while aetna warning about changes to obama care, investors got warning from new york fed president, bill dudley that rattled markets. new york reserve president dudley telling fox business peter barnes in an exclusive interview, markets may not be taking rate hike seriously enough. more with the exclusive sit-down, it kind of frightened or shook market as bit. what was nugget that turned markets red after couple record breaking days? reporter: bill dudley wanted to manage market expectations to communicate with investors, another rate hike by the fed in short term federal funds rate of quarter point or so is on the table for this year. he has been been cautious moving forward with higher rates, wanting to make sure the economic data comes in solidly for the fed to make a move. he is positive on economic indicators he has been watching. so, as a result, he thinks the fed could move on rates at one of its three meetings coming up the rest of this year, including as soon as the meeting at the end of september. here is what he said. >> i think it is possible. i think we'll have to see you who the d

in new york fed president bill dudley early this morning, in indonesia. dudley saying the markets shouldn't rule out the possibility that the fed will hike interest rates again this year if the u.s. economy improves significantly. still dudley warns that global lackluster growth is limiting the fed's policy options. he's urging caution on raising rates following the brexit vote and big gains for the dollar. this is a more internationally focused fed no matter how you look at it. is it so much so that they don't raise rates this year. >> that is the question. it was really, you could find anything in dudley's comments if you're a hawk or a dove to seize upon. maybe it's the way -- they want the not to get overconfident. which is frustrating of course. meanwhile, a few stocks to watch today. heineken shares under pressure as the results fell short of estimates. this is demand weakening key regions like africa, russia and the middle east. heineken ceo speaking with colleagues in europe about the sab deal and owe tension impact on heineken -- >> the deal abis

just yesterday bill dudley said that a september hike is possible. atlanta fed president says he is con and that growth is accelerating. in terms of how traders are pricing in the profit -- of a rate increase as of today the odds of a rate increase on september 21 is that 25.2%. compare that to two days ago before dennis lockhart and bill dudley spoke and it was at 17.5%. clearly traders have gotten more hawkish on the back of those comments. and: joining us now is cio global wealth management of bankamerica. what do you think? is there any chance that we get an increase this year or are you seeing it happening in 2017? the dollar -- in late 14ar fading and 15 and the oil prices brought that deflationary full force into 20 asked team. that is fading very fast. matt: the deflationary force is fading. >> absolutely. it's not only growth. central bankers have been saying it is picking up but it's also deflationary forces. i'm not talking about in mass yet. the weight of the strong dollar has been stating for a while and that is feeding into the system.

i did ask bill dudley about the election. conventional wisdom is the fed will not hike it rates going into a presidential elect because they don't want to be seen as help one side or another. but if you don't hike rates, maybe that helps one side and not the other. bill dudley says we focus on economic data, we don't look at politics. i researched this. it turns out they have increased interest rates going into presidential elects. 1988, 2004. they did it in 1999. so that is kind of a little bit of a old folk tale. kennedy: will it strengthen the dollar if they raise rates? >> yes. the dollar is another kind of investment. if people want to invest in the dollar and get a return on it. they can get a higher interest rate buying the dollar, that drives up the price. kennedy: we cut it, you printed it. peter barnes, thank you for your time. >> can i come back soon please? kennedy: can he independent candidate ed mcmullen sop up republicans discontented with donald trump. and are republicans in holloo subject to reprisals for bei

new york fed president bill dudley told me last week he thought the economy was strong enough to hikees a quarter-point come as soon as the september policy meeting. fed vice chair stanley fischer ended higher rates are coming it is close to hitting the targets for full employment 2% of elation. a note to clients yesterday morning. the chief market strategist for the lengthy group predicts his yellen concurs in his friday rate hike is coming as it can break there will be fireworks in the market with higher short-term interest rates and lower stock races. dave's vodkas telling her comments that would signal an end to rate hike in jackson hole. the speech will come ahead of two major inflation reports in the august jobs report critical to the fed's decision making. back to you in new york. lauren: coming up in sports, all four olympics from brian lochte sponsors stunting yesterday. he also drew fire from jimmy kimmel. >> the olympics are held in tokyo. i hope brian lochte doesn't get attacked by a godzilla. we will have more. a wiki helps the red sox move into a tie for lead in the amer

