let's turn to steve liesman. what is the headline today >> you know, i think the headlines, i don't work for a newspaper. it's not much redirection from yesterday's dovish commentary. i'm seeing the markets okay it with i saw the two year and the ten year yields up just a little bit. but pretty much intact this idea that the federal reserve is on track to reduce the balance sheet sometime this year they didn't get into the exact timing there and perhaps raise rates if the inflation data were to behave. and that means go back up to 2% and we'll get a cpi number tomorrow a lot of talk about regulatory reform i think it's high on the senator's mind and just to recap that issue, everybody agrees that some of the rules should not affect the smaller banks. but nobody can agree or neither side can agree on what the right number is for the cutoff for the smaller banks. somebody mentioned $125 billion in assets. there are numbers on the republican side of much higher one of those amazing places where both sides agree some

steve liesman, i go to you first. what do you make of dimon's comments >> jamie's on the front lines there. he's going to be part of the process of unwinding the balance sheet. and i think his words of caution should be taken seriously. i think two things, though i think the fed has kind of preempted these concerns, if you look at how they're doing, balance sheet, they've sort of put it on auto pilot, but they have a switch where they can turn it out if things turn out badly. i think what the fed wants to see is wants to see the market behave in this process and not be disrupted by the process. and i think they'll turn it off, if they do so jamie's right to be cautious. he's a guy who's going to -- and his bank are going to feel the effects of this. but i think the fed has this very slow ramp-up that allows the market to, yes -- and the only other thing i would say, ma scott, is that the market has been told about this repeatedly. its reaction has been really benign >> joe, the chances that this gets ugly and rates ge

steve liesman reports. >> reporter: that check with your raise in it might finally be in the mail. a new survey from the national association for business economics suggesting that wages could already be on the rise. 47% of the 101 businesses surveyed said they're hiking wages, up eight points from last quarter and the second highest reading since the end of the recession. the same percentage said they expect wages to rise in the next three months. those gains are not the type of wage inflation the fed should be worried about. >> we've been looking for wage growth. it's only when wage growth really outstrips productivity for a period of time that you have trouble. i think this is good. it's a sign the labor market's tightening. that's a good thing. not a bad thing. we need to do more to bring people back into the workforces, but that's a tougher problem. >> a big problem in the survey, employers are saying it isn't easy to find workers. more than a third saying they're having difficulty hiring. in response, they're employing several different strategies. 22% say they're raising pay

steve liesman went in search of answers. >> reporter: it's been an enduring economic mystery. job growth is booming but wage growth, when labor's scarce, employers usually have to pay up to keep their workers and attract new ones. wages are only rising a little more than 2% on a yearly basis, well below the 3.5% to 4% you could expect with such a tight labor market. look at who is making the most gains in the job market could solve the mystery. the unemployment rate for all americans without a high school degree has fallen shortly. also been a big jump for those with just high school degrees. add to that a sharp decline in teen unemployment to an almost 17-year low and it's clear that those with less skills and education are a big part of the new hires. and education matters a lot for wages. less educated and younger workers make less than the overall workforce. >> what we're seeing is that the vast majority of the modest wage growth that we are seeing is very segmented in the economy. meaning these are particular areas that are looking for specific skills so skills that are i

for "nightly business report," i'm steve liesman. >> a separate report from the federal reserve shows the labor markets are getting tighter. according to the beige book, the job market is strengthening, for both low and higher skilled positionings, particularly in construction and i.t. sectors, but a drop in gasoline prices has kept the lid on inflation. overall, the central bank reported modest to moderate economic growth or really kind of beige. >>> despite expectations for modest growth, historically, the economy tends to cool after series of hikes which the fed chair alluded to today, but are things different this time around? the chief market analyst at the lindsey group and jeff mcintyre is with brandy wine global investment and both join us to talk b about that. welcome. peter, i'm going to start with you. you don't think it's different this time around. and if the tightening continue, we may very well see a recession. >> so, since world war ii, there's been 13 rate hike cycles and considering how extreme the easing was, it's not going to take much of a rate in change and rise

steve liesman explains. >> the federal reserve kept interest rates unchanged in this july meeting. it signaled it will likely begin reducing its balance sheet as soon as september. unwinding its massive stimulus program from the financial cris. will begin relatively soon. the fed bought securities before and after the crisis. once it lowered its benchmark rate to near zero. the fed was generally positive on the economy. economic activity has been rising moderately. inflation is running below it's 2% goal, it had previously said it was running somewhat below. took out the word somewhat. the fed said it expects to raise rates gradually, markets doubt the chance of a december rate hike now. and the fed backed that up with its concern over inflation. they expect inflation to be moving back toward the 2% goal, that could lay the foundation for the next rate hike later this year. >>> ford tops wall streets with's expectations. the automaker reported second quarter earnings that beat analyst's estimates. a solid performance from its credit union. much of its quarterly performance was than

