i think today's all about the fed, going forward, it's about the fed.ng rates. they've done enough. you're doing the wrong thing, guys. maria: jonathan fahey. >> advice for joe biden, stop undermining the incoming administration. don't sell the wall. you're trying to get short-term political gain from if a party that rejected you. the american people will remember you much more favorably being presidential if you stop talking. plaintiff. [laughter] maria: thank you, everybody. great panel and great with conversation. have a great day. "varney & company" picks it up, stu, take it away. stuart: good morning, everyone. elon musk doesn't like the funding bill moan as

they have gone from a massive gap between treasury yields and the fed funds rate and now with the fed funds rate down by 100 basis points, that gap is completely closed. so i think it's not illogical to believe that two rate cuts is, if anything, on the high side as we survey, obviously, an uncertain landscape in the new add in, coming in and the like i think two rate cuts is now sort of a maximum for the year, which is why we need to reprice some of the, you know, the pe ratios and the stuff that are -- have been hoping for more than a rate cut or two in 2025. >> well, we're repricing all right as we speak. at least in the stock market on the back side of what's happened today. right now the dow's down 650 the nasdaq is down by 2.5% our steve liesman has come out of the room. i want to bring him in, our senior economics reporter. the market reaction lle story. this was hawkish today he called the cut a, quote, closer call. he said inflation, the risks there he sees as, quote, higher and that they are closer to the neutral rate what's your read >> yeah. the other thing that maybe not

the s&p having its worst fed day since 2001. stocks falling around 3%, yields higher around 10 basis points on the u.s. 10-year. the focus shifting from the labor market of september to inflation again, a new dynamic into 2025 from this federal reserve. european futures looking to drop around 1.6%, european stocks flagged by these futures, ftse 100 futures also pointing lower a full percentage point as we lead up to the bank of england decision expect it by the markets to stay on hold. s&p futures currently flat after the losses of yesterday. nasdaq 100 futures pointing to losses of 0.2%. let's look across asset then. the focus on the treasury yield curve relatively benign picture in the session today, but the rout was there yesterday. the 10-year yield at the highest level since about seven months, 4.5 two on your benchmark. the pound in focus ahead of the boe decision, currently 1.25, you saw pressure coming through on strong dollar yesterday, brent 72.95 down 0.6% on oil, the growth concerns will be front and center in terms

our december fed rate cut. the big issue is november payrolls showing a rebound. >> it is somewhat strong report but not consistently strong. >> moderate softening in a pretty solid labor report. >> there are some cracks in the labor backdrop at the floor isn't falling out for me this year. >> reiterating a gradual slowing. >> the fact the unemployment rate went up means the fed will be comfortable cutting by 25 basis points. >> this is the kind of number that will support the fed cutting rates in december. >> with the unemployment rate up a little bit the fed can go in december. >> we will prove it to this pause, skip debate and what kind of message that means. >> they will continue to wait and see how the data unfold from here. sonali: though payrolls came in hotter than expected i want to look at the chart showing the unemployment rate climbing .1% in november to 4.2%. that indicates cooling demand for workers with long-term joblessness at the highest in almost three years. historically low but still trendin

the fed put is not there anymore. this is a flipping and flopping fed. the degree of uncertainty took the uncertainty in the lack of risk-taking to a new level. jonathan: i'm not sure who was more confused, chairman powell or the people listening. citi, unexpectedly hawkish, bank of america, unabashedly hawkish. steven englander with a question, if you're going to be so hawkish, why bother cutting? lisa: this was at the top of my notes this morning. he was asked that question and the answer was unsatisfying to markets. people do not get a sense of what the barometer was and how much this hinged on the expectations of next year. when he said some members just casually or theoretically penciled in some assumptions based on what the trump administration would do indicate to some people this would be a fed that assumed an inflationary impulse, respondent according to that assumption, and cannot even get behind the curve when it comes to weakness incoming. rbc capital talking about that. annmarie: typically -- jonathan: typically frustrated by fed speak. we a

instead of a fed that's hiking, you have a fed that's pausing, all coming off elevated equity levels and tight spread levels that does not bode well for back half of 2025, but near-term, i think the signaling is actually reasonably strong. >> i think the pull-back in banks is actually really interesting. i don't think that the environment for banks, the backdrop for banks, which i view as very positive, i think you've got -- you've got growth in loans, i do think the animal spirits are still there. i think you've got great potential for m&a, good capital markets, and they're not crazy expensive. and so, this pull-back i think is attractive. i would be adding. >> i just have one other thing and i know we don't price in geopolitical risk, but i cannot remember the last time there's been so much uncertainty look at what's going on in canada, germany, france, russia and ukraine, look at what's going on in syria and the middle east, look at what's going on in china, and taiwan. and that's not just the only point i want to make here. china's economy is a disaster, okay when you think about

