joining me now live, former chief economist for vice president joe biden, jared bernstein. to you. it's been quite a couple of days to say the least. give me the highs and lows. what's going on here? >> well, the highs yesterday, you've said it, 1,000 points. the lows, the market hasn't carved out a bottom yet. we see today the market is down once again. i think there's two fundamental stories here. one is basic market nervousness around a lot of uncertainty. much of what is political. you've got trump's war on trade. you've got his badgering of the fellow reserve. you've got the government shutdown. i know you've been talking about all of these issues and that doesn't help markets. then you've got some real economy stuff going on. consumer confidence took a hit today. economies are slowing, in china, in europe. the federal reserve is raising rates, tapping the growth rates. corporate profitability won't be what it was in 2019, what it was in 2018. there are a lot of things pushing the market around. >> let's talk economy first. if you're looking at swings here, right, it d

joining me now to discuss live, jared bernstein, former chief economist for vice president biden.hat was promised to middle class taxpayers? i understood that the average household gets a tax cut of about $1,600 this year. is that going to happen or will people be surprised doing the taxes this year? >> a lot of people are already surprised and that's one of the reasons why republicans during the midterms very clearly did not run on this tax cut because they recognized it wasn't a plus for them at all. let's start with the notion that middle class people, working class people have been helped by this. the white house said that their paychecks would grow $4,000 per year eventually. we are starting to see positive real wage growth and we are in year nine of economic expansion and seen nothing like the promises to the middle or working class. where steve mnuchin went way off the reservation was on this business of the tax cut paying for itself. in fact, we have a budget deficit that's about 4% of gdp. historically when the economy is as strong as it's been the budget deficit is close

hold on to the rally as the ongoing uncertainty continues to weigh on investors let's bring in jared bernsteinlow at the budget on policy priorities and policy adviser to vice president biden and policy analyst at the american enterprise institute. good morning to both of you. jimmy, hassett on the tape saying powell is 100% safe could that clear up muddled messages >> i'm always reminded of when a baseball owner says they was full confidence in their manager and then they're out two weeks later. more important than what kevin hassett says or what mnuchin says is the president and rather than what the president says, he needs to stop tweeting about the fed, stop tweeting about powell. less tweeting overall would be great. every time the president tweets about the fed it will remind people he's -- obsessed on the federal reserve and that's bad for confidence. >> the president hasn't mentioned firing jay powell and now we're hearing from an economic adviser and we already heard from the treasury secretary that the president doesn't have an intention of firing powell. how much of a risk is there?

jared bernstein is former economic adviser to vice president biden.ood to have both of you with us david, you first how do you see it in context of what we've just discussed here >> i think what it all boils down to is how investorsthink about the distribution of outcome, the uncertainty around growth, the uncertainty around trade, the uncertainty around the fed. coming into december, you really had no idea what 2019 was going to hold. like we were chatting about before, the risks really seem tilted to the downside i think one of the bigger risks that people may be failing to appreciate next year is if we get a deal with china and economic growth does continue at a fairly moderate pace, the stock market could go back up. that will put powell in a position where he's going to want to hike rates there's going to be a balancing act in 2019 between an improvement in the fundamental, an improvement in the political outlook, but also the response from the fed as that uncertainty gets removed from the picture. we still view the fundamentals as supportive but

joining us to dive into that angle of the fed story, cnbc contributors jimmy pethokoukis and jared bernstein from the center on policy and budget priorities gentlemen, good to sigh both. >> jimmy, we don't know how the president is the going do react. clearly he made his position clear ahead of this saying the fed should not raise interest rates. does raise a risk now that the fed did raise interest rates for the president to do something more drastic than just complain on twitter >> well, listen, i think there will be a lot of complaining on twitter. i would expect -- listen, we had the hike today may get a couple more. we have a slowing economy. i would expect that 2019 is going to be a year where the president will open up with both barrels or both esphonsmartphon, you're right that's just tweets it matters if it begins to change how congress treats the fed. back around 2010 there was the whole sort of audit the fed movement haven't heard a lot about that that can change. republicans could key off what the president says and begin to talk about bringing a fed chairman up for more hearings