steve liesman is at headquarters in washington with some of the highlights. kind of a quiet meeting this time, steve. >> reporter: yeah, but interesting though, kelly. the fed looked through recent economic weakness, a signal to markets a june rate hike remains on track here while it said, quote, growth has slowed and consumer spending was only modest. went on to say, fundamentals under pinning the continued growth of consumption remain solid and, quote, the committee views the slowing in growth during the first quarter as likely to be transitory. then the fed repeated the line from march where it said specifically economic conditions could warrant gradual hikes in the future. that lead to comments like, they want to high again in june.

for "nightly business report," i'm steve liesman in washington. >>> and bank stocks rose in trading on those expectations for june interest rate hike. the bank etf outperformed the broader market today. >>> private sector job creation cooled in april but was still in line with what economists had expected. adp says companies created 177,000 new positions, a steady pace, but a sharp deceleration from the prior month. it was also the smallest increase since october. some of the highlights included increase of 11,000 in manufacturing jobs. business services added 72,000, the most in three years. small and medium sized firms increased hiring while construction employment fell. >>> and growth in the services sector accelerated in april, thanks to an increase in production and new orders. that's good news for the overall economy, since the services sector accounts for about 80% of the economy. according to the institute for supply management, this is the 88th straight month of growth. >>> that economic data and the fed standing pat were barely able to move the needle on stocks today. the dow

for "nightly business report," i'm steve liesman. >>> coming up, meet this year's top disrupters. companies that have remade entire businesses. the top three have something in common -- they love sharing. >>> hackers are reportedly demanding ransom for a stolen disney movie. disney's ceo bob iger said hackers claimed to have access to an unnamed upcoming movie. according to reports, disney does not plan on giving into demands and the company is working with federal investigators. their two big upcoming movies are "pirates of the caribbean" and "cars 3." >>> as you know, we report on a lot of companies that are disrupting the status quo. they tend to be fast-growing starredups that revolutionize entire industries and attempt to unseat corporate giants. today cnbc is out with its fifth annual disrupter list. the companies topping the list may be familiar to some. number three, we work. it provides shared work spaces for entrepreneurs and freelancer. number two is lyft, a ride sharing firm. and airbnb is this year's most disruptive company. julia boorstin tells us why. >> reporter: a

for "nightly business report," i'm steve liesman. >>> still ahead, cisco skids. why the world's largest networking gear maker could put more pressure on stocks when the opening bell rings tomorrow. >>> dow component cisco warns revenue for the current quarter will come in below analysts' estimates. it will also cut jobs. it earned 2 cents better than estimates. revenue fell to nearly $12 billion. investors punished the stock in initial after hours trading. seema mody has more on cisco's quarter. >> reporter: cisco, the networking giant, issuing weak guidance for the fourth quarter. revenue has now fallen for a sixth quarter in a row, although earnings did beat street expectations. cisco also extending its restructuring plans, which will impact an additional 1100 jobs. the cuts come on top of the 5100 job cuts announced last august, as cisco tries to stay competitive in the fast moving world of technology and invest in new areas. for "nightly business report," seema mody. >>> amazon shook up the retail industry and has forever changed the way americans shop. and n

for "nightly business report," i'm steve liesman in washington. >>> still ahead, driving away with a new jodhpur. >> reporter: i'm morgan brennan in new jersey. in the midst of a truck driver shortage, one company is turning to the stock market to attract more workers. we have that story coming up on "nightly >>> congressional democrats are asking deutsche bank for information on president trump's accounts. that request is part of the investigation into alleged ties between his campaign and russia. democratic lawmakers are trying to determine if loans for the president's real estate business were backed by the russian government. >>> iraq and iran both say that they support extending oil production cuts. at a meeting in vienna, the oil ministers from those countries say they're ready to back a deal through the first quarter of next year. iran and iraq are critical because they are the second and third biggest producers. today the price of domestic crude fell just slightly. >>> china's debt rating was cut by moody's for the first time in nearly three decades. that country's rising deb

steve liesman found kids across the country vying to be the top of the class. >> reporter: they are dancersians, wrestlers and basketball players, 11,000 unique kids from 47 states but they have something in common. they are just about as smart as they come and they study and really get economics and they faced off in the finals of the national economics finals, call it the national spelling bee for economics and you can't believe the drama and you can't believe the brains. >> the zarnowich rules. >> that's correct. >> reporter: haar more than 20 questions, the teams from moundsview high school in ardensville minnesota and chat hootie were neck and neck. >> the score is 12-11. >> moundsview pulled out a win for the fifth time in seven years. >> the equilibrium price and quantity will not change. >> that's correct. [ applause ] >> moundsview economics teacher credits her students' suck to hard work and making economics fun. >> you won't get the kids there by hitting them over the head and taking more tests. they have to be doing it because it's fun for them. >> reporter: the competition also

steve liesman, cnbc business news. >> president trump renewed his vow to consider breaking up america's big banks. when asked by bloomberg news whether he would re-evaluate his campaign pledge he said "he is looking at that right now." major u.s. averages slipped on the comments, but then rebounded. >>> foreign policy remaining in focus with president trump not ruling out the prospect of meeting north korea's kim jong-un at some stage. peter alexander reports. >> reporter: tonight, president trump with this alarming warning about north korea. >> so nobody is safe. we're probably not safe over here if he gets the long range missiles, we're not safe either. >> reporter: that dire assessment after surprising comments to bloomberg news. opening a door to a meeting with dictator kim jong-un. if it would be appropriate for me to meet with him, i would absolutely. i would be honored to do it. no sitting american president has ever met a north korean leader. >> this is probably the most brutal dictator in the world and it would elevate his status well beyond what's deserved. >> reporter: presid

