steve liesman asked a very important question steve?in hassett said this, great point, profits during this recovery have increased at 11% at an annual rate, very healthy. unfortunately, unlike almost every other recovery, wages have barely increased that difference is a big difference >> i agree with that >> here's the thing -- here's some reasons why here's some reasons why. first of all, tax avoidance has pushed so many of those profits offshore, overseas, and are not available for either investments or wages that's a fact. >> i agree >> or we've had the inversion. that's taken a big chunk out of it and in terms of the tax rate, steve, the rate on capital, right, this is about the cost of capital or the cost of investment after tax well, our after tax investment cost is way too low. compared to everywhere else in the world, virtually so what we're trying to do is get the companies to stay home, secondly, take the money at home and invest it. we haven't had any capital investment in 15 years then you'll see the wages move in accordance

bob, thanks for taking the time. >> good to be here >> all right, you heard steve liesman steve liesman nicely wrapping up the jobs report. i want to dig down in that one area last month jobs report was a bit dismal due to the hurricane, but the wage component month over month shouldn't have been that affected by weather issues and it was up .5 today it was goose egg, zero year over year last month was 2.9. now we're back to the 2.4 area do you have quick general thoughts on the one-time pop in wages? was it a one time off? >> no. i think there will be more good news on the wage front if you say high wages are good, especially here in northern california when we will have to rebuild from all the fires obviously, there's a delayed response people can't be put to work immediately. it will take half a year, maybe even a year until all the permits are there. that's the problem with slow government, but there will be increases in wages very strong, especially up in northern california. >> i'd like to hear that, but don't like to hear it based on the broken window kind of economic theory. i'd

steve liesman reports on today's se >> reporter: the more fed chairman nominee jerome powell spoke at his confirmation hearin today, the more the stock market seemed to like what it heard. the 64-year-old fed governor was named by president trump to replace fed chair janet yellen. the more he spoke, the more the s&p seemed to accelerate to the upside, as he indicated he would continue with those gradual policies of yellen. >> we have low unemployment, 4.1% unemployment. we've got strong growth. the very low settings of interest rates that were appropriate during the crisis and after to support economic activity are no longer appropriate. and that's where we're raising interest rates now on a gradual path. i expect that that will continue. >> reporter: powell expressed some belief that the jobs market could run further without sparking inflation and that low inflation allows the fed to keep moving rates up just gradually. bank stocks rallies as the if he had chair nominee supported regulate relie relief for banks especially small to mid-size banks. powell is headed to confirmation firs

steve liesman tells us where he is and where he stands. >> reporter: president donald trump in a rose garden ceremony nominated jerome powell to be the 16th chairman of the federal reserve bank, by far the most important economic nomination of the president's term to date. >> he's strong. he's committed. he's smart. and if he is confirmed by the senate, jay will put his considerable talents and experience to work, leading our nation's independent central bank, which has the critical responsibility to set monetary policy and monetary -- our banking system as whole. >> reporter: powell, a fed governor since 2012, previously amassed a fortune working as an investment banker. he's the first chairman not to hold a ph.d. in economics since paul vcker left in 1987. powell praised outgoing fed chair janet yellen but stopped short of explicitly pledging to continue her policies. >> i've had the distinct privilege to serve under chair bernanke and chair yellen who guided the currency through difficult times. monetary policies matter for american families and communities. i share that sense of m

i'm steve liesman. >> jack van der hei is our guest. thanks for being here, jack. there are some parameters that you've identified foth >> well, we've been studying national retirement income inadequacy now for many years. we built a model in 2003. every ye wie rerun it to see what percentage of people who retire will have sufficient retireme income. the number is perhaps strikingly low in many cases. it's overall about 57%. but the thing that you have to keep in mind is that we're really telling a tale of two different populations. we have those people who are fortunate enough to work for employers who have employer-sponsored ret plans. and unfortunately those that don't. the probability of having adequate retirement income is over 50% higher for those people who are working for employers who have those particular types of retirement plans. >> i have to say i learned something. social security, if you wait until you're 70 to begin drawing rather than waiting when you're first eligible, your benefits go up by 76%, and the trick is waiting that long, right? >> right

our senior economics reporter steve liesman is live there at the white house. you saw earlier. us here at the new york stock exchange, larry

he doesn't think the fed ought to do a lot of tinkering with the economy >> steve, thank you, steve liesmann washington, d.c., what does this mean for the markets? this is the consensus view in terms of fed picks >> steve is very plugged in, great to get that insight. you said it on the lead-in to the lasting block, this is the most important decision that donald trump has made yet. if that's the case, there should be some fear no matter what, changing continuity at the fed is something that the market should not be blase about i agree, this gentleman has proven to be as dovish as the status quo, that's ultimately good i want the fed to be independent, not a puppet of donald trump people are too complacent on the impact of the fed. a number this morning showed there is an enormous amount of pressure in terms of labor the job market is something they've missed pce is not a good gauge of inflation. >> i'm always surprised how complacent everybody is on the fed, considering that they're embarking on getting off the easy money path, what would go wrong, right a lot could go wrong >> inflation c

