. >> reporter: for the first time, chairman ben bernanke and his colleagues at the federal reserve laid out their long- goals for the economy. their aim? an inflation rate of 2% and an unemployment rate somewhere between 5.2 and 6%. you could think of those numbers as the fed's definition of what a normal economy should look like. and that puts bernanke in a tough spot, because fed policymakers forecast they will not reach their own goals for the economy for at least three years. >> the framework makes very clear that we need to be thinking about ways in which we can provide further stimulus if we don't get some improvement in the pace of recovery and normalization of inflation. >> reporter: markets, caught by surprise by the fed's promise to keep rates low through late 2014, initially rallied on the news, sending the interest rate on five-year treasury notes to a record low. >> the market did respond positively. equities, stocks went higher, longer-term yields on government bonds fell, so the market responded positively and one thing about monetary policy is once it's announced, it's a

bernanke knows stocks are the way we save money. bernanke also knows if he's going to keep rates ultra low, he's going to drive savers to the high yielders. stocks like at&t, that quarter wasn't so bad, verizon, pfizer. he's sending you out of the fixed income aisle, wall street gibberish for bonds. toward the high dividend aisle. that's all good with me. uncle ben is unintentionally throwing us off the scent of what stocks to buy right now. his saturnine approach may not be in sync with reality. i know it not his job but he's making mine a heck of a lot harder. then there's the president. he has to say things are better but in the same paragraph he has to say things are still pretty bad because in the aggregate, the employment numbers are nothing to write home about. and let's not forget the republicans. they'd like you make you feel there is an obama-inspired depression going on and the only way to cure it is to give rich people tax breaks so they can create businesses. i'm not going to get involved in the politics of the moment.

bernanke and liesman take broadway. bernanke as himself.e committee. >> yes. >> raj tweets, have a conversation with some apple geniuses about how to stimulate the economy. william tweets, how about bernanke lectures the house and senate on budgets and resolving the debt problems? >> a lot of good responses. we'll get some more throughout the show. >>> all right. coming up next, we've got a sneak peek of a first-time advertiser in this year's super bowl sunday. "squawk on the street" straight ahead. >>> later on "squawk on the street" -- >> our century 21 agents are the biggest tycoon in real estate? >> we'll find out soon enough. century 21 will be here to tell us all about that first ever super bowl ad. will their commercials embody the smaller, bolder, faster spirit of the brand? time will tell. we'll be right back. that is better than today. since 1894, ameriprise financial has been working hard for their clients' futures. never taking a bailout. helping generations achieve dreams. buy homes. put their kids through college. retire how t

. >>> federal reserve chairman ben bernanke has extended easy monetary policy. we have more from the business desk. >>> the low lending rates were set to expire middle of 2013, next year. but that's been pushed back by more than one year. the u.s. central bank says it will keep key interest rates at very low levels until at least late 2014. in a statement released after the open market committee meeting on wednesday, the federal reserve said it will extend its ultra easy monetary policy by more than one year. the fed says corporate capital investments are slowing and that the u.s. housing market remains sluggish. >>> fed chairman ben bernanke says credit woes in europe have strained financial markets around the world and could pose a risk of severe economic deterioration. >> we continue to see headwinds emanating from europe coming from the slowing global economy and some other factors, as well. i don't think we're ready to declare that we've entered a new, stronger phase at this point. >> bernanke also said the fed is prepared to take further steps if it sees t

he is now pushing congress to help housing bernanke he wants the broke home proper offers fannie and freddie owned by the u.s. taxpayer to provide cheaper mortgages to more of the same taxpayers makes sense we think maybe bernanke he has his hands full just propping up the big banks let's get to today's capital account. as i said europe is really a sore that will not heal government medicine yeah not helping so much so let's see what's been going on lately france had a not so hot bond auction the country may not be looking so aaa after all spain is warning its banks to set aside fifty billion more euros to guard against bad loans greece needs dough as some of its citizens are forced to search through dumpsters literally for bread and you see it right there now the country faces the risk of default in march unless it gets a new bailout deal also investors drove appeals on hungary's debt they came close to ten percent italian ten year bond yields jumped back above that key seven percent level and trading in shares of unicredit the bank you see right there it's italy's largest bank by a

