has donetely, the fed what cam. >> is the fed ms.credit right now or encouraging the misallocation of credit? >> while interest rates are very low, it's good news for large companies refinancing their debt or for the government and wealthy households. the many households cannot borrow anywhere near this rate. certainly entrepreneurs and small businesses cannot. the fed is aware of this but thinks it's in the interest of making the employment situation brighter. >> if we look at the whatloyment rate, i'll literal level -- at what literal level doesn't become an issue and force the fed's hand? >> within a year, we will be at the lower bound or below of what the fed even says as the natural rate of stop we will be in the low fives in a years time if we keep that job creation at its present pace. the fed will have to ask and i think the fed will be acting 2015 because wage pressures will be building. even though there is a legitimate problem with low labor force participation, that's for the president and congress, not the fed. >> what a

it's going to be the fed's bosses' decision and that's the conme. with the unemployment rate to drop into the fives and likely to go over 80%, we're one hot inflation report away from the economy, the boss of the fed telling the fed and the financial markets hey, we got to move this thing up. and i think that would be concerning is not so much when they do it but if they have to do it more aggressively and quicker in terms of magnitude that would have to force investors to reprice assets on a different rate schedule. >> all right. to be continued. thank you so much, gentlemen. deutsche asset and fine management. >>> despite the pull back midday on the fed minutes we've been talking about, the s&p 500 rebounded to within a few points of a new high but it didn't quite have enough steam to close. by the end of the day, the index did rise almost five points to 1986, the third straight day of gains. the blue chip dow industrials up 59 points and the nasdaq ended one point lower. >> looks like $17 billion is the big number for bank of america. reportedly

if it's structural, then the fed needs to back off.'s cyclical, monetary policy theory is that, yes, they nudge the unemployment rate back to the normal rate, but it cannot change the overall unemployment rate of the economy given what the underlying structural policy is. if it ends up being more in the charlie foster world of unemployment, the fed needs to back off. yellen says there's a lot of cyclical factors out there remaining so the fed has work to do. the question is one that miller's come up with, which is if the economy is so much closer to normal, how is it possible, and is it appropriate for monetary policy to be so far from wrong? >>. okay, steve, i'll let you go, you want to watch yellen, and no cameras allowed to watch that keynote. >> my eyes, that's it. those are the cameras. >> for the moment, thank you very much. we were down 11 points on the dow before janet yellen, got the details of what she was going to say, so net net, up 20 points, not a huge move. bonds moving sloie ining slight within the day's range before. a

the fed meeting just days ago, we take on the fed actions and markets and health of the economy. first word since the meeting only on "squawk box" when we come back in just a moment. thank ythank you for defendiyour sacrifice. and thank you for your bravery. thank you colonel. thank you daddy. military families are uniquely thankful for many things, the legacy of usaa auto insurance can be one of them. if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life. >>> welcome back. everybody. yesterday the dow was down 117 points. take a look. you'll see the futures are indicated lower once again. in fact, the dow futures are down almost by triple digits. they have been down triple digits at points through the morning, but right now, dow futures look like they are down by 97 points below fair value, s&p futures off by 111.5 points and the nasdaq is down at this point about 25 points. the losses we saw yesterday in the markets were significant. you're talking about wiping out the gains that we've see

how is fed policy hurting or helping you?>> tom, you're off to the radio to continue bloomberg surveillance. a.j. and i will take care of our agenda. what are you looking at? >> retail. we have already seen some earnings coming out this morning. as as companies outlook home depot raised its outlook. staples, down 5%, closing 140 stores. we are still waiting on target, limited brands, and american eagle outfitters. i'm focused on retail. apple.erms of my agenda, investors seem to be a bit more optimistic on the stock and the company overall because the stock line to a record high yesterday. it's moving a little higher in the premarket as well. people are excited about the new products coming out. >> i'm buying the big one. what is it, five inches? at somethingook like apple, ward mccarthy, do you see it as being in a bubble because of fed policy? >> i don't think so. that is a very innovative company that has produced remarkable products over a long time. there are no signs it will end soon. >> ward mccarthy, thank you so much

