maybe those future rate cuts are in danger. >> warranted or not, it looks like it's coming today steve liesman down in d.c. steve weis, now what they're going to cut maybe they do something on the balance sheet. what does the market do as a result in the weeks ahead? >> i do think they'll maintain the dovish tone. so the market is going to react positively react positive in advance, that's going to continue the most interesting thing today was in terms of the underlying strength of the market is that the news that was coming out of china in terms of any progress on trade talks was negative. yet the market just shrugged it off. so again, that news has reached diminishing returns in terms of its negativity in the market it's up, up and away we're still the best market in the world, and i believe you want to be investor here the only other place to be is if you want to be in longer duration, alternative assets that aren't correlated to the market if you'll be in any type of public invest automate. >> up, up and away says steve weiss. do you agree >> steve summarized it nicely. jerome powell is go

that got us thinking about the impact of such a move and so we asked steve liesman to tak a look. >>h the federal reserve about to cut interest rates at the end of t month, many are asking the question what will a quarter point rate cut accomplish. fed chairman jerome powell has a list of worries that cutting rates are supposed to address. >> we think that uncertainty around trade polico and a global growth, it is not -- it policy.ll down to trade >> right. >> there's something going on with growth around the world, particularly around >>nufacturing and investment and trade. ut some are concerned that fedate cuts won't address those issues. companies just got a huge tax cu interest rates, they're already low. skeptics argue if a ceo is worried about the effects of a trade war, a quarter point rate cut won't prompt corporate o spendi hiring. >> i don't think the cost of borrowing is a constraint on activity these days, particularly if you are looking at the economy, the real weakness borinesses, the little guys are hardly any problem getting access to credit. it is not the cost of bor

let's drill down on all of this with steve liesman we've also just heard now from barkann, from the fed. fed speak in general and we'll hear, you know, from corals here shortly as well. what do yomakeu of all these moves today? >> i think that there was no daylight between powell day one and powell day two he very much reiterated the ideas that have led the market to believe there's an interest rate cut on the way. he didn't really incorporate anything about that hot or inflation report this morning. or even the strong jobless claims numbers that continue to accentuate the negative with the trade uncertainties out there. the low inflation problems and the global economic weakness the question going in was, hey, what is he going to tell us about how much of a rate cut in july and how long this will go maybe he gave us a hint in this one answer to the question about what lessons we've learned from europe and japan >> you don't want to let -- you don't want to get behind the curve and let inflation drop well below 2%. what happens is you get into this unhealthy dynamic potentially where lo

r "nightly business report", i'm steve liesman. >>> the number of job openings fell slighy in may butained near record levels according to the labor dertment, a little more than 7 million positions were posted, suggesting that hiring isly unlio slow dramatically even though the economy has softened a bit. this report is considered a measure of labor demand. >>> small businesses are considered the engine of job creation in thicountry, and today a new survey showed thati set among small business owners dipped a bit, mostly due to the uncertaintyrom tariffs. but despite that pullback, optimism among busess owners does remain relatively high. >>> so, yes, there are someco signs thatmic growth is slowing, but it is still considered healthy. however, the bond market is saying something e oe. the yie the short-term treasury has been higher than longer term treasuries for more than 30 consecutiveng tra sessions. now, it is a phenomenon which is known as an inverted yield curve, and that tends to happen before recessions. we're joined now by jackh mcintyre w brandywine global investment to tal

new reports like thesean often change a long-held outlook for growth, so we asked steve liesman to putether a real-time assessment of the economy. that's where we start tonight. >> reporter: well, everyone seems to be expecting the economic party to wind down or even end, no one seems to have the told the u.s. consumer. the government reported june retail sales tod up a strong 0.4%, beating expectations on the street. consumers spent less money on gasoline but plowed the savings into clothing and furniture purchases. auto sales also did well and internet sellers did a brisk business, seemingly at the expense of department stores. all of this shored up views the second quarter with the cnbc rapid update with the median tracking on wall street running at 1.8%, a fslowdownm 3% of the first quarter but well above theorst quarters that accompanied the beginning of the omarter about trend growth. fed chair j powell in a speech tuesday continued to tout a rate cut coming fro the fed as did chicago fed president evans. in interview he said he was concerned about slowing growth, the trade war a

steve liesman breaks down the latest great rate debate. >> reporter: most in the marketa agree with theill do with monetary policy tomorrow, that is cut interest rates. but they disagree on what the fed should do. 98% of the respondents to the cnbc f survey see a rate cut and nearly all say it will be a quarter point rate skcut. but what the fed should do, and that's where there's a split. about half say the fed should not cut rates at all, mostly because the economys in pretty good state. chief investment officer at arden assess management wries in respo to the survey, quote, objectively the case for a rate cut is n obvious. the economic data has simply not been weak enough a the level of rates is already low. more economic data today showed strong consumer confidence along with g healthyrowth in personal income and spending. it is not t kind of economic data you typically see when the fed is cutting rates. the surve showed most expect the economy to slow, but not much more than expected when the fe was still raising interest rates. growth in gross domestic product seen in th survey fa

. >>> steve liesman takes a look at the fed back-and-forth and whether investors are preparing for arter or a half point cut. >> reporter: kate lewis fed president james bull lard speaking in new york today, said the federal reserve needs to follow through on what essentially was a promise made to markets in june. >> we didn't ease at the june meeting, but signals were we were highly likely to ease at the july meeting. so now that's all been priced into markets, so if you try to take it out i think it would be very difficult at this stage. so you might as well follow through and ratify that. >> reporter: said a quarter point cut was appropriate for july, not 50 which some have been talking about, but the fed could revisit additional cuts in the months ahead. he went on to defend new york fed president williams saying he thought controversial comments williams made yesterday were more academic than a comment on where current policy from the fed is going next. williams said research shows, quote, don't keep your powder dry. that is move more quickly to add monetary stimulus than you ot

for "nightly business report", i'm steve liesman. >>> and as sue mentioned, investors did indeed like fed chief's message, especially early in the trading day when all three major iexes hit intraday highs. bob pisani is at the stock exchange. >> stocks marched higher pushing ths&p 500 beyond 3,000 early on though we did end well off the levels. federal reserve chair powell testified before the house financial services today, reassuring the markets there's a case to be made for a rate cut later this month. in particular, powell's comments that uncertainties have increased pushed the s&p into record highs, but we came off n'ose highs fairly quickly. we d end above 3,000. right now there's a clear consensus in the markets around a 25-basis point insurance cut for july, some are calling it. some investors likely would be surprised now if there was no rate cut, but others would be surprised if there was aoi 50-basis rate cut. so the consensus is just 25. sector winners today, big tech names like micron, cisco, intel and microsoft. energy was another brightud spo. e oil prices are knocking

for "nightly busiss report", m steve liesman. >>> u.p.s.for investors and that's where we begintonight's market focus with the company posting better than expected earnings and a revenu it raised its guidance as well. u.p.s. also said it expects to get faa approval for drone deliveryy end of the year and to compete with rival fede x, u.p.s. will be offering a seven-day delivery service next year. >> as a company, we had to realize that sunday, saturday and sunday is just like another day of the week. we chose to maximum partners in michael's, cvs, advanced auto parts and also for sunday delivery, enhancing share pos with usps. with those combinations and with our network we feel that we have another good offering for our customers. stock rose more than 8% today to 114.3 >>> health insurer anthem's results topped expectations and the company also raised its full-year guidance, but anthem said that costs connected to its medicaid business w higher than expected and shares fell more than 5% today to 288.91. >>> vf corps bea estimates thanks to

to start we have steve liesman who will tell us what is ahead for the central bank, but first dominichu has the outlook fks stoc >> reporter: after a blistering run for stocks in the first half of the year, here are three things to watch as the markets head bnto thek half of 2019. first, trade. deal or no deal? despite the fits and starts over trade negotiations between the u.s. and china,e investors h largely been optimistic that a resolution will come to pass, but what happens if things drag out? and we're not even getting into what happens if america decides to stir things up with other trading partners around the globe. cond, the fed. to cut or not to cut? that is the question. at this point markets are largely expecting that the economic data will lead the federal reserve to ease financial conditions by cuttite benchmark rest rates. will it push the stock market to record highs or signal weakness ahead? and third, mega cap stocks, specifically those in tech,ic commion services and retail like microsoft, amazon, apple and facebook to name a few. they've had a lot of ionluence he m

steve liesman with a rapid update from chicago. thank you very much. let's stay with the theme. i think it's fair to say that the death of the american shopper due to tariffs has been greatly exaggerated. june retail sales blowing the doors off estimates. nearly everything you can buy maybe except large screen tvs coming in stronger than expected the discretionary and staple sectors are hitting highs. you have positive comments from jpmorgan chase ceo jamie dimon on the strength of the american consumer to the heartland, i was just in wisconsin. >> oh, yeah, you betcha. >> you know how it is. out there on the ake you drive up 94 from chicago to milwaukee or go to the lakes you see trucks everywhere. new cars new boats. >> pulling boats and jet skis. >> mall of america crowd the consumer ignored the memo that tariffs were supposed to destroy the economy. >> they have not gotten the memo look at lululemon stock. look at the charge to the upside that's a canadian company. but look at target as well you look at t.j. max you walk into these places i'm in costco, home depot, every one

steve liesman is in the house. he'll interview mr. evans and we'll learn about the economy not just in this region but globally we'll talk to you from chicago right after this lunch. and to the chicago at work event where we're exploring the future of work in a changing economy. and who better to do that with than the ceo of a company that has been around now 99 years nick pinchuk of snap-on incorporated congratulations on making it almost to a century. >> i haven't been there for the 99 years although you may think that, it's not true. >> i was going to say, you look pretty good. how's business >> business is okay. you know. >> okay, not better than >> our first quarter was okay. we do business across the world, and one of things about the market for auto repair, people always need to get cars repaired and the other thing is that cars keep changing. people think that the car repair is the same over and over again. but it really keeps changing every time they bring out a new model, it creates a new challenge for the guys in the garage

. >>> we are less than an hour away from the fed decision let's get straight to steve liesman. he's in washington this is or last chance to see you before you go into the lockup. >> it is just about an hour before the fed expected to cut rates. it will either elevate or repeat the uncertainties that were repleat in the last. and i've got a big questions there has sure been a lot of talk about it. they'll be listening to james for how he explains the cut and what it means. >>> right now looking through this july contract, 100% reliability, and 57% chance of another rate cut in december this comes after a barrage of criticism from the president among those comments, the president said he would not be satisfied with just a 25-base point cut. he wants the fed to go 50. the president also complained that the -- dollars hitting fresh two-year highs, it's done nothing but strengthen, so kelly, to those people who think they know how to manipulate a currency, i would say guess again. >> i would echo that steve, no dot plots, no projections today, right we only get the statement? >> you

tyler. >> thank you very much, steve liesman. >>> so what will powell actually do tomorrow? steve is chief u.s. economist. he said the fed should not cut rates at all, and joe is also global chief economist, he said the fed should cut by 50 basis points great to have you both, and it looks like both of you could be disappointed if market consensus has its way. steve, i don't know if you're part of steve liesman's suri, but based on just the disparity of what you think the fed should do and what the fed is expected to do, what is your grade of jerome powell? >> my view towards the chairman and towards the fed in general is much lower than what you have out there. i put them in the c category, and i think a big part of it has to do with the fact that we're dealing with sort of an open-mouth policy amongst people in the committee and i think they all have their own opinions, and they're too forceful in expressing those opinions as opposed to sticking to the party line that comes out as a result of post-meeting policy statements and the f-1-c meetings >> do you feel like the poli

mike is chief economist at jp morgan our own steve liesman is here as well look, 4.3%, phenomenal confirmed by so much of corporate america in earnings today as well. are people saying that's sustainable? >> i think the way to think about all of this quarter is as a rebounder or reaction to last quarter. there are so many categories where there's been this reversal on the downside inventories, investment, and net trade all reversed from negatives -- strong positives in the first quarter to negatives in the second quarter and the counterbalance to that, the reason why we have this stronger growth was the consumer who went from to 4.3%. it was down around 1% i think in the first quarter. the contribution of the gdp was a big change, near 3%. >> but it's still, mike, the consumer's 70% of the economy. manufacturing is about 10% and the dilemma right now can basically be summarized as everybody watches manufacturing for signs that the business cycle is slowing manufacturing has been sending some flashing warning signals lately but the rest of the economy not so much. so what do you guys think i

steve liesman has got that >> he was listening to your conversations about cryptocurrencies and he has presentation at the new york fed at this time on cryptocurrencies, where he said he's concerned that cryptocurrencies could push the u.s. towards nonuniform, that is a many-currency system, kind of similar to what we have internationally, but not within the united states. he warns that exchange rates are excessively volatile, so if you have that, you create volatility in exchange rate and he's worried about the collapse of a company, for example, that issues cryptocurrencies and points out there's always a chance that a currency, that is, any currency's value can fall to zero now, he points out that these currencies have to be reliable and hold their value and he says when you accept the cryptocurrency, it means you accept the monetary policy of that currency. so, jon, a lot of fed folks are sort of figuring out what to do with this currency thing and bullard gives this kind of theoretical discussion of what a currency is and how a cryptocurrency comes in with that and he said there's

katie nixon, joe and our own steve liesman. >>> how is the bond market digesting this news? rick santelli is in the pits in chicago. hey, rick. >> hey, melissa lee. if you look at a two-day chart to give it more context, just in intraday on scaling, a two-day of two-year go to the further part of the curve, ten-year and the dollar index, you can clearly see the moves are already made, giving up ground rather quickly today here and abroad the dollar index was down. we see a little bit of movement based on the beige book. for the most part, just cementing what every trader i talked to already knows. jay powell didn't push back. you don't need to look at percentages or fed funds he will deliver in july. and the market will want more. the market will demand more. and i continue to say, these nine quarter point increases that brought us to 2.25, 2.5, shouldn't be used for slowing. they should be used as major economic life insurance, and that will be the ongoing debate. if anyone thinks doing 50 is going to nullify the appetite for more by the market, i don't think they have been

of the atlantic council, jason brady, ceo of thorn burg investment management i'm going to you steve liesman, is she giving cover for powell does she believe we need a rate cut? >> if you're arguing institutional allegiance in the words of the former fed chair, i would not disagree with you. >> what's happening? >> i think yellen in general probablyelves there is not a lot of downside to a rate cut. look, i'm starting to think a lot about the idea that maybe the federal reserve, and maybe the fed chairman believe there's institutional self-preservation in this rate cut and when i think about this, and i've been thinking a lot about this. >> when you say institution, explain what you mean. >> let me explain. i think that in the current political context with the current resident of the white house. >> yes. >> if the fed gets this wrong and it's too tight and they should have cut when they didn't cut i think they think that if they make a mistake here the fed can be gone. >> the fed can be gone or powell can be gone? >> the fed can be gone and powell can be gone. >> what are we talking about,

unemployment at record lows, this is exactly when you shouldn't be cutting rates let's get to steve liesmanith a closer look. >> despite the strong jobs report, kelly, the market continues to price in multiple rate cuts from the fed, which changes the debate about whether there are two or three cuts this year you can see where the 50% probability is, or higher, for the fed funds futures market the current at 240, one cut priced in still for july which changes in not pricing at 50 anymore, almost no bid on that right there. then a second cut somewhere in here september, october, december let's do a deeper dive into december and take a look at the big debate does that third cut happen 51% say no, this should be higher i'm not quite sure why they made it this way. typically near record low unemployment, fed rate cuts wouldn't be priced in. why cut at all three reasons. trade still a negative despite the g20 meeting. inflation running below target global growth remains weak, a threat to this expansion and this is a really important week for figuring out what the fed will do at its meeting later

money on their next pair of shoes however, we begin with breaking news from fed chair jay powell steve liesman has the headlines. steve. >> thanks, joe fed chairman jay powell speaking in paris at this hour, says uncertainties around trade and global growth have increased he said the u.s. debt ceiling and the problem with the resolution of brexit remain unresolved he used a word he has used quite a bit. the fed will act as appropriate to sustain the u.s. economic expansion. he points out many participants at the june meeting judge the case easier for strong monetary policy he sees q2 growth as having moderated. the consumer bounce back, but business spending has slowed notably. labor markets he says are strong he expects pretty solid gdp growth sounds like in the 2% area, and job opening are plentiful. but he says a low neutral rate, says that rate has come down for the economy, meanish the fed is in danger of hitting a low more often. these are similar to comments he made recently. if you're wondering, i am personally at work here at the cnbc events at work conference, where in about an hour

here is steve liesman with your second half play book. >> for the second half of the year the federalill be focussed on when to make a move on rates and how big a move to make here is what to watch. first, the economy ahead of the meeting in july unless the strength is measurably from the 2% growth forecast cut interest rates. second, how much to cut? perhaps a you are the kwaer point with a few more in the months ahead, or perhaps more muscular 50 basis point cut. the fed could pause for a few months while taking pause of the outlook for growth and especially for inflation ahead 2% target. >>> third, when to stop. the fed will be reluctant to do more than a few cuts the fed will want to avoid another long spell and won't want another quantitative easing unless it really has so look for some near-term rate cuts from the federal reserve but they'll be limited unless the economy gets measurably worse. >>> that was steve liesman with your kekd half economics play book what does the economic setup going to mean to the investments you may have after what was a very solid first half to the

we are one week from today, the fed kicking off its meeting on interest rates joining us now, steve liesman, senior economics reporter. i love the way the guys on "squawk in the street" were talking earlier today, make sure jay powell doesn't see the earnings today, put on ear muffs, because if he looks at what the companies said today, why would he cut rates >> earnings play a part. it's not maybe the most important part, but it's a factor when they look at how the health of companies are, and right now, in this particular decisionmaking process for the federal reserve, companies spending and cap x is a big part of what they're worried about. i think there's a legitimate question as to what a quarter point rate cut would do to help capital spending given that you've just come off an historic corporate tax cut and you have decent growth. i'm not sure how that would help, but be that as it may, it's something they're going to watch and it's another notch that along with the imf upgrading the u.s., you have the earnings seem to be doing better, the job market was doing pretty good, the retail

first let's bring in steve liesman. the fact that, look, he even had a chance after he saw those remarks cross at 8:30 to water things down, and he didn't appear >> think\like, the serving of the turkey he brought a very large turkey of a rate cut. i'm not saying the rate cut is the turkey to the table and said here eat this. he was asked, kelly, directly by a congressman to trade uncertainty and low inflation. those two factors, does that mean you should lower rates? here's what he said. >> yes as i mentioned, we think that uncertainty around trade policy and also global growth, it's not all down to trade policy >> right >> there is something going on with growth around the world, particularly around manufacturing and investment and trade. and so that uncertainty is we think weighing on the domestic economy. >> as kelly said, not only from the report but also in the testimony, he accentuated the negative on a bunch of things. let's go through them. the jobs report, it did not change the outlook data since june has cont

. >> cnbc's senior economics reporter steve liesman is here as well to give us his two cents and much more, i hope. it's a foregone conclusion in terms of what the fed will say afterwards, though that is not necessarily a foregone conclusion. >> right we were trying to be watching the guidance very carefully, and also the press conference. powell has a per wet to do here, which is to explain why he's cutting while the data doesn't necessarily 100% support it. now, you can make the argument, based on what's going on with trade around the world and make the argument based upon what's going on with the manufacturing side of the world, not necessarily based on, i think, what's going on with the u.s. economic data in and of itself, especially if you look at things like retail and jobs and some of the other indicators that are out there that are really not that bad >> inflation also obviously. >> that's the other argument >> it's the obvious one, the slam dunk. >> on the other hand it's 1.8% in the gdp you're looking for 2 the miss of 0.2, is that a reason to cut or a reason to stand pat? i

steve liesman in washington for us >>> how do we trade this market? what did we make of jerome powell's comments? guy. >> it was an impossible situation and the president, of course, coming out -- you knew this tweet was coming at some point, whether it was during our show or some point late in the evening you knew it was coming the fact that president said, i am certainly not getting much help from the federal reserve. what does that mean? it is not the fed's job to help the united states, it is to do what is right for our economy. powell is in a no-win situation. the president is very tactful and has done it for the last two years. the fed is set up to be the fall guys and gals and if the market goes lower here is your villain, folks. i think they were in a no-win situation. he did what he needed to do. thousand do you trade it i don't know if you look and we can talk about it, but the last couple of big names, amazon reported at the all-time highs, sold off facebook, the same thing we will see what happens with apple but it seems to be setting up f

xfinity store today. >>> the federal reserve expected to make its first rate cut today since 2008 steve liesmans been monitoring the fed ahead of the big decision steve, what do we know >> history expected this afternoon with the first rate cut by the fed in 11 years, but also a dramatic turnabout in policy by the central bank not much change in the economic outlook. we looked at what was the fed thinking about 2019 in december versus what it's thinking in june 0.2 lower on growth. 0.1 higher on unemployment very low rate still. 0.1 lower encore inflation but a big change in the economic -- sorry, the policy outlook. there were 15 fed officials who thought the fed would hike in 2019 that fell five, and now think there will be a rate cut this year there may be more after today's meeting. fed officials have described it as shoring up the economy and addressing inflation running consistently below the fed's 2% target news this morning. manufacturing indices turned down the u.s. consumer and job markets remain strong. the policy strange also comes as, you know, amid unprecedented pressure from the

. >> steve liesman, what you make of that? >> i think he fortified it pretty much there. i kept thinking of that bob dylan song, i ain't going nowhere i thought was the way he was answering that, and he's been pretty steady on that idea. he believes he has the right to finish that four-year term, i suppose unless removed by congress he doesn't believe the president has the authority to remove him from office. i also thought some of the things he said on the economy were fascinating, carl i'll go through some of them, the idea that the jobs he was asking about specifically, the strong jobs report friday did not change the outlook of the federal reserve. that was one trade uncertainty remains. he's concerned about global economic weakness, and then the thing that stood out to me the most was the very dovish characterization he had of the jobs market. he said i just want to find this exact quote there. he said to call something hot, you need to see some heat. very dovish about the recent increase in wage gains being just -- really just 3.1% he says they could be higher, so h

steve liesman has more. >> in two days oretestimony beongress, jerome powell has a tough choice, affirm the market's deeply seeded belief in a rate cut coming at the fed's meeting later this month or push back. in pushi ining back pouwell fac more criticism from a president who raised the prospect of firing powell if he doesn't cut rates. powell has reasons to side with both the president and the srkets. >> tnaling has been all about inflation not meeting target, heightened risks from overseas slowing growth, and trade uncertainty which still has the opportunity toheit real economy here in the u.s. and we see the g20 as simply being neutral, slightly positive in that tariffs were not put on, but the trade war is alive and well and that uncertainty is alive and well while current tariffs remain. strong ter: despite the jobs report friday, markets still have two rate cuts priced in. fed fundsutures still see the rates falling from about 2.4% now to 1.9%. maybe as soon as september. markets are split w overther there's even the chance of a third cut this year. it's anying but textbook mone

. >>> okay for more on fed's decision, we want to get over to steve liesman who is in washington awaitinghe big moment. good morning, steve. >> yeah. andrew, the federal reserve set to make history today with its first rate cut in 11 years moving to shore up the u.s. economy from global economic weakness and addressed those concerns about u.s. inflation running persistently below the 2% market but acting in the face of several dilemmas. jobs, consumer spending and confidence, well, they have held up at decent levels. markets at all-time highs so financial conditions are not tight and the cut from the fed comes amid unprecedented public campaigns from the president for rate cuts. >> frankly, if we ever got interest rates down where they should be, and if they weren't raised so fast you would see another probably 10,000 points on the dow the dow acted too soon, i turned out to be right. they acted too soon and too violently. i made the economy so strong that nothing is going to stop us, but the fed could have made it a lot easier. >> the president's written ten tweets critical of the federa

for "nightly business report" i'm steve liesman. >> and that gd report is one of the last major readingsthe economy that the fed policymakers will see before they meet next week. market is ay the already priced in an interest rate cut which leaves investors in an unusual positann. mikeli explains. >> reporter: well street typically likes when the federal reserve starts cutting interest rates, but what about when a rate cut comes with the economy in ghape and stocks up 20% in past seven months? esese are the questions consuming irs ahead of next week's fed meeting. with second quarter gdp arriving better than expected and the s&p 500 at a fresh all-time high, a quarter percentage cut in short term rates has beenul priced in to the bond market this avnth. the companies had the benefit of lower borrowing cost even before the fed acts. the s&p 500 is valued above 17 times forecast earnings for the next 12 months, about a high valuation for the bull mark. does it mean a rate cut has front loaded the full benefit of the anticipatin easing of policy from the fed? there's a risk it is true but n

i'm steve liesman in washington for "nightly businestereport." >> mentioned inflation data where pricesd the biggest gain in june. the core consumer price index, sich excluood and energy, rose by 3% and followed four on straightly gains. food and energy are often excluded buthose prices are considered volatile on a month-to-month basis but it is thetuff we pay for every day including things like >> like everything is increasing because salaries are increasing but it goes with the -- it is like gas. u need it. >> as a college student i think it is a little bit like, yikes, when you realize shall o, oh, ie $5 for this much coffee. you have to cut ba w. >> pricet up significantly. i remember when coffee was $0.50 a cup. a medium at dunkin' donuts is 2.85. if it goes to $4, wouldn't do it. >> i haven't paid attention to the pricing. it is kind of a necessary evil. i le coffee and whatever goes up, i'm just going to deal with >> so some people are seeing inflated prices at their local coffee shoput the government data and the feds say that inflation remains w tame. has it right? bob brusk is

. >> let's get to steve liesman. a pretty good question, not sure -- >> well, i think we have a change in regime here. i think that's the key at this point. i was very surprised that i don't think powell was ready to ploy the guidance that he thought he could be sure that reports was going to ask him for. if it's not a data dependent move and we can look at x data to know this is why we moved, he needed to provide something else i think what he did provide is essential we need to watch headlines. 'em stanafter now will know more and kayla tausche who record on trade for this administration -- look, i think the market went a little crazy with this concern about the statement he made about it's a mid cycle correction i think pretty clearly that if you read the statement, powell probably wants to do another one here i think and have always thought three is too many. the key is we're not headline dependent and not necessarily data dependent. >> steve, would this a bad conference from powell did he screw up just now >> i

. >> steve liesman, thank you. larry kudlow weighs in on the concern of the dollar. >> foreign countries may be manipulating their own currency lower to gain short-term temporary trade. >> kayla tausche joins us from washington with fresh details on the feisty white house meeting kayla, fill us in. what mr. kudlow said feels like distinction with little difference >> reporter: the meeting was focused on currency and debate over whether to devalue the dollar a presentation by peter navarro in the administration. among the proposals he put forth were capital controls to weaken the dollar and potentially active job owning by u.s. officials to drive the dollar lower. the outcome of the meeting as kudlow confirmed was not to do anything not to have a concerted currency policy change at this point. even so, one official said it was president trump who shut navarro down another said it was thomas phillipson among the chorus of every other official in the room, kudlow and steve mnuchin and lighthizer and moore they signall

ahead of next week's meeting, steve liesman, fed watcher steve, the fed on the same page here >> not discussion about dissent is a perfect segue. fed chairman jay powell has the votes to cut rates as you found out friday, he has opposition let's look which fed members are where when it comes to making the cut. those who might oppose to it esther george, eric rosen gram, bostic from atlanta, on the fence barken and daily from san francisco. for the rate cut on the right, kashkari, a good collection of folks. you can see the small v is the voters those people on the bottom, kaplan, brainerd, quarles, those are voters with powell let's argue the fed case for the cut. only the president talking about that act forcefully when near zero take out insurance against the trade war, brexit along with declining capital spending and a potential debt ceiling problem adjust inflation expectations. convince the market you are serious about the 2% goal. and you expect a weaker economy. the job market is strong unemployment is low. we saw data showing the consumer is doing quite well. growth at trend

consumer continues to be strong senior economics reporter steve liesman with us now to break it all downd morning, steve. >> good morning, sara. basically what happened is the consumer and the government kind of saved the day for the economy. other parts of the economy had a pretty good reversal we had one chart that looks at the first quarter versus the second quarter here and what you see in terms of things that might have been affected by trade or other issues that are out there is a pretty big reversal from the second quarter. i'll give you some of the data here real quick. for example, inventories were up 1% in the first quarter. down 1.1%. sorry, investment. inventory up half point and then down look, the way to think about this, i think you take it all together the 3.1, 2.1, 2.6, you have above average or above trend growth >> so that means the fed will cut rates next week, steve still? >> i hear a certain skepticism in your voice or incredulity it is a weird -- you add a nice point in the first block of the hour talking about how inflation is firmed also core pce, 1.8%, just .2 b

focus in on the big stories, bob is on record watch at the exchange, steve liesman has highlights, elon moye, kayla tausche big technology and josh lipton news on microsoft >> dow at a record high, let's not quibble. s&p and nasdaq knocking on the door dow, january we hit, now at 27,000 the three stocks that mattered, biggest contributor visa the dow is a price weighted index. the price moves what is moves the index. visa contributed 420 points of the dow's 1,000 point rise since then the other second most important one, microsoft, contributed 350 points of the move in the dow jones industrial average since january 19th, when it hit 26,000 3m and the industrials, tough time, down 30% this year that cost the dow nearly 600 points believe it or not huge move to the downside for them. back to you. >> bob, thank you. fed pachair jerome powell wrappg up testimony and other fed officials making appearances steve liesman with the highlights of a busy day steve? >> didn't take long to hear from other fed officials. you know what fed chair jay powell signaling the rate cut coming at the end of j

steve liesman is over at the big wall to explain why. hi, steve. >> hey, tyler. thanks very much it's not a question over what the fed will do. it's a debate over what they should do. in our survey, 98% say a rate cut is coming tomorrow 95% say it's going to be a 25-basis point cut, and two is the medium number of rate cuts expected this year with september being the most likely month mentioned by the 41 respondents to the cnbc survey what should the fed do here's where we have some disagreement 48% say the fed should not cut the economy is in pretty good shape. a cut is not needed. 50% say es, the fed should be cutting. of the total group, 37% say it should be 25 a group of people say the fed should do more, 13% now, why should the fed cut or why will the fed cut? we asked that question 34% said inflation is not hitting their 2% target. 30% say it's the weak any, then the inverted yield curve, chosing by a fifth of respondents. pressure from the stock market, and then pressure from the president. those equal to about a quarter of respondents so let's take a look

and the best you got is 1.6% so what they've been saying in the last month is very important, steve liesmanicked up and not everybody picked up, they said they don't want to beat japan and now europe. they are telling you japan and europe are in this negative rate environment they can't get out he told you he doesn't want to be there that tells you, that tells me there will be a lot more aggressive we've been looking for a fed rate cut in the summer time since december this will get aggressive not because the economy is tanking but if inflation expectations go too low and you start to spiral down in interest rates you got a problem. they will try to beat that before it happens and they may beat you >> if all we have to worry about is credit shutting down, what does that look like? what does credit shutting down look like? >> it's a great question corp operate credit spread high yield debt. barclays high yield debt there's something that anybody can get, go the chicago fed website. on there find the national financial conditions three indices that major 105 of credit risk. i wake up every da

. >> elon, medicatiothanks let's bring in steve liesman with reaction to what has been a very, very busy fed day and now the minutes on top of that. >> it fits together, kelly you had a fed chairman that all but guaranteed that there was going to be a rate cut the end of this month. what we learn now the june meeting, maybe more so than we thought, a large number -- the key thing that elon said, many thought additional accommodation was needed there was a preponderance of members on the board one headline i'm looking at off the dow jones, uncertainty in economic risk increased significantly. didn't say that after the meeting there. but this idea that there was -- significant risk, but did want to give time to play out as for fed chairman jerome powell, he was very clear today about what the federal reserve was going to do. he emphasized global economic weakness and low inflation as the more important factors beyond the strong economy or the economy being a good place in fact, he was asked specifically if these factors would lead to lower interest rates. now, listen to this very carefully

kudlow today weighing in on powell's job security and central bank independence among other things steve liesman is here with those details. >> melissa, the firing of tur y turkey's central bank chief and president trump's consistent throats to fire or demote the chairman of the fed sparked a controversy over whether the central bank is and should remain independent larry kudlow weighed in, saying he believes the fed should be independent. >> that word independent, i mean, it doesn't mean they operate from another planet. the fed reports to congress. and that's in the constitution and the fed is appointed or the governors are appointed by the president. so i think that in a day-to-day sense certainly they're independent, but that doesn't mean that they shouldn't listen to advice from their elders. >> that advice from their elders, from the president, also from kudlow, was for the fed to cut interest rates to accelerate growth, with both going further than their predecessors and the clinton, bush, and obama administrations in offering advice to the fed. leading them to write in a recent piece, th

watching fed chair powell's testimony for any hints about what the fed will do later this month steve liesman is watching the will they/won't they scenario. >> yeah, in two days of testimony this week, jerome powell has a choice, to affirm the market's deeply seated belief in a rate cult or push back he faces the risk of a short market sell-off and more criticism from the president who has raised the prospect of firing powell if he doesn't cut rates. one, trade is still a negative, despite the g-20 inflation remains below target, and global growth remains weak and that threatens to weaken the u.s. economy job cuts remain priced in. there you go, looking at the 50% or higher average for the rate in the fed funds there's one cut. i probably should round up to make it easier why do i go out to the 100th decimal? that's just me being me. >> i apologize to viewers. 2.4, down to 2.13. that's right or 2.2 whatever it is 1.9 would be september somewhere in there is the second cut with the debate about the third cut. but the strong jobs report friday complicated the decision. it's anything but text bo

the european central bank signalling a rate cut and mario draghi sounding dubbish this morning steve liesman with what he said. >> and a what the market heard and didn't hear. it's a curious case of mario draghi saying very much what the market wanted to hear about stimulus, but many asset markets acting as if they were disappointed draghi appears to fulfill the expectation of cig malling that rate cuts and further quantitative easing, it's attempt. >> a significant degree of monitory stimulus continues to be necessary to ensure that a financial conditions remain very favorable and support the expansi expansion. >> the council is determined to act. all instrument as appropriate and options do include new asset purchases. the u.s. ten-year loved it for a bit. but then perhaps when draghi started talking or perhaps when better u.s. economic data came out, it sold off so did the ur euro, which has bounced back and stocks that have remained down one reason could be draghi was fairly down on the economic outlook. another could be the market wanted action now, not in september. melissa's shaking h

steve liesman will be there to bring us the news, but he's here now to bring us some analysis. steve. >> i think the context for what you're saying, tyler, is the fed is meeting under extraordinary circumstances with markets screaming for a rate cut, and unprecedented political pressure from the president of the united states in fact, with the fed on the verge of giving the president the rate cut he's campaigned for for months, the president tweeting out this morning that that's not enough. he said, quote, the fed has made all of the wrong moves a small rate cut is not enough but we will win anyway over time, the desires of the president and the outlook for the market, however, do align. here is where the probabilities are. july, a 100% probability in the fed market of a rate cut that breaks down to 77% for a 25-basis point cut 72% chance of another cut in september. 57% chance of yet a third cut come december. here are the cases for and against. a sagging global economy, dragged down by a trade war, and domestic manufacturing sector on the edge of contraction are sufficient ris

celebration of the author's life and work the winner will be crowned tomorrow night if you take steve liesmant a beard on him and face app him you may have a contender there i don't know. >> i like it. >> what do you think >> you also give the russians steve's facial data so it's a tradeoff. >> he does speak the language so i think it's okay. >> bill, thank you very much. >> i will see you next hour. >> see you next hour and then we will say have a lovely weekend. >>> over to mike santelli for a second dashboard. >> mr. liesman also a freshishen there are some elements of market activity that seem like they're getting a little bit overexcited. this is something called the dumb money confidence index, sentiment trader is a service, sentiment trader.com that tracks a multitude of market sentiment indicators, this one got to 80%. now, this is not a subjective determination of who is smart and who is dumb, it's looking at categories of traders and investors that have demonstrated good or bad market timing when they get too extreme this 80% level somewhat significant although we also were here bac

second statement his first statement is 100% correct in that the fed raised too fast and too early steve liesmanning us now with fresh. >> let's do this one by one. fresh fed speak first. >> thank you. >> speaking at the same conference where william spoke yesterday turned up that dust said moments ago the fed needs to follow through on what he said was a promise made to markets made in june. >> we didn't ease at the june meeting but signals were that we were highly likely to ease at the july meetingso now that's all been priced. >> the right amount of cut, not 50 the fed could revisit more cuts in the months ahead. that the item one. item two, he thought the controversial comments made by the new york fed president were more about academic research than about current economic policy in remarks that marcus took to a 50-day on the way, williams said research shows quote don't keep your power dry that is michael vick moore quicd monetary than you otherwise might. not too long after the new york fed said the comments were academic and not about policy actions at the upcoming meeting. here are the f

i'm steve liesman. an update of where gdp is tracking for the second quarter. three data points, inventory, trade and durables and the tracking estimates on the street falling by 