and if the fed is not serious about achieving this inflation goal, how will the fed's credibility suffer when inflation rises above 50%? accordingly today, i hope that chairman bernanke can give the committee more insight into how the fomc's inflation goal will work in practice. i would like to hear whether he believes congress should hold the fomc accountable for meeting its inflation goal. and while the chairman has taken steps to improve the transparency of fomc, the transparency of the board of governors appears to be getting worse. a recent "wall street journal" article noted the board has held 47, yes, 47 separate votes on financial regulations, yet held only two public meetings. the article noted that there's been a steady reduction in the number of open meetings by the board since the early '80s, when the board had more than 30 open meetings. as a result, the fed is making sweeping policy decisions behind closed doors. this is inconsistent with your professed goal of making the fed more transparent. in another troubling new development, the fed decided to enter the debate on hous

>> we're doing a fed survey. we're going to ask the street what they think about the possibility of continuing operation twist. it's all going to be about the numbers. if we can continue back on a 2.5%, 3% gdp growth track, possible it goes away. if down towards 2% or even below 2%, i think twist remains in place. we have a visual representation. the second chart will show you what's going on with the balance sheet on twist. the problem is that they've b increasing, buying more ten-year yields. but they've been selling the short end. they're running out of short end stuff to sell. that's twist right there. >>> president obama announcing the u.s., europe and japan are bringing a trade case against china. at issue, how china is exporting rare earth metals, minerals used in all sorts of electronic things such as tvs, smartphones, batteries and more. the president says china is not playing by the rules. let's ask u.s. trade representative ron kirk. ambassador, great to have you on the show today. are you confident th

mandate for the fed. -- informative mandate for the fed. perhaps they found this section to be very confusing. it is very confusing because it is written as if the dodd-frank act did not exist. it was not clear to me as to what part of this act was trying to achieve it. specifically, the dodd-frank act and section 11 already requires that any lending programs before the specific purpose of providing liquidity in a broad based program and not to a specific and single company. a bill out of aig would already be prevented by this provision of dodd-frank. second, dodd-frank requires the collateral be sufficient to provide tax payers -- to protect taxpayers from losses. it prohibits the fed from lending to borrowers that are insolvent. it requires the fed to terminate any such lending programs in a timely fashion. it would conform with these requirements. the fed has been working on this. they are not finished. they are in the works. the only uncertainty is whether the fed intends to release these new lending

the reason is fed was created was to try to panics. financial stability was the original motive ofe d. so now we saturday of come full will always be with us. that is probably unavoidable. we've had financial crises for 600 years in the western world. periodically there's bubbles. given what the potential fory important for central banks and other regulators to do all we can first to try to anticipate or prevent a crisis, but if a crisis happens, to mate gait it and make sure the system is strong enough it will be able to make it through the crisis i tact. so again, we begin by noting the two principal tools of central banks. serving as lender of to prevent or litigate financial crises and using monetary policy to enhance economic stability in. the great depression as iribeth used appropriately. but in this episode the fed and other central banks and i should say that there's been a great convergence that other banks havell have followed very similar policies to that of the fed. that these tools have been usedy case we avoided -- by do

so the fed is a bank for banks. si accounts with the fed essentially, those are called reserve accounts. so as the purchases of securities occurred, the way we paid for them was basically by increasing the -- the amount of reserves that banks had in their accounts with the fed. so you can see this here. this is the liability side of the fed's balance sheet. of course, assets and liabilities including capital have to be equal. so the liabilities side had also to rise near $3 trillion as you can see. now, take a look first, if you look at this, take a look first at the light blue line at the bottom. the light blue line at the bottom is currency. federal reserve notes in circulation. sometimes you hear the fed is printing money in orto we acqui. i've talked about that in giving some examples. as a literal fact the fed is not printing money to acquire these securities. you can see it from the balance sheet here, the light blue line is basically flat, the amount of urrency in circulation has not activities. what has been