we should get an official read on that tomorrow our steve liesman has that back at headquarters. e? >> yeah, we want to give ut official cnbc rapid update which is a collection of all of the tracking -- not all of them, many of the leading tracking forecasts on the street for gdp. it is up as a result of this morning's data the trade data, the inventory data and also the durable goods data raising the outlook for second quarter gdp to be reported tomorrow morning by .3% to 2.9% which is towards the middle of the range it's been in the range among estimates, 2.2 to 2.3 they're keeping a strong estimate at 2.6 to third quarter. the first quarter was down to 1.4% leading pack is stephen stanley at 3.3%. morgue an stanley at 3.2%. atlanta fed at 2.8%. all of them went up by two to three tenths and goldman sachs, uncharacteristically at the bottom of the pack there at 2.2% we'll see tomorrow how accurate the estimates are. the tracking estimates include the incoming dat yachlt trade inventory was good durable goods not so good. back to you, carl. >> steve, thank you very much. steve li

i'm steve liesman. >> let's turn to our two guests for their outlook for the economy and the financial markets in the second half of the year. we have josh fineman and tom stringfellow with frost investment and visors. i'm going to start with you. it looks as though things have steadied out in the economy. we're seeing steady growth. how does the second half look to you? >> i think the e the second hal pretty good momentum. looks to be in good shape. frds much of the cyclical repair has been done. the labor market is healed and it will get to the lin growth in the economy has diminished. from a cyclical perspective, i think it's likely going to continue. >> so, tom what are you looking for in the market in the second half of the year? it's been a pretty good first half, not ju t likely to continue? what should i be watching out for? >> i would agree. i think it's going continue. everything that josh mentioned about the economy does play into the markets. there are some concerns we've had concerns of this first half of the year, last year, a number of sectors that can't seem to get trac

steve liesman takes a look. >> a quartet of economists are arguing in a paper that the u.s. isn't stuck forever in the growth, they say 3% is realistic if the right policies are pursued. they joined to say attaining 3% annual gdp growth rate is based upon enactment and implementation of a package containing significant tax reform. regulatory reform, budgetary reform and monetary reform. >> they're believed to be under consideration by the trump thi this business cycleions at was different in was the collapse in capital spending. that's been the biggest explanation of the decline in prugtivity. better tax policy enough to turn that around. tax policy can talk with hours workeded. but we've got to do it. can't just talk about it. >> productivity growth or how efficient the econn hours worke growth in the labor force are the lynch pins of overall growth. if you work more and work more efficiently, you grow more. the paper argues that the wrong policies of the obama administration are the key culprits in the u.s. slow down. the congressional budget office and many economists thi

. >> steve liesman said this yesterday. what is wrong with 26% on tax reform that apparently is rout theout right now. that would be a victory. it's not the aggressive numbers we were talking about. >> you're not getting to 15 -- >> absolutely not. i agree. >> yeah. >> it would be -- the market is factoring in at least -- so, a 26% number would be very favorable. so anything better than that, we take off >> there's another angle here too. there have been reports that gary cohn may be in line for a chief of staff job maybe. he's obviously not getting that. there have been other reports that gary cohn may be in line for the fed job. >> he does not want -- >> he now does not have the chief of staff job dan nathan, do you think there's a chance gary cohn becomes the next fed chair and is he qualified? >> here's the thing, at the end of the day, i think what you said, tim, is really important we have record -- not record low rates, but very yenear we have commodity prices that are very weak and a dollar that is very weak all of

. >> he obviously changes his tune we've seen it before hearing steve liesman on this, if we got to october and we vrnts h haven't had a nomination, that would start to be a bit late right now we're talking about it a lot, but it's not typical that we would have had the nomination yet. but fascinating to hear those two names singled out. >> and we will get that interest rate decision in just under nine hours from now countdown clock is up. wall street widely expecting policymakers to keep rates unchanged. the big focus will be on what the fed says on inflation which really has been missing. we'll have full coverage of course of the decision at 2:00 p.m. >> and this fed decision just snuck up on us >> no interest rate change expected >> exactly but i think ooirts realit's rean yieldsaeen leading curve. and that dragged the bank stocks up uk gdp this morning was softs relative to history, but still fine with expectations and is that again because trade with europe european outlook very positive i had an off the record with a senior ceo two days ago and he was very positive, a banking ceo, abo

i'm becky quick along with joe kernen and steve liesman andrew is off today. the u.s.t will be front and center today on wall street it's the june jobs report which hits at 8:30 a.m. eastern time forecasters are calling for an increase in 174,000 in non-farm payrolls, up from 138,000 in may. the unemployment rate is expected to hold steady at 4.3%. that's a 16-year low average hourly earnings, which are closely watched by the fed, those are forecast to rise, 0.3% we'll have more on jobs in a moment luckily steve is with us today to talk about it look at u.s. equity futures. they're flat after a big down day for the markets yesterday. the nasdaq and the s&p both had their bigges

