steve liesman explains. >>> once upon a time, america was a manufacturing powerhouse. about one in every three american jobs was on the factory floor. but beginning sometime around the end of the korean war services started to take over, now, just one in every ten americans is in manufacturing. yet, the government stuck to the old ways of measuring the economy. that is slowly changing. this year, they re-vamped the numbers to take account in the survey. 35% of the activity before, it is now 75% and should do a job of pinpointing inflationary pressures, the two times the index has been published including today it shows expectations well above the expectations. that is making former fed chair alan greenspan nervous. >> the presumption that it is -- no longer on the horizon, i think is a mistake. >> to be sure, these are producer prices. and they often don't get passed along one for one to consumers. but if inflation is going to start it is likely to be picked up first in wholesale prices. maybe especially now that it covers more of the u.s. economy. for "nightly busines

steve liesman has more. >> reporter: funny thing happened on the way to the year that interest rates were supposed to march higher. they went lower, much lower, some are doing an about-face so they can keep going down from here. the cycle below 2 and a half percent for much of the day, a place it has not been since 2013, and some think the rates could fall further. it was the economy, first, with a strong improvement in jobless claims offset by weaker manufacturing report. the housing data, meanwhile, continues to be weak. the upshot the economy might have contracted in the first quarter, while looking for a decent rebound in the second quarter, the first quarter expected to be a small 1.6%, mostly it was a bet on smaller growth this year and higher under-pinning for higher rates. second, central banks are still easy and getting easier, the european central bank is expected to ease in june. the u.s. fed is reducing bond purchases but still buying, helping to drive down rates. long-term yields have been coming down for 30 years. some experts believe they will fall further because the

for "nightly business report," i'm steve liesman. >>> and chief economic adviser at allions.mohammed, good to have you back with us. i want to get your reaction to a couple of things. you have the economy basically flat in the first quarter. you have the fed pulling back on its stimulus, something that worried investors, and yet the dow sets an all-time high. whats not computing, if anything. >>> so tyler, think of it this way, the fed is on auto pilot. we know what they will do, reduce by 10 billion at every meeting, and they will keep the interest rates low and continue to encourage us that interest rates will stay low for a long time. so the fed is predictable. markets like that. the markets also look at the economy and say yes, we had a weak gdp number, but as steve and susie said, we had a good barometer number. so put these two things together and what the markets see is basically a range-bound outlook. the lower volatile range-bound outlook. what it does is encourage the market to leverage and reach for yield and return and pushes both the bond market and the equity ma

we know what it means to serve. >>> welcome back, earlier today our very own steve liesman co-hosted annual economics challenge where the nation's top high school students competed in a quiz bowl, think of it as "jeopardy" for high school brainiacs. it was a tough competition and with us now are the winners, fresh from ringing the new york stock exchange "closing bell," steve liesman with the students from bel-air high school, winner of the adams smith division and from hunter college in new york, winners of the david ricardo division. congratulations to everybody. >> thank you very much. >> let introduce them him. xu from baylor high school and laura zhang from bel-air and jonathan lin from hunter college along with aeksel feldman. did we run the bite. >> set up the winning question. >> we over not given the question. the question in case anybody missed it is which comb nebt of gdp is most important to the long-term direction. >> for future growth. >> do we want to run the sound of the -- by the way, folks, set the scene for you. the score is tied here. what was it, 10-10. >> 11-11.

steve liesman is in san francisco. steve? >> thanks very much. leading policy makers, academics and ecologists gathered here and weern got a special guest coming up, john williams on his outlook for fed policy and the economy when "power lunch" comes back. [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ my mom works at ge. in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. >>> welcome back to "power lunch." i'm julia boorstin in lachlkos angeles. lions gate earnings are down. this despite a positive outlook on upcomin