mortgage spread to the ten-year has come in while the fed has been cutting.was abnormally high, above 300 basis points, the average by the way is like 175 to 200 basis points. there's the ten-year, 30-year mortgage spread. you can see it's down, i'll call it 270, 260. it was as high as 300. that would provide some relief to the housing market and home buyers that are out there, as well as the notion of small businesses paying very high rates in the market. >> if you think they might end up skipping in december, should we expect the chair to say as much, whether he says it in a way that everybody understands or market participants understand when he talks to andrew in a little bit? >> i think he likes keeping his options open. if you think about what steve was talking about, no one is talking about financial conditions anymore, yet right before this, we were talking about how high the equity market is going. doesn't seem like the best idea to cut rates into an equity market that keeps rising and rising and rising. you're going to have to worry about financial

if you look at the december, 2025 fed funds, you see the market one upping the fed a little bit on hawkish nurse. this forecast, the average forecast from the fed met the market where was that before it came out. if you look at what is happening in the 25, they want more hawkish and raising it up toward 4% for the end of 2025. also, if you have the 91% chance of no change at all. 91% chance of no change at all at the january meeting. and a little bit lower probability for rate cuts fo both march and may. still 50-60%. the idea is, skip a meeting. maybe skip two meetings and then see where things are. i don't think the fed fear trump and i don't think it fears reversing course if there is a big fiscal package or change in the fiscal policy. i think what the previous speaker said is what do the fed is more concerned about. inflation becoming nanchored. if they have to raise rates in response to physical policy, i think the fed would do it. >> stephanie, your thoughts? >> i think it is fair. it is soon to be talking about raising rates when we are still on a cutting cycle. by the way, if they

the fed needed to rip this band aid off. economy and lower with tariffs, we have to reset expectations. they could not leave the dot plot >> you sound optimistic. i want your word of the day. how do you see today shaping up? >> it was speed bump i don't think this was the end of the line. i think yesterday was an ugly speed bump if you tend to drive fast like i do, every now and then you hit a speed bump and miscalculate and bottom out the car and look to see if the ffler is still attached you continue to drive up on the bull market. this wasn't the end. it was an ugly, nasty speed bump yesterday. >> is this a buy the dip moment? we saw a huge selloff in small caps i think the fact we go from four to two cuts would change the thesis on that in your mind, what areas are buy the dip? what areas are you holding off >> i love buying large caps. everybody loved broadcom two days ago, how could you not love it today if you have an opportunity to buy at a discount and cash on the sidelines, i would doubt the selloff to 10% i know s

then the fed had its meeting, and what was a little concerning was the outlook by the fed participantsmaybe even deteriorated a little. and it made for an awkward press conference. if that's true, why are you cutting. the third thing that happened, in and of itself got resolved was the debt ceiling and that isn't that consequential, but it reminded people. we've got four or five big structural changes that are going to have to happen next year. some will require congress, and maybe they're not going to be as easy, maybe more challenging than people thought. i think all of those things together, you know, put a little more uncertain backdrop as we head into the new year. >> what does it mean for the fed? which now there's some uncertainty about whether they cut next year and when it happens. >> i think that's good that there's uncertainty because if i were there, i would not be willing to go any further unless i saw below 4 1/4, 4 1/2, unless i saw demonstrable improvement in inflation. >> did they make a mistake last week? >> i said before the meeting, i would go in concerned but with

this is a fed trying to buy time.: before he even started speaking you picked up on that and said you think the fed is afraid of what may happen with respect to fiscal policy. >> and they should be in terms of extended timing, right? as you said their data is breaking down. he used the term inflation has fallen apart from what we thought at the beginning of the year to the end. that may be the most sort of aggressive culpable language we've ever heard him use, and then we're talking about the extent. he just took back from 4-to-2 to match the market and sorry in the reverse and then this is, it's 150 basis points between what neutral is from the top dot to the bottom dot. i just heard danielle say that's the largest range we've seen in a long time. so you can drive a truck through the range. it's getting wider and wider. timing, we knew they weren't going to go in january because of the presidential transition. that's gone from about 11% odds to probably 8.6 now. march now looking 40-ish. it could be second quarter or

you are author of this, you have been no fed fan. i guess do i have to resurrect oliver cromwell again, in the name of god, go. >> fed, misread where inflation is doing, they are admitting it. they are right now saying inflation will be 2 .5% at end of next year, not 2.1 until end of following year. 2027 they are talking about to -- 2026 to to 2.1%, they are telling us where they thought we would be at the end of this year is not happening until next year, inflation is with up for longer, september cut was a mistake, i think that powell should resign, this is an admission of failure on his part, market lost confidence in the fed it does not believe that fed has inflation under control, powell insists they do, he almost insanely said it is going according to plan, jjerome, they are not, we can see where we thought we would be. larry: i said to edward lawrence, i don't know what powell's message is, he is not speaking to middle class americans, you agree with cromwell. the subject matter is different but in the name of god, go. powell

