chair powell: good afternoon. my colleagues and i remain squarely focused on our dual mandate to promote maximum employment and stable price force the american people. commit has made good progress toward our dual mandate objectives. inflation has ease interested its highs without a significant increase in unemployment. that's very good news. but, inflation is still too high. ongoing progress in bringing it down is not assured. the path forward is uncertain. i want to assure the american people that we are fully committed to returning inflation to our 2% goal. restoring price stability is essential to achieve a sustained period of strong labor market conditions that benefit all. today, the fomc decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings. over the past two years we have significantly tightened the stance of monetary policy. our strong actions have moved our policy rate well into restrictive territory. and we have been seeing the effects on economic activity

we won't keep that secret. >> hi, chair powell. evan wiper with market news. can you explain a bit more on what you're considering and why tapering qt, do you need to see the overnight reverse facility all the way down to zero or something that you can start with the couple hundred billion there? >> we wouldn't be take ago position. it would have to go to zero and come on out for the march meeting and whole range of issues and will be briefed up and they'll get into all the issues over the course of the next year or so. >> chair powell, i want to switch gears and the presidential primary going on and your name has come up often and many republican candidates said they wouldn't want to give you a third term. i wanted to give you a chance to talk about that, do you want another term? on the fed, what's your stance on that? >> i don't have a stance on that. it's not something i'm focused on. focused on doing our jobs. this year is going to be a highly consequential year for the fed and monetary policy and we're all focused on doing our jobs. >> thank you, jennife

we won't keep that a secret. >> hi, chair powell. can you explain a little more on what you are considering when tapering qt. do you need to see the overnight facility all the way down to zero, or something you can start with a couple of hundred million dollars? >> not a decision we have made. we would not take that position, it has got to go to zero, if it were to stabilize. that is what we will be talking about at the march meeting. a whole range of issues will be briefed in the committee. we will get into all the issues that will be rising over the course of the next let's say a year or so. >> chair powell, i want to change gears a little bit. in the presidential primary campaign that has been going on for the last nine months or so, your name has come up often and any republican candidates have said, they probably would not want to give you a third term. i wanted to give you a chance to talk about that. do you want another term on the fed? what is your stance on that? >> i don't have a stance on that. it is not something i am foc

chair powell: we want to see more good data. it is not that we are looking for better data.e are looking for a continuation of good data. an example is the six months of good inflation data. is that sending us a true signal that we are in fact on a path, a sustainable path, to 2% inflation? annabelle: let's get more on the fed decision with our next guest, thomas honecker, a former kansas city fed president and now a distinguished fellow at the carter center. did anything stand out to you from today's meeting as a surprise or from the press conference? thomas: the only surprised to me -- surprise to me was markets seemed surprised. to me it has been clear they would not raise rates today and not be in a rush to do it in march. number one, the u.s. economy is growing well. even above trend the last half year. inflation is coming down. year-over-year basis it is well over 2%. that's what they are looking at. the labor market in the u.s. is still strong. it is moderating. at three point 7% unemployment there is not a big expectation for an increase in unemployment on this frida

very routine profit-taking. >>> here comes fed chair, jerome powell. >> good afternoon.eagues and i remained squarely focused on our dual mandate to promote maximum employment and stable prices for the american people. the economy has made good progress toward our dual mandate objectives. inflation has eased from its highs without a significant increase in unemployment. that's very good news. but, inflation is still too high. our ongoing progress in bringing it down is not assured, and the path forward is uncertain. i want to assure the american people that we are fully committed to returning inflation to our 2% goal. restoring price stability is essential to achieve a sustained period of strong labor market conditions that benefit all. today, we decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings. over the past two years, we have significantly tightened the stance of monetary policy. our strong actions have moved our policy rate well into restrictive territory. we have been seeing the effects on economic activity and inf

given the dovishness of chair powell during the last press conference, to some extent, the fed has itself to blame. sonali: do traders get burned or given the rally in the bond market more recently. do you think perhaps people are getting ahead of themselves? jamie: absolutely. we think the duration move especially in two year notes is exactly what we expected. we talked about this the last time you and i spoke. to think that the fed will do all the cuts preemptively before they see inflation sustainably heading towards the target is we think the market is ahead of themselves from that perspective. sonali: on the long end of the curve we have seen significant steepening watching the 210 occur -- to 10 curve steepen to the steepest level since the end of last year or the year before. does that sustain itself? is there risk in the yield curve here? sonal: there is risk in the yield curve in that sense i think shorthanded rates have proved too much and long dendrites also rallied a little too much. i see the long and it's selling off closer to 425 450 as we go through the year and i think th

