if steve liesman is right, how should you stack your game plan?e spoke to some experts out there and a couple takes after the break. we will bring you the taper playbook. keep it here on "power lunch." the american dream is of a better future, a confident retirement. those dreams, there's just no way we're going to let them die. ♪ like they helped millions of others. by listening. planning. working one on one. that's what ameriprise financial does. that's what they can do with you. that's how ameriprise puts more within reach. ♪ [ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. . welcome back to "

our own cnbc steve liesman out on a limb.e's reporting that the fed will taper down its bond purchases and come up this month in december at the december 17th to 18th meeting. he's going to explain his position just ahead and also next the debate we've all been waiting for, former treasury undersecretary john taylor. he says alan greenspan and the federal policies were responsible for the housing bubble that led to the financial and economic crisis. mr. green span completely disagrees. they will both join me and have it out. i'll be completely fair, balanced and moderate, next up on "the kudlow report". we invest more in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years - making bp america's largest energy investor. our commitment has never been stronger. >>> we are moments away from our historic debate on the financial crisis. alan greenspan and john taylor are with me here right on set. they will go face to face and see who should be blamed for the housing bubbl

steve liesman will ask that question, we'll see it later. that does it for us today. more fast at five, follow me on twitter. power starts now. >> lace them up. "halftime" is over. the second half of the trading day starts now. >> all right. countdown to the fed, everybody. you know the story, your investments and their performance could hinge on what takes place over the next two hours. the rate decision, statement on the economy and ben bernanke's final news conference as the fed chief. will he go out with a bang and begin pulling back on stimulus? we'll give you a playbook to how you might want to react. three big stories on the housing front. housing starts, six-year highs, but mortgage apps plunge to 12-year lows. why affording a mortgage is about to get a lot tougher. and we continue counting down "power lunch's" top five business and finance stories of the year. number three is coming up later this hour. see if you can guess what it is. meantime let's go down to sue at a very busy new york stock exchange. >> yep. you're right, ty. the fed is front and center fo

steve liesman, economy check for 2014. also john harwood on the end of unemployment benefits for 1.3 million americans. plus, a key leader in lebanon killed in a massive car bombing in beirut. turns out he was a former ambassador to the united states. don't want to miss that. we're back in two. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. hmm. mm-hmm. [ engine revs ] ♪ [ male announcer ] oh what fun it is to ride. get the mercedes-benz on your wish list at the winter event going on now -- but hurry, the offers end december 31st. [ santa ] ho, ho, ho! [ male announcer ] lease the 2014 glk350 for $419 a month at your local mercedes-benz dealer. . > all this >>> all this week we've been telling you what you need to know to make money in the new year. steve liesman has 2014 predictions for the economy. check out how he did in 2013. steve predicted the fiscal cliff would be res

for "nightly business report", i'm steve liesman. >>> well, another strength in the economy has been housing but last week applications for new mortgages fell nearly 13%, the fifth straight weekly decline with mortgage rates ticking higher now averaging 4.3% for a 30 year conventional loan. >>> sales of newly built homes soared in october, that's the biggest monthly increase in over three decades. too good to be true? some thing so. also that jump in interest rates has some lenders saying act now before it's too late. diana olick reports. >> reporter: at pennsylvania based orleans homes business has been brisk since the government shutdown ended. >> the government shutdown being resolved contributed to people's peace of mind, and i think they have gotten hesitant prior to that and when that passed, they came back from the sidelines right away. >> reporter: and according to new government numbers out today, the story was the same nationwide. contracts signed to buy newly built homes jumped 25% after falling 6% in august. so eye popping in fact some analysts don't buy it. >> the real i

back to you. >> many thanks, steve liesman.ap-up. >>> now let's bring in carol roth and zach karabell. carol, the last meeting in september, i guess, when we thought they were going to taper, it was a close call. 50/50. according to the officials. the economy's improved since then, retail sales, industrial production, gdp, employment, whatever. so why shouldn't they run? why should they reduce their bond buying? >> well, i personally think they should. i think they should have been out of the way long time ago. i don't know that they're going to. i think if you look at the unemployment number, it's a little bit deceiving. you have a low labor participation rate. look at u6, that's over 13%. i think they're going to use this meeting to perhaps set some benchmarks, whether it be in january -- >> benchmarks for 7% unemployment rate? that was a benchmark. guess what? we hit it. what are we waiting for? do they have a backbone, or what? >> i certainly think you're dealing with bernanke who wants to preserve his legacy here. i also t

