greg ip is the u.s. economics editor at the economist. greg, it's always great to have you. has the bank been forced to deal with problems that it wasn't designed to tackle back in the last century? >> i'd say what you have is a situation where the circumstances it's facing are such that the tools it has simply are not up to the task. think about it. through the whole post-war period there was never a time when unemployment was so bad that they couldn't deal with it with short-term interest rates. but they've had their short-term interest rates at zero since the end of 2008 and we're still stuck with high unemployment. so they've gotten more creative with i count seven major unconventional types of monetary policy, of which this week's was the seventh. but what's interesting is that eve installment gets a little less aggressive tonight last one, and the reason is i think these are like experimental drugs and the fed is very worried about the side effects. so you get the situation where you become much more careful about using them, because you're afraid the side effects are

greg ip is u.s. economics leader at "the economist" and cnbc contributor.> hey, tyler. >> let's talk a little bit about china cutting its rates for the first time in four years. the chairman of the federal reserve was asked about europe versus china. it seems he feels europe is a much bigger threat to the u.s. economy than china's slowdown is. >> well, i think he's right, tyler. first of all, like the chairman said, the thing about china's slowdown is that it's a deliberatie induced slowdown. officials are worried about inflation and deeply worried that the stimulus in 2008 aggravated some of the balances in the chinese economy. way too much attention not on consumption. they have the ability to speed things up a bit. way more levers than we have here in the united states. they can speed up investment projects. they can reduce reserve ratios. they can lower interest rates like they did today. the question is they don't want to do it too aggressively because they don't want to aggravate some of the pre-existing balances. the point, tyler, is that the chinese

we'll talk with greg ip, u.s. economics editor at the economist. >> tom: the nation's commerce secretary has stepped down. john bryson is leaving his post nearly two weeks after being involved in two car crashes. those crashes were blamed on seizures. in a letter to president obama released by the white house today, bryson said, "the seizure i suffered could be a distraction from my performance as secretary, and that our country would be better served by a change in leadership at the department." >> susie: calling it a no- brainer, president obama today stepped up pressure on lawmakers to stop student loan interest rates from doubling before a july 1 deadline. the president wants congress to keep rates on federal stafford loans from rising, they're set to jump to almost 7%. republicans and democrats agree the rates should stay put, but they're deeply grid-locked over how to pay for it. today, president obama accused congress of "playing chicken" with our economic future. >> this is all about whether or not we are

point is if they need to take more action at least it will no longer be an election issue. >> brown: greg ip of the economist, thanks so much. >> thank you. >> brown: online, we have several prominent economists, including more from paul krugman, weighing in and debating ben bernanke's moves to prop up the economy. >> ifill: still to come on the "newshour": attorney general holder held in contempt of congress; a powerful labor union looks to it's future; poet natalie diaz on saving her native american language and how americans in germany viewed the rise of adolf hitler. but first, with the other news of the day. here's hari sreenivasan. >> sreenivasan: the federal reserve's pronouncements didn't do much for wall street. stocks struggled as the forecast of slower growth undercut any momentum. the dow jones industrial average lost just under 13 points to close at 12,824. the nasdaq rose a fraction of a point to close at 2,930. a new leader took control in greece today, supporting the country's international bailout, but vowing to negotiate easier terms. the head of the conservative new democr

neel kashkari will join us next and the fed kicks off a two-day meet tomorrow, morning jolson and greg ip.m. eastern. we imagined a vehicle that can increase emergency braking power when you need it most. and we imagined it looking like nothing else on the road today. then...we built it. the 2012 glk. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. >>> global >>> global risk managers shifting their focus from greece to the rest of southern europe this morning, joining us is neel kashkari. neel of course as the head of global equities at pimco and neel this morning we are watching the spanish bond yields pushing above 7

developments, the chief economics correspondent at the "wall street journal" and cnbc contributor greg ips. economics editor at "the economist". john, i don't think anything probably surprised you yesterday. if so, if something did what was it? >> two things. one was, you know, the market is responding as if it was disappointed that there was no qe coming out of the fed. i didn't think they were going to do that. but, you know, frankly i thought the chairman had sounded very dovish to me. sounded to me they are moving towards more quantitative easing. the other thing is he was asked about the bank of england's program to funnel loans directly to consumers through banks. and, you know, he was pretty sympathetic to that idea. that's a new idea for the fed on table. >> weird world. wow. he's really negative on things so you would have thought people would have been happier. that's what you just said. he said there's no end in sight. nothing bright on the horizon and yet people didn't take that positively. >> that's another way to interpret it. >> bad. >> i mean what people -- what i hear peo

joining us greg ip. you say nor easing. more twists or a twist tweak.that not considered easing, mark? >> think when we talk about twists, i think that -- i get the impress some people think it's an off and on switch. we have to look at the balance sheet of the fed. there's been enormous restructuring that has been done and a significant percentage of the bonds are now in the 10 to 30 year category of maturities and so that has happened. i think what we'll probably see today is a reaffirmation of the need to continue the overall easing policy, that there isn't a lot of twisting left to be done. chubby checker not with standing. >> heard qe3 is coming. not now or never? >> it seems to me that the timing is not right. if there is going to be a real issue -- if you look at for example the last statement that the fed made in april, if you look at janet yellen's statement and chairman bernanke's statement they've seen an economy, domestic economy that's doing moderately well although some risks and the risks are to europe. if you folks have covered very well