. >> we will get to that in a moment first, steve liesman is hire with the highlights. >> three hours of testimony and as far as the market was concerned, it all boiled down to something the fed chair janet yellen said in about 14 seconds over the outlook for rates >> monetary policy is not on a preset course. we are watching this very closely and stand ready to adjust our policy if it appears that the inflation undershoot will be persistent >> that prompted markets to start to bake out the possibility of a third rate hike this year. it's now just around 43% helped the rally in bonds and also in stocks yellen also sees global growth helping out all over, reject the effort to audit monetary policy. lot of back and forth on that in congress and no comment on a second term, though congress did try three or four times the fed chair was also asked to respond to jpmorgan's jamie dimon's case about the fed's plan to reduce its balance sheet. >> we have tried to be very methodical about informing the public and the markets about how we are going to do this. we have provided essentially comple

steve liesman pondered this all weekend.didn't get any sleep and he's combing through the clues to solve this mystery behind weak wage growth and joins us now with his foundings >> when labor is scarce employers have to pay up to keep their workers and attract new ones but wages are rising 2.2% year on year, below the 3% to 4% that you might expect with a tight labor market but a look at whose making the most gains in the job market the unemployment rate for the least educated americans has fallen sharply in the past six months 1.3 percentage points for those with no high school diploma and add to that a sharp decline in teen unemployment to a 17-year low. it's clear that those with less skill and education are a big part of the new hires, and education, well, it matters a lot for your wage. less educated and younger workers, they make less than the overall workforce. your median weekly wage for those with high school degrees, 60% of those with bachelors degrees. in addition, the unemployment rate for african-americans and h

was that she said we don't need that many more rate hikes until we're back at a neutral rate >> steve liesman did a good job of covering remarks from the prior today. yellen echoed a lot of the dovish tone and in-the market was celebrating that we might not even see another rate like this year. one of the last questions after are basically everybody tuned out had to do with slowing home sales. and the beige book didn't get a lot of cover yesterday, but over half the districts saw slowing in auto sales. and that was one of the last questions. so i think that they are beginning to pay attention to the signs that the economy is slowing. >> markets celebrated quite significantly, but we also just heard those comments that said that there is space for tightening as well draghi tried to rein police comments back in will that be possible, was there an overreaction? >> energy prices are proving to be anything but transitory and if we continue to see inflation metrics coming in under what is expected, we'll see the cpi data out tomorrow morning, we'll see more out on retail sales as well if we continu

let's dig deeper into the jobs report that mike mentioned as a catalyst for today's real cnbc's steve liesmanns us with the breakdown steve? >> yeah, this was a solid jobs report, and alade concerns that the job market and the economy were slowing it all seems to be enough to keep the fed on track to raise rates. here's what jorgan said in the comment. the overall takeaway for the growth picture is that the economy seems to have finished the second quarter with decent momentum and fears of a sharp slowing in the third quarter should be mollified by today's report what was in the report, 222,000 jobs, better than the 174,000 expected and you got the may and april revisions up by almost 50,000 jobs. unemployment rate ticking up because there was an influx of workers in the workforce that you can see in the participation rate that was higher where were the jobs? that may have something to do with the why the wages were so muted. leash our and hoppity up 36,000. government, all local up 35,000. construction doing better and temporary help a good sign and retail the first increase in five months,

steve liesman is at the federal reserve in washington to lay it all out for us hi, steve. >> hey, good, sarah. there's a slight chance of a surprise this afternoon if the fed were to announce reducing the balance sheet now rather than as the market expects in september. fed chair yellen said it could be relatively soon, but most fed watchers think the fed has no reason to surprise markets odds-on bet is that the statement will signal balance sheet reduction on the way and begin in september markets will also be looking closely for the fed's comments on inflation, which as you know, can continue to run below the fed's 2% objective the fed's statement in june said it expects inflation to rise, but some officials are more worried they want more evidence before hiking again. and the odds of a final rate hike is 42%. >>> the odds of janet yellen keeping her job look to have improved someone told the wall street journal that the president has a lot of respect for janette yellen he said, i like her, i like her demeanor i think she's done a good job. the president also said national economic c

