>> this is n.b.r. dennis lockhart says new measures are not needed to help the economy. >> tom: and he has some advice for lawmakers. >> susie: also we head to maryland to meet one of the nation's oldest names in foods, ma core mack spices, as west continue our week-long look at the foodie craze. >> tom: that and more tonight here on n. b. r..

>> susie: a top federal reserve policymaker tells nightly business report, the central bank could provide more stimulus for the economy "this year", if necessary. dennis lockhart is the president of the atlanta federal reserve bank. as a voting member of the fed's policy committee, he is a powerful voice on the economy. in our exclusive interview with him today, he described the u.s. economy as a "mixed picture." his comments come a week after the fed decided to extend its program to keep long term interest rates low, rather than launch a third round of so- called "quantitative easing", or q.e.3. my first question to lockhart: why not do more now. >> i don't think the conditions yet call for really

stronger action. interestingly, the anecdotes are painting a stronger picture than the data is, which is one reason why i prefer to wait a little while to see if the data persists in its softness. but i don't think the conditions have developed that require us to bring out bigger guns quite yet. >> susie: how likely is it that we will see qe 3 by the end of this year? >> it is certainly an option. remains an option on the table, i would say. if the circumstances call for it, the more stimulus could be provided. >> susie: if the unemployment rate goes higher, or stays where it is now, could that trigger qe 3 and how bad do things have to get? >> from my own perspective, i would put everything on simply the unemployment rate. there's several conditions i think are important. first would be if the growth rate of the economy slowed

dramatically, was moving in the direction of recession, that would be one element of a picture that i think might call for a response. obviously, losing ground on unemployment, i would also say if you saw prices strongly in a mode of disinflation headed for deflation, conditions similar to what we saw in the fall of 2010, that also is a picture that might call for action. >> susie: could europe's problems warn u.s. action? >> europe's problems could develop into a situation in which there are impacts on our economy here in the united states. and if they were severe enough then yes they could be action that's called for. our concern in my view should be about the u.s. real economy, that's what we really focused on, and if you see something

develop that begins to translate into impact on the real economy, then yes it may be a call to action. >> susie: a lot of people have concern about europe. how much damage could ump's problems have on the u.s. economy? and could that push us into recession? >> i think that's far fetched, quite frankly. but i think certainly a spillover from europe has the potential to soften the growth rate in the u.s. economy. >> susie: we know that chairman bernanke has said that europe has to deal with its own situation. but what can the fed do with europe leaders to prevent the european situation from getting worse? >> not a lot really. we have already extended swap lines for dollar funding to european central banks, and that helps them provide liquidity to their banks, the banks that are headquartered

in their particular countries. but it's a relatively, in the greater scheme of things, a relatively small aspect of fed help or fed action vis-a-vis the european central banks. >> susie: so how bad do things have to get in europe for the feds to play a more active role? >> if there were widespread financial instability that was through contagion spreading globally, then i would expect there would be far more coordination. >> susie: i also asked dennis lockhart about what it it will take to get companies to hire more, and banks to loan more to businesses, and home buyers. we'll have more with atlanta fed bank president lockhart a little later in the program. >> tom: some encouraging news about the u.s. economy today, helped stocks move higher. the dow rose 92 points, the nasdaq added 21, the s&p up 11. here's the stronger economic

data: orders for durable goods rose last month, as demand for built-to-last items, like televisions, washing machines and airplanes, grew by 1.1% in may. machinery and defense orders primarily were behind the jump. more homes went under a sales contract last month, a lot more. the national association of realtors' pending sales index jumped almost 6% in may. that's its best reading in about two years. meantime, in europe, fresh worries today about whether spain will be able to repay its debts. spain's prime minister wants european leaders to help the country refinance its debt, that request comes one day ahead of a euro-zone summit meeting on the region's crisis.

