when we move on to mary daly, the same kind of things, but she said they make sense.hat mary daly said financial contentions are tightening nc expect them to keep on tightening, and they should and the economy can balance supply and demand. in other words, bring inflation down and get the labor market less tight, things like that. she does think the rate should rise to neutral. and she said 75 basis point is not a primary consideration. and yes, a bipartisan vote in favor of jay powell, the senate confirmed jay powell on an 80-19 vote. democrats and the white house pointing to the fed' inflation-fighting efforts. bowel is widely expected, this doesn't change anything but shows both parties want the fed to fight price increases. haidi: our global economics and policy editor kathleen. let's look at futures in europe opening up after we saw european stocks dropping with the risk off move persisting on growth woes. investors are fleeing risk assets on worries about inflation, tightening monetary policy, we heard bearish remarks from central banks in that region recently.

if you take the words from fed president mary daly yesterday, is the most interesting fed speak of the entire week. she said this -- i expect financial conditions to tighten even more as we march through these rate increases and remove stimulus from the economy. i would like to see continued tightening of financial conditions. aren't they telling you exactly what they want to happen with markets for the rest of the summer? >> i totally agree with that. it was whether the trade-off between inflation and growth, how much of a balance they can achieve. i think it's very clear which side they are leaning on. the path -- the soft landing benefit will be debatable but we will be able to determine that but the path to inflation is at a more acceptable level and more growth scares are being priced into the market. until this point and time, the first quarter price action was around the rate sensitive pockets and duration sensitive pockets. now we are getting into the stage where it will be the growth sensitive pockets that will see more pain. jonathan: you thought of getting ahead of that a fe

mary daly said a 75 point basis hike is not a consideration. just like what we are seeing with crypto investors, that equity space is feeling a lot of jitters and anxiety. they're left wondering how much and how fast the fed -- they are looking for clues everywhere. that came in the form of ppi today. when the federal reserve representative made that comment , we saw treasuries rise and the greenback advancing. haidi: trying to work out where the bottom is. have we reached the bargain-hunting stage yet? parks a lot of the sources we have talked to say we have not. it's tricky to say where the bottom is. one analyst said we are not at the bottom yet, but we might be at the beginning of one. another source said we are not just there quite yet, but they also said that we are near one because investors have already priced in the bad news. what more can happen? it's hard to tell. today, we almost reached bear market territory. it's interesting because people look at bear markets closely. it's an indicator of what's ahead. usually, it is a forthcomin

john williams and raphael bostic and chris waller and jim bullard and mary daly. let's bring in greg branch and an dan morgan. thank you for being here >> hi, frank >> a lot of people are looking forward to the jobs report at 8:30 this morning. a lot of pressure and thoughts about that you are looking past that to next week to the next cpi. i want to ask about both how do you see the jobs report in the market and what do you look for with the cpi? >> it would allow 2 million more jobs with the lowest benefits taken in 50 years. the tech hands are tied unless there is a cratering in employment they forced themselves into this by being behind the curve on inflation. many of us thought they should have come out of jackson hole to tighten last year. they did not do that at this point, their hands are tied the next cpi could be a big event. at the end of the day, we have to talk about the base again this was a popular issue in 2021 for those in that transitory camp nothing to see here on inflation. it is now working the other way. last month, we had 8.5% on the march o

mary daly says rate hikes is not her primary consideration. and caution, because u.s. equities are exiting bubble territory. let me show you what anxiousness really looks like. it is in the form of the bond market. this is the worst week for bonds since march 2020. down by 24 basis points. you are looking at an implosion in yields. crypto got trashed. money went into the dollar. but you saw this momentum of haven status of dollar down dollar assets. you are looking at a regime shift in the bond market. i would say powell's language of challenging a soft landing is somewhat hawkish. to the cross as a narrative. money going into the dollar, it takes dollar haven status away from the classic, swiss franc. euro, they are calling it 102. yen 107. yuan at 680. where does the flow of liquidity go? if you have a stable coin, and the blockchain closed, where does the momentum go? bitcoin this morning. natural gas futures closed up. more future is asian from -- they have halted sales. it is 3% of the supply. it is not the supply, it is the principle of anxiousness about the weap

