myth out there is that the fed drives these things they tend to follow these things the fed back in the seventy's eighty's and ninety's we saw this time and time again that when the market starts to move up and we see short term rates moving up the fed will step in and announce a quarter percent hike because you don't want to get in front of that claim that they're the ones that were driving that but that's not really the case now basically investors they front run the fed's rate hikes by sending yields up anticipation of that of those rate hikes now can't the fed use its forward guidance to angkor interest rate expectations by signaling that rates will remain at zero no matter what. well certainly they can and this will continue until it won't the fed absolutely will not all on its own raise interest rates that would be a stone cold killer here not just for the fiscal situation of the u.s. government but it would kill all sorts of things that the fed desperately wants not to be killed borrowing they want to see a result of borrowing not just at the corporate level they want to see

the answer is to be the fed chair, and in yellen's case she was on the fed and she was at san franciscoot long ago. where it is difficult to exercise one's idiosynchrocies, and for the last number of years we have not been able to see yellen's idiosynchrosees, many of which are scrubbed by fed staff. >> well, if you're going to buy or sell a house, if you're heading to the market to look for a car, what can you expect in the coming years in a janet yellen-led fed? we're going to take a short break and when we come back we'll talk just about that. this is inside story. al jazeera america. we open up your world. >> here on america tonight, an opportunity for all of america to be heard. >> our shows explore the issues that shape our lives. >> new questions are raised about the american intervention. >> from unexpected viewpoints to live changing innovations, dollars and cents to powerful storytelling. >> we are at a tipping point in america's history! >> al jazeera america. there's more to it. consider this. the news of the day plus so much more. answers to the questions no one else will a

the fed makes its own decisions independently as much as some in congress don't like that fact, the fedan independent agency. >> good to talk to you all. that brings us to the end of this edition of "inside story." thanks for being with us at home. the program may be over, but the conversation continues. we want to hear what you think about the issues on this or any day's program. you can log on to our facebook page or send us your thoughts on twitter or reach me districtly at ray suarez news. see you for the next "inside story." in washington, i'm ray suarez. ♪ >>> welcome to al jazeera america, i'm del walters. these are the stories we are following for you. thousands of flights have been canceled already as another major winter storm slams the south. >> we're pretty confident that we will win the vote. >>> a landmark labor vote taking place in tennessee. >>> and casting doubts about mammograms, we'll hear from the lead author of a controversial new study. >>> and the president using the pow o'er

fed is a jeopardy factory to. run i have to ask you what were some of the skits that. roost watch all the members to get inducted have to do a lot of musical skits in particular some of them were doing kind of jokes from the book of mormon but it was kind of a parody skit a lot of them were doing jokes. often at the expense of people like hillary clinton and barney frank barney frank in particular someone who they saw as pushing for financial regulation for a lot of jokes so this was from january two thousand and twelve when he went so there were a lot of jokes at the expense of occupy wall street which was still kind of right occupying physical space at that close to wall street now what was ruthless conclusion after these proceedings what do you think what are the right what he said that this was kind of an indication to him that these financial titans were very disconnected from the world they surrounded themselves and he made particular mention of the fact that they were making fun of a lot of people when they got a bailout for instance and mainstream america did n

you know the fed is a creature of congress and i think the way the average person can impact the fed is by letting their their congressperson know that they're not happy with current policies and and one of the goals of the film is to bring about more awareness at the congressional level of the impacts of fed policies on the average american you know that we point out in the film that it's a very regressive policy if you're if your goal in stimulating the economy is to stimulate stock prices and financial asset prices if that's how you're trying to stimulate the economy you're really going to benefit by you know by the nature of what you're doing the wealthiest right and the banks is as mish was saying earlier so i think the average person it's they can write their congressman they can email their congressman they can go to our web site money for nothing the movie or good you know send a copy of the film when they care about it so it's it's all about you know i think creating awareness creating we're trying to with the film generate public opinion and create some awareness at the con

reason why the asset markets might be so point right now correct yes of course that means the fed is. fueling massive inflation but it's inflation of financial assets not inflation of goods and services and but it's equally damaging in fact it's even more so because this huge inflation of financial assets take one measure the russell two thousand which is the index of the most speculative and higher beta stocks so-called main street america small mid-cap companies is now trading at eighty five times trailing earnings that is lunatic that is that surge that's what you get at the peak like we did at the dot com peak in two thousand or early two thousand or at the peak of the market in two zero zero seven before the big crash so the handwriting is all over the wall there is really extreme speculation everywhere and you have the new fed chairman testified last week that she can see no signs whatsoever of not only any red flashing lights but orange ones as well and i think that's just a major of the fact that the fed today is being run by academic zealots who do not understand that they h