she was around with the repo crisis, so chair powell spoke about that. they do not want to relive that. i think they are trying to be very cautious. lori laid it out. i think they are talking about how we have to put this all out there. we need to look and communicate way ahead and we do not want another crisis. i was reading some interesting research. if you read the speech, it could take longer. maybe we start qt, but there is no end date for the slowing. so i think people are still trying to decipher that, but what lori is getting at is not so much about other assets, but they do not want another crisis under their belt as far as the repo market. we saw a flicker of that. this is on the table now. for a while, they kept saying that we could cut and qt would go on blindly in the background. i think that is over. it is on the table now. >> great to see you both. we're going to get more insight into the question of the day. we will dig into all of it. head of the derivatives market. she joins us next. this is bloomberg. ♪ the first time you connected you

so this points to the fact -- going back to the november meeting, chair powell wanted to see a persistence of tighter financial conditions, and we haven't really seen that. so in some respects, it feels like they probably want to see inflation durably approaching the 2% target opposed to just looking at the inflationary prints for them to start cutting rates. so i think that they have the luxury to wait and they probably will. >> when do you think -- you mentioned may/june. is that your target? and if so, how many rate cuts do you think happened if they do start in that kind of may through july time frame? >> so our expectation coming into this year, it was probably cut rates by 150 basis points. but given how strong the economy is, i feel like the markets are sufficiently priced and perhaps overpricing the risk of cuts this year. so we think a may start makes sense, but perhaps the market is pricing in too much for this year. so maybe three or four cuts for this year makes sense. >> three or four quarter point cuts. so paul, i'm going to ask you a similar question here. i would like to kn

and you can feel the confidence exuding from chair powell in the last presser, i thought. >> scott, i have been waiting for this moment on television for a long time. i want to do my very best bill barr imitation.. . in the wake of a pandemic that was a supply shock, you do not need growth to slow in order for inflation to come down. that is what we have learned. inflation came down, growth did not slow, and i will tell you this. i'm going to put up a graphic here that i believe to be wrong. i have never put up a graphic i thought to be wrong. this when i think is wrong. this is our cnbc wrap it up date. you are going to see wo pieces of information in this chart. one, economists have had to upgrade their forecast again for the fourth quarter by 1.2 percentage points. again for the first quarter this year by nearly a full percentage point. but the thing that is wrong, that i think is wrong, is that they are still forecasting that slump. that slump has been something that is moving ahead of us two quarters in the future, and it has been wrong, wrong, wrong, wrong, and wrong. i don't kn

when chair powell and others have been asked that, they say no, we have a goal and something we written down have to stick to it. any conversation about any changes that have to happen. if you say your goal is to percent and once you miss it high, you just say never mind, people will think you will do that again and again. the view is that having some credibility at 2% is important. if you are going to change that one day, make it way down the road when you

now as for when rates are going to be cut, fed chair powell said something really interesting in decemberand i want to share this quote. he said we're aware of the risks that we would hang on too long before reducing rates, and there is a risk that that poses to the economy. meantime we've been covering the session here. there's a disconnect between encouraging economic data on jobs, inflation and spending versus the reality of how people feel about their personal finances when it comes to your rent, your gas, and the rising cost of insurance. so this is a vibe session that went on throughout 2023, likely to continue well into the presidential campaign even. >> thank you very much for joining us. >> thanks. great to be with you. >>> now to the environment. pover the last several days, rogue waves, some over 20 feet tall, have been crashing down on the southern california coastline, causing injuries and destroying property. the region is bracing for more this morning. a recent study by an oceanographer at the university of california san diego found climate change may be increasing the siz

chair powell it seems to me you raised rapidly over the last two years for two reasons.ne was a risk of wage price spiral. two there were risks of inflation expectations becoming unanchored. this morning eci report shows private sector payroll growth running sub 4% pace. inflation expectations are very close to where they were before the inflation numbers you've seen of last three years, given you appeared to substantially cut off these two tail risks and that you have judged hire today current policy is well into restrictive territory what good reason is there to keep policy rates above 5%? are you really going to learn more waiting six weeks versus three months from now that you have avoided those two risks? >> so, as you know almost every participant on the committee does believe that it will be appropriate to reduce rates and for partly for the reasons that you say. we feel like inflation is coming down, growth has been strong, the labor market has been strong. we're, what we're trying to do is identify a place where we're really confident about inflation getting bac

when chair powell and others have been asked that, they say no, we have a goal and something we written down have to stick to it. any conversation about any changes that have to happen. if you say your goal is to percent and once you miss it high, you just say never mind, people will think you will do that again and again. the view is that having some credibility at 2% is important. if you are going to change that one day, make it way down the road when you have achieved price stability. host: leslie in georgia, democratic caller. caller: good morning, greta. i would like to make a couple of points. first of all, trump's economy was great because he was riding the waves of president obama's economy. secondly, i would like to say that workers are coming back now because they are not coming back to their slave minimum wages. they are coming back to 11 and $12 an hour. that was put forth by these private companies and the third thing i was like to say is republicans, you think they do so much but bernie sanders has a minimum wage where he is trying to make the minimum wage $17 an hour over