steve liesman there. back at hq let's get to our "closing bell" exchange nothing like the past two days where we had some volatility because of headline risk it's been a pretty placcid rate and the dow up 21 points cnbc's contributor art cashin is with us and joe is john manley, the chief strategist for wells fargo fund and rick santelli gheks from the cme so, arthur, we've got the health care -- the revised health care bill coming out. we've got janet yellen testifying again, but it's oil that's moving this market today. >> yeah. the market had coined of a tri-polar personality. we started out with a bounce in the morning hoping that yellen would bring in another box of candy to the game. when she failed to do that, the market pulled back, and then from late morning until just a little while ago the fact that oil moved from threatening to break below 45 to up above 46, that gave us the midday rally, and then believe it or not getting close to -- well, i shouldn't say getting close. finding a health care

we brought on steve liesman today because his exclusive fed survey tells that story as the markets hit these new highs every day, the vix is at its lowest in forever. and yet more people are expecting a drop in it >> people answering my survey think all the people at this table are not paying attention >> so what have you got? >> and haven't been for the last eight years. >> i guess that lif-- no, not necessarily. first thing we have, we asked people do you think the market is too optimistic about the trump agenda and about half of our 44 respondents think 50% say too optimistic there are the results. 36% say realistic. basically counting on too much fiscal stimulus coming from the trump administration and by the way, they have pushed back the expectations. and i want to share one other thing from mark zandi, an economist, this one quote that he has, as set markets are very highly priced and invest tors are com place event. >> i don't does his agree, but what do you do with that knowledge?place event. >> i don't does his agree, but what do you do with that knowledge? do you sell everyt

here, he's one of baron's top 100 financial advisers also here, cnbc senior economics reporter, steve liesman. and kevin o'leary is joining us, the chairman of o shares etf investments. happy to have everybody with us. josh, just when you think this rally might be teetering, here you go with a better than expected jobs report dow's at the highs of the day as we have this conversation. >> sure. i think probably one of the more reasonable things to say is that the market already sniffed a lot of this improvement out, and that's why it's been so resilient all year but even when you look beneath the surface, you could find thing to be very happy about, and things to be very not so happy about. and i think that's what the market is supposed to look like. i'll give you two quick examples the xlf is on the verge, if it goes out where it is right now, of the highest close on a weekly basis, going back to october 2007, which is pre-crisis or right at the apex of the last bull market, i should say. and that's a clear positive, because the banks, right now, have much better balance sheets and are in a m

. >>> welcome back to halftime senior economics reporter, steve liesman, has a rapid update. >> the negative data today, especially the negative retail sales data vz a downward effect on the outlook for gdp the cnbc rapid update, which is the median of forecasters on wall street for the current quarter or the one that we're in the middle right now, second quarter gdp tracking 2.5%. that's down 0.2. and we have been as high as 3.8 when the quarter started, but the data has come in negatively and it's been whittled down the range 1.9 to 3 you can see the first quarter there is 1.4 who is where moody's is keeping the faith at 3% morgan stanley in action at 2.6. barclay's at 2.4 goldman sachs and b of a bringing up the here at 1.9% all of this having a downward effect on the outlook for that third rate hike of this year it is now running for december at just under 40%. this contract is as high as 50%. well below a flip of a coin now for that third rate hike, bruin? >> steve, thank you very much. >> sure. >> well, jon najarian, always watching the options market for you. so we have sent him over

with us today, joe terranova, stephanie link also with us, steve liesman, and from chicago, our own ricklli let's begin with those comments today from jpmorgan boss, jamie dooild, ll

i'm becky quick along with joe kernen and steve liesman andrew is off today. the u.s. labor market will be front and center today on wall street it's the june jobs report which hits at 8:30 a.m. eastern time forecasters are calling for an increase in 174,000 in non-farm payrolls, up from 138,000 in may. the unemployment rate is expected to hold steady at 4.3%. that's a 16-year low average hourly earnings, which are closely watched by the fed, those are forecast to rise, 0.3% we'll have more on jobs in a moment luckily steve is with us today to talk about it look at u.s. equity futures. they're flat after a big down day for the markets yesterday. the nasdaq and the s&p both had their biggest declines back at the levels they've seen since may. nasdaq is down for six out of the last eight sessions. you're talking about elevated levels for all of these indices. the nasdaq is still above 6,000. dow is at 21,320 again, you can see things actually picking up as we sit here talking about it. dow futures indicated up by 8 points >> keep talking. here are the big stories we're w

rick santelli, for more reaction bring in steve liesman >> yeah, this is an interesting number, joe.way rick thought about it, right. which is that we talked about this for a long time a single number is very volatile but you average the two numbers and we're at the 2% number which is a pretty good balanced growth which is nice you had 3% on consumer -- sorry 2.8% on consumer spending. business investment up 5.2% with equipment up a strong 8.2% number housing investment was down after a very strong first quarter. not unexpected and then the government was up after being down the first quarter. and i believe inventory was a slight positive. one other thing is that we revised upward 2015, we had this bench mark revisions but revised down a little bit, 2016. so 2015 was stronger than we thought. 2016 weaker. overall, nothing here that tells me that this is anything but still a 2% economy though i will say that interesting question we can ask ourselves. this little bit of surge we've had in business investment is this part of the confidence that as a company the election of the president