>> susie: continuing our exclusive interview with atlanta fed president dennis lockhart, we turn to jobs. i asked lockhart why companies are reluctant to hire. >>ñr uncertainty is probably the, to put it in one word, is uncertainty. businesses have been dealing with a mix of elements, the mix has changed over time, but a mix of things that raise the level of uncertainty and make businesses cautious about either investing to expand or hiring. >> susie: a lot of people say the reason that businesses are not hiring or expanding is their inability to get loans. is there anything that the feds can do to encourage banks to loan more? >> well, our role as a regulator really is to work with the banks to ensure that the banking system and individual banks are safe and

sound as they possibly can be. it's not our rule to dictate that they lend, make particular kinds of loans or push them to lend. when i talk to bankers, what i hear is they are very much looking for good loans. that they have lert i at least over the last few years raised the standards for lending. >> susie: it's the same issue, we hear stories about how difficult it is for people to get a mortgage, that the loan requirements are overly stringent. is there anything the fed can do about that? >> that's what monetary policy is trying to do is to create conditions that make it affordable for as many people as possible, either to refinance or to borrow to buy a home, and that's really what policy has been trying to achieve. and rates are extremely low for mortgagesç'yand other kinds

of consumer borrowing. >> susie: as we talk about getting people to get a mortgage or for businesses to expand, we've got to talk about confidence, and it doesn't help to get these forecasts from the feds that are so dismal about the outlook for the economy, to. policy makers adjusted their outlook last week. so are you concerned that at some point the gloomy forecast will affect confidence? >> i think our role should to be tell it as we see it. our credibility is going to be maintained and enhanced if we simply give the most straight forward view of what's likely to occur and what policy is likely to be that we can possibly provide. so i'm not one to try to somehow spin the picture just to get a confidence effect.

>> susie: what do you think of uncertainty about the so-called fiscal cliff, it's also holding back companies from making decisions. what do you say to lawmakers about the importance of avoiding the fiscal cliff? >> it could have a significant impact on the economy, so we watch to make sure they understand how important it is, and i would also say that this is an issue for the congress and the administration to deal with before year end, and that monetary policy shouldn't be thought of as in any way a substitute for or able to compensate for fiscal mistakes. so i would emphasize that this ball is in their court. >> tom: still ahead, the heat is on, the nation's corn crop

is facing a drought, putting upward pressure on grain prices. a >> tom: two big developments in the tablet computer market today. first, a california federal judge banned samsung from selling or making its galaxy 10.1 tablet, or any similar device in the u.s. this is the latest chapter in the legal battle between samsung and apple over patents. apple sued claiming the samsung tablet violated its design patent, for how the ipad looks. but the jury is still out on how this decision will affect both company's bottom lines. >> in the short term this is a nice, little win for apple. it kind of trips up samsung. in the long-term it's not a huge deal, you're gonna see a lot of little skirmishes around the world, and ultimately they're gonna have to come to together for a broader settlement where there to be some kind of judication. the other development is a new

competitor in the tablet computer market. this afternoon google unveiled its first tablet, the nexus 7. at its annual developer conference in san francisco. with its seven-inch screen and $199 price tag, it's much cheaper than apple's ipad and is expected to give amazon's kindle fire a run for its money. customers can order the device today, and it's expected to ship in mid-july. google also debuted the nexus q, a streaming media device that plays music and movies. >> susie: barclays will pay more than $450 million to regulators here and in the u.k. to settle claims it manipulated a key interest rate. investigators allege the bank submitted false information that affected the libor rate, an interest rate that banks use when they lend to each other. the rate is set in london, but it's used to price consumer loans around the world. sylvia hall breaks down what happened, and what it means for the financial system. >> reporter: barclays admits it manipulated the libor rate, to improve its position on trades, and to make itself look better during the financial crisis. barclays chief executive bob diamond said the company, "fell well short of the standards to which barclays aspires in the conduct of its business." diamond also said the company

"took prompt action to fix the problems and co-operated extensively and proactively with the authorities." most consumers haven't heard of, libor, but banks and traders rely on it to help set prices for everything from derivatives to student loans, credit cards, and mortgages. >> reporter: barclays also agreed to cooperate with the justice department's criminal investigation into these practices. that investigation spans across the financial industry. sylvia hall, "n.b.r.," washington. >> tom: blistering hot weather in the midwest sent corn prices higher again today.