. >>> steve liesman will have an interview with dallas fed president rob kaplan on "squawk box" at 7:.m. >>> >>> industrials have been on a tear this year with the industrial etf hitting a record high on friday. what is driving the sector? landon dowdy joins us with more. >> industrials have gotten a nice bump since the election. in fact, defense stocks are coming off of the best week of gains so far this year. the sector is up 14%, the overall s&p is up 12%. as the pro growth trump rally has faded so has the sector, now one of the lower performing sectors year to date, up about 7%. despite the reversal there are some bright spots. csx popping 50%. morningstar pointing to the increased confidence in hunter harrison coming on as ceo earlier this year. arconic soaring 48%. the specialty metals company which split off from alcoa last year getting a boost after a truce to end a colorful proxy battle. ametek is up 25%, thanks to strong orders in q1 and better than expected guidance. the losers, acuity falling 28% on a not so bright outlook. ww granger sliding 25%. the industrial equipment

steve liesman has more. >> reporter: the federal reserve looked through recent economic weakness and signaled to markets that a june rate hike remains on track. it went on to say fundamentals underpinning the continued growth of consumption remain solid. and that the committee views slowing in growth during the first quarter as likely transitory. the fed repeated the line from march where it said economic conditions would likely warrant gradual hikes in the future leaving many on wall street to think a june rate hike is more in play now. >> it's basically what we should have expected. that the economic weakness is probably transitory, they want to stay on path to increase rates. >> fed funds future showed a sizable chance for a hike coming this june. the fed did not change its balance sheet language saying it would reinvest principle. most think a plan to reduce holdings will come later this year. steve liesman, cnbc business news in washington. >>> for discussion we have peter rosenstrike head of market strategy around the desk. does the fed need to hike twice this year if the refla

steve liesman bringing us those comments from george. get to the cme group in the meantime, get the santelli exchange. hey, rick. >> hi, carl. you know, everybody is talking about it, the vicks near a quarter of a century low. but it really is not the vicks that's the issue. a few seconds ago i told you there's a group that predicted ultimately a computerized worlds of trading, markets would come to a halt and volatility would be very low. you know who that group was? human floor traders. i can remember many meetings in the early '90s where the notion of floor trading moved to the electronic media would in many ways end up with a stalemate. now, what does that mean? i'll tell you. i can go back to the early days of computer trading here in chicago, and what everybody did was bought these huge mounds of data on disks, data in everything. you know, all of the treasury data, soybean data going back sometimes to the 19th century, okay, and they put it all in the computer and they would start back testing. ultimately they would come up with a

steve liesman is playing quiz master, the second match of the challenge that is about to begin and, stevewhat can you tell us about all of this? >> reporter: well, becky, i'm here at the national economics challenge. the 17th annual challenge. call it the spelling bee for economics and you've joined us at the right time because we are go to begin the final round here. one chat hootchie is back from arden hills, minnesota. the first question -- oh, this one, come on. who wrote -- >> you may not confer and you have five seconds. >> marks. >> that is incorrect. >> i'll read the full question. who wrote dos capital and what other famous book did he or she write? >> you have 15 seconds. you may confer. >> carl works and communist manifesto. >> that is correct. >> why are you beginning with that question? come on. of the british pound sterling the australian dollar, the japanese yen or the yeuro, whic is worth the most -- >> mt. view, you have five seconds. you may now confer. >> the british pound. >> that is correct. >> off to a quick 2-0 lead. question three. >> more corruption of the kids. q

steve liesman, thank you very much. >>> you might have heard amazon -- guys, amazon hit $1,000 a share today. >> i heard this. finally. >> this kind of attention could put even more pressure on hedge funds to get back into it tech stocks. is this trade already dangerously overcrowded? a new report from bank of america/merrill lynch says 71% are now overweight. melissa, is that right? >> most are overweight technology. the highest on record going back to 2008. of that overweight 71% -- >> are in those stocks. >> not all active managers. >> not 71% of all fund managers. >> the overweight in technology. >> basically a lot of people in a really small elevator. >> exactly right. that's what you need to know. >> this is why they pay me tens of dollars. the state street global advisers and senior portfolio. michael, i'll ask you first, are you one of these guys in a very small elevator? are you heavily buying into any of those tech names? >> this elevator is going to the upward part of the floor so that's a good start. >> all elevators have weight limits. >> folks are equating the stocks to t