the worst predicters of where fed funds are going to go is the fed itself. their track record is abusiness massachusetts -- amaze -- abysmal. powell said today he only thinks that the unemployment rate will go from 4.2 to 4.3. well, it's 4.246 right now, you think it's only going to go up half a percent? citi has it going to over 5% in the first quarter. he's going to be the wrong, the fed's going to be wrong, and they're going to have egg on hair face for this hawkish ease that they did today. liz: hawkish ease, meaning we'll ease today but don't get excited, that's not going to happen. peter, i do have to ask you because you're talking about a potential bear market for christmas? we've seen a speculative frenzy -- >> well, i don't know that it'll be a bear market -- [laughter] liz: that's what you said. i'm just quoting what you said a few seconds ago. >> yeah, no, no, no, it's a bear market in that if the market ultimately declines by 20% from here, then we're in a bear market, we just won't know it until after christmas, but we would be in the bear marke

it is of course fed day. all about the fed with a side helping of u.k. inflation. 7:00 a.m. u.k. time. an eye on the market crisis as well. some have characterized it in brazil. european futures currently flat after four days of losses. s&p futures in similar territory looking for guidance from jay powell and the forecast and the doc plots. will they revise lower? rate cuts of .25. s&p futures just pointing a little higher. up 10/10 of 1%. losses of 4/10 of a percent for the s&p and nasdaq yesterday. you could be looking at 6% yields on the 10-year next year depending of course on the fiscal challenges of that u.s. government. the bench mark state side. the pound in focus. at 7:00 a.m. u.k. time. the bank of england expected to cut two times next year. 50 basis points between now and november next year. keeping the pound supportive as markets pull back expectationors rate cuts. $73 a barrel for brent and bit cone. taking a breather. let's get to a major corporate story now in asia with global ramifications because shares in nissan surging the most in at least five decades. take y

according to steve leesman and his fed, 90% of people believe the fed will cut. actually should cut. we'll show the audience the graphic in a moment. do you think they should cut with the strength we are seeing in the economy? in the last jobs report. is now the time to cut in your mind? >> i do. i think they should cut. they achieved their mandate. the goals, at least close enough. i mean, the unemployment rate is 4%. inflation is coming in gracefully. it is still a bit above their 2% target, but that's because of the growth and cost of homeownership and that's trending lower. so it feels like we're going to get back to the 2% target in the next few months. and so if you achieved your goals, the federal funds rate should be at their rate, and that is not where it is right now. i would cut in december. at this point, think about a cut early next year. after that, given the economic policy and uncertainty, i would suggest they pause and take stock of what they have in mind. >> why are we hearing, again, you think they should cut. why are we hearing hawkish comment

the fed, i am a long way from being an insider at the fed.n as responsive as it usually is. the fed is usually very willing to dialogue with the banks. maybe this case they got their backs up for some reasons that i wouldn't know about. it's possible. this will work out. i can't imagine that this will actually go to court. >> you think they'll settle. >> i think they'll settle. >> the fed in its own statement yesterday said that they were making some of the transparency changes in light of some recent legal rules. they didn't say what but we have had the chevron act. there have been changes that have given banks more confidence on a suit like this to question the legal veracity of the agency making these rules. how do you think it goes in the fed? >> the fed is not happy. lots of regulatory agencies are not happy about throwing out chevron president. i have written about that. i don't think it's a great idea. where do we want it make these rules actually made. on the other hand administrative po cedars act, it is very detailed, has a lot of r

it is fed day. the fed expected to cut rates with investors focused on the projections for 2025. s&p 500 up a quarter of 1%. the market expecting a 25 basis point rate cut and it is all baked in. 10 year yield not moving at all. crude oil is higher by 1.5%, recovering from a drop. i wanted to point out the brazilian read. this is a big move today moving to a new low even after steady interventions to sell the u.s. dollars. there are mounting worries in brazil and overseas over that governments fiscal spending and debt levels. we have seen this currency loose 21% of its value versus the dollar. in the meantime i want to go back to the u.s. equity market and checking on midday movers and bring in abigail doolittle. abigail: let's start off with shares of general mills off the lows but still down 2.7% after the reported a good quarter, one analyst saying they were helped out by the way thanksgiving was positioned. however for the guidance, they have now lowered their sales and their profit outlook on price cuts. they are saying consumers are across categories looking for value so th

the fed has to evolve with the economy. as we have seen, inflation is sticky with some very, very sort of slow incremental movement lower, so they could be a little bit patient so that the orientation is still lower, but in reality as brian mentioned, the economy is doing well. unemployment is low. the job market is holding together reasonably well, so there is no urgency to push rates reasonably lower. as i mentioned before, the prospect of material change on the fiscal side is something the fed will have to contend with over the course of next year and they don't know how the interplay of those factors is going to roll through the economy. so, we think it is sensible to take it slower. sonali: talking about higher for longer, there is a question of how high, isn't there? at t. rowe price they say, "the 6% 10-year treasury yield's, yes, it's possible, why not, but consider that when we move through 5% in the transition for u.s. politics, that's an opportunity to position for increasing long-term treasury yields and a steep

