for "nightly business report," i'm steve liesman. >>> and as steve liesman just mentioned, retail sales fell in february and the figures for january were revised lower. sales at retail stores and restaurants declined .1% last month. this is a key barometer for overall spending. a separate report showed producer prices decreased 2% in february, an indication that inflation pressures remain modest. >>> business inventories rose more than forecast in january. the congress department said inventory is a key component of gross domestic product but the ratio of inventories to sales reached a post-recession high. and that is a sign that companies may not be able to sell what they've been producing. >>> ceos say the economy has room to improve. a survey released by the business round table, a group of business leaders from some of the country's biggest companies, finds that ceo expectations on the economy remain mixed. mary thompson joins us with more on that. what did the survey tell us, mary? >> first of all, their outlook improved from the fourth quarter. the index itself remained well below

and steve liesman in d.c. is with the federal reserve governor in a "power lunch" exclusive. steve?hington with fed governor lael brainard. fed vice chair stan fisher said he sees inflation is stirred or may well be seeing the first signs of stirring of inflation. do you see that as well? >> i'll tell you, inflation matters a great deal to us as we think about the policy path forward. what we have seen over the last two years is that core inflation, which is what we really care about, has been stubbornly low, between 1.25, and 1.3. we saw 12 month inflation crept up to 1.7. that's a good data point. but it is just that. a data point. and for me i'm going to be very focused on inflation. but i want to see a pattern. i want to see some persistence, that would give me some comfort. >> you talked about needing clear evidence. which does that look like to you. is it several months in a row of 2% inflation. >> well, what we really want wes that core inflation that is inflation that strips out energy prices, oil prices have been moving down consistently but core inflation, moving up toward

steve liesman reports on why the fed seems uncertain about the economic recovery. >> reporter: a dovish federal reserve kept interest rates unchanged in its march meeting and suggested it would be very cautious about future rate hikes. in fact, it slashed the number of hikes it forecast this year with the average number of rates, the committee now seeing just two rate hikes this year down from four. the fed gave a fairly upbeat assessment of the u.s. economy and jobs but was clearly concerned about recent global economic weakness. >> you have seen a shift this time in most participants' assessments of the appropriate path for policy. and as i tried to indicate, i think that largely reflects a somewhat slower projected path for global growth. >> reporter: yellen did not rule the chance of future rate hikes underscoring fed officials forecast two more rate rises this year and said every meeting including the one in april is locked. >> most participants do continue to envision that if economic developments unfold as they expect, that further increases in the federal funds rate will prove a

let's bring in senior economics reporter steve liesman. keep calm, proceed cautiously. what she said. more than once, steve, she made reference to the markets, cognizant of market response to what she's done. is this going to open her up to ever more criticism that the fed has become a creature of the markets rather than a steward. economy? >> i think so. i mean, you know, people have been criticizing the fed for all manner of things over time. whether or not that is warranted, look, the markets have been and always will be a major conduit for the fed to conduct policy. they need the markets on board, but one thing i did notice, let me just tell you one sound bite here which is he talked about -- the outlook for rates was very dovish and talked about this idea that the federal needs no move with greater gradualism and emphasize the global risks that were out there and the risks to the u.s. economy and growth to inflation. here's what she said. >> in particular, developments abroad imply that pleading our objectives for employment and inflation will likely require a somew

for "nightly business report," i'm steve liesman. >>> on wall street, stocks drifted to the downside. the energy sector led the declines on that drop in oil prices we just told you about. by the close, the dow jones industrial average fell nearly 80 points to 17,502. the nasdaq off more than 1%. good for 52 points. and the s&p 500 lost 13 and now hovers about where it ended last year. >>> and still ahead, google may dominate search but there's one area where it is playing catch-up to its rivals. >>> as of this evens the manhunt for one of the terrorists in yesterday's bombings in brussels is still under way. belgium along with countries across europe remain on high alert. michelle caruso-cabrera reports tonight from the capital city >> reporter: the manhunt still under way for the man identified in the closed-circuit tv video by police as one of the key suspects in the bombing that killed at least 30 people in brussels yesterday. at the same time, the airport remains closed at least through friday for commercial flights even though they have begun to allow cargo flights and also priva