fed chair janet yellen says the u.s. economy is improving, but not enough to worry the markets about moving up the rate hiking timetable. >> slipping. why buying and then quickly selling houses is back in vogue but this time the game has changed. >>> and stripping. the vegas strip is back, as the first casino in five years opens its doors. we have all that and more, tonight on "nightly business report" for this friday, august 22nd. >> good evening everyone and well company. it's billed as a kind of summer camp for 3407b tear policy superstars. the annual retreat for central bankers hosted by the kansas city federal reserve in jackson hole, wyoming. and today amidst the elk, the moose and the low-hanging clouds came two speeches from arguably the two most powerful central bankers in the world. and their stories were very, very different. federal reserve chair janet yellen's highly anticipated speech described an improving u.s. job market albeit one that is improving slowly, and an economy that is making progress. but her

david: that's true. >> the fed talks fed speak. when the fed will raise rates they will raise rates if we have any luck they will tell us before they do that. they sort of indicated they will do that but until then we're on hold. like we're all trying to pick bottoms and pick tops and when they are going to and. david: right. >> i don't think the market lies. i don't think the market has it wrong. i think market tells us interest rates are going nowhere and market is going higher. david: brilliant. liz: if that is true you have three names that you believe can capitalize on rising tide. boeing, honeywell, parker hand fan. these are big industrials make all kinds of things. i look at parker hand fan, this is quiet by exciting stock to me. >> terrifically well-managed company. they're going through one of the biggest restructurings in the history of the company. they warned the street there will be significant chars but every time they have done this in their history they have been able to pull their costs down significantly and notc

activity and the data getting well ahead of the fed and the marketplace getting well ahead of the fed which i think is the biggest problem that we face is whether janet yellen can control and manage a fairly intensified policy debate, whereas the previous cheer bernanke and greenspan were able to control that dissent, control the policy. it's not obvious that janet yellen is able to do that. liz: all the more reason, jon, they are waiting to hear what she says on friday. keep it to today for a second. what jumped out on you in these minutes? >> i want to come back to what you were talking about about, fear and how that relates to the minutes. you know, i talked to a lot of officials in the last couple of months who have been really surprised and a little worried that the markets look complacent. they've been dropping all kinds of hints. yellen said in july, we might have to move rates sooner than we expected if the economy keeps improving more than we expected. liz: why is that fearful? why should i be scared that the economy is improving and see rates tighten a little bit, jon? >> th

you don't fight the fed.t. >> but at some point we'll have a change and at some point rates will go up which is good news because economy is stronger and markets have to adjust. that's life. david: as you mentioned you were not only hedge fund guy, federal reserve officer, you have a lot of talents. most people didn't realize you were also a poet. earlier you talked about the dot charts that the fed came out with to describe what various fed officials believe and now you think maybe it is time to get rid of them and you put that dissent in the for of a poem which i'm going to read. we gave you forms so you would inform about the price of dough, but all you've done is make for fun and this we didn't know. so outdamn., out with a lot, clearly it is time to go. i got to say, sounds a little like dr. suess, richard. >> i was channeling dr. suess. here is the point. public needs to understand, these are guesses, the best guesses we can make with our informed minds. we submit our economic forecast. of the forecast

maybe the fed is as well.o be a three day assault by your mother has become a week long consumption by children. stephen sadove used to make sure you spend the money on cosmetics sakse you got the kids fifth avenue elevator. i have done this back to school thing. you guys are criminals. it is terrible. what is the state of the american consumer now? >> i think it is gradual. you are starting to see some decent numbers being put on the board in the last month or so, but it is off of a weaker base last year. the high end is holding up pretty well, but the middle and lower ends of the market are very tough. >> is there a metal? -- sa middle? >> i think there is a bifurcation as we speak. a sure, there is a middle america that is struggling. they are having a tough time making ends meet, and they are looking for deals and value and discounting is prevalent. thesaw it and all earnings numbers. >> who is trying to own a middle ground you are talking about? >> depending on how you are finding it, macy's is doing a gr