the issue is this kibbutz chair powell in a tricky place when he -- this could put chair powell in a tricky place when he visits congress. when you head into an election, it is tricky. lisa: do you think anyone really thinks that the fed will say, if chair powell asked us to rates, we have to? what is the message from democrats in terms of the reason for inflation? it is evident that restrictive monetary policy is no longer the right tool for combating inflation. are they going to try to give the blame to the federal reserve for the lack of sentiment? it is not reflecting the economic data coming out. jonathan: it is political grandstanding. it was inappropriate when the trump administration did it. it is inappropriate now. it is stupid about now and we should use that word. we are about to cut interest rates anyway. what are you doing? annmarie: just hold tight. this is about how they are trying to craft the messes around inflation and it has been pretty muddy. jonathan: coming up, peter oppenheimer of goldman sachs following disappointment from tech. the latest bloomberg poll shows

i think that the market noticed that at the december press conference pair chair powell took a dovish tone, always insisted that fed would be strict and keep interest rates that at level to cut up on growth to decrease demand so long as they were above 2% target rate, now he is saying we don't have to actually get down to 2%, we could be approaching it seem by fed's own trevio prev sou previous standards they are more open, i can't help but think of situation in 2018, and 19, president trump was unhappy with the fed, he said why would you up necessarily restrict growth when we have low unemployment which was result of a pro growth program of lower taxes, less regulation, better energy development unleashing, that capability, for the country. and we were below 2% inflation at that time, people thought that was scandalous that president would say anything. but the fed to raise the up rates 7 times after he got to office. >> i thought that trump of the right. >> in 2019, the fed agreed, they took back three of those, said it was hurting manufacturing. now -- >> let me get steve in here.

. >> there is an understanding or historical norm that perhaps chair powell -- i am curious as we talkut the strength in the currencies combined with the weakness you see here in europe and the lack of resilience we are seeing here. if he could actually front run the federal reserve in 2024, what do you think? >> that was already in the conversation. there was a question that dominated the press. you can see a european central bank the cut before the fed. i can almost hear the words of madame lagarde and i had right now. it is not the dependent and therefore what they did to say is the nature of inflation that was on 2023 would be different between the two. the dynamics are different but you make a very good point in terms of the european economy. this is going to be here between 24 it was dynamics are definitely going to change for the european central bank. it will go from hiking nonstop almost automatically to narcotic rates. a lot of that was he given the weakness in the economy and the concerns for european economy that can not catch a break here. but also, even more openly if i m

if the fed doesn't want that cut in march, i think you were saying chair powell at a press conference will walk it back, i don't know, in january. don't you expect you'll get fed speakers saying, no, no, no, 81% is not where we're going here, or are we in the blackout period? if they don't want to cut in march they have to put this out right now. >> i don't think they have to. i think the fed is happy to price something three months ahead of time. where expectations are going into where the cut is expected and what i'm suggesting, jim, the world today is not the world we're going to have going into the march meeting. if you suppose if you have these inflation numbers going into the march meeting, it will be harped for the fed not to acknowledge cuts are imminent. the fed is really tight here relative to the underlying inflation rate. it's not for guys necessarily in the stock market. it's the folks doing the financing that really only the fed can change what sofr is. if that comes down, that will help the corporations that are needing to refinance right now. that's the big, underlying

what chair powell said, many participants expressed their views, that discussion was going to happen. in the minutes, but the fed has made progress in terms of their dual mandate. that means that they do not need to be as restrictive. the funds rate will become more and more restrictive as we go through the first quarter and if inflation continues to come down as we expect. that will keep the country study at this level if inflation continues to come down. that could be overly restrictive and damaging to the economy. that is something the sun will consider as they make their decisions. jonathan: taught --katie: it is a high bar. 140 basis points rate cuts priced into 2024. that is almost six rate cuts. can we talk about the why? what would need to happen to justify six rate cuts? a downturn? or just cutting to get back to more neutral territory? rubeela: what the market is pricing, that backdrop has to be one of recession, contraction. the fed has indicated 75 basis points. would i be surprised if they did another 25? i do not think so, but i think the market pricing in six or more ra

when chair powell and others have been asked that, they say no, we have a goal and something we written down have to stick to it. any conversation about any changes that have to happen. if you say your goal is to percent and once you miss it high, you just say never mind, people will think you will do that again and again. the view is that having some credibility at 2% is important. if you are going to change that one day, make it way down the road when you have achieved price stability. host: leslie in georgia, democratic caller. caller: good morning, greta. i would like to make a couple of points. first of all, trump's economy was great because he was riding the waves of president obama's economy. secondly, i would like to say that workers are coming back now because they are not coming back to their slave minimum wages. they are coming back to 11 and $12 an hour. that was put forth by these private companies and the third thing i was like to say is republicans, you think they do so much but bernie sanders has a minimum wage where he is trying to make the minimum wage $17 an hour over