the december futures price for corn closed nine cents higher at $6.33 a bushel, up 24% in a week and a half. the heat reminds farmers of the 1988 drought, and as diane eastabrook reports, some of them are already tallying up losses. >> you can virtually find no moisture, we're just dry on down. >> reporter: its been nearly two weeks since carl neubauer's central illinois farm has seen any rain, and neubaur's corn crop is suffering. >> we're seeing rolling on these plants as the plant tries to protect itself from the heat. >> reporter: illinois has only gotten about one and a half inches of rain this month. about half what it normally gets in june. in fact the nation's entire mid section and southwest are either abnormally dry or in some state of drought. >> this corn was planted april 12, it's about as tall as i me,

and i'm five foot, four inches. it should be about eight feet tall right now. >> reporter: fears that drought could fry the nation's corn crop are rattling grain traders in chicago. veteran trader scott shellady says futures crisis could hit seven dollars a bushel shortly. then again, he's not a betting man. >> you could see seven dollar corn and you could see five dollar corn. that is why the volatility is so high because if for some reason we get drenching rain in the eastern corn belt, that would send us 50 cents lower, easily. >> reporter: grain analyst shawn mccambridge says fears of rising corn prices have already spread beyond the trading pits. >> there's a lot of pencil pushing in the marketplace in all sectors of use seeing how it will impact different sectors of the market, whether it's processing, livestock, ethanol production. >> reporter: neubauer says his crop needs rain before pollination and that's about two weeks away. still he thinks he's already lost part of his crop. >> i got to think we'll be reduced 10 to 20% at this point

given the forecast that's in front of us. this was the biggest crop planted circumstances the 1930s,. are we now having to worry about supply? is the crop being damaged that much? >> the usda isn't saying there are any supply issues, but some traders i talked to yesterday are concerned that there could be supply issues. the farmer i talked to in central illinois this morning says he thinks he already may have lost 10 to 20% of his crop. we're hearing anecdotal reports that there could be some farms south of him say around springfield or epping ham, in southern illinois, where there could be significant damage. so there could be some supply hugh issues. >> tom: what about inventories? we know that previous crop inventories in the bins have been at lows going into the growing season, is that a concern? >> we should know that by this friday. we're going to be getting a crop report from the usda that

will report what the closing stock to the ending stock from last year are. the estimate that we're hearing is about $859 -- 859 million bushels of corn. go into this growing season they were hoping this crop would produce s.8 -- 1.8 bill bushels. so we could have such tight inventories going into next year. >> tom: likely to provide a lot of price volatility. diane estabrook, thanks. >> susie: an update on the ouster of the tco c.e.o. at warren buffett's berkshire hathaway. it turns out benjamin moore c.e.o. denis abrams was replaced because of a strategy dispute, not for hosting a lavish party for executives on a boat in bermuda. today, abrams released a letter from warren buffett detailing the reasons for his replacement. buffett tells abrams, that his decision was based on quote, "a differing view about distribution channels and brand strategy."

buffett also said he'd never heard about the boat trip before reading about it in the papers, and that he had no objection to the party, tom. tom, this whole story is very unusual. warren buffet, you rarely hear about management shakeups at berkshire hathaway, and warren buffet is seeing this with his hands-off management style. so i think there's still more of this. >> tom: i agree, there will be more of this in the days to come, very rare for this kind of management dispute to become public out of berkshire hathaway. >> tom: u.s. stocks had a positive tone throughout the day, climbing on the positive durable goods and pending home sales data. the s&p 500 continued yesterday's bounce, opening strong after the durable goods report, and continuing to build. the market shook off a small afternoon swoon to end higher by almost 1%. today's action continues this month's volatility on both sides, up and down. with today's gain, the index is up just under 6% on the year.

volume on the big board fell from yesterday, down to 682 million shares. it was steady on the nasdaq at 1.6 billion. energy stocks fueled the gains with the energy sector rebounding 1.9%. financial stocks also put in a strong performance, up 1.2%. today's energy stock buying was under-pinned by a rally in oil prices. benchmark oil ended back over $80 per barrel, up 85 cents on the session. crude oil inventories rose to their highest level in more than three years. but refineries also stepped up production to the highest rate since 2007. independent energy producers led the energy sector rally. cabot oil and gas jumped nine percent to the highest price since the first week of the year. q.e.p. resources rallied 8%. it was at a 52-week low earlier this month. and w.p.x. energy gained 8%.