>> pretty good. >> what are your anticipations with regard to fed policy and what we hear from the fed today? >> i think our economists generally don't expect something too exciting out of the meeting. >> out of the symposium, we should say. >> out of the symposium. >> this time around, we have janet yellen presenting. she is at the dovish end of the spectrum in the fed. i think that's the tone we will get out of it. a slightly dovish message out of that from the yellen speech. >> what do you think the main issues are, though, that they're looking at? are they looking at the risk of inflation/deflation? are they looking at the risk of a stronger/weaker labor force? are they looking at how the general global environment is faring? what's the main thing that's really moving them at the moment? >> well, the topic is very much the labor market. they'll be talking about the slack in the u.s. labor market as there are conflicting messages you can get from different data sets that janet yellen will look at. today, we wouldn't expect much. a viewer just mentioned that there's a slightly dovish

the game changer to me is when you begin to see the fed lift the fed funds rate.ht now, if you own bonds or another asset classic on and you want to book a profit because there are profits everywhere in the bond market now, you end up sitting in cash. there is only so long you will sit in cash earning zero percent , perhaps a negative return in europe, before you go back into some kind of bonds. to raise short rates and that is when we will begin to see some short level. >> when do you think the fed will move? the middle or toward the end of next year? >> toward the end. and you look at how long the fed rate, it negative real has been the longest time in the history of said that they have run a fixed rate. even if they start from a year from now, you're talking about the middle of 2016 before they are at two percent. that should effectively be a zero real rate. are youuch leverage seeing, how much risk taking? are you seeing things that concern you? >> we are not seeing a lot of that yet. companies are prudent about the way they are managing their balance sheets.

how does the fed handle that? >> i think the fed is basically looking at -- when we're hearing this difference between yellen and the committee, we're talking about a difference between when they start between second quarter of next year and third quarter next year. we're getting fine tuned here and maybe overemphasizing sometimes how much the different is. there's a possibility that the fed members would actually say, okay, we started and let's go very slow in getting into it because the economy just it's not going to be rocked too much by any news that comes out of this. you think the fed has done a good job of priming the market for these higher rates? >> you know, i think they have generally for higher rates. at the same time, i recognize the fact that the market tends to take these news items and react fairley dramatically to them when it really doesn't make all that much sense, just a slight wording change and you'll find that the market moves, you know, 50 basis points or a full percent on that news alone w

ex goodsed on fed ex routes. they say they're vetting the companies but that's not always the case. some are operation illegally, potentially other drivers in danger. it begin here is. a federal express distribution center in sacramento, a major hub in northern california. over hundreds of trucks come in and out every day. some with the recognizable purple and green fed ex ground trademark on the side. others with names you have never heard of like tiris trucking company. it was a third party contractor with, transporting only fed ex goods. that's what tiris driver was doing on august 8th, 2011. after picking up packages from the distribution center just outside of sacramento, quinteros failed to stop his 25,000 pound box truck for stalled traffic along interstate 5. he crashed into donald taylor's parents car at around 70 miles per hour. >> their bodies were burned beyond recognition. >> reporter: the high school sweethearts were killed instantly before their vehicle burst into flames. the accident also killed a

anything in the fed minutes that jumps out at you?mentioned second-quarter quarter gdp, while the rebound, was not a lock oster. if you take a look at it, you get a two point 2% year-over-year. that is right smack in line with of 2.1% toecast 2014 2.3%. the other thing that they highlight is the labor market, which is steadily improving. expected, butas it is possible that they are raising rates in january or march of next year. >> the 10 year, the yield is that 2.44%. is that where he would be after the release of these minutes? >> it is up a few basis rights, but not a big reaction. what we are seeing here is room to leave the door open for a , but not wanting the markets overreact. >> overreact in the sense that maybe if you are looking at it. charter or something else that you don't know which way they the fedg to move? is intentionally not trying to tibbets hand right now? >> the chart says one thing, geopolitical events say another thing. it is really pushing this flight to quality flight to safety here . there is a little bit o

