i agree with the fed. in the emerging markets is something to be aware of and they may make reference to that in the statement today but i don't believe that will dissuade them from removing quantitative easing. ashley: charles i want to ask you quickly about emerging markets. is this something if it continues to evolve that could ultimately hurt the global economy and could have impact here in the united states? >> it could but if you look at more recent currency crisis they were resolved with foreign intervention, imf-type things. i don't know the fed will necessarily say we have to be concerned about that but i do disagree a little bit that everyone thinks that the fed will stay the course and go down another 10 billion. everyone says it. i don't, the way i watch the market it doesn't seem like everyone is sanguine what the fed will do in a few minutes. >> i'm hearing comments out by many analysts and strategists but donald kohn, they believe that they are growing to do it. >> i hear you. tracy: i'm goi

well so what the fed is saying the fed has to get nominal g.d.p. up around four or five percent the reason they have to do that is so that the debt to g.d.p. ratio doesn't go up that would put us on the path to greece now i like to think things are real terms about inflation but debt to g.d.p. is one of the things you have to think about in nominal terms the reason is that is nominal if i borrow a million dollars from you aaron i owe you a million dollars it's interesting whether it's actually worth a million monor nine hundred thousand that's inflation deflation but contractually i owe you a million so the government owes its creditors seventeen trillion dollars they have to pay off seventeen trillion dollars if you can get fifty percent inflation over twenty years then you're only paying off a half trillion dollars so so the fed has to get that nominal g.d.p. so the debt to g.d.p. ratio doesn't go up they would like real g.d.p. but they're not getting it which means they'll take inflation and the fed has more or less said that you know they said

well so what the fed is saying the fed has to get nominal g.d.p. up around four or five percent the reason they have to do that is so that the debt to g.d.p. ratio doesn't go up that would put us on the path to greece now i'd like to think things are real terms about inflation but debt to g.d.p. is one of the things you have to think about in nominal terms the reason is that is nominal if i borrow a million dollars from you aaron i owe you a million dollars it's interesting whether it's actually worth a million monor nine hundred thousand that's inflation deflation but contractually i owe you a million so the government owes its creditors seventeen trillion dollars they have to pay off seventeen trillion dollars if you can get fifty percent inflation over twenty years then you're only paying off a half trillion dollars so so the fed has to get that nominal g.d.p. so the debt to g.d.p. ratio doesn't go up they would like real g.d.p. but they're not getting it which means they'll take inflation and the fed has more or less said that you know they sai

well so what the fed is saying the fed has to get nominal g.d.p. up around four or five percent the reason they have to do that is so that the debt to g.d.p. ratio doesn't go up that would put us on the path to greece now i like to think things are real terms about inflation but debt to g.d.p. is one of the things you have to think about in nominal terms the reason is that is nominal if i borrow a million dollars from you aaron i owe you a million dollars it's interesting whether it's actually worth a million monor nine hundred thousand that's inflation deflation but contractually i owe you a million so the government owes its creditors seventeen trillion dollars they have to pay off seventeen trillion dollars if you can get fifty percent inflation over twenty years then you're only paying off a half trillion dollars so so the fed has to get that nominal g.d.p. so the debt to g.d.p. ratio doesn't go up they would like real g.d.p. but they're not getting it which means they'll take inflation and the fed has more or less said that you know they said

well so what the fed is saying the fed has to get nominal g.d.p. up around four or five percent the reason they have to do that is so that the debt to g.d.p. ratio doesn't go up that would put us on the path to greece now i like to think things are real terms about inflation but debt to g.d.p. is one of the things you have to think about in nominal terms the reason is that is nominal if i borrow a million dollars from you aaron i owe you a million dollars it's interesting whether it's actually worth a million monor nine hundred thousand that's inflation deflation but contractually i owe you a million so the government owes its creditors seventeen trillion dollars they have to pay off seventeen trillion dollars if you can get. if you percent inflation over twenty years then you're only paying off a half trillion dollars so so the fed has to get that nominal g.d.p. so the debt to g.d.p. ratio doesn't go up they would like real g.d.p. but they're not getting it which means they'll take inflation and the fed has more or less said that you know they sai