. >>> ben bernanke has extended policy, good morning. >> good morning, catherine. the super low lending rates were set to expire in the middle of 2013. that's been extended by more than one year. the u.s. central bank says it will keep key interest rates at very low levels until at least late 2014. in a statement released after an open market committee meeting on wednesday, the federal reserve said it will extend its ultra easy monetary policy by more than a year. the fed says corporate capital investments are slowing and the u.s. housing market remains sluggish. fed chairman ben bernanke says credit woes in europe has strained financial markets around the world and could pose a risk of severe economic deterioration. >> we continue to see head winds emanating from europe, coming from the slowing global economy, and some other factors as well. i don't think we're ready to declare that we've entered a new, stronger phase at this point. >> bernanke also said the fed is prepared to take further steps if it sees the recovery is faltering or inflation is not moving towar

ben bernanke, the chairman of the u.s. federal reserve, said financial conditions may improve slightly. interest rates will remain at or around where they are until 2014. >> for anyone looking for a strong recovery in america, ben bernanke hit a downbeat note. he has pushed back the date of the let the interest rate rise until late 2014. that is in the hope that the extremely low rates will spur faster growth. >> many decided to keep the target range for the federal funds rate at 0% 2.25%. these are exceptionally low levels for the federal funds rate at least until 2014. >> the workings have long been shrouded in secrecy. they were less so until today. for the first time, ben bernanke identified a specific target to u.s. inflation at 2%. it disclosed the interest-rate forecasts from each member of the rate-setting team. >> there is to be widespread agreement that clear and transparent central bank communications facilitate well informed decision making by households and businesses, reduce economic and financial uncertainty

bernanke came out and changed the way they report inflation. i don't know how many times the government has done this in the last decade or two. but they're always changing it to make it look better. they're lying to us again, larry. >> i've got to jump, jimmy rogers. thank you for your update, my friend. please be well. >>> next up on "kudlow," why isn't anyone facing up to the issues of our time. the near-bankruptcy of our u.s. government. spending, deficits, debt, the lack of economic growth. no one is talking about it. not congress, not the white house, not on the campaign trail. i want to talk about it. we've already started. much more to come. please stay with us. "the kudlow report." nesis. in a new, faster-acting formula. zero-to-sixty in less time than a porsche panamera s. the 429 horsepower genesis r-spec. from hyundai. the two trains and a bus to the 5:00 arider.holar. the "i'll sleep when it's done" academic. for 80 years, we've been inspired by you. and we've been honored to walk with you to help you get where you want to be. ♪ be

bernanke the you know acted is trying to stave that off with preannouncement that they're ready to do another round of quantitative easing what it was that doing as propping up oil prices that sending gold higher and that keeping interest rates low it's destroying everyone on fixed income so is his policies are counterproductive not contribute to the to this income inequality and distorting those on fixed income. that's what they're doing they have not learned a thing so the thing i'm actually worried about is that these heroes is a negative real interest rates these q.e. programs these lock in rates until twenty fourteen and beyond that they may actually work not that they'll work you know what the p.r. rationale is but they'll actually work in preventing banks from going bankrupt and keep the financial system afloat while the rest of the economy can use the kind of model to do in this new normal of high structural employment eventually leads to social unrest and that's what we saw a kind of with the occupy movement and we're seeing more and more what do you think what do you think a

>> bernanke's opening statement was enough to send the markets into positive territory. some traders sounded a familiar note of caution here. >> we'll run either way with the story, right, and say it's great. the fed is going to be there. on the other hand, you're going to say things aren't as good as the way the fed says. it opens the door for the fed to help stimulate the economy more. that's the overriding factor. we've rallied 100 points. we were down 50, we're up 60. the market likes that. do i necessarily agree with it? it's another manufactured rally. it's frustrating and confusing for investors. the truth; it's confusing for the market. >>> let's take a look at how those markets are fairing in light of what that trader was saying. while it's confusing, and it's also very difficult, you've go to remember, to figure out how to play a market when you know that interest rates are going to be steady at the historic lows for another three years to come or two years according to ben bernanke's statement. as you can see, these markets mainly positive taking the cues from