new home builders continued rallying, thanks to a big earnings report from lennar. earnings made a big jump from a year ago, and three cents per share better than estimates. lennar is one of the country's biggest homebuilders, and is seen as a barometer for new homes. it's results indicate a strong spring selling season, and strength may continue. new orders were up 40%. shares jumped 4.8% on heavy volume. the rally brings the stock less than $2 away from a 52 week high. other builders caught a bid. m.d.c. was up almost 5%. standard pacific gained more than 4%. and meritage homes added 3%. for the first time in more than a decade, a new weight loss drug has gotten the green light from the food and drug administration. and its maker, arena pharmaceuticals saw big buying in anticipation of a big hit.

shares shot up 28.7% to a new 52 week high. this brings its gains since early may to more than 300%. its weight loss treatment is the company's first commercial product. the medicine still has to go through another regulatory process lasting up to six months before it will go on sale. shares of irish bio- pharmaceutical company amarin were up 8.6% to a new 52 week high on heavy volume. the u.s. patent and trademark office is expected to rule soon on the company's fish-oil heart medicine. the office posted a notice on its website indicating formal patent approval could happen within weeks. all green arrows among the most actively traded exchange traded funds. the were led by the russell 2000 e.t.f., up 1.6%. and that's tonight's "market focus."

>> susie: the latest taste crazes don't just happen, they are invented, often in the kitchens and labs of companies like mccormick. that red tea smoked sea bass you tried at that hot new restaurant? the chef may have gotten the idea from mccormick's flavor forecast. as we continue our look at the foodie craze, darren gersh talk with mccormick c.e.o. alan wilson about how a 100 year old company is now a flavor innovator. >> reporter: what makes someone a foodie? >> open to different kinds of flavors and experiences and... really seeking that intensity that you get from different flavors. >> reporter: so the traditional view that americans, you know,

won't try anything new; that they want ketchup and mustard, is that antique? is that gone? >> there's a growing number of ah people probably driven by things like the food networks and cooking shows there that people really are willing to experiment and try new things. >> reporter: what percentage of people are foodies and are they like anything its, you know ten percent of your customers drive 90% of your innovations and new business? >> our gourmet line which there... which really is what appeals to foodies is about 10% of volume. >> reporter: so foodies are notoriously fickle folk. how do you how do you keep developing something that's going to keep them... that's going to wet their appetite as it were? >> in a normal year we will introduce about 100 new units-- new products. around the world. this year, in 2011 and in 2012, we'll have over 200 and part of that is just keeping the line fresh and capturing those

trends. >> reporter: what are some of the up-and-comers what will we be looking for in our pots? >> i think it's an expansion of something we did in the flavor forecast in 2008, is alcohol based flavors so we introduced a brown sugar bourbon last year which has become one of our top selling grill mates items. this year we introduced a brandy and herb which is also a great flavor and so i think that trend is going to continue. >> reporter: coming up with a spice like garam masala; how much can that do for your business? >> we generate about a third of our growth from products... from new products. so if we're trying to grow 4% to 6% a year, we expect 2% of that to come from new products, and we've been pretty consistent in doing that. >> reporter: well alan wilson, ceo of mccormick, thank you for your time. >> thank you. >> tom: tomorrow on "n.b.r." we head to california, as our foodie craze series continues,

we get the recipe for success from a family barbecue business that's been around for almost 40 years. and, the supreme court is expected to make its ruling on president obama's health care law. we will have the decision and what's next for the health care industry. some real sharp words from the regulators in congress about the fiscal cliff. >> susie: that's a really important issue and we've been hearing that from chairman bernanke, but it's also very good to hear it directly from policy makers, that they are concerned about it. and again that one liner that if the fed can't do everything. >> tom: and clearly he's looking at the economy from atlanta and the southeast u.s., and you've got a big voice nationwide this year. >> susie: right, he is one of the voting members, there are four more meetings of the fed this year, so we'll be hearing from him and heel have a critical vote on what happens next in fed policy. so it was really great to have

him for a one on one today. >> tom: you can see the transcript and watch the video on our website. s we'll see you tomorrow. >> susie: you as well tom. we'll see everyone online at: www.nbr.com and back here tomorrow night. "nightly business report" is brought to you by: captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org