the fed have been big demand of fanny and fre fredie securities.s the government going to issue as many treasuries? is fanny and freddie going to issue as much debt? that will impacts rates. all see a small impact on rates. a few basis points. it's a hundredth of a percentage point. we're talking about 10, 15, 25 basis points in the cost of a mortgage, borrowing in the economy. the most important part of this is less the real size as it is a signal about a change in direction and change in confidence in the economy. >> pedro in the beginning critics of the policy said this is terrible. this is the worse abuse of money, money that you talk into being. but then it didn't get lent out. it didn't go flooding into the economy. it got held in closets somewhere if it's not being issued or written into being, will it make a difference? >> the question is will it make a difference on the positive side and the negative side. the critics are worried that the expansion would lead to run away inflation. that's hardly been the case. inflation if anything is tren

but that's that's more or less what the fed has already communicated they're going to do. i think that's not is as tricky a process as many people thought there was some excitement in markets last june when the fed first. talked about this but i think the fed has now done a good job of separating its asset purchase program from the decision it's going to make on short term interest rates that the fed under yellen or anybody else is not going to be raising the overnight rate anytime soon and so i think markets got in the sense of that now and i think it should be a fairly stable process for the fed to gradually wind down its asset purchase program now is yellen or someone who means towards policy accommodation. well that's part of the caricature of that i think is a reasonable yes she's been a dovish member of the f o c for the last several years but that's turned out to be the correct position this inflation that some people warned us about were scared was right around the corner that hasn't come at all we've had the lowest inflation rate in years and the so-called doves w

the fed does its part. right now the fed has limited tools with monetary policy. it keeps playing and working with the one tool. >> you like yellen. >> i want to be hopeful. >> but you are not sure. >> i am not sure. >> what grade would professor warren give ben bernanke? >> it is a mixed grade for me. ben bernanke did a lot to stabilize the market, but he kept the focus on the largest financial institutions and much less what was happening at a family level. the fed's role has limited tools. in dealing with that crisis, the fed has a responsibility and -- on regulation. under dodd frank, it has missed its deadlines massively. the rules have been complex and difficult to follow. it is very uneven. there is then -- and there have been cases where ben bernanke did a good job. regulation has not been a place he has concentrated and done with the fed needed to do to help bring it under control. >> you think there'll be a new day with janet yellen? >> i want to be hopeful. >> that is your byword for today. senator elizabeth warren, thank you for being with us. when we

he leaves the fed.ank chairman making what could be his last public appearance in office. >> in doing so, he may outline challenges janet yellen faces as it all starts in a few minutes from now. >> welcome back. >> let's talk about ben bernanke. he is preparing to take the stage in washington. he could be his final public appearance as fed chairman. is standing by. we are wondering what kind of tone he is expected to take care it is it going to be a valedictory address? >> we will have to wait to see. it is not prepared. a lot of focus on the bernanke legacy. i wanted to get insight. senior fellow at the brookings institution. good to see you and thank you for the time. you look at the bernanke years, what is the legacy he leaves behind in your view? of havinges a legacy coped well with the worst financial crisis of any of our lifetimes. that is a considerable achievement. he did not anticipate this. we can say he foresaw this and headed it off. he did not do that. timee was in charge at the the financi

fed the fed -- while the cannot off their cap at the moment, it is proverbial in terms of real demand in about eight months time. it is a fairly moot point. -- $10 billion a month, that is the road. the hurdle to stopping that is pretty high. >> they set policies for their own country, sometimes ignoring the rest of the world. what has been the reaction in emerging markets? >> not as volatile as yesterday but chinese manufacturing numbers, price contraction more than expected. it is not going to actually help sentiment this morning. when it is good, no one believes. when it is bad, people really believe. we will have to see whether there is a read across into commodities. we also have gdp from spain pretty much as expected. gaining 0.3% in the fourth quarter. staying on corporate news, hans, you're talking tech. a big deal for to lenovo and google. >> normally when we talk about cool, we talk acquisitions. today we are talking sales. they have sold or plan to sell their motorola handset unit to lenovo. we will look at both sides of the deal, who got what and what it means for both com