the yellow line is the fed funds rate. for most of the time if you're saving money you can do okay because the inflation rate is below it. but you're getting killed if you're a saver in this environment. go ahead, steven. >> yes. that is absolutely true. so, if the economy picks up as the fed expects, still are looking for something like 3% gdp growth in the second half of this year and next year. then the federal fund rate is going to rise, probably sometime next year and going to make its way gradually to a level close to 4%. that is the fed's forecast. so that is conditional though on the economy improving. if it doesn't improve the fed funds rate is going to stay low. liz: one of the reactions we saw today was a stronger u.s. dollar against most, not all, but most currencies. in fact it hit a pretty significant high against the euro. so that brings me to john because one of your picks is the deutch x tracker etf. this has a different name. it used to be called the current hedge equity fund. it has currencies around the

so i think for that to change, you're going to see -- have to see the fed begin to lift the fed funds restore some yield to the money market curve and start to get money market yields back up to at least a zero real rate. >> two quick last questions. how much longer do you think the current cycle long and remarkable has yet to go? >> we think a couple more years. if we look -- and there are a number of things that come into play and we're looking mostly at risk appetite. and we think we're about two-thirds of the way through the positive side of risk appetite. so a couple more years. and the other metric we look at is when do you see large corrections and typically you see a hiccup when central banks start to raise short-term interest rates but the big problems occur when they've actually finished raising interest rates. >> second and final question. in a word, if you can, liquidity is priced today. you can look at the junk bond space, shouldn't that be more of a concern here or not, in your view? >> well, i think there's so much liquidity out there and i think about i've i've been in

even if it's going through the handoff from being force fed by our fed. i mean, the point i'm trying to make is there's still plenty of global liquidity of the stock market. i think that's one of the reasons they're not worried at all about ending quantitative easing because the world is going to do their heavy lifting. our ten-year yield is not going to get that out of whack with european yields as long as they keep pumping money in it. i am surprised. i'm not buying it here. >> nonetheless, jim, going into tomorrow when yellen is going to speak, everyone on the street including their dogs thinks she's going to be dovish. the uber-dove. do you think the doves are overexposed? how vulnerable are they, therefore, going into tomorrow? >> i guess if i have to attribute that move to something over the last two weeks, we're looking at jackson hole thinking she's going to be dovish. that's what we're positioned for, positioned for perfection out of her. to me, it seems like we're probably a bit overdone. as i say again, i'd rather for a shore term be a buyer th

you think the fed's not going the raise rates until 2016. >> we think it's a much more cautious fed than other players in the market might believe. we also think when the fed goes to raise rates as they want to now, they're not going to be able to. they're not going to be able to communicate it well to markets and some positions will lead janet yellin to delay. >> this is interesting. the fed's stiuck in a little bi of a position and there's a lot figure out if the next move is going to be for rates to tick higher or lower and how the bond market itself drives things. >> absolutely. but what we know is the fed is committed. despite the fact that monetary policy is a blunt instrument, not a surgical tool, we know the fed is committed to supporting this economic recovery so, when they decide to increase rates, it's going to be because thai look they've looked at a big mosaic and feel comfortable. >> what does an investor do at this point? >> it's all about time horizons. for the investor that has a long enough time horizon, they need to have adequate exposure to stocks. >> what does that m

