yield. i have to think the fed j wast more sure. >> if they had had this meeting -- let's play a game of hypotheticals here, with the benefit of knowing what that jobs report was going to be in february, what the budget deal was goingo be would they have been even more optimistic about th and more hawkish? >> yeah. absolute. i mean particularly the budget deal. one economic data point, no big deal. you need a string string of economic date. but the budge deal, that's going to add anional half a point this year and another half a point next year. ove an economy that's growing above potential with an

unemployment re that's headed into the threes. yeah, i think if the fed werett g down today they would be even more hawkish than what came in january. >> i'm goingo ask the great mark zandi to give me the numbers. put your disturban on, what do you see for growth, what do you see for inflation? unemployment? what are you benchmarks here? >> i think we are going to be close to 3% yet to. unemployment will decline. it's a4. by this time next year it's going to be closing in on 3. inflation is going tora acce. that means the fed has to get moving here. it's likely going to be fourth hikes an four next year. investors are adjusting to the reality. i think they have more adjusting to do. >> the n trick is merely in the current environment, mark. what the fedit does the interest rates, but what they do with the roll off of secheities from balance sheet.

and that side of plays a role here >> good point. inthat's on auto pilot. they told us what they are going to do. i think they are going to stick to the script. to the prospects for higher long term interest rates. up until a year ago orrs two y ago the fed was buying bond. now they are letting them roll off. th are not buyingbonds. and you throw into the mics the fact that the treasury to be issuing a lots of bond to pay for t deficits and tax cuts and spending increases, demand, supply, means higher long term interest rate. we saw the ten year treasury yieldit a new four year high today. it's going to be high. >> mark zandy, great to see you, thank you. > housing is a critical part of the economy, as we all know. what we have just b n talki about certainly play as role in that. two new reports out today showing a spring slowdown at

this, the very busiest time of the year for real estate. diana olick has more. >> 500 homes. >> reporter: demand forerousing is v hot. >> three bedrooms, right. >> reporter: actual home sales are not. january sales of existing homes opped more than expected for the month, and were down a surprising 5% compared tor a y ago. the biggest annual drop in three years. e problem, another big drop in supply, down nearly 10% compared to last year. and affordable supply is even sales are dropping all on the lower end of the market.ee st for homes priced under $100,000. and still down between $100,000 and $250,000. sales are gaining on the higher end. but more than half of the market exists on the low end. that's a problem. even more so because these numbers ranresent jry closings. that is deals made before mortgage rates started to rise. >> the mortgage rates are rising for good reasons of economic

expansion, strong job growth, wages beginning to rise. but any time mortgage rate rises. it hold some buyers ohe margin. >> reporter: rates are up more than half a percentage point since the beginning ts year. last week mortgage applications to buy a home fell for the second straight week and barely higher than a year ago. that means home sales could be lower in the next few months as well. the realtors are begging for new construction. but buildersre not tha active on the low end. because of sky high construction costs. the realtors are also now making a plea to investors who bought all those foreclosed homes during the recession, asking them to sell. >> the price appreciation has been very good. but the futureent flows may not be as bright as what it had been. so the investors begin to unload, there that would be ale welcoming trend for the housing market currentlys we need more inventory. >> reporter: that however, is

unlikely, rents andl ren occupancy are both strong, and investors have spent millions not just on h but on renovations and on new management infrastructure. there is no compelling reason, other than generosity to the rest housing market for them to get out now. for "nightly business report," i'm diana olick in washington. >> to read more about the fall in existing homeales and housing affordability, head to our website. you know it. nbr.com. the supreme court ruling states that whistle blowers are not shielded from beg fired under a federal law unless they have reported the potential wrong doing to the securities and exchange commission. the decision narrows the sec's interpretation of the 2010 financial overhaul nope as dodd/frank. the ruling was unanimous. time now for upgrades and down gradesar in thet session today. rejenneron downgraded fm hold

to buy. this sirm sites them not iguodala longer providing guidance for the macular treatment. the price target lowered to $356. shares fell nearly 2% to $317 1 $317.51. match group was downgraded at jp morgan. they call it fairly valued and sees fewal cts ahead. the price target is unchand at 2 a share. shares well to just under $42 a share. palo alto upgraded by susquehanna. the price target lift there had to $195 a share. the stock rose 1% to $164.40. still ahead, would breaking up big tech be good for shareholders?