but that's more or less what the fed has already communicated they're going to do. i think that's not is as tricky a process as many people thought there was some excitement in markets last june when the fed first talked about this but i think the fed has now done a good job of separating its asset purchase program the decision is going to make on short term interest rates that the fed under yellen or anybody else is not going to be raising the overnight rate anytime soon and so i think markets got in the sense of that now and i think it should be a fairly stable process for the fed to gradually wind down its asset purchase program now is yellen or someone who leans towards policy accommodation. well that's part of the caricature of that i think is a reasonable yes she's been a dovish member of the sea for the last several years but that's turned out to be the correct position this inflation that some people warned us about were scared was right around the corner that hasn't come at all we've had the lowest inflation rate in years and the so-called doves who are the

the fed's role has limited tools. in dealing with that crisis, the fed has a responsibility and regulation. under dodd frank, it has missed its deadline massively. the rules have been complex and difficult to follow. it is very uneven. regulation has not been a place he has concentrated and done with the fed needed to do to help bring it under control. >> you think there'll be a new day with janet yellen? >> i want to be hopeful. >> senator elizabeth warren, thank you for being with us. when we return, we will talk about what is next for president obama and the december jobs report. ♪ >> welcome back. the unemployment rate dropped to 6.7%, but only 74th out and jobs are added. we have julianna goldman and richard miller. tell us what the figures mean. >> gosh, i feel a little bit like charlie brown and lucy where he goes to get the football and she takes it away. we get something like that. >> bring it back. >> right. a lifetime employment. it was disappointing. we had bad weather a couple of weeks ago. remember it wa

the fed's target is two. and the fed has warned that if it gets over two and a half all bets are off. but that seems remote. it's not impossible. it could happen. but it seems remote. so i don't think at least early in janet yellin's tenure as fed chair she's going to be worried about combatting inflation. i think she's going to be more worried about a kind of a soggy labor market despite the fact that the unemployment rate keeps going down. >> give me a final thought if you wouldn't mind on the tenure of ben bernanke. what will his legacy be? how will he be remembered? >> i think he's going to be remembered for several things. first, saving the economy from oblivion. now, it got really bad, but it could have been a lot worse without a lot of the creative and imaginative things that the bernanke fed did. secondly, with continuing that imagination, that creativity, you might even call it bravery because he was getting a lot of criticism, into the recovery period because it was such a weak recovery and trying t

let's get some reaction to the head and announcement -- the fed announcement. >> the fed state away from any kind of controversy. they noted that the economy was showing mixed signals in january, but "on balance" was the term they kept using, in general, the economy continues to improve, but they kept everything pretty much the same. they continued with the taper as forecasted. they are going to keep an eye on it. did not put any new threshold in or change the forward titans. looks like then bernanke -- looks like bernanke decided he would just punch it over to janet yellen. if anything comes, it will be on her watch. >> not a surprise. it is important that they kept their inflation mandate in tact, and i think it is important they will be doing the reverse repo operations. one of the things that has happened with this new reverse repo facility is that during times that tank talents sheets sheetsct -- bank balance contract, it's important to keep interest rates above zero. close toey rates of so zero that one balance sheets contract, interest rates go down. better than interest on reserv

liz: the fed may be, i don't think the fed is panicking. i think the fed is staying the course yet we're looking at companies that are managing to do pretty well and make money. with qualcomm the revenue number was slightly light. s&p 500 is down 18 points. we're up double-digit percentages year-over-year. >> absolutely. liz: that brings in charlie smith. do you like these numbers? do you like the way the market looks beyond the day-to-day tick by tick? >> i don't think the fed is panicking. if we see them pull the taper off the table, that is reverse the 10 billion increements then we might be able to say the fed is panicking i think they're following the playbook. liz: right. >> this all started with the negative chinese pmi number last year. we'll get the official, that was the hsb-c estimate. we'll get the official pmi tonight. that will be a number i think we should pay attention to. we haven't had a 10% correction since october of 2011. it is about time. david: john, the fed is not panicking perhaps but it is under new leadership. it