steve liesman has more and what it could mean for the markets and the economy. >> reporter: a taper by the federal reserve at the meeting next week looking more likely than not. the economic data the market's reaction point to a possibility the fed could move next week to reduced and the amount of stimulus in the economy that it provides to bond purchases or quantitative easing. the fed offered three tests for tapering or reducing that qe and those tests look to have been met. one was confidence in the outlook, average job growth risen to 19 3,000, up 43,000 when the fed said tapering was a close call. the unemployment rate is 7% isdown 2/10ths. the end of fiscal uncertainty is another factor. they wouldn't taper ahead of the government shutdown back in september but now a budget deal looks to be in the works that could put off the debate of deficits for two years. interest rates are well-behaved. short-term rates have remained low. that's a sign to the fed that the markets believe that even if the fed tapers, the fed will keep the fed funds rate low predicting, the news has been tough

bob has that story but we begin with steve liesman on what the fed did, why and what the chairman said about it in the last press conference as central bank chief. >>> out going federal reserve chairman ben bernanke, a historic move engineering the 10 billion-dollar reduction with the purchase of assets by the federal reserve to take effect next month. it is the last press conference for federal reserve chairman ben bernanke in the second to last meting and when he explained why the fed felt comfortable reducing it. >> progress towards the economic objectives will be sustained. if the incoming data supports the committee's outlook, we'll likely reduce the pace of securities purchases in further measured steps at future meetings. >> reporter: bernanke suggested the fed would reduce the monthly qe in measured inkments, sounded like $10 billion a month, reduction depending upon the economy. he said the course of reductions is data dependent but said when the fed hits the 6.5% unemployme unemployment threshold and it would remain on hold once they hit the 6.5% unemployment rate. >> we coul

find out steve liesman at the fed. >> the federal reserve announcing a $10 billion taper, $5 billion each of mortgage backed securities and treasuries the fed saying in light of cumetive progress in labor markets, they decided to moderate the pace of its asset purchases and if the data comes in as expected here with further improvement they will taper further at future meetings. however, tapering is not on a preset course the fed says. the pace contingent on the outlook and the outlook for inflation and labor and assessment of the efficacy and cost of the program. but they are providing very dovish guidance on rates saying the highly accommodative pace of current rates is appropriate for a considerable time. in fact, they're saying they will be appropriate to maintain the current target range of the fed fund rate well past the 6.5 unemployment threshold they said in the past. especially they say if inflation runs below 2%. they've tapered, provided future guidance for tapering. that's number two. but also provided very dovish guidance about interest rates on the way out. more details

steve liesman and hampton pierce have been our go-to guys. steve, let's begin with you. we had the fed last week announce that taper. and fed chairman bernanke, the kind that he announced the cutbacks, he said the economy is healthier and that the job market is improving. what is your take? how healthy is the economy right now? >> well, what seems to have happened is this nice revision upwards to the fourth quarter after a very strong third quarter. we're going to probably average 3% growth in the second half, and that's up from around 2% in the first half. and that extra percentage point means more jobs, says better werings for companies and better economic growth. i think what the fed did is it's still going to be providing a lot of stimulus next year. it just said it's going to be providing less as the year goes on. it's kind of like it didn't announce last call at the bar, but it said here's the time when we're going to have last call, when it comes to quantitative easing or those bond purchases by the fed in order to drive down long-term interest rates. the fed said

steve liesman along with robert frank. steve, let me start with you. what does it mean for these companies? what's the bottom-line impact if, indeed, the minimum wage did go to $15 an hour, and how soon do we see that? >> there's a couple ways it could be redistributed effectively. it could come out of the owners of the corporations' profits, or they could charge customers more. those are the two essential ways. >> if they have pricing power. >> so the question is the social good of a cheap hamburger, the social good of the profits of the hamburger owners versus the social good of the profits -- or the wages of the workers there. and that's how you balance all that stuff out. that's attenuated by competition from other hamburger makers who may be able to do it more cheaply. and there's no easy answer here. i think what's happening is in inequality is rising to a point where it's a big problem. people are looking for ways to solve it. we don't even understand the reasons for inequality. and if the problem with the minimum wage is a symptom or is it actu

