it is worth noting that the goals of the fomc's asset merchant -- purchases are somewhat different. the goal is to accommodate rates. i would emphasize that a decision by the committee to end asset purchases, whenever that is reached, would not be a return to policy. in that circumstance, the committee would no longer be increasing accommodation, but his policies dance would remain highly accommodative to growth. as i have discussed today, the decisions to modify the asset purchase program and to undertake rate increases are tied to a different criteria. the fomc's actions today are part of our ongoing efforts to support economic recovery and job creation, while maintaining price stability. monetary policy has its limits. only the private and public sectors working together can get the u.s. economy fully back on track. in particular, it will be critical the fiscal policy makers come together soon to achieve longer-term fiscal sustainability without the policies that could derail the ongoing economy -- the recovery of the ongoing -- the ongoing recovery of the economy. i will take yo

and won't asked if we are on a bond bubble but obviously the new guidance you have given in the fomcng to give a lot more clues to people who own bonds, about when they might start lightening up their bond portfolio and changing the composition of what they own. was concerns about information about bond prices and things happening in a big hurry in terms of some sort of a bubble popping, was that a consideration in adding this transparency? >> i wouldn't say was an important motivation for adding transparency. adding transparency has a lot of value, but it is the fact the greater clarity will help markets better predict how bond yields will behave. as we go forward in time as the economy continues to strengthen as we hope, as the exit comes closer for the federal reserve, you would expect longer-term bond yields to begin to rise, the more information we can provide markets about the conditionality under which the fed would consider, the better information they will have about the likelihood of bonds that allow for adjustments so that is a positive aspect of this communication. i woul

as the fomc statement makes clear the committee anticipates policy and revenue guidance of the fully consistent with continued products that -- employment and inflation remaining close to the 2% objective over the longer-term. although the modified guide should provide greater clarity to respond and dated by monies puts monetary policy and autopilot. disregard let me make several points. first, the committee views its low rate policy as likely to be appropriate at least until the specified thresholds are met. reaching one of those results however not automatically trigger immediate reduction in policy accommodation. for example if unemployment were to decline to slightly below six-point represented time when inflation and expectations were subdued and projected to remain so the committee might judge an immediate increase in its targeted federal funds rate to be inappropriate. ultimately in deciding when and how quickly to reduce policy accommodation the committee will follow a balanced approach in seeking to mitigate inflation from its longer range goal and deviations in employment f

. >>> agency expected, the fomc has ramped up its purchases program.t ow new levels of tlefl hold on uninflation before it moves on interest rates. fed chief ben bernanke says the changes will make the central bank more trabs parent, but ultimately he did try to play down the changes. >> the change in the form of the committee's forward guidance does not in itself imply any change in the committee's expectations about the likely future path of the federal funds rate since the october meeting. in particular, the committee expects the stated threshold for unemployment will not be reached before mid 2015 and projects that inflation will remain close to 2% over that period. >> as investors prepare to head home for the long christmas holiday, we're taking a look at what's in store for markets in the new year. european equities, that's the call for our next guest. he says the stoxx 600 could return more than 7% despite ongoing stagnation in the euro area. peter, welcome. >> thank you. >> why are you so bullish on europe, despite the weak macro fths. >> let's

. >> jeff, appreciate your explaining your views on your dissent at the fomc. jeff lacker.back to you. >> thank you very much, steve, for that exclusive. let's look at this chart here. you don't have to adjust your tv sets, you're actually seeing that correctly. research in motion, handily outperforming apple over the past three months. what does this mean for your investing strategy. apple versus rimm later on in the show. ally bank. why they have a raise your rate cd. tonight our guest, thomas sargent. nobel laureate in economics, and one of the most cited economists in the world. professor sargent, can you tell me what cd rates will be in two years? no. if he can't, no one can. that's why ally has a raise your rate cd. ally bank. your money needs an ally. tdd#: 1-800-345-2550 let's talk about low-cost investing. tdd#: 1-800-345-2550 at schwab, we're committed to offering you tdd#: 1-800-345-2550 low-cost investment options-- tdd#: 1-800-345-2550 like our exchange traded funds, or etfs tdd#: 1-800-345-2550 which now have the lowest tdd#: 1-800-345-2550 operating expenses