the expectation is that chair powell will try to keep things close to the vest and keep the language pretty neutral to keep options open but that will be the focus in about 20 minutes or so, when do they think rate cuts will start to be appropriate at least based on the quick look at the report it seems like the economy is holding strong but pushing back on any expectations that a rate cut may be coming soon. >> we know that you will be watching the press conference closely. please keep us updated on what you see there. let's discuss now with our chief economist for moody's. there was talk of the potential rate cut early in the year. your reaction to the feds statement? >> i think indicating that we won't get the rate cut at the march meeting six weeks from now is premature. they are being cautious so i get it. they want to make sure that inflation is getting back to the target and there's no chance it will really accelerate. they want to be sure to put a dagger in the heart of the high inflation, but i suspect given all the trendlines and data and the data we will have between now a

here's the federal reserve chair today, jerome powell. >> inflation is still, you know, core inflationarget on a 12-month basis. 12 months is our target certainly i'm encouraged and we are encouraged by the progress. but, you know, we are not -- we're not declaring victory at all at this point. we think we have a ways to go. >> bret: there are people saying that this could be the soft landing they were looking for, that the economy is still chugging along and kind of a good place. people aren't feeling it, obviously. how do you see the u.s. economy? >> well, i definitely see the economy having significant issues. we have had very high inflation. the fed was late to raising interest rates. and this was a result of their view of inflation was going to come down. when it didn't, they have raised interest rates to very high levels. the good news is that is slowing inflation. but as chair powell said today, they now want to be careful that they don't lower interest rates until they are clear they have inflation under control. so, inflation is still around 3%. they want to get it to 2%. and

it's all about the narrative would chair powell.e done nothing but pushback. where all things considered looking at the economy which still seems to be in relatively good shape we're honed in on may, june. maria: for rate cut and will start to get guidance on balance sheet from the fed chair but i think the narrative is this, people are sitting there saying why is the fed get a cut rates when gdp is over 3%. i think the why it's about inflation the to talk about real interest rates the inflation fed funds rate if you look at the tenure rates i think they will continue to set. if you look at the pet indicator there below 3%. if we continue along the pathway also we went 753 or four times in 2002 we could take some of that off. maria: wearies the weakening in the economy, look at the job cuts that these companies are starting the year with cutbacks, ups, nasdaq, block announcing thousands of job cuts alone. there are now more than 20 companies cutting jobs will get the january adp employment out this morning at 8:15 a.m. eastern will

this morning we saw that and maybe fed chair powell's comments were taken too far, seeing yields, pressuren publishing, we've got long treasury yields the last couple weeks and it will continue in january. neil: talking about basic points, the market turning 150% worth of cuts. and the market is getting ahead of itself. maybe the fed will hint at that. the federal reserve president, speaking in raleigh, north carolina, we said there is no autopilot. he was saying it is time to buckle up. what do you think he meant? >> there' s clearly some internal division and the fed where some officials want to see rate cuts come quicker and some in the camp of maybe we can raise more and right now the market keeps wanting to know when rate cuts will start and he specifically speculating into march a couple months out, too far to advance and see what happens with inflation over the next couple readings and the fed manages market expectations. and it was premature to talk about rate cuts. it feels like, in the dovish direction, and the average 30 year mortgage is down 130 basis points. that is what they

that is an important point of view but what if jay powell, a, doesn't want a third term as fed chair b, knows the next president if it is a republican say it is trump, haley, won't reappoint him anyway and therefore decides to play it straight and keeps tight rein on the money supply, keeps interest rates high, keeps the dollar steady, whatever, keeps getting the inflation rate down? what if powell place it straight, is it possible? >> not likely because even though, it's human nature. he has been in eight years. he would like another four years just as greenspan wanted more. ben bernanke wanted more and didn't get it. they wanted that power. as henry kissinger the ultimate aphrodisiac. what they do with bank reserves which they pay interest, they have cut the interest costs there. urged the banks to start making loans. that is not a very public thing but to juice up bank lending. tell the regulators don't go bonkers on new capital requirements like that, those are things you could juice up the economy not get political flak for it, but make no mistake he would like another four year

about the end of 2023 we were saying chair powell has made that dovish pivot clear to the markets. or not that is actually true, the markets interpreted it as the federal reserve is done hiking, his peers around the world are done hiking, that means we can double down on that bullish bond bet. and by extension, a weakness in the dollar. that created a tailwind into some of the currencies on your screen. euro-dollar almost hit 1.10 at one point. you are starting to see a little reprieve, but this morning you see a turnaround story, where you see not only yields higher, but the dollar stronger as well. what does that mean for some of the snapping back people were expecting in the euro and pound? we have boj next week, 148 .62 is where we are on dollar-yen. and dollar-swissie is one of the big longs in this market simple because there was one of this expectation that the swiss national bank was going to stop and have their dovish pivot, creating massive weakness in the swiss franc. really fighting some of the capital flows going into that currency given the geopolitical situation. let