steve liesman is monitoring all of that action and joins us now with more. eve who is on tap and what you are listening for? >> you have kuroda from japan, draghi from europe, yellen from the u.s. and carney from the uk. earlier today, charlie evans speaking said the fed should prepare for the next crisis now. said it's worth considering things like price level targeting. in other words, say we're going to hit this level and we'll stick with it. we'll keep policy low until we hit that target. saying the fed should prepare the public for unconventional policies in unconventional times. these are four central bankers on the podium with different policies take a quick look at their balance sheets relative to their gdp. japan has done much more in the way of quantitative easing their balance sheet is 95% of their gdp. the eurozone, 39%. both the two on the left are rising as is the one on the right, the uk, the u.s. is shrinking. i don't know if we have time to look at all the global monetary policies and where they are, the u.s. is in a different place on the le

steve liesman has the details. >> reporter: fed officials continue to grapple with the conflict of inflationt's too low and asset prices that to some on the fed are worrisomely high minutes of the october meeting show the fed is on track to hike rates in december an additional quarter point but also showed a broad inflation debate with a few showing the fed should not hike until u.s. inflation is convincingly on track to the 2% target fed chair janet yellen earlier this week provided a curtain raiser on the broad-based concerns at the fed. >> we expect it to move back up over the next year or two. but i will say, i'm very uncertain about this my colleagues and i are not certain that it is transitory and that we are monitoring inflation very closely and i'll go back to what i said earlier about keeping an open mind and not assuming you have a monopoly on truth. there may be something more endemic or long lasting here >> from the other side, arguing for higher rates, the minutes show many fed officials think the economy is operating at or above the employment rate that could spark inflation. t

so how did jay powell do steve liesman joins us with his take >> the stock market appeared to give theominee two thumbs up, mostly rallying while jay powell talked, and a debate among economists about how dovish he really was powell passed his first test by successfully dancing around the political minefield of his views on the tax cut bill before congress >> don't you have a responsibility, in an ongoing way, to talk about the modeling you've done that what this will mean to the fiscal situation of our country in years ahead >> i think our responsibility is to carry out the mandate you've given us which is to achieve stable prices and maximum employment and look after the financial stability. >> we rely on you for data all the time >> i respectfully don't think you rely on us to score fiscal proposals. that's not our role. >> score that one for powell he indicated he would continue the gradual policies of the janet yellen fed, both in rebucing the balance sheet and raising rates gradually. he even seemed dovish on employment, suggesting there was still slack in the labor market that w

steve liesman is back with us by what we know of potential impact on wages >> this is a tricky one. claim of the administrations, it is a subject of much controversy among economists that's a $200 million estimated by the white house of a minimum of $550 billion boost in american wages chl second very few ceos stepping up and the corporate tax cuts will leave them to boost investment corporate taxes are one factor behind the decision to invest in one country or another interest rates also play a big role capital is mobile and labor? mostly not mobile. standard economic stetheory say the factor that bears the burden but, how much it helps, that's where the dispute is the government estimated of a quarter. this administration comes along and says the figure is much higher in our administration is the following graphic. so take a look, this shows wage gains in countries with low corporate taxes and against those with high corporate taxes. seems like a slam dunk until you look at what countries are in there. po poland and czech republic is in there. they do have lower corporate tax rate

let's get to steve liesman with the details. >> thank you very much jerome powell, the fed chairman nominee, nominated earlier this month by president trump, will say in testimony before senate banking tomorrow he expects rates to rise, quote, somewhat further and the balance sheet to gradually shrink he pledges to preserve the fed's independent nonpartisan status and says transparency and accountability must accompany that fed independence. that's a nod to some critics, particularly from the republican party in the senate and in congress he says he will look for ways to enhance that transparency and accountability but goes on to say, i am a strong supporter of current fed structure. that's a bit of pushback on some we want to change that structure in congress. goes on to say, his aim or the aim of the fed is to sustain a strong jobs market and will have gradually rising inflation the fed must retain the flexibility to adjust policies another bit of a pushback against those who want to do a monetary policy rule here is a couple of quotes, we must be prepared to respond with appropriate forc

let's get to breaking news with steve liesman. >> thanks very much. mandy crowell, the new vice chair at the federal reserve said digital currencies can pose a potential risk to the financial system if they become used widely. he does mention bitcoin in his speech he said they are a niche product and do not pose very much risk at the current level of use. his concern is if they become more widely used, they will have trouble in times of stress, specifically he's concerned about liquidity of digital currencies and having liquidity problems he said these currencies are not backed by secure assets and have no intrinsic value he said these currencies are not the liability of any institution at all he goes on to urge caution is something that was mentioned yesterday by the new york fed president on the central bank issuing a digital currency he seems to prefer allowing the private sector to lead the way on this issue. he thinks banks ought to get together and offer instant payment system amongst themselves rather than just clients within banks he said the

