bernanke -- >> reporter: it began in 2006 when bernanke became the 14th federal reserve chairman, takingrom the man once called the maestro, alan greenspan. at first it was smooth sailing. the u.s. economy was expanding, storm clouds seemed far away. but all that changed in 2007. >> the economic outlook has been importantly affected by recent developments in financial markets which have come under significant pressure over the past few months. >> reporter: the slump in housing gathered speed, foreclosures surged. publicly, bernanke remained upbeat. >> our forecast is for moderate put positive growth going forward for the next few quarters. >> reporter: in fact, the great recession was just beginning. bear stearns collapsed in 2008 and was gobbled up by jpmorgan chase. lehman brothers collapsed, stocks tanked, and credit markets seized up. >> this plan is an emergency plan to put out a fire. >> reporter: bernanke stepped on the gas and revved up the engines. >> mr. bernanke was aggressive at a time when our country needed him to be aggressive, and quite frankly, needed for him to be decis

bernanke gave investors a big christmas present with three parts to it. he removed the uncertainty when the fed will taper and how. in fact, in the press conference, he even gave us a road map for the next 12 months. second, they compensated what they are taking away with a lot, in particular they said interest rates would remain low for a long time and thirdly, they upgraded their economic projections. so put all that together and the markets love this. for investors it's great. for businesses, it's quite good because it increases the wealth effect and therefore households are better off. but for the average person and particularly the unemployed person, it is not clear whether this will materially influence their outlook. >> you know, mohammed, mr. bernanke was asked today and it was a question he didn't really seem to have a particularly adroit answer to, that is why hasn't quantitative easing or the the stimulus program created more jobs than it has, or has it at all done that? do you say? >> i think what it has is avoided something much worse. i'm wi

and ben bernanke. former partner of private equity firm bain capital and also the author of "unintended consequences. oh -- consequences." years andthrough the you also lived through the bernanke years, culminating in your book. in your view, which fed chairmen serve you best? [laughter] >> i suppose alan greenspan. even.t things steady and if you look at the class of 1982, it has been an extremely successful class because over this time, the economy has grown by leaps and bounds relative to other times. are talking about what ben bernanke's legacy might be but i feel like we do not know because we do not know where it ends and the flooding of the markets and all this money could and poorly. money really led to the asset inflation and lead to a crash that was very punishing for a lot of people. do you think we can take stock in bernanke today e >> i disagree with you on greenspan. i do not think the fed has a big impact on asset bubbles. small but not large. i think ben bernanke will be recognized as s

that's outgoing federal reserve chairman ben bernanke. he's talking about unemployment, inflation, and monitory policy. he mentioned today that he set transparency as an important priority for the time that he served as fed chair. when he talks like that is the public meant to follow it or really is he talking in technical terms to an audience of journalists and others who understand the technical talk? >> i think he's doing the best to straddle both worlds. his first attempt to be colloquial than his "60 minutes" interview that he did. he has done a great job, especially when you consider where the fed is coming from. his predecessor alan greenspan led in policy by discretion. we're doing this because we think its best and we're not going to tell you the reasoning behind it, bernanke has gone out of his way to use explanations to the public. he uses terminology that may not be your average person's vernacular, but he has increased the amount of transparency. >> and in this case what does that mean? >> very low interest rates for a very l

that's outgoing federal reserve chairman ben bernanke.e's talking about unemployment, inflation, and highly accommodative monitory policy. and even today he mentioned that he set transparency as an important priority for a the time that he served as fed chair. when he talks like that is the public meant to follow or is he talking in-- >> during the press conference it's difficult for him not to get technical because we ask him somewhat technical questions, but i think he has done a great job. his predecessor alan greenspan believed in policy by discretion, and it was sort of we're doing this because we think its best. we're not going to tell you the reasoning behind it, and ba bernanke has gone out of his way to discuss the policy. he has not use the average person's vernacular, i think he does his best to describe why the fed is doing what it's doi doing. >> in this case what does this mean? >> very low interest rates for a very long time. the fed is going to remain supportive of the economy regardless of this small retreat from the won'