steve liesman is here with three very good reasons. >> and why they might go lower. the school of thought, not the conventional wisdom. first, i want to show you the data we have today and emblem attic we've been getting all over the place. jobless lower than expected. inflation, same, as expected. and housing worse. i want to focus on better better worse. that's from april. the more recent doing a little better. does that help the growth outlook? i don't know. take a look at the next chart. we will look at the gdp forecast. there we go, nicely done, guys. over here, what you see is we're tracking on our cnbc rapid update, minus point 4. take the two together and you're below the line where we've been the last couple of months. really mixed economic outlook. number one, the economy is lower. number two, central banks, the fed has been very busy buying bonds. yeah. it's coming off. look at all this duration of long bonds off the market forcing you to take that choice, do i buy expensive bonds or go into the stock market. look at this long term trend down. we had a bli

who better to put it together for us than steve liesman. retail sales are worrisome. >> a hefty revision to last month taking much of the sting out. for now the data suggests a pause in computer spending growth, not a retrenchment. here are the details. retail sales up a paltry 0.1%, missing expectations s. the core, the part that feeds into the gdp calculation down a tick, look at the march revision, up 0.4% -- i'm sorry, that's my mistake from 1.1 to 1.5. spending moderated in april after a strong finish to q1, but the net result is still a good start. bank of tokyo says net net consumers are down, but not out. the momentum of retail spending is enormous. finally ubs says the late easter added volatility and softer april is not a signal of fading consumer demand. >>> now our wrap it up, where we take the data from today, the inventory, we plug it into the calculations with our help from moody's analytics. 3.6 is still the tracking, and minus 0.4, down two ticks is the tracking for the first quarter yet to be revised. in other data, small

steve liesman is here to explain. it has been very mixed, all in the interpretation, or maybe confused. >> the data was bothering me. it came in this way, that way, up and down so i created a system. i look at all of the data and say, show me the stuff that beat on the consensus and better than the prior report. show me the stuff that was worse, and worse than the prior month, so better/better, worse/worse, you know what happened? it came out even. i want to show you better/better. payroll's 288, beating the 215, jobless claims essentially coming in better than expected. small business optimism. ism manufacturing, and housing starts this morning, better than expected, better than the estimates, better/better, but then look at here, some pretty substantial players in the worse/worse component. industrial production, retail sales, gdp, all of these vehicle sales, and we just got consumer sentiment. six big over here. all of this daya comes in -- but some of these things have an effect, and this is what we get. it ends u

we have steve liesman. also steven whiting. steve liesman, what do you think about the numbers?asonality. you had this later easter. that factors in. what i like to do is fall the forward moving average. 3.20, 320, 324. you have a chip in there. tell us what that means for monthly payrolls. >> it's keuconsistent with 238 april. it was a shift of employment that would have occurred in the winter into early spring. so probably above 230 for the may employment report. april may be one of the strongest of the year. we will have continued declines in the unemployment rate this year. >> the participation rate, that do you think of that, staoefren? >> it has been incredibly vexing. a large number have dropped out of the labor force from 2007 on. it's been very, very resistant. it's critical for this economic cycle for the recovery that we get labor force growth. it's been close to zero. so i think there is potential for, again, younger workers to come back into the labor force. i can't imagine they stay out forever. but this is obviously really important here. because the fed can't pri

. >>> federal reserve basic of new york phil dudley,ed head of it, and steve liesman has the text and is on the case. >> a bit of news to think about, talking about the exit strategy, saying really the opposite of what the market believed here. they may not allow the balance sheet to shrink better raising. the thinking was then the fed would consume in with higher rates. dudley saying that could create too much tightening, more than the fed wants. and the fed should prioritize or focus on raising rates first rather than shrinking the balance sheet. that's not policy, that's just his idea. he's also saying that rates will remain lower longer term for three reasons. headwinds from the recession continue, aging of the population lowers the overall growth rate, and bank regulations lowering the amount of lending. expect the longer-term rate below the historical average. on the current timing of the economy, he says rates could lift off and could be pulled forward in case of tightening, says dudley, depending on the financial market response. we had charles plosser out earlier, both guys w

louis steve liesman. what he thinks about the economy and the interest rates.et hit again. this time by joint pain. it's a double whammy. it could psoriatic arthritis a chronic inflammatory disease that attacks your joints on the inside and your skin on the outside. if you've been hit by... find out more about psoriatic arthritis. take the symptom quiz at doublewhammy.com and talk to your doctor. could mean less waiting for things like security backups and file downloads you'd take that test, right? well, what are you waiting for? you could literally be done with the test by now. now you could have done it twice. this is awkward. check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business built for business. >>> welcome back to "squawk on the street." check out what's happening with lowe's, it's coming off its lows. the company raising its quarterly dividend by 28% to 23 cents a share. the yield is now going to be around 2%. you can see lowe's shares down about a half a percent but off their lows on that div