china is set to overtake the u.s. as the biggest nuclear energy nation. a new report puts china on track to more than triple its nuclear energy capacity over the next 20 years. china's push into nlear power comes as that country puts an emphasis on clean energy. the u.s. has bee global leader in nuclear power since the 1960s.

dish network reports dippointing revenue. that is where we begin tonight's market focus. the satellite tv provider added more subscribers. but it wasn't enough tfset declines in the company's core satellite business.ve profits imp largely because of a $1 billion benefit tied to the new tax law. the stock off 3% at $43.18. advanced auto parts reported per than expectedly quarthough revenue slid. that was enough for investors. they sent the stock u 8% to $114. utility lectric southern company reported better than expected earnings despite n drop customer us a usage. the company said it plans to pass ang savingsrom the new tax law to its customers. >> we did benefit from a lower tax rate. the net effect of that now i'm speaking bradley. everyoi company is to be a

we bit different but we will be able to reduce rates, we believe, in about the 5% to 7% rain. and do the things necessary to reste our financial integrity. ow credit metrics. l southern company shares f 1% to $42.92 an activist investor is urging blooming brand to make changes it says could double the restaurant operator's stock price. they want blooming to spin off the smaller brand into one company and run outback steak house as a stand alone business. shares of blooming rose to $22.02. broadcom cut its offer to buy qualcomm following qualcomm's move to raise its bid for nxp semiconductors. broadcom's revised $79 a share

offer saying th. a potential merger between qualcomm and broadcom would represt theargest technology acquisition to late. broadcom off fractionally. qualcomm down neay a percent. after the bell, roku issued disappointing revenue guidance. that offset the profits in the fourth quarter. shares plunged in the after-hours market but finished the regular day down a tick. amazon issued a linect of health ps challenging retail chans. they are produced by a private label manufacturer, peregot. and include itemsrom ibuprofen to hair regrowth treatment. it could start a price war and pressure drugstores. that is why you see drutores lower today. today amazon shares hit $1500. they clod justelow that

willful. there is a growing conversation now over big tech's minance and whether titans have gotten just too big n. a "new york times" magazine article called the case against search critics say the giant is schedule offing competition before it begins. so should the government step in? the author is one of the country's leading business journalist. charles duic. he highlights how easy it is for google to weaken another business. he is a pulitzer prize winning writer for thees "new york t welcome back. >> thanks for having me. >> what is the main gripe companies have against google? and why do ty say it is illegal, not just unfair, but illegal, wha they aredoing? >> what companies say is that google has become so big it isl essent a gatekeeper. google is the front door to the point.et at this if google makes decisions that mean that your website won't show up, and somef google's decisions have negatively

impacted whole categories of website such as competing search engines, search engines that might look at a specific type of product like airline tickets or finding good dea on line, if typee decides that shouldn't be prioritized. if it doesn't he show up on the first second or third or fourth page of google theyia essey become invisible. last year, the european commissid agr that google was using its monopoly might ani poweillegal ways and fined them. >> what do you fine when you g in and use going schnell do you get suspicious that they are burying t ng orwhat? >> well it's definitely true there are some types of thingsh that you seaor now where the results that come up from google are not necessarily always in the user's best interest. the feder trade commission has found this in the united states. european authorities have found

this. oftentimes what happens now at the tom of a google page is that it gives you results that are essentially ads. it's not completely clear, i think, to the common user that it is an ad. it will say sponsor in a box at the top of the results on the page. but those companies are paying for the abilie to be at top of the page. that's also true of amazon and basically every other large website at this point. >> i have seen that in my persons experience. when i go and look for a hheel oftenirst two or three are sponsored content and then i get into the lower ones. let's talk about its dominance insearch. that's where it really is the dominant player. but there are other search engines. there is bing. there's yahoo. andhere are other players as you say that are more nichy.