need to have more keynesian type you know middle income oriented manipulations we need to get the fed out of the financial markets its fat thumb off the scale let interest rates clear the market based on true supply and demand let traders and speculators be at risk shut down the fed fueled casino in will solve the problem that he. purports to be addressing you so you obviously think that the fed's accommodative monetary policy is a big reason why the asset markets might be some point right now correct yes of course i mean the fed is fueling massive inflation but it's inflation of financial assets not inflation of goods and services and but it's equally damaging in fact it's even more so because this huge inflation of financial assets take one measure of the russell two thousand which is the index of the most speculative and higher beta stocks so-called main street america small mid-cap companies is now trading at eighty five times trailing earnings that is lunatic that is that surge that's what you get at the peak like we did at the dot com peak in two thousand or early two thousand o

and they got it but it took the fed at four minutes. for months to come up with one hundred sixty tons well now two years later they can't come up with three hundred times for germany. so this supports the conclusion of many people who are been active in the gold trade for years that what the fed initially did to suppress the price goal was to lin that up the gold it had on the closet to bully the dealers who sold it and this increased supply of gold into the market helped hold down the price now as a drained their holdings of gold they had to turn to a new mechanism and that was to sell the next good paper assurance that is they go in and they sell a future contract that gold it's not covered there's no gold to try to protect and that then drives down the price so that's the explanation for why the received out so much negative short selling where huge amounts of contracts are dumped on the market it least opportune times of day and nobody trying to get out of a position would unload it in that way because that's the way for maximum lo

where only the fed would give german school back. i think if i remember correctly german is deposits with a fair that is. fifteen hundred pounds thousand five hundred pounds a ton something tops thousand five hundred bucks wow and the fed said well and you can have it over the next seven years we'll give you three hundred tops that will give you a fifth of what you trusted us to keep for you well why would the united states tell its most important european now that it could only return a fifth of gold that it left where they don't drive still if it had to go and i think this last year the united states actually only returned five times. that i have seems incredible to me now if the fed doesn't have a goal what will happen when brown his bank figures this out i mean a learning it as it goes along but what's going to happen i think the buddhist monk is already figured it out but it looks now go back a little bit in time in two thousand and eleven should it and did as well demanded their hundred sixty times back and they got it but it t

economy repeating the fed's statements that asset purchases arch on a preset course so pretty much more of the same however one thing that's not the same the clear skies smooth sailing conditions that j.p. morgan chase is accustomed to now is that thirteen billion dollars settlement that j.p. morgan worked out with the way back in november the federal government that is it caught the attention of both washington and wall street now the landmark settlement stemmed from ak accusations that the bank overstated the quality of its mortgage securities sold before the financial crisis however a lawsuit filed on monday by the nonprofit group better markets has challenge the constitutionality of the deal in the complaint better markets argue that the justice department violated the constitutional principle of separation of power when it unilaterally struck the deal without a judge's blessing better markets is seeking to have a judge approve an injunction that would abolish the deal unless the justice department provides a quote ample and detailed records so such courts may review all the facts a

in the history of the fed, there have been only 15 fed chairs. you are the first woman to lead the fed or any major central bank. we are so proud of you. in your long and distinguished career, you have excelled at every single point of your career. i wanted to note that your appointment is a historic achievement in the women's movement. >> thank you. >> i would like to ask you about your reaction to the unexpectedly weak job report. which showed the economy only created 113,000 jobs in january. some of the markets are calling for a pause in the fed's tapering strategy. has the report caused you to consider slowing the pace of the tapering? >> i was surprised that the reports in december and january, the pace was running under what i had anticipated. we have to be very careful not to jump to conclusions. in interpreting what those reports mean. there were weather factors. we have had unseasonably cold eemperatures that made -- may b affecting economic activity in the job market and elsewhere. the committee will meet in march. we will have a broad