plus, steve liesman's economic mystery. we'll tell you what it is as we head to break.. which are still mixed as nasdaq is the strongest of the bunch up 12 ♪ >>> good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq marketsite in times square take a look at some stocks to watch this morning abercrombie & fitch is under pressure in premarket trading. the teen apparel retailer issued a statement saying that it had terminated discussions about potential transactions those discussions again in late may after the company received expressions of interest but abercrombie now says its best path forward is what they're calling rigorous execution of our business plan. they say they're seeing solid comp-store sales and continuing to refine and implement strategies for revitalized performance. meaning they're probably not seeing sales gains but they say they expect improved trends to begin in the second half of the year compared to the year before >>> we're also continuing to watch shares of chip maker rambus this morning. the stock soaring

, the fed kicking off the final day of its two-day policy meeting we're going to check in with steve liesmann d.c. this morning. plus, a cohn/yellen showdown what president trump said about his top economic aide's future at the fed stay tuned you're watching "squawk box" right here on cnbc. because, when you really, really want to be there, but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies see it- and see it through-with digital. to keep our community safe. before you do any project big or small, pg&e will come out and mark your gas and electric lines so you don't hit them when you dig. call 811 before you dig, and make sure that you and your neighbors are safe. 811 is available to any business our or homeownerfe. to make sure that you identify where your utilities are if you are gonna do any kind of excavation no matter how small or large before you dig, call 811. keep yourself safe. >>> welcome back to "squawk box. pre

joe, it's all yours. >> okay, rick, thank you steve liesman is here again.on about coming on in the morning like you have some hard -- like it's difficult. did i -- i didn't give you any grief today. what were you -- you get to be on "squawk box" almost every day. what were you complaining about? >> no, it's the introduction, joe. >> like this one >> no, no, no. when i have like a prepared hit and incredible wisdom in the prompter that i feel is essential -- >> that you've worked on. >> that i've done work on. >> okay. >> and then it's a bit like lucy sticking out the leg and charlie brown tripping over and with the football and the whole thing. >> you don't have that now, though. >> no, but we've just done it almost as if i did i was going to say something about -- >> are you going to do constants? >> do you want to say anything about what rick said. >> you had a 006 pop in food, it looked a little bit up the chain of pipeline pressure, finished goods up 0.2 and intermediate down 0.2 the thing i wanted to say is we were looking for possibly a pop because yo

let's bring in steve liesman who's had time to chew on that as well as the reaction. steve? the notion we don't have far to go when it comes to interest rates i think it calls into question whether they would pause in september and reduce the balance sheet and perhaps come back in december i see the possibility of the september rate hike down around 4% which is one of the lowest i've seen following the contract over the last several months it had been about 50 it's about once every five years i pick a fight with david faber. i'd point out, david, it was the academics who laid the groundwork for quantitative easing operating at zero bound well before there was any threat of it and it was the academics who identified it in the midst of the crisis. i'm not saying gary cohen could not run it but many have acquitted themselves quite well. >> actually, steve, i was not criticizing them earlier i was making it a distinction. jim had made it more substantially between the academics and what mr. cohen would represent if, in fact, he became the fed chair. >> my apologies. i was listen

steve liesman joins us now >> interesting paper, joe. of those economists, all of whom are well known to "squawk box" viewers, are prospects for the federal reserve under president trump. john keoghan of the governor institution, joined with kevin warsh, john taylor and glenn hubbard of colombia, penning a paper that they don't by the argument that u.s. is stuck at 3% growth. attaining 3% annual gdp growth rate is based upon enactment and implementation of a package containing significant tax reform regular tory reform they say productive goes up and down cyclically and it's linked to getting policies right. what they did is a five-year moving average, got rid of some of the ups and bounce and said it was down for awhile during the wrong policies of the '70s up during the right policies of the '80s down during the wrong policies of the 2000s and positive that it could rise again if these policies are right they believe the u.s. could meaningfully boost u.s. growth and put some numbers into it. what you're looking at next is going to be a

guys, back over to you >> thank you appreciate steve liesman is here.ide enfoe on this gary cohn thing? >> no. only that we've talked about this for a very long time -- >> sorkin has been -- >> -- also by the way -- >> and the idea that the guy who is in charge of the search committee, ends up being the guy who the search committee finds >> i thought about that. >> we've seen before >> funny how that works. >> very, very high levels. i want to talk real quickly about what, you know, ylan was talking about. what we're wondering, one of the big questions is when will the fed begin this balance sheet reduction. and i didn't hear anything ylan said that gave us that insight she said it's going to happen this year. i don't know that the matters a whole lot. jim let's come back and talk to you about whether july, september matters a whole lot. whether they end up -- you on your way out right now >> i don't think it matters that much i really don't i think did she say any words like appreciably, and if they weren't going to commence this, you know, it's kind o