build ugly speaking moments ago -- bill dudley speaking moments ago about the minutes that revealed ae inside the central banks over when to raise rates. this morning, he is money to two months of job gains. that eases worries that the labor market growth is stalling. to explain how this could all impact next month spent meeting -- month's fed meeting, we are joined by terry. thanks for joining us. previous to these minutes coming out, you thought a rate hike was on the path for december. do you still hold that view? >> i think so. the market is nothing otherwise. they were up like a 50% chance of that happening. if i say the chances are 60%, i am not far off the market. dovishutes were mildly in the fact that there was a split committee, but the minutes were produced during a meeting that took place before we saw a very good july employment report out of the u.s. it was also before we saw this last leg of the run-up in the markets. when someone like bill dudley expects it, he does it with the benefit of seeing what happened in the last two weeks in the markets and data. nejra: we hav

you had it from bill dudley from new york. he said sooner rather than later. thankthank you, peter.eporter: you bet. liz: everybody will be ready when it doesn't happen you will be at least ready. 2minutes away. we take a hard turn to this. devastation from the deadly floods in louisiana. sure to cost billions of dollars. but what happens to all the homeowners that didn't bother to buy flood insurance or didn't have to because they didn't live in the floodplain and still got flooded? a former fema fish calling the flood insurance program a melting iceberg about to break off and crash. "countdown" coming right back. what powers the digital world? communication. like centurylink's broadband network that gives 35,000 fans a cutting edge game experience. or the network that keeps a leading hotel chain's guests connected at work, and at play. or the it platform that powers millions of ecards every day for one of the largest greeting card companies. businesses count on communication, and communication counts on centurylink. [announcer] is it a force of nature? or a sales event? the summer

bill dudley told foxbusiness we are edging closer, the fed will increase interest rates.r losses lower across the board, the worst performer germany's decks and deck down 1% and in asia the major averages were mixed with the nikkei average in japan closing up 1%. startling numbers on immigration, pew research, the us brought in 60,000 refugees since october 1, 2015. of those refugees half of them are of muslim descent have donald trump says the united states is in big trouble. he sat down with sean hannity during a town hall, it will air tonight where he addressed his top concern. >> we can say it will never happen again, when we are doing by allowing thousands of people in the air, we don't know anything about will happen again because there is something wrong, we have to stop it. marymac joining us is the president of the american islamic forum for democracy, good to see you, thanks for joining us. trump revealed details of his extreme vetting plan. what is your take in terms of the refugee inflow at 63,000, how do you see it? >> good to reflect that the numbers show th

peter barnes interview with bill dudley, the head of the new york fed. we may be closer to a rate hike than you think. market is flat on that news. floor show traders on the fascinating stock move since the fed minutes came out. >>> and urban outfitters dressed for a little success with record second quarter sales, apparel retailer, you know this, a favorite with the college set and dorm room sets, surprising the markets by beating estimates. urban jumping to the sky here, up 15.75% on trading volume of 12 million. that stock is jumping $4.92 right now. >>> the battle for viacom moved into entirely new galaxy as settlement talks resume. are founder sumner redstone and philippe dauman on the bitter edge of the final frontier? the details next on "countdown." stay tuned. to folks out there whose diabetic nerve pain... shoots and burns its way into your day, i hear you. to everyone with this pain that makes ordinary tasks extraordinarily painful, i hear you. make sure your doctor hears you too! i hear you because i was there when my dad suffered with diabet

