jarome powell, he was almost getty, the outlook is to good to be true. unemployment to remain less than 4% but doesn't see inflation worsing and raise rates once a quarter at least through the fall of next year. lauren: you're sounding pretty positive as well, we will get more numbers on friday when we got job's report, unemployment rate to down a bit, do you think we will see wages go up some more? well, we are had the hurricane and that's impacting things. >> the hurricane may impact things and the numbers of hours may not have risen because the hurricane hit during survey and didn't hit populated areas, it's possible that we do, but wages are rising, not only raises but pace is accelerating, there's good news there, we don't want them to get out of hand, they are up 3% year to year, we think it'll end the year about 3.2% year over year, next year 3 and a half percent, we are moving in the right direction, plus one-time bonuses in there as well. in terms of jobs, we are looking for 185,000 net increase and the unemployment rate to come down and those a

i think jarome powell came out and said it was too optimistic, i think he misspoke a little bit.fed has done a great job of telegraphing their moves so there's no surprise on the market. the economy is trading and it is fantastic. lauren: number to watch is hourly earnings, let's say they go up and let's say they get the 3, does that send psychological signal to traders that, oh, oh, the fed will hike really fast and really strong? >> i don't think so. the biggest thing right now is not necessarily pressure and it could pretend that interest rates go more. that's still normalized rates, we are at historic lows, the biggest thing right now is oil prices and potential inflation that comes with that. lauren: you're fine with 25% rate? >> i'm fine with normal rates absolutely, we have low for a decade now. do i want 5%, i would like zero percent but i'm fine with normalized rates. lauren: everyone is talking about midterm elections, if you look at research the year after midterm elections has historically been the best year of the 4-year cycle for stocks, in fact, the s&p 500 climbed

cheryl: well, for weeks president trump has been critical of fed chair jarome powell's campaign to graduallyaise interest rates, we will talk more about that interview a little bit later on the show. lauren: let's do it right now. jimmy lee and gary smith, they join us now. gentlemen, good morning. gary, let's start with you, what happened between yesterday and the day before, why extreme selling yesterday? >> yeah, you know, it's funny, it looked like a one-off event and i looked back since 1988, 3% down day, we've had 77, 3% down days, i hate to minimize it but i think it's just normal selling, since the march lows, the market went straight up, almost 13%. it's still having a good year across board, stocks like amazon and netflix are still up by healthy percentages, i think that this was just a normal selling to get selling, people worried about china, people worried about interest rates, you know, maybe, maybe not. it's probably healthy for the market in the long term. lauren: including the losses that we are seeing today is down 6 days in a row, jimmy, what do you make of the timing and

federal chair jarome powell gave speech, we are a long way of normalizing rates. >> interest rates areaccommodating but we are moving in a place where they will be neutral, not restraining the economy, we may go past neutral but we are a long way from neutral at this point probably if we see things getting stronger and stronger and inflation moving up, we might move a little quicker. liz: move and quicker. you pair those two words together and investors did not like it. how did that translate to housing? warning today that 30-year mortgage rates will jump 10 to 15 basis points by next week if the 10-year stays at current levels. that's in a couple of days, i don't know, do they move that quickly? >> listen, first of all, liz, there should be no surprise that the fed has been talking about this for 18 months, you know, i think we clearly got to a momentary inflection point in terms of rates and the equity markets but i think it is short-lived, you know, we are a week away from third-quarter earnings which is usually a very positive period for the stock market. the overall u.s. economy c

lauren brought the threat of interest hikes, criticism of jarome powell, this is real market concerns let's be frank, but also the issue of china is a big market concern and i'm wonder if that's on your radar as you talk about possible headwinds you mentioned a moment ago the fact that we are not willing to go back to the table with china that we reported earlier in the hour, you the meeting coming up many argentina between trump and xi jinping, they may have nothing to discuss as far as tariffs. is that one of your headwinds you mentioned? >> it is definitely. take a look back, 6, 8 months ago at market perspective at the time and you take a look at uncertainties that are plaguing the market today, china has to be near the top of that level near uncertainty. affecting supply chain, the market was looking forward to some reasonable and fairly timely resolution of trade conflicts with china, i think we have seen that that's going to be much more prolonged process and may not get to the sort of solution that we would like to have sooner rather than later. lauren: yeah, now reportedly we

. >> largely tipping point from market selloff is when fed jarome powell spoke last week, he sounded very hawkish, touted the economy but no concerns about potential for inflation to overheat and that really kind of spooked the market and pushed the 10-year above 3.2 and we have been up four days and that's when the stock market really had to take a second look at where is the 10-year, where is it going, this is -- we are right in the sweet spot of where the 10-year should be. when we look at 2019, economists 3.39 on the 10-year, not much higher where we are today. how do we get there and how fast do we get there. dagen: federal reserve's monetary policy was too cheap and way too easy for long time. at some point chickens come home to normalize environments. the president i'm guessing if there's a stock market downturn and we have seen it, slowdown in the economy, he's trying to find somebody to blame for it. >> right. dagen: it would be the federal reserve. there's a method to what is going on here and i will add the s&p 500 is down 5 days in a row, that's the longest losing streak

senator elizabeth warren democratic member of banking committee asking jarome powell to keep growth restrictions wells fargo in place until the bank fires ceo, warren says growth cap on bank should not be removed, vocal critic of wells fargo calling for harsh disciplinary action following series of scandals, shares of wells fargo are down 10% so far over the year. outgoing un ambassador nikki haley joking about senator warren and ice at the al smith foundation dinner. >> you went with paul ryan who is a boy scout, that's fine but little boring, so this year you wanted to spice things up again, right, i get it, you wanted an indian woman but elizabeth warren failed her dna test. the president asked me if i was from the same tribe as elizabeth warren. as a member of the trump cabinet it is a thrill to be out to dinner without being harassed. [laughter] >> you're all familiar with diplomatic immunity, exemption from prosecution or as mayor de blasio calls it sanctuary city. [laughter] cheryl: just last week president trump announced that haley resigned as ambassador to the un and will be leaving po