. >>> as you likely kw by now, paul volker passed away over the weekend.e was a prominent fixture in the world of fance f more than 40 years. he servedix presidents, most famously as the chair of the federal reserve in the19s, the current fed chair and his colleagues today are dealing with a low inflation environment. and in some ways, they can thank paul volker for that. >> he is credited with taming runaway inflation in the 1980s, earning that credit wasn't easy. he was predent of the federal reserve bank of new york. at that time, economic growth was way down, but prices were way up. puttinghe economy in a period known as stagflation. by 1980 gdp was down to 3%, and inflation was u to 14%. >> ronald reagan was elected president in november of 1980, and he vowed to get the economy growing again. but volker who committed stopping inflation, b keeping the money supply tight and interest rates high, found himself at odds with with the president for years. >> nobody in the federal reserve, certainly not myself likes high interest rates, they're no fun. >> an

but so although you started with paul volker.if you look back at 2018, i'll take you back to the beginning of 2018, we had an economy growing at 3%. we had inflation at 2%. and we had a trillion and a half dollars worth of stimulus arriving and the fundrate was 1.4%. we moved policy up during the course of the year. we never got policy even at the level of what we thought the neutral rate was at the time. there was no sense of it being restrictive. we took steps make it less accommodative. that seemed to be the right thing. it still seems to me to be the right thing in hindsight. the idea that we were trying to slow the economy down -- we were really just frying to get near neutral. even with the last rate increase a year ago we were meaningfully below that. policy was always accommodative during the course of that year. i think what's happened is obviously the facts on the ground have changed. you saw the global economic slowdown begin in the middle of last year, gather force, and then continue to go on this year. so you've seen

giants over the last couple of days, literally and figuratively don marron once ran payne weber and paul volkerd away at 92 fed chair from '79 to '87, attacked inflation with rates we have not seen nor perhaps will ever see again it worked. >> yes, october he decided to -- fed chair volker decided to target credit. people feel after he broke inflation, that's when the great bull market began. there have been stutter steps, but a lot of people were -- think of volker as the man who made america a country that was regarded as not willing to take inflation anymore. >> the great bull market in bonds began too. >> yes, and it has been -- you can sell 14%, 15%, 16% bonds treasuries to people in the early '80s 30-year and that paper kind of just came due. i -- everyone respected volker now there was a second volker, the volker who came in after the great recession. and basically said, we got to get these banks from taking on risks. very unpopular again, you know what he did? he took unpopular stances in an era where people seem to always want to please and i think that's extraordinary. if we had more

. >> my response will not be about paul volker. look back at 2018. we had an economy growing at 3%. we had inflation at 2% and we had $1.5 trillion, and the federal funds rate was 1.4%. we never got policy even at the level of what we thought the neutral rate was at the time there's no sense of it being restrictive. we took steps to make it less accommodative. that seemed to be the right thing. in hindsight it still seems to be the right thing the idea we were trying to slow the economy down, we were just trying to get near neutral with the last rate increase a year ago, we were meaningfully below the median estimate. policy was always accommodative during the course of that year you saw the global economic slowdown begin in the middle of last year, just look at the imf forecast of growth from the spring of 2018 and compare them to now i think there will be a very wide range of estimates, meaning effect, to a lesser extent through the tariff effects that's not to make a judgment. that's not up to us to make a judgment about that. that would be my story. >> chair powell, donna borak

you started out by talking about paul volker who kept the long chowdeshadow. i wonder if the shadow was too long in the decades since his tenure and last year if the fed was too quick to raise interest rates to attack inflation bogeyman that did not materialize. >> my response will not be about volker. , if you look back in 2018, i'll take you back to the beginning of 2018, we had an economy growing at 3% in inflation at 2%. and we had a trillion and a half dollars worth of stimulus arriving in the federal funds rate was 1.4%. so it was not -- we move policy up during the course of the year, we never got the policy at the level of what we thought the neutral rate was at the time. there was no sense of it being restricted. we took steps to make it less accommodative which seemed to be the right thing and it still seems to be the right thing in hindsight. the idea that we were trying to slow the economy down and trying to get near neutral and with the last rate increase we were still meaningfully below the median estimate on the committee of what the neutral rat