. >> here now with some more on the numbers is steve liesman >> first quarter as you know has been historicallyarter rebounds common 2% plus or minus as joe has said >> across the economy, consumer spending of 2.8% we have positive numbers and invest ms up 2% and that's the business under the economy and government up, 0.07% all of these were healthy bounce back and sometimes negative figures. the president set this 3% bed mark for good growth most are below 2%. mid 2 is a healthy number should be good for job and it is good science so far and what i am hearing on the street is remaining in the mid 2's that's the lowest probability we have seen for the contract and we have been here before and another one brian, maybe you can add -- >> the psycho killer >> no, that's not appropriate. we keep on ending up 2% growth >> we are not followed by the house though >> not when it comes to growth >> that's a good one >> stick around. >> a rock n' roll. >> i am going to start with the first question that steve opposed, we got this nice number today, bounced back and first quarter of the start of something

steve liesman. >> thank you very much i'm going to be as interesting as i possibly can.tly exaggerated the national federation is acknowledging the industry challenge but still growing, they say, and the government data itself could be misleading. it has been a tough year according to that data for government jobs. the economy has gained more than 800,000 raising the specter of the death of stores with e-commerce we talk about that a lot the data could be missing. more warehousing and transportation jobs have become more a part of retail employment even at the brick and mortar companies, not just the e-commerce ones. this has made headquarter jobs for anyone not involved in retail and actually selling to people here are some other points 87 million square feet of new retail space add in 2016 retail is at the highest level since 2008 and pure play, e-commerce, online retail, they are less than 6% of total sales but they are growing and high-profile stores get headlines but don't tell the real story what is happening at the million of small shops that are responsible for t

steve liesman has it >> the federal reserve announcing it will fine bnp paribas $246 million the federal reserve citing unsafe and unsound forex practices at bnp part of a larger scandal involving manipulation of foreign exchange that now encompasses four banks ubs, barclays and deutsche bank. and it looks like they are approaching nearly a billion dollars in total i don't know if this will be a total surprise to the market in january 2017, the federal reserve board permanently prohibited pnp paribas trader jason katz from being involved some analysts thought this might be coming. now the federal reserve announcing this $246 million fine which looks to be in addition to the fine put in place by the new york bachking regulator. >> thank you very much >>> let's take a look on where we stand all three indices are on pace to close at record highs, even though it looks like on the percentage basis, not much is happening. let's look at some of the names hitting all-time highs mastercard, cigna, boeing and facebook some retailers on the move leading macy's, sears and kohl's >>> winnie the pooh

today on this news thank you very much for joining us >> thank you, michelle, talk to you soon >> steve liesmans here >> good numbers. a possible upside surprise of cnbc wraps it up the range is 2.2% to 3.3%. lets see who's rare at the top is amherst pierpont and all the way down to goldman sachs. we had a little pop capitol spending in the past few months. it was down this month, we had a huge revision in may the question is whether this is an early reaction to the positive business sentiment. we'll see if so, it will have to be a longer and steeper of some of the better rebounds that we have seen in the past. the u.s. conditions positive consumer spending and adding the better business spending that could switch the economy of 2% by the way, guys, we are looking for the forecast of the third quarter of never stop estimating the future at 2.6% >> i think it is interesting to watch the market's reaction on this bat thing >> what do you think it is the corporate rate >> that's the question this is maybe one of those things where we were debating yesterday of the feds where the reality is catchin

chair janet yellen will keep stocks low for the foreseeable future stocks once again are higher steve liesmanollowing the action in d.c. and bob pisani tracking the markets at the nyse is this all about balance sheet reduction conversation or do rates still matter >> you've got that right there is a slight, brian, chance of a surprise this afternoon if the fed were to announce reducing the balance sheet now rather than in september as expected fed chair yellen said it could begin relatively soon but there is no reason to surprise the markets today. the fed does mention the balance sheet reduction and the question is how it will react the big story has only been the modest reaction in the fixed income markets really a lack of concern with this announced plan by the fed to reduce the $4.5 trillion balance sheet. and inflation continues to run below the 2% objective the fed statement in june expects inflation to rise but some officials are worried they want more evidence before hiking again the odds at 42%. and the odds of fed chair janet yellen keeping her job is better after trump said that he