get straight to steve liesman for the fed's decision on interest rates. steve? no change in interest rate policy. the federal reserve maintaining a 0.76% to 1% range for the federal funds rates. it expects future conditions to "warrant gradual hikes" a sign rate hikes could be coming down the road and no change in its balance sheet policy. the federal reserve will continue to reinvest those securities that roll off, and so continue that balance sheet policy. it did note economic weakness saying that growth and activity "has slowed" saying household spending rose only modestly and noted a decline in march core inflation. it did say, "the fundamentals underpinning the continued growth of consumption remains solid" added "the committee views the slowing first quarter to be transitory" and to stabilize around its 2% objective, note the business investment firm gauged solid. unemployment rate declining add the decision unanimous among all members. a couple notes took over language from previous statements say the risks appear balanced to the economy, still sees monet

back to you. >> okay, thanks a lot, steve liesman.iz ann, let's bring that part, the headlines steve liesman was telling us about shrinking on the balance sheet and how these hawks and defenoves are finding middle ground. will that spike volatility later on this year? >> it's possible. if you look at the history of quantitative easing and you look at when we ended qe-1 but volatility picked up. the same thing between qe-2 and qe-3. you could argue that could be a catalyst in pickup in volatility when we get closer to year end, the time frame everybody's best guess now that we're getting from the fed that this would be probably a year end phenomenon. i wouldn't be surprised to see that as a factor. >> liz ann, we'll leave that there. liz ann sonders joining us. news alert on the bond market, three-year notes up for auction. rick santelli is tracking all the action. hey, rick. >> reporter: hi, melissa lee. this is the beginning of a big supply week, $62 billion. today's portion $24 billion three-year notes. yield at the auction 1.572. t

steve liesman takes a look at how this could play out in the economy. >> reporter: consumers took a worrisome break earlier this year. but new data released today suggested they resumed their spending ways in april, retail sales in april rising 0.4%, a touch lower than expected but a strong improvement from the prior two months. consumers bought cars and electronics and health care and personal care items. and most of all, they helped shake off the concern about a weakening economy. autos, appliances, and building and garden equipment also did well. the trouble for investors, consumers didn't necessarily buy at the stores run by many of the publicly traded retailers. sales at general merchandise stores fell a half point in april. earnings reports have been mixed. but the nonstore retail category, including the internet, rose by 1.4%. >> these department stores need to reinvent themselves. they're going to look different today than they did a few years ago. and there's not going to be as many of them. >> reporter: but with plenty of job creation and rising wages, there's little reason to belie

steve liesman, host of the competition, got to award the championship trophy. >> dancers, musicians, basketball players and wrestlers. 11,000 unique kids from 40 different states. but they have something in common. they're just about as smart as they come. and they study and really get economics. the winners faced off in the finals of the annual national economics challenge. call it the national spell bee for economics. you can't believe the drama, and you can't believe the brains. >> carl marx and the other famous work is the communist manifesto. >> after more than 20 questions, the teams from mountain view high school in minnesota and chattahoochee high school in georgia were neck and neck. >> the score is now 12-11. >> in the end, mountain view pulled out a win for the fifth time in seven years. >> the equilibrium price and quantity will not change. >> that's correct. [ cheers and applause ] >> mountain view economics teacher credit hard work and making economics fun. >> you're not going to get them there by beating them over the head and take more tests. they have to be doing it

steve liesman has more. >> reporter: wall street not expecting much from the fed tomorrow, but debating what happens with monetary policy the rest of the year. 98% of respondents to a cnbc survey expect the fed to stay on hold. 65% say the next rate hike is in june, some say a little later. 53% say there would be three rate hikes this year. 71% say the balance sheet, that $4.4 trillion of assets the fed has, will begin to decline by january 2018. as for where the fed funds rate goes, look for 1.4 in 2017, 2.2 in 2018, 2.7 in 2019. we get up to that 3% thereafter. that's where the long rate is supposed to be. as for the outlook for stocks, you can see not much more expected for current levels this year, just about a percentage point is the average forecast for the s&p to 2409. a little more next year, a 7% gain seems to occur at levels up to 2564. the reason is because they've moved the expectations for fiscal policy from the trump administration from 2017 to 2018. and now, looking ahead at what's behind the rally, back in december, 18% thought it was economic fundamentals and earnings.

steve liesman takes a look. >> reporter: the trump administration coming under fire in its first budget release for growth projections that some say are too optimistic. actually growth in 2015 and '16 was just below 2%. both the congressional budget office and wall street economists think the next decade will be more of the same. not the trump administration. it's projecting 3% growth or 50% more than the other economists. >> the focus is sustained 3% economic growth. we have been attacked, stunningly, by some folks on the left, and even in the mainstream, who say that's an unreasonable assumption. you should stop and think how absurd that is, to think that 3% growth in an american economy is to some people an absurd assumption. it used to be normal. >> reporter: criticism of these growth figures goes beyond just democrats. >> being at 1.9 as opposed to 3 is probably more realistic. unless there is some kind of big surprise and they pass all of this. but i think right now, that's not the current trend, either politically or economically. >> reporter: of course no one knows what will hap