the fed's negotiations. we will probably come around closer to the market view. >> if you were to dial it back you would say we have strong? are we overheating? >> we are not overheating. the inflation data has not been as good as forecast. i would bear in mind the early part of the year has seen seasonality. we are just ahead of that, but we are still at the point where 4 1/2% is still well above the inflation rate, well above long- term neutral. they will be in this environment where they are second-guessed about how fast they go when the economy continues to grow. >> let's get the flipside from michael. can you hear me okay? >> shirt. >> if you think you can hear me okay, my question because you are one of the few people on the street that thinks the fed will do more cuts than is priced in right now next year. why? >> it is interesting. i think steve made a great point. you talk about the implied terminal rate. it was 290 in september. it is really unusual to be this early in any seen cycle and have a mas

fed decision.higher and investors parsing mixed inflation and labor data. john of oppenheimer, the most bullish on the street writing " fundamentals suggest further upside for equities based on current stateside monetary policy. the resilience, -- the resilience in economic growth and job creation evidence in recent years, we need to initiate a price target for the s&p 500 by the year end of 2025 by. 7100" he joins us now. you are the biggest ball last year. john: i love the drumroll and that is great. we really think about setting the target seriously, although we think the most important part is what we expect the direction of the markets to be. and in this particular case it looks like the fundamentals are intact. you have a business friendly administration coming into the white house as well as at least on a marginal basis, a congress that is essentially more business friendly and the outlook, it would seem. and then you also have the bond market which applies discipline. the fed i think relies

it all comes down to this the final fed decision of 2024. we get a fed decision. wildly expected to be an interest rate cut. 30 minutes after that we will hear from chairman powell. >> this to me raises a really key question and you and i have been discussing this what will the market's response be to a fed chair that comes out more dovish versus one that tries to stay the course and reemphasizes the threat of stickier inflation. it's not so clear-cut cut if the market will embrace dovishness. >> whether there some consensus they cut today and skip tomorrow that's what a lot of people seem to think coming on the show. timothy: -- ann marie: same regardless of what happens even if they cut rates will be higher for longer. and they say all of this has to do with policies potentially. what happens when you are cutting into a re-acceleration may be of the economy because of policies in washington like tariffs and tax cuts. >> this was described as a recalibration phase paid 100 basis points of cuts across three meetings. feels it we are going into something else with

the fed, as we heard from chairman powell, some of the fed members are incorporating some of the changesactly what you are seeing among economists. lisa: what is your reaction function to the tweets? subadra: it is funny because i mentally prepare myself to wake up to the morning that i was not prepared for and having to react very quickly. and our counterparts in asia especially are looking forward to it because they can react to the volatility as it happens because they are awake at 3:00 a.m. new york time to respond to the incoming news. it is going to be interesting. it is a paradigm shift where we were between 2016 and 2020. lisa: do you get more tactical long and how much is it a tactical market because of how obscured what is going on underneath actually is. subadra: it is going to be very tactical and we will have to constantly recalibrate. the past few days we have gone back and forth between whether there is going to be a government shutdown are not based on information from either the trump aids or from trump so you are going to see a lot of back and forth like that for the ne

the veland fed was a close dissenter.he policymakers indicated the fed could cut two times next year with two of the five officials projecting more than would cuts the chairman jay powell repeatedly stressed the need for caution. >> we have been moving policy toward a neutral setting to the strength of the economy and labor market and enabling further progress on inflation. with today's action, we lowered our policy rate a full percentage point it from the peak and policy stance is now less restrictive we can, therefore, be more cautious as we consider further adjustments to the policy rate. >> so, off the back of that announcement, we saw equities selling across the board i want more detail here so you get a better understanding of what levels we're talking about. the s&p was down 2.9%. the dow fell 2.6% and the nasdaq down 3.6%. so, significant amounts of selling for u.s. equities and, of course, there were ramifications on the bond market let's get a look at treasuries overall, the announcement from the fed is a hawkis

big take away from the fed speak.or waller and not the federal reserve chair jay powell. there is still some distance to go producing to neutral. they believe they have a lot of work to do. dani: they think they are sufficiently or too restrictive. i go to the atlanta gdp tracker at 3.3%. it is crazy to think we are restrictive and running so hot in this economy. that is why this number -- maybe it is cpi and ppi next week that shows inflation is too hot and the fed cannot continue their cutting cycle for now. jonathan: there is a man joining us that believes we are not sufficiently restrictive. coming up, priya misra of jp morgan, everette eissenstat, john murphy of bank of america and that man is torsten slok of apollo. we are going into the big one. payrolls is just around the corner. the second hour of "bloomberg surveillance" is up next. ♪ ♪ where ya headed? susan: where am i headed? am i just gonna take what the markets gives me? no. i can do some research. ya know, that's backed by j.p. morgan's leading strateg

should the fed be cutting. talked about in private sector hiring. it had been up 170,000 through the first six months of the year now it's 110,000 kind of normal but it's a reason why the fed might want to shift towards more neutral because you're back down to more normal job creation >> steve, we have a great guest. >> for more on the economy and the fed's latest rate cut, let's bring in richard clarida, former fed vice chairman and now global economic adviser at pimco. so, we were talking, it was three minutes ago. i think i can remember do you remember what we were talking about? let's just recount what i asked you when you sat down. first thing i said was, is it possible the fed hikes next year you said probably not. and then i said, do you think the risks are symmetric, i'm asking if both mandates are equally important right now. i think you started to tell me, no, the inflation -- the dollar stability side of things is more important to what the fed should be doing right now i said, why are we cutting >>