our president bill dudley is going to start raising rates in you have folks like carl icahn who are getting out of the market due to the risk of exposure. >> a lot of pessimism that we hit peak earnings so we are in the six quarter where earnings have come down a piercing valuation starting to get more stretched so we start looking at a lot of the staples and walmart 17 times earnings and can they keep growing at that pace? to support that valuations others concern on the valuation site as well as sustaining those earnings that they have had. >> liz ann anthony mentioned one of the stories this week was the idea that we may be back in a cycle again maybe because these guys are walking and talking. financials have had a decently gone a relative basis. should people be buying financials now? >> we have a rating and there's a wrinkle in the near term because s&p is going to pull out its own gigs at third. it will be the 11th sector and that is where a lot of the yield is so some of the money money that is going to financials that his yield chasing money they be doing it in a yield that may giv

i don't know if they're doing the dirty work, what i would say is you know, bill dudley and who else did we get? evans. we had a case where we had a lot of fed speaker, but ultimately, the case is there's starting to be some consistency with this message, but to their credit, it's coming after housing market is tarting to really take off. we have wage growth, a durables number yesterday that had the component coming alive so, to say these guys don't have a reason to be more positive, they're more constructive on the economy and that makes a ton of sense to me. >> i think they've had data that's looked positive already. there's been so many times where they could have raised rates. they've chosen not to. last night, we talked about what happened happen. we said utilities staples will probably sell off. gold would probably sell off and what would run would be financials. got a little of that. got the utilities. didn't get enough of financials, so i think financials are stuck between that getting spooked of higher rates for the overall market, but positive about it for the financials sp

bill dudley, thank you for joining us on fox business and sandra we are going to continue talking to g to our website later today about three or four more minutes of questions. so look for that on fox business.com later today. sandra: all right, peter barnes and william dudley, an exclusive interview. breaking a lot of news there. i want to get to john hilsenrath. i thought that interview with a great and interesting and janet yellen will be speaking in jackson hole. sandra: let's get the news out, he says we're edging closer to an appropriate time to raise rates we could see two rate hikes. >> he said we're closer to the day when a rate hike is going to happen and peter asked him could it be september, he said, he why, it's possible. what this is, it's a warning call to investors that they're too complacent, that they're not expecting the fed to move and he's saying, hey, wait a second we could move as early as september. he put-- one of the things that really jumped out at me about this interview is he said, look at the 10-year, yields on 10-year treasury bonds at 1 1/2%, that's ver

bill dudley the head of new york said in an interview with central bank may raise rates as soon as next month citing strength in the market. another said the economy is likely strong enough to withstand at least one rate hike this year. on those comments the dow fell to 18452. the nasdaq dipped 32. and the s&p 500 was off 12. >>> the consumer price index which reflects the price that consumers pay for goods and services was unchanged last month primarily because of a sharp drop in the price of gasoline and troesh reese. policy makers have been looking for firmer inflation readings. >>> home builders broke ground on more properties than expected in july climbing to five-month high. housing starts up 2% last month as building activity increased across the board. according to the commerce department permits for future construction dipped slightly. >> the rebound in housing has indeed been very good to home depot. the dow component reported g and sales for the most recent quarter. the company says big-ticket items are driving sales are as purchases from traditional customers like plummers a

at a briefing with reporters, bill dudley reiterated his stance that job gains remain sturdy and explains why he watches the labor market so closely. >> at the end of the day, i put less emphasis on the gdp than what's happening in the labor market for a couple of reasons. the market data is i think more reliable. i think we count jobs better than when we add up gdp. number two, we're not targeting gdp growth. we're targeting maximum sustainable employment in the context of price sustainability. >> he says he sees second half economic growth, whatever the reliability of the print, coming in stronger than the annual growth rate in the first six months of the year. >>> the number of americans filing new applications for unemployment benefits declined last week. initial claims for jobless benefits fell 4,000 last week. that report is considered a proxy for layoffs across the country. >>> housing has been one of the economy's bright spots. but there are still substantial pockets of pain. as diana olick reports, a sizable number of borrowers remain underwater on their homes. >> repor it's hard