jeff rosenberg, joe terranova, ryan streeter, jared bernstein, rick santelli and steve liesman. seen everybody have wide standard deviations from the main. steve, you were on a roll, you know, i knew this was coming. i knew it was coming, and not only were you too low but even your reason that the revisions from the previous would go up, and they wouldn't be reflected in this one it was like the opposite sort of. you knew this was going to happen, steve. >> well, you know, there's -- >> very strong forces in the universe. >> all right. >> you know, as einstein said compound interest is the most possible force in the universe followed by the electromagnetic force followed by reversion to the mean. i was doing great for seven or eight months now, now i've got a couple of big misses. go back and check the calculations. look, who cares? 200,000 people hired is a very good thing. 4.4% unemployment is a really good thing. probably average the two months, joe, 80 and the 200 gives you what did hampton say, 180 was the average? >> that would be 140. >> you have people, the decline in the

bring in steve liesman. >> i don't know where to start.hat are very important. let's start with the good news here. income and spending, up 0.4. look at this pages and salary number up 0.7. now unchanged in march but that's a very healthy number. consumption up 0.4. the nice revision of march. what this tells me i think is that we're going to be on track for this around 3-ish gdp number in the secretary quarter and there was some doubts about that, because the data was a little squirrely. a good number in durables up 0.9. nondurables up 0.6. there's the savings rate, which even though you have this nice 0.4% increase in personal income, and 0.4% in consumption you still did 5.3% on the savings rate which is higher than it was before the crisis. but, it's still a healthy number. 2340u we've got to talk about the inflation number. robert kaplan talked about that earlier. he was concerned about weak inflation. and the trend is unmistakable here. here's the head line. 2.1 in february, 1.9 in march, 1.7 in april. those are progressive steps dow

let's get to steve liesman with the headlines. steve?re at the hoover institution annual monetary conference, stan fisher saying we don't need no rules, a day after the committee passed a sweeping regulatory reform rule saying that the federal reserve should pick a rule for making monetary policy. fisher saying the fed should consult rules but not apply them mechanical mechanically. committees can be better than rules. and the fed can have good reasons for deviating from a rule and also points out almost all countries decide monetary policy by committee, not a rule, and i want to redo this quote here, emphasis on a single rule implies that the truth has been found. he said it has not. mike? >> all right, well, didn't break any news there, didn't say the truth has been found, steve, but that's interesting stuff all the same. appreciate it. right out to the cme group in chicago. rick santelli has the santelli exchange. >> well, thank you, mike. i would like to welcome our first friday of the month guest ed lazear, thank you for taking the

our senior economics reporter steve liesman is watching all that. ood morning, carl. the fed has some uncertainty to deal with. as the consensus is no action today, but pretty good certainty about a june rate hike. here's what's on the fed's watch list. weak consumer in the first quarter and weak gdp as well. some less than stellar auto firms. fiscal policy i think muddle is the right word for forecasters trying to figure out what happens this year, if at all and the effects being next year. soft inflation numbers. it fell for the first time in march since july. and falling beyond yields since the last fed meeting. now, goldman sachs saying in a commentary we think the fed officials will view the slowdown as temporary in nature with underlying momentum considerably stronger. the bond market though a bit more tentative since the last fed meeting in march. yields have fallen in the gauges of the economic growth and look to waning prospects for fiscal stimulus this year. down about 30 basis points since the last meeting. the fed got some support this mo

senior economics reporter steve liesman joins us now with some reaction. ning, steve. >> hey, sara, do you hear the sound of the tequila glasses clinking on this cinco de mayo jobs report? and the reason i think is twofold. one is it shows that, you know, this weakness we had in the first quarter here's the economy back on track and the fed is thinking, you know, this move we had last time that we said we'll look through the weakness, it's transitory, well, that helped support this idea. let's look at the numbers. 211, substantially better than the forecast that was out there which was 188. minor revisions to the prior two months. unemployment rate hitting that low, 4.4%. the labor force participation rate ticking down. the average hourly rage is 0.3%, but we had revision down, so we're doing 2 1/2 year on here. here is some of the glass clicking that's going on. bank rate.com, they said that hiring got the groove back in april. a red hot labor market, the boss won't pay you any more and pantheon they're concerned. the falling unemployment rate will scare t

steve liesman, cnbc business new. >>> let's turn from the fed to diamonds. sotheby's sold the world's most expensive pair of earring force almost $58 million. i guess one blue, one pink? the two are perfectly similar except the color. the other one is blue. the chief auction near declined to identify the buyer. let's talk more about the diamond business with tobia tobias corman. what was the significance of yesterday's sale? why would anyone buy diamond there's a are two colors? >> the significance of the sale is that they're the most expensive pair of diamond earrings ever to be sold which is fantastic. sets a new record. the stones themselves extremely unique. so colored diamonds are incredibly rare. and when you have a vivid blue which is internally flawless, had is one of the two stones, talking about the third most blo blue ever sold at auction, and pink the most expensive on the stone list so we're seeing an influx of wealthy buyers looking for alternative asset classes, going for extremely rare stones. >> why is it that colored stones, especially pink