what is ben bernanke's legacy?we would like to hear from you. what has he accomplished or not accomplished? this is "bloomberg surveillance." i am tom keene. scarlet fu and alix steel are with me. jim rogers is with me. tope have fed-less headlines. the jobless rate is dropping to 7.4% in october. that is the lowest since april 2009. the fall and unemployment has led to speculation that the bank of england could raise interest rates as early as next year. there were two winners in last night's $636 million mega millions jackpot. one ticket was sold in california and the other was sold in atlanta. become harder to win as the pool increases. to russia with burgers. shake shack is opening its first restaurant in the country and moscow. they will go for more than seven dollars. that is 50% more than in new york prices. russia 30's opened in years ago and a lot of people stood in line for their grand opening. >> i enjoy and they're fine with zine a few nights ago -- fine cuisine a few nights ago. my people brought it to

bernanke confounded everyone. in true cartoon fashion, bernanke was indeed smarter than the average bear. let's go over -- two bernankes and there was an initial bernanke who was in august 2007 and he had been taking rates higher in lockstep and going in serious overkill and not realizing how it was part of the bond market bubbly and asset prices were plummeting, that he was wrong in not seeing the serious recession in hand, he switched everything. he admitted it was wrong and went all in with ultra low interest rates and bernanke being allow ultra low rates and the 401(k) to recover. he wanted that, and he knew the low rates could pabl make it possible to get rid of expensive debt. he knew it. he knew low rates would help highly leveraged companies staying a float and the president's dud of a stimulus plan. after he got out of the recession, bernanke recognize heed had to use the ultra low rates to keep him there to make up for the lack of hiring and business expansion caused by washington's inaction. he understo

>> i think chairman bernanke did an incredible job. there were a couple of errors. i think the mishandling of the taper announcement last may. certainly his role in the excessive deregulation, loose up supervision in the early 2,000 but everything else was great. they reacted to the panic in 2008/2009. they got international agreement on loosening policy. he increased the transparency of the fed. he creatively came up with new methods when they couldn't cut interest rates below 0. and he has spobly hoo tucked to the american people, i think he has done great. >> woodruff: john taylor, how would you size up ben bernanke at this point? >> i think the actions taken during the panic in september, october 2008 were good. classic central banking, lender of last resort providing liquidity am but if you look before and after that, i think you have to ask questions. overo after person bernanke joined the federal reserve board they held interest rates quite low for a long time. i think that added to the housing boom, to the search for yield and the risk-taking. and then when

is ben bernanke a friend or foe of retailers? ask than a retailer who was schooled by one of ben bernanke's heroes by the way, the late great milton friedman. first on fox business interview, we're pleased to have back with us in person in new york this time, patrick m. byrne, overstock.com chairman, ceo and founder and really renaissance man. patrick, good to see you. the fed -- >> the fed. david: is it having any influence at all on retail sales do you think? >> of course the easy money policy is, a way to prop up retail sales, a way to prop up the pockets of the rich. them saying they will taper in january is like you and i saying we're going on a diet in january. i don't think they can taper. if they do taper we'll slip back into recession. i don't believe anything they say. david: we're seeing retail sales up .7% in november. it sounds like it is fair to say you think the fed's influence on the economy has been pretty negligible? >> i think it as an influence, wholly pernicious. david: how? >> because they are enabling, they

bernanke's news conference which is at 2:30 p.m. eastern time.ing to be very, very highly watched. >> and, of course, this is his last news conference before he presumably moves on to whatever he is going to do next. i thought it was an it interesting conversation you had about a half hour ago about bernanke and greenspan and volcker. >> you know, i give it to bernanke only because the 2007 crisis was so global in nature. >> all right. >> and the moves he made were impressive. >> "street signs" begins now. ♪ it's the most wonderful time of the year ♪ >> it is the most wonderful time of the year but most important week of the year pore the stock market. all eyes on the fed. hi, everybody. good start to the week for stocks. we'll hit them. your other top stories this hour. could america actually become an oil exporter and who wins if we do. why google is buying up so many robot companies and for the files of no good deed goes unpunished, a story abo