steve liesman has done the analysis here.rents i'm going to get a c in math, and i come home with either an a or an f, i wasn't even close. >> pretty much. debend pends how you gauge it. here is the way to think about it. instead of calling it gross domestic product, let's call it gross domestic problems. large and persistent errors should give everyone from investors to business executives to policymakers pause and relying on this data for key decisions. we went back to 1990. found an average error rate of 1.3 percentage points in the initial gdp report compared to where it was advised to with more complete data. initial report of 2%, it could be 3.3. or 0.7. a or an f. the research does not show any systematic understatement or overstatement of growth. we found 30% of the time the government gets the direction of growth wrong. if it is initially shown to be higher than the previous quar r quarter. he says the government agency that produces the gdp report says we're working to try to get more accurate data in time to improv

steve liesman is filling in today. he's joining us.teve, lots of political news continues, of course. but the story for us remains the fed. a very positive risk-on reaction to the nondecision yesterday. >> yeah, good conversation you guys have going this morning. we're going to continue it, trying to answer that question. why does the market rally when the fed gives the market what it already knows? more on the fed coming up on "squawk box." plus, a lot on this issue of free trade. is it dead? how do revive it, if it is. we have the former commerce secretary. we have more on pershing square, that big 26% year to date decline in their main fund, guys. back to you. >> very quickly, steve, do you think this was a major -- now that you've had time to digest it, come back from washington, do you think it was a major shift in thinking the a the federal reserve? >> i actually do, sara. i think what they had is they had an idea before where they were going to hike earlier so they could go gradually and not be forced to do a lot more later. the

their minds could change three times. >> liesman is still with us. steve?m a little confused by joe's comment. bringing gdp to 2.3% is still right around where trend growth is. and it's really the spook, joe, off of trend that is the thing that the federal reserve put the fed on hold. i mean, i think the market has a way of overshooting certain communication by the federal reserve. this seems to me like a pretty warranted bringing back. i've been out there saying the fed has overshot in terms of essentially ruling out rate hikes this year. the market goes too far. i think making that call earlier is better for the market, better for the economy overall than getting surprised later on. >> so -- but the trend is going the wrong way, steve. i'm supposed to get excited over 2.3% growth? >> yes, you are, in fact, joe. i'm sorry. to inform you on the reality of where growth is these days. i wish it was higher. it would be great if it were. but that's the benchmark that the fed is looking at. that's the benchmark the market is looking at. you are correct. it is su

steve liesman is here. we have a lot to get through. >> love it.ounds like a great show. >> thanks, becky. still to come, the fed follow through. the reaction to a dovish janet yellen. jim o'sullivan, chief u.s. economist at high frequency economics, will give us his take next. don't go anywhere. we're back in a couple minutes. hi watson. you are a fierce competitor. i've heard that. i have analysed your biggest matches. oh really? when down a point, you serve an ace 5.8 times more than other top players. you sound like a coach. i am not. but i can customize training programs based on biomarker data. watson, that's pretty impressive. you might say i am the serena williams of cloud-based cognitive systems. nah, i wouldn't go that far. we'll be with you shortly.. yeah right... xerox predictive analytics help companies provide a better and faster customer experience. hello mr. kent. can i rebook your flight? i'm here! customer care can work better. with xerox. wait i'm here! mr. kent? (gasp) shark diving! xerox personalized employee portals help compa

our steve liesman is joining us on set.typo and we were talking about the chinese gdp. >> no, this is american gdp, but instead of gross domestic product, call it gross domestic problem. in an in-depth analysis by cnbc on the government's report shows a large and persistent error that should get everyone from investors to business executives to policymakers pause in relying on this data for key decisions. cnbc went back to 1990. we found that average error rate of plus or minus 1.3 percentage points in the initial gdp reports, compared to where it would eventually be revised to years later with more complete data. so, a initial report of 2%, you can do the math, would later be revised to as much as 3.3% or as little as 0.7% on average. the research does not show any systemic overstatement or understatement of growth. we also found about 30% of the time the government gets the direction of growth wrong. that is, if it's initially reported to be higher than a prior quarter, it could later be revised to be lower and vice versa