the fed is not going to raise rates. they're going to keep interest rates very accommodated, well into 2015. as long as we don't see any big spike in price inflation or wage influgs, and with the slack in the labor market, i don't think we're going to see that. >> when you look at the equity market are the rates undervalues overvalued or reasonably valued? >> overvalued. profit margins that are 75% above their means. putting a normal pe on peak profit margins is not the right thing to do. market cap to gdp. 2,000 was the only time you've seen a more expensive market. price to sales, 2000 was the only time we saw a more expensive market. the market is very expensive, there's no margin of safety for fed accommodation. >> appreciate you're being here. thank you opinion. >>> earnings after the bell from american international group, aig easily topped wall street's estimate, making $1.25 per share. that's a 20 cent per share beef with profits rising more than 12%. revenue also topped forecast, getting a boost of a leasing uni

you think the fed won't raise rates until 2016. >> we think it's a much more cautious fed than other players in the market might believe. we also think when the fed goes to raise rates, as they want to right now around mid-2015, they're not going to be able to. they won't be able to communicate well to markets and market volatility or tighter market conditions will lead janet yellen to delay. >> this is an interesting conundrum. the fed is stuck in positions and people can't figure out if the move is for rates to tick higher or lower. not because of what the fed is doing but how the market looks at things and how the bond market drives things. >> absolutely. but what we do know is the fed is committed, despite the fact monetary policy is a blunt instrument, not a surgical tool, we know the fed is committed to support this economic recovery. when they decide to increase rates, whenever it is, it's going to be because they looked at a big mosaic of economic data and they feel comfortable the economy doesn't need more support. >> what does the investor do at this point. is that an argum

the fed met this week. lot of things going on for the markets to think about, and especially international concerns as well, the argentinean debt default. here's the s&p. this is what traders watch. ordinarily, i would show you the dow for the week, but the s&p is what the traders watch all the time. they took out what were considered support levels of 1,950. we took out 1,930. we're right now 1,925 and down 2.65% for the week. this is the worst week for the s&p in two years, for whatever it's worth. when up, yields on the ten-year for a time very volatile week, especially after the fed meeting. a lot of the data coming out, that second-quarter gdp report that came out on wednesday as well. but today, coming back again with that less-than-expected job growth number that we got this morning from the federal government. and for the week, the ten-year yield is up about 1%. one more thing, volatility, the fear indicator, also big move higher, and it's up 34% on the week at 17. independent investor david darst h

will it be fed policy or foreign policy?eillance. >> russian officials shut the doors to the country's largest mcdonald's. sayty regulators violations. is this a political move? we will see. we will begin in perspective of the damage that all the sections have caused on the russian economy. this is "bloomberg surveillance." we are on bloomberg television, streaming on your tablet, your smartphone, and bloomberg.com. ♪ >> this is "bloomberg surveillance." i am scarlet fu here with tom keene and adam johnson. let's get you company news headlines. in the last hour, we got some murders and acquisitions in the utility sector. the duke energy selling a stake in some of its 11 midwestern power pants. -- plants. dynegy is buying energy also from capital partners. chrysler is recalling 16,000 models. rear shock absorbers might attach. sedans.ts chrysler 200 curated green mountain is rolling out a new version of its coffee brewer. the machine can make a whole carrots of coffee instead of just a single pot. that is today's company news

several fed presidents weighing in on cnbc today. >>> and then there is the fed and housing.a rising interest rate environment might well mean for mortgage rates and the housing market. which has benefitted so much from those very low mortgage rates. sue herera is on vacation and susan lee from cnbc asia joins us for the hour. susan? >> hey, tyler, despite all the talk of the fed making a move, stocks are up anyway. the s&p hitting a new all-time intraday high a

we think the fed wants to see 3 1/2, 4% nominal wage growth. if i'm earning money and not increasing at faster rate of prices of things i'm buying, that is ultimately not good for growth. i think we can both agree on that, david. so that is the real sour spot. i think that is also the one line item that will give the fed an excuse to wait longer to move to higher interest rates. as long as we're at 2% on average hourly earnings, fed fund rate is not going anywhere in your opinion. liz: so we go back to bill baruch now in the pits. did you get any sense where the smart and faster money is going? with the flows today, we saw money going into gold. we saw money coming out of oil and energy. tell us what you saw there. >> well, gold seeing up tick today. but really it has been disappointing up tick. the market right below 1300. there is a lot of headwind in gold. gold has not taken on safe haven attribute even what is going on geopolitically, bold is not moving much. we're seeing dollar though of the we really like the dollar. one thing that is hol