bill dudley usually reflects what she says.e wants to make a statement? ben bernanke did a couple of times, but jackson hole is not a place you traditionally layout monetary policy. so will yellen do that, will he she -- will she be forced to in the markets? she said this was not the right occasion, and they have the jobs report coming out a week after she speaks, so maybe she wants to hold her fire, which will only frustrate wall street more. sure janet yellen is watching and saying that the markets have no clue, she has to make a statement. >> the problem i have is that the data is not clear. there are some good numbers and not so good numbers. francine: what are the not so good numbers? i mean more widely, particularly, the world economy is in a questionable place. that is what is making heard decision difficult. the other thing is they are starting the rate so close to the floor that there is a risk. it is all well to say that you take a punch bowl away, but if you get your timing wrong, you have to cut the rates, but they

sam fisher and the bill dudley suggest the september meeting is live.t say that but whether or not she suggests the fed is close to an interest rate increase is something we will find out on friday. michael mckee, bloomberg, jackson hole, wyoming. michael mckee, primed and ready at jackson hole. the symposium where we will hear from a host of that officials, dennis lockhart. some big names on the agenda. that spring into the , tapan datta. there is an expectation she might give us clues. there is something you hear from investors. megan greene said we should not expect too much. on a few occasions that we've had clues as to the very near direction of interest rates. tapan: the date should be put to rest. we should not expect singles from wyoming to tell us very much. this'll emphasis of the wyoming gathering is to discuss the framework of monetary policy in a very difficult economic environment. it is really about neutral, so-called equilibrium interest rates. just the way the fed can indicates with the market which is -- which is been a sore point. tha

new york fed president bill dudley is currently speaking at a briefing here in new york.lking mostly about the regional economy. we'll bring you any headlines from him. there are other economists discussing this and he's at the event and if there are market moving headlines of course we'll tell you about them. our next guest says to raise interest rates the fed needs to be confident inflation is returning to the 2% target level and this is far from clear. joining us now is frederick mishkin, columbia university economics professor and former federal reserve board governor. thanks, good to see you again, fred. >> good to see you. >> so you don't think it's time to raise interest rates on the discussion we got from the minutes, do you agree that this sort of wait and see mode is appropriate? >> well i think the answer is yes. my view actually is, that the fed should actually be very, very reluctant to raise rates until we actually have a strong indication that inflation is going to get back to 2%. in fact, one of the problems for central banks is that they frequently talk a

this proved bill dudley's point. probability that we will see in interest-rate hike by the end of the year. are these folks going to get caught out of the trade if the fed does raise rates before the end of the year? david: that is what julie: bill dudley is worried about. julie:this is the 50% line. david: who did you vote for? jonathan: a i will go forlix is so muchhere nervousness about recession risk in the united states even though the data surprises to the upside. that's something i have not seen before. withlix for al go different reason -- i will go with alix for a different reason. impressed, you figured out a way to make a contango. alix: you said that before 9:00 a.m. we talked a lot on the program yields wouldeasury cause a shakeout in stocks? 2% andd be as little as that proves it. i will vote for julie, apparently. nimble with the chart, gives up, l davide beau us his outlook for global equities in this market. one story is dollar-yen and the other is banks. for credite low suisse and ub down by over 6%

and the s&p rose, which would signify that investors considered a rate rise not as imminent as bill dudleyade it sound. financials continue to rally. you can see utilities of the biggest gainers because a weak dollar is good for that, but then financials as well. not nearly as big as utilities, but the second biggest industry group. ,f the fed does not raise rates then margins won't have a chance to expand. joe: interesting things in the government bond market, u.s. -- no,ent bonds portuguese government bonds, yields a jumping on the 10 year, bad,rned the dbrs is raising questions about government debt and whether it would be eligible for buybacks. dbrs is the rating agencies. now it is back. two year and 10 year yields dovish minutes push back expectations. scarlet: the dollar fell after the fomc minutes showed officials split. -dollar did take a leg up, and it has given back some advances, bust highs level since june 23. the other currency is the korean today, theg the most worst performing currency today. you can see that line at the far right, the dollar rising in value versus the won.