steve liesman, update on gdp.we come back, uber's travis kalanick talks business in china and his plans for a ipo or thereof. it's next. >>> welcome back. uber ceo travis kalanick sitting down with our geoff cutmore for a cnbc exclusive interview. here's what he said about business in china, a major point of emphasis for the company. >> we're very young here in china. and we're still in that investment mode. the good thing, though, when you have profitable cities around the world, those profitable cities can then help us to invest more deeply in this country. so you take like the top 30 countries -- sorry, the top 30 cities that we're in around the world. they -- we're already generating $1 billion in profit from those 30 cities a year today. and those cities are growing by 2 x, 3 x, 4 x per year. and so that is sort of the fuel that allows us to go to places like china and invest deeply to make the system work and to work in a big way. >> all right. so you can tell they're trying to emphasize just how much money

steve liesman is back with an early edition focusing on who wall street prefers in the race. ing. want to share with you the results, very interesting of the fed survey, the political part. and the first thing we asked about is what effect does the campaign itself have on the economic outlook? 56% of our 42 correspondents include economists, fund managers and analysts. 56% say the effect of the presidential campaign on the economy is negative. 39% saying it has no effect. now we asked a topical question before we get into the candidates. we'll tell you the candidates. by the way, want to tell you, these results are anonymous. we're not sharing who said what. but these -- overall results here. 40% pick -- republican would be best for the economy. 18% a democrat. but this is interesting right here. 42% say it doesn't matter or they don't know. that's higher than we have seen in previous polls. a bit of indifference right there. now on to the candidate choices here. who is best for the economy? and the answer is, 0% say standards. 8% for rubio. 11% for cruz. 13% for trump. and jo

steve liesman filed this report. >> the question being asked, has the federal ri serve quietly retreatedrom raising rates after launching what it dubbed rate more to magization in december with that first quarter point rate hike. markets reacting with unanimity that janet yellen laid out a dovish look for rates. she suggested, quote, greater gradualism is warranted. >> given the risk to the outlook, i consider it appropriate for the committee to proceed cautiously in adjusting policy. >> one fed observer said, quote, the fed chair is clearly in no hurry to undertake the next rate hike. and dana saporta said, curiously, for a central bank presumably in the middle of a tightening cycle, yellen's speech focused more on downside risks than those to the upside. there has been some deceleration, certainly in first quarter expected growth, but yellen offered little possibility of a rate hike next month or even suggested when the next hike would come. she also questioned the one obvious reason for hiking rates now, rising core inflation. she suggested she had her doubts that the inflation gains

steve liesman breaks down the results of the survey. >> interesting results from the cnbc fed survey. we asked a bunch of political questions and what you see is of our 42 respondents, 56% say the campaign is negative for the economic outlook. 5% say it's positive and 39% say it has no effect. as for party choice, which party would be better for the economy, 18% say democrats and 40% say republicans but a large percentage says it doesn't matter or they are not sure, which is higher than we've seen in other surveys. how about the candidate who will be best for the economy here. zero percent say sanders, 13% trump, 16% clinton and 42% governor john kasich is seen as being best for the economy. how about best for wall street? similar results here. 11% for rubio. zero for cruz. 14% for trump. 22 for clinton and 35 for governor kasich. you can see here again, kasich loses a little bit. clinton gains it when it comes to the stock market but if that number two position unclear in this anti-establishment, anti-wall street campaign if candidates wear this as a badge of honor or the other, you

steve liesman is here with a preview of what we might hear from the chair. steve?> kelly, a much anticipated speech by janet yellen. hopefully given more guidance to the market. not on how many rate hikes this year. that's decided in terms of the median estimate for the fed, probably two. but when? when do we get the next one? in the lead-up to the speech, shortly after the meeting about ten days or so ago, you had a bunch of fed guys come out and say april is a possibility. john williams of san francisco, denny lockhart from atlanta, if the economic data cooperates, jim bullard from st. louis and esther george, a voter who dissented at the last meeting. she wanted to raise rates back in march. that becomes one of the questions for janet yellen. we hope she will answer today. april or sometime later, after the fomc meeting last week, the market priced in september. you have the global growth weakness, she emphasized that, versus generally better u.s. growth. yesterday as we reported the street took down the expectat n expectations for first quarter gdp, yet we had