if we don't get that from the fed or -- the other thing we haven't talked about, not just a fed thatoes into pause mode. god forbid we develop another inflation problem courtesy of tariffs or some other reason and the fed doesn't just go to pause mode, but they actually have to pivot book to rate hikes that's not our base case, but our job is to think about the tales of outcomes. i think that that is one that maybe deserves at least a modicum of attention >> i think the biggest - >> hold on. >> go ahead, steve. >> go ahead. >> i want to make sure we do giver time to the upside here. you know, it is possible this deregulation, these tax cuts, you know, i talked to a lot of cfos they are excited about the possibility of bringing forward depreciation that could spawn some capital spending so the story here is not one of just only potential downside the story for investors have really to balance the potential upside with the potential for downside here and look at, for example, the balancing act of the trade-off between perhaps less fed but maybe a little bit more growth. that's somethin

it does appear to be that the fed is watching the market, then the market does influence the fed because we had a 50 basis points cut in september. what's the difference between now and then? well, they were at 150 basis points lower than where fed funds were. where are fed funds in two years? they're almost on top of each other at this point in time. i think the fed really does pay attention to the market or the bond market per se and that does have a pretty good influence on it. >> i mean, i remember when i was sitting at jeffrey dunlap's office doing that fed meeting in september live in l.a. and they do a super cut and rates go up. oh, that's an interesting move. maybe something to keep an eye on. >> yep. >> and here we are where we are. now people are making a whole bunch of predictions for the new year. there were some out today from apollo who said of this conversation we're having, 40% chance inflation picks up, 40% chance the fed raises rates, 40% chance the 10-year goes above five. say we don't think they're going to hike. if the 10-year goes to above 5 do we have a problem in

the fed is data dependent. i'm optimistic the disinflationary process will continue i believe that the fed ultimately will be giving us three to four rate cuts next year >> i'm happy that we had this sell-off on this side of 2025. i think it was coming on the other side of 2025 >> because of tax purposes >> you have to acknowledge there was speculative froth in the market we are sitting here right now, you have bitcoin below 97,000. i think that's actually a good thing. i think when you look at positioning in 2025, you have to kind of be open to everything. the one area i disagree with you on is the small caps i think when you look at small caps, you say to yourself, why do i need to go there when i could stay high up in the equity size class with mid caps and large caps they give me all the exposure i need to the common themes that are strong in the market right now like artificial intelligence and cybersecurity. then looking at small caps, the composition of them, you are reliant on health care it's literally

this is in anyway put - fed. this is in anyway put pressure on them? i fed.essure on them? i think the fed is under pressure - pressure on them? i think the fed is under pressure to - pressure on them? i think the| fed is under pressure to some degree because it has the difficultjob of trying to keep inflation to 2% while the employment at the same time. in the background, it probably has to think about financial market stability. only 18 months ago we were talking about american banks going fairly and they probably also need to think about the terrible federal deficit which in october and november grew at a record pace for the two months of the financial year and the more that that gets really out of control and investors become worried, then, you know, american borrowing costs and bond deals could go up. they want to keep the american interest bill low. it is over $1 trillion a year. if he can get interest rates down, that might help. it is under pressure on several fronts, yes. pressure on several fronts, es. ., ~' pressure on several fronts, es. . ~ , .,

at least we think we know what the fed is going to do.ow likely is it that we are in a scenario yet again where we get a fed cut and yields keep going higher? >> it is very possible. less is more. the market is very efficiently priced for exactly that scenario. the market is pricing in two cuts. we think a summary of economic projections would probably show three cuts because they don't want to move dramatically from the four cuts that they penciled in at the september fomc meeting. i think that, you know, if the front end actually stays somewhat pegged to a very benign policy path of easing, then i can actually see the 10 year yield stay within four and 4.5%. i don't really see a case for a buildup in term premium in the first quarter of the year. it's going to be very range bound with the long end for the first quarter. dani: are we range bound through the first quarter? >> i would love to be able to disagree and have a aggressive debate here. but the truth is, the long end of the at a 4% to 4.5% rate is what we are expecting. there is

the fed kicking off the two-day meeting.ortfolio strategy ahead of tomorrow's rate decision. we might talk about the editorial in "the wall street journal." jay powell has one question. one question for jay powell. why? why are you cutting? we have been asking that question quite a bit. >>> government funding talks hit a snag on capitol hill. we will tell you what is holding up a deal to avert a government shutdown ahead of friday's deadline. it comes quick. >>> nvidia shares now fall into correction territory. that means 10%. that move putting pressure on the dow futures which after all is said and done, it closed lower yesterday. eight straight sessions for the dow. it's tuesday, december 17th, 2024. "squawk box" begins right now. ♪ ♪ >>> good morning. welcome back to "squawk box" here a cnbc. we are live at the nasdaq market site in times square. i'm andrew ross sorkin along with joe kernen. becky quick is reporting live from the bank of america. >> good morning, guys. we will talk about a lot of things at bank of america

tariffs in the shadow fed.ow had has gone down in the court of public opinion. the current one does not seem to disag or to agree with the person who will succeed her presuming they can get confirmed. scott bessent is trying to lock in the confirmation with his visit to capitol hill and he is not the only one. we heard from the senate majority leader chuck schumer saying he plans to meet with howard lutnick today and that is not to mention the more controversial pix.