. >> you gave our secret away, steve liesman is on set. >> that was a secret? >> i have a metric for that. >> what's that? >> give me a dollar for growth, i'll trade you 10 bucks of qe in a day. >> okay. >> that's my metric. >> isn't that the conversation that we really should be having -- >> absolutely. >> -- from now forward? why the market can handle rising rates, the rates are rising for the right reasons? >> that gets into the debate, is it the flow of the stock, the excess liquidity out there that's pumping up the market? the unemployment number will be key for a couple of reasons. i think the fed wants to know what the real unemployment rate is, because i think it's throwing out the october data that had that 700,000 decline in the workforce, was it shutdown-related? so it will look at that number to get a feel for, hey, where are we? the other thing that it's going to look for, and this is the trick, watch how the two-year reacts. i want to show you the 10-year versus the 2-year. and this is a new metric for the fed here. i think it's been talking about

steve liesman reporting the fed is likely to begin tapering next week. d.c. to a budget deal, new regulations in place for wall street, and new dawn for the big banks. the government out of gm and europe is stabilizing. we're going to have playbook on how you should play it. what do these gentlemen think about it? a rare and exclusive interview with the co-ceo of the private equity giant carlyle group and exclusive with time

steve liesman is back with more. . >> hey, andrew, and our survey of 43 economists and money managers and advisers shows that the fed may have made some progress in convincing the market that tapering is not tightening. i want to show you how you arrive at that conclusion from the data. first of all, i want you to focus on this. this green line is the outlook for the fed funds rate in 2015. something the fed watches very carefully. this is what spooked them back in june and july. they started all that rhetoric about tapering not being tightening. it was up at 1% suggesting the market saw a lot of hike in the funds rate in addition to the tapering. and you see that coming down to 0.7% where it is now. and here's the outlook for tapering, how that's changed. it was gone when it was 0.82%, the outlook was april 2014, now it's come back to february. they've increased the pace or the timing when they think the tapering's going to happen. they have lowered the feds fund rate. that's one of the things the fed's looking for.

. >> let's bring in steve liesman. s been digging in on the minimum wage impact on jobs. >> in the report we call minimum wage maximum controversy, we've gone back and looked at some of the research over decades. i just want to share with you just the one lines. new market watcher, a very famous report said almost all studies, this was a survey of the research, point to negative employment effects, right? well, a year later, they came out with the following in 2007. we compared all the contiguous county pairs in the united states that straddle a state border and find no add veers employment effects. are you with me, miss lee? >> yes. >> we find it reduces the job growth. and one more i just want to give you here. this is a very good one from milton friedman. in 1973 interview with "playboy." quote, a minimum wage law is in reality a law that makes it illegal for an employer to hire a person with limited skills. and that gets at an important issue which is the effect of minimum wage laws on low-skilled workers and the yo

here is our very own steve liesman. >> good evening, larry. federal reserve essentially tea at least steps. $a billion the treasuries. second, announcing a schedule for tapering. about an even $10 billion monthly -- or every decline, every meeting. third, very dovish guidance on interest rates, and how the fed will react once it hits that 6.5% unemployment rate. >> i expect there will be time past the 6.5% before all the other variables we'll be looking at will line up in a way to give us confess that the labor marge is strong enough. >> some of es expected the taper, larry, but i think the dovish comments might be what excited the market. he said it may not be until december 2015. he was also asked about fed chair nominee janet yellen, and whether she approved of this schedule, and had el said she did. so markets don't have to expect much change in policy if she's approved this week, as expected, by the senate. larry, back to you. >> many thanks, steve liesman, appreciate it. >>> it was a record day on wall street, as the stocks surged. let's