>> bernanke got that question. he said, not middle of next year, but twarsdz the end of next year. $10 billion is the pace, that takes them into the late third, early fourth quarter of next year. he made it clear this is a data-dependent, not a preset course. if the economy falters again, they'll stop. on the other hand, he also laid out the possibility that if momentum picks up, they could proceed much more quickly, which would make for a pretty choppy period in the markets. >> rick santelli, where are we going on the long end? are yields destined to go higher now as the fed reduces the amount of treasuries they will buy in those auctions down the road? >> i think that will be the case. but i don't think you're going to see that dynamic in year end and i don't think you'll see it until we get midway through the third quarter. i would say this, if i didn't tell you the country, and i said if a central bank kept interest rates at zero for eight years, what would that tell you about the economy that they were guiding

ben bernanke and the post-crisis ben bernanke. at those individuals differently. >> why? >> i could tell you why. let's give peter a chance. >> this was a guy who got the baton from alan greenspan in 2005 and 2006 without any storm clouds. everyone thought this was smooth and he would be able to coast along on a goldilocks economy that was happening. it did not work out. students of the great depression, the expert on the great depression found himself confronted with much the same thing. he had to invent new rules and new tools for the federal reserve. that has been controversial. those decisions -- we do not know how the full legacy will be measured. we have not seen the wind down of the risk factors that everyone knows are out there. looking back, critics in washington as well as supporters who say they are thankful ben bernanke was in the job if for no other reason that he provided a cool hand. in terms of how he led the fed and made decisions, controversial as they may be, people in washington are thankful he was there. serve

ben bernanke, that was a stimulus. but that cannot be economic policy for this country and economic policy by just flooding money into our system. you have to have confidence. you can give me all kinds of money, but if i don't think i can replace it and i don't have aren'tnd these tariffs coming into this country and we don't get jobs because corporations can do it cheaper are note else and we charging them to have access to our economy, we are not ever going to recover from this mess. we need to have our representatives put these things on the floor. these bad trade agreements are killing us. we are not going to survive otherwise. thank you folks. , the caller reddy was talking about putting bills on the floor to change the system. another is a bill pushing to audit the fed. can you talk a little bit about that bill and who is behind that effort. it is directed by a number of lawmakers. a substantial share in the house of representatives. in the senate, you are seeing a fairmont of leadership from senator rand paul, w

bernanke has laid out 3 criteria for tapering. better incoming data and a stronger outlook, we have got that. plenty of policymakers have shown we have had substantial improvements in the labor market by showing the unemployment rate falling. was his thirdhat criteria, that is turning upwards -- >> and i write -- right. >> many economists on the fence about the fed's message on tapering. sizeey will talk about the of tapering and if we go back in september when it seemed like a 0 billion dollars, it is likely to come back today because yellen will get the chair for the march meeting, that is more likely. a march topic. treasury, aat couple things interesting. the first is that despite -- even if they bring, the supply is lower than 2013. the amount of securities as a percentage of supply bought by the fed will increase. the size of the balance sheet of the fed will continue to grow 3/4 in 2014. inre you could get an impact countries dependent on liquidity in the world. >> inflation a big fan. if the central bank decides to start t

bernanke: thank you. liz: federal reserve chairman ben bernanke begins to finish what he started, he leaves that press conference, his final press conference, after his federal reserve term. good afternoon, everybody, i am liz claman. 24 minutes before the closing bell, we have seen the taper, and it is not so terrifying at all. ben bernanke and the federal reserve taking the plunge announcing come january it will start to reduce its $85 billion per month bond buying program, slicing it very delicately with almost a suz sushi knife qualit. 5 billion from the treasury purchases. ben bernanke saying the economy simply looks better and it is time to wean it off all of the fed's generous accommodation. reaction, the dow moving on that news. from up 44.2 down about the same amount to check it out, back and double digit gains. the dow up 255 points holding onto significant gains at 16,116 or so. up 244. the 10-year treasury yield shot up 2.94%, you can see it moderating a bit. a similar story for the five year

the senate is expected to confirm bernanke's replacement janet yellen. bernanke was asked if yellen supports the program and he said that she fully does. so little change expected in the program for tapering and keeping rates low later on today by the outgoing chairman ben bernanke. back to you guys. >> steve, russelling up the details here. we're weighted to the upside, just 30 stocks out of the stoxx europe 600 in negative territory. shows you how much we're weighted up. and the stoxx europe 600 up 1.4%. last night, the ftse 100 closed pretty flat. just up 5 points. this morning, it's up another 60, nearly 11% higher. we've got retail sales coming out in just under 30 minutes. xetra dax, cac 40 up 1.5%. ftse mib up 1.3%, as well. in brussels, european officials backing a deal to create a bank resolution plan. credit suisse up 2%. santander up 2.25%. these are typical average gains across the sector. take a look at bond rates. how high would bond yields push high. treasury yields, 2.87%. that's kind of where we've been for most of the week. so just a li