interest rates went up higher than anyone would have ever expected, but history proved to be on paul volkers side, and think which i for the past 20 or 30 years, much of that is ohhed to bawed to paul . >> he had a quality that is missing greatly and he was involved in politics, and that squault courage. he had the courage of his convictions to do as you just eluded to, interest rates and that period of time, it turned out that he was exactly right as to what to do. he was a mechanic that knew what he wasni trying to fine tune an fiction and he had the courage toad do it. >> that was courage, and you know, that quality that mike talked about, he sort of had it, he clark gabled his last line in gone with the wind, he didn't give a dam. >> we are counting down now to the top of the house, the house judiciary committee hearing that will review impeachment evidence against president trump. there is steve cast ter, the attorney for the republicans. we're counting down to the start of this impeachment hearing set to begin any moment now. they present their evidence about the president's pressure a

. >> to begin, i'd like to say a few words about paul volker who as you know, passed away earlier this week. he served as federal reserve chair from 1979 to 1987 he accomplished many things during his long and distinguished career he's known best for taming the double-digit inflation what is perhaps most admirable about him. more than his many accomplishments was his character. he believed there is no higher calling than public service, and he dedicated the lion's share of his life to it with courage, integrity and tenacity, he always pursued the policies he believed would benefit all americans. my colleagues continue to draw conclusions. we decided to leave the rate unchanged. as always, we base our decisions on judgment of how best to achieve the goals congress has given us, maximum deployment -- our economic outlook remains a favorable one. with our decisions through the course of the past year, we believe that monetary policy is well positioned to serve the american people by supporting continued economic growth, a strong job market and inflation near our 2% goal the economic expan

now, you know, of course, we mourn the passing of paul volker, who was america's guardian against inflation let's hope that this isn't a watershed event that now starts to turn inflation the other way. >> so, michael, if conditions are as favorable as jack suggests and, i don't you know, there's a divided jury here on these things, if conditions are as favorable as jack suggests, why are investors, individuals, taking money out of funds? >> it is a good question, tyler. there's not been a sustained level of enthusiasm by retail investors for the bull market. maybe a little in early 2018 it reversed quickly. i read it as a little bit of long-term factors. for example, a lot of money right now as we know is in these passive asset allocation strategies with the market up as much as it is, the stock market, a general gravity of rebalancing the portfolio means you're pulling money from traditional equity funds almost on an ongoing basis.ographic aspect, too. we're battle tested, i think, psychological. based on not just the last ten years because we've had the scares periodically, but because of

strep welcome back to mornings on 2, breaking news this morning, the new york times reporting paul volker a former chairman of the federal reserve bank has died, he shaped u.s. economic policy more than 50 years, he worked in the treasury department under john f. kennedy and served under barack of anna, his career spanned 10 presence, his daughter confirmed his death, the former chair was 92 years old. >>> the 49ers now at the top of the nfc west, tied for the best record in the nfl. yesterday's game had a little bit of everything, a lot of fans call it the most fitting game of the year, jamika ruffalo through four touchdowns including a deep pass to emmanuel sanders. >> deep down the field. going for it all. he caught seven passes for 157 yards his arm. >> inside, little trickery. sanders throws it wide and open for the touchdown. >> he was falling too. the forth, the saints to lead with less that he minutes to play then the game came down to fourth from the 49ers 33 yard line to jimmy ruffalo fighting his favorite target. >> he fires it's and it is part. oh cher [ cheering ] here it com

liz: paul volker the former federal reserve chair has passed away at age 92. he defeated soaring u.s. inflation in the 80s. it was around 15%. by april 1980, dropped to a little over 4% when volker left in 1987. three decades later his rule became a controversial element of post cry says banking regulation in the obama years. paul volcker passing away. let's be honest, quitting smoking is freaking hard. like quitting every monday hard. quitting feels so big. so, try making it smaller. and you'll be surprised at how easily starting small... ...can lead to something big. start stopping with nicorette most people think as a reliable phone company. but to businesses, we're a reliable partner. we keep companies ready for what's next. (man) we weave security into their business. (second man) virtualize their operations. (woman) and build ai customer experiences. (second woman) we also keep them ready for the next big opportunity. like 5g. almost all of the fortune 500 partner with us. (woman) when it comes to digital transformation... verizon keeps business ready. ♪