. >>> president trump nominating a bank regulator steve liesman joins us with more. >> reporter: nominating quarles to the top bank supervisory job, unfilled, technically, since it was created by the new dodd regulatory reform rule it had been held by -- orreall dan tarullo, former fed governor had been serving as that governor as such, he will also be able to vote on monetary policy. it's one of three open positions at the federal reserve right now. randall quarles is a former private equity executive, who had been involved in buying small and mid-sized companies, investing in them as well as managing what looked like family money as well as other wealth management jobs he did there former treasury official involved with the g7 as well as reforming the financials, fannie mae and freddie mac, a trained lawyer as well as at the carlyle group. he is advocating change to dodd/frank, wrote an op-ed in t "the wall street journal" about breaking up big banks and criticizing low interest rates at the federal reserve he said, years of near zero interest rates have led to a rise in speculative posit

. >>> monthly payroll number blowing past estimates jobs grew in nearly every sector steve liesman who lied in russia for a while is here. anyone characterize this besides a good report? >> english or russian? >> as you prefer. >> english i think it's characterized as a very good report and rumors of the death or the softness of the job market premature and exaggerated. a quote of oxford economics. very much from brian said. a solid report that reflects still strong increases in payrolls and modest gains and here's the numbers they like looking for 174,000. march, april revised higher. unemployment rate ticking up and you get it in the noninflationary way and average hourly wages disappointing, a modest gain right there. here's where the jobs were leisure and hospitality, government and all local that government level federal down construction, temporary help and retail, first job gain in five months over at barclays, saying the fed believes activity and labor markets will lead to higher inflation and likely comfort that the recovery will continue despite the modest removal of accommod

who'll take over from here >> steve liesman has the exclusives >> i want to talk about what you guysre covering as breaking news right now which actual street wall street is expecting it. >> we have gary comb and john taylor of a renown there is been some perspective >> taylor fell 9% and kevin warsh remains 27% where he was look at gary kcohn, how about th outlook for what kind of policy the next fed chair will enact. and 48% say unchanged. you can read this chart anywhere you like 58% say loser or unchanged or more and more than 80% says tighter or unchanged the risk seems to be on tighter. lets look at the expectations for monetary policy and physical policy on monetary the outlook is coming down. it had been 2.3% for 2018 for the fed funds rate and now it is down to two. partly because of the screen the outlook for fiscal policy has also come down if you look at the average it is all plus 3 quarters and 1 quarter, that's half a year later than expected. if you look at the nevers, 31% would be healthcare reform they're following the healthcare reform why part of the reason because

let's get analysis of cpi retail sales from steve liesman what a morning >> the consumer sentiment dataally what's followed by wall street are the retail sales and inflation numbers. the inventory numbers coming as expected here's the data. unchanged on cpi missing by a tick core cpi up just 0.1 and think about these numbers being higher than the gauge that the fed looks at from 0.3% to 0.5% these numbers not getting there. retail sales defying expectations and very interesting given that consumer centiment is still pretty high. let's look at some of the details. first the cpi details. prescription drugs an outlier, up 1%. new vehicle prices down. airline fares down and gasoline station sales down big, 2.8% now we'll look at the retail details and you can see some of the deflation in the sales numbers there. sporting goods down 0.6% department stores down 0.7% and gas station sales down 1.3%. all of this combining, guys, to lower the probability of the fed rate hike. the third rate hike coming in. down to 38%. one of the lowest probabilities we've seen this contract had traded above wit

. >>> let's bring in steve liesman, cnbc's chief economist. >> we can do this any way you like i am the senior economics reporter. >> if you were chief economist. >> the thing that stands out to me is a nice durable goods number unfortunately, it looks to be driven -- not unfortunately, but it looks to be driven by civilian aircraft. i know you had a good profit number yesterday from boeing apparently they are making plenty of airplanes and shipping them the ex-transportation part not quite as strong and the investment part, look, i think beginning 15 years ago, one of the main value-added on this number i told you was that it's incredibly volatile. you were up 07 last month, you're down 0.1% this is the last bit of data you're going to get to estimate that number. so we have had something of a rebound in business investment the fed yesterday upgraded its take on business investment. that's going to be a key for economic growth in the months ahead, because we have had a real lack of it in the economy if we can get things going on the business

cnbc's senior economics reporter steve liesman is here. 's your take on these -- >> good numbers. you know, we're still right in that range and the question is going to still be asked as to when ever did we break out of the range? and i do this every month. i remind that we were up near 2 million units on an annual basis back in the heyday and nobody quite knows what the right number is for this situation let me go through the numbers. a strong number on the single family starts here 849,000. multifamily, 366 that's been a little bit challenged and when you talk about the weakness that's happened over the past several months a lot of it's been in the multifamily sector as rick pointed out, big numbers in terms of the permits, which say that things are going to continue going on. a lot of talk about what's challenging housing. this rise in rates a little bit when it comes to the federal reserve, that a little bit maybe has translated over to the mortgage market. the tariffs on lumber is something to said to reduce homebuilder sentiment in th