still our baseline because i think it is consistent with the inflation data and what we heard from chair powell press conference when he said that they would like to cut well before inflation gets back to 2%. now, core pce inflation has been running at 2%, actually slightly below, for the last six months. the year-on-year rate is still closer to 3%, but by the second quarter we will probably be pretty close to 2%. so if you combine all of those things, then a march cut would make sense. that said, a march cut, or cuts in general in the next few months, are somewhat optional because of what i said earlier. the economy is holding up pretty well. we do not think it is essential that they cut here, but it would be consistent with the signaling. stephen: -- yvonne: what do you say to the critics? the consensus was we would have recession last year in the u.s. that was wrong. rates are now at a restrictive level that usually leads to some sort of recession. you are seeing it in the soft data as well. how do you explain that right now? jan: there will always be a range of indicators. if i look at the

i think chair powell will never forget the fact that no one is going to forget that he said inflation again. cheryl: did transitory make the word of the year for 2023? that might've been 22 i lost track. >> i want to add one thing to what david is talking about. we have a tight labor market, there is not much room for faster growth without bringing back rapid price inflation. cheryl: thank you so much for your commentary. we appreciate it. we are going to take a quick break. we have breaking news out of japan that we are following. horrifying moments at tokyo international airport. firefighters still battling a raging fire, there was a plane that burst into flames on the runway. we're going to bring you the details. life pictures there, still dousing the aircraft. shockingly everybody got out of the plane. we'll be right back. ♪ ♪ (upbeat music) ♪ ( ♪ ) with the push of a button, constant contact's ai tools help you know what to say, even when you don't. hi! constant contact. helping the small stand tall. when we started our business we were paying an arm and a leg for postage. i reme

dominique: definitely in december chair powell suddenly turned much more dovish and much more inclined and the key data is likely. so, core pce print, which has been falling too fast, and the fed needs to guard against both inflation being too high and inflation being too low. i think that, you know, discovered that it was easier to bring down inflation than to bring it up when you are stuck in this low-inflation regime. so, absolutely. guy: why would we return to that pre-pandemic environment? let's call it that. we have a different global economy than we had then. there are many more bottlenecks and a great deal more sand in the gears of the global economy. presumably that would be inflation. you only have to look at what is happening in the red sea to kinda see that happening. why would we return? why is the economy set up to return to that more disinflation of her world? dominique: so, i am with you, but i actually think that long-term inflation risks are substantial. i think there is a big issue with the tradition of income, and that is one of the reasons former president trump is

and i operate by chair powell's maxium, which is that it reveals itself by its works. know what r-star is not by pulling it out of the air but looking at the economy and see how it's responding to how it's growing with any particular given interest rate. i think the important thing at this juncture to talk about is the fact that during the teens, from 2012 through until the pandemic, the fed persistently overestimated r-star. in 2012, when it first released the dot plot, it said that it was over 4%. on the cusp of the pandemic, it said 2.5%. so it reduced its estimate for a decade because the economy was persistently weak and inflation was below target. so the 2.5% that we have now, which the fed is still printing, as its r-star estimate, reflects the prior decade. so as we move forward and look at where we are in the economy and the resilience of the economy, it seems to me that 2.5% number is no longer operative. and i think it will be revised up over time. and my instinct is something about 3.5%. so that would set the marker for where the new terminal rate will be i

investors sifting through chair powell's comments.and banks, bob diamond, urchin capital cio. thanks for joining us. >> good to be here. >> earlier in the year you were right. predicted no interest cuts in 2023. what are you looking at for 2024? >> there can be cuts, but i think we have to take it in the context the economy is actually accelerating. first half last year was about 2%. second half last year was 4%. i think the fed is absolutely delighted with where the economy is, where inflation is. and i think if the fed did cut in the first half of this year, and the economy began accelerating more, and worse, if inflation picked up, that's exactly where the fed does not want to be. so i do think we'll see more neutral language today. i don't think it will be hawkish, but i think the expectation of first half cut rates i think are ahead where the fed would want to be. >> just because the economy is strong doesn't mean that rates aren't restricted. the real rate, as inflation has come down, is much larger, much higher than it should b

. >> all right at the last meeting of the fomc in december, chair powell said the committee was talkingts. then new york fed president williams said the fomc didn't talk about rate cuts. powell, at the press conference, at the fomc said we really made a ton of progress on inflation, no matter how you measure it. now board governor christopher waller comes out and says, no, no we have to wait for next month's cpi because new seasonal adjustments might wipe out all the progress like they did last year he says. they didn't last year. they made no difference at all. now powell literally kept his mouth shut like you said. powell's in charge. so make no mistake about this, rate cuts are coming and they are coming soon to an economy near you. charles: so on friday edward lawrence and i had the pleasure interviewing with the whole stampede of fomc members, we had the last one before this blackout period. mary daley she was great but dodged a few questions. one was the scuttlebutt federal reserve making all banks use the discount window at least once a year even if they don't have to. apparently