but there was no warning of any imminent rate increase until yesterday, when new york president bill dudleysident dennis lockhart suggested there was a hike possible in december. which was different from san francisco fed resident john williams saying that may be the expectation should be adjusted downwards. so we will look at the minutes to see what the fed is thinking. maybe the deal williams that long-term prospects tempered the rate increase prospects at the time. so people looking at the minutes to provide clarity. maybe not move the markets, because it is the weeks old, but it will fill in the gaps. inspectinges, we are that. and i know you're going to jackson hole, where this is a big one. we expect the policy speech from janet yellen the 26th. that will have more weight than anticipated. mike: in the past, only ben bernanke has used jackson hole as a springboard to talk about future monetary policy. does janet yellen want to do that? we do not know. by tradition, she gives a keynote address, but will the markets push her into doing it? a week from friday, everyone will be glued to t

morning, bill dudley suggested a rate hike is possible, edging to the point where it would be closer -- appropriate to raise rates. john williams call for policymakers to rethink how they operate in a new economic environment. aree nominal targetings options, fiscal policies must take on the burden to sustain economic growth. joining us now from london is hot record, -- is constant reddick or. we are awaiting charles lockhart later on today. it is interesting how these points come across. he wrote an essay that seemed more like an academic expansion than anything else. float aley is trying to trial balloon with his comments about the possibility of a september rate increase. how does each of these fed speakers set up for what janet yellen will likely say? >> we think that the central bank in the u.s. is not going to hike rates this year or next. we we have to look into inflation expectations that have not done what you would have expected they would have done. why inflation expectations have been held back has a little to do with the global aspects. overcapacity, and it especially is

previously as july she said they .ould not height -- hike rates we heard from stanley fischer and bill dudleydid the walk with her this morning. they thought the case had strengthened so you have the core three saying rates could go up, and you add that they are a data defendant fed and what they are probably waiting for is the jobs report that friday, the cpi report in september before the fed meeting. if the data is supported than a september move becomes more likely. vonnie: that move -- that meeting is on september 20 and 21st. if you look at treasuries, we are looking at lower yields and a flatter curve. well so itties as does not look like the markets believe that the u.s. economy will grow more quickly than it has been growing, or that it will reach that inflation target anytime sooner than janet yellen , in the next few years. that does not bode well. michael: she is making no promises because their position is, we do not understand what is going on in the economy either. she made a specific reference to the bond market and the idea that the fed does not know exactly why rates are so

we had bill dudley come out with more hawkish comments are let people think that the july minutes would hawkish. they weren't very there isn't a clear thing that people are looking for that is wide volatility is coming down. whatis also important is is happening outside the u.s., where you have central banks from the u.k. to japan they're forcing yields down by buying assets. -- the u.k. to japan who are buying assets that are forcing yields down. the very front end is more about pricing what is happening with the fed. importantly, we have seen rising costs or rising libor versus t-bills as the u.s. moves to a new framework for money market funds. i think there is a difference there. there are different games that drive different parts of the bond market. into: are you putting more those holdings? myles: yes. we are in a world of positive growth. we think the fed will be gradually raising rates. slow infed will be raising rates because of what we discussed, low inflation and low activity. in that world, investors will be looking for higher yield. external thatts is the sensible place to

fastest pace in five months and consumer prices were not changed last month and then there was bill dudley, the president of the new york fed, saying in an interview that we are getting closer to a rate increase. he says it's a possibility it could happen in september and he says the market is becoming too complacent. futures had been down and they went another little bit lower of the samepart playbook we have seen over the past month. every time the s&p has closed at a record, it has fallen the next day. monthst have the past action in the s&p and in yellow are these debts that are circled after a record. if you look at mid-july and nextng the next thy -- the day. we're seeing this pattern play out once again in today's session. we're looking at the 10-year note on the back of the world dudley comments and the economic and we had been seeing the yield the back and then they shot up after that commentary. we have been watching the dollar closely because we have been seeing broad the dollar weakness this morning particularly versus the japanese yen. we saw it both 100 for the first time goi