steve liesman joins us with cnbc's fed survey result. a busy week ahead for you. let's start right here. the presidential campaign on economic outlook. >> the full results tomorrow, what they look for for the fed, but out of the presidential campaign, 56% saying the campaign itself is negative for the economy. 39% saying no effect. only 5% say it is positive. as to which party they would like to see win the presidential race, 40% would like to see republicans, 18% democrats. over here, 42% say it doesn't matter or they don't know. that's higher than we have seen and we have done this during other presidential campaigns. a little bit of indifference out there. and now on to the candidates, which candidate would they want to see, which one is best for economic policies? zero percent of our 42 respondents, including economists, fund managers and analysts say bernie sanders. 8% rubio. 11% cruz. 13% trump. 16% clinton. and governor john kasich wins here, 42% say he will have the best economic policies. how about who would be best for wall street? another goose egg for

i think you have to consider two things, and i think steve liesman described it right. are responding to global economic and global conditions. chair yellen talked about it a number of times. by the way, you have top respond that the dollar can't rally on the back of other easing -- second point, this is a fed, and i would argue most would rather see inflation run hotter, employment run hotter, because there's so many tools to break it. you don't have many tools to bring it up. it's easier to pull on a string than p usual on it. i think that's what they're willing to do. >> so dan, we're starting toss materials, a few other sectors like that leading the pack here. how do you trade and investment around this event? on the one hand they've had not set things were horrible, but on the other hand indicated they certainly aren't great, either. first question she faced from the committee was, if not when and why not now? you're now factors in two rate hikes down from four. >> for this year, right. so they have to start at some point. nobody likes free money forever. >> do you

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steve liesman asking janet yellen about her credibility. >> i missed that. >> i was surprised rick would >> did he? >> steve, it would have been a much easier answer for her. i wish they could be more honest but she won't say it. we don't know. >> we don't need any more enabling of the fed. >> the fed did the right thing in not raising rates in my opinion. deflation may finally be ending. that's what the commodity index is all saying. finally. >> you came in lay it on the conversation. >> rick, thank you. >> the weirdest green tie i've ever seen. >> as opposed to your green tie. >> mine is sort of -- >> i was blueish. >> all the traffic is saints paddy's. i should have gone and taken mass. been easier. >> you had time while you were sitting there. let's talk about this next subject. donald trump is on the verge of securing the nomination for the president. but his position on trade and tariffs are scaring the washington establishment. joining us is john engler and of course you know larry kudlow is here, cnbc senior contributor. >> delighted. top of the morning torch. >> great to see you

you know what, let's go to steve liesman to bring us up to date on what mario draghi's actually sayingankfurt. steve. >> yeah, hey, we're getting some conflicting comments from draghi, and the market, the euro is rallying again and is now above where it was before the statements came out, and the reason is because mario draghi said he does not anticipate further rate cuts. that, however, is one of only three things that he said about the future of rates. as i reported, he also said that rates will stay low for a long time, longer than march 2017, when qe stops. the second thing he said is we can go as negative as we want, although that suggests there is some lower bound, wouldn't give a number from what i could hear. then he said this other thing, he doesn't anticipate further rate cuts. so, that seems to have been the spark that led to a rally in the euro. and now the last i checked, guys, you probably have a better check than i did -- we started this whole thing at 1.09, came down at 1.08, now it's back about 1.10 right now. but up. >> and steve, clarify exactly what he said. this no

steve liesman and why he thinks the answer is yes.t pharma's huge drop may be slamming your retirement money even if you do not own that stock. starbucks, stuck for a year, can their big international plans give their stock a boost? a good old-fashioned bull and bear debate on the coffee mermaid coming up. (patrick 1) what's it like to be the boss of you? (patrick 2) pretty great. (patrick 1) how about a 10% raise? (patrick 2) how about 20? (patrick 1) how about done? (patrick 2) that's the kind of control i like... ...and that's what they give me at national car rental. i can choose any car in the aisle i want- without having to ask anyone. who better to be the boss of you... (patrick 1)than me. i mean, you...us. (vo) go national. go like a pro. man 1: he just got fired. man 2: why? man 1: network breach. man 2: since when do they fire ceos for computer problems? man 1: they got in through a vendor. man 1: do you know how many vendors have access to our systems? man 2: no. man 1: hundreds, if you don't count the freelancers. man 2: s