the fed reserve is the biggest regulator. what do you think janet yellen will do as far as big bank regulation that her predecessor did not do? >> one of the tools at her disposal is ordering capital reserves. a second part related to this is the bigger the bank and the more risk it poses to the system, the higher cost on larger financial institutions. so, the fed both independently and through its leadership of all the bank regulators has the capacity to put more balancing constraints on the largest financial institution. balancing the risk they impose. >> you expect that yellen will be more likely to do that than bernanke was? >> i asked about the importance of the regulatory role. yellen is making commitments in the direction. saying she understands, she sees the problem, she knows what the tools are. >> that makes you hopeful? >> i'm more hopeful. look at the numbers. the big things are getting bigger and they are taking on more risk. our banking industry is becoming less diversified with every single day. we are losing s

you cannot fight the fed, can you? >> i don't think this is just the fed.his is representing deeper political instability in turkey and do we have central bank independence. this was a big move but is it credible? i don't think it's just the fed going on. i would highlight china, i would highlight some political backsliding that's been hidden by the boom, and probably also the current account surplus that europe is running. there's a lot of different things that are weighing on exchange rates and equity markets. it's a big recalibration of these markets. that doesn't yet mean it's an all out debt crisis collapse. >> is the fed -- however you describe it, is the fed right to ignore it and to continue steel like in its determination to reduce the printing of money by $10 billion a month? >> i think if the fed had done something different today, it would leave the markets even more confused. i think in the fed's own mind it's actually not planning to tighten policy. it just wants to change it, but the markets are kind of confused. in emerging markets there are

the fed might look like. the title of this hearing is international impacts of the federal reserve's quantitative easing program. qe, as we have lovingly come to know it, has been the subject of a number of hearings or discussions and hearings in this committee since it was begun several years ago. my opinion on qe in terms of its domestic policy has been clear. there are benefits, if you will, to qe, and there are clearly risks and negaives to qe. and in my estimation, the risks and negatives of qe are currently outweighing the benefits thereof, which call for its being wound down and eliminated him in my view. but clearly, the federal reserve board open market committee has not agreed with that assessment in the past, and we will see what they do in the future but a lot of those discussions have been based upon an evaluation of the domestic impacts of quantitative easing, of what it's doing for the economy, for interest rates, for the money supply, those sorts of things. that's not what this hearing is inte

there is procession -- perception the fed. try hard enough. -- the fed did not try hard enough. there was little recognition in that classic function of the central-bank to provide a liquidity in a crisis. there was confusion among representatives between spending and lending. they character -- they characterized it as spending. the actions of the federal reserve and the crisis a necessaryustified and keeping with classic central banking. recovery, some actions have been perceived as distorting asset prices and save hearing -- asset prices. favoring the rich. there has been a hit to the reputation to the fed. unfortunate but true. issue is the whole discussion of the federal reserve and federal reserve policy has been caught up in this very polarized political have beenthat we experiencing in these countries these days. in the papers there is a chart of democrats and republicans and their support for the fed. that polarization shifting and switching and getting worse over time. a very disturbing example in my mind, this was in the republican --maries, who will fire bank fire bee

what can the fed do? we can't change all those, all of those trends, the solutions involve a multitude of things including education, maybe early childhood education, job training, other things. but what we can do is try to achieve, as we are, a robust recovery so that we create jobs, we have a stronger job market. and in a stronger job market, people will -- or who are having a lot of trouble getting jobs -- will be drawn into jobs. they'll get better jobs. there'll be more training. people will move up job ladders, and opportunities will increase. it's not going to put an end to the problems these long-term structural problems that are striving this, but it -- that are driving this. but it will be helpful, and it's a contribution the federal reserve can try to make. >> just related to that but in specific, some of my colleagues have criticized you for keeping rates, quote, art initially low. but isn't the zero lower bound on the short-term interest rates in some ways also artificial? let's say rates wer