let's get over to steve liesman. revealing some surprising trends in housing. results. >> yeah, and we told you last hour that expectations for holiday spending are down and down quite sharply in our survey, about 9%. then when we look inside the survey about people's expectations for key economic indicators, they're actually up pretty decently. let's take a look. first over here, the expectations for wage gains, inflation and housing gains. you can see on an average, wage expectations are up over last year. inflation expectations are down and housing gains up quite a bit compared to a year ago. and quickly, here are the fourth quarter numbers we registered. 3.3% expected next year. 2.8% on inflation, down one of the lower numbers we've seen in quite a while on housing. not as good as it was in '07. but if you're expecting higher wages and housing, you think you would be spending more. again, that's not what we found. 10%, the lowest number of people expecting a decrease in the home value. we've got to come back here, march 2007 when it was 9%. what's the diffe

let's get right down to steve liesman who is outside where today's big meeting is happening, the federal reserve in washington, d.c. steve, rates are up. your neck has been stuck out on this. what's going to happen? >> you know, i'm still -- [ laughter ] -- pretty secure with how i came to the conclusion that i came to, which was based on the fed's own test. you're right. it's a market out there. there are a lot of big houses that don't think it happens today. there are a bunch of guys who think it does. in fact, let's look at the cnbc fed survey, which i arranged in a different way for you. -- 20% think it happens in december. that's actually a little bit wrong. i don't know how that happened. it looks -- that's not the right -- okay. we're looking at october, right? now just overlay december, i forgot another segment, 20% say it happens in december. and then you can see 50% by january, 60% by february. and that's what it looks like in terms of where the street is on their call. here's the case against tapering. and part of it is that the street isn't entirely ready for it today. that's

. >> let's bring in steve liesman.now it's all a little fun but we have to find new and exciting ways to talk about all the things that are going to be happening this week and i bet the taper never expected to be so famous, right? >> i isn't think so. and what we should have done is polled our people on the tapir, not the taper, i am going to be talking about the other taper, his taper, bernanke's taper and show you what the results are from our cnbc/ fed survey and what's happening. we are talking about tap-a-p-e- starting here, looking for a taper in april next year, now looking for a taper in february is the average amount and even 55% are saying it's by january of this year. how about stopping qe, that's not changed. pretty much the end of 2014 and hiking rates. they've moved back or closer to the taper, but not changed when they think qe will stop or when the funds rate will be hiked. and part of that is the economic outlook of this group and you can see here, pretty consistent. this is the forecast through each o

steve liesman, who has pretty good sources, would have you believer otherwise. he's reporting today it's more likely than not you will see tapering at the december meeting next week. what happens if there is, in fact, tapering? what happens to stocks? >> i think they get cloperred. we see a lot of volatility for next year with possible range on the s&p with anywhere from 15, 25 on the down side to 1975 on the upside. i think you see the downward move before upward. >> why do stocks get clobbered on that? any time weave seen fed tightening, even with volatility, certainly hasn't been the end of the rally. >> because people are underestimating the amount of nearly five-year rally we have that's directly attributable to the unprecedented liquidity the fed pumped into the market. when that safety net starts slackening, people will take their massive profits they generated and say it's time to take profits and that selling will drive the market down. >> rick santelli, jack bogle was talking to kelly yesterday. said he believed the taper was already priced in to both

steve liesman from washington. to josh lipton who hooz the news on oracle. >> oracle just reporting. let me get you those numbers. the street was looking for 67 cents on $9.2 billion. oracle reports 69 krefrcents on billion. new software licenses and cloud subscriptions down. smack in line from what analysts were looking for. revenue from hardware, $17.4 million. analysts were looking for $16.8 million. i'll keep combing through the numbers and get back to you. >> thanks, mr. josh lipton. mr. -- i almost did it again. >> you did. >> doctor, what do you make it -- >> you can call me anything but late for dinner, kelly. these are great numbers out of oracle. not spectacular. we did see unusual activity going into it. we cited someone sold a lot of put spreads in this stock which means they thought the stock wouldn't leap but would hold a level and/or trade higher. i would say they're good numbers. the volatility in this thing is way down from where it was. normal moves are about 7%. they were only pricing in 4% for t