if you're looking for transpare transparency, all you need to look at the question steve liesman asked janet yellen in the last conference and the response that was given. if that's their idea of transparency, that's about all the market needs to know, not very transparent. >> heather -- i like your wardrobe consultant by the way. so ben is talking about which way are these markets moving and how are investors supposed to read the central bank here. what are you guys advising? >> transparency has led to increased confusion in this case for sure. oil, china and interest rates are still the leading indicators in the market. that strong dollar may present a headwind for earnings coming out next week and globally that continues -- we continue the slide or sell-off as u.s. interest rate speculation has sparked and lifted the u.s. dollar. corporate profits are holding up okay but revenue is weak. quarter over quarter, five consecutive negative quarters of revenue growth. that's somewhat bearish tone for the markets, although we've had a nice rally from january, february lows, there's still a

thank you and i'll be happy to take your questions. >> steve liesman, cnbc.you know inflation has gone up the last two months. we had another strong jobs report. the tracking forecast for gdp has returned to 2%. and yet the fed stands pat while it is in a process of what it said it launched in december was a process of normalization. i have two questions about this. does the fed have a credibility problem in the sense that it says it will do one thing under certain conditions but doesn't end up doing it? and then frankly if the current conditions are not sufficient for the fed to raise rates, what would those conditions ever look like? >> well, let me start -- let me start with the question of the fed's credibility. and you used the word promises in connection with that. and as i try to emphasize in my opening statement, the paths that the participants project for the federal funds rate and how it will evolve are not a preset plan or commitment or promise of the committee. indeed, they are not even the median should not be interpreted as a committee endorsed

steve liesman is with us from hq. ger picture here is we've rallied call it 10% from the lows two or three weeks ago on the stockmarket. part of that is on the belief that the data is getting better. does that still hold? >> yeah. this is the beauty of cnbc simon. i have a little different take from rick. it has hit a multi-month low. i don't know about you. i think the market is out there breathing a sigh of relief whether it sees a number, still suggesting expansion in the services sector and not showing. you can see there from the history of this indicator here, of this index rngs it drops down below 50 when we have to worry about recession. picking up on what you were saying when we look at theory cent indicators or the hits and misses of the last several weeks, we can see it. they were all a bit better than expected. in case you weren't interested. here's the nonfarm payroll estimate for tonight. looking for 2,000 although we had the strong one on adp. we're looking for wages not to equal that nice number in janua

we're not going to realize that. >> steve liesman has caused a lon on what he's talking about.ome of the voting members, maybe not the minority, are vocal about the dovish nature. where are you on that? >> fed is clearly in the process of falling bhiev the curve. >> is it clearly behind? >> i think so. i think the old trade-off between inflation and unemployment is something that a lot of the members of the committee are lil ig to live with. >> you mean letting inflation overshoot. >> that's right. when you talk to various presidents at the fed, they talk about the 2% inflation target as being an average, right, not a feeling, and so we could have an overshoot to 3% or so and they would welcome it. >> what's your view on the ten-year yield still that it will go down before it comes up markedly? >> i think so. i think we're still vulnerable to financial stocks. especially after sara's comments. we've got to a lot of political noise out there. i think we're discovering that monetary policy and europe and japan database. >> are you still at 1% because we're almost at 2%. >> i'm cr

janet yellen, and our own steve liesman will be there asking a question. your money? what does the fed mean to you. john bellos with us. your expectations are what? >> we think the fed will be cautious. last few months has been hard, challenging for investors, challenging for policymakers. >> cautious meaning they won't raise rates. >> right. i think they are not going to raise rates but shift the tone a little bit. they will be worried about inflation expectations, inflationary expectations move down a lot. it's a big concern for them. it's questionable whether expectations will be well anchored. >> most of our viewers are investing for five, ten, 15 years not trading off fed. we act like in some ways that low rates are aumtsally good for stocks because they have been the last seven years or so and higher rates may necessarily be bad. history doesn't show that. we're going to get rate hikes at some point. are equities or bonds good or bad investments in a raising interest rate environment? >> let me say two things. first of all i think the federal reserve

steve liesman is here with a guest to break it all down. >> we're all here with a guest. >> you'll dokind of you. let's bring in former philadelphia fed president, charlie plosser. let's talk about this jobs number and the federal reserve. in general the market has pretty much priced out the possibility of a march increase. it's probably redundant to ask you. if you were on the fomc this month how would you be voting? >> oh, it would be a lose call for me. one of the things that the market is not thinking enough about is if the fed chooses to passing march which most people think they will and that's probably the right guess. if the fed chooses to pass and they are really data dependent and we get through this soft patch and the economy goes back to where fed has thought it would be for the year i think the markets need to anticipate being data dependent means the fed has to catch up. there may be rate hikes but one or two of them may be 50 basis points instead of 25. >> would you be nervous looking at numbers like this. and thinking you know what i'm getting more behind the curve but