immense growing political pressure on the fed. even more so than you have seen in the last year, year and a half. republicans are about to start a on theestigation process 100th year anniversary. how many voted against janet yellen will be an important gauge to look at going forward. she has an enormous amount on her plate going forward. clearly as ben bernanke has alluded to his last couple times in public, dealing with congress is pretty high up there. >> thank you. world of e-he commerce, india is the world's fifth-largest marketplace. snapop online retailer, deal. 20,000 members. the future is bright. what does that mean for an ipo? snapdeal's by founder. you just came in from india. how did you start this company? >> the company was started in [inaudible] we wanted to do something together. was challenging to find stuff and we realized an e-commerce site would solve the problem. >> is there a challenge in india because you have so many mom- and-pop, small retail merchants? >> india has $600 billion retail market. on the seven

what can the fed to? we can change all of those things including education, early childhood education, job training. what we can do is try to achieve a robust recovery so that we have a stronger job market and in a stronger job market, people who are having a lot of trouble getting jobs will be drawn into jobs. they will get better jobs. there will be more training. people will move up the job ladder. opportunities will increase. it's not going to put an end to the problems or the long-term structural problems driving this but it will be helpful and i think it is the contribution the federal reserve can try to make. >> on my colleagues have criticized you for keeping rates "artificially low," but is in the zero lower bound on the short term interest rate and summarize also artificially? but say rates were 5% today but we have high unemployment and low inflation, wouldn't you lower interest rates? if you did not do quantitative easing, would interest rates be artificially high so to speak? >> i think that'

economy and for the fed. the experience has head to important changes at our institution including new monetary policy tools, enhanced policy communication, a substantial increase in the institutional focus on financial stability and macroprudential policy and increased transparency. we up speak of the principal reserve and other institutions as if they were -- federal reserve and other institutions as if they were autonomous actors. of course, they are not. the fed is made up of people working with an institutional culture and set of values. i'm very proud of my colleagues at the fed for the hard work and creativity that they have brought to bear in addressing the financial and economic crisis, and i think we and they have been well served by a culture that emphasizes objective, expert analysis, professionalism, dedication and independence from political influence. whatever the fed may have achieved in recent years reflects the everetts of many people -- efforts of many people who are committed to pursuing t

the fed is going to be reducing liquidity. the fed is the central bank of the world. the most powerful central bank of the world. >> can i stop you there, though? you said reducing liquidity. what liquidity is leaving where? there is still $4 trillion sloshing around. >> the cash may not be used, but the point is now they're buying fewer bonds, they're injecting less cash. people are starting to forecast what you you just said. qe is going to end this year and the next move is going to be they start withdrawing cash. maybe before the year is out. maybe these markets are saying being well, the fed's going to move faster, the american economy might be stronger, and all of a sudden people that benefited from the cash, leveraged foreign currency trading for example, thatted had the overnight carry trade coming back to the usa buying cheap currents, that game is over. >> i don't mind that. do you mind that, those carry trades unwinding? is that a big economic issue? >> i think the issue is expectations. and i think the second issue is i don't think people are sure what the

the fed decision is one hour away. this is the last meeting for ben bernanke as fed chief. as we count you down to the bulk of this market, it's not really in a great mood. as its worst point today, the dow was down 174 points. we have recovered quite a bit of that. we are down about 140 right now. the spike started at about 10:00 a.m. or so. the biotech index once again in focus. the top performer today, it's up some 50% for the year and we will follow that in just a few moments. more on that coming up. three sectors have been holding above the break-even point all day. those are the materials, energy and utilities sectors ahead of the fed. also, let's check the dollar versus the euro. right now the dollar, it's been a very interesting session. against the euro, you can see the move there. still a big short squeeze again the yen today. that's why you see that relationship between the dollar yen. there's the pound and also, we put the turkish lira up of course because it is very much in focus. all right. let's bring in bob pisani as we look at the ten-year note. 2.71% on th

so i think a big challenge is the fed helps the economy. we see this throughout 2013 and earlier years, but going forward, faster economic growth is going to come from elsewhere in washington hopefully. it's going to depend on what congress and the white house does with issues like tax reform, immigration reform, hopefully this is not as good as it gets. we need it to be better. >> the fed has said they don't expect there to be as much fiscal drag this year meaning they expect congress to get there. >> that's right. but it's not just the overall budget deficit. it's other things related to that. so it's the tax regime we have. many people on both ends of pennsylvania avenue have acknowledged our business tax code in the u.s. is really complicated and high burden for small and global businesses alike. it's those type of policies we need to get job growth faster. >> rich, one way or people to find of look to earnings season, for example, and figure out whether the economy actually is strong, demand is picking up or not, is to watch the revenu