>>> is the fed celt to finally make a change? we're going to find out in seconds. a fed and stock market are -- mandy, obviously one of the weirdest things i have ever seen. >> me too as well. on course for the biggest weekly gain in four months. the s&p 500 is less than five months away from the all-time closing high, which is 1987. you have the s&p there, 1984, all very good years. write it down, folks, and gold did below $1300. the dollar is holding around a high for nearly a year. the headlines straight away with steve liesman. >> july meeting, many agree at the fed they should move sooner if their goals are me more quickly. in order to move up that schedule. it was a strong debate within the federal reserve about the labor slack in the economy. many concluded that it did not perform better than anticipated and broad measures , that was the term used in the recent statement, have become better than expected, have improve. the labor markets have moved noticeably closer. they use the word normally to describe labor markets. somewhere it's typical to define labor

here's where the fed minutes come in, the fed released the minutes of the previous meeting. . minutes emphasized that the fed would cut rates if needed and things were nowhere near that dire. when i read that i was like the people now who think these are all important. when i read i actually believed that i and my sources were too negative. maybe i was being too bearish and things were more in control they thought and the minutes were more reassuring and i sent out a bull 10 onning a awing 17, 2007 saying, quote, at last i believe the worst is behind us. even though i had been right about the systemic risk of the crisis to come and did change my mind soon after after that bulletin i ended up putting too utsch in faith in the fed and the minutes. the fed was way late in cutting rates and took its time about it so the damage occurred as i predicted. i did believe the fed's statements were paramount. that's right. i violated the most important tenet, i put my faith on month-old minutes from the fed instead of actions taken by the secretive commity. since then i learned not to put

we have a man who has been in the fed voting room with fed chair janet yellen before. he knows what she might be thinking. former kansas city fed president and now fdic vice-chair, tom hoenig. david: nice to be a fly on the wall. he is a fly on the wall. >>> bank of america will play $17 billion to settle grimes over mortgage bond that it sold that led up to the financial crisis but where does all that money go? over 100 billions in fines paid off to the doj since 2008. where is it coming from? where does it go? could it be funded by the fed? all those questions could be answered coming up. liz: are you ready for some football? american football making its way across the globe to china. we're talking to a man betting big on the new china american football league a real entrepreneur. david: as we revisit the financial crisis started by the subprime crisis, who do you think is more responsible for it, the banks, or the government? tweet us, @fbnatb. your answe ♪ [ male announcer ] once, there was a man who found a magic seashell. it told him what was happening on the tra

about where the fed wants inflation. i don't know where you're going on that. and germany is selling for zero. yeah, zero just to protect the money. the stock market is just left. liz: andy brenner was here friday saying can you believe that german bonds, supposed to be aaa and all of that, that they are now at zero. points are excellent. phil what is working as well as stocks is the entire energy complex is moving higher. what's going on there? >> mainly rbob there is refining issues in st. john, a refinery is going to come down. gasoline led this rally today and it's driving the market. this comes on the day that aaa says that this labor day we're going to have more people traveling than the last six years, we're going to have big numbers there. gas prices at the lowest level that we've seen since 2010, but forget about that when you have refining problems. we're seeing that. we saw good pop on natural gas after a bearish report. injection of 88 billion cubic feet. supplies are 19% below the five year average. we're getting hot temperatures in the midwest, be