steve liesman asked him for his outlook on the u.s. economy. >> i'm concerned about the recent weakness the last couple months of inflation. my own overall view is gdp growth will bounce back, i believe, for the remainder of this year. it's been disappointing for the first quarter. the reason i think that is we've got a relatively strong consumer. household balance sheets are in good shape. we now have better business spending. i still believe we can grow at % this year. while that is sluggish by historical standards, that's sufficient growth to take slack out of the labor market. regarding the inflation numbers, even though the recent numbers have been weak, some of it is idiosyncratic. telecommunication pricing. if you're getting to a tighter labor market, my own judgment is with a lag effect, inflation pressures are building. >> ecb board member, benoit curde says rap tid action needs to be taken on greece. he said a rapid debt agreement would help. caroline simmons from ubs wealth management is still with us. does it matter to any

steve liesman has more. >> i want to get to what the expectation is of respondents for the stock market. it is for being flat and then up a bit. you can see here, 2388 was yesterday's close. the outlook is for 2409. a little more juice for 2018, we go up 7%. that may be because of a shift of where they think fiscal stimulus will hit. i will tell you 62% of respondents say the market is too optimistic about potential outcome from president trump's policies. also when it comes to foreign policy, let's see if we have that. 60% say the president's foreign policy increased market risk. 38% say no effect. nobody is saying market risk is lower. what's behind the rally? an interesting shift here. back in december, only 18% thought it was economic fundamentals and earnings. everybody thought it was policy expectations. let's look now. a more divided response here on what is behind the market rally. 50% say it's the economy and fundamental earnings. 48% say policy expectations. first time we've seen this number be higher. let's talk about the commentary out there. neil dutta says investors contin

steve liesman, what a great get. here's what i heard. all's well that hasn't ended yet.lance sheet, pretty much full strength. i digress. let's start at the beginning. ben bernanke called out his critics on hyperinflation. he's right. in many ways, i was one of those critics. i made a bad assumption. you know what my assumption was? all of these wild things they were doing throwing all this money out there would result in growth. it would result in productivity. it would result in a pretty big economic move. it didn't. because we all missed one chapter of the book on the road to inflation. that was stock buy backs in large part. financial assets definitely experience what i call some pricing upside there. yes. the strategy was this is for the middle class. this isn't for wall street. this is for main street. it didn't turn out that way. unintended consequences. it was recycled into the financial assets. they absorbed it. but the key to this conversation is quantitative easing. i'm not sure what i'm most fearful of in the future. no doubt the fed praobably over decades ca

steve liesman joins us now with the details. the data within this report shows what courtney was talking about in terms of how consumers spend and where. >> they're spending whatever the individual retailers are reporting. the overall retail sales report shows consumers bounced back nicely from the weak first quarter and started off in a spending mood. they bought cars, electronics, health and personal care items and, most of all, helped shake off the concern about a weakening economy. retail sales up 0.4%, a tenth lower than the expectation. autos are doing well. electronics are up 1.3%. and there's that nonstore retailer internet. that is a month on month number not a year on year number. revisions to the prior month, the effect of all of this on growth was to bump up first quarter growth and keep the second quarter rebound story intact. we're running 0 3.9% first quarter. bond markets focused on april inflation data. the rate has declined for the third straight month. core inflation dropped below 2% since 2015. the overall re

steve liesman there. s get to our "closing bell" exchange today with the dow virtually unchanged, the other major averages lower. david saurby is with us, steve grass el from frankel sitting next to him, and rick santelli in chicago. i'm going to start with you, rick. what are you seeing, if anything, in terms of market response to the fed meeting? i mean the two-year note up is three basis point, dollar index up just a tad here. is the market starting to get ready for a fed rate increase next month do you think? >> i think that the markets are ready for rate increase. i just think the question is, a, how many rate increases and is the notion of reducing the size of the balance sheet a 2017 infomercial that happens in 2018 or not. many traders on the floor believe that's the case. so, you know, the market's prepared for this. the moves everybody is talking about that have, you know, somewhere in the 70% range of a june tightening, those are predicated on fed fund futures which really, you know, as they go

. >> we're going to go to steve liesman with breaking news regarding the fed. >> thanks very much.resident joining the club saying two more rate hikes this year are appropriate and some aggressive outlook on the unemployment rate. he says the rate could hit 4.2% by the end of 2018. that's .2 below where it is now and he sees job growth averaging about 200,000 then going down to 100,000, a more normal, sustainable rate. sees the drag or weak numbers in the first quarter as likely temperatuorary and he expects t growth to be around 2.3%. he says inflation is going to stabilize and the bond acting today to a lackluster tomorrow. then a quotement we're essentially at normal now. i assume he's talking about the economic data rather than the political discourse. back to you. >> steve, correct me if i'm wrong, did i see the atlanta fed has their q2 gdp forecast at 3.6%? >> you did and you're stealing the thunder a little bit. we're working op the rapid update, it's around 3.5, i don't know what you guys are seeing in the retail earnings reports, but the overall number was pretty strong to

steve liesman joins us from the fed in d.c.ow the fed's not going to do anything today, but is the fed going to lay the groundwork for a hike at the next meeting? >> i don't think explicitly. the market is listening to the fed today is how does it deal with the recent economic weakness and some uncertainties out there. it's expected to mostly look through them, but you can imagine different scenarios where the fed says oh, wait, there's all this weakness in the economy. we're bringing the process to a full stop here or you know what, we really dismiss ilt, we see this transitory, the recent decloin in inflation, there's plenty of uncertainty out there. the whole fiscal stimulus story seems to be a muddle. the best guess is that the fed looks through that and tries to keep the market on track thinking about essentially a 61% problem b bability. >> how can the fed make a decision on rates until it really sees what comes out of d.c.? >> you know, the fed i believe has positioned itself to say you know what, these are the interest