treasuries, the 10-year .as fallen some are calling it a dovish tone in contrast to officials like bill dudley, who is with us. komal sri-kumar is with us. he sees the 10-year falling to a record 90 basis point by the end of the year. you say the market is interpreting these minutes as dovish. extent, the market is looking more for a rate increase this year than it was before the minutes. they seem to have a more divided view. why do you think they are so dovish? >> i think the fed members alternate between talking up rate and then others postponing. you had a set of contradictory messages from the numbers. the fed cannot get a consensus to raise interest rates. the second reason for the dovishness, they saw what happened when they raised interest rates last december 2016, and the global market created in january, and they do not want to have that ahead of the u.s. presidential elections and have the next three months of problems developing. so september is off. in the case of november, the meeting to decide would be a couple of days before the elections in the u.s., so that is off. december,

having -- i'm glad you are pointing out the tension that has risen in the ranks here because we saw bill dudley saying we need to get closer to raising rates and then jim saying pretty much really need one of the next year or so. we have seen the takeaway as being a little more dovish. what do you think, that makes market participants the -- bet that ultimately they will not go that way this year. >> we knew at the very least that it was 9-1 because only -- just send it at the last meeting. if there were other members who felt a rate increase might be wanted soon, they did not vote for in july but make deal that given the jobs report we saw on august the fifth was 255,000 jobs created for the month of july, that there is enough evidence to warrant a rate hike in number but will there be enough to get a majority of those 10 members to vote in favor of a rate increase? it is not clear because the , and i hate to go doves versus hawks but it is convenient, the doves said back in july that there was not enough evidence that the jobs market was strong enough and there was not enough economic data to

bill dudley, president of the federal reserve of new york is saying in prepared remarks at a conferencen bali today that investors may be addressed writing how many times the fed is going to raise interest rates this year and next. they are probably right about the pace being slow. investors have not necessarily been getting that message. in terms of how this is being reflected today. take a look at the bloomberg. long funds have been going treasuries. that's the white line. this is that long in the treasury market versus shorts. that search. down here you see the odds of federal reserve rate increase by the end of this year. markan see this is the 50% , it's below 50% once again. it's interesting that we are seeing the market basically proving deadly's point -- d udley's point. you're watching oil prices they continue to pull back, the seventh down day, down by 2.25%, $40.65 is where we see oil trading. oil stocks pulling back. lower.obil, all we have this alluvial to talk about today quickly, tesla saying it is going to buy solar city. solar city down because the price has been reduce

new york fed president bill dudley saying in indonesia business investors will likely, quote, remain profits have stagnated and election year uncertainty could act as an additional depressant. it whacked half a point off of growth so 1.2 would have been 1.7. longer term workers won't have the machinery and technology to increase improvement. business investment that is shrinking on friday, we see how things meet. are businesses cutting back so much that they aren't hiring and that would co-mean consumers are going to have a hard time holding up this economy. >> okay. let's get a check on the markets right now after both the dow and s&p snapped a four-week win streak. joining us right now is stifel's fixed economic and our cnbc contributor. good morning. you heard goldman sachs. you heard me read that. does that make sense to you? >> it does. >> you've been negative on it for a while so maybe it's an unfair question. >> i see the widening disconnect between the underlying economy and the earnings fundamentals and that gap continues to widen to almost historic levels if you look at net

we're just creeping back into a range that's well worn and as far as fed speak, new york fed bill dudley talking about the market not as aggressive as he thinks they should be. how many times have they cried the sky is falling? of course it isn't. if you want the market to pay attention, mr. dudley, just raise rates instead of playing this childish public relations game that has never worked. if we look at foreign exchange, and foreign exchange is where the whole game is, the interest rate markets are almost held hostage to these huge historic gyrations going on. look at the dollar yen. the dollar's at the lower level, the yen's at the best level since november of 2013, so now let's swap out the dollar for the euro versus the yen. best levels for the yen since december of 2012, swap in the pound versus the yen, best levels of the yen against the pound since november of 2012. so you could see, when central banks play games, the market's kind of smart, lines up fairly well chronological with regard to comps and if we look at the pound in an isolated manner versus the dollar, these are leve

