not you personally but the fomc.'m wondering, if you look at the growth rates, you have growth rates up to about 3.4 percentage points in 2014 and 2015. how long do you think it might work that you have such strong growth and no inflation pressure? the second question is a lot of economists don't see too much effect out of a further round of qe-3. are you worried that in promising that you will do whatever you can, even if it's small, that you give some kind of cut to the fiscal policy and to congress not to do enough on their side of the policy action? >> well, the -- on inflation, we do anticipate at some point what's normal in a recovery, given that the economy failed very quickly and there's a lot of unused capacity, there's a lot of slack in the economy, it would be normal there would be a period the economy would grow faster than trend in order to make up the slack that was created. so we don't anticipate the economy is going to be overheating any time soon. as long as we pay close attention to inflation expect

the fomc has taken several actions this year.january it extended its forward guidance stating that it anticipated that the federal fund rate will remain near current levels until late 2014. in june the committee decided to continue through the end of the year the previously established program to extend the average maturity of the securities it holds by buying longer term securities and selling an equivalent amount of shorter term securities. however incoming data confirm that the modest pace of growth continues to be inadequate to generate much progress on unemployment. with inflation anticipated to run at or below our 2% objective the committee has become convinced that further policy accommodation is warranted to strengthen the recovery and support the gains we've begun to see in housing and other sectors. accordingly the fomc decided today on new actions electing to expand its purchase of such securities and extend its forward guidance regarding the federal funds rate. specifically the committee decided to purchase additional

is this a sneak-peek how the next fomc meeting will unfold on september 12th and 13th?h us is fbn's peter barnes from jackson hole, wyoming. were there any surprises what the federal reserve chairman had to say? i know some investors are reading into the speech that they will do something in september. peter? >> clearly he laid out the options and set the table for additional policy easing at some point because, listen, the economy is just not growing fast enough, just not creating enough jobs, and so, the postmortem on this it has been, it was kind of a dovish speech here. he did say that the fed stand, well provide additional policy accommodation as needed to promote stronger economic activity and sustained improvement in labor market conditions. they talked about all the options from quantitative easing to extending what is called forward guidance. they will keep interest rates, short-term rates low, exceptionally low through 2014. now they may extend that. that is on the agenda for the september 12th meeting. between now and then, adam, critically we have the august

yesterday, the markets staged a minor rally ahead of today's rate decision from the fomc. in new york, it's decision day on the controversial proposal to regulate sugary drinks, better known as the soda ban. and shares of apple rallied about a couple of dollars higher in the after-hours session. following the release of the iphone 5, shares end the day up $9.66. larry shover of sfg alternatives joins us now. larry, what is your trade ahead of the fed, or will this market stay quite muted until there's any news later today? > > you know, i think the trade today is just to stay out of the market, because i think the market has already priced in the fact that the fomc is going to have another asset purchase program, otherwise known as qe3, so they'll printing a lot more of this- > > larry! larry, its bond buying! it's bond buying! moving on, let's go to germany now. the top court has ruled that the eurozone can move forward with its bailout plan here. can we finally say the eurozone issues are over, or is that still in the trade? is the risk still on? > > you know, the risk w

the fed ends its two-day fomc tomorrow. announcement whether more stimulus will be used to jolt the economy is expected. the dow closed up nine points. the euro climbing to a knife-month high versus the dollar. germany's high court refused to block the creation after eu fund. >>> facebook shares soar more than 7% following ceo mark zuckerberg's customers comments since the ipo. zuckerberg admitting mistakes have been made in the recent months. he made it clear that facebook plans to push hard in the fledgling mobile ad market. >>> to our top story we're currently giving billions of dollars to libya and egypt, two countries who violently attacked americans including embassy officials in libya. they claim they were outraged over a movie that mocked muhammad. last night ambassador chris stevens was killed in trying to get his fellow americans to safety in the consulate in libya. they are wondering there is a more organized plan. we have the james jeffries, former ambassador to iraq and turkey and visiting fellow for the wash i