our steve liesman's been listening in and has highlights. nally monetary policy questions here. you just got done listening to -- listening to yellen explain why she wants 2% inflation, not higher, not lower. earlier, she said the fed, when it decides to taper, looks for progress in two areas, progress towards maximum employment, and cheaper 2% inflation target. she also said the fed would reconsider tapering if the fed decides it's not making progress towards those goals. she said it could take five to eight years in order to get the balance sheet currently greater than $4 trillion back to the precrisis level. she didn't say what that level is. i happen to know that the fed will not want to go back exactly to where it was, because the economy's grown in that time period. but certainly much smaller than it is now. finally, she said deflation is associated with very weak economic outcomes, and said even inflation that's persist at any timely -- persistently below, so neutral comments, but looking at the 10 year, don't know if it's still the ca

steve liesman is constituenting somewhat amusedly, first off, did you understand alan greenspan?d. since he's left office, it's been easier. the second month in a row that's happened, has the street buzzing with inflation fears, add to the chorus of the concern allen greenspan who was just asked about the ppi numbers at an interview at the washington, d.c. conference. >> now, i'm not forecasting inflation is about to run. i doubt it very much, but the presumption that it's no longer on the horizon i think is a mistake. >> he was speaking at a peterson foundation summit. bill clinton and chris christie were there. he'sle spoke about the problem of too big to fail. >> jpmorgan is a fannie mae/freddie mac type of institution, because they are indeed too big to fail, and taxpayer monies will come in to hold them up if necessary. >> greenspan made his remarks when asked about the reliability of future -- he said bailing out the too big to fail banks are liabilities the government should count. had he been so plainspoken when he was in office, i might have hair. >> did we just hear the

steve liesman has more. decline actually caused economists to be more optimistic in the second quarter, on average they raised their forecast on the current quarter to a strong 3.7%, the reason? the negative number appears to be mostly the result of tough winter weather, the downward numbers came because of much lower inventory. turns out businesses kept a lot less stock on their shelves in the first quarter and they have to restock now. >> part of that negative is the weather, to be sure. but if you think about what the bounceback will be in the second quarter you still have a growth rate of less than 2%, so i think that is a disappointment of what people were thinking before. >> a big drop in unemployment insurance claims reported today to just 300,000. bolsters the bull's case for the strike and the economy. the bigger question being debated what happens after the bounceback andcxw the decline in-year-old in-year-old -- in yields for the u.s. government debt has some believing that the bond market is stif

steve liesman sees signs of growth and reasons for optimism. >>> and michelle caruso-cabrera with signs of worry, and we've got a big debate this hour on "global risk versus global reward." that's 14 minutes away. first sue at headquarters. >> that's right, i'm in the house. we start this hour with new data on the most important asset for many, if not most, americans. their homes. existing home sales ticking up for april. and diana olick is on the case for us in washington. hi, diana. >> reporter: hi, sue. and that's right, existing home sales did move up in april. that's the first month-to-month move we saw all year, but we're not quite out of the woods yet. we know existing home sales up in april 1.3% month to month, but they're still down about 7% from a year ago. regionally much of the nation was unchanged, but the west did see a nice bump up higher. that may be because it began to correct first last year, so it may be beginning to improve for us this year. sales, though, in the west still down 10% from a year ago. let's talk about inventory and price because they're tied at the hip

steve liesman with the latest there. >>> the world is changing fast, and it's hard to keep up on whiches are leading the way. and that challenge is why our next guest left her post at cio of alliance bernstein to create her own investing firm, focused solely on finding disrupter companies. cathie wood is founder and ceo of arc investments. welcome. great to see you. >> thank you, scott. happy to be here. >> which companies are disrupting the most, do you think? >> a few of the ones not really well known are athena health, in the health care space. health care space is a $3 billion space. tremendous inefficiencies. athena is the first health care management company in the cloud. i started following it about five years ago, talking to jonathan bush about it, asking him why there wasn't any competition. you know, time and time again he would say, "i don't know, but i'm happy there's no competition." i think the reason -- and he agrees the reason -- it's hard. it's hard to do. >> he may agree, but david einhorn for one doesn't necessarily agree. >> right. >> as to what this company really