steve liesman says a december taper is increasingly more likely than ever before. ds on the table today. >> you look at the number and you make a call. a taper by the fed at its next meeting looks more likely than not. the economic data, and the mashmas market as reaction and the fed's reaction to it. the fed offered three tests and now they're near to being met. confidence in the economic outlook. three months average job growth. that's improved quite a bit. job growth and the unemployment rate is down 0.2% from the september meeting. there's a budget deal in the works and in addition, interest rates. the june 15th fed funds is down from 90 basis points in september. you could read that as almost full four quarter rate hikes to unchanged 27 basis points on jobs friday with that stronger-than-expected numbers. it tells the fed they've been successful so far convincing the market will remain lower for longer and tapering is not tightening. they can reduce the amount of stimulus in the economy but not say anything about raising rates. predicting the fed has been tough

if you were watching "squawk box" back on december 10th, you heard steve liesman's call on the fed taper. >> i wish i flew someone who knew. >> well, we might have a guy who thinks he knows. >> it's impossible to know, isn't it? >> well, this guy is closer than others and his name is steve liesman. >> a taper by the federal reserve at its next meeting now in my opinion looks more likely than not. the economic taet, the market's reaction to it and statements by fed officials all point to a strong possibility the fed could move next week to reduce the amount of stimulus it provides the economy. >> steve joins us right now from washington and, steve, if we want to be honest about this, you are the one we need to be bowing to. you were totally right on this and i am glad i stuck with it because you are the one who led all of us here. >> thanks. i need one of those things like joe has with the big head,ite? i thought that's why joe's head was so big because of his good call on the market. look, i think what's interesting here is you just pay attention to the data and what the fed says. and i

i'm becky quick along with steve liesman.utures are up big, up by about 75 points for the dow futures. s&p futures up by over nine points and the nasdaq up by about 15 points. in our headlines this morning, we are about 90 minutes away from the november jobs report. economists are looking for 180,000 new nonfarm jobs to be added. that would be down from 7.3% in october. investors have been reacting negatively on data on concerns that will lead the fed to start tapering its bond buying program sooner rather than later. sears has filed with the sec to spin off the lands' end clothing business. it was considering a spinoff back in october. the transaction is subject to approval. the company's board of directors. and keeping an eye on commodity prices today. below normal temperatures and ice in the midwest and southeast is threatening livestock. agricultural economists say the weather could also lead to transportation problems for those commodities. we'll have more on the cold snap in a few minutes. >>> the world is remembering n

let's get to steve liesman. steve, what exactly are we hearing right now?there's paul volcker speaking. we have an unusual gathering of all the living former fed chairman, volcker, greenspan and bernanke in the same room. no cake on the table, i noticed for this celebration on the birthday. ben bernanke is going to make some remarks and say that the fed going to defend the fed's policy actions over the last five years over his tenure saying the fed operated traditional way using new methods to fulfill its tradition of providing liquidity. bernanke and greenspan, and the richmond fed president between them and volcker probably making a couple joke. three fed chairman guys from three eras. volcker fighting inflation, greenspan kind of riding over the crest of a series of waves including the tech bubble, but also moderate growth and declining inflation, bernanke's era marked by fighting the financial crisis and some instances deflation. >> any way to read into their faces on whether or not we are going to get a taper on wednesday, steve? a briefcase indicator

steve liesman joins us with his 2014 predictions. first, let's see how he did in 2013.cal cliff would be resolved january 8th. it was close, it was january 1st. next, he predicted at least one quarter of growth above 3% in 2013. this was right thanks to the third quarter growth. finally, steve predicted that former chief of staff jack lew would be the next treasury secretary, that proved true, as well. i don't know. and there was a 4% in there. not bad. now let's see steve east predictisteve's prediction for the new year. >> my big call for 2014 is synchronized global growth. we haven't had a year without at least one quarter of negative growth from either japan, the u.s. and europe since 2005. 2014 could be that year with the crisis ebbing in europe, u.s. fiscal drag and japan opening up the throttle, there's a decent chance for one of the big growth years from the big three since the crisis began. global growth will keep the fed on track to end qe in 2014. it'll do all it can to get out of the program without a spike in interest rates and a sharp fall in stock markets