the fomc wrapping up the two-day meeting today.ne in at 12:15 to find out if the central bank will launch a round of quantitative easing. cnbc brings you the latest fed announcements on monetary policy, barclay's barry knapp and a lot more. at 2:15 eastern, the fed chairman, ben bernanke will be holding a press conference to try to explain the fed's latest move. we will have the entire news conference live with our coverage beginning at 2:00 p.m. eastern. the market yesterday closed at a 4 1/2 year high. apple shares bouncing around after the unveiling of the iphone 5. we hear it's thinner, lighter, made entirely of glass and aluminum. earlier on "squawk box" we spoke to brian marshall of isi and asked him about the experience. >> the product came in from what we're expecting, when i actually touched the iphone 5, got to play around with it a little bit was blown away. once you get it in your hands, you'll feel much different than your iphone 4s. >> shares of apple in the meantime have been bouncing quite a bit, up by $5.40, 6.75.2

and the fomc announced since last week. expires at the end of the year and all your friends in the bond market's wants to know what happens then. you lose half of your fire power and you will be a voting member in january. would you vote to start buying additional assets to help keep the strength of the program going after december 31st? >> we will have to evaluate where we are. a lot will happen at the end of this year with the fiscal issues that have to be addressed. if the economy is going strongly we may not have to do additional purchase in terms of treasury securities if we are not getting the kind of outcome we are hoping for. we may have to do for -- is conditional on the economic environment that the end of the year. peter: you would be open to that. >> i would be open to doing more if that is what the economy requires. peter: there has been criticism of the announcement. there are folks out there who's saying interest rates are very low. this is not going to do much to help economic growth. what do you say to that

bernanke and the fomc have certainly given the markets something to think about. the chairman's speech in jackson hole. but aside from all this and cool graphics aside, folks, it's very simple. the most important question is this. if we get more easing today, will it matter? will it grow the economy? will it reduce unemployment? will it stimulate hiring and gdp growth? that's the question. senior economics reporter steve liesman is on the roof in washington, d.c. steves what is the debate inside the fed over whether to qe or not? >> really cool graphics brian. all i have is the washington monument behind me. that's good stuff, my man. >> let me go through and talk about the debate inside the fed. you laid it out right there. i wanted to get a little more specific here. the idea, should they do qe in a specific sum? that gives the market a sense of how much is coming but it create as time when it might run out. going to monthly meeting, meetings by meeting, the fed's going to be in the game as lodge as it's not hitting the economic targets. i don't know what the ta

>> once you get the fomc, a lot of news, the europe news is temporarily out, the fomc is gone.r, the only thing that's right is buy on the rumor. the draghi put is huge and enormous. maybe a little bit of a pullback seems likely here, but 10%, 20% correction. i think people are kidding themselves at this point. did you see the news earlier, bill gross announcing that he's cutting holdings? he's concerned about inflation. there's a little bit of effect. and i liked him comment on high yaeldz because i've been talking about these high yields etfs. people believe the fed is going to extend its low interest rate guidance. >> high yield funds will be the beneficiary. >> on bob draghi, he's one of my large investors in the marketplace comment just that. he said, look, the fed is important, but don't underestimate what the news out of the ecb is. that is structurally different. >> do you see it as inflationary, though? bill gross tweeted that a few weeks ago and gold hasn't looked back. it's been higher ever since. >> i think it's going to be difficult to determine exactly what will b

next week the fomc meeting, which wraps on thursday. before that, of course, then there's a german court ruling which has a lot to do with the european bailout funds. if that doesn't go through, then that will give a lot of headaches for eu leaders and traders and market investigators. quite a lot there for investors to take in with politics, key data and a lot of other events which may play into markets. back to you. >> thank you very much. that was ramin at the tokyo stock exchange. >>> well, spain and greece are struggling with their debt crisis, finland has the top aaa credit rating in the euro zone. the finnish prime minister stresses that the nation is committed to the euro, but he has some reservations on the extent europe should help ailing member nations. we spoke with them in tokyo to find out more. >> good morning. >> good morning. very good to see you. >> first of all, the european financial crisis, what is your current assessment, and what is your view on the eu's actions so far? >> i'm a little bit more optimistic, because