york fed. the new york fed told us we can have have them until they get permission to give them to us from the treasury. in light of your earlier comments regarding fed independence, are you concerned about having to ask the treasury for permission to given information to congress? >> well, the federal reserve acts as the treasury's fiscal agent and in that case we take instructions from the treasury and are merely abouting as their agent. that's one of our rules to serve as the fiscal agent of the treasury. >> the gentleman's time -- >> it is not a monetary policy rule. >> thank you, ma'am. >> the chair recognizes the gentleman from delaware, mr. carney for five minutes. >> thank you, mr. chairman. thank you for the opportunity to ask some questions of the new chairman the fed. welcome. thank you for coming. i know it's been a very long day. we do appreciate your coming twice a year as part of the humphrey hawkins act testimony and we appreciate your report. i have found these meetings very us

role in fed is very-- the careful. other thing she said, which interestingly is beyond the fed, is this issue of income inequality. give a sense of the numbers. in 1980 fewer high school graduate and you compare the average wage to a college-educated graduate, he made about 20% more than you did. today, the college graduate makes almost twice as much as the high school graduate. almost twice as much. as chair yellen said, the two drive that primarily are globalization and technology. there has been increased demand for high skilled workers. >> those will find us on the wrong end of the inequality equation? >> if you're a high school educated worker with no postsecondary education and you go into the labor force, 90% of the low-wage jobs are held by people with only a high school education. how do you get more people into high school category? >> you are the dean of the business school. you're looking at people in their late 20's going to serious debt in order to get a higher education and a great job opportunity. are t

my question is would the bhafr of the fed, would the actions and the policy of the fed by any different if the fed had only a single mandate, and that were price stability? >> so over this last several years i think the answer is no. because at the the moment -- >> how about today? >> well, inflation is running well below our objective. and the economy is falling short of unemployment. so both pieces of the mandate are giving us the identical signal. mainly we need an a policy. there can be situations where there could be conflicts between the objectives. and in that sense, it would make a difference. it might make a difference to have a dual mandate rather than a single mandate. at the moment there is no such conflict. my personal view is this mandate has served as quite well, and most central banks even if they have an inflation target also have a mandate to take account of economic growth. >> although the ecb does. >> that is true. >> thank you very much, mr. chairman. >> senator, egin? >> thank you, mr. chairman. welcome to the committee. i was so pleased at the beginning of the hea

these minutes, the last meeting under fed chairman ben bernanke, when the fed chairman continue to scale back its bond buying program another 10 lane dollars. another jobs report. the first testimony of janet yellen. they saw the economic outlook basically on track despite volatility in emerging markets. they made very few changes in their statement. the minutes say all members agree the cumulative improvement and the likelihood of continued improvement indicated it would be inappropriate -- appropriate at this meeting. at the table, i number of participants noticed they should be ready to adjust if the economies took a turn for the worse. they indicated changes are coming and that is important. participants agreed with the unemployment rate approaching, it would be appropriate for the committee to changes forward guidance for the committee to make decisions. . range of ideas were discussed including changing thresholds other spoke about, listing more factors that would guide their decisions. running below their target as factors to be considered. that is something to be watched for goin

the fed's easy money policies. our retirement savings will not be restored until i am age 83 assuming i can continue contributing to our retirement accounts. perhaps then i can retire. chair yellen, many seniors who are living on fixed incomes are suffering. when chairman bernanke was asked about these concerns, he always changed the subject to talk about younger workers or home prices. what will you do to address our concerns and will you commit today to attend a town hall meeting of retired seniors later this year to hear from folks >> i can ask it any better. >> well, that was very well expressed. and, of course, they are very valid concerns, and i would like to see retirees that are more on their safe investments. i believe that if we get the economy back on track after all, interest comes from returns on investments, even in the bank, the bank tends to pay more for deposits and pay higher interest when its investments are faring better. and and a stronger economy that will be more possible. so i would very muc

the fed has one approach.try has another and other regulators around the world have very different ones, so i think understanding the fed's approach, understanding how that affects international markets and the interaction across markets will be something that will be very important particularly given some of the tumult in emerging markets these days. >> what is the latest view on the soft patch and the degree to which -- she has to give an upbeat message, that is her job otherwise they should be changing monetary policy, but how does she indicate where the committee stands in particular on the last two job figures which were so poor? >> i think what she is saying is they don't see it as a reason to change policy. simon, one of the things that's happened is the fed has gotten into this rhythm of not really changing its outlook until its outlook changes, i know that sounds like a tautology, but specifically the notion it doesn't change its outlook until it presents its economic projections and that's going to b