so the fed has failed, everybody can see it. the premium now is on some competent fiscal leadership. that means on this continuing resolution, i'm with you on this. don't do it until next year. do the smallest thing you can to punt into the new year. get your new senate in place. larry: there's 12 pages? brian: i think vivek said we can do this in 20 pages. larry: not 3,000. brian: get it to january of next year. exactly, whatever the thousands it is, and then, gosh, we have got to get the tax cuts and the regulation piece right, because if we're going to lick inflation it's not going to be because of jay powell. it's not because of the fed. it's not their interest rate policy. it's productivity, it's growth, it's getting an economy roaring again, putting money in people's pockets. the stuff he doesn't get and he doesn't know how to speak to are the things people care about and that's going to have to be a fiscal deal so if you're in d.c. and you're not the fed, time to get it together right now. larry: charlie, it looks confusi

rates not directly infected by the fed, mortgages -- not directly impacted by the fed -- they have not come down. there is still restriction that holds the economy back. they want to get that down a little bit. wait and see what happens and how far they can go. they might be close to neutral. scarlet: it is a hurry up and way situation at the fed. michael, thank you so much. let's explore this further and get the take from chris grisanti . it is always a pleasure to speak with you. in terms of market action, i want to get your take because stocks are making a dramatic u-turn from yesterday's broad declines. what is your read on the economy and therefore markets and how they are set up for 2025? chris: hello. scarlet: chris, can you hear me? chris: now i can hear you. scarlet: let me rephrase that. we are seeing stocks make a recovery but treasuries continue to decline at the long end. how does that input change your outlook for 2025 and how you want to be set up in 2025? chris: it is good to see you again. i am as worried about the market as i have been in a long time. i think the shor

the fed is clearly focused on — tomorrow? the fed is clearly focused on the _ tomorrow?arly focused on the risk to - tomorrow? the fed is clearly focused on the risk to the - focused on the risk to the labour market, because if something goes wrong in the labour market, that will spell trouble for the rest of the economy. the inflation genie is essentially back in the bottle. of course, there are upside of course, there are upside risks about tariffs, but overall, the impact of inflation from higher tariffs is pretty modest. the fed is likely to look through that. the labour market is not inflationary, so i do think the fed will try tojuggle inflationary, so i do think the fed will try to juggle both sides of the mandate, but i still think they are focused on making sure the labour market hangs in there. they need the job market to hang in there, and if there�*s any risk to the economy going forward, there will be some unexpected weakening of the market. that is a great risk, a significant re acceleration of inflation, which i don�*t see on the horizon. which i don't see

fed funds rate.he economy has done well throughout the whole period even though the interest rates were high and even though the interest rates were high, it got inflation started on the path down. i think the economy is handling it quite well and it could be that interest rates will settle in at a higher rate. i think the nominal funds rate is higher -- going to be higher over the long run than it was prepandemic. >> all right, loretta, thank you very much. great to see you again. happy holidays. >> thank you, you too, happy holidays. >>> a quick programming note, all day on wednesday we will have wall-to-wall coverage starting with the latest interest rate decision, that's up to 2:00 p.m. and you will be here. >> it may start at 1:00. >> you will be revving -- >> it's going to be a fun couple hours for sure. for more on what the markets are making of the fed's interest rate actions, let's go out to rick santelli. >> so many interesting dynamics going on here. first of all, this is the sixth consecu

the fed has a dual mandate. you haven't seen significant weakness in the labor market and inflation continues to be somewhat sticky, and so i think there was a case actually to be made to not even cut at the december meeting. now the fed doesn't tend to go against really powerful market expectations in the immediate vicinity to the meeting so that part of it wasn't a surprise but the signaling of a pause i think makes sense in light of not just the aforementioned dual mandate but the unique uncertainties with the incoming administration, tariff policy, immigration policy, et cetera. charles: there's this sort of, it felt prior to this meeting that the fed was sort of taking it as almost a mission accomplished with inflation. it's going to drift to its target, already on a glide path and they were more concerned with the jobs market, and outside of government data things like indeed and other things do look worrisome. has the tables turned? is it all about really the assumption that maybe inflation is going to be

pce, tomorrow which the fed's preferred sentiment gauge and the final michigan consumer sentiment report for december is one to watch. >> you have to say there has been so much volatility. we are currently down on the week for all of the major averages >>. >> that will do it for overtime. >> "fast money" starts now. >> live from the nasdaq marketsite at the heart of sometimes square the dollar and yield both continuing their treks higher after yesterday's fed decision will that spell gloom and doom for equity marks in the new year we'll debate that and health concerns from weakness and the insurers to the disappointing drug rile and the sector getting hit hard today and we'll dive into the headlines and dig into whether the sector is worth another look nike and fedex surging and we'll go inside the numbers and shares of french fry maker lam westin getting skewered and i'm mel melissa lee, on the desk tonight, tim seymour, karen finerman and mike khouw will join us shortly. three major moves that can threaten stocks, and the ten-year climbing 4.6% after yesterday's fed meeting and its hig