diana olick and steve liesman have been walking us through the so-called blueprint, if you will.box" we looked at the foundation, affordability. in "halftime," we looked at the ground floor, supply. now we talk about what makes a house a home, family. it's people like us. and guess what? demographics are changing real fast, right, steve? >> absolutely. one of the key things we've seen is the rise of the single-parent family. that changes the kind of house that you want. i don't know about, but if you're living alone with a couple kid, somebody else to do the lawn or take care of the house, that's why multifamilies -- let me show you the rise here of single-parent families. you can see it's quite a bit up from where it was previously. folks, that's the cue for the change in the graphic. we may not have it there. anyway, it goes up to around 31%, diana, from what was nearly 21% in 1980. that's why we bring in along here. i don't know if we have my second chart. it's a great chart. and what it says is -- >> you're such a tease, man. >> there we go. here we go. brian, do you get the

chair -- >> while we await the next question, let's turn to our senior economics correspondent steve liesmanhe fall, steve. i don't know if that's what you want to talk about or not. >> no, very quickly, during the break, carl, she was asked about this issue of goosing the stock market. and yellen said she wouldn't deny that the level of rates helps the stock market or is related to the stock market, but she rejected the term of the fed goosing the stock market. also rejecting the charge from the congressman that the fed was responsible for inequality, saying specifically that the fed has an impact on stocks and also on housing prices and the positive effect on housing prices has had an effect for many average americans. and i don't want to keep you too long from the interesting question of bernie sanders. >> no, let's see what congressman sanders has to say. >> -- one year, despite the oppressive obama economic policies. in terms of income, 95% of new income generated in this country in the last year went to the top 1%. now, a study which i've just introduced into the record by two professo

steve liesman takes a look at the fed's exit strategy and the tools available to policymakers. >> let'sake a look inside the federal reserve's tool box it will use to regulate interest rates, the main tool, the fed fund rate is not doing to work. during the easing the fed bought all the security and put all the cash out into the system. in order to control interest rates the fed has to control the amount of money in the system. what else does it have? it has this big thing? really an axe. effectively, the federal reserve is going to pay the banks in order to keep the money on accounts at the federal reserve. if that doesn't work, what else does it have? a thing called reverse repo, we're going to have to get used to the terms, the fed lends out a security. again, soaks up cash for a period of time. the deposit facility, think of it like a certificate of deposit at the federal reserve. if it works you put your money in the bank for a period of time, the fed pays you interest rates. finally if all else sells, the feds can actually sell the assets for good, retire the cash, that is what we

steve liesman has more. >> reporter: it is not every day that economist's theories are seen as so important as to be discussed at the federal reserve. but the minutes of the april meeting released today showed that the interests of president obama's top economic adviser sparked a long and lively discussion at the fed and they were rejected. they argued the 3.4 million americans unemployed long-term 27 weeks or longer are mostly not coming back to work. >> the evidence suggests that they exerted relatively little pressure on the labor market. many of them sadly give up searching for a job and eventually withdraw from the labor force. >> as a result, the long-term employment rate doesn't keep the feds low, forcing the fed to raise rates higher and faster than markets now think. >> i any the longer people are -- i think the longer people are unemployed, the more challenges they face. employers are less likely to have them come in for an interview, they get disengaged. >> they express skepticism about the work, citing both the long-term and short-term unemployed. the fed believes that because t