hey, ben, so bill dudley seems to suggest -- he says a rate increase in september is possible. >> always like that guy. >> does the market believe that? or, does the fed have enough credibility that the market believe that is or not right now do you think? >> i don't think the fed has any credibility. you have to lean on people like dudley and commentary lock hart, non-voting member. the u.s. economy may not be performing to the standards that most people grew up with watching, greatest recession of all time and recovering nonetheless. there's inflationary pressure and anybody that's paid a health care premium recently understands the idea of inflation in the pocketbook and the inability to pay the obamacare bill. so that being said, the u.s. economy is doing just fine and it should let rates naturalize. it's not a tightening. it is just naturalizing. >> interesting thing, rick, i want to go to you next, is what's happening with the u.s. dollar today below 95. what is going on here? >> you know, i think that many of the issues that are moving currencies like the yen are counter intuitive

i'm bill dudley, president of the federal reserve bank of new york. as you-all know the economic club of new york is the nation's leading nonpartisan form for speeches on economic, social, and political issues. more than 1,000 promised speakers have appeared before this club over the last century and we have established a strong tradition of excellence. i want to personally recognize the 232 members of the centennial society. these club members continue to make an extraordinary contribution to ensure the financial stability of the club as we go into its secretary century. their names are in your programs. i would like to welcome students here today from columbia university, hunter college, university of pennsylvania, and southern methodist university. this afternoon we're honored to be able to have as our guest eaker eric schmidt, the exec alphabet ink -- inc. he acts as ambassador with responsibility for the external matters pertaining to all its businesses, including google. these responsibilities have taken him to all corners of the world, includin

let me bring you this comment from federal reserve president of new york, bill dudley. i want to ask you both about it. here it is. >> stronger than the first half so, some acceleration in the growth outlook. labor market continues to generate reasonable job gains. 190,000 the last three months. i think we're edging closer towards the point in time where it will be appropriate, i think, to raise interest rates further. deirdre: that was a fox business exclusive, and there's the headline, right? the u.s. economy looks pretty good. second half looks better than the first half and september 20, 21, we could increase rates. jason if that happens does, that change the direction you think the markets will go in? >> i don't. 25 basis points is almost -- deirdre: a drop in the bucket? okay. >> not a big deal. on the other side of the coin, it's actually a good thing. there's the movie how i stopped worrying and learned to lot of atomic bomb. this is how i stopped worrying and learned to love a 25-basis-point hike. banks earn more money than they loan. a 25-basis-point hike irng

re-rating ise overblown but maybe what the fed wants to do, i don't think bill dudley from the new yorkous about the september meeting. he says it's possible and not probable. many scenarios are possible but the fed will not have sufficient clarity that the economy has shrugged off its sluggishness in time for the september meeting for the fed to increase rates. if you are gunning for december, you have to be serious about the next two meetings as well. a boring subject more boring but as we look at the fed minutes this afternoon, we have to keep in mind that these are more dated than usual. gdpfed had not seen the q2 numbers or the extensive back revisions and had not seen the last jobs report which sound of the all clear. alix: dudley and lockhart saw those last 24 hours and spoke of a potential rate heart -- rate hike. will this get the market re- rating higher? fed will have to start a communications campaign to put december on the map. september is simply too soon. alix: thanks very much. makes it more difficult are the retail earnings we get it the consumer was posted be the back