let's move on from the fed, looking to next year. do you see the january effect presenting opportunities for investors? >> right. well, we look at the january effect a little bit differently. some people will just look at the first day of the trading and then they'll use that as a range and if things break from there or break down, they go we actually look at it for the first 10 trading days which makes sense even considering that we won't have the inauguration until the 20th but basically what that does is sets up every instrument no matter what it is into a range that then will be extremely important especially with a new administration to follow at least get you off on the right foot as we go into the evened of january, february, march and so on until it resets again. so yeah, watch those first 10 trading days, try be a little bit patient which is probably not the worst idea at this point and then when you get that range, like in 2024, if you had done that the s&p, for example, broke out of that january calendar range and did not

what if this comes out before the feds decision? you know, mike powell would have a slightly different song to sing. >> i don't think so. because, correct me if i'm wrong on this, the street has gotten -- and the fed as well -- has gotten good at or casting the pce number from the cpi and the ppi. i don't think it's as good, maybe it didn't used to matter. now it has gotten so good that even powell will come out and tell the market what the fed forecast is. he has done that a couple times. it's kind of interesting. i think they had an idea it was going to be relatively tame. that allows them to go ahead with a rate cuts. there are still rate cuts ahead. you can ask me about whether or not this was the overreaction. i think wednesday was a little bit of an overreaction, kelly, to what the fed did. they stopped, they stopped a little harder than the market thought. but there are still cuts out there. austin, i guess, redirect did. he said, look. the average fed official still sees the rate at 0.3% which means there is still 100 to cha

the pce is not going to please the fed. and the hope is that the fed will tolerate high inflation for a while. and three, the growth dynamics, as ed said, are still robust. so, that, i think, has come together to resolve in those yields. and it wouldn't surprise me, mike, if we trade in the 475 to 5 for quite a part of next year. >> on the 10s, i think you mean there. barry, in this type of environment, where you feel as if maybe rates will apply some valuation pressure, how would you navigate it? what would you look toward in terms of places that can be relatively resilient there? >> one of the concerns we have right now is that as wages slowed, inflation stays sticky, then real or after-inflation wages in the back half are going to fall. and that would bring down the consumption side of the economy at the same time housing is in the doldrums and government is not likely to respond. so, you have a weaker gdp numbers in the back half. these mid cycle, late cycle slowdowns are very common, but they typically do cause the s&p

if there's anything that the fed can do that this fed would consider a fail, it would be to let inflationhat we are probably going to skip january. when i say base case going in, that is almost meaningless. that is the base case today knowing what you know now. but what has to happen is we have to see all the data that is coming in 2025 and determine what we are going to see through the course of the year. annmarie: it is a good point and it is fair that you say this. this time last year it was going into 2024 that the market was expecting at some point, 6, 8 rate cuts. torsten's lock talked about the fact that fed raises interest rates in 2025 may be at a 40% probability. do you think we could see hikes in 2025? >> you can't take it off the table. because of the fact that the fed will fight hard to keep inflation down. we got 86 reading on friday. we don't have reason to think that inflation is rearing again at the moment. it's not coming down as abruptly as it was. there is to a certain extent some ambiguity about what inflation is actually going to do, so i would say a rate hike is not

more rate cuts but we think the fed will start | but we think the fed will start to go easy. a cut next week which is largely priced in we will maybe get three or four next year. we have the fed stopping at about 3.5 but we would put upside risk around that given the policy intentions of the incoming trump administration. speaking of that incoming administrationjanet speaking of that incoming administration janet yellen has said that donald trump �*s tariff plans could be inflationary.- tariff plans could be inflationa . ., ., . inflationary. your thoughts? we a . ree inflationary. your thoughts? we aaree but inflationary. your thoughts? we agree but not — inflationary. your thoughts? we agree but notjust _ inflationary. your thoughts? we agree but notjust the _ inflationary. your thoughts? we agree but notjust the tariffs - agree but notjust the tariffs which will obviously raise the cost of import but we have a large tax—cut bill and more fiscal stimulus under trump potentially under harris and thatis potentially under harris and that is inflationary and the immigration pol

the fed can't cut but again, that's misunderstanding how the fed looks at financial conditions.e been telling you, they're looking at things like financing rates, so mortgage rates are high, people are unable to afford houses. that's tight financial conditions. credit card delinquencies are going up that's tight financial conditions. they make policy not now high bitcoin is or mag-7 is. so because of that, i think they are going to definitely cut rates at least four times and maybe as many as six next year. charles: you know, it's interesting, because if they are looking at for instance the jump start housing, they probably have to do maybe six, right? you have to help get that mortgage rate down, to under six, maybe a five handle, four handle before the housing market really moves. i do want to ask you about the increase in the word i saw this somewhere, the word "careful." in recent fed speak which always coincided with policy inaction. in other words it feels like there's a certain degree of confusion or angst inside the fed. do you think that's true? >> well absolutely. you