cheryl: interesting findings from the fed. >> yeah. cheryl: coming up, one millennial tries to put stereotypes about generation to rest. >>> and new predictions about where the economy is going from a top fed official and what that means for interest rates? larry summers is weighing in on this one. yeah. you're going to want to stick around. so i can reach ally bank 24/7, but there are no branches? 24/7 it's just i'm a little reluctant to try new things. what's wrong with trying new things? feel that in your muscles? yeah... i do... try a new way to bank, where no branches equals great rates. we're changing the way we do business, with startup ny. we've created tax free zones throughout the state. and startup ny companies will be investing hundreds of millions of dollars in jobs and infrastructure. thanks to startup ny, businesses can operate tax free for 10 years. no property tax. no business tax. and no sales tax. which means more growth for your business, and more jobs. it's not just business as usual. see how new york can help your

she concluded by referencing the fed's most recent statement. if the economy picks up faster than expected, and it has been doing that, then rate increases could come sooner. if not, the phase gets low. nothing to see here from jackson hole. keep your eye on the economic data instead. get a live report from michael mckee in jackson hole at the bottom of the hour. and also, european central bank president mario draghi speaks at the symposium 2:30, new york time. this is been a boom town in iraq. developers pouring billions into the segment -- into the sector in recent years. but the threat of the islamic state has put these ambitious expansion plans on hold. >> just a couple of hours from the iraqi conflict zone since this small slice of the american dream. kurdistan's first self-proclaimed subdivision. >> how much does one of these houses cost? around $3000. -- $300,000. he is a courteous but this time between virginia and iraq. see most of the developers in this area, even in lebanon or turkey, they start to move to do business here. sank $6 mi

if you look at fed funds, after the last couple days, fed funds are unchanged for december, 2015 and '16. as a vol guy, i would think you would be selling vol this afternoon after what we had. to me, i sold had some ibm puts, which did a very good job. the russell totally underperformed the rest of the indices, but i don't think this is a panic time. maybe as steve's saying, there's a couple more points to go on the index, but at the end of the day, i think you should have been fading vol on a trader's perspective at the end of today. >> but to go with it, i think there's always that put, i think is a big mistake, because that sends such a signal that they have no idea. and the point of diminishing returns? you want to talk about that's the least of which i'm worried about. i'm worried about people actually saying they have no clue whatsoever. you can't rewind this again. >> to button this up, trade update, you are short the dax -- >> covered it today. >> why today? >> it's down 7% or 8% within a couple weeks, so i just had to take the profit. doesn't mean i don't think europe still

the fed will remain accommodative.t. >> it doesn't change the trajectory of rates which had everybody having a fit almost in the market yesterday. you could blame a number of factors but that certainly was a central part of the conversation. >> it was. i think when you consider the distribution of risks, i think the gdp numbers that we saw showed that the downside risk to the economy are diminished. we don't necessarily have the same type of vulnerability that we thought we had when we were looking at the prior set of numbers. but when you're thinking about the trajectory going forwards, it's a healing economy, it's a growing economy but it's not one that is off to the races that's going to trigger a real move higher in inflation. so i think in terms of rates, you remain range-bound. the fed will at some point hike interest rates. but i don't think it's right now. >> stuart, where does this have stocks going, do you think? >> well, i think that we're still in a sweet spot for stocks. we've seen a little more volatility

the fed meets today.olicy watchers in washington are watching anymore -- that closely. 298,000 is the number on the jobless claims. coming out better than people had anticipated. is that good news? >> certainly. one of the greatest things that has been going on. simply put, know what is getting laid off anymore. -- no one is getting laid off anymore. consumers spend money because they don't have any fear of being laid off. that is an increasingly normal view for someone to have in the labor force right now. >> confidence is a key component of overall economic growth. interesting because labor is going to be a big theme this year at jackson hole. thoughtspate hearing on structural changes. what are you watching for most carefully from janet yellen? >> it is pretty clear that she is going to be somewhat dovish relative to market views. , sheu look at janet yellen is clear that there is labor capacity in the marketplace. she thinks there is more the fed can do to help. >> politically speaking, what else is s