the fed says 15 of 19 u.s. banks have passed its latest stress tests, releasing the results two days early. that may have been forced by the fact that jp morgan announced around 3:00 p.m. time that it will pass and boost its divid d dividends and buy back millions in stocks. four banks failed. citi, ally financial, metlife and suntrust. others are boosted dividends. the feds say total losses under the doomsday scenario would be $534 billion over two years. cit citi,al ly aa a citi,ally financial, metlife and suntrust. >> he's the global head of gt epic strategy. i want to talk with you in terms of the reaction of what we saw yesterday. some people were called it a market melt-up. we saw the dow up by 217 points and we saw a lot of action in stocks and the financials. we saw jpmorgan wigan the announcement, prompting the fed to do something it wasn't prepared to do. what's your reaction to it? >> think clearly this exercise has had a positive outcome, more positive than we expected. i think it's also in sharp co

we had the fed.k news is tremendous. >> it comes at a time we've already had a pretty good rally from the october lows. we're already building a high here. >> the only way to break through into new territory is to come through with some gusto. >> let me bring in bob pisani. we'll hear from the fed in about a half an hour and you wonder if that will have an impact on tomorrow's market. >> expectations are very high for a lot of these banks. citigroup people think there will be a gigantic buyback. jpmorgan is the best house that's out here. i'm a little concerned the expectations may be too high. >> warren meyers, always good to see you. that is it for the first hour of the

the fed always tloend banks. we made some modifications in order to reassure banks by the availability of credit, and to get more liquidity into the system, we extended the maturity discount window loans which were normally overnight loans, we made them longer term and auction ever discount funds where firms bid on how much they would pay. by having a fixed amount we would assure ourselves we got a lot of cash into the system. the point here is that the discount window which is the fed's usual lender last resort facility was used aggressively to make sure banks had access to ca but our financial system is a lot more complicated than the one that exists created in 1913. we have many other different kinds of financial institutions and markets now, and as i the crisis was like an old time bank crisis but appearing in all different kinds of firms and institutional context. fed had to go beyond the discount window. create other p, special credit facilities that allowed us to make loans to other kinds of financial on t

mandate for the fed.- informative mandate for the fed. perhaps they found this section to be very confusing. it is very confusing because it is written as if the dodd-frank act did not exist. it was not clear to me as to what part of this act was trying to achieve it. specifically, the dodd-frank act and section 11 already requires that any lending programs before the specific purpose of providing liquidity in a broad based program and not to a specific and single company. a bill out of aig would already be prevented by this provision of dodd-frank. second, dodd-frank requires the collateral be sufficient to provide tax payers -- to protect taxpayers from losses. it prohibits the fed from lending to borrowers that are insolvent. it requires the fed to terminate any such lending programs in a timely fashion. . [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] and there are at least three things that that pen can sign. one, he can approve the ke

but moreft was that the fed would in making loans, to financial institutions the fed would charge an interest rate that was lower than the rate, t but higher than normal interest calmed down and rates came down back to more normal levels, it was no longer economically attract attribute v for financial institutions to keep borrowing from the fed. the program just sort of wound down quite naturally. so we didn't have to they basically disappeared on their own. federal reserve took in lender of last resort programs were quite minimal. as i described lending was clateral in term. most cases. in december of 2010,e all the d involved in the fed made during the crisis. of the 20 2 1,000 loan defaulted. every single one was paid back. even though the objective of the program were stabilizing the system was not profit making, the taxpayers did come out ahead in those loans. so that was the lender of last resort activity. that was the tool, the fire hos financial crisis. but of course as i described last time, theven though the crisis was contained, the impact on the u.s. and global was severe

the fed is trying their hand at p.r. via twitter maybe we can just throw up a couple of our favorite tweets that the federal reserve because of course this is the best thing about them being on twitter is the fodder it gives everybody to say what he thinks on twitter because right now not essentially said the federal reserve is now on twitter at i'm sorry i can't read his kind i need to see it must mean the federal reserve is now a twitter out. word is they'll be able to inflate their tweets to two hundred eighty characters who also weighed in zero had a funny one thanks to the federal reserve arrival the value of all tweets look lags by ninety eight percent in a few years someone else said the tweet that from the twitter of jackal island at a reserve we love that that for now thanks for our show don't forget to follow me on thanks for watching our show don't forget to follow me on twitter at lauren lyster give us feedback at youtube dot com slash capital accounted for everyone here thanks so much for watching and have a