i actually am an admirer of ben bernanke. i think that the actions taken by the fed in the fall of 2008 probably kept this economy afloat. but neither mr. bernanke nor the federal reserve are infallible. many of the things that they're doing could be downright dangerous. we have as of year end, over a $15 trillion deficit. every time -- when interest rates rise, and eventually they will rise, if we rise one percentage point, that's $153 billion more of interest for a 1 percentage point increase. we have treasury bills almost at 0. the rate on treasury bills is 0.04%. that means in six months on a million dollars, you would pay $200 in interest. we all can remember times when interest rates were significantly higher. one of the questions i think we as americans have to really ask ourselves, why, if we are the richest nation in the history of the world, why are we a debtor nation? this can be leading us nowhere good. >> rick: so as far as announcing the rates are going to stay near 0, until at least the end of 2014, is that to

fed chairman ben bernanke reportedly said, "so far we're seeing, at worst, an orderly decline in the housing market." then president of the federal reserve bank tim geithner said "the we think the fundmeamental of expansion going forward still look good." they believe at the time inflation was the greatest danger to the united states' economy and not the housing market. >>> let's take an early look at the markets. jeff cutmore live in london for us. good morning. >> hey, good morning to you. and of the transcripts are fascinating. they show how much bernanke and others underestimated the consequences for the globe financially from the slowdown in the u.s. housing market. i'll tell you why the transcripts are important and why people are seizing on them right snou because they want to know how it shaped fed thinking going forward and just why bernanke so keen to make qe-2 and possibly qe-3 happen here later this year to stop the u.s. economy sliding away from its recent growth. so fascinating reading. tells us a lot about fed thinking right now. the markets today, they're trading high

he and ben bernanke and mervyn king all went to m.i.t. together. they were schooled -- >> and the similar types of lessons they thought. that's an interesting point. silver, you still see it going to $50. >> yes. >> gold, $3,000. >> easily. it's going to be -- >> a lifetime. >> exactly. >> which is about two weeks. >> the way you live, in the next three years. enjoy the rest of your life. >> scott, thank you very much. >> i'll be holding the fort down. >> herb, are you talking to yourself? what's happening? >> i was talking to our producers. i was looking at some names i want to discuss and just point out because what i like to do is take a look at some of the companies that are trending on stock picks. it gives us an idea of what people are talking about at this

diamond all you other sh'ma gagne's you have abandoned ship get off i'm in charge right have ben bernanke you better in charge of rescuing the cruise ship his solution would have been to take a boat out of the ship with a crowbar and make the hole in the boat and all the problems bigger that's the central bank solution to the global economic crisis is to make the whole bigger with artificially low interest rates this is what's making the situation even worse and of course in europe we find that they're going to expand the european central banks credit lines by a trillion euro that's the exact opposite of what is required to bring some of this accountability that you're talking about the maritime law stepped in people are drowning. don't go in there obviously dying so maritime law came in and said ok we have to impose the law now in the global economy people are dying from the derivatives that are being created that are making the top one tenth of one tenth percent of fabulously rich and everyone else is choking on their own fiscal vomit and the regulators are making that easier for the cr

n d say any did a hissy fit let's cut to jam right now this one isn't two thousand and eight and bernanke is being an academic it is no time to be making it is time to kill the bear stearns course listen open the door and window he has no idea how bad it is out there. he has no. right or has almost embraced. you know what it's like out there now cramer he got his word member right after that paulson went in front of congress and said give us three quarters of a trillion or we're going to declare martial law that came out in the in the testimony later which turned into that was tarp and it turned into when you add all the extra tarp features almost fifteen trillion in bailouts we know from request freedom of information act that there was a seven trillion that went directly into the banks pocket another seven trillion of ancillary kind of was just tributed to these guys gary simply have that kind of money been used to bail out the homeowners hey the recession depression would have been over already two years ago big obama would have come out like somebody who is a populist representing the

ben bernanke appearing fourth on the list. and then down here.ext award we want to give is the power player of the year award. the most movement per speech and that was, drum roll, charles placer, philly fed president. just barely edging out bull ard. .92 versus .91. all the way down here is where you find bernanke. well below the others. the other thing you see here is a lot of the hawks do the talking. evans is the first real dove to appear right there in market movement per speech. finally, one of the most interesting parts here, guys, the market neutrality award. don't take this the wrong way. this is not because they're boring, it's because they are likely to move the two-year up as down. last year was fed president from boston but the market neutrality award this year goes to dennis lockhart of atlanta. it's interesting to follow this person because he often could be on the side of where policy is going. bull ard, plosser and fisher these are the hawks tend to move the two-year yield higher and down here the doves tend to move it lower. loc