how are theyge disadvan or is google just the bran name here, and better? >> it's a gonat ques right, because this is the argument that many of google's defenders as well as the company itselfke which is there are alternatives, one you didn't mention is duck, duck, go,hich is a website that promises not the look at any of your information as you use to it search. the thing i would ask anyone watching this is when is the st time you went to bing or duck duck go in order to conduct a search? we basically don't. this is a characteristic of the internet economy. there is a winner take all effect where google has become dominant because it is a great then that raises the question, does that mean, because it is a great search engine that it should live by especially rules, rules that don't apply to anyone else but they give everyone a fair chance when they go on line. >> it is a wonderful and very complete article. if you get chance to read it over the weekend i certainly recommend it.

charles duig's work is always thorough. white house is looking at a $1.5 trillion issue. at&t is namhe first city that will get its fifth generation wireless broadband. 5g will rolled out initially in atlanta, dallas, and waco,

tes, with plans to install it in 12 cities by the end of the year. 5g is expected to be more reliable and offer interne speeds ten to 100 times faster than current 4g broadband technology. a new survey shows that americans are planning to use their t refund this year either to pay down credit card deb or to add toheir savings. that's different than in past years when most of them said they would typically go out and spend the money they would get back from the government. last i year the issued nearly 112 million refunds average a piece.00 the trump administration is proposing new types of health nre plans. ones that wou meet some of the affordable care act standards. the department of h and human services said alternative plans would help lower premiums. critics caution though that these plans will less comprehensive and could deny coverage based on preexisting conditions. it could also draw healthy people away from the fact,'s insurance markets.

the trump administration has also signalled that it is open to kind of mileage tax. the white house today praised an experimental program in oregon as a wayo find new revenue sources to help pay for the proposed i in oregon, volunteering motorists are charged a fee of 1.7 cents for each mile theye drive on stroads. in return, drivers get regates for state fuel taxes. as of the end of 2016, only 700 people were participating in the program. meantime, the white house is looking at a t way help student loan borrowers get out from mountains of debt.t but does come with a catch. from sa cohn reports jose, the proposal would make it easier for borrowers torase through student debts through bankruptcy. >> reporter: step onto almost an college campus, like san jose state here in california, and it's hard to findde a s

who isn't here at least in part on borrowedmoney. >> yes. i have a lot of student loans. >> i'm looking at $20,000 for all two years. that i'm hoping to pay off eventually. >> reporter: student loan dent has gone nolace but up. now approaching $1.5 trillion. more than doubling in just the last decade.lo and with it, the level of defaults. 5 million borrowers in default, or more than onen i ten student loan beyond that, an entire generation of students like jennifer lee, facing crushing debt just as they enter the economy. >> you want the come out on a fresh start but you are actually holding all this weight of money that you feel like you have worked so hard for. >> reporter: one of the thing that makes student loan debt such a drag on the economy is that it's hard to get rid of. the intert rate is higher than on most other loans. and a federal l makes it almost impossible to get relief,

even by declaring bankruptcy.ac vists have long been calling for a change in the law. and now the trump admistration is seeking public comment on at least changing the way it's enforced. an attorney who works with troubled borrowers says it is a start but not enough. t we are seeing the programs that can provide most benefits to lborrowers,e defense repayment, income driven repayment. public ln forgiveness programs, those programs are targeted for elimination. >> reporter: the administration s taken aim at student aid in its proposed budge slashing pell grants for low income students, ending federal work study programs. easing the bankruptcy restriction leaves even more students wit a stain on their finances just as they start their careers. and another risk, the more debt that's wiped out, the greater the cost to the taxpayers, which is why the regulations were put

in place to begin with. scott cohn, san jose, california. the dow yo-yos much of the day. finished down to 24797. the s&p 500 down 15. and the nasdaq as well, down 16. >> that' it for "nightly business report." i'm tyler mathisen. we hope you see you again tomorrow night.

>> this is "bbc world news america." funding of this presentation is made possible by the freeman erfoundation, and ko foundation, pursuing solutions for america's neglected needs. >> planning a vacation escape that is relaxing, inviting, and exciting is a lot easin you think. you can find it here in aruba. families, couples, and friends can all find their escape on the island with warm, sunny days, cooling trade winds, and the ys