for "nightly business repor i'm steve liesman. >>> the government report on gdp also showed that corporate profits are near an all-time high. adjusted earnings rose more than 4% in the third quarter to an annual rate of more than $2 trillion. that's just slightly below the peak reported back in 2014. financial services companies accounted for two-thirds of the increase. >>> home sales bounced back in october, pending home sales, which are contracts signed but not yet closed, rose thanks to pent-up demand from hurricanes in the south. but sales in the rest of the nation were not as strong as record low supply pushed home prices higher, especially where demand is the greatest. diana olic >> reporter: buyers came back to the housing market in october. but not everywhere. it was mostly in the south, where they've been sidelined during two major hurricanes. the northeast and midwest saw small gains. but the west did not. and that's because supply is tightest in the west and prices are high. inventory is at the lowest since 1991 nationwide. that's when the realtors started tracking it. and price

not too shabby >> steve liesman in washington, going to be a crazy back half of the week thank you, steve get to sue herera in the meantime for a quick news update >> good morning, carl. good morning, everyone here's what's happening at this hour the new york rangers and the las vegas kings stood with fans for a moment of silence at madison square garden last night to remember the victims of yesterday's terror attack as well as last month's mass shooting on the las vegas strip. >> the cost of california's recent deadly wildfires now topping $3 billion that is triple the amount previously thought the fires killed 40 people and destroyed nearly 6,000 structures >> facebook stepping up its security efforts saying it will double its 10,000-person security workforce by the end of next year. facebook just admitted 126 million users nay have been exposed to content posted by russia-based operatives in the last few years >> high school students in chicago's south side got a big surprise when the former first lady michelle obama and prince harry popped in for a visit. hyde park academy is located

for "nightly business report, i'm steve liesman. >>> meantime, corporate america's decisionmakers are feeling more optimistic about the economy. and there are a few issues in particular that are top of mind. jackie deangelis surveyed the nation's chief financial officers and got some intere >> reporter: chief financial officers are more than just number crunchers. they make some of the most important decisions in the business community. from hiring to pay raises to investment. cnbc's global cfo council represents some of the largest public and private companies in the world, collectively managing more than $4 trillion in market capitalization across a numof s. we asked them a lot of questions. the takeaway is they're optimistic about the future. here's why. tax reform. the majority answered that they think the proposed plans making their way through congress will create jobs and stimulate growth, although they don't expect their effective tax rate next year to be lower than this year's. about a third say tax reform will increase wages, although others weren't sure. they do have plans

steve liesman joins us what are they talking about? >> some guys are -- i'm going to refute them more than give them voice here, if you don't mind. give me a second economists think they see slowing momentum i don't agree. a massive 261,000 jobs created in october folks, you don't get to say this often. this missed expectations economists looking for a bigger, 350,000, jobs as a bounceback from the hurricane hobbled number from september. my take is this. three hurricanes affecting two of the nation's biggest states and puerto rico. how could anyone either guesstimate how many jobs were lost or how many would come back this month it was always a fool's errand to try to get this right. a bigger fool's errand to try to find a trend in it payroll is up 261. they brought back 90,000 jobs, added revisions to august, september. average hourly wages unchanged, but it was really affected at the half point labor force participation, 62.7%. although the headline figure disappointed the october jobs report is strong enough to lock in a fed rate h

steve liesman asked the experts. >> reporter: expecting a statement tomorrow from the federal reserve, the cc fed survey shows 98% of our respondents expect rates to stay unchanged. 96% say there will be a third rate hike coming in december, a bit higher than the mark prices. three rate hikes are expected in 2018. let's see what that does for the outlook for rates in the long run. there's the one hike for 2017, 1.4. there's three more hikes built in for 2018. and then just two more, leading to a very low long run rate of 2.9%. that's the bottom of the cycle for many other times we've had the fed hiking and raising rates. let's look at the outlook for stocks. just very much the gains for the year already priced to just 1.7% geared to an s&p level of 2617. going up next year to 2700 for a gain from 2017 to 2018. we asked about the corporate tax cut the president proposed. is 20% the right number? 58% of our respondents say yes, it is, 12% want it lower. but there is one big disagreement they have with how this is being proposed. we asked should tax cuts or tax reform be did he have s ne

steve liesman joins us with more on that. ning again, steve. >> good morning, becky janet yellen speaking with three other global central bankers at a conference in frankfurt saying that price to earnings ratio on stocks are at the high end of historical changes she was repeating there a staff evaluation that was made public not too long ago she said ultimately, they judge the financial stability in the system to be quite moderate. >> in recent months we have communicated in the minutes staff's evaluations that asset prices are elevated. that means that price earnings type ratios are at the high end of their historical ranges we are in a low interest rate environment. >> you can see her on the stage with mario draghi from the ecb, mark carney from the bank of england, along with mr. corrota from the bank of japan dr draghi said regulation are what the central bankers called macroregulation not monetary policy should address the asset prices also, yellen earlier had criticized some fed merngzmbers citing the failure to explain

not anticipated there will be any big problems there. >> steve liesman is back with us along with our panel steve? is. >> reporter: well, it was interesting to hear jay powell, jerome powell talk about the idea of making change in concert with colleagues, praising yellen, praising bernanke, connecting himself and his forthcoming tenureship with their prior tenureship and the policies they made, again. he praised those policies breaking a bit as we talked about with republicans also the president made clear, i think, in his statements what attracted him to powell. it was the combination of three things prior government experience, prior business experience, as well as experience at the federal reserve. so those three things, it was interesting to hear him connect to william chesney martin -- >> almost 20 years. >> chairman. 20 years ending in the 1970s who also was not an economist and also had business experience. >> i was just reading up on him after he mentioned him i hadn't thought of it in a while, larry served from 1951 -- he was nominated by truman and served until 1970 and rich