take a quick peek at how they were impacted by the fomc and ben bernanke speaking.ore than 4.5%. the xlf up 2.5% plus. you have the nyc oil index above $98. huge moves in gold today after qe-3 set sail. back to you. >> all right. thank you so much. >>> well, over 11 million people get disability benefits from social security, which is an increase of more than 23% in the last five years. turns out social security is so overwhelmed with disability claims that some officials are awarding benefits without giving applications the proper review. that's according to a new report out of congress. the issue only adds to the debate over social security as a whole and what some call a broken system. cnbc contributor jared bernstein says the disability problem is exaggerated. peter ferrara of the heartland institute has been a long-time supporter of major reform. jared, first off, you say the fraud and disability claims is exaggerated. >> no, actually, what i meant was that the increase in disability claims as a function of fraud, as a function of people getting disability paym

has not really partaken of this fomc rally.hey did say everything for the fall looks very good for us but they also pointed out they are taking a $50 million write dourn in their film unit. this is not carter. they say it is about work they have discontinued. either way walt disney hit an all-time high, then pulled back a little bit. back to you. >>> to the nasdaq where we have a very significant percentage gain in that tech heavy index and the vix is plummeting as traders move into those equities. hi. >> take a look at the nasdaq, trading near a 12-year high but that's not the only catalyst. apple unveiling that new iphone5 which is leaner, meaner and faster. wall street putting out a lot of bullish notes this morning. goldman sachs raising their price target on the stock in the anticipation the iphone5 will drive earnings higher in the december quarter. it is also talking about some of the derivative plays. nuance communications is said to be behind the siri application. yesterday apple talked about the siri enhancement. nuan

having studied jackson hole a couple of weeks ago, we felt the fomc decision was going to be close.would be data dependent. the silver lining on the horrible jobs number is we think the hurdle has been lowered and we'll get something next week. >> hope springs eternal that the fed will pump more money into the economy in what would be a futile effort and waste of taxpayer money. but i want to ask you this. maybe the lousy jobs numbers, revisions the last few months and the whole economy has slowed down to less than 2%. i want to ask you. is it good that the fed is going to stimulate or are the lousy numbers bad because they are telling us a bad economy will produce bad profits? since profits are the mother's milk of stocks bad profits mean bad stocks. >> corporate earnings will be a question, larry. the second quarter we just saw wasn't great. it was okay. third will be much of the same to a significant degree. we need stronger top line growth. we think third and fourth would be next. consumption is 70% of gdp. we'll have to watch it. >> we had a 0.0 wage rise in today's jobs number

consider september september 12th and then a critical data point* four bernanke and his colleagues at the fomc. >> it looks like it might start raining. >> is all digital. [laughter] we are in a warehouse in new jersey. [laughter] for more on in the next up with senior economics writer for "the wall street journal", he does not sound happy with the economy. >> wall street loves easy money. if you want more we may deliver it. put it in the perspective of the election there is not much he could do to influence the job rate so the fact he will delay any decision the fed is a nonentity. he said we are two percentage points above where he wants us to be. and tell if this lower the fed will put to the pedal to the metal with more money creation. gerri: of that number comes in bad want today take action? >> possibly. said even early september i am not sure. it takes a couple months to penetrate. i don't think the fed will be obeyed impact. nixon wanted guarani george bush sr. thinks he lost because the fed is to slow. gerri: i don't see people reacting. low-level sand they don't know anything. right?