lease h steve liesman has some of those findings. >> rate hikes are on the table this year but not as the next hike? in the prior survey it was may 2016 and now it's moved to june. pretty strong support for that june rate hike, about 80% see june or even earlier for that rate hike. next one, when will the balance sheet be allowed to decline. that remains unchanged. what's interesting about this, february 2017 folks less than a year away we may be talking about the fed one uniteding the $4 trillion balance sheet. final the terminal rate. had been in the second quarter of 2018. now a little bit higher moving closer to fed. further out the third quarter of 2018. how many hikes this year? 2.8 or call it three for the december survey and that's come down two. just call it two here. what's interesting about this is the fed itself, the median fomc member has four in there and that's remained a difference with the market for quite some time. is the fed too easy. i'll show you one other thing. this is the different between the median fomc and our survey. call it 80 here and here over time. wha

in the meantime steve liesman and our guest host paul mcculley are both here to talk us through a lot haven't heard from you this morning but, again, expectation is that there will be additional stimulus added. >> yeah, i think we just have a headline crossing, becky, that the ecb did take additional action. we're waiting to see what is that. what we're waiting for is expectation european central bank goes further or more deeply into negative interest rates and also announced additional qe and on the third front liquidity problems that they have over in europe right now. >> real quickly to tell you about the refi rate the ecb is cutting it from 0% to 0.5%. >> should also be a deposit rate. >> it's not out yet. the euro is already falling on the ecb decision. futures picking up a little bit. dow futures up by 90 points. s&p futures up by 11. the euro you'll see quickly the whole intent of this we expected was grab the euro lower and it's at 1.0916. >> i'm fascinated in paul's -- if negative interest rates were a broadway play i believe it would be closed down already because the review

let's bring in steve liesman, cnbc senior economics editor and celebrating st.ashin director of floor operations for u.b.s. happy st. patrick's day. >> same to you. >> there's a certain jolliness. when the fed makes a major move as it did yesterday, the s&p rallied 17 points, less than 1%. okay. above the 200 day moving average. but it's not the sort of euphoria you might normally expect. why is that >> i think the real story was less about what the stock market did and more about what's happening with the dollar. and both yesterday and today the dollar continues under some real pressure. the bank of japan can't be happy with that. they got negative trade data today, exports were down for the fifth month in a row. so we may be looking at temptation of currency wars breaking out. fed has effectively taken the sting out of the dollar. very good for our multinational companies, but trading partners are not going to like it. expect to see something from the bank of japan. >> you would normally have expected a bigger knee jerk reaction on this. >> i agree with that.

let's get some reaction from steve liesman. >> just checking this out.r the third straight week. one of those things you want to follow the level a bit, this 271. we still have a variety of indicators that job growth is commensurate with this 200,000 plus range. the number came in with that. between adp and claims you're looking at i think the street will be comfortable, at least expecting 200. whether or not they get it is another story. we have this quandary giving a lot of commentary, i'm happy to say about my work. people wondered whether or not that's something asserting itself now. remember we came way down. we started this quarter with, you know, hope springing eternal at least for the winter with a plus 2% gdp number. we're now floating around 0.9% on the cnbc rapid update. the question is whether that weak first quarter seasonality is asserting itself. guys are saying like is it time to do what we do ritualistically every second quarter which is set to begin tomorrow and start banking on a second quarter rebound. there's quite a bit of talk abou

let's bring in craig johnson from piper jaffray and cnbc's steve liesman. good to see you both.t after a nice string of gains. little in the way of economic data and earnings on track for this week. we get an ecb meeting. i know you're technically driven, but what do you think will drive the next move in the markets? >> let's talk about the technicals on this market. when you look at the internals of what's happening, it's amazing. we have the highest number of 26-week new highs since the end of last year. a growing number of stocks entering uptrends, and sentiment towards the market is negative. over the last week, the page rate which had been down is starting to flip and turn higher. investors are questioning whether this advance is more than just a relief valley. we think it is. the internals of the market are beginning to improve. the economic data has not been as bad as what a lot of people expected. >> steve, good morning. is that how would characterize this idea of pricing out a recession risk and investors just got too bearish and pessimistic? >> i think that's exactly i