for "nightly business report" i'm steve liesman. >> i could talk for hours with you about that story. women ceos in the next decade? and also we have to figure out the work balance stuff. >> definitely, i think women are the not so secret weapon of the u.s. economy. we have more women engaged in the economy. happy mother's day, by the way. >> thank you. >> you bet i do. >> that is "nightly business report" for tonight, i'm susie gharib, thank you for joining us. happy mother's day to all of our mothers watching the show. >> and for me, i'm tyler mathisen. did i say have a happy mother's day? have a great weekend. >> drought, flooding and the challenges of climate change. plus, the supreme court on prayer. the u.s. in nigelia. and is the tea party fading? tonight on "washington week." >> this isn't something in the distant future. climate change is already affecting us now. >> temperatures are rising. streets are flooding, and washington's debate about climate change has reached a fresh crossroads. >> this debate shouldn't be about alleviating the guilt complexes of liberal elites. gwe

for "nightly business report" i'm steve liesman. >> i could talk for hours with you about that story. women ceos in the next decade? and also we have to figure out the work balance stuff. >> definitely, i think women are the not so secret weapon of the u.s. economy. we have more women engaged in the economy. happy mother's day, by the way. >> thank you. >> you bet i do. >> that is "nightly business report" for tonight, i'm susie gharib, thank you for joining us. happy mother's day to all of our mothers watching the show. >> and for me, i'm tyler mathisen. did i say have a happy mother's day? have a great weekend. ♪ it's all right, it's okay ♪ ♪ doesn't really matter if you're old and gray ♪ ♪ it's all right, i say it's okay ♪ ♪ listen to what i say ♪ it's all right, doing fine ♪ ♪ doesn't really matter if the sun don't shine ♪ ♪ it's all right, i say it's okay ♪ ♪ we're gettin' to the end of the day ♪ morning. hello, governor. what have you got there? electricity bills. bank statements. letters. all belonging to different people. and all recovered in a raid on a lockup. what were they

steve liesman has our report. >> reporter: fed chair janet yellen's testimony before congress' joint economic committee today blamed the first quarter's economic weakness solidly on the harsh winter weather saying she already sees a rebound in spending and production in the first month of the spring. and that leads her to be optimistic about growth this year. >> looking ahead, i expect that economic activity will expand at a somewhat faster pace this year than it did last year. that the unemployment rate will continue to decline gradually, and that inflation will begin to move up toward 2%. >> reporter: behind yellin's optimism she sees less fiscal restraint, that is, a small er decline in government spending, gains in home prices and equity leading to increased spending, increasing confidence among business and consumers. yellin cited geopolitical tensions and possible financial stability in emerging markets as the biggest risks to her forecast. she's also clearly concerned about recent housing weakness, suggesting it's a serious risk to the fed's outlook. the new fed chair, though,

labor secretary and steve liesman see it today. it's the same level today at 62.8 that it was in december of last year and october of last year and that it was 36 years ago. now let's switch gears. let's pretend stock prices today at the lows were the same as they were in december, the same as they were in october of last year, but that level was a 36-year low. would we be bragging about it? come on! >> steve? >> you know, it's friday afternoon. i'm not sure this is the best time to do a pitch battle. i would say that rick is classically leading people to look at the wrong indicator. >> 36 years, correct or not? yes or no! >> yeah, but, rick, how many jobs were created in that period of team time? >> we have 92 million people that are able to work that aren't working. >> if you want to yell, i'll yell over you. >> go ahead, baby. >> how many jobs were created? 288 this month? >> i said it was good. >> private sector was good. >> pun in the pocket that determines the spending, rick, that determines the earnings. >> part-time. >> tha

as you highlighted in steve liesman's report, the jobs numbers looked quite good here. gdp numbers should be taken with a pinch of salt and given the weather issues that affected them. we're looking for a 250,000 job gains in the payroll report. that's this friday. that should give the dollar some firmer support in the near term. but ultimately it's going to have to wait better news on inflation to support u.s. rates and that's a trend of dollar appreciation. >> unfortunately it's never a zero sum gain for currencies, is it? >> no. >> when you say firmer support, against which cross rates in particular? >> we think it's going to get most of its support versus the euro. we think that should be an across the board move there with the u.s. rates moving higher towards the end of the year. and certainly the payroll report should support it across the board here. the places we certainly look to focus on in terms of trading are being long dollar swiss, being long dollar yen. those are the places that offer the most up side, probably this week, over the longer horizon we think