ben bernanke with on with my colleague, steve liesman, on cnbc this morning saying 3% would be a stretchen what is being described by the former fed chair as tax cuts, not tax reform. he sees a read need for comprehensive tax reform. what we've seen thus far in the one pager from the white house -- >> tax cutses. >> -- is just unfunded tax cuts. that may in and of itself be helpful to wall street and healthy people to an extent. it is not necessarily great tax policy. >> there are a lot of people who say if you want to goose gdp growth by 50% from a 2% to 3%, immigration, skilled immigration is a bill part of that. need to bring more people in to look. >> listen, you know this equation as well as any of us, it's a very simple equation. the size of the labor force growing plus productivity equals gdp growth. if you constrain the size of the labor force which we're doing because we're discouraging people to come to the united states, plaarticularly high-skilled workers we badly need for the technology sector, we're going to put a crimp in the gdp. >> ron, always a pleasure to be with you,

steve liesman is back at hq with some of the highlights. >> thanks very much, sarah.he former fed chair not shying away from controversial topics in this morning's exclusive cnbc interview and went after critics that said fed policy only benefited the wealthy. it helped create 16 million new jobs. >> talk about how fed policy helped the rich. when the fed was thinking about raising rates, the hedge fund guys writing op e-eds saying ras are too low. >> the former fed chair ventured into current policy saying economics behind his support for the current fed notion that interest rates can end up at a low 3%. >> it comes from global savings. it comes from low returns on new capital investments. so the feds very low interest rates are not as stimulative as it would have been 10, 15 years ago because we're not that far from where interest rates are neutral. >> what that means for current fed policy is because bernanke agrees the fed doesn't have that far to go, he thinks the fed can get there gradually so the fed should be cautious seeing no immediate threat from inflation.

let's get to steve liesman for finally another rapid update. >> yeah, the update is a downgrade becausea this morning was pretty lousy. we're down to 3%. still a good number, still a strong number, but minus 0.4% after a lousy trade. here is what we're looking at, 0.9% for the first quarter. now tracking 3% for the second quarter which is down four tenths. and i'll tell you who is where, moody's came down big down 0.6, 0 3.7. morgan stanley at 3.2. barclay at the bottom 2% for the second quarter. so we're looking for the big comeback. it is still a decent bounce back, still average 2% over the first half of the year. but not as strong as we had hoped for. back to you. >> steve, have we been seeing as many adjustments as we have in past quarters? >> no, because i was looking at it, one, two, three, four, five pieces of data have all confirm confirmed where we started. so it would be at the estimate of the economist, but this trade data along with the wholesale -- along with the inventory data we got was substantially weak and it caused to shave about half a point off of it. so keep your

i'm becky quick along with andrew ross sorkin and steve liesman. joe is off today.pecial guest is former fed chair ben bernanke. mr. chairman, thank you for being here today. it's a pleasure to have you here. >> thanks for inviting me. >> we're going to be talking to him in just a moment. quickly let's get a check on the markets. after a big week last week fruit yours are in the green once again. dow futures indicated up by about 30 points. dow is not far from 21,000. and the nasdaq closed above 6,000 for the first time last week indicated up by another 15 points again this morning. s&p futures indicated up by 5. the 10-year right now, yielding just below 2.3% at 2.295. >> among today's top stories, a media bidding war could be in the works. 21st century fox in talks with blackstone to make a joint offer for tribune media. the move by fox and blackstone could beat out another off by sinclair broadcasting group. the deadline for tribune is this week and under the terms of the deal, blackstone would contribute cash while 21st century fox would contribute 28 owned and

steve liesman joins us with more. an apolitical fed? >> not exactly.ls in speeches and interviews have been dropping comment, both positive and negative on the policy changes being debated in washington. minutes from the last fed meeting even showed them urging president trump and congress politely to pose new rules or get off the pot. here's what it looks like in fed speak. clarification of policy changes would remove one source of uncertainty for the economic outlook. here's dallas fed president robert kaplan from our "squawk box"ible ter view yesterday. >> the reality is some of the policies being discussed will help gdp, regulatory review. if it's thoughtfully done. potentially infrastructure spending if it's thoughtfully done could help. but some of them could hurt gdp growth. >> fed officials have made positive comments about plans for tax reform, especially corporate tax reform. but they're reluctant to go too far because they don't know how it will be paid for or structured. they like infrastructure spending and to a point they like deregulatio

also steve liesman is here.ou very much for joining us. >> so glad to be here. >> this is pretty intriguing stuff. yesterday we spoke to david novak who said that something like 62% or 72% of all employees -- 70% of employees are not engaged. >> yes. >> your finding is even more concerning. even if they're not engaged, they are ready to leave. what did you find -- >> yeah, so this year for the second time we launched research study called evolution of work. the key part of the methodology is we are asking employers and employees the same question. and check -- >> it's the newlywed game for jobs. >> and one of the questions we're asking, of course, are employees willing to look for other jobs? and what are employers thinking of their employees looking for other jobs. we found an interesting mismatch. about two-thirds of all employees really are open to switch their jobs. 27% are actively looking. but the rest, 40% are open to be approached. and employers actually have the idea that as the percentage of actively l