what is the fed going to say next week? they've already floated the idea of wanting to increase the taper. i don't think that's happening but yet no one really knows that. so people are being a little more cautious taking money off the table in case you get a spike down next week they want to be able to take advantage of it. >> do you agree, warren? >> i do. i mean i was looking at the market on close and balances early, and they were pretty neutral. i don't think you're going to get too much of a push either way from that. i think 1800 ong the s&p is a key number psychological. at the end of the day i think the damage has been done for the day and probably setting the tone as kenny just said for the beginning of next week. i do want to stress everything is calm and orderly here and if you keep your head and maybe -- >> that's either a good for bad thing depending how you look at a sell-off. thank you, guys. >> thank you. >> have a good weekend. >> thanks. >> got about 50 minutes as we head into the close and match markets

watching the fed as well. fed officials have been analyzing u.s.ic data to determine the timing and pace of reductions in asset purchases. we will have those results later on. we are watching two stocks, mulberry down some 20%. down 23% as we speak. their shares are lunging as the luxury goods maker sees a profit setback. it is going to be a difficult year. this is a picture for looks to -- luxottica, gaining some 4.9%. it is in line with growth. let's have a look with the currencies. currencies play into what is happening in turkey. francn declining, swiss declining. that reduces demand for haven assets and you can see dollar/won. these are the bloomberg top headlines. emerging-market currencies are rising led by the lira's biggest jump since 2008. that is after turkey more than doubled interest rates in an attempt to stem outflows. the decision followed an unexpected rate increase from the central bank yesterday. nationwide protests continue in ukraine after the departure of the nation's capital year. opposition leaders -- premier opposition lead

is the source of all corruption the fed is the ultimate evil we have all of the fed if we and the fed everything will be great the problem is i don't necessarily know what would happen tomorrow if the fed was a ball or should i am i'm just wondering i know that you had some interesting points about the solutions that we could actually fix the fed well we haven't figured out how to. abolishing the fed you know that has to do i think overnight lending rates but one of the big things is abolishing the fed we had crushes the market went up and down way before the fed existed in one thousand thirteen and it always has having the fed their kind of uses it it's again it's designed to ease the tensions that come with it you know what you could do it takes out. more than thirty seconds to explain but i think that. some argue get rid of it have it be totally free markets but it's never really going to be free. of crashes that was always the intrinsic a free market system if you want to let that be it or anyone are all casualties of the market area we're going to talk about this pick it back up

and so the challenge for us at the fedded was to -- at the fed was to adapt his advice to the contexta modern financial system. so, for example, instead of having retail toes fors -- depress to haves standing in line out the doors as was the case in the 1907 panic, for example, in the united states, we had instead runs by wholesale short-term lenders like repo lenders or commercial paper lenders, and we had to, um, find ways to essentially provide liquidity to stop those runs. so it was a different institutional context but very much, um, a, an approach that was entirely consistent, i think, with badget's recommendations. >> now, you also rather than lending only to institutions, you intervened in markets. >> uh-huh. >> is there a sort of similarly-pithy dictum, i don't know, a bernanke rule that you can come up with about when the fed should intervene in markets and when it shouldn't? >> well, the -- if we're talking about the crisis period, i would say that all the interventions we did fit under the badget heading. for example, the commercial paper facility that we set up was essent

but that's that's more or less what the fed has already communicated they're going to do. i think that's not is as tricky a process as many people thought there was some excitement in markets last june when the fed first talked about this but i think the fed has now done a good job of separating its asset purchase program from the decision it's going to make on short term interest rates that the fed under yellen or anybody else is not going to be raising the overnight rate anytime soon and so i think markets got in the sense of that now and i think it should be a fairly stable process for the fed to gradually wind down its asset purchase program now is yellen or someone who leans towards policy accommodation. well that's part of the caricature of that i think is a reasonable yes she's been a dovish member of the sea for the last several years but that's turned out to be the correct position this inflation that some people warned us about were scared was right around the corner that hasn't come at all we've had the lowest inflation rate in years and the so-called doves were