steve liesman is our resident expert.ining us with what he thinks the highlights were. stick around. "squawk box" will be right back. (v o) watching. waiting. for that moment, where right place meets right time. and when i find it- i go for it. (announcer) at scottrade, we share your passion for trading. that's why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so you're always connected, wherever you are. because at scottrade, our passion is to power yours. >> translator: at the moment it is apparent even to those who still continue trying to work in the system that does not exist anymore. they are trying to retain the monopoly to try to dictate policy trade and finance as well as in culture and behavior. >> that was russian president vladimir putin speaking about the united states. he sat down with cnbc's geoff cutmore. the international economic forum is being held in st. petersburg. steve lies was watching. steve, this was interesting because putin doesn't take questions

steve liesman is going to untangle it for us. >> you know, put it all together, most of the data beating or missing expectations, and a lousy start to the first quarter and the higher is levels of economic activity. so far some of the data, durables beating expectations. s&p case shiller, beating expectations, consumer confidence in line 83, and the dallas enrichment fed also doing we had well. says business spending is through the roof. over there at rdq, john riding says the leading care of orders is just further gains in manufacturing ahead. finally goldman section says continues to mod rate over the court of 2014. and finally confidence enjoyed a post-winter balance from diminishing weather disruptions and home price gains. let's give you the cnbc rapid update. it's the durable good numbers that factor in. now running mine fwrus 0.53, where a range of positive 0.1 to minus 0.8. there's your big bounce back. 3.6% with a high. that's joe la vornia ticking to it. so tyler, the data doing its part to underpin what's happening in stocks today. big question -- thursday we get the g telepho

steve liesman has more on this bullish sentiment despite the mixed data. >> well, that friday jobs report continues to echo today is several economists upping their growth forecast. some now at our even well above the 4% level, but a key question remains -- is it bounce back or newer, higher level? >> here we surveyed nine economists, the average -- up 0.2 from their prior forecast, range being 3% at the low end to as high as 4.6%. that's ubc. here is the 4% club. many of them signing expectations for a bounce back. residential investment should be on the way up in the second quarter. barclays says our 3% consumption forecast for q2 should be easy to achieve. they're among those who see upside risk. monthly data shows a clear acceleration. these photograph coming before the snunt service reports this morning, beating expectations. ahead of the 54.4 expected by wall street. the best figure we've had since's. it's shown a clear strengthening trend since the winter. my suspicion at the level of the new orders are unsustainably high. over at rdq, they say the leading indicators points to furt

well, joining us to break down the putin-speak is john jensen, also our very own steve liesman. welcome to both of you. you know what, guys, we're going to play a couple sound bites, then i want your reaction. they see were translated into the england, so you'll hear a female voice. let's hear what putin had to say about this weekend's upcoming presidential elections in ukraine. >> translator: i want to see the country emerge from this proj t projected crisis, and we will have respect for the choice that the people will make. we will watch very closely what will happen. >> okay. so mr. putin says, don, that he's going to respect the outcome. sure he is, we believe him, right? >> sure we do. he's said a lot of things in the last three months, many of which turned out to not be true. after having waged a low-level war against ukraine for the past three months since yanukovych failed, i think he's discovering that his strategy hasn't worked, but also that russia has taken a lot of hits internationally for what he's tried. i think it makes sense to pause, see who's elected, see if t

steve liesman lived in russia, speaks russian -- john, it would appeared to me there's virtual will no common ground between the white house and mr. putin about what's going on in ukraine right now, but things can be going on behind the scenes that we're not aware of. what is the white house's reaction to these comments? >> well, i think the white house reaction is the one that you just articulated, which is at the moment there is no common ground. these complaints, the tough messages that geoff referred to, and by the way i think geoff did a terrific job in that conversation, these are things that the white house is accustomed to hearing. they don't see much departure in these remarks, and i think the attitude of the white house is they're going to wait and see if and when the russian and vladimir putin behavior changes in response to sanctions or whether more sanctions get implemented. we're at a place right now where he's playing to his audience and the rest of the world as a different view, as putin said. >> his audience seemed to laugh it up, steve. >> i want to push back on john

