coming up, former new york fed president bill dudley discussing monetary gdp stronger than estimateshing on some key stocks and now we are awaiting more earnings this time from del, nordstrom and gap. we're going to bring you those joining us to talk about the market day, alicia levine. good afternoon to you. let's start with mike santoli. mike >> you know, morgan, we have been operating at stall speed in this market for a while. today we closed on the s&p 2784. exactly where we closed eight days ago and eight days before that or five days before that, ten points lower half a percent obviously we got this sprint higher up 10% or 11% year to date on the s&p and then saying are we flattening out a breather are we trying to test the limits of how much to go up just on treasury yields low, fed patient and growth not as bad as we feared in december >> sector performance today and the chart by the end of the day selloff into the close not that encouraging. >> no. i do think it's a little bit of a -- i wouldn't want to say it's a risk off mode but definitely not aggressive so i do think it'

matthew: bill dudley made this point in his op-ed, focus on the interest rate outlook. haveot last week been read as a sign that the fed was changing tack on interest rates. they did amend their statement and remove the part that had the commitment to further rate increases. at this point, investors can take a dovish signal from the developments on the balance sheet and interest rate outlook. we did not get a projection in january like we did in december, so we have to see what they say in march. right now, investors are more relaxed about the interest rate outlook. guy: talking about the idea that we will see 4% wage growth, if we do the fed will have to raise rates. matthew: if you look at the data we got in the jobs report friday, wage growth hit 3.5% in december after the upward revisions, for the first time since 2009. throughout this tightening cycle, the fed has been very much indexed toward those developments and especially wage growth. it remains to be seen whether they will react or shift toward inflation and focus on that more. that is an open question. powel

bill dudley said the fed is willing to miss a bit on the high side. we've seen other central banks, including sweden, saying they will not hike their rates. michael: the most interesting one, kuroda saying they might ease some more. bonds is they are willing to bonds suggesting they are willing to reverse that. there is concern about global growth. how much of it is psychological and how much of it israel? real? much of it is do we actually have to put more money into the system? they are not in good shape to do since rates are so low right now. alix: no one was talking about more easing. investors are buying emerging markets. peggy: we see that over in over already -- over and over already. people are bullish on em. that's where growth is coming in terms of population and the younger people coming up the ladder. there was a story about franklin templeton, airing a bit of caution around investors in the u.s. getting too bullish on treasuries. the rally may not indicate a cut and people may be getting too excited about that. alix: bank of america comin

jeanna: it is really interesting that this is coming from bill dudley. he spent time at the new york fed, was an influential leader during his time there, prior to that at goldman sachs. he has a lot of experience in this area where markets touch economics. i think he is really seen as an authority on these issues. it is interesting that he is the one saying, all of you people paying to so much attention to the balance sheet, you may want to look at rates over here. vonnie: does this mean the balance sheet will not be used as a monetary policy tool, ever? jeanna: absolutely not. and i don't think the fed would say that. they are not using it as their primary total as a look to remove monetary policy accommodations, but they certainly want to make the case that it is still in the toolbox, that they could grow the balance sheet to ease economic conditions going into the future, especially if we get into a situation where zero rate vines again. vonnie: you have a piece out from an essay from the dallas fed president robert kaplan, saying there should not be

gene: i would have to say i agree with bill dudley on this.of quantitative easing or tightening on financial markets is very unclear. what you don't understand, you generally fear. from that perspective, i think people have naturally been worried about the impact of liquidity and the fed is responding to it. tom: in the spirit of ben bernanke, who has told me he is isn'tncerned about this, their advantage the x-axis and if they can bring the balance that down over a timeline market participants aren't focused on? gene: i think without question. again, most fed watchers would tell you that the impact of this is equivalent to very marginal tightening in fed funds. isis really about signaling, the fed continuing to tighten or is it going to neutral? from that perspective, whether it is rates are the balance sheet -- i agree with bill dudley. if you look at the impact on the balance sheet estimates from an earlier and, a qualitative , it makes very little difference at all, but it is a messaging of, we feel like we are appropriate and don't need t