steve liesman, cnbc. >> announcer: you're watching "worldwide exchange." >>> corporate news, there's a workshop on one of swatch's parts makers. it couldn't quantify the amount of damage done during the fire and whether or not it will interfere with production. shares in swatch are down 130%. danish km karlsberg is buying china's company and is trading up. in chongqing beer. >>> the private equity firm is investing $215 million in the shoe maker crocks which would give it a 13% stake. blackstone will receive preferred stock. crocks also has announced that the ceo will retire in april and plans to step down from the board. crocs sales are down 2% in the third quarter and expects fourth quarter numbers to be at the low end be of estimates. shares in crocs currently up 2 point be point 4% in frankfurt. we bo like you would like you t there was a questionable trend you would like to see changed. >>> european central banks will stay low and could be cut lower. we asked stefan if he thinks there will be fewer european assets over the coming year. >> we're being very supportive. we don't th

steve liesman has the details. the federal reserve in a significant news, surprising markets somewhat by reducing the amount of quantitative easing by $10 billion a month, equally of $5 billion of treasuries and mortgage-backed securities, but providing strong guidance that interest rates will remain low through december 2015. fed chairman ben bernanke explained his move today. >> our modest production in the pace of asset purchases reflects the committee's feeling progress has been changed. we will likely reduce the pace of securities purchases in further measured steps at future meetings. >> bernanke suggested the fed would reduce the $85 billion of monthly qe in measured increments. it sounded like about $10 million a month reduction depending upon the economy. he said the course of reductions is data dependent. but he also said when the fed hits the 6.5% unemployment threshold, which the fed said it would raise rates, no, that's not going to happen any more and the fed giving substantial guidance that the fed w

steve liesman joins us to talk about that. steve? >> yeah, becky, thanks.ail numbers in the holiday spending plans in the economic attitudes. today, we're continuing what we began in september which is really detailed views of america's views on obama care and the economic effects. and as you said, what's remarkable is, yeah, these numbers are terrible for obama care. but our pollsters, democratic republican team can't believe they're not much worse. so september, 29% had a positive attitude. over the three months, which you'll remember, there has been a drubing in the headlines of this program, fallen to 26%. those who are neutral has fallen down to about 9%. and a slight decline -- slight increase in those who have a negative opinion. but look at this, the don't knows are up quite a bit. you can see right there. that's where we've ended up in terms of people who have gone from positive, more into the don't know. who are these don't knows? an interesting group according to our pollsters. a third of the people don't own a home, don't know. don't have an opi

steve liesman is in washington. so we're finally there? >> reporter: we are. bernanke but the last press conference he'll conduct. a robust debate is out there among fed watchers with many believing today is not the day for the taper but it's coming soon. there are some big investment houses that are on the not taper track. cnbc service shows just 20% of the market expect the taper today but 55 expect it in january, 52 expect it in february. it is the uncertainty that it itself offered as a reason for the fed not moving today. that is because wall street doesn't expect it today, the fed won't do it because the central bank does not want to surprise markets. here's the case against tapering, wall street not being ready, inflation too low and really not enough positive data. now on "squawk box" this morning, they said the street not being ready is not a good reason to hold off. >> why does the fed care about surprising the market? they told us back in september -- we didn't say we were going in september and the market was prime for it and ten-year yields are ba

steve liesman at hq. let's keep the conversation going.g to both of you. >> good morning. >> charlie, i assume you saw that poll that 1781 number looking out to next year. does that give you comfort or pause? >> yeah, i think it's actually giving as you little bit of pause. it does seem to be a real consensus pick that stocks are going to be up next year, that rising interest rates are not that big a deal. it's fine how these people weren't naturally as bullish a year ago when stocks weren't nearly as cheap. >> how about you, joe? >> i started thinking gross would be in the mid 2s. i thought the 10s would get to 3, which they did. my colleagues and i have been extraordinarily bullish on equities as simon knows. next year we'll be at 2,100 stocks. there will be some indigestion if stocks go higher. given buybacks and dividends, you'll have a good year for stocks. >> you're in the camp you think taper will begin this month -- >> tomorrow. >> and it will end by september, october. that's not what steve is saying. where do you fall now? >> sta