. >>> steve liesman is standing by with news alert. >> reporter: randy ambassad rans he made his first remark as a member of the fed governor every aspect of it and a fresh look at everything stress test and supervision and living will and some of the searches at capitol that are out there. here is what he said about stress tests and transparencies. >> with respect to all of the regulatory standards, stress testings and other capital standards that we can be simpler and simpler in the overall capital and regulatory framework so as we take that fresh look at where we stand, those are, you know, those principles and simp. >> this is relatively good news for the banks in the idea that you have a guy in charge of bank supervision on the feds and a bit more similar thet i thiympac we can talk about some serious reforming of the dodd frank rule in favors of the bank. >> steve liesman, we got first comment from randy quarles >> still ahead, other travels and stocks are getting crushed plus, new details on the saudi shake up taking another sca

steve liesman joins us now with more he's dovish, but maybe even more inclined to deregulate the financialector, steve? is that why? why not just leave her in. that would be the reason >> i think that's the question >> i don't think he's more dovish than yellen what does this mean for monetary policy and bank regulation let's talk about bank regulation many believe he will bring a lighter touch. >> the post-crisis reform program has been mostly completed. and has mostly been successful it's our obligation now to look back at it and say which are redundant and which should be protected down to every level, but there will be some adjustments. >> powell looks to follow the current framework of gradual hikes. he does not share the republican criticism over the fed's post-crisis easing policy. >> after a tumultuous decade, the economy is close to full employment and price stability the problems that some commentators predicted have not come to pass accommodative policy did not generate high inflation or excessive credit growth, but returned full employment and returned inflation to the 2% goal

our steve liesman reports that dudley is expected to announce this week that he will be retiring next spring or summer >> amazon is offering discounts. the sellers would still get full price with amazon absorbing the discount as it moves aggressively to try and win more sales. >>> and a rare corporate partnership is in the works. the "wall street journal" reporting that chip making rivals intel and advanced microdevices are timing up on a chip that would combine an intel processor with an amd graphics chip that would normally never happen, but in this case they are teaming up to go against rival offerings from nvidea. >>> a corruption crackdown, at least as it's being billed in saudi arabia, is another story we've been reporting on this morning. billionaire saudi prince was arrested with several other saudi royals and government ministers. again, this was billed as part of a sweeping anti-corruption crackdown by saudi crown prince. joining us right now to talk more about it and how to really read the whole situation is thomas lipman. he is an adjunct scholar this story was a confusing

let's get to cnbc economics reporter steve liesman on what she's saying steve. >> hey, jon. janet yellen and valedictory being praised, vocal disagreements on both sides as often. want tax cut proposal which she would only do to the point current taxes need fixes and capital is a good idea for the economy. democrats want to continue dodd/frank which she is mostly doing, saying it would be a mistake to roll them back. she does support easing them for small and mid-sized banks. economic committee on why interest rates should continue rising. >> we do think it's important to gradually move our policy rate toward what i'll call a neutral level which would be consistent with sustainably strong labor market conditions. we want to do this gradually if we allow the economy to overheat, we could be faced with a situation where we might have to rapidly raise rates and throw the economy into a recession. >> on the economy yellen noted it seems to be taking up steam but she said she hadn't seen a lot of ways for inflationary pressure if there's a difference if fed chair nominee powell a

so i just don't see it. >> let's go down to steve liesman. steve?> tyler, i think what you are alluding to is setting up for the tension that will come after this new leadership. we know that the leadership of the fed and that's the tension over 2018. i talked about this in the 1:00 hour there is a gap between the market and the fed i don't expect with the new fed leadership that the idea of where the forecast of where the fed is going to change very much there were three rate hikes of the average fed official and that's the general idea bringing up the funds rate to 2.1%, but only one rate hike is sort of baked in for next year and somewhere along the line something's got to give. we're 50 basis points apart there and the fed maybe took a baby step here towards kind of trying to nudge the market notice what it said here this is the most important part of the statement, to my opinion. economic activity has been rising at a solid rate despite hurricane-related disruptions. it kind of asks you to take out the hurricane-related disruptions saying you k

his confirmation testimony he said he pledged to respond decisively to any new economic crisis steve liesman has more >> reporter: jerome powell nominated earlier this month by trump will say in testimony before senate testimony that he expects rates to rise somewhat further and the balance sheet to gladly shrink. pledges to preserve the fed's independent nonpat srtisan stat. he said he will lock fok for a y to have more transparency. he goes on to say his aim or the aim of the fed is to sustain a strong jobs market and gradually rising inflation the fed must retain flexibility to adjust possibilities, another pushback to those who want to do a monetary policy rule there is some concern about the powers taken away from the fed in the dodd-frank reform he says the financial system is stronger, more resilient than a decade ago and supports the higher capital levels of banks, but says we will continue to consider appropriate ways to ease regulatory burdens while sprefi i preser ser sprefing co preserving core reform >> citadel's ceo ken griffin has concerns about bitcoin cnbc spoke to griffin a