>> that's in europe. >> this fellow, bernanke, right?e's leaving, i understand. >> that is correct. >> do you like him? >> he's a perfectly good chap, yes. >> was he all right? with his job? >> he's done okay with the hand he was dealt. >> the does he like cards? >> i don't know. >> i'd like him more if he likes cards. >> i don't know whether he likes cards or not. >> all right. this is enough of this nonsense. this is a dumb channel, all business and economics and whatever it is you guys do. i have no idea what it is you guys do. but that's never going to work. thank you, mr. -- mr. -- whatever your name is. all right. enough of that nonsense. yes, ron burgundy is launching today, apparently. the producers thought they would stitch me up. although i think i'd rather stitch myself up. >>> now, it will never take off, a channel devoted to business will never work. india's central bank wants to wait and see what the does. the rbi says prices are set to slide. we should low food inflation. the policymakers warn they'll keep a close eye on p

watching ben bernanke full labor force participation rate.lem in back in september when you didn't announce taper. why is it a problem low. still at 1978 levels. are we going to hear more fed officials trying to anchor expectations about interest rates? rate spikes, rate rises are kryptonite to the market. ashley: right. -@>> you will see more fed officials out en masse to anchor inflation expectations. more to your point, before the break, ashley, where will the banks park reserves. that is when you talk about inflation, right? that is when banks start lending again and true inflation could possibly pick up steam. ashley: lou, same question to you. you're sitting there. mr. bernanke says, mr. dobbs, you've got the next question, what do you say? >> i don't know that i would form it as a question but rather say, mr. bernanke, well-done, because the, they have managed the, fed in one taper, if you will, to take two elements out of the market. one is they have taken ideology out of the market. you won't hear much discussion now from the hard ri

ben bernanke raining back by $10 billion per month.e has convinced of the markets that this tapering does not mean tightening. the forward guidance finally gets through to the market. he is going to keep interest rates near zero even if on employment does fall below 6.5%. the stoxx 600 trading higher at the moment. that go into industry groups. technology up more than 1%. isancials up more than 1% as oil and gas. optimism in the markets. the united states can continue on its growth path even though we start to see stimulus coming back. our clays say $10 billion per month will be taken off the overall asset purchase scheme. all will be done by october 2014 but we are not going to see interest rates rise until 2015. therefore, growth can continue. bond markets are staying pretty placid. a bit more optimism means that we are less risk-averse. we are therefore selling the more stable asset classes. yields coming up for basis points on the five-year u.s. treasury's. the havens of bonds. we want to get into equities today as we feel that muc

we saw ben bernanke appeared to many people changing the goalposts.t was 6.5% unemployment which would lead to raising rates. now he says the, chairman says until far beyond that, i think phrase he used when they might does that concern you the goalposts seem to be changing here? >> david, let me differentiate between two. one is asset purchases, large-scale asset purchases, qe3 in the parlance of the media. then there is how we anchor the shortened of the-year-old curve. that is the reference to 6.5%. that was not just ben bernanne. it was a statement by the committee. it is in the issued statement. david: i understand. >> we'll go working on, getting back hopefully to normalization, working on the overnight rate which is the fed funds rate or its equivalent when we do these reverse repo operations as they're called. we'll just have to wait and see how the economy develops. i think it was just shifting the ball and going back, really essentially to what we originally did which is dealing with the short term end of the yield curve. that is the beginni

bernanke for giving us the lowest inflation rates in u.s. history as well as preventing great depression