deregulation and animal spirits, even 2.5 or 2.75, or even 3 which is what we're shooting for >> steve liesman we're running above where we should be just because of the population and demographics. >> -- i'm getting to feel better about gdp. and he says it's working you're working with liesman and i'm being successful and i said when i finish with him i'm going to start with andrew this is a much tougher nut to crack. right? >> practice. >> if i can get liesman even to 2.5, where he says that's possible, you know, in communist countries it's very difficult. >> i would say 2.5 >> if i could get you to believe it's possible then i'll work on 3 after that because it's coming i think. >> i hope you're right >> as america gets greater and greater. >> i can only hope you're right. >> even if you're wrong about it >> i would prefer to be wrong about it i genuinely would prefer to be wrong. i would love to see 3% growth. love i would love how about this not only would i love to see 3% growth i would love to eat my own words. i would love to tell you that president trump is responsible for it >> you h

. >>> ecb president mario draghi has been speaking right now and steve liesman has a few of the highlightsd morning, andrew. ecb president mario draghi not giving an inch on his accommodative or highly accommodative policy saying a highly accommodative policy is necessary, remains necessary, sees no signs of inflation picking up and expects headline inflation to remain subdued in the coming months. he just said this in answer to a question first of all, they did not discuss the idea of when they would reduce their stimulus. he said we discussed no precise date for when to discuss the change and, quote, we aren't there yet. so while the u.s. federal reserve seems to be moving towards a tightening policy, mario draghi not giving an inch. there's an expectation out there that perhaps in september they'll announce what they'll do after december, 2017, when their qe is supposed to run out. right now he is saying it is full steam ahead on qe and maintaining this bias towards essentially doing more if the situation turns badly for them not saying, hey, we'd do less if it goes good so it's a symme

steve liesman joins us with the details.e inflation finally starting to -- >> i don't call it wage inflation. i call it wage growth. we can talk about the difference a little bit later but that check with your raise might finally be in the mail a new survey from the national association for business economics suggests that wages are already on the rise. 47% of the 101 businesses surveyed said they're hiking wages up 8 points from last quarter and the second highest reading we've had since the end of the recession the same percentage that they expect wages to rise in the next three months and employers are saying it isn't easy to find workers 35% saying it's difficult to hire, 27% say no difficulty, and 20% didn't try to hire and 18% don't know but, take a look at the strategies being used by this 35%. 22% are rising pay to find workers. 19% are training internally. and joe there's your 10% are automating more instead of finding workers. and 4% are actually lowering requirements for the job businesses also reporting positive

steve liesman is here with exclusive results from cnbc's fed survey >> yes, and we're on the fiscal andy side because both are really important. and when it comes to both of those things the market is dialling back its expectations both for monetary and fiscal policy here are some of the top line numbers. 100% see no rate hike coming at tomorrow's announcement. but 72%, which is a bit above where the market is, by the way, when the fed market, do see that third rate hike coming by december, and the balance sheet decline in eptember. nobody's before that a few were after that. that is two months earlier than the prior survey, i suppose if there's a possible surprise tomorrow, it would come with the announcement of the balance sheet decline. it is not expected in the market according to our survey. now, looking at the outlook for rate hikes, you can see that since march it's come down we were looking for 2.3% next year now it's down to 2%. 2019 also down 0.3 to 2.4% and the long run average, remember yellen said the fed didn't have really very far to go is now down to 2.7% from 3% and tha

look what happened there raises taxes is the way to go, rick let's get to cnbc's chief economist steve liesmanics -- >> it's been awhile. >> since yesterday >> i didn't call you chief economist -- >> you called me chief economist. >> tried to throw you off. >> i thought maybe 24 thursday -- >> cnbc had a chief economist. >> they did. bill wallman >> and then you had another person, the woman with the chickens >> kathleen hayes? >> marcy -- >> oh, that's right. we did >> i used to appear -- >> why don't we hand that title out more >> i don't know. i'm not an economist >> your work is better than the economist -- >> sometimes my work is pretty good sometimes it's pretty good i want to talk about this thing right here which is you have two things going in the same direction. you have the inflation coming in weaker than expected retail sales coming in weaker than expected. it's got to give a little pause here i'm looking at the inflation data and i'm seeing here, really muted gains for even some negatives. obviously a big decline in energy we expected that a decline in vehicle sales vehicle sales