i'm becky quick along with joe kernen and steve liesman.es at this hour have been indicated higher, despite this news overnight from this terrorist attack. you can see things are stable here in the united states. they are in europe, as well. right now the dow futures are indicated higher once again. up by about 47 points. s&p futures up by 4. the nasdaq up by 10. if you take a look at what's been happening in the european markets you will see that in the uk, stocks are actually slightly higher. ftse is indicated up by better than 0.1%. the cac is indicated up by 0.7%. the dax indicated up by more than half a percent. >>> a developing story out of the united kingdom. 22 people killed in a suicide bomb attack in manchester after an ariana grande concert last night. willem marx joins us on the phone with more from manchester. willem, the choice of the -- you know, it's hard to make it any more kidious. you're talking between and teenagers. so just the choice is telling, isn't it, in terms of how evil this was? >> absolutely. you know, we've se

. >>> welcome back to "power lunch" i'm steve liesman here at stanford after the monetary policy conferencere we're starting to get a bit of information about the fed's plan to reduce the balance sheet. a couple fed officials here now, one here and on the east coast giving us a sign at how much they think the balance sheet should go down here. here's what st. louis fed president jim buller said a few moments ago. >> the size of the balance sheet is larger than we'd like so that's why i've been an advocate of beginning to shrink the balance sheet by ending the reinvestment policy. i think we can go down as to the as low as $2 trillion. just john williams the froze president talking in new york he says balance sheet with a two handle only it. they're not saying how fast they'll bo it but they're doing a lot of balance sheet reduction coming from the federal reserve in the months and probably years ahead. tyler. >> thank you very much steve. appreciate it. >> on the past eight sessions the s&p 500 has traded one of its tightest trading ranges ever. what is the lack boone the museum and what co

steve liesman joins us with the detail. >> not very recent for the economy.concept as much as that it could achieve the growth in the first quarter. growth in 2015 and 2016 just blow 2% you could see that. if you're watching on the left side of your screen there that's 2%. the budget wall street and economist think the decade will be much of the same. not the trump economy it's projected 3% growth. >> that is a pessimistic look at what the potential for this country and what this country's people is. we reject that pessimism and say you know what, we probably should have done in and assumed 3.5 or 4% growth because that would be aggressive. 3% growth is just getting back to normal. >> many economist see the long-term growth rate -- there are plenty of people on the sidelines who can come back to work and work more. if that's the case 3% probably still on the high side but maybe within reach, if it's wrong the president's tax cuts without growth could mean bigger deficits. >> steve, listened to that earlier there was a line where he said if -- growth is 9% you

our steve liesman was there. he joins us here with more. >> wide ranging and interesting interview. ben bernanke just out with the paper back edition of his book "courage to act." expressed his doubts president trump's tax plan can make the economy hit 3% growth and sustain it. >> on a sustained basis, it's certainly possible but not that likely. i think if there's a big tax cut that lowers tack rates you might have a bump because of increased demand. >> it gets you over 3 ps? >> probably not. i would take the under on that. >> bernanke agreed it's useful to try some of the things like spur business invest many, spend on infrastructure, make the tax system and the economy more efficient. he says the administration should focus on policies that boost productivity growth. bernanke is generally upbeat about the fed's ability to ease from the monetary policy saying its critics have been proven wrong in the past. >> it wasn't long ago people on shows like this were saying we would have super inflation and dollar collapse and all kinds of terrible things were going to come. it's gone pret

steve liesman joins us with a report showing household debt. >> maybe a sign of confidence, maybe notthe new york federal reserve has a report today that shows household debt across the nation hit a dubious milestone. we finally surpassed the peak of 2008. $12.7 trillion of debt for the households. while there are some worries debt is different from '08 and that led to a financial panic. so here is what we know. mortgage and auto debt and student loan debt were all higher. debt per capita well below the peak and default rates remain low right now. larry is emphatically gesturing. mortgage debt has fall en by fie percentage points in '08 in part because fewer own homes or have defaulted on debt. auto loans up three percentage points. student loans up six percentage points. another gesticulation by layrry. 90 days delinquent remains well below the level of '08 and substantially below the worst levels. >> and a share of income way down. >> way down. >> i will say one thing -- >> there's confidence and prudence at the same time. >> one thing we do see on the data, larry, only the most cre

steve liesman is also with us. michael thanks for joining us.ught-provoking read it's different than what's here. i want to believe you're right not any of us want a robot to take our point. i guess the beef i'd have with you are you substituting productivity for jobs? do you think it'll be an overall positive for the american worker? >> i think it'll be an overall positive for jobs. my keg line now is don't fear the robots. what we've seep is the industry that had more productivity growth which is digital industries are also the ones that have had more job growth. they have had more job growth, wage growth j really at this point now what the economy is suffering from is a profound productivity in the physical industries. the physical industries are the ones that would benefit more from robots. what we'd see is prices would drop, we'd have more demand and more demand for workers as well. this is the way the economy has been working. there's no sense in which robots have been taking jobs overall, wee need more productivity and more good jobs too.