. >>> janet yellen giving wall street and washington her vision of the economy, and steve liesman has the highlights. >> she told the joint committee that it was transitory and mostly weather-related. she said she sees a rebound occurring in spending and in production, but she sounded concerned over housing, pointing to it as a major economic risk, along with growing tensions overseas. here's what's behind her optimism for the rest of the year. less fiscal restraint, gains in home prices and equities leading to a wealth effect, and increasing confidence among businesses and consumers. yellen gave no hints that rates would rise, already believed in the decline several times to put a time frame on considerable period. remember he spooked markets back in march. she defined considerable period that the fed would wait from the end of qe to the first rate hike, six months. now a lot of the q&a dealt with weather. they are bubbles in stock markets. >> valuations are in historically normal ranges. now interest rates, long-term interest rates are low, and that is one of the factors that feeds

they are eating up every bit of treasury supply that's hitting the market and steve liesman looks at this chart all the time saying the fed balance sheet is getting bigger. can't find this many treasury notes out there so if you're underexposed you've got to buy them and pay a higher price. that may put a secular decline in yields at least for some time to come. guys? >> interesting. good job, guys. that's been the debate this week. where doug, right? >> and sometimes it seems to be the case. it's both or neither. >> right. >> exactly. >> right now stocks -- >> right now it's both. >> up 39 points. >> actually probably a little bit back above 235. >> after all the ends we went through. >> pinterest played this round of volume, the scrapbooking website valued at $5 billion, that's right. 5 billion with a "b." tweet us if you think pinterest is worth that much. we'll put your thoughts on the program later in the show. >> for 2 billion you could have bought red lobster. >> cheddar bread biscuits. latte or au lait? cozy or cool? "meow" or "woof"? exactly the way you want it ... until boo

steve liesman, you get to go first. is there renewed optimism about the economy that this could boost this market right now? i keep hearing 4% gdp all of a sudden. >> i came in this morning and do what i always do on monday after a friday jobs report and look what economists did their growth forecast, and it looks like 4 is the new 3, bill. at least 4 of the nine guys that i looked at this morning have a 4% handle on second-quarter growth with a big question, is this a bounce back or just a depressed number in the first quarter or a sign that we're ratcheting up to a new level? a bunch of data came in stronger than expected and let me draw you one of my famous air charts. january, february, march and now april, doing even better than that, and i don't mean to say it's off the charts but everything showing a sequential increase from the winter weather woes. >> this is important for people trying to wrap their heads around, for example, what interest rates are doing. just for the second quarter. how much -- how sustained

. >> steve liesman will join us.the rich think differently about how people reach millionaire status, and confide some people are constrained to poverty. >> so robert and i many months ago conspired, asked the same question of average americans in our all-america survey and of millionaires in the millionaire survey. we ask people why do you think people are wealth? and why do you think they're poor? i'll show you the differences first of all. if you see here, the blue is the millionaire survey. they're less likely than the average -- they're more likely to believe it's family or circumstances than the average american. and both sides are equally likely to say that it's a result of poor education. one more chart i want to show you, what about reasons on for wealth? here the wealthy are more inclined to believe it's their hard work. 44% of our millionaires in robert's survey people are wealthy because of their hard work, only 36% of the general public. about the same on family circumstance, but here again, wealthy less

. >>> normally say steve liesman and "toolbox" in the same sentence, that can raise eyebrows, but when it's a fed toolbox, it adding to intrigue. steve has a shopping cart of really big things. what is going on here? >> here's what's going on. the fed has a problem. it's going to try to normalize rates sometime next year, we believe, but there's excess reserve sloshing around the system. so the fed will warrant to set a rate, but it won't be able to hold that rate. the fed has been using all these tools, or thinks about the tools, usingly basically tests to try to see, can it control the rate? here's the first tool, the one that everybody knows about. it's the fed funds rate. it's probably -- >> careful with that ax, eugene. >> it was powerful. the fed will try to set this rate. so it's vetted a whole bunch of mutuals. reverse repos. >> wait, that's a real sledgehammer. >> you know what a reverse repo. the fed will put the security out overnight, and soak up cash into the system. that's testing those right now. what else do i got? how about this one here. >> can i hold that one? >> ter