this live shot where we expect to see the fed chair along with bill dudley and stanley fisher in a fewwarn, strategist at edwards jones and joseph, be chief u.s. economist at deutsche bank securities join us. good morning to both of you. >> good morning. >> joe, after getting bullard and george and kaplan and dudley and now lockhart in the past couple minutes does she in your guess lean into or away from that commentary suggesting a hike this year is still likely? >> she'll leave the option open for a hike this year if the data continues to evolve as they expect. so she will try to straddle both the hawkish and dovish approaches, leave that option open for a hike. i do not expect her to be hawkish. i don't think she will be as hawkish as stan fisher, kaplan or george. those people are on the other side of the spectrum than yellen, but she'll want to leave her optionality open to go. >> and kate, how would the market react to such a thing given there's so much hype and attention and seems like investors are craving a catalyst right now no. >> i do think investors are looking for a catal

as you know we talked to new york fed president bill dudley last week, who is normally fairly dovishthese matters. he told us he thought the economy was strengthening and that, moving along nicely. he thought that the people should start getting ready for the fed to hike interest rates sometime this year. when i asked him about the september meeting, he said, that's a possibility. there is also a meeting in november just before the election. i don't think that would be on the table. but then there is a meeting in december as well. so issue is, will janet yellen signal how she feels about the outlook for rate increases? we expect she will talk about improvements in the economy. according to some of the economists i have heard from, she will likely keep her options open and then, of course, we've got another jobs report between now and next fed meeting in september. some key measures on inflation as well. and that could be the determining, those could be determining factors whether the fed decides to move in september. so, all ears on janet yellen tomorrow morning. we'll get headlines

that bill dudley and stan fisher have started to resognate with investo investors. >> are you say thag the market is not expecting the hike as much. >> the fed is very hawkish in between meetings. we don't trust the fed anymore. i'm say sg that actually, i think the commentary over the last couple of week, the housing data, payroll, we have enough for the fed to come out and feel differently. >> september hike. >> i think, yeah. on the table. i think it is. and i don't know what's pricing in. >> 20 something percent. >> i would say it's higher. >> higher. >> no, i don't think so september. i think it's too difficult to do ahead of the election. probably december. i think they have enough data to do it in september, but they won't do it ahead of the election. >> but separately as the miner trade did. >> crowd ed trade, i think it's coming off here. gold i think 1280, 1300, probably you see a little support. what's that, 26.5 on etf, so maybe for a trade at that level, i'd buy, i think this product trade is rolling over. >> still ahead, walmart surging more than 17% and why traders are b

do you buy the idea that bill dudley of the new york fed was suggesting that the markets are yawn playingsibility of a september rate hike too much? >> so i think that markets are too complacent. i'm not sure a september rate hike is as high a probability as people may be interpreting his comment to mean. the inflation print wasn't exciting. inflation remains the issue for the fed and i think the fed recognizes this election as it gets closer and closer may cause a lot of angst amongst investors. i think the fed will stay on hold in september. we still see one rate hike in the cards for this year and see that rate hike in december. >> dan, my question to you, if you are expecting a sell-off where do you go for protection and hedge against that? because you have sectors like utilities and telecom that have been bid up so much as you are looking for higher treasure yields they would be vulnerable? >> yeah. i think you're right. i think there's still cheap places to get defensive characteristics and to get yield. if you look at sectors like utility they are trading expensive but you can look

it is really interesting that we just heard about george soros getting out of the market an bill dudley is saying maybe we got to keep an eye on growth pressure and inflation. sounds to me like soros is talking about disinflation. these two are going in opposite directions. i have no expectation of the fed raising interest rates before that election in november. can you imagine if the markets tanked and one of the other campaigns lost? they would blame the fed for blowing up the election. not going to happen. melissa: aetna announcing that they are backing out of obamacare health plans in all but four states. blaming huge losses in the second quarter. they say they lost $200 million in the second quarter. they think it could be 300 million in the next. really astonishing numbers there. dan, i go to you. what are they supposed to do? they got in the way the rules are set up, they're losing money hand over fist. they have to back out n the statement getting out, we really support the whole idea of exchanges but we're leaving because we can't possibly make money, we can't take these losses