not everyone thinks the fed ought to cut. 93% of the respondents say the fed will cut rates.that's our economist strategist and fund managers, 27 of them, saying they should cut. a quarter point cut. only two quarter point cuts are expected in 2025. that removes a quarter from the last survey. 3.84 is the fed rates. 81% say the fed should for now ignore fiscal policy. here's the rate outlook for from the survey. 4.62 at the end of the year is where we go after the quarter point cut to 4.37. down to 3.84. 3.48 against a neutral rate or average between 3.30. the idea is that the fed does remain restrictive over the whole time. comments by the president-elect and nominee for treasury secretary appear to have calmed concerns about whether donald trump will respect the fed's independence. 56% now say he will respect that independence. up from 30% in november. one-third still believe he will remain unsure. asked about the impact on inflation of all president-elect's policies likely to be enacted. 11% see it as extremely inflationary. 56% say somewhat inflationary and 19% say no imp

fed chair jerome powell's dark room.ut darkened rooms creating a dark mood on wall street. chairman and ceo joe mobley a is here to tell us what he made of the selloff and if he can see the light at the end of the tunnel when it comes to the fed's inflation fight. "the claman countdown" is coming right back, stay with us. ♪ patients who have sensitive teeth but also want whiter teeth, they have to make a choice- one versus the other. new sensodyne clinical white, it provides 2 shades whiter teeth as well as providing 24/7 sensitivity protection. patients are going to love to see sensodyne on the shelf. when i got diagnosed with skin cancer, it was right under my eye. i was told that surgery was the only option, and i did not want to get cut open on my face. i asked my women's group to pray for me, and one of the other ladies told me about the procedure that her friend had and it was gentlecure. if you, like millions of others, are affected by skin cancer, it's important to know that surgery isn't the only option. there's

is the fed coming back?ancial conditions have been a problem for them. peter: but that was in the context of significant rises in inflation which are now using. i think if central banks are less conflicted, there is an ability and good reason, there is going to be an important support. but it will also be an important support for some of the weaker balance sheet companies or more leveraged companies that have been left behind a little bit on a relative basis in the last year or so when most of the returns had come through at least in the u.s., very strong balance sheet tech companies. >> it feels like the market continues to price in all of the good policies, but what about some of the bad policies especially for places like asia? how are you thinking the incoming trump administration might use tariffs? peter: there are the tariffs themselves with a more negative impact on asia and europe depending on how and to what scale they are applied, and then also there's the inflationary impact that those will have i

check with our mock fed panel. five of our seven panelists voted for a quarter point rate cut, but don peebles is out there, as he has been for some time now, voting for a half point cut. roger ferguson voted no change at all. so will there be a similar sort of dia spora or dissension on the fed? markets will be listening closely to the press conference to hear what chair powell telegraphs about the next meeting coming up in january. let's get some insight from peter, chief investment officer of bleakley financial group. i assume you're in the quarter point camp here, but what people will be listening for is the idea of whether the fed is going to pause in january. do you think they will? do you think they should? >> so i am not a 25 basis points cut. i think they should wait. not because i don't think that the economy may need more rate cuts. i just think that there is such a cloudy situation when you try to marry the economic data they're looking at, those who they are restrictive for and those that they are not

the fed rate cuts, mortgage rates have barely botched. executive vice president iv zelman on what that can mean for meet the traveling trio. each helping to protect their money with chase. wooo! tools that help protect. alerts that help check. one bank that puts you in control. chase. make more of what's yours. jack: a tough year for homebuyers who face high prices, elevated interest rates and limited inventory, what is next for buyer, seller and housing stock prima guest for the new forecast heading into 2025. joining me now zelman and associates executive vice president iv zelman, thank you for coming on the show. >> thank you for having me. >> let's start with the question for anybody in the housing market as a buyer. is it going to get easier to buy a house in 2025? >> unfortunately i don't think so. we are in an environment where rates remain higher for longer. we are at a high level of stress affordability. i think there has been a real bifurcation in the market with respect to the entry-level be much more challenge than the higher

for the fed. because we're starting from an inverted yield curve. so, yeah, kelly, i think you did a good job. you're an economist. >> not just any economist. i want to raise a point that john spellan makes, is that is central bank the bank for the world and everyone where it is looking economically and we might be looking okay here in thu.s. but global growth is slowing and that could lower a funds rate. >> i think that is a pret yes loose connection to global economic activity. but to the extent there is that configuration, with the united states strongest horseradish versus the rest of the world, the dollar is going to want to go up and that is a disinflationary influence particularly in good. so i understand the argument. but it would be a bank shot, not a direct shot. >> steve, come on in here and tell us how you think fed officials, and i think about what powell has said and he remains in the driver's seat and he said he's been affected by things he reads in the previous weekend or the few d