also with us is andrew levin.eard before the break saying there is no urge in a hike, the economy still has plenty of slack, we are not at full employment. do you agree with him? >> i do. the congressional budget offices produce estimates of full employment. we take them twice a year. the latest estimate indicates that we are still 3 million jobs short of full employment, which means we need another year or two of strong payroll growth to close out gaps. according to the cbo's estimates, the fed is tightening at an earlier stage than they ever have before in the last few decades. that sense i agree with austin and with a bunch of other commentators in the past few days who said that it seemed inevitable that it wasn't .ecessary >> from the date left off to the day it slackens off, the unemployment curve drops off. to think that you are tightening and i don't think anyone at the fed does think that. the other point is this. it's true that u.s. economic growth has been disappointing, but the disappointment has been

a collision in the near term over the path of future increases, here's what andrew levin said. >> thearkets are misreading 17 fmc canadian members expect the funds right to be up by one and a half percent. that's the committee, not the market. >> you agree that the markets are misreading the fed. >> yes, this is something we have been talking about. the market currently pricing a little more than two hikes, the fed -- we tend to agree with the fed on this. forgive me if you have heard me say this for the 50th time, you will have as scenario over the course of 2016 where inflation continues to rise and the unemployment rates continues to fall, and over the course of the year as the things play out, the market will come to realize that -- they might be wrong, but the fed might be wrong. there might be even more than four hikes. we think you will see a classic hiking cycle, but a lot can happen between now and then. 4% by next year on in the employment rates, and two and a half percent at a core and half for inflation.el mark the dot in the research that show the actual voting members ar

andrew levin told the cc a collision in the near term over the path of future increases. >> the markets are misreading the extent to which can out of expect thee members funds rate to be up at 1.5% by next year. who gets to decide that? the committee, not the market. scarlet: do you agree that will see a collision? guest: i think it is possible but the committee tends to follow the market, not the other way around. in september everybody thought they were going to hike that the stock market that hike. they chase the stock market and not the other way around. 5 when you think of -- joe: when you think of the stock market, you think of them being fairly closed and i sleep with the rest of the world. there is a correlation now between them and oil. when did this happen. when did it become the chinese currency. you did see correlations with other parts of the market? >> august 11 there is no question. be the d siding event of 2015. that bodes the future. that is telling you they are not just going to be like any other currency going forward. ofna is the largest consumer priorities. china is

let's get some reaction from andrew levin, special advisor to the special that federal reserve, current professor at dartmouth college. you said that this would be a mistake for the economy. tell us why. andrew: the fed has a dual mandate to promote maximum employment and price stability with a 2% inflation goal. ismy reading of the data still falling short on the employment mandate and the inflation mandate. todayk it is remarkable that it is unanimous decision. chair yellen was obviously successful in moving the committee to a momentous decision. it is a quarter-point hike. the real question is -- what will they do next year? i agree with what richard claret theet a few minutes ago, fact that they are referring to actual progress is a key condition going forward. tom: you have a wonderfully controversial view. we have heard slack this, slack, slack, slack. you wrote a terse note saying that it was mostly about cyclicality. you get an improved economy this angst will not so much of evaporator become less. why have that right? andrew: yes, if you look at the primeipation rates of the ei

andrew levin, a former advisor to janet yellen, told us earlier this week he sees a collision over the path of future increases. >> i believe the markets are misreading today the extent to which tend out of 17 fomc committee members expect the funds rate to be up at 1.5 but the end of next year. who gets to define that? the committee, not the market. bishop is the lead fixed income strategist at rbc, which has $271 billion in assets under management. do you agree, that the markets are misreading the fed? >> no, i don't. we think the market may have a better idea of where rates will eventually end up. our view is, going into 2016, we expect to see the projection from the federal reserve, those numbers ratchet down and again to converge closer to where market expectations are. scarlet: what would profit federal reserve to bring them down? they didn't do anything here except to tweak the edges. >> they did bring down the intermediate. that signals -- supports the view that they will take a gradual approach to raising interest rates over this long, extended tightening cycle. what would cau