it is worth noting that the goals of the fomc and asset purchases and the federal funds rate guidance are somewhat different. the goal of the asset purchase program is to increase the near- term momentum of the economy by fostering more accommodative financial conditions. purpose of the rate guidance is to provide information about the future circumstances under which the committee would contemplate reducing accommodation. i would emphasize that a decision by the committee to and asset purchases would not be tied to a tighter policy. the committee would no longer be increasing policy accommodation, but its policy stance would remain highly supportive of growth. only at some later point with the committee began actually removing accommodations through rate increases. as i've discussed, the decision to modify the asset purchase program and to undertake increases are tied to two different criteria. in conclusion, the fomc actions today are part of our ongoing efforts to support economic recovery and job creation while maintaining price stability. as i've often stressed, monetary policy h

some speculation over who would take the top spot and be the head of the fomc, obviously that will be so many names thrown around, have to tell you just to name a few. some of the most heavily traded most active stocks here on the floor of the exchange today. bank of america, aig, citigroup and sprint. four of the five are actually in the green, but not aig. liz: morgan stanley breaking news. the ceo put a lid on new hires and is now deciding whether to lay off more people with the big securities firm. how much and when, charlie gasparino. >> what they have right now according tforincreasing execute firm is informal hiring freeze, basically they are not adding staff. those are the brokers, they work on commission. they are not adding staff, only replacing key positions. it is the fourth quarter, but this is very interesting basically building up what we know will come in january. the ceo of morgan stanley will be deciding how much and if he will cut. more how much you will cut versus f. the decision isn't made yet. they will note in january, but they have approximately 55,000 employee

. >> big surprise today, fomc setting economic specific targets, saying it expects to keep interest rates near zero as long as unem plounemployment remains 2.6%. also agency mortgage backed security at a pace of $40 billion a month and feds announce what some call qe 4 or qe 4 1/2. they commit to longer tune treasuries to the tune of 45 billion. to the fed sheet big and getting big wesh rick. i just wonder, where the money comes from. is this a giant hewlett-packard or what kind of printer is this? >> i don't know what kind of printer it is. but one person's deficit is another person's stimulus. that is stimulus. when we look at things like one trillion against the 15 trillion economy, on the deficit, what is that, about 7%? what is gdp, 2%? are we minus 5%? a lot of questions. but i think the biggest we have heard today, is an old bond guy. 3 to 5 basis points, from the bond market, freaking out. it is not that big of a move, it is big based on the fed. but is it really that we're all thinking 6.5% around the corner? no, probably more of that inflation around the corner but the biggest t

it was a little celebrate, good times around this time after we already heard from the fomc and quantitativeand accommodative fed. we heard from ben bernanke and the truth is everybody realizes that we do have a tough economy and we'll see what happens. but i was just looking at major market averages. we're losing 61 points right now. however we're still up for the week. and then i began to look back to see how many weeks in a row. we're already up. this would be the fourth week in a row of gains. so it is sort of slow and steady and moving higher, slowly but surely like take two steps forward and one step back. that seems to it be the trend. it is still continuing even with the move back here of 61 points we're still up for the week. traders talk about the fact that december is traditionally a higher month. we're still trending to the upside. everybody thinks the fiscal cliff will somehow be solved. look at best buy. this has been a name that's moving. this is winner. this is all about the fact that richard schulze, the founder may be moving forward and may make a takeover buyout offer with

with the fomc. the federal open market committee, the protege of paul volcker said, if we don't raise interest rates, the chances of getting any help from the fiscal side is almost at zero. i say if you read with there first saying behind closed doors. this is unfiltered conversation in. they were very clear. >> whose conversation? >> you one be to rely on just would remember. [laughter] we had this argument. >> i found in this quotation somewhere. i said we have to go with the contemporary record. they stood use said the opposite of what he meant. i know that. [laughter] you want me to say that he reminded me by the way he did not read the book until he calls me up after word to say you made a big mistake. >> i said what was that? >> you got my resignation wrong. that was important because i have a whole story about it with the foreign exchange collapse and gold went up. he sent resigned monday afternoon and use said tuesday morning. i was sweating. the book was already out. it was too late to. i s