>>some months ago when ben bernanke talked about it it rattled the markets. do you think some of the fear has been built in already? >>i think that's why we saw the s&p pullback about 1 ½% last week. i think caused that momentum for traders to take some of the money and pull some things off and start looking toward next year. >>tell me about some of the sectors out there that you might see impacted by any announcement that comes this week. >>we should see the gold market selloff hard. i think that will press that 1200 level. that's been a key level of support so we're probably gonna see another leg down on that. we'll also see the oil markets sell off. most likely 2 -3 dollars on that type of news. >>both of those commodities have already been dropping. >>absolutely. >>how about equities in general? >>we're probably gonna see the s&p 500 continue to melt down. 1750 is a key level of support and i think that a lot of liquidation is gonna occur as a result. >>you think people should be ready for the turnaround right? >>back to the downside, yeah that's complete

did ben bernanke did forward guidance right this time? markets seem to be dancing duties to right now. >> dancing to his christmas tune, indeed, anna. he did seem to successfully decoupled this idea of tapering and tightening. the taper has begun, but he has convinced investors that will not lead to automatic tightening. is key indicator here -- it almost more inflation based than the unemployment rate, because they will keep interest rates thee to zero well past unemployment rate hits that 6.5% threshold. let's have a listen. >> we are certainly not giving up. we intend to maintain a highly, they've policy. nothing that we did today was intended to reduce accommodation. we will still be buying assets ate, andh rea increasing our balance sheet in holding onto assets. we strengthened our guidance today to make clear that we expect to keep rates low well beyond the point that unemployment hits 6.5%. >> we have ben bernanke's word for it. janet yellen agrees to ritchie supports it. what we have is $5 billion less bonds last month. on bondsse

we just heard from federal deserve chairman ben bernanke -- reserve chairman ben bernanke.ter cook was inside of the room at his last press conference. we are talking about what a monumental day this is in some ways because this is the legacy ben bernanke is leaving behind. he has begun this taper program, the unwinding of the balance sheet, something janet yellen will face, and it will be a real test for her moving forward. >> absolutely. the chairman, we know the decisions he made during the financial crisis, being credited with keeping the economy from falling into the a bass, but he will be judged on how this wind down takes place, as we'll janet yellen. they will be tied together because of this turnover. wasas striking when he asked about whether janet yellen agreed with everything, and whether there might be any surprise in the future, that there was no separation. he wanted to make it clear there was no daylight with regards to these decisions. he consulted with her before she was nominated, then again, and she is totally on board, an important message to the market

the contenders, paul volcker, alan greenspan, ben bernanke. i will have my pick and so will our panel of experts. >>> don't forget, folks, free market capitalism always the best path to prosperity. we're "kudlow" and we'll be right back. my mantra? family first. but with less energy, moodiness, and a low sex drive, i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron. the only underarm low t treatment that can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle,

bernanke? >> i think so. i think they'll go to one a meeting because you don't like orphan meet where is you have a meeting with no press conference. >> thank you both. appreciate it very much. >>> cnbc as you know is your place to turn for live coverage of the fed decision right here on cnbc. we're going to hand it off a little early to "street signs" at 1:50 p.m. eastern time today. that will be followed by fed chair ben bernanke's news conference at 2:30. steve liesman is down there, ty, he usually gets the first question. >> the naked taper. i love that. all right. >> yeah. >> four shares getting whacked right now. warning investors. we'll give you the details ahead and the power pitch. >> coming up on power pitch, this start-up wants to turn a heel on the shoe industry by letting the customer customize their shoes. will the panelists find this a step in the right direction? stay tuned to find out. [ female announcer ] thanks for financing my first car. thanks for giving me your smile. thanks for inspirin

bernanke's last news conference as chairman. >> let the taper begin. at their final meeting, the federal reserve decided to scale ,ack the bond buying program convinced that the economy's cumulative progress allows the central bank to ease up on its record stimulus. chairman ben bernanke who has chosen successor janet yellen also carefully matched to that move with new language reinforcing the commitment to keep interest rates low for the foreseeable future. the bond buying which has swelled the balance sheet will be reduced to $75 billion a month starting in january from the current $85 billion. defended the decision in what was likely to be his final news conference as chairman. >> our modest reduction reflects the committee's believes that progress towards this economic objective will be sustained. with the incoming data broadly supporting the committee's outlook for employment and inflation, we will like to reduce the pace of purchases in further measured steps at future meetings. >> the chairman said bond buying could also increase if the economy