senators the status quo is likely to remain presuming he is confirmed to take over from janet yellen steve liesman sends this report. >> reporter: the more the fed chairman nominee jay powell spoke, it seemed the more the market liked what it heard the fed governor appointed by trump to replace janet yellen spoke about his views on monetary policy and bank regulation what did he say? well, the first thing he did was dance around the minefield of the current tax bill before congress that's one area that could derail the confirmation. here's what democra democratic r asked him about the 1 trillion bill for the new tax cut >> i think our responsibility is to carry out the mandate you have given us, which is to maintain stable prices and -- >> we rely on you for data all the time i respectfully don't think you rely on us to score fiscal proposals. that's not really our role >> reporter: more importantly powell indicated he would continue the gradual policies of janet yellen, both in reducing the balance sheet and in raising rates. he even seemed dovish on the outlook for employment and the effect on i

yellen spoke in what is likely her final testimony on capitol hill as head of the central bank steve liesman has the story. >> reporter: the u.s. economy got a better report card for the third quarter than the one first sent out the government revised up growth to 3.3% from 3%, it's the best economic showing since 2014, and marks the second quarter in a row of at least 3% growth. the cnbc rapid update estimate for the fourth quarter shows forecasters expect the economy to remain strong in this quarter as well. fed chair janet yellen, in what was likely her final testimony before congress, said today it looks like the economy is hitting another year >> the economic expansion is increasingly broad based across sectors as well as across much of the global economy. i expect that with gradual adjustments in the stance of monetary policy, the economy will continue to expand and the job market will strengthen somewhat further, supporting faster growth and wages and incomes. >> reporter: yellen's big concern is that the economy has yet to hit the 2% inflation goal, bu she sees early signs that wages

let's bring in senior economics reporter steve liesman your take?think it's interesting that the beige book this month and last month has not picked up the stronger growth we have. we have a full percentage point extra out there, if you figure and still believe that the great colleague over here larry kudlow may not believe, but it's general consensus that the underlying growth rates's 1.9 and 1.8. we did a 3.3 upgraded and the cnbc rapid update is at 2.7 and we did a 3 in the second quarter and that's better than modest to moderate i don't know why they are not picking that up. >> usually they're pretty good at that and sometimes on the forefront and it's also a good place for the beige book to get an understanding of the mysteries out there because you get it from a real business level so the price pressures are something worth noting that hampton highlighted in the beige book, the idea that they're growing price pressures out there and wages are still moderate and it's not too much of a concern and janet yellen would certainly get access to the b

let's get to steve liesman about what this means for policy going forward. >> president trump tapping candidate here for the federal reserve board of governors, one who does not easily qualify as a hawk or dove he nominated marvin goodfriend to one of the vacant spots on the fed. he's a member of the shadow group committee, a group normally critical of fed policy. he wrote a landmark paper in the mid 1980s that upset the status quo by being critical of fed secrecy. then chair paul volcker did not like the paper but it laid the ground work for a big change in fed transparency colleagues say goodfriend will offer essential historical perspective and bring balance sheet expertise to the fed, and that will be headed by noneconomist fed chair jay powell just a couple years ago in jackson hole, he offered a paper arguing in favor of using negative interest rates to combat inflation, and i quote removing zero interest bound is nothing more than the sensible application of monetary economics. credibility against inflation is tied to credible against deflation. goodfriend will also differ with

let's bring in steve liesman to discuss that that's what the reports are indicating i know people arealking about monetary policy. he seems market friendly i want to know why president trump is breaking with what decades long tradition and not reappointing janet yellen. >> maybe we'll get a chance to ask him that question in the rose garden today. it's a good one and one people are asking two other questions are what is the jay powell chair meaning for monetary policy and bank regulation on regulation, many think he'll bring a lighter touch to the table. here is he in june in which he generally supports the post-crisis framework but calls for adjustments. the post-crisis reform program has been mostly completed and has been mostly successful i think it's our obligation now as we reach completion of it to look back over it and ask what aspects of it may be redundant or inefficient but there's going to be some adjustments that's different from what president trump said who said he will do a big number on dodd-frank on monetary policy, powell looks set to generally follow the framework l

our senior economics reporter steve liesman has a look at the person considered the front runner for the job steve? >> yeah, kelly, if all the kings sources and all the king's men and women are right, this is the eve before president donald trump announces tomorrow his pick for fed chair, and it will be, so they say, fed govern jerome, or jay, powell the 64-year-old native of washington, d.c. is a republican, appointed to the fed in 2012 by president obama at the fed, he's overseen some changes, intricate changes to markets in the wake of the financial crisis he's a former partner at the private equity firm where he amassed a small fortunate that would make him oneof the richest fed chairs ever. he has said he's in favor of rolling some of them back. here's what he said about some other key monetary policy issues over the years >> while monetary policy can contribute to growth by supporting a durable expansion in a context of price stability, it cannot reliably effect the long run, sustainable level of growth inflation is a little below target it's kind of a mystery you would have exp