so chairman bernanke testifying, you do have a refunding announcement in treasuries.could back up yields a little bit in front of that supply. and of course we've got that ever present nonfarm payroll number at the end of the week. with the fed on protracted hold and bernanke testifying next week, it would not surprise me that these overriding technicals kick in and we still see lower yield. you saw 5-years made new low yields today. 10-years could easily approach their low too over a short period of time. >> jeffrey, all things sort of being equal, are we looking at oil at or just around $100 a barrel for the foreseeable? >> that's where we are now. gasoline is the only reason this market is here now. the gasoline has blown out against the crude oil by about a 25% increment and a crack value. without that we'd probably be mid-90s right now. again, we have to see that. remember, usually the strongest markets become the weakest following. i have a feeling the gas is going to ease off next week. it's blown out against all rationales this week. >> peter, blue chips, the

my suggestion, ben bernanke, chairman bernanke is a baseball fan.e. just like they to do for baseball players. anybody sitting at that table could move the market this much. what does a real contributor do in that same circumstance? you're a smart guy. certainly you and larry could come up with that i would think relatively easily. >> let's do this. could you put back that chart that showed the positives and the negatives? that's my favorite chart, actually. >> real quick. we got to wrap it up. >> so governors, they don't like to make waves. >> they don't make waves. >> if you look at all the measures there, usually the top ten, they're always -- governors don't like to make waves in public. >> that's true. that is a discussion. let's leave it there. >> when i saw this exact discussion on regis and kelly last week. you should have seen kelly when she found out. she had no idea. the whole thing. they did this -- no, they actually didn't. this is the only show in the world that could have just done that. it is. >> absolutely. >> can you imagine? harve

also bernanke's decision to hold press conferences. it worked. both the press and the public liked the innovation of the fed chairman holding press conferences. okay. the most overrated, pat? >> the most overrated, john, i think is the threat from iran. we're getting all this hype from the neokinds and others. we have to go to war to save ourselves when iran represents no threat whatsoever to the greatest super power in history. >> texas governor rick perry, who came in as the frontrunner with lots of money, lots of promise and it turns out he was exposed in the debates as someone who cannot think on his feet. the republican debates were the best idea ever. >> rick perry, the idea of him was so good. >> well, i would say the most overrated was the euro. the euro has not virtually collapsed and may bring about a huge collapse of the entire european economy. >> most overrated, the u.s. budget will cut $1.2 trillion. the national debt is 15 trillion. 1.2trillion is a drop in the bucket. it won't even pay for the long- term interest on our debt. most

they need to get their house in order and so you know in that respect i'm just wondering if ben bernanke is announcement that interest rates are going to stay where they are he doesn't see them changing until at least twenty fourteen if that there is any way you know what the talk is over there at davos because some are saying well hey that's good news interest rates are going to stay low but at the same time it gives kind of a gloomy outlook for where exactly bernanke he thinks the economy is going to be headed over the next two to three years. exactly alone my question is for all these people that are bullish on the u.s. economy are saying things are getting better if things are getting so much better then why is the fed keeping interest rates at zero until the i can see four years that doesn't make me feel like things are getting better and that's making it so that savers still can't make any money and are oppressed which is a major concern for you and for people that are the speculators the jamie diamond the brian moynihan those guys that are here at davos as far as reaction to the f

yeah i think like that and bernanke you say that this is what happens when you cut and so i mean do you think that affects the discussion at all either every republican candidate is still calling for more cuts in government spending and they think that a magically make the economy grow well to the degree that growth in the economy is dependent on the government spending then yeah when you cut the you know when you cut government spending then you're going to have a drop off in the economy i think that's where the idea that austerity is helpful sort of comes into play here is it's not helpful in the immediate quarter after you cut it's helpful down the line because you're removing a government which is in sort of intruding on the private sector and then when to pull back the government if you are the private sector to step in a place then you know three four quarters down the line that's really going to see a lot more robust growth what we have seen over the past three years of sort of massive spending and bush you know the bush administration's spending is just both negative growth in t