the fed's easy money policies. our retirement savings will not be restored until i am age 83 assuming i can continue contributing to our retirement accounts. perhaps then i can retire. chair yellen, many seniors who are living on fixed incomes are suffering. when chairman bernanke was asked about

the fed to taper even more by $20 billion a month. fresh off the first meeting as a voting member, richard fisher joining us exclusively to tell us how this market downturn could influence the fed's next decision. liz: that is a can't-miss interview. it takes a lot of guts to quit your job but how about quitting your job on national television in front of the largest audience ever of any television show? yes the super bowl. that is what one woman, her, she did during the super bowl, with the help of godaddy. guess what? she is with us coming up, along with the ceo of godaddy who says the bold move had a lot to do with their business focus now. david: that was the real thing. amazing. tell us what you think by the way. is it time to bail out of stocks and head towards bond and commodities or even just cash. tweet us at fbn-atb. your answers coming later this hour. ♪ [ male announcer ] what if a small company became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace

then there's the fed.yellen's first day on the job officially today and she's greeted with this kind of sell-off. is she paying attention and what does the fed do now? that discussion right after this. well another great thing about all this walking i've been doing is that it's given me time to reflect on some of life's biggest questions. like, if you could save hundreds on car insurance by making one simple call, why wouldn't you make that call? see, the only thing i can think of is that you can't get any... bars. ah, that's better. it's a beautiful view. i wonder if i can see mt. rushmore from here. geico. fifteen minutes could save you fifteen percent or more on car insurance. >>> welcome back. so the dow closing down 326 points on the day janet yellen is sworn in. earlier on this program our steve liesman thought economic factors, not necessarily just the market could mean yellen's first big move will be to taper the taper. joining me now with more reaction, ben white, the chief economics correspondent

there's a market and there is the fed, but as long as the fed promises zero funding costs, what you findery tight. what you find is a great euphoria settling over almost all of the so-called risk credit markets, whether it's sovereign debt, whether it's corporate credit, whether it's bank debt. there is a terrific -- there has been a terrific rally in the prices of all these securities and the fed does not control them, but it heavily influences them all. >> so you wouldn't touch bank debt here. >> i'm not sure about that. it's an excellent way, kelly. here is one line of sight. i would submit to you that biotech is the most worrying portion of the stock market, not to be sure the people who were long and have been long and have been mining money from this, but people will say the stock market might not be cheap anymore. it might be on the upper edge of fairly valued, but they say there really is no sign of speculative excess. they are not looking at the 700-odd-billion dollar segment. the biotech segment is plain wacky. by every indication, ipos. if the market is open, biotech goes up.

the fed wants to be steady.nd sure enough when she came out, she really emphasized continuity with the bernanke fed, because markets don't like surprises. they want to be able to anticipate what is coming up. and she sent some pretty strong signals. she said the federal open market committee expects the economy to expand at a moderate pace this year. we have seen two consecutive months now of disappointing jobs growth, but that is not enough yet, not enough data yet. and she did signal as long as we continue to see moderate economic growth, the fed will continue to scale back its asset purchases. >> you business types pour over every word that she says. you look for everything. so it's not like these speeches aren't dissected for every word. >> oh, they are completely dissected. and everything is trying to read into it. and especially in the q&a session, people will listen to her answers. and this is happening on the hill and this is an election year, so you are likely to see political grandstanding, but this is

it is her first hearing after all, as the new fed chair will stop there -- the new fed chair.may be questions about direction of the economy. we were supposed to have a better 2014 than we have been having. job growth has been disappointing and people want to know why that is and we have seen housing fallback. and manufacturing numbers have coming a bit weaker. the fed offered its forecast in december and was saying a three percent growth rate this year. capitol hill will be asking if we will be able to get there. >> and she is expected to say that policymakers will continue with the tapered? >> yes, it is on track at this point because when they said they were going to taper, the numbers from then until now have gotten better in terms of hiring and participation rates. they are a little bit better than they were, so the fed can keep going with that, because they want to get out of this business. the balance sheet is over four dollars trillion and they are being criticized by emerging markets. -- is over $4 trillion and they are being criticized by emerging markets. one questi