our senior economics reporter steve liesman listening and watching all of this steve no, reason to believe that jay powell won't be confirmed. also from what we heard today, no reason to believe it's going to be any dramatic shift in policy from his predecessor. >> i think that's the key right there, scott it sounds like he's on track to maintain the basic policies of the janet yellen fed if and when he's confirmed, and i think that that will probably be the case. he went on to say, on track for the december rate hike i want to talk about full employment and he did say, quote, we can push harder on maximum employment and we're doing that i think unemployment will go below 4% so he's kind of on the dovish side when it comes to the issue of unemployment, and he talked a bit about inflation i don't know if they have that bite in the back might be worth listening to what he said about the issue of low inflation. >> this year came and we have -- we have actually stronger growth we have a healthy labor market, but to my surprise, to all of our surprise, i believe inflation readings started to co

steve liesman joins us with some of the comments from yellen, draghi, and carney >> yes, and curoto fromapan. yellen saying price ratios are alt the high end of historical ranges but the risk remains quite moderate >> in recent months, we have communicated in the minutes staff's evaluations that asset prices are elevated. that means that price earnings type ratios are at the high end of their historical ranges we are in a low-interest rate environment, and that may be one that's likely to prevail for a long time. >> draghi saying he saw some local cases where asset prices were out of line, but not in general. a general idea for dealing with them is regulation, not policy to address those price changes or those price levels. also on the podium, japan's governor, england governor mark carney carney sees an economic impact from brexit in terms of incomes and supply to the overall economy, and that will have an effect on policy kuroda saying prices are slowly picking up in japan. banks are all in somewhat different places britain recently raised its rates but still expanded the blassheet. ec

. >> let's jump to steve liesman with a news may left on the fed sglul hey, steve a little bit more on this idea of mohamed el-erian being considered for the vice chair job. indeed that's true and a lot of people, just going to put together their list, and it hey not be an announcement on the vice chair, trying to get a good fit with the chair, taking their time on this, looking for somebody specializing in monetary policy after having named james powell as chair who has more expertise in the banking regulatory side. this is an ongoing story right now, scott, but i don't think they are anywhere close to announcing anybody but el-erian is one of the people perhaps under consideration right now. >> interesting steve, thanks so much. >>> here's what else is coming up on "the halftime report." >>> next up, the one analyst who just cut his rating on a hoy-flying stock that may drive the battery-powered car market. >>> before the break, kensho says look for a russell comeback our data partners show after the small caps underperformed the s&p 500 by 2% after q3 earnings season, it stages a tu

the s&p and nasdaq fell into negative territory and that's where we stand right now let's get to steve liesman with breaking news. >> dallas fed president dallas kaplan making strong comments about market valuations and is increasingly cognizant of financial imbalances which can threaten the sustainability of the expansion. more on what that means for policy for him in a second one, the stock market capitalization is now the highest relative to gdp since 1999 and 2000 and commercial real estate and other markets are, quote, notably extended and also notes it's extraordinarily unusual to go one year without a 3% correction and margin debt is now at record less i've looked back and not seen him having said these sorts of things in the past now, all that have said, he sports raising rates in a gradual patient matter doesn't seem to change his immediate outlook on policy, and that's because he supports what he calls strong macro prow dengs regulatory bank policies, and i'll explain what that means that means using regulation and supervision to keep the banks from being overly extended and overly l

inflation might not return to the fed target for quite a long time let's bring in economics report steve liesman. she said it will pick up next year or a couple of years but she's not all that sure. >> right that was the -- it was the back end of that quote that really represented a change, melissa, you're right she continues with the sort of general consensus that we're going to head back to the 2% target, but she's saying now she's not so sure that it's also transitory, and this to me raises the question for next tuesday. what is next tuesday, you wonder >> it's a fed meeting, isn't it? >> next tuesday. >> no. next tuesday going once, twice, gone, powell's confirmation hearing. >> oh, hey, hey, hey. >> thank, steve. >> he'll be on the hot seat. look alternate they were ready with the baseball card on that. >> nice. >> they knew in the back but not on the table here. >> let's go on i think next week inflation is going to be question number one for powell he did tell me in an august interview that we did that low inflation is a bit of a mystery, but whether or not he's willing to go as far as ye

the best performing sector steve liesman is here. >> it's a good word.ings happening. there was the tax cuts and beginning by committee there was a brexit deal sort of. there was also a engineer opjer showing markets that he is the fed chair. continuing on the current track of monetary policy, but support more deregulation in the banks >> honestly i can't really think of a place where we are lacking an important rule. i think we filled out the rules that we need, and it's a question now of dealing with things from a supervisory standpoint >> so of all the rules the fed has issued during your time here, you've been here for five years, on capital and leverage, on liquidity, on the stress tests, you don't think a single one should be made tougher >> honestly, senator, i think they're tough enough >> well, okay. got to say this worries me >> didn't worry stocks they were higher especially regional bank stocks. they took off as powell indicated support for lifting regulations. especially on small and medium size banks powell sounded a bit dovish on monetary