"time" magazine named bernanke its person of the year.financial crisis, the fed is still pumping billions in stimul stimulus. critics say the easy money is fueling risky investments, but unwinding stimulus will not be easy and could upset world markets. >> we have now reared an entire generation of investors that have become dependent on qe to buy stocks. >> reporter: the jury is still out on bernanke's tenure at the fed, but after such an eventful economic journey, he's earned the right to do something a little less stimulating. maggie lake, cnn, new york. >> that last image looked nice, didn't it? look at the federal reserve right now, we'll have complete coverage on the fed meeting today starting at 2:00 p.m. eastern, cnn money will take a closer look at market reaction and what it all means for you and the economy. >>> still to come in "the newsroom," police are now saying the shooting at a medical center in reno was not random. cnn's miguel marquez is there. hi, miguel. >> reporter: hello there, carol. i am at the scene of america's

, and the bernanke era way to do was to begin? >> i think they said, look, we want to do this, but we do not want to do this in january when we might have another political fiscal issue he cut the debt effect goes back into february 7. and at the same time, the economy is good enough that if you're going to do it in january or march anyway, why not just get it started? to doally if you're going it slowly. >> this is about as small a taper as you could do. it is a small paper with a big market reaction. you can see a one percent move, the dow tobacco over 16,000. -- the dow back up over 16,000. we welcome all of you worldwide as we look at this fed decision and move forward to the news conference that the chairman will give. we will see that in about 20 minutes. from our headquarters in new york, good afternoon. this is "bloomberg surveillance coco stay with us. -- "bloomberg surveillance." stay with us. ♪ it's good afternoon. a fed decision and a big decision and in-store day. i richard see with us from credit suisse. jeffrey rose

ben bernanke says the u.s. economy is almost ready to stand on its own two feet without monthly contributions from the fed. that i had that made invest organs heaps for a day but ben berneke t took you him months to admit that the economy was tanking. he stood side-by-side with then president george w. bush, henry paulsen, as they continued to try to convince americans that everything was fine when it clearly wasn't. that administration did americans a huge disservice. bernanke gave it credibility. he came it out and came out from under their shadow. his fed led the charge coordinating in the darkest days of the financial crisis, ensuring the global flow of money and credit. while congress spent much of the last few years actively sometimeying the economy, the if he had has replaced it as the adult in the room. ben bernanke was late to the game. he stepped up. for that, he deserves the nation's gratitude. >> that's our show for today. i am ali velshi. thanks for joining us. >> hello, i'm richard gizbert and you

how about grading bernanke? overall he gets a "b." a little bit up from the b-minus in our last su va here. some of the comments we got from our respondents here. those giving him an "a" included you can see steven gallagher, makes a kind of critical comment. time may tell us monetary policy took pressure off fiscal policy and therefore contributed to poor fiscal policy, still gives him an "a." the next person giving him an "a," stuart hoffman. calls him a national hero. alan blinder from princeton, a little more critical, said without lehman he would have given him an "a." how about some who give him a "b." "a" for the crisis. incomplete for 2010 to 2013 according to barry as the cost will be realized over time. a lot of commentary like that and this, from jon riding who says "a" for handling the financial crisis but a "d" for the monetary policy leading up to the crisis. too easy on the way and the continuation of qe. lot of comments on that. >> very interesting. your view tomorrow, will we get the taper or not? >> i think it's line

did ben bernanke finally get full guidance right? >> it looks like it. on his last press conference, bernanke convinced investors tapering did not mean tightening. that is the crucial part of what we got yesterday, the fed could actually be more dovish, in part because they are keeping short- term interest rates at close to zero through 2014, well pass the time the jobless rate is below 6.5%. givingre certainly not up. we intend to maintain a highly accommodative policy. nothing we did today was intended to reduce accommodation. we will still be buying assets at a high rate and increasing our balance sheet and holding onto those assets, and our guidance today, we strengthened guidance to make sure we expect to keep rates low well beyond the point that unemployment reaches 6.5%. >> he also said that janet yellen fully supports his decision which is crucial. there was one dissent, in part because they do not think the asset urges his shows slowdown, so it was 9-1 the vote. it will be dated depended. we're talking about the fed having on their balance sheet