bill dudley at 4:45 eastern time talk to him about all of this too. >>> fourth quarter gdp stronger than expected. is that a rally for stocks strategist with allianz and then blakely adviser group and cnbc contributor. thank you to both. fourth quarter gdp seemed good enough and there were some green chutes when it comes to how businesses were spending. >> that's a key. we've looked at the durable goods numbers of orders where obviously shipments would be in the first quarter. they're declining at an annu an annualized rate i expect to reverse in q1. what's the health of the consumer and was the december retail sales number an anomaly that quickly reversed itself? we saw january auto sales somewhat mediocre. i think it's the consumer that's going to determine what kind of bounceback, but i think with the government shutdown thrown into that, that's why you have a one hand on a lot of these gdp estimates. >> the consumer, two-thirds of the economy, mona. so when you gauge the consumer, do you look at those measures given to us by the government? may not be clean data or look at walmart's

former new york fed president bill dudley said, "fundamentally powell has a harder job than janet yellin during the yellen period the economy wasn't in full employment there was room to grow interest rates were very low now you are in a more tricky environment. the economy has been surprising because inflation hasn't shown up frefring the verbal stumbles, the economic record looks pretty good the unemployment rate is down .2% to 3.9%. core pce inflation which takes out food and energy, up .2% to 1.9% just below the fed's target range, and average gdp up nearly a full percentage point to 3.3%. the stock market, however, is essentially flattened since powell took office over that time, though, he has raised interest rates by a full percentage point and reduced the balance sheet by $350 billion. maybe the record on the stock market is not that bad and he has pivoted fed policy from gradual increases to patience we'll see now if critics go back to praisinga patient powell. steve liesman, cnbc, business news >>> let's get back to our chat with francois, cio of prime partners now, we just hear

i spoke to bill dudley over the weekend.yellen during the yellen period, the economy wasn't at full employment interest rates were low. now you're in a tricky environment. the economy has been surprising because inflation hasn't shown up not to mention a full employment tax cut and stimulus from the government here's the record for powell down 0.2% on unemployment over the years. up 0.2% on inflation and gdp, the average of this four quarters, a percentage point higher so he's doing not that much more in the way of tightening relative to that the stock market, flat since powell took office over that time he has raised interest rates by a percentage point and reduced the balance sheet. and he has pivoted this is probably the most important thing. he has pivoted policy from gradual increases in the statement before now it says the fed will be patient. we'll see. >> for more on this, let's bring in deano cass and richard fisher good to have you both. richard, i will start off with you. in terms of his communication skills, do y

bill and marilyn from mancato. thank you, dudley d.d with prince for so many years, for being here. hey, if prince can do the half-time show in all that rain, i can do this in this snow. sound of blackness, thank you, robert zimmerman. thank you, friends, from across the country. this is why we live here. thank you, greater minnesota. thank you, our suburbs, and thank you the twin cities of minneapolis/st. paul. we are gathered here today on this beautiful mississippi river, america's great river running straight through the middle of our country, through the heartland. it takes its name from the native american word "for the father of waters." it starts small up north. and like so many of you, as a kid, i got the thrill of going up there and claiming that i jumped clear over the mississippi river. it then gets wider as it flows down here to the twin cities and then to wisconsin where my mom was born. and then down to iowa. a place where we in minnesota like to go south for the winter. or at least i do. and then to illinois, a state th

bill and marilyn from mankato. thank you, dudley dee who traveled with prince for so many years for being here. hey if prince could do that halftime snow all that rain, i can do this, in this snow. sounds of blackness, thank you. rabbi zimmerman. thank you, friends, from across the country. this is why we live here. thank you, greater minnesota. thank you our suburbs and thank you the twin cities of minneapolis-st. paul. we are gathered here today on this beautiful mississippi river, america's great river, running straight through the middle of our country, through the heartland. it takes its name from the native american word "for the father of waters." it starts small up north and like so many of you as a kid, i got the thrill of going up there and claiming that i jumped clear over the mississippi river. it then gets wider, as it flows down here to the twin cities and then to wisconsin where my mom was born, and then down to iowa. a place where we in minnesota like to go south for the winter. or at least i do. and then to illinois