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the world is nervous because steve liesman says the end is coming sooner rather than later. it changed. a few months ago, it was riding pretty high. watch the dollar index. >> no one will suggest that it's not a liquidity driven real. >> so then faux economy, it isn't the economy, it's liquidity. that's all i'm saying. >> you have to respect the improving fundamentals of the economy. if you don't want to give the fed credit you don't have to. >> it really isn't about giving anybody credit. it's that i would like to live in a free economy, f-r-e-e, not subsidized economy. >> yea, now it's my turn. absolutely. free economy, free markets and free decisionmaking. i would love to see economy that's justified by the fundamentals that are attached to it. i would love to see the fed step out of the way and actually take responsible financial action like giving the markets the impetus they need as opposed to stimulus that politically they want. >> this indicates why this is the most indicated market rally. >> when i get this push back with taper, the fed and it's all faux, give me a

steve liesman is here to break out exactly what the jobs report means for the fed when it meets in a couple of weeks. i mean, december taper? people are going to start talking about, has the likelihood gone up, even if the likelihood was small, has it increased? >> definitely has increased. they're going to talk about it. they're going to talk long and hard. i think it will ab close-call. i would say right now they'd be undecided. i think they'd wait to see more data. the data has been good, scott. whoever used the term great, i think that's a little hyperbowlic. -- hyperbolic. >> no, i said is good news finally great? >> it's good news, it's okay. you asked me not to be too complicated today, so i brought the one-month diffusion index. >> i appreciate that. >> take a look at this. and what this tells you here, this first chart, if we have it, one, two -- >> it's so complicated, they can't pull it up. >> no, that's the second thing. that's 203. that's all the stuff. look at that the earnings up. the hours are up. from the gdp. there's the diffusion. what this tells us, it's a numeric

be -- and steve liesman. >> the beige book is a 2% beige book, 2% growth, the economies the beige bookto expand at a moderate to modest pace. the manufacturers did activity continuing to expand in most districts and the gains were seen in autos and high tech. manufacturers that were optimistic about their growth prospect. consumer spending increased in almost all districts at that 2% pace. retailers were hopeful but cautious about the holiday shopping season and sales of autos were moderate to strong. residential real estate

be -- and steve liesman. >> the beige book is a 2% beige book, 2% growth, the economies the beige book says continues to expand at a moderate to modest pace. the manufacturers did activity continuing to expand in most districts and the gains were seen in autos and high tech. manufacturers that were optimistic about their growth prospect. consumer spending increased in almost all districts at that 2% pace. retailers were hopeful but cautious about the holiday shopping season and sales of autos were moderate to strong. residential real estate improving across most districts and some gains in loan demands and several districts, reported easing of credit standards, something they've been waiting for for a while. some concern may be about hiring. up moderately in five districts but really unchanged in seven of the fed's 12 districts. there was difficulty finding quality workers. we've heard that time after time. some declines from the federal government shutdown se questions trace, other anecdotes were not so conclusive. concerns about fiscal uncertainty in the future could dampen demand. p

elan of "the washington post," greg and, of course, steve liesman. you all look fantastic immortalized in stone. let's start first of all with there are two questions we want to address, one of which is, which of the chairman faced the biggest challenges during their tenure at the federal reserve and how is history going to treat them and record their events and their actions? larry, you want to give it to paul volcker, but in all fairness you worked with paul volcker so maybe you have an inside track on that. >> perhaps i do and i just saw him. look, i've been watching the fed or working at the fed since the middle 1970s. paul volcker is the greatest chairman in the history of the federal reserve board. he faced 15 to 20% inflation okay which was destroying our economy and the rest of the world's economy. i believe that was the greatest crisis of all. he conquered it. he conquered it and did it the old-fashioned way. he removed money supply, raised interest rates and was successful and frankly that set the tone to 25 years of prose peerty. >> elan,