to what extent does the fed take its cues from the stock market?last spring when they were talking about the drop in stock market going down and had this pr effort and seems they're willing to do that less now. a maybe that is good thing. sometimes what the stock market does goes against the employment mandate. yesterday, barns and nobody, job cuts, big announcement, firing a lot of people. stock went up 9% that happin th. >> correct. i think in general since last may's mention of tapering caused a lot of volatility in the market and fed and markets are much better rythym and they would like to say that with. to john's point they have to figure out how communication in the markets to the threshold of unemployment. to get to 6 1/2%, augment it with other measures or go back in the day when they used qualitative language such as we'll keep short-term rates very low for a considerable period of time. getting that formula right is something that janet has devote ad lot of time to and i think it is going to be one of her first order of business as chair

fed reserve president lockhart said recently. i appreciate the fed's use of forward guidance as another tool to influence market conditions. i'd like to get your thoughts o. i would like to get your thoughts on how it's most effective. it seems the fmoc had significant discussion about revising down the fed's forwards f forward guidance which originally stated it would consider raising interest rates once employment fell below the threshold of 65. in your testimony in the house you indicated that the 6-5 threshold would not be the only factor that's taken into account. policymakers would be looking at a broad range of day on labor market job creation and other indications. so it seems you're inclined to offer a more qualitative approach rather than the numerical threshold of 6-5. given the reality that to be effective, the guidance must be trusted by the market, would you agree with the president who said they would favor much more work towards a more qualitative approach, which would give you more flexibility and yet still give

what should the fed do? >> any three of you if you would like to respond to that. >> i do think that policy has been a tremendous drag. the chair mentioned earlier the tax increases. whether we have seen that in the fiscal cliff. it is important to talk about os tert. all of it has come from revenue racers and not spending cuts. i think we need to fix policy that is outside of the realm of the fed and that you can only do so much. there is a great amount of cash on the corporate balance sheets. almost two trillion on bank balance sheets. but it is cost facing the labor market's cost. so i will repeat something that chair yellin said which is monetary policy is not a pant pantacia. to go back to your question of what would i have the fed do? >> follow a taylor rule. was nothing like 1.25 point something like that. no one is sougti insougt sugges another rate. and to begin to taper into a quicker way. >> 30 seconds would you like to comment? sure i think there is a burden on congress to address the 11 million

how do use the investor play the fed. x stock-market guru jeremy siegel accurately predicted last year's equity rally makes the call on fox business. tesla stock get to supercharge boost from china when ceo elon musk continues his electrifying investors or rival bmw, take some of the voltage out of tears. we have a bull bear debate. google everywhere. and new meaning, next time you checked into a place you might be greeted by a google blast of smart watches. not science fiction. already happening at some of virgin atlantic checking desks. all aboard, "countdown to the closing bell" starts now. liz: the nasdaq up 46 points, good afternoon, everybody, i'm liz claman. it is the last hour of trading, and stocks are rallying for the fourth straight session with the dow jjst breaking through the 16,000 level. after a day for the history books on capitol hill. right now we are up more than 200 point offense the dow jones industrials, and you can thank janet yellen for much of this rally as she becomes the first female fed chair

the fed will be flexible about this. they are data dependent to get more aggressive if things get strong or to stay dovish if things go the other way. >> reporter: her comments echo her predecessor, ben bernanke's strategy, the market liked the continuity in the federal reserve's message. turns out it's a fairly powerful thing for equity markets. courtney reagan for "nightly business report" on the floor of the new york stock exchange. >>> not just stocks got a janet yellen bump. after getting beaten down by economic uncertainty and jitters about emerging markets in recent weeks, gold prices rose 1.4% today and even closed at a three-month high following yellen's reassuring comments on the fed stimulus plans. >>> another thing that helped investors breathe a bit of sigh of relief today was the vote on capitol hill tonight. the house did pass a clean debt limit extension after house speaker boehner agreed to bring the bill to the floor without trying to get any concessions from the white house. the move could avert anothe

len.hair yel in the history of the fed, there have been only 15 fed chairs. you are the first woman to lead the fed or any major central bank. we are so proud of you. in your long and distinguished career, you have excelled at everything goal -- every single point of your career. i wanted to note that your appointment is a historic achievement. >> thank you. >> i would like to ask you about your reaction to the unexpectedly weak job report. which showed the economy only created 113,000 jobs in january. some of the markets are calling for a pause in the fed's tapering strategy. has the report caused you to the pace of the tapering? >> i was surprised that the december and january, the pace was running under what i had anticipated. to be very careful not to jump to conclusions. reports mean. there were weather factors. be affecting economic activity in the job market and elsewhere. the committee will this is. i think the committee has said that -- >> well, can you describe what would cause you to consider a tapering pause? in months of bad data reporting? what