anthony. >> reporter: scott, bernanke and company are signaling that a full economic recovery is really still years away. the fed not only pushed out its pledge to keep interest rates low for another 18 months. it also lowered its growth forecast for the economy. the fed now expects the economy to grow, at best, 2.7% this year, accelerating to just above 3% next, and 4% the following. and progress on the unemployment front will be slow. the fed says the jobless rate will fall no lower than 8.2% this election year, 7.4% next year, and, scott, the fed says unemployment won't drop below 7% until 2014. >> pelley: that will mean a lot to the election coming up. anthony, thank you very much. pivoting off the state of the union address, president obama set out today on a three-day tour that will take him to five states that just happen to be battlegrounds in that fall election. while the white house insists it's not a campaign trip, he's talking up his campaign message of economic fairness. norah o'donnell is traveling with him tonight. norah. >> reporter: and, scott, it is clear today that pr

for the first time, benjamin bernanke identified a specific target for u.s. inflation, 2%. >> there is widespread agreement that clear and transparent central bank communications facilitate well-informed decision making by households and businesses, reduce economic and financial uncertainty, increase the incentives for monetary policy, and enhance accountability for the public. >> despite the gloomy outlook, u.s. stocks moved higher. investors reacted positively when they heard the central bank was willing to act to support the recovery. president obama has a lot riding on the future of the economy. based on the central bank forecast, the unemployment rate will still be above 8% when he faces reelection in november. >> at least 11 people are dead or injured following the collapse of a multi-story building in rio de janeiro, brazil. witnesses say they heard an explosion before the building collapsed. rico, news of a dramatic rescue in somalia? >> that is right. president obama praised u.s. special forces who went into central somalia to west -- to rescue weste

and ben bernanke has time to moonlight. he is going to teach classes at george washington's business school. the classes will be live on the internet. bernanke has a history on campus, he is a well known professor, he taught grad school at stanford and chaired the economics department. his term as fed chairman ends in 2014 and it's possible that he could return to academia. that's it for now. not bad, getting the federal reserve chair to teach you thou fed works. >> 4:46 now. it's a feel good friday. some fog and great weather. >> we do. we have great opportunities to get outdoors so saturday and sunday inland temperatures are going to be in the mid-60s. so, great weather for outdoor activity. you can take those kids out of the house if you didn't get a chance to do so last weekend because of the rain. 52 degrees atgilroy. we're starting out mild, 54 in livermore. san francisco's at 53 degrees. we're starting out so mild even with that fog, that will probably burn off before about 9:00 a.m. we'll see a comfortable afternoon

because what ben bernanke would love to see is what he calls a virtuous cycle. and spend, that means there's more demand for people to get hired, more people hired, people spend. your house starts to come back up. that's what they're trying to orchestrate, and you just wonder if they'll go too far. obviously, when that initially happens and at some point with so much money it might happen or will happen, do you recognize when it's time to turn off the spigot? jenna: in 2006 they were most concerned about inflation, not necessarily a housing crisis, and now we're back again looking at inflation. is that a concern you have? >> inflation is going to be a massive, massive problem. it's hard to pinpoint when it's going to happen, but it's inevitable. you just don't know. and initially, as it happens it's going to be good because everyone's going to be happy their 401(k)'s getting better. it's only when it starts to run off the rails, these guys are supposed to catch it before the rest of us do. jenna: well -- >> we'll see. [laughter] and if they don't, ben bernanke w

it was also the cusp between the greenspan era and the bernanke era.alan greenspan presided over the first meeting of the year. now secretary tim geithner, then the head of the federal reserve bank of new york said into the record, i'd like the record to show i think you're pretty terrific, too, and thinking in terms of probability, i think the risk that we decide in the future that you have been even better than we think is higher than the alternative." the greenspan reputation has not matched geithner's predictions,s that. >> no, there are many people who subscribe to that view at this point. this was a remarkable sendoff for a man who was regarded as the iconic central banker, the person who played that role better than maybe anyone else ever had. he guided the economy through almost two decades of fairly steady growth. people thought the economy was still on an upward trajectory at that point and his colleagues praised him to the sky. one called him yoda-like, and another said he left behind for his successor, an economy that was a tennis racket wi