steve liesman joins us with more. >> thanks very much.president robert kaplan says he has his doubts over whether or not we could hit that 3% growth rate. he says productivity along with labor force growth rates determine what the growth rate can be in the economy, and he says some trump policy proposed could be helpful and some like trade and immigration could hurt, most of all they don't exist yet. >> i don't know what's going to be enacted and as i just said, some of the things that could be enacted may actually be negative for gdp growth. some could be positive and i want to wait and see what unfolds and i think the better bet is to stick with a base case forecast. >> the base case is for 2% growth in the years ahead. it's also for two more rate hikes this year and beginning to reduce the balance sheet but he's concerned about the recent weakness in inflation data but he thinks they will strengthen out in the months ahead and added the current level of the stock market is not a major cause of concern. >> my own view if there were some

. >>> bring in steve liesman. on the one hand, three big cities say, see a softening.u still have modest to moderate wage growth. >> i don't like the consumer spending part of this. if you had come to me, some attention had to come me before the 2:00 break. i was going to say, looking in the beige book for inflation. we don't appear to have found it. >> even when it comes to wage growth? >> even wage growth. little change in recent trend of modest to moderate wage growth. next one after that, pricing pressure, little changed. modest increases in most areas. yesterday the fed governor posed the puzzle of the moment, which is this idea, how is it that the unemployment rate is so low and the labor market seems to be tight. by the way, affirmed here, yet we're not seeing pricing pressure around not seeing it in wages. a bump up, a little, the story a while. now wages flat again. >> my question is, they seemed hellbent on raising a certain number of times. as long as they continue to see wage growth rise, isn't that an offset to any softening they might see in the cities? >

steve liesman is at federal reserve building in washington with those numbers. w did they look, steve? >> pretty interesting, bill. minutes of the meeting affirming market expectations for a june rate hike, with most at the meeting saying a rate hike would "soon be appropriate" if the economy rebounds as expected. now, there were some concerns and officials at the meeting said they wanted evidence that the economy was indeed bouncing back from a weak first quarter before they hiked again. the economy grew less than a percent in the first quarter but it is expected to rebound with a 3% number or so this quarter. there also was some concern about recent soft inflation readings and deep uncertainty over timing of any fiscal stimulus from the white house and congress. in fact, suggested a number of participants as the committee took a general swipe at washington with saying clarification of prospective fiscal and ot policy changes would remove one source of uncertainty for the economic outlook. in other words yellen to trump, get on with it. on the other hand, most s

thank you courtney reagan, steve liesman talking retail. >>> we do have breaking news this afternoon, there are reports of massive ransom wear attacks sweeping across asia. we had hospitals in britain turning some people away. the attack used so much leech tool that was developed by the n surgical a. >> joining us on the phone, nicole pearl roth rote this story for first time. now we're learning the person trarts are using tool that is may have come from the n s a leeks a couple months ago right? >> that's right. it was described tom by security experts the red attack. and basically what's happening is we've seen a couple cases over the last must months of ransom ware, mal ware that takes over your data until you pay a ransom. pop up in a few hospitals and even in a hotel in austria i believe. so this is the first situation where spreading across the globe. it's 12 countries, hitting hospitals in the u.k., and part of the way it was able to spread inside these organizations was through a particular flaw in microsoft's window servers, that was part of the nsa tool kit that was leak ed

> well, look, one of the things that happened i think there was a misconception, i bumped into steve liesmanwe talked about how the statement from the fed says, look, don't worry about the first quarter. we are going to be accelerating. that was kind of an anomaly. i have seen it from some companies, obviously the international companies. not seeing it from the domestics, but i really want to go back to matthew boss' call that february was the trough for bricks and mortar retailer. the consumer is doing better. housing has levelled off and autos is the weak part. but i get it. they can come up with a thesis if tomorrow's number is strong. boy, they better be banking on that because they need that to keep their credibility frankly. >> speaking of some retail, square, 8 cents loss is about half of the expected loss. they raised their guide, payment up by a third. been a good week for dorsey when you put square and twitter together. >> i bumped into sara, she's the cfo and the spokesperson i loved the square quarter. they are really starting to ramp with merchants. they have this great business

steve liesman has that report. >> michael, good afternoon. saying the economy continues to grow modestly, but some signs of weakness in consumer spending but also worry about economic policy in washington with several fed banks saying their context report is affecting business. here are example also. in boston they say manufacturers say policy uncertainty is holding back spending among consumers. dallas says some firms see uncertainty about trade policy affecting business. san francisco, immigration policy changes, in fact farmer high school to throw away some parts of the harvest because they couldn't get workers. in st. louis, hospitals lay-offs citing. it remains to be seen how much economic impact this amounts to. fed officials said more uncertainty about the direction of taxes or more uncertainty and other fiscal policy changes could help clear up the outlook, guys. we will ask these questions and more in the exclusive interview we have with fed governor jay powell at 10:00 a.m. tomorrow, guys. >> in spite of that was the overall tone of