ben bernanke did what did he and still satisfy bond and stock markets. he made everyone feel good about the economy. >> it did two things. they did decide to taper. they're going to slow down their bond buying, but they're still going to be buying $75 billion a month. there is still going to be upwards of half a trillion dollars worth of these bonds. they haven't stopped. they certainly have reversed course. they're just slowing down a bit. but the other shoe that they dropped was one that is really the source of the big boom today in the stock market, and that is they're announcing they're not going to really begin to discuss raising interest rates until the unemployment rate falls a good bit further. >> which they don't see it happening until 2015. explain to my viewers that the rate is not going to increase until unemployment go lower, so why would i see higher mortgage rates. >> because the fed mostly and historically in the rates that they're talking about today are the short-term interest rates. the rates that you and i are borrowing at for mortgag

this is bernanke's final press conference. he will pro side over a meeting in january that is one of those meetings that does not have the press conference and this is where the action came up because guys like steve liesman will pound ben bernanke to understand why they made this move, why not. bill gross one question i have for you as well, which is this idea and i don't know if you heard it in our previous discussion before you joined, maybe the fed hasn't tapered. they may have changed their own bond buying program, but yet, through longer easier rates, have simply shifted the idea of qe further on to the consumer? agree or disagree? >> well, i think they have. whether they've shifted it on to the consumer or shifted it on to the 10 to 30-year holders of bonds which will be inflation dependent going forward based on this policy, that's how i would pose it. they haven't really tightened certainly in terms of their language when they speak to well past the unemployment rate lower than 6.5% so we're looking at easy money here

ben bernanke announcing that they will reduce the bond program by $10 million in january.ing that the paper will continue further measured steps at future meetings if the economy stays on course. and here is the outgoing fed chairman explaing why the decision was made to begin reining in what has been an explosi expansion of the fed's balance sheet and the greatest capital injection into our financial system in history. >> policy actions today reflect thassessment that the economy is continuing to make progress and that it also has farther to travel before conditions can be judged as normal. notably, despite headwinds, the economy has been expanding at a moderate pace and we expect that growth will pick up somewhat in cominquarters, helped by highly accommodated monetary policy is and waning fiscal drag. lou:the dow jones, 14 times in the our leading up tothe announcement, panicked by an intimatiothat the fed would cut back the bond purchases. imementing this so-called paper. this includes investor anxiety ov the announcent sent the market indexes lower. down to pos triple

been portraying which i think has been support for the big banks support for the stock market ben bernanke has been very explicit about wanting stock prices to go up and recently with with their purchase of mortgage backed securities at five hundred billion dollars a year explicit support for the housing market and so there's a number of people at the fed who think this is a bad precedent this is a bad road they're going down and they would like the fed to get off that road and to unwind q e to stop talking about the stock market to stop talking about the housing market to stop buying mortgages and to go back to what a traditional treated the central bank more traditionally does because you could argue that their policies today are designed for you know massive crisis and right now we're not in a massive crisis so really it represents subsidies to certain groups in the economy and historically you know when governments or central banks do that kind of thing it doesn't work out and b can sort of backfire on them can create a lot of public backlash when people see the fed supporting one grou

and i thought bernanke was incredibly adroit at doing it. he is going to be moving on from the stage. how much are we likely to miss him? how much will you miss him? >> well, i think he was the right guy at the right time for a financial crisis. he was an expert in the depression. and that was very instructive for him for keeping really the gas pedal down on the economy even while many around him said that he should draw back. i think he's going to be missed, but i also know that janet yellen is also known as a monetary policy expert. she was there during the financial crisis. and i think what we're hearing is that policy's going to continue very much the way it has. >> hampton, you cover the job market for us, and every month you tell us, you know, what happened in that monthly jobs report that investors and everybody is waiting on. what is your take? still a lot of people are out of work, right? >> yeah, absolutely. but here we are at the end of the year now. essentially according to the bls, we've added about 2 million jobs including the

chairman ben bernanke announcing the central bank will reduce its bond-buying program by $10 billion month. upon hearing about the changes to the stimulus spending, the market rallied to a record high. wait, wait, i'm sorry. back that up. a record high? is that a typo? weird. all right. i just seem to remember a lot of panicked fretting over just what would happen when stimulus spending slowed. >> it's a market that's sort of set up, i think, for a major crash, a major selloff. >> are we going to see another, we hope not, crash. >> so with the sky decidedly unfallen, let's bring in susan ox, senior fellow, to talk about the fed's decision and the economic outlook for the year. thanks for being with us. >> great to be here. >> so they announced the taper, backing off that stimulus spending. and the market sort of shrugged. >> they actually rallied. it was a positive response. there are really two reasons more that. the first one is this was mostly just a signaling measure by the fed that they think the economy is improving. so they look at a large variety of economic factors, not just