let's talk a little bit about the fed and the likelihood that the fed will continue its taper even if it doesn't, it does seem likely that the federal reserve is going to pull back on its stimulus this year. do you think the markets and the economy can withstand that? >> well no i don't at all. portfolio strategy is now 90% cash. i will be shorting stocks this week or next week. i think the fed has engendered a phony economic recovery based on reinflating asset bubbles, particularly home prices and equities. i think they will be tapering into falling economic strength and i think that ends very badly for the economy, earnings the market. >> todd what's your take? >> well we like to hear expectations. we at schaefer's investment research, we like to go off expectations. it's part of our investment strategy. if you look at -- i think there is a lot of caution out there in terms of the economy and the impact on stocks. you look at for example, in the options market all the portfolio protection trades out there is fund managers are cautious. you look at short interest. it was just reporte

remember, this is more of a macro strategy the fed is trying to employ. i think they are just trying to get out of the center stage here with quantitative easing and go back to their traditional monetary policy. i will say my conversations with the fed over the last, say, two quarters, they do remain on notice if they have to raise quantitative easing once again, they are prepared to do it. i know they want to move to the sidelines, they are trying to move, ignore a lot of the noise, so to speak, but they are prepared to ramp it up if they have to. >> what we're in right now feels like the beginning of a global monetary policy tightening cycle. my question is if we continue to see the volatility like we have in international markets, is the u.s. economy now strong enough just as the fed is pulling away from the punch bowl, is the u.s. economy strong enough to be able to withstand what's happening offshore? >> oh, absolutely. the u.s. is at the center of the global financial system and it is still the driver in many ways of global economic growth. europe c

one is something changed very importantly under the bernanke fed which is the fed as an institution becamented place. it has become a lot more important for the leader to have as many people on board as possible. so, i think that, janet yellen like bernanke, is going to have to work really hard to convince people to go along with her. bernanke had to do that. the other thing i would say, we shouldn't overdramatize how much sway, particularly paul volcker had, but volcker had epic battles with governors on his own board appointed by reagan. at one point he threatened to resign because these reagan appointees wanted fed to cutting rates and he didn't want to be doing it. he had epic battles with that fed. david: that is very interesting. this hasn't always been a chairman-dom neyed place. david: you brought up reagan. some people think if the economy does grow, even janet yellen saying the economy will likely grow above 3% than 2% next year the question whether growth immediately means inflation. >> yeah. david: under ronald reagan we saw growth go like gangbusters yet inflation came down. i

chatter around the fed. the fed is irrelevant now because the economy's coming back.d centric. it's difficult to grasp between the rigor of individual stocks in countries versus taking a macro view, that i think is no longer important as it was in the last four years. >> the scone sus iconsensus is,e it goes up 20, 25, or down 15 or something, so i mean, i don't know what it favors are now. >> look, there's real secular difficults here. it really is hard to figure out what's happening with retail. we take howard schultz's view, this was the shift, when internet took over and bricks and mortar did bad. that group has been a huge, huge black hole since the year began. but when i look at industrial companies i know we want to say that china's bad, but then you're stuck with the work. if you read case by case the industrial companies, almost entirely driven by strength in china, it's counterintuitive to listen to the news about china because it presumes individual banks are controlling. that's not the case. china's doing quite well. again, that's having to do with the fac

we asked former fed governor wayne angell, he knows all about the fed. wayne's coming up. sandra: netflix set to report earnings after the bell tomorrow. the stock was the number one performer in the s&p 500 last year, up almost 300%. the time to buy or is this stock overvalued at these levels? 328 bucks a share, david. david: we have experts coming on or sell netflix ahead of the earnings? log on to facebook.com/afterthebell. your answers coming up. we'll be right back. ♪ [ male announcer ] what if a small company became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. [ chicken caws ] [ male announcer ] when your favorite food starts a fight, fit back fast with tums. eartburn rief that neutrales acid on contact a gs to work in seconds. ♪ tum, tum tum tum tums! open to innovation. open to ambition. open to boldids. that's why n york has a new plan -- d