think was the most important fed speak we have had in the last couple weeks is what we heard from mary dalyn she said i expect financial cap -- financial conditions to tighten more. "i would like to see continued tightening of financial conditions." this is why goldman has a three-month price target, they think we are cap here because any rally is considered a loosening of financial conditions and perceived as an unwarranted loosening of financial conditions which is a struggle and the equity market. for some, we have a ceiling. tom: we do not have time for you here, but there is one standard deviation on the bloomberg financial conditions index and if that breaks through 1.20 that is a big deal and we see this weekend a change in the dialogue. all of that wrapped around international relations. our champion owns that high ground in glasgow, scotland. jack fitzpatrick who knows how to pronounce glasgow is in washington. i have to go to jack on the biden trip because jack, to me it is actually hilarious how we are turning tpp into itpf. secretary clinton said that he was against -- he was ag

louis fed, mary daly of the san francisco fed. how do they respond? what is the markets response to jay powell easing financial conditions. could it be followed by a reversal in decline? at 4:15 p.m., this might be the most interview of the date, to me. michael mckee is speaking with the former fed governor randy quarles. you've picked up on certain things that have been said in the recent past, but i want to hear his comments on basically whether fed chair jay powell has not messed up, but didn't go aggressively enough, or aired in laying out a path for interest rates at a time when the risk right now is to the upside with inflation and how comes out. jonathan: earlier this week, it was said the fed delayed getting on top of inflation because they do not have clarification on leadership in the fed at the white house. in any other week, with the carnage and market mess, that federal reserve decision, this would have been talked about so much more than it has been. so much more. tom: it has been exhausting folks with the news flow. it is extraordinary.

what we've seen with the stock market in the last week or two, tightening financial conditions, mary dalyid jerome powell last night in a radio interview that demand for the labor market is out of whack which means they can hike rates a lot and scare people into spending less to bring down inflation and they don't believe that will lead to excessive unemployment or weakening economy so the fed really is not your friend right now when it comes to the market because their priority is not broke. it is inflation. charles: the fed picking recession over markets, what about when the inflation ratings start to change? their back is against the wall. with peak inflation could that change? >> glimmers of peak inflation probably not, they said they expect and i expect inflation rate is speaking but the question is how fast does it come down in the future and if the answer is not very they will go aggressive and when they say their back is against the wall president biden said my number one priority is to bring inflation down and then jay powell is going to fix it. they got their back on this. it is

san francisco fed president, mary daly will be on tech check at 11:00 a.m.tern time don't want to miss it. >>> for years the motto is there is no alternatives to stocks and the stock market just seems to go higher. but now that rate have moved up, with the potential to go higher, commodities are soaring and stocks are a lot less attractive or are stocks still the best place to be? chief investment officer at momentum advisors. this is your phrase, your moniker. i think it's an appropriate one. explain it and where it leaves you in terms of the market >> sure. thanks for having me listen, a year ago we're buying stocks because there's nothing else to buy. even though we knew valuations were getting price ea. now we look at a market that pulls off a lot and bonds. it's a rerating across all asset classes. and now you can buy things and feel good about it really nice dividends and in bonds, there's good fixed income out there right now. there are reasonable alternatives out there in the market right now >> so, would you be buying bonds after everything we talk

thank you, lindsay piegza, bob katz, rick and steve >>> sticking with the fed we will have mary daly, san francisco fed president tomorrow on the exchange speaking with her around 1:00 p.m. eastern time for more color on these concepts >> we have more breaking news out of washington and the congressional budget office releasing projections moments ago. the forecast will shrink to $1 trillion this year from 2.8 trillion last year but will increase over the next decade. on inflation the report shows the economy moving past peak inflation saying elevated levels will persist this year and then ease as economic growth slows. we'll have more later this hour when we speak to the cbo director philip swagel in a "power lunch" exclusive. >> also ahead, dick's sporting goods cuts it's outlook for the year and nordstrom lifts its forecast and both stocks are moving higher and we will trade them and one more in today's three-stock lunch. plus tesla down 25% so far this month. the stock trading bilow its s&p 500 inclszug price the bull case or the bear case a powerful development coming up price th

mary daly -- how much does she push back against the complacency that was overturned yesterday? how much do they talk about the need to tighten faster. in the face of increasing headwinds? we spoke to the vice president yesterday. he will come out and talk about -- or he did come out and talk about the concern for higher rates. the funds rate will i believe ultimately need to be raised well into restricted territory, by at least a persistent -- percentage point above the estimated nominal neutral rate of 2.5%. the reason i bring that up is that the former head of the governing council is going to be speaking to michael no later today. -- michael mckee later today. jonathan: he's told us what he thinks, hasn't he? he essentially came out, and thank you lisa, by the way, and said the reason they waited is they did not have clarity on fed leadership it they should've gotten on top of that in september. i'm so much looking forward to that conversation with mike a little bit later because at the moment, the only real transparency you get right now is through former officials. with th