steve liesman has been connecting the dots. you see what i did? >> there's a pun there. we just hope the people are smart enough to put it together. a week after janelle yellen convinced markets the fed wouldn't be hiking rates anytime soon, it looks like she has a mini-revolt. five fed chairs coming out to suggest a preference for rate -- jim bill lard said if the jobs data is strong, you could probably make a case for moving in april. earlier this week, two other fed chairs, john williams of san francisco, dennis lockhart of atlanta, both mentioned april as a month for a possible hike. to be sure yellen didn't rule out a hike next month at her press conference last week, saying it was, quote, a live possibility, but much of the rest of the answers rang a more dovish tone. raising the level of concern over global economic weakness. they also cut the forecast for the number from 4 to 2 this year. the market had been prizing in a hike, a of -- question now is whether what's being said publicly by some fed president is being thought quietly by others on the committee. >> y

let's dig deeper with steve liesman and bill rogers. steve, take it back to the federal reserve. does this, dare i say, put march back on the table? >> i don't think so. i think the market is all the way over to one side right now. and unless the fed has an interest in surprising the markets, and the effect of that would be to make the markets raise interest rates further than the fed would want, it wouldn't go unless there is some major speech and we have brainerd and stan fisher, both speaking on monday, they will not redirect the market. it does put june on the table and the market had mostly priced june out and i think if we keep going, steady like this, june is a real possibility. >> fisher, correct me if i'm wrong, has been the fed official who has thrown the most specifics out. we could get some market moving fed stuff from fisher on monday. >> that's entirely possible. i would be paying very close attention. >> i have a feeling you will. >> bill rogers, i heard for months and months and months as the economy gets closer to full employment, which we either are at, i love t

let's get to steve liesman. >> what happened? wrote the whole script based on the idea that the market would sell off in last hour but now it's no good. it did appear while the nation is focusing on the presidential case, markets are acting to economic data. first data out of the box today was pretty positive. car sales and construction spending were reasonably strong. and the downturn in manufacturing didn't get worse. it's now barely contracting a little below the 50 line. big data though yet to come despite fears in the u.s. economy is softening. wall street economists are still banking on a strong february jobs report. the consensus for tomorrow's adp, the private sector up 185,000. jobless claims are still seen being relatively low. that gives confidence for the friday report. you're looking for another 200,000 number up from 151,000 in january. recent market gyrations and growth concerns led bill dudley to suggest he's not in a rate hiking mood. he said the balance of risk to my growth and inflation outlooks may be starting

steve liesman suggest this means janet yellen has a mini revolt on her hands potentially as four of the statement. >> interesting enough, steve liesman story, cnbc story on the mini revolt could be a headline on drudge. don't always see that. they do like to delve into -- >> this is a soap opera. the intrigue. i would say corporate drama. >>> let's take a quick look at u.s. equity futures at this hour to see what's going. things do look like they are in the green. but marginally so. dow looks like it will open five points higher. nasdaq up by five points. s&p would open higher. for more on the global markets let's get to wilford frost. >> reporter: asian trade we saw declines but, again, muted similar to the response yesterday in european markets to the brussels terror attacks and this is the first chance asian markets have had a chance to respond. we're looking at quarter percent declines. if we move on to european trade today it's not muted it's strong. big response of positivity. relatively low volumes. the german dax up significantly best part of 1%. on a weaker euro which is down .

. >> steve liesman made a good point. going to raise in march, that would have been telegraphed already and bill dudley would not have said what he said already so close to an upcoming fed meeting that you have the market offsides. you think more globally, we have the rest of the world in recession. people argue whether or not this is within the fed's mandate to worry about it. the head winds, you look at the economists, the picture of chinese steel supplies, the surplus is greater than the combined production of the united states, germany and japan. deflation, both in commodities and in finance is still there. it is not gone. >> everything you just said is 100% factually correct. >> okay. >> but here's my concern. >> my wife never tells me that. >> you too? we also say this stuff as if we automatically assume higher rates are bad. we don't know that. raising rates and i get all your points, but if we just assume higher rates are bad, we had higher rates in the past and the economy has done just fine. how do we know that