ahead of itself, but it's gotten an awful lot more investors interested just this month, ahead of the fomc meeting and ahead of other developments in europe including german high court ruling. >> tom: we have seen an increase in trading volume, we've seen an increase in open interest in gold futures, essentially positions that are kept after a closing bell, after a settlement considered long investors here. are these characteristics potentially early signs of a bubble in gold? >> oh, i don't think it's a bubble. i think the people who have been buying gold have noticed other commodities, especially the grains, moving up to very high prices because of the drought worldwide, and it looks like between currency fluctuations, the interest rates maintaining themselves low, that means the weaker dollar and of course with a possible downgrade from moody's if there are no, there's no progress in congress and the senate, well, then of course people who own gold will maintain their gold positions. >> tom: well, how about that, if you do own gold at these levels and you've got some profits, do you sel

this monday morning a lot of people are considering the fallout from the beginning of the fomc meeting on wednesday. and one of the things they're considering - interest rates. what's your read there? > > i think what the fed is going to have to do based on last friday's jobs number is they're going to probably have to add some other kind of stimulus to the party here that we've seen over the last three years. whether that comes in the form of bond buying of treasurys or mortgages, you're certainly going to see probably the 7- to 10-year sector of the treasury curve see lower yields than based on where we may see longer-dated treasurys. i think right now you're going to see a tight range going into thursday's announcement, and i really don't see treasuries moving much until we get a plan. but i do see interest rates in the 7- to 10-year sector going lower over the coming months. > > let's talk about metals. how about that precious metal of gold? that sure is soaring right now. > > that had a big day on friday as well, but look, it's really a flight-to-quality trade there. it isn't a cu

. >> well, obviously the jobs numbers, the big news, especially with the fomc decision coming up nextatching it closely. there's a big deviation from consensus, it could nudge the fed in one direction or another. this could be a case where in the short term good news is bad news for the markets and bad news is good news in terms of the likelihood of additional easing and the market is looking for a little there. watching that closely tomorrow. >> all right. eight seconds left. good job. stephanie, you're watching tomorrow what? >> of course, the jobs. within the jobs i'm looking at the manufacturing sector. it grew 25,000 last month. we've had a lot of cross currents in manufacturing since then. i think that's going to be the wild card. then you still have conference season. so granger and honeywell will also present. they'll give us a real tell on the manufacturing tesector. >> wow. you had 15 seconds left. ward, over to you. beat that. >> i think the data will tell us that the labor market is moving in the right direction, but not as fast as the federal reserve would like to see. ce

right now the guidance as fomc does not plan to tighten before mid 2015. >> right. >> you would favor i certainly anticipate that yes, we'll have to tighten before then, particularly if my view of the economy and what's holding it back turns out to be accurate. that if it really is about uncertainty, about fiscal policies and elections in europe and worldwide growth, then if those ameliorate, we're going to have more growth going forward, not a lot but more growth and we will find ourselves having to tighten sooner. >> but you don't feel then, you don't agree with some who cite in some empirical evidence showing that, quantitative easing has helped to lower interest rates, reasonably substantially, and thus helped to create you know, extra growth in gdp? >> right. >> we heard two million additional jobs from a friend of yours recently. >> there is a lot of empirical work that's been done on the effects of quantitative easing and asset purchases but those, studies are take actions were done at very different times. you had qe1 which came at the height of the financial crisis where mark

it's about jobs, jobs, jobs for the members of the fomc and particularly the president of the boston fed. he's not a voting member, but will be in january. nonetheless, he deafed the extraordinary action the fed approved last week, $40 billion worth of mortgage bond purchases. a month, and they hope this helps jump the economic activity and create more jobs. i asked, well, how many more jobs, you know? the last two rounds of quantitative easing qoording to ben bernanke created an additional 2 million jobs. take a listen to what he said. >> i'm expecting to get a couple of tenths off the unemployment rate relative to way we otherwise would have got and each year we continue the program. that seems like a small amount, but actually in terms of the number of people, it's a fairly significant number of people, and over a broader period of time, it can have a reasonable impact on the economy. i would highlight that this, by itself, does not get us to full employment quickly. there's nothing we can do to get the full employment. >> obviously, there, eric trying to manage expectations. for