he sees the fed buyingost the e. it's nightly business report >> announcer: nightly business report with susie gharib and m huds nightly business report is made possible by: this is "nightly business report" with susie gharib and tom hudson. soox*ud good evening, everyone. my colleague, tom hudson is off tonight. the dow broke its winning streak after some disappointing economic news today. investors had been buying up stocks on a steady stream of upbeat news about the economy, but not today. inflation at the consumer level rose 4/10ths of a percent in february. high gasoline prices accounted for most of the increase. the biggest disappointment is a significant drop in consumer confidence. the university of michigan index in march fell to the lowest level this year. it's a sign that consumers are worried about high prices at the pump, and could scale back on spending. the major averages closed mixed. the blue chips lost 20. the nasdaq fell a point, and the s&p edged up a point. the dow rose almost two and a half perc

and once again, the fed did not meet its mandate. they responded inadequately to the bank runs, allowingthis tre decline in the banking system, as many banks failed. and as a result, bank failures swept the country. as i mentioned before, a very large fraction of the nation's banks failed. almost 10,000 banks failed in the '30s. and that continued until deposit insurance was created in 1934. now, why did the fed not more aggressively be lender of last resort? why didn't it lend to these failing banks? in some cases the banks were really insolvent, wasn't much could be done. they had made loans in agricultural areas and their loans were all going bad because of the crisis in the agricultural sector. but part of it was the fed appeared at least to some extent to agree with the liquidationist theory which said there's too much credit, we're overbanked, let the system contract, that's really the healthy thing. but that was unfortunately not the right prescription. now, of course in '33, franklin roosevelt came into power. roosevelt had a

do you think the fed did the right thing? you were fed governor for many years. is that how you would vote? >> yes. i don't think there was any reason to change the policy right now. they still have a lot of accommodation, a lot of support for the economy, because the economy although we've got some good signs, things turning around, we've had a few false stalls before in early 2010, early 2011, where the employment situation seem tobd improving and then we got very disappointing numbers for subsequent months. so i think it's right for the fed to be taking a wait and see attitude right now. >> susie: so what happens next? a lot of people are saying the april and june meetings of the fed could be critical. what's your prediction? >> i think it's really going to start to get interesting, because we'll get one more employment report between now and the next meeting, which is in mid late april, so when we we'll get some information but not a lot of information. so my guess is the fed will be still somewhat cautious in its outlook. but by june we're going to get a lot

the fed is 100 years old. how many of those years have been years in which we've had stable growth or relatively stable growth and low inflation? well, there was 1923 to 1928. on the gold standard. limping gold standard but a standard. then there was 1985 to 2002 when they followed something call called -- not identitically every meeting. but pretty much followed it. that's it. the rest of the time they produced the great inflation, the great depression, a whole variety of business cycles and they contributed, they didn't cause, but they contributed to the current crisis. so that should tell you that all this discretion and making policy judgments from quarter to quarter is a bad idea. and the economics profession is if it's solidly on the side of anything, it's solidly on the side of rules are going to work better than discretion. and, you know, would we have had bubbles if we had followed rules? no, we would not. the bubbles are people getting out of money and into real -- intol

louis fed economists. it's very long, but it's very good, and it uses extensive quotes from the transcripts in the period between, i guess, like '92 through the early 2000s, and it's all about the, what the increase in the trend rate of productivity growth, how that was dealt with in the fed and how decisions were reached. and, you know, it's really worthwhile, and to me, that's exhibit a in understanding how these, you know, transcripts can really be used productively to understand and improve monetary policy function. >> the transcript question, though, does kind of raise -- like, i sensed from all the fed guys up here this kind of bureaucratic intransigence a little bit. on the one hand we're saying, okay, we already know everything. like, steve listed automatic things they do to be -- listed all the things they do to be transparent. but if they really do, they should be discussing their genuine views, so it should be uninformative. in the state of the world or where it is informative, then i want to be