it's more like, well, left you with the idea, chair powell, at the last meeting solely focused on inflation now. they don't want to snatch defeat from the jaws of victory. >> right. and if it does come down to target, they have more room to start talking about cutting. i don't think 6 will happen in that case in that case gdp growth is stronger and a point he made in the last meeting was all it does is if the economy stays stronger than we expected, it lengthens the process out, it makes it more difficult for us to declare victory. it takes longer. it doesn't necessarily cause a problem, it takes longer. you see cuts get pushed back. >> if you take a look, the market conditions have eased, right? so it's easing from the fed, number one. >> in a good way, though? there are no credit issues, spreads are really, really tight. >> right. i want to put my portfolio in perspective. i will participate given my holdings in meta, microsoft. i haven't shaved amazon or alphabet because they're big positions. they're not as big positions as the others. i will still participate. >> so let's squeeze in a

the empire state yesterday that markets largely ignored because they got so frightened by, fed chair powell'sef lieutenant christopher waller had to say about taking interest rates down at a very slow pace, not what investors want to hear but do not fade the empire. charles: by the way the multiple sigma event the is same thing scott saying with the poopie event, same thing. >> exactly. charles: argentina has a new president. this guy is amazing. he made big promises including abolishing the central bank. at love americans agree with that but how does a modern economy compete with the rest of the world if it doesn't have to ability to print money? >> that is a good question. that is a better question for the country with reserve currency status and taken advantage by spending well, well beyond our means because we can print a lot of what i want. i applaud a lot of messages he had for western leaders in general who hijacked their central banks to print money. the fact that is going to lead to perdition. if we really believe we can spend our way to prosperity by taking on more and more debt we

chair powell said something really important a couple months ago. he said that longer term interest rates are now appropriately behaving separate from fed policy. so that's, remember, that's the way the world worked before quantitative easing and then quantitative tightening. so that's part one. part two is that stock prices are driven by longer term interest rates, not the fed funds rate. now here's part three. the rally's probably oaf. two plus two is four is the long-term average of the 10-year treasury. that's 2% inflation, 2% real, the break even's at 2.2% aisle not surprised we're giving back a little, but my guess is range bound on the 10-year and range bound around pe multiple. lauren: whoa. do you agree, kevin? is the rally over? >> i believed that the santa claus rally did come this year, it just came a little bit earlier, lauren. this year santa claus wasn't wearing a red hat, didn't have a beard but, rather, was wearing glasses and a pin streep suit. that -- pinstripe suit. once investors came to the realization we were with at the end o

but it's going to be hard for chair powell to contain his enthusiasm at the press conference once again. after the statement that comes out next week. >> steve, once you throw in food and energy costs, the headline inflation, 0.2% for the month, held steady at 2.6% annually the fed would like to see it maybe a little lower, but this is pretty dog gone close to their target, isn't it >> yeah, tyler, where are the party hats and the kazoos? i'm just wondering here we are, the first good thing that happened was that we have the core with a two handle on it for the first time in who knows how long it's been that low i'm looking at the three-month annualized core rate at 1.5%, and then powell's super core, which is services housing at 2.16%. the problem is not where it is now, the problem is how long it's been there, tyler i think the trouble is, i only have this one statement by the fed to go on, which is when they're going to cut rates that is that inflation is heading back down towards the 2% target sustainably you can't really make the sustainable argument, especially just to undercut th

but all in all, fed chair powell's got to be pretty pleased with this number. les: if your -- in your most recent note, you mentioned angst about this powell victory lap maybe coming a little bit too soon, and overall market investors being too bullish. now, i agree completely, i think a lot of money was made last year. people waited to pay the tax man, you know, take your profits early this year and is pay them a year from now. but, you know, as far as individual investors, retail investors being optimistic, should people be optimistic? is there reason for anyone not to be optimistic or bullish right now? >> well, i think you should try to be optimistic. you live longer. it's the better for your health. but the reality is there really haven't been too many bull, too many optimists as a result of the melt-up that we had at the end of last year. sudden lu you -- suddenly you look around, there's no bears and everybody's bullish, has been buying the market. i think that's one of the problems is the sentiment was too bullish, and from a contrarian standpoint, that

we're just 24 hours from fed chair powell's press conference. always a market moving event. santelli in chicago for a look at how the bond market is trading ahead of the fed decision. hello, rick. >> hello, contessa. boy, it's all about the fed. the market was really shocked at some of the data points on the first of two-day fed meeting days. look at the headline for consumer confidence. the best in two years. just a whisker shy of 115. the best since 2021. but it didn't end there. current conditions even blew that away. the best in nearly 40 years a reading of 161.3. what happened? well, interest rates popped, up over five bases points as we sit right now. 2-year yields and about unchanged on 10-year yields. but what's really interesting and to answer your question, contessa, is normally one would think strong data, better jolt, should have pushed long rates higher. it should have steepened the curve. what it did was it inverted it more. it inverted it by six bases points because it's all about the fed. the stronger data, knocked down the percentages of a fed rate cut in ma