>> this indicates to me, just look at the introduction to that fomc statement this time, it was really different than the other two and it was much more -- than the other two. the last part of this 40 billion a month buying of mortgage-backed securities, this really is a major change in the weight they put it in terms of substantial increase, decreases in unemployment is, i think, indicates they are worried, very worried. liz: there was one quote from ben bernanke, if we do not see improvements, we will continue. again, that sort of paid that the doors are open. let's look at the other side of this. you as an economist may see, what would be that domino effect? when you have open ended bond purchases like that, is there an unintended consequence? >> i think the unintended consequence, to me that is that the banking system is still weak. the regulatory agencies and the bank examiners are very concerned with things taking on risks. if banks don't take on risks and get the money flowing to businesses and other types of investments, then it really will not have an impact. the fed could wai

>> and the fomc hosting its policy meeting later this week.s if bernanke actually disappoints? >>> let's talk about apple coming off the all-time high, intraday high set this morning, days before the big iphone event on wednesday. shares now down by a little bit more than the dollar. two analysts join us. good to have you with us. will, i'll start off with you. apple has had a monster run, up by about 20% in just the past 13 weeks or so. is this the typical trading pattern we've seen going into every product launch where the stock runs up sharply and sells off? and will that be a buying opportunity for investors? >> well, i think you probably hit the nail on the head. typically the stock runs up in advance of a product announcement. to the degree it sells off, like it has in the past, that probably presents an even better buying opportunity. we'd like it on any potential weakness if that were to occur. >> rob, would you wait on buying apple? if you didn't have a position at this point, you want to put fresh money to work, would you wait? is th

finally, you have that fomc announcement.uick comment on the german ruling tomorrow. a lot of people are worried about the conditionality that court may impose. they'll approve it. everybody believes that. what is the conditionality? first off, everybody believes that they're going to require them to have approval for any more bailouts in the future. that's obvious. that's going to happen. here's the two things people are worried about. some people are arguing there might be some kind of ceiling on the amount of german exposure for future deals that are out there, some kind of euro limit. that would not be good. it would imply the bazooka is not essentially incident. here is one that is particularly disconcerting. some have been arguing that the court may rule that there has to be -- because we're getting very close on european integration that there has to be a change in the german constitution. i think this highly unlikely. but if that happens, you'll definitely have some people concerned about it because, again this would

fomc in the muslim world part 2. that is the subject of this evening's talking points memo. as we told you last night. mr. obama should change his approach when dealing with the muslim world. it's obvious the soft power strategy not working. jihadists don't care what mr. obama says and any sign of sensitivity will be perceived as weakness. not to say we should antagonize muslim governments have to tell them they will be held accountable and actually hold them accountable when measures are harmed. apparently president obama read the riot act to egyptian president morsi and now the egyptians are finally protecting the american embassy from the fanatics in the street it is worth noting that egypt is dependent on american aid and tourism to survive economically. there are nearly 84 million people in that country. the average per capita income $6,600 a year. unemployment among young people 25%. owe i didn't want san economic catastrophe. and there is little the u.s.a. can do about it. today the head of the house intelligence committee said that everybody in cairo knew trouble was

investors care schuss ahead of the fomc meeting this week. the dow was down 52 points. intel was the dow's worst performer. its shares taking a tumble again today. intel cut its earnings outlook on friday. that has analysts quite worried. hewlett-packard announced it will cut another 2,000 employees over the next two weeks. the news brings the total planned layoffs to 29,000. but investors apparently welcoming the news. the shares of hp closed the day up nearly 1%. >>> to our top story tonight. after 20 years of government pushback offshore drilling in the alaskan arctic is finally back. just this weekend royal dutch/shell began drilling in the sea to test the size of deposits there. shell paid almost $3 billion for the leases that was four years ago. you can bet the company is hoping the investment will pay off. we got word it is temporarily halted drilling today, one day after it began because sea ice moving in towards the company's drill ship off alaska. tefco and phil flynn price futures group and a fox news contributor. phil, they have temporarily stopped. we're ju