chairman ben bernanke said the fed can begin dialing down the program because it's working. >> today's policy actions reflect the committee's assessment that the economy is continuing to make progress but that it also has much farther to travel before conditions can be judged normal. >> reporter: in his final press conference as fed chairman, bernanke pointed to the economy's improving outlook. unemployment has fallen from 8.1%-- when the latest round of stimulus started in 2012-- to 7% today, a five-year low. 2.9 million jobs were created during that time. in all, since 2008, the fed's invested more than $2 trillion buying treasuries and mortgage- backed securities to keep interest rates low and money moving. and bernanke said his successor, janet yellen, who has yet to be confirmed by the senate, was completely on board. >> i have always consulted closely with janet even well before she was named by the president and i consulted closely with her on these decisions as well and she fully supports what we did today. >> reporter: bernanke said the fed will leave short-term interest rates

you know i think as many people have noted he was ben bernanke his advisor at mit so i think to me it's just it's it's what i a little bit worried about is is just more of the same you know i think it in our in our film we highlight officials like paul volcker and some of the regional bank presidents at the fed who have a slightly different perspective i think with stanley fischer i think you know he's clearly a very smart guy and an esteemed you know figure in this world the question is will his ideas be any different from what we've been seeing for the last five ten fifteen years out of the fed and i think i think the answer unfortunately is is notably more of the same now in your film you have a lot of access to current and past that officials what they have to say about quantitative easing and i mean specifically the effects that will have on the economy if and when the fed starts to wind it down yeah i mean i think. a good quantitative easing similar to the vocal rule is the kind of thing i think a lot of people have been judging in the short term and i think we really won't know f

ben bernanke began tapering this week. is he making the right move? >> yes, yes, i'm worried about a bubble forming if we don't begin tapering, so -- >> is he doing it at the right speed? >> well, we'll see. the numbers just came out, as you saw, today indicating that our gdp growth in the third quarter was higher than expected. a lot of it was inventory, so we're not sure how much to trust that, but i do think that we have to begin this tapering. we're unprecedented in terms of the fed balance sheet, and also having the overnight rate be at zero. basically, there's no flexibility for the fed to be able to respond to the possibility of going into another recession, so i think it's appropriate. >> senator portman, let me close by asking you a political and personal question. earlier this year, you reported that your son was gay and that you had changed your position and you now support gay marriage. nine months later, what's been the political fallout? and really more importantly, what effect has it had on your family? >> family's doing great, first of

i think janet yellen is cust out of the same intellectual cloth as chairman bernanke. they've been working together closely for years now and i think are on the same page. i don't expect to see any meaningful change when she takes the reigns in a few weeks. >> this was ben bernankes last hurrah today, he's presided over the fed during an extraordinarily difficult time. how do you think history will judge him no. >> very, very well. i think we're lucky as a nation that was at the head of the federal reserve when he became chair, because we went through a very dark period and it required somebody who had an exceptional understanding of american history, what we went through during the depression and most importantly how the federal reserve should navigate through something like that. there was no one better than he to lead the federal reserve at such a key critical time in our history. i think he will be judged very, very well by history. >> mark, i know you're bullish about the economy. it's good to hear good news. thank you for joining us tonight. >> thank you. >> to a

bernanke. now the economy will take things from here.y still want the although interest rates, but right now, the view seems to be that qe has outlived its usefulness. >> the way you look at it, if it looks like it is better than the know and we still get still get 75, i can live with that. and santa claus. >> there's a bit of a risk here. twice before, they started to wind down qe. we know not out of the woods. this is still very much a job that janet yellen has to finish. >> thank you. >>> when we come back, the ceo of home building giant lenar, will rising rates stop the industry's building phase before it gets off the ground? not based on what we've seen so far in this action in the bond market. first, we're going to check out the squawk green room. we have two power players in washington and wall street watching up this morning. erskin bowles and judd gregg. coming up at the top of the hour. stick around, "squawk box" will be right back. (vo) you are a business pro. seeker of the sublime. you can separate runway ridiculousness... fr