when he blows out his birthday candles which, of course, is what you do if you're on the board of the fomcll read some of your answers next. sors. can i help you? i heard you guys can ship ground for less than the ups store. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiday stress. save on ground shipping at fedex office. [ male announcer ] break from the holiday stress. ...so as you can see, geico's customer satisfaction is at 97%. mmmm tasty. and cut! very good. people are always asking me how we make these geico adverts. so we're taking you behind the scenes. this coffee cup, for example, is computer animated. it's not real. geico's customer satisfaction is quite real though. this computer-animated coffee tastes dreadful. geico. 15 minutes could save you 15 % or more on car insurance. someone get me a latte will ya, please? >>> let's get to it. time to "squawk on the tweet." fed chairman bernanke celebrating his 59th birthday this morning. that brings

this means stimulus is easier to pass in, say, a governing council meeting or an fomc meeting if inflation rates are lower than they would have been maybe a year ago or two years ago. so from that perspective, of course it's a good thing if oil prices don't rise as much. >> ian, you nailed the 2012 brent call. $111 is a barrel. what is it going to be for 201213? >> i've got 105 in. i have to say i think it's going to be a pretty weak year. going back to points we made about 2010 and 2011, 2010, the arab spring, that was a big surprise. 2011, sorry. 2012. and we had the iranian situation, as well. in the first quarter, oil prices up, brerchbt was up to 120 before it came back in 2010. always a problem with making the forecast is the political situation. there are some very big talks with regards to the iranians and the nuclear program and around april, i think it is, and at the same time know when you look at some of the websites, the possibility of action maybe by the israelis ahead of that because they're not confident that iran is going to do anything. so there's always sort of that impa

richmond fed president jeffrey lacker was the lone member of the fomc to exchange the rate guidance lasteek. he sits down for an exclusive interview on cnbc today at 10:30 eastern. >>> we can take a look at how u.s. futures are doing. a mixed bag this morning. the nasdaq is the underperformer there. on that note, let's get straight out to ben lichtenstein with traders audio.com. ben, how worried are you about the weakness in apple or is this a company specific story only? >> well, i think it's company specific for the most part. we are seeing slow down a little bit, lack of enthusiasm in terms of energy to the up side. the only convincing move that this market has seen in my opinion over the last few months is this extreme rejection that we saw, off of that 1340/1350 model. but we still have to get back up to around election day totals. we tested it last week. we've sold off from those levels. but for the most part, this market is really lethargic, very little energy, very little participation, as well, from the institutional players. we're closing out the year and for the most part, a l

its two-day meeting with a decision at 12:30 eastern followed by updated economic projections from fomc members at 2:00 p.m. and ben bernanke's press briefing at quarter past. the fed is expected to announce a new round of bond purchases as its latest program, operation twist, is set to expire at the end of the month. cnbc will begin at 12:00 p.m. eastern. >>> joining us is stewart richardson, partner at rpmg. the press conference -- we'll hear a fresh round of stimulus from the fed. how significant would that be? >> in my mind it's not that significant. i think as optics, people think this is another addition to the stimulus. the fact is that the fed for months and months and months when they go out to purchase longer term treasuries, they're trying to reduce the supply of those in the market and effectively swap short dated cash or other securities. north about 1.25%. whether they're holding reserves or selling the, say, two-year treasury at north of 2 5 basis points, it's effectively the same thing. they're printing 85 million a month and saying we're not doing a twist, we're doing a