and the market beliefs that somehow the magically the fed has their back i find it interesting paul volker passed away at the same time the fed lost remaining semblance of credibility they had. i don't want to get on the soapbox. but the fed talks about inflation. they measure everything x inflation if they factored it in it was surpass any benchmark they had but the market wants to go higher i think president trump is pulling the rip cord on the tariffs on saturday night. because in in his mine the chinese are weak, vulnerable the stock market at an all time hi i can step on their neck cost me a nont in the market but february, march turns it around et cetera up well for the election if i'm not convinced they won't happen this weekend. >> go ahead. >> that's the risk to the market i was surprised the market wasn't higher today. because you ask the impact on this, the federal reserve has had a tough time almost impossible time creating the type of inflation that they want but they're excellent as creating asset inflation that should be great for the stock market after today's reaction and

day-to-day increment all moves do not really matter that's what i'm hearing from you but at a time when paul volker federal reserve chair back in the 80s was so focused and tuned out even the presidents for whom he served he's unafraid and doesn't care if politicians yell at him for example, and this is before president trump or president trump yelling at powell, don't you worry about low rates? >> i do but first i was a federal reserve economist at the time and i have amazing respect for him, what he went through, but when was the last time inflation is an issue. what's a bigger issue is extended amounts of leverage from low rates, and that's the bigger risk. liz: good to see you larry catle r of atlas, our thanks to him and yes the dow closes. melissa: kicking off a week in the red, a major rally on friday , wall street waiting on a trade deal with china as an agreement has been reached on the u.s. mca, president trump making comments on the status of that we'll bring you the headlines moments from now, the dow ending down 104 points at session lows i'm melissa francis connell: i'm connell mcshan

paul volker, the fed chair, who waged war on inflation in the early 1980s, has died, according to thenew york times." volker also served in the treasury department under presidents kennedy, johnson, nixon. he also imposed new regulations on banks known as the voelker rule. he was 92. what shines forever? diamonds. what is as rare as true love? diamonds. what lights up every room? diamonds. beautiful diamond styles for the diamond in your life. get 25% off everything, including these one-of-a-kind deals at the winter jewelry sale. exclusively at zales, the diamond store. at the winter jewelry sale. (shaq) (chime) magenta? i hate cartridges! not magenta! not magenta. i'm not going back to the store. magenta! cartridges are so... (buzzer) (vo) the epson ecotank. no more cartridges. it comes with an incredible amount of ink that can save you a lot of frustration. ♪ the epson ecotank. just fill and chill. available at... (brakes screeching) okay. so, today you're going to leave your phone with a guy named flip. (ding) but it's more than your phone, it's your business, your customer data, y

. >> paul volker, the fed chairman that really did as much as anybody to shape the modern economy overtion, the great economic threat. they had buttons that said win, whip inflation. and in the "new york times," in his obituary that just went on lon -- online. he did it, interest rates went up higher than anyone would have ever expected, but history proved to be on paul volkers side, and think which i for the past 20 or 30 years, much of that is ohhed to bawed to paul . >> he had a quality that is missing greatly and he was involved in politics, and that squault courage. he had the courage of his convictions to do as you just eluded to, interest rates and that period

paul volker, the fed chairman who waged war on inflation, has just passed away at the age of 92 yearsim about a year ago, published that book. but was a huge giant in the world of economics and policy. we should also mention maybe not in the same breadth, but don maran, a friend of this show, and also towering figure on wall street for so very many reasons also passed away on friday >> we will miss both these gentlemen. ntmee'll ms thhe isbo tse gelen. ♪ for every family going home for the holidays, there are countless people working to help them get there. thank you to everyone we rely on to get us home to the ones we love. ♪ ♪ let's groove tonight share the spice of life ♪ >>> good morni ing and welcome o "squawk box. i'm david faber with jim cramer. carl has the morning off a look at futures as we get ready to start things up at the stock exchange a half hour from now, full trading week we're looking for -- what do we call that, down slightly lower open doesn't really matter. road map this morning, the