fisher is, but steve liesman knows him quite well, has known him for many years when you were working in russia. >> yeah, he was on the imf. >> fetell us what he'd like and what we need to know. >> stan fisher is the guy, when he starts talking to a room of bankers in his very hushed accent, every stops to listen. let's take a look at what we're calling his fed cred here. bank of israel governor, '05 to 2013. citigroup vice chairman from 2002 to '05, imf deputy managing director, eastern europe and the reconstruction there for which, by the way, he took a little criticism with his add vocation by the imf at the time of austerity. world bank chief economist and of course m.i.t. economics professor which is a big part of who he is. take a look here at some of his students. none other than ben bernanke, mario draghi. lawrence summers, one of the eminent economists of our day and gregory mankiw. but that's history. the bigger question, what does he think about the fed's policies? there he is. with ben bernanke in jackson hole. here's what he said back in november when he sat on an imf pan

steve liesman you get an a-plus. many i talked to on the floor don't believe that you would be as aggressive saying something is happening on the taper the next meeting unless somebody wases which perring it in your ear. you have everybody's attention. maybe that's one of the reasons the auction was weaker. >> that is reporting. you nailed it, rick. steve does a lot of serious reporting. rick, thank you very much. basically the message there from rick is, when the market speaks get out of the way because the market is far more powerful in the aggregate than any policymakers, et cetera. lawmakers on capitol hill beginning to sound off on that bipartisan deal on the budget. amman javers is in washington with the latest. this seems to me like a deal that was the least they could agree and the most they could agree on. >> yeah, that's right. kind of hits the sweet spot here. a two year diehl. here's what they're going to do in the aggregate. get rid of about $63 billion in the spending cuts. they're going to replace thos

senior economics reporter steve liesman joins us live from hq. >> hey, sue. always hard to tell how stocks will react. one thing is clear, everyone in the interest rate world, this will be a rate cycle like no other we have ever experienced. some respects it looks now more like an easing cycle than tightening cycle even though everyone is bracing for the fed to remove in accommodation. here's why guys in the the market are telling me this could be different. rate rise begins at low levels. the fed pledged to keep rates low a long time. markets increasingly believe the low for longer pledge and some limits to how much the fed will tolerate a hike in long rates. the result is there is almost no historical comparison to this cycle. typically when the fed is throttling back on stimulus the yield curve flattens out. short rates rise and long rates rise less or stay unchanged. look at this, two-year notes are flat to down while long rates are rising. that's often the way they behave ahead of a fed easing cycle, not tightening. see the two lines move apart. for stoc

another big story in washington, comes from cnbc's own steve liesman.g all the triggers for a fed bond tapering have been hit and the fed may come out this month of december at their meeting next week and

steve liesman here with the results of our fed survey. i described for the radio broadcasters a few moments ago janet yellen is ben bernanke's sort of monetary soulmate. >> fair or not fair is. >> that's a good point and lead in, tyler, because that's what our panel believes. we surveyed 42 economists and strategists in our cnbc fed survey and i want to show you, did a double take on this, compared to bernanke is yellen going to be much more dovish, no different, hawkish, et cetera if i originally thought they thought she was more dovish but if you look at it, it's come from a decline compared to the last survey and those that think she's going to be much more dovish, no different here, as well, and nobody thinks she's going to be much more hawkish. it's interesting. i think they think yellen will be much more like tyler was saying, much more like bernanke. we asked people as bernanke on his way out here, what they thought of qe1, qe2, qe3, essential, harmful, not needed, no help here. overwhelming support it was essential. there is no or

but their cfo told our steve liesman they would not have to beef up their staff last weekend. of course, he said that two weeks ago. >> we continue to become more efficient and use technology on the ground for routing and scheduling. so we can, you know, meet increased demand with pretty much fixed amount of resources. >> reporter: as for the retailers, amazon placed the blame squarely on the carriers, saying amazon fulfillment centers processed and tendered customer orders to delivery carriers on time for holiday delivery. we are reviewing the performance of the delivery carriers now. the u.s. postal service also put out a statement saying that the package surge volume exceeded expectations. fedex also experienced some delays and apologized earlier this week but put out a statement today saying everything was going just fine. back to you. >> well, talking of just fine, diana, when you look at the stocks, it's interesting because u.p.s. is only down very slightly. fedex is up about 0.75%. clearly not damaging stocks today. however, will the backing lash over these delivery iss