i think in the conversation, chair powell will talk about the sep and other things that seem to put the the second half of the year. it will be a tightrope for him. >> okay. roger ferguson, thank you for taking us through all this and giving us the inside dope. thanks. >> thank you. >>> when we come back, tax filing season begins today. oh, boy. we will tell you about the changes this year that could affect the amount you owe the government. "squawk box" will be right back. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today. - i got the cabin for three days. it's gonna be sweet! whose resumes on indeed match your job criteria. what? i'm 12 hours short. - have a fun weekend. - ♪ unnecessary action hero! unnecessary. - was that necessary? - no. neither is a blown weekend. with paycom, employees do their own payroll so you can fix problems before they become problems. - hmm! get p

i remember talking to fed chair, jay powell, last summer in portugal he didn't think they would get to, they're closer to the target if you - >> by the end of next year being this year. >> this year. >> when he said it. >> and they very well could be with numbers like this i think it surprised everybody you know some economists look at the six month annualized numbe which you can do to smooth it out, 1.9% in december. that trailed the 2% fed target for a second month in a row. by some measures some economists look at, we know a llael braina at the white house does, they're at target which is amazing because they've done it without stressing out the labor market or sending our economy into a recession. far from it. >> hence, does it change any of the calculations about when the first rate cut comes >> we'll learn more next week depending on what fed chair powell says about it i think march is still kind of a toss up around 50% odds but the odds increase they'll do something. now i think the debate is what is the destination be on rates are we going to get all the way back down? i don't

when you say chair powell answering a question about emmanuel macron or olaf scholz?p, just avoid it like the plague -- like the plague. lisa: that is the last question. jonathan: united airlines reporting better-than-expected earnings but expects to lose money as a result of the boeing 737 max 9 grounding. scott kirby venting his frustrations over boeing management and its handling. even taking the issue to pete buttigieg. where is pete buttigieg on the story? annmarie: he is saying that they have conveyed to boeing how they feel and they want to make sure that they are getting answers. the fact that they are airing frustrations to the white house, what is the white house supposed to do? they are monitoring it. this is not the decision for the west wing. the faa -- the faa needs to go through the process. lisa: i was scared of flying as a kid and then i flew a lot and it did not matter because it would be safe. it is disconcerting to see burning planes and have this a concern, even if it is not justified. flying is still very safe, get it. but, there is this why do w

chair powell indicated they started that discussion about rate cuts at the december meeting.sion will pick up at the january meeting, or officials will outline how they are thinking about rate cuts. most officials their story is, soft landing, inflation is coming down quickly, and if they don't cut rates that the real rate rises in risk over tightening. jonathan: can the entertain that without engineering a biggie easing of financial conditions? matthew: the market is pricing in cuts already, so this is embedded in market pricing. i think governor waller was indicating the december dot plot was a good guide. i think they can entertain that and still keep financial conditions in check. jonathan: appreciate the update. matthew luzzetti of deutsche bank. equities right now higher by .3%. that's get you the morning brief. you can do that with dani burger. dani: the faa has put a halt to expansion plans for the boeing 737 max. it is a blow to the company's minors. the faa had just announced a path for return to service following a new procedure for inspections. united and alaska a

there is an argument to be made that the december meeting where chair powell came out more dovish thanto start cutting rates this year, why not signal it a bit sooner to get as far away from the election you're are going to start that process? in our call when we have the economy going into recession midyear, that dominates the discussion for the fed and they are going to cut if they need to cut. it is not a good political scenario to be in, cutting that much right into an election, especially the closer we get to an election, that is when voters start to form their opinions. it is a tricky balancing act. jonathan: i am thinking about that september 18 meeting when they put out the projections. are we going to get a rate cut in september, two months before we have got an election? robert: it sounds crazy right now, but if the on up limit rate is moving up, then we are in a recession is our call, that is what is going to dominate. however, if the economy is much more resilient, that trade-off becomes much more extreme. jonathan: i think it is going to be absolutely fascinating. you try

fed chair jerome powell said it's unlikely the central bank will begin cutting rates at its next meetinghat sent stocks tumbling, including the nasdaq, which fell more than 2%, while inflation has cooled over the past year, l too high for many americans. in tonight's "money watch," cbs's nancy chen takes a look at the skyrocketing cost of rent. >> reporter: matt wheeler was looking forward to finally getting a place of his own, when he started searching for an apartment in providence, rhode island. what was your reaction? >> disappointment. i sort of felt like i was working to a point when living by myself was going to be financially within reach, and then just sort of finding that it was going to continue to be a budget stretch. >> reporter: ethan was a position at prestigious brown university, the 33-year-old ended up settling for a studio apartment. >> to be in my 30s, working a professional job come and having the aborted t 241 bedroom apartment, it doesn't feel like i'm begging for largess here and yet it also feels so on a tale unattainable. >> reporter: while rent has been easing

served as the chair of the council of economic advisers under president obama, welcome, good to have you. did we stick a soft land something. >> good to be here. i think it is. look, jay powells rightfully cautious. he's the fed chair. he needs to be super duper careful. i only need to be somewhat careful, and so i'm going to say we've had a soft landing. >> do you mean because, yjason n december of 2022 you said it was most likely not going to happen? >> it is a surprise to me, and it was a delightful surprise. i was overly pessimistic, i was wrong. i'm thrilled that's the case. >> if only every politician spoke the way you do, i was wrong and moving on. what about a recession? can we just, no recession or is that just still somewhat of a risk in 2024? i wonder if people are giving too much credit to the good gdp reports we're seeing? >> yeah, look, you should always be nervous. i took a moment to be happy there, and now you got me back to the nervous mode. >> great. >> we could have a recession. you can always have a recession. there's issues in the commercial real estate sector. borrowing rates for things like mortgages have come down in anticipation of fed cuts later thi

it's sort of what you might have heard is the soft landing, the goldilocks and what he, fed chair jerome powelle would say it looks like he's doing it. >> and janet yellen, they think they're in the soft landing and we're 15 minutes archway from the opening of the market. >> they pop a little bit and they were flat before and they popped a little bit and last i checked. >> rahel solomon, thank you very much. kate? >> right now we are keeping an eye on the michigan courtroom. the mother of a school shooter is on trial. the question is could she be held criminally responsible for what her son did, the heinous crimes he committed and what happens there could be a first. >> also a death row inmate in alabama just asked the supreme court again to halt his execution and set to happen in hours. this would be the first known execution using nitrogen gas and there's a whole lot of c controversy around this. nikki haily is telling donald trump to bring it. her plan for her home state, south carolina's and donald trump's threat to republicans. you donate to nikki haley. you're out. we'll be back. >>> open

uncertainty and an unusual amount of uncertainty so we're looking to see whether or not fed chair jerome powellrop hints about whether they can have relief in march or if this is more of a summer issue for when people will get relief. as you know, the implications are massive for the consumers, the economy, the market and maybe even the election. >> everyone listens and tries to decipher and translate what the fed chairman says in his press conference and we'll be listening to that. >> we'll turn to a very interesting story, as well. a judge in delaware striking down a multibillion-dollar payout package for elon musk. it had boosted him to be one of the richest people in the world, what happened here? >> a stunning decision out delaware. a judge ruling that this 2018 competition package that musk and tesla, that they failed to prove that this package was fair. now remember, this monster pay package valued at $51 billion. billion with a "b" at today's prices it did help mack elon musk one of the richest people on the planet and tesla shareholders don't have a lot to complain about in the sense t

can fed chair jerome powell deliver a soft landing, and what clues will he give in the timeline of tera cuts? we'll talk about that in a few moments. we'll be right back. i'm andrea, founder of a boutique handbag brand - andi - and this is why i switched to shopify. it's the challenges that we don't expect, like a site going down or the checkout wouldn't work. what's nice about shopify is when i'm with my family, when i'm taking time off, knowing that i have a site up and running and our business is moving forward because we have a platform that we can rely on. that is gold to us. start your free trial at shopify today. >>> welcome back to "street signs." i'm joumanna bercetche and these are your headlines. k novo nordisk shares hit an all-time high. the ceo tells cnbc what is next on the approval horizon. >> it's a dynamic situation now, and as we ramp up, it's a surprise. this goes nice and hand in hand, and we can grow and benefit and bring this to health care systems. >> novartis grows. the ceo highlights some of the challenges facing the business. >> we do face some products losing

going to be on hold tomorrow, but the question is, do they change their guidance and how does fed chair powell he's thinking about when is appropriate to start cutting and why. >> the quit rate pretty steady at 2.2 n line with where we were before the pandemic began, and, of course, the quit rate has a large impact on implied wage growth. pantheon yesterday accelerated the quit rate by a couple of quarters. it's right in line with wages growing at about 3.25. we'll keep our eye on that. back to miami. >> pro independence, political class, and yet klchina was ableo be thoughtful in its choice of words and to, i want to say, embrace the moment, but to play through the moment in a constructive way. we need that tone in this world. if there were a rupture around taiwan it would be catastrophic to both the chinese and to the american economy. by catastrophic, i think you're looking at great depression circumstances. >> if there were some -- you say rupture, a war, some sort of attack? >> if we lost access to taiwanese semiconductors, how many weeks until tesla stops making cars? or gm? or ford? or

basically because chair powell said at the press conference in december that they want to get movingng back to 2%. the minutes said the same thing, and, you know, we think that year on year core pce inflation is falling to 2.5% by the end of the first quarter and i think in that sort of environment, with more deceleration expected, what they have said is consistent with cutting at least gradually. >> the other thing that jobs report showed today, jan, is that we're really seeing some real income growth, some real wage growth, which has been part of your soft landing scenario, but now that wages are rising faster than inflation that bodes well for consumption which also may make it harder for inflation to come down. >> well, we certainly agree that the economy is pretty solid and strong real income growth is an important part of that, but it has not stood in the way of very significant disinflation in the united states and really across the world, and we think that's going to continue to be the case. there will be additional disinflation and even as there is inflation in a healthy gro