sees the first stirrings of higher prices in the u.s., but in an exclusive interview with cnbc's steve liesman, they'll be watching the data closely and still wants to see signs of persistence before raising rates again. >> of course, if the dollar strengthens, that means manufacturers' exports are weakened, profits come down, core import prices come down. so there's an interaction between the strength of demand abroad. there's been very deficient global demand for some time. what we all need to be doing at central banks and we're generally including fiscal authorities around the world is working to raise global demand. not shift it across borders. >> eu leaders appear to have reached a break-through agreement with turkey on the migrant crisis, this following late-night talks and a deal brokered by angela merkel that still needs to be signed off on later this month. >> translator: this proposal that was brought forward by the turkish side is a breakthrough if it is to be realized because it would break this vicious cycle of entering illegally on a boat and as a result being given the right to

in an interview with steve liesman yesterday, the fed governor said the evidence is not so clear. >> are a variety of reasons to think that inflation could stabilize, could move up over time if oil prices stop falling, if the dollar doesn't rise further, if what we're seeing in the labor market starts to translate through into higher inflation than one would expect to see it moving up. on the other hand, though, is some troubling signs that inflation expectations have slipped downwards. so that is a risk to the outlook that i'm looking very carefully at as well. >> a two-day fed meeting scheduled to begin two weeks from today. >> really centering on inflation. they can't argue with the improvement in jobs with the 4.9% unemployment rate. some slack still in the labor market, but it is that inflation debate that's going to be so crucial. as far as the hierarchy, stand fischer, if you had to go with one over the other. >> inflation still a serious issue in europe as well. that's why so much expectation -- >> it's negative. >> just to the margin if you look monthly or yearly. absolutely

steve liesman, what should we expect from the fed chair? >> i think she's going to break a tie. let me show you where the race is or what the contest is. i want to talk about today's gdp number. our -- we didn't have gdp, we had it last week at 1.4%. it's been strongly downgraded, now tracking 0.9%, down a half point on the strength of that very weak personal income and spending number. tomorrow you have yellen but i want to skip yellen and come over here to the jobs report scheduled to come out on friday. 213,000 jobs, unemployment unchanged at 4.9%. now take the wide view, you've got a weak gdp number over here and expectation for a strong jobs number over here and then get to janet yellen. does she break the tie and siding with the weak gdp numbers or stronger jobs numbers and the unchanged unemployment rate below 5%? some of the things we need yellen to clear up include a lot of economists or fmoc members, the possibility of a april rate hike and how much strength she sees in the u.s. economy or the weakness and side more with the jobs over here or gdp over there. i want to

steve liesman making fun. the markets go up and go down. we know this.re reasons why some traders and investors are saying maybe we could do for a pause here, has to do with warning signs. too many to put up on our wall here. but a handful of them that you our viewers resonated with and what not are here up on the wall now. first of all, we're almost at earnings season yet again, strong dollar always plays in that conversation. has over the past few years. remember those foreign profits are much harder, more expensive to translate into profits here in the u.s., if we have a strong dollar. commodity weakness, associated with the strong dollar, oil prices falling, gold is falling what does that say about those parts of the economy or with the energy sector overall. high yield bonds. people said this as well. are we seeing signs they were on a huge run higher off low levels, but are they rolling over? the utility stocks, the best performing sector in the s&p 500, why would you buy utility stocks if you're bullish on the overall economy in the stock market.

we begin with our steve liesman, and the numbers at the center of that debate.nd really surprising numbers, at that. >> yeah. big-time downward revision to the tracking forecast for gdp. we call it the cnbc rapid update. we have the street come in, create a median. it is down 0.5%. we're now down below 1%. this is a number above 2%. the story we have been looking for a bounce back after that weak fourth quarter number, which, by the way revised up. still looking of north of 2%. now down to 0.9. big-time revisions. atlanta fed down 0. 8. so lopping off almost a full percentage point, scott. auto com all comes from the jany revised down sharply. february, nothing to write home about. >> this is the area, stephanie, of the economy that people had high hopes for. you know, on numerous occasions. have cited the strength in the consumer for the reason why you've bought certain stocks. >> the consumer is very important. 70% of the u.s. economy. certainly very important to keep an eye on what these numbers are showing. i think it's very lumpy. you also had some weather.