it came from president manley day at -- mary daly who spoke to bloomberg yesterday. take a listen to this. "i expect financial conditions to tighten more. i would like to see continued tightening of financial conditions. that would be consistent with bringing supply and demand back into balance." that is quite a quote for a market like this. tom: the best indicator is that michael rosenberg and his team, they invented the bloomberg financial conditions index which is 11 variables moved into a soup that's measures of stresses in the system. we are out one standard deviation towards restriction on that measurement, so we are getting there quickly, we are getting the tightening of financial conditions while the fed the amazon. jonathan: we are not going to start fed speak of the week. lisa: i think we should. i think that would be great. honestly i think i should start that quietly. jonathan: the founder and ceo of macro risk advisors, we are seeing a ton of notes asking the same question, have we seen capitulation, are we there yet? >> we have to be working closer to i

. >> bret: mary daly with the federal reserve bank. president of that, ceo.me. >> thank you. >> bret: up next, president biden slaves another statement. this one about monkey pox. >> doesn't seem to be a need for any kind of extra, extra effort beyond what's going on. >> bret: we will get reaction from an expert on infectious diseases about the threat and the latest. ♪ ♪ (vo) with armor all, a little bit of this... protects you from a lot... of that. armor all. minimum effort. maximum protection. >> bret: vice president kamala harris says the biden administration is directing addressing and prioritizing the well-being of healthcare providers. she made those comments during an appearance at children national hospital in washington today. >> the choice to dedicate your life to helping people is a noble bun but too often it requires sacrifice so much of yourself, you deserve access to the mental health care that you need you deserve support and understanding when you are struggling and you deserve working conditions that support your mental health. >> bret: on a

that is essentially what mary daly of the san francisco fed said last week. i think that is so important going through this summer. tom: we are going to address that in a moment. in the last hour, it was clear there is a bond bear market. jonathan: there is, and in the treasury market specifically, have we seen the highs? 3.20% on the 10 year, was that high for this cycle? 2.58 percent right now. bank of america does not think we have seen the high on the front-end. they think later this year and the fed has to reassess, they have to assess the long dots higher. tom: the reassessment of this globally is not only equities and bonds, but it is about what politicians will do with it. the language on inflation, the language on the pain to the middle class and the elites, it is stunning what we have seen over the last 48 hours. lisa: this is the predominant issue as people go to the grocery store and figure out what to do in aisle seven, which tends to be the most extensive aisle. we are looking at the market that is still showing signs of strength, at least in th

getting some headlines from san francisco fed president mary daly saying no reason to alter course forwo meetings. she wants to reach a neutral rate of 2.5% by the end of the year and the debate between 50 basis points and 75 basis points is not a primary consideration. so really reiterating what chair powell said, but it is notable in light of what was another hot inflationary print that we got on wednesday with cpi moving up, core and services. so we mentioned the weird moves in the meme stocks earlier cnbc pro ran a screen of stocks with the highest to short interest focusing on names with market cap over a billion dollars and included in the s&p 1500 several of those meme names did show up on the list. kristina partsinevelos with the details. maybe those shorts getting covered today, kristina. >> maybe, that could be the case in general stocks with massive short interest means investors will have to scramble to buy back borrowed stock. top of that list are potential rallies. video gaming company corsair stock is short at 13.99. gamestop has fallen the furthest, plunging 70% and tod

it was at 11:20 on thursday, may 21st that mary daly said we could do 25 or 50 or 75 we will deliberate it all. thatis when the market on the s&p went down 9.6% to 4.065% that remained unchecked. the idea that the fed could be random or could do 75 and the market could be worried -- that fre freaked out the market we will not do 75. the market liked the idea of the guardrails powell said we're going fast down the highway, but we are going to obey some of the lines on the road and we will be deliberate and tell you what we are going to be doing. that helped the market out did it go too far? i don't know that's not my job. i cover the fed. >> steve, there have been times when we asked whether market players in they saw the fed really wasvigilant we thought some market traders liked the fed to be more hawkish than what we thought maybe bond traders do press the buy signal when the fed goes further. i don't think it -- it is the punch bowl always works. that should be the default position if it looks dovish -- they will never want to take their medicine right now stock traders. no >> i thin