. >>> as we head into the final fomc meeting of 2012 fed policymakers have traders on edge.lli on that in chicago. >> i'm on edge, all right. let's do a summary before i bring my guest and friend art nolan in. december 5th you have a 2.86 trillion fed balance sheet. you have 1.65 trillion of treasuries within that. you have 884 billion of mortgage-backed securities. of course, you have an unemployment rate more dramatically affected by beaming the unemployed to mars. but it is just a bit under 8%. why do we have to keep going down this road? why do we need to be printing more? what is the fed accomplishing? and, you know, as you said, where are more leeches? >> the one thing, they do the same thing over and over again. it just doesn't seem to be working. they keep coming into -- with bigger amounts because they have to to have the same effect. they have to come in with more amounts every time. they keep coming in with it. they're already projecting the balance sheet at the end of next year might be 4 trillion. >> let me stop you there. the reason it will probably be 4 trilli

in conclusion, the fomc's actions today are part of our ongoing effort to support economic recovery and job creation while maintaining price sfabblet. as i have stressed, while monetary policy has its limits, only the private and public working together can get the u.s. economy fully back on track. in particular it will be critical that fiscal policymakers come together soon to achieve longer term fiscal sustainability without adopting policies that could derail the ongoing policy. thank you. i would be happy to answer your questions. >> i guess i have ad. unemproacr -- you have another paragraph that's not just targeted something else. so what good are these targets if you have to reference the calendar date? >> we will be learning about what unintended consequences they make, and we will see what else happens to the economy that affects the levels of unemployment, for example, that we hope to achieve. so for that reason, as i discussed in my opening remarks, we decided to make the right ra for asset -- criteria for asset purchases qualitative right now because we have a number of issu

. >> i think that's one thing you can say about the fomc and this leader's chairmanship. going in new direction. the question is, is the efficacy of what we're doing solid or not? we'll continue to examine that. and if it's not, we're going to have to change course. it's the best i can tell you, joe. >> i understand. i understand. and you're a reasonable, calm, conciliatory, collegial, the fed is very collegial. but i would -- >> that's right. >> -- at some point wonder whether you might just snap? because you've been on in the past, with much less significant, and much less -- much smaller actions were being taken that really raised your eyebrows, and i -- that we know you really weren't behind. and maybe it's the, you know, as it keeps happening nothing surprises us anymore. it's like, you know, when we were going to do another $40 billion a month, people didn't really think that was that great of an idea. and that was going to be for maybe nine months or something. but then to go to 85, basically where you're assuming the unemployment rate gets down to 6.5. we don't ev

his criticism, he's from credit suisse, he says quote at least upon the introduction after today's fomcting the new guidance language seemed anything but clear. he called it the fog of transparency. you guys also were speaking about the connection between the fed and unemployment rate. diminishing returns. take a look at the chart here. on the right-hand scale there, all right, that is that is the unemployment rate and that is the green line. the blue line. they messed that up. the other point is supposed to go down, the blue line, in a very shallow way. the green line which is the balance sheet, shoots up. so there you see that the fed's own forecast is you go down from 7.75 down to 7.5. 20 basis points, in the next year for a trillion dollars. which is not really a whole lot of return. then the other thing, if you look at the forecast they really lowered their forecast. they do see a 3% growth quarter but they brought it down, they did a trillion dollars of qe, or forecast that, and they brought their forecast down by a tenth. so they're seeing diminishing returns. >> steeper. >> you'

the fomc will gather for a two-day meeting tomorrow.expected to maintain its bond buying at $85 billion a month, replacing operation twist with purchases of longer term treasuries funded by new money creation because they're running out of these longer things to twist into. they're going to have to start creating money or twisting money, whatever you want to call it. chairman bernanke will meet on wednesday afternoon to cover the federal reserve's positions. we'll cover that live. >>> right now, dow futures down by 35 points. s&p down by 45 points. oil price these morning, they are up slightly. they're up 39 cents to just $86.32. a lot of concerns about the consumer, though. it's still pointed out that there's a story of the front page of the "wall street journal" about weakness. we'll continue to watch a lot of these numbers that come out, though. you take a look at the ten-year note this morning. right now, the yield is 1.605%. the dollar this morning is indicated down across the board. euro is at 1.2911. and gold prices, which we've