. >> steve liesman, 3% in the next two years?i think it's probably about right if all goes well, and i think it's okay. >> because the economy would be -- >> i think the stock market -- i economy would be in a good place. i think the stock market has been inordinately benefitting from rates that are lower than they probably should be given the economy, the stock market is forecasting. right? i think there is a little gap here between when markets -- >> it's called goldilocks, right? >> it's a little goldilocks -- >> i don't think that's right. i think that that is a stretch i think that you would be good to do 2.5. i think that's where we're going to be. >> that's it nothing for tax cuts >> i think you are getting two or three tenths for tax cuts, and i think you're getting two or three for foreign growth, and i think that's about it. i think there's a potential except we're having -- we have an argument with people like -- it's like arguing with a cheerleader -- it's like a statistician arguing with a cheerleader. you think we c

danielle di martino booth and cnbc contributor ron insana is with us and senior economics reporter steve liesmant with you. your take on the headlines >> what we're hearing is persistent conflict at the federal reserve. on the one hand you have this issue of inflation continuing to run below the fed's target and the belief that it's no longer transitory fed chair janet yellen made a change in her outlook saying she's not certain anymore that this is transitory is this concern for imbalances and the need to raise rates and i would say from these minutes, it's continuing as believed bied market with the december rate hike and you start to debate 2018 which on the one hand you have the federal reserve saying three hikes and the market's priced in one, maybe another half of one so far >> daniel, one of the lines is fed members want to wait until inflation is concerned >> i don't think so. i don't think they would shock the markets come december 13th and you're right that is definitely a change in the tone and it comes along with janet yellen's comments at nyu and it would take the 60% probability th

steve liesman is joining us now. >> michelle, thank you he's being named for fed chair by president trumpomination goes before the senate's banking committee, it is scheduled here at 10:00 and we'll have live coverage here on cnbc current fed here, janet yellen" raised the stakes, i will say i am uncertain about this. my colleagues and i are not certain that it is transitory. powell has not gone far publicly yet. back in june, he was confident and unemployment putting pressure on inflation. he was less confidence when i interviewed him in august. >> inflation is a little bit below target and it is kind of a mystery. you would expected given it is a little higher inflation. what it gives is the ability to be patient >> second question, powell's view on the levels of the stock market robert kaplan released a statement, he's more concerned of equities. it is going to be interesting to see if powell will raise rates because of the high stock market evaluatio evaluations are by the president's pick >> i don't think there is possibility of a delay i think he will go through the process relative

steve liesman has the headlines. >> thanks so much. saying it is appropriate for rates to rise gradually in two years. he is one of the newest fed presidents, has a vote next year says the economy is near full employment and demand spike, talking about fiscal stimulus could push the economy beyond capacity he doesn't expect surge in growth or inflation, says tax reform will effect economic activity not sure how much or how gdp over 2% and modest wage growth increase is what he is looking for. confirming muhammad he will-erian considered for fed chair. search has just gun, earbegun. announcement not likely this year, looking for someone with monetary policy expertise. more strength in the regulatory side quick thing, why are we so interested the fed is being remade and made over as we speak we have a new fed chair nominee who broke with the mold of being academic or ph.d. economist, now looking for who and how the rest of the pieces are filled in with monetary policy. >> do they feel it is a good bench, folks you talk to, is there any c

economic outlook before the congressional joint economic committee our senior economics reporter steve liesmantoring that and joins us with more morning. steve. >> good morning, carl. fed chair janet yellen in what is likely her last testimony before congress. she just said it is important to move the policy rate up towards a neutral level, do so in a gradual manner so the fed doesn't have a kind of boom/bust. she sees modest upward pressure on wages, but it lesson from the modest wages is that the economy is not significantly overheated. i want to show you what she actually did say about the economy, quote, the economic expansion is increasingly broad based across sectors as well as across much of the global economy. i expect that with gradual adjustments in the stance of monetary policy, the economy will continue to expand and the job market will strengthen somewhat further, supporting faster growth and income on inflation, she's a bit less certain than a week ago. she said current inflation is a result of what she thinks are tranlsatory factors. she thinks the inflation level will move back

steve liesman is here with more. >> this is an interesting choice, he replaced bill dudley who announcednation last week. >> of 135 fed presidents in the history of the fed, six women and three non-white and there is a question where the president should be and as well as someone looking for a strong banking and be holding either banks or markets. here are some of the names being mentioned. and moderator and expert globally jp morgan affairs officer, and brian sack, he had s same job dudley had before and then there is peter fisher now with dartmouth and also had the open market group job and there is seth carpenter working as treasury and in charge of financi financi financial markets. so no dirt of candidates there here is a few more to look at. robert kaplan is under consideration. his name is one of the potentials and people out there. >> so the chance of getting it is pretty low? >> i am not sure if it is disquali disqualify >> depends on who you ask. >> i should be clear, maybe michelle does not understand this is not a presidential point. appointment >> this is made by the federal