, and i think fed some complacency at the fed, there was a philosophy at the top of the fed, that said markets do a better job of policing themselves than government regulators, and unfortunately that was a major fact -- one of the contributing factors. the success of the fed taking risk out of the system, bringing inflation down, allowing home prices to go up, etcetera was a fundamental -- green span was proclaimed a hero himself for the success. >> talking of the great moderation, craig, you are from canada, and td bank, chief economist, which i was surprised to find out is the eighth largest bank in u.s. and second in canada have a good viewpoint to see what is going on in the united states in the last few years and what has not been doing on in canada. can you share some insight there is? is there more that we can learn from canada? >> well, let me start off with the comment about the great moderation and then work in the differences and experiences. because i think it's a really good point. you know, in actual fact, you the murder on the orient express works. i cannot find anybody

we've basically come full circle back to the point at which the fed -- where rates were when the fed started operation twist. is that a problem for them at all, dan? >> not at this level. certainly if it continues drifting higher you're probably going to see a couple of the more dovish members of the fed come out and try to jawbone rates lower. but it's important to remember that virtually every fixed income strategist's model, the yield on the 10-year should be anywhere from 2.75 to 3.20 underscoring the importance of fed policy. they want rates lower. at the same time, let's be clear. we should all be praying to god that we eventually get higher interest rates or else we're jap japan. >> dan and kelly. an earthquake hitting off the coast of acapulco, mexico. it is a 7.9 magnitude quake. a pretty big quake. initially reported 7.6. couple minutes went by. now 7.9. off the coast of acapulco, mexico. awaiting word on any damage reports. a heavy touristed area. concerns about the waves as well. mexico city is more inland. still the city mayor tweeting out we have an earthquake but nothi

don't focus on the fed.n you consider what jpmorgan did and you think they can raise the dividend because natural forces for the market -- actual market forces are taking over and banks are truly functioning. they're functioning like banks, lending money to profit and growing. not just like talking like the fed. that means there's going to be clamoring for borrowed funds, and rates are going to go higher whether the fed likes it or not. the fed actually really -- they actually want them to go higher. or it wouldn't free jp morgan to raise its dividend and give them that buyback. they want them to be higher. they want the market to take over. they, too, want to have a back seat. they're probably sick of being talked about themselves. it's been so long since we had an honest-to-betsy growth in the economy and not the turbocharged washington kind. one that's actually growing. we need to think about what's going when we go from low growth to middling growth other than geopolitically prices of oil. washington is

you know how the fed and the treasury re acted to this, the treasury balanced the budget and the fed actually raised interest rates. guess what, the depression ended. we keep on hearing this propaganda stick drum beat assertion that in order to get us out of our sorrows, the authorities, the high and mighty ones, must run immense deficits, must cut interest rates to the bone. how do they know that? they assert that. but there's a real living historical example of it doing the exact opposite. yet that depression which featured 14% of unemployment at the lows, ended, and within a year the unemployment rate was back in the 3%. today 20-somethings are desperate for an economy that does something besides sit there and slumber. they're not getting it. >> what are the alternatives? jim, you've been headaching the case for -- >> capitalism is an alternative to what we have now. i hardly recommend it. >> actually, we all do. >> no, we don't. >> well, okay. the federal reserve may not. but let's make the case for gold. >> we ought to be discussing an intelligent move toward a sound currency, b

the fed is supposed to be nonpolitical or apolitical.ut it doesn't mean that they are politically insensitive. i've never lived through a time where the federal reserve has been the target of so much political rhetoric, basically. does that at all stay their hand as we draw closer to the election? >> i think it does in general. i think -- some of it's a judgment call, tyler. and it can go either way. i think the fed would probably take the path of least political resistance. with the economics and monetary policy concerns coming in the first order. but, tyler, i would step back and ask myself about the broader political mood of the country. and i think it's broadly about inflation overall needs to be contained but at a time when inflation is not apparent, i think the fed is -- has a green light to execute monetary policy within certain constraints. i think that's the broad mood of the country. >> a quick question, vince, do you expect the fed's language about housing to change? do you expect perhaps the decision about mortgage-backed sec