the fed. because it appears that miss yellen will continue to pursue these misguided policies, i cannot in good conscience vote in favor of her confirmation. i yield the floor. i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: mr. brown: madam president? the presiding officer: the senator from ohio. mr. brown: i ask unanimous consent to dispense with the quorum. the presiding officer: without objection. mr. brown: thank you madam president. for those who don't remember or those who don't choose to remember five years ago our economy was at the brink of collapse after being rocked by a financial crisis because of incompetence, wall street greed overreach of the financial sector and more. washington has let the financial system run wild through deregulation. banks had overloaded on toxic mortgage securities that they used massive amounts of leverage to purchase. these banks -- in many cases these wall street banks were so large, so complex so op

the fed chairman about to take questions on the fed economy.farewell experience. will they ask him about charles said about interest rates. could be market-moving news. >> that's the speaker just before the q&a, by the way. here's something that might make you feel a little sick. a new study finds obamacare's costs could skyrocket because newly insured americans may actually use emergency rooms more. not less than expected. is this another budget buster for the new law? a top white house official will be reacting to all of that coming up later on the "closing bell." stay tuned. ate. that's correct. cause i'm really nervous about getting trapped. why's that? uh, mark? go get help! i have my reasons. look, you don't have to feel trapped with our raise your rate cd. if our rate on this cd goes up, yours can too. oh that sounds nice. don't feel trapped with the ally raise your rate cd. ally bank. your money needs an ally. [ male announcer ] alka seltzer plus presents the cold truth. [ coughs, sneezes ] [ sniffles ] i have a big meeting when we land

he was named to the fed chairmanship by jimmy carter. what do you think he did that we can learn from? >> you know i think lesson we try ohold up volker as a lesson what you look for as a central banker, or any leader in a society. someone who is willing to do things that might hurt in the short term but have long term benefits. the fed has political independence. they're not elected officials. they're very much protected i think in a lot of ways from pressure, from explicit pressure from politician he. but the question is how does the fed use that influence? volker did something raised interest rates up very high, up to 20%, hard to imagine, 20% interest rates today. but what it did in the long run was, you know set the stage for a very healthy period for the u.s. economy. restore faith in the u.s. dollar, bring inflation down help, you know, lower the cost of living for americans. so it was a great thing. in the short run it caused a recession, it was very painful but in the long run it really helped us out. again we keep talking about

a statement from the fed.erve has two objectives -- growth and full employment. >> in the u.s. and only the u.s. is the message that seems to come from the fed last night. we will find out from the minutes. what are you talking about? >> emerging markets. >> they did not make a statement, we don't know whether they talked about it. >> i think that is fairly significant. >> the emerging markets are only talking about the fed. not go to saying "do the war zone with a peashooter." that was new england governor graham wheeler. you see south africa and the rent only rallies for two minutes, the problem was bigger in turkey for the lira. even if you trade in fx, it is a big concern. a central bank with dwindling foreign reserves. turkey is tanking out -- turkey chunks at at 10% time. riddle. -- brutal. >> what will it take for a market to take these central banks seriously? 250 basis points from them turks, a big move. >> a lot of peashooter. >> half a bazooka. >> not like our friend at the oecd. >> a fascinating on

according to many economists and senior fed officials it was the fed itself at the eye of the storm.> the fed kept interest rates too low for too long. that contributed to the bubble in housing crisis. this was textbook when you take rates that low you're going to have a boom and a bust that is likely to follow. >> the fed failed to prevent a housing bubble, the predatory lending scandal and utterly failed to prevent the financial crisis. so we failed to regulate the most important part of our financial system. >> i don't think anybody of us who look at the fed take comfort from the fact that somebody screwed up, but i think its important that we recognize that mistakes were made. >> didn't the federal reserve system fail? >> i know my time has run out, but i really fundamentally disagree with your point of vi view. >> i think there ia natural inclination that things are fixed, but things are not fixed. >> everyone wants to go back and say things with fine now. we solved our problem. we're asking for another crisis. >> this is an experiment. we've never done this before. we've never