steve liesman was watching >> it was fascinating. the more jerome powell spoke, the more thestock market liked what it heard. the s&p seems to accelerate to the up side as the fed governor, appointed by the president to replace janet yellen increased as he spoke. he danced around the mine field of the tax cut proposal. one area that could derail the confirmation here is what he said when sharon brown asked him about the $1.5 trillion deficit cost? >> don't you have a responsibility in an on going way to talk to us about the modeling that you have done, what this will mean to the fiscal situation of our country in the years ahead >> i think our responsibility is to carry out the mandate you have given us, which is to achieve stable prices and maximum employment and look after the financial stability. >> of course, we rely on you for data all the time. >> respectfully, senator, i don't think you rely on us to score fiscal proposals, that's not really our role. >> off camera, melissa is noting, he is good more importantly, he said he wo

started to move and learned senator john mccain was onboard for voting for this tax bill get to steve liesmanpdate and one fed officially warning about bitcoin. >> somebody has to inject reality into this party you're having spending numbers disappointing brought down -- reverse, guys. bring up the rapid update screens. down 0.3%. good job back there. pick your favorite economist, go with it. now at the top, amherst, 3.2%. stanley there followed by the atlanta fed at 2.7 morg morgan stanley down to 2 bottom on 1.7% randall quarles, vice president, strong comments about bitcoin saying digital currencies could pose a risk to the financial system if used widely. not a lot of risk now. not in heavy use if they get heavily used, his concern, what happens in times of stress? will they provide liquidity? will banks, institutions get the liquidity they need? digital currency problems if widely used. not backed by any secure assets. no intrins it value, no backing from any institution at all as far as he could say. going back, looking. some of the harsher words made by any fed official or by the way,

. >> after he announced his lee tir retirement last week steve liesman is here with a look steve?> thanks very much. replacing dudley comes at a time with the fed under pressure to bring more diversity into the ranks of bank presidents take a look at this graphic of 135 fed presidents in the history of the fed brookings says there were six women and just three non-whites. one of whom is the president of the atlanta fed. there's also the question about whether new york fed president should be like dudley, an economist. this after president trump nominated jerome powell to be the new fed chair. he is not. they're also looking for someone with strong banking, strong markets experience, but someone not beholden to either banks or the markets. so here's some of the names we're hearing b ining bandied an in the search that will take six to nine months peter blair henry, dean of the new york sterns school sandy o'connor of jp morgan. has regulatory affairs brian sack, once had a top job at the fed, as did peter fisher. also at the treasury, seth carpenter, ubs chief economist who was als

steve liesman joins us now with more on some of the possible candidates >> yeah, we're going to namee names first, let's talk about the issues replacing bill dudley comes at a time when the federal reserve is under pressure to bring more diversity into the ranks of bank presidents of the 135 presidents in the history of the fed, the brookings institution counts six women and just three non-whites. also the question about whether or not they should appoint an economist, which dudley is presidential president, you remember, nominated jerome powell he's not an economist, whether this should be an economist at an important position. finally, the new york fed on unwinding the $4.5 trillion balance sheet. the perfect resume, someone with strong banking and market experience that is beholden to neither. here are some of the names mentioned call it around town. peter blair henry. a dean, moderates a lot of jackson hole conferences sandio conner. knows powell, has worked with powell brian sack is the de shaw chief economist, former new york fed markets group head peter fisher, top jobs in the

. >> randy, steve liesman here how are you? last several months going through things that jay powell has said and a bunch of them obviously in cnbc interviews. i haven't been able to find out what he thinks about current market valuations. i don't know if you saw yesterday what the dallas federal reserve president robert kaplan said, but he made comments about concerns markets are currently overvalued and i'm paying more attention to this is what he said what do we think powell will do when it comes to market valuations and monetary policy is he a guy who could lean against the current stock valuations >> i think at least alt this point he's going to dance around that i don't think a fed chair nominee want to say markets are irrationally exuberant or undervalued. he'll say we're looking at financial conditions and taking those into account in our monetary policy. it might be later on he'll take a view that he is seeing certain markets as be frothy it would be unwise and highly unlikely he would do that at the moment >> steve, a

cnbc senior economics reporter steve liesman joins us now >> are you taking notes? are you ready?ught he is not going to face much resistance or tough questions at all i mean -- >> he is going to be confirmed, and it might be one of the more bipartisan confirmations, but the trajectory, the current debate over fed policy is interesting. i can tell you that in his testimony for his confirmation, fed chairman nominee powell won't be telling his critics or the fed critics in congress all they want to hear, despite some republican criticism of an overactive fed in the wake of the financial crisis powell, now a fed governor, will tell the committee, "we must be prepared to respond decisively and with appropriate force to new and unexpected threats to our nation's financial stability and economic prosperity. while president trump is strongly criticized the dodd frank financial reforms, powell says the financial system is stronger than it was a decade ago, and he adds, "we will continue to consider appropriate ways to ease regulatory burdens while preserving korea forms pul also pushing