. >> he is not a voting member of the fomc and won't be one next year but he will rotate on in januaryf 2014 and had he been a voting member this time around in the last meeting he would have urged patience because he thinks the problem is the uncertainty in the economy and the election in the u.s. and the debt crisis unresolved in europe. liz: you really have the ear of many fed members just a week ago you had eric rosengrin on the opposite side who felt q e has started to work and witnessed in the housing market. >> that is right. she pointed to the increase in the stock market for one thing as a sign that this was already having an impact and the fact that mortgage interest rates actually dropped on the day they made the announcement and he thinks that will support the housing market so he thinks this is the right direction to go and that is the great debate we are having in the fed. what is the right direction? we don't know. and chartered waters for all of us. liz: a lot of voices to come to fox business. rich edson is in the beltway. liz: let's go to rich. rich: the u.s. is at th

. >> today kicks off the smart of the two-day fomc meeting and the big question remains to qe or not to qe? we might know the answer tomorrow. here now is frederick michigan, former federal reserve board governor and current economics professor. good to see you. >> good to see you. >> i reckon the fed will ask for quantitative easing tomorrow, and i happen to think it is a futile waste of money. >> i don't think so in that sense. i think there are problems and costs to doing this, but a quantitative easing has been able to have an impact on markets and actually in terms of helping to lower interest rates and raise the stock market and actually help increase spending. so it has been able to have had some effect and unfortunately, there's no other crap game in town. the federal reserve doesn't have the ability to lower interest rates and the policy of extending the commitment to keep interest rates low is less and less effective as we get close to the end of ben bernanke's term. >> but, rick, let me just ask you again. you know more about this and you're an ex-federal reserve governor.

and he clearly believes that he can have an impact and the fomc can have an impact on the struggling labor market, right? >> i'm going to assume, scott, that the question is everybody's smarter than the fed is a rhetorical question. >> yeah, it is. i mean, why do you think there's such a negative opinion of whether it can work. the fed chairman clearly thinks it can. >> here's what i think, i think the conclusion that qe has helped is essentially a counterfactual conclusion. you've got to say that this lackluster growth would be more lackluster in the absence of qe. i think people are getting tired of that counterfactual calculation and saying you know what? we've given this a chance right now. and the frustration is building among those who think -- who have supported it. >> let's talk more about the federal reserve, what could happen, we're joined by the global head of economics at morgan stanley. he joins us on the fast line. sir, i hope you've been listening to the conversation. what are your expectations for tomorrow? does mr. bernanke deliver more quantitative easing? >> well,

i mean, bernanke's clearly in control of the fomc, and he has the voting bloc on his side. david: but it is an interesting split, is it not? i've never seen a split as out in front. usually, people have their disagreements behind closed doors. >> yeah. they're definitely getting more vocal on the objections to quantitative easing and bernanke's policies, that's for sure. liz: okay. so let me just push back on you here. we can sit here and rail against the fed all we want, but we are also a business network trying to make people money, and the trade is what it is. how do you view it, brian, and how do people make money off it? obviously, they have to stay on their toes and watch because it's a fluid situation, but what is your focus and what is your thought right now when it comes to investing? >> you know, my take is, you know, other the next 12-18 months that, you know, the fed is going to be pump liquidity into the market, so risk-based as sets are poised to do well. if you see a pull back, i think equities will do well within the fixed income markets, the credit markets,

the impact of the fomc. all you have to see, this is when the announcement came out and when bernanke started talking and spikes levels off at the close but 200 plus points on the dow. financials dominated the dow. bank of america usually trades thr 330 million shares. home depot hit a new high up almost 40% year-to-date and touching on gold. qe-3, six month high for privilege. the 2012 high is 1790, we're only 18 shy of that. back to you. >> sure, they will destroy the value of the dollar. that easy many thanks to brian shactman. not everyone liked it. with the fed pumping nearly 500 billion dollars a year in perpetuity, don, nearly $500 billion a year in perpetuity, that means forever. do you really think this is a bad move for stocks? >> it's a terrible move for stocks, larry. ben bernanke has joined chief justice john roberts as a bush appointee working for the re-election of barack obama. it's the economy, stupid, it will re-elect barack obama that will throw us off the fiscal cliff and all the fed mone