the minutes saying many believe with this faster progress towards the fed's goal, then the fed shouldraise rates quicker than markets expect. .are ready to move quickly, almost immediately. there was a big debate about labor slack, how much of it was there and how much inflation concerns the federal reserve should have along with concerns about wage pressure. we discuss the communication strategy and how the fed might quantify normalized rates, which is a euphemism for raising rates. the fed service there, especially for the jackson hole meeting by the federal reserve shows markets expect rates to rise in july 2016. that was before these minutes came out. that idea may have been pushed forward a little bit, perhaps by the minute. and the rate hike cycle is seen ending in the fourth quarter of 2017 at 3.2%. if that is the case, it would be nine months longer than the average rate hike cycle. all eyes will be on janet yellen and her speech. followed by margo graggy, the european central bank governor and the japanese central bank governor is here, as well. so the big three in attendance

. >> hey, melissa, minutes from the july fed meeting show some fed members seeing enough progress in the economy to start raising interest rates perhaps sooner than expected. quote from the minutes, some participants viewed actual and expected progress toward the committee's goals as sufficient to call for a relatively prompt move toward reducing policy accommodation to avoid overshooting the committee's unemployment and inflation objectives over the medium term. the minutes also said that many participants noted if employment and inflation moved closer to the fed's objectives, it might be appropriate to raise interest rates sooner, but the minutes say, most participants, and this is important, indicated that raising rates would depend on further information on the economy. so, once again, show me the data for most fed members. the expectation is the fed will start to raise short-term interest rates sometime the middle of next year. finally the minutes said, that the fed expects continued, a continued moderate economic expansion with stronger growth in the second half, but they're wa

markets are set for the fed chair's speech. minister seekign aid from terminally, as angela merkel meets poroshenko tomorrow. ash alert. a volcanic eruption threatens flights. a warm welcome to "the pulse" live from london. i am an edwards. economic symposium in jackson hole is officially underway. markets around the world can set their clock for the first keynote speech from fed chair janet yellen. yesterday, michael mckee caught up with kansas city fed chair after george. -- esther george. he asked her about the international impacts of monetary policy. >> we live in the global world, obviously, and the connections are growing between our countries as the fed thinks about monetary policy. it is focused on the u.s. and its mandate, but we talk about the geopolitical risk, we talk about what is happening in the economies of other countries because w we affect each other. >> has mario draghi called? >> mario draghi has it well in hand, i am sure. draghi, our next guest says that the ecb president could steal the spotlight at jac

the fed sees the neutral rate at 3.75%.at 2%, and we see them taking the time to get there. the overall bond market is attractive, which means it will generate income for our investors. we can get 4% to 5% in height fro high-quality bond portfolios. you.ank coming up, labor secretary tom perez joins us after the break to give us the white house pause take on this jobs number -- white house's take on this jobs number. ♪ >> we have been following the july payroll report that came in that 209,000, under estimates. we are stabilizing in the stock market. for the white house response and their take on the economy we are joined by labor secretary tom perez. good to speak with you again. we have several months of pretty decent job growth, and revisions were up to 15,000 jobs. are you ready to say that this economy has in fact turned the corner? report,is another solid it shows that we are sustaining the omentum of rod based -- momentum of broad-based growth. this report is very consistent with the other positive indicators we have

will his voice get a hearing at this week's fed meeting?sk someone who will be there, glenn hubbard, former chair of the economic council of advisors and current dean of columbia business school. dean, great to see you. >> my pleasure. david: will anyone defend interests of poor old guy saving his money his whole life and relying on savings from savings account to retire with and he can't do that? he has seen those savings whittled down. >> i think you're asking a great question for the jackson hole meeting because monetary policy has been easy for too long. i think the beginning of the fed's response to the crisis is very appropriate. i think the real reasons to question whether monetary policy is what is needed right now. better fiscal policy could help the economy a lot. i'm not persuaded continuation of the fed's policy will make much difference. david: as you know, if you go back to 1980 up until now, there is only one three-year period where you have inflation above interest rates. whereas you could not keep money keeping it in the ba