louis fed members. it uses quotations from the transcripts from 1992 through but they 2000's, increase of the trend rate of productivity growth, how that was dealt with in the fed and how decisions were reached. to me, that is exhibit a in understanding how these transcripts can be used productively to understand and approve a policy function. >> the transcript question -- i up here -- the guys appea we're saying we already know one thing, but if we know that stuff, to release of the transcript should not be harmful, because it should be informative. in the world where it is not informative, i want to be informed. if they are saying one thing in the public stuff, but in meetings saying something different, that is something i think congress should be informed about when they are voting on the confrontation -- on the confirmation of the federal reserve chairman. i like the three years. i think the argument is against -- >> do you want two? into thenvite the tv's meeting. >> i do not want to have them put

second one is the fed. he's going after the fed. the only one with the guts to do it.ecomes self-feeding again. and the fourth one is that notion that america, that central notion that america is about is about resilience. and you don't achieve that through bailouts. you need the economy to stay vital and you need a certain rate of failure. what is -- what is fragile to break early not too late. and he represents these ideas. this is why i came out of my hiding to just express my support and going to be fund-raiser with some friends. but is the idea. although i'm not a libertarian and i'm not coming from a political standpoint, but on a risk-based view of the world. >> actually we have a sound bite of a recent interview or a conversation with ron paul, i think in which he sums up the kind of points you're making. let's take a quick look. here's ron paul. >> you continue to do exactly what we're doing now, it crashes the country. we're not there yet. but it will come. you know, last month, two -- a $200 billion deficit in one month. that used to be the entire budget are

he said t's conceivable" the fed's key interest rate could move up to 1%. tom, charles plosser is a powerful voice inside the fed, and he said the economy is improving. >> tom: susie, we are certainly seeing improvement in the job market. the government reported today the number of people filing for jobless claims for the first time fell to the lowest level in four years. the number last week dropped to 359,000, just the latest sign the job market continues getting stronger. >> susie: that's where i began myonveation with charles plosser. i ked him what he needs to see to feel that job market is healed. >> the job market will be healed when the flows and the jobs are flowing at a reasonable, steady pricement but you know, economies fluctuate and so they will be times when we feel like we're taking two steps forward an one step back. that's just the way economies work. >> so do you need to see job gains of five month, six months back-to-back before you feel comfortable that the economy is over the herd snell. >> well, i think certainly the longer we get 200,

and did the fed or treasury take a hit? >> i was looking at this hearing, sue, as a barometer as to whether or not what the fed or treasury has done or what's going on in europe would be part of the political debate that's going on. and i think there was a little bit of probing and examination going on here. i don't think there was any big issue that came out as something where either the obama administration or the fed is going to be a part of the political discussion. i think there are those out who have their feelings about the role of the fed and treasury, but i don't think it's where the wider political discussion going to happen in the next several months now. >> fair enough. thanks, steve. >> a monster week for housing data. we have a slew, yes, a slew of reports from the state of the mortgage market to the amount of shadow inventory out there. our real estate correspondent, diana olick, has been crunching the numbers and is here to walk us through them. diana. >> that's right, tyler. an awful lot of numbers to get t

how the fed responded to the crisis. in lecture for, we will talk about the recession recovery in the aftermath and the policy responses there. that is what i wanted to cover today. we do have a few minutes. i would be happy to take questions. what do we not take the microphone? >> in the previous lecture, we discussed how it led to double that. today we are discussing that policy in the 70's -- how do we know when the right time is? >> well, it is challenging. it is one of the reasons we have so many economists and models. everything we can use to try to figure out what the appropriate number is to tighten or east policy. it is not an easy thing. forecasting is not very accurate. we as provisionally to keep making adjustments as we go along. the 1970's was particularly difficult because at that time, inflation expectations were not all tied down. one thing that happened then was that if gas prices went up, people began to expect higher inflation. then they began to go and demand higher wages to compensate for the higher

all three critical for the fed's test. they said they plan to talk further with the fed to understand the loss models and asked that they be released to the public for more transparency. >> you know, i guess it's not a huge surprise to see the strength among the majority of the banks. we knew that this was going to be much better. they've come a long ways from 2009. >> you know, in aggregate, it's a positive certainly for the banking sector. again, citi right now is fine because if it doesn't -- if it can't go ahead with, you know, additional buybacks or dividend, it would have enough cap nal a stress case scenario. it just means investors looking for some of that capital to be returned might be disappointed. >> mary, does it have to -- can it submit a plan that includes a smaller capital distribution so it's out there or some increase at all? because they were only at what, 4.9 and needed to get to 5.0 or 5.1? >> 5%. the assumption would be that, yes, they could submit a smaller plan to fed and they have 30 days to do tha

not going to worry if the fed goes to 2.25%. when do the feds start worrying? do we wake up one morning at 3%? when will ben bernanke really start to sweat? >> i think that's a loaded question. if we get up to 4% because the economy's cooking in greece, i'd like to see ben take a hiatus or a three-week vacation. if we move higher because there's a perception that there isn't another sugar buzz coming from the fed or economy isn't really improving but rates are going up, then that becomes an issue. and i'm not sure what the fed should do or shouldn't do. one thing i can tell you, the closer you get to november, bob, the more reticent the fed's going to be, in my opinion, to do anything. >> tradition holds they will stay out of the way there. before the april meeting, when everybody expects some guidance on what they do when operation twist goes out of the way, whether they provide more quantitative easing, it is going to be a nightmare for them if yields are much higher at that point. >> remember, these declines, bill, are coming

the fed meets tomorrow.the fed meets tomorrow. one of our next guests says the fed is wrong. high inflation already here. as much as 8.1%. so might he be right? steven cunningham of the american institute for economic research and our pal, brian westbury. steven, with a cheap dollar and bodeles of money creation at a very high price, i want to believe that inflation is stronger than the fed is telling us. but 8%, that one is a little bit incredulous. what's your take? why is it 8%? glit sounds a bit extreme. we had a lot of people who said exactly what you just said. it doesn't seem right. the inflation i seem to experience every day in the economy when i go to the gas pump, when i go to the grocery store, it seems to be quite a bit more than what the bureau of labor and statistics is telling us. we decided to see if we could validate that experience. we built an everyday price index which is made up of goods and service that is you buy day-to hi day, frequently. and we found that those prices, indeed, do go

the policy response of the fed, including monetary policy.he broader response in terms of changes in financial regulation and a little bit of forward looking discussion about how this experience will change how central banks operate and how the federal reserve will operate going forward. so this is our topic today. origins and missions of the federal reserve. so let's talk in general about what a central bank is. if you have had some background in economics you know a central bank is not a regular bank. it's a government agency. and it stands at the center of the monetary and financial system of a country. central banks are very important institutions. they have helped to guide the development of modern financial systems, modern monetary systems and play a major role in economic policy. now we've had various arrangements over the years, but today, virtually all countries have central banks. the federal ree japan in japan, bank of canada and so on. the main exception is only cases where you have what's called a currency union where a number of

one of my options, you know, as much as i would like to do something with the fed, i say the fed is going to self-destruct eventually anyway when the money's gone. why wouldn't we legalize competing currencies? can't people save and put this in a mattress and get four or five times much of the value in a few years so the record of what you've done in the last six years is destroy the value of real money, of paper money. at the same time real money is preserved. a competing currency, we already have a silver eagle. it's legal tender for a dlal, and some pim say well, it's legal tender, and it's a dollar and it's on the books and they use it and get into big trouble. the government closes them down and you can get arrested for that. what's wrong with talking about parallel currencies and competing currencies. this is something that i think would be a compromise and that we could work along those views. >> first of all, good to see you again, congressman paul. one word on the inflation. of course, those numbers constructed by the bury reof labor statistics and not by the fed, they're done in

the fed was created by congress to manage the nation's monetary policy. and this is its oversight process. twice a year the fed chairman comes down. he held an appearance before the house today. and he'll do it all over again in june. >> as you take away from this hearing indicating that economists and the fed chairman specifically seeing modest growth and modest growth continuing over the next couple of months, what else did you learn today if anything? >> you know, i think as far as new information, there wasn't an abundance of it. what was most striking was we didn't see any change in the fed's outlook. there's ban lot of talk lately that the economy is improving, growth is accelerating. the housing market may have bottomed out. none of that good news has yet been sufficient to show the good times have returned. that's a caution for americans. his opinion which is worth more than most perhaps is that we're not there yet. >> it was important enough for a candidates to get off the campaign trail and go back to congress. >> any opportunity to get in front

we looked at this in great detail inside the fed and a lot of research outside the fed and i know --t warn you there is no consensus on this and you'll probably hear different points of view but the other thing i see what we have done within the fed suggest monetary policy did not play an important role in raising house prices during the upswing. we need to talk a little bit about some of the evidence on discretion. one piece of evidence is the international comparison. people don't appreciate that the united states, the boom and bust in the united states was not unique. many countries around the world had rooms and busts in the house prices and those booms and busts were not very closely related to monetary policies of other countries. for example, the united kingdom had a house price boom that was as big or bigger than that of the united states but monetary policy was much tighter in the u.k. than it was in the united states so there was a bit of a puzzle for the monetary theory of the house boom. another example which is not on the slide as you know germany and spain both share th

steve, what about that thought that the fed might actually follow the market here and raise its fed fundsy that? >> i can't answer that question, tyler. >> sworn to secrecy? >> i'm working now on the cnbc fed survey for monday. >> uh-huh. >> and i can tell you -- i'll let it slip, there's not a lot of belief in that late 2014 number or date. they are not on board right now with the idea that the fed will keep rates low until 2014. >> these are economists? >> economists and wall street 67 market respondents. and i'll leave the percentages for monday. you'll have to tune in. but there is a growing disbelief in late 2014. >> but, katie, if the fed -- first, do you buy that possibility that the fed may raise rates sooner than its stated sort of late 2014 goal? number one. and number two, if it does that, isn't that a good sign that things are moving along better than the fed might have expected? >> well, we doept believe that the fed's going to move before their stated date of mid to late 2014. however, i do agree with steve that consensus has certainly turned in the last several days. and fu

but as the fed remaining cautious in part because, in the past, the fed has overestimated the pace of economic recovery. ben bernanke again today reiterating a list of reasons for his own cautious optimism, including the compressed division of the housing market and the economic turbulence in europe. again, the uncertainty of oil prices putting a big cloud on the future of economic recovery and also expectations somewhat lower today about the long-term jobs out look. among those posing the questions, ron paul who is in springfield virginia last night with an eye on super tuesday. he is a member of the house financial services committee with questions to the fed chair who he is often a critic on issues rising, including inflation and rising prices. >> but i do want to make a point about prices because prices go up. that, to me, is not the inflation. it is one of the bad consequences of the inflation, which comes from the increase in the money supply. and is one of the bad effects. but, you know, you took over the fear in 2006. i have a silver ounce here. and this ounce of silver, back

the fed or other metric out there? think right now the market is reassessing that. >> i was going to say, that's why we've seen -- part of the reason we've seen the backup in yields, i would think. >> i think it's absolutely right. i think what's happened is we captured at a really interesting time. we did this survey last week just when the market was rethinking this. if you're looking at where they're putting the 10-year at the end of the year, it's 2.6%, which is not much change from where it was. we got them right when they were re-evaluating that. we do this again in another month or two, it's going to be moved. >> we've moved on about worrying from systemic financial collapse because of the eurozone. and now going to be less effective by the eurozone, it's because we feel more confident that we're not going to have the systemic financial impact. >> right. we're not falling off the cliff. thanks. >> gentlemen, pleasure. >> when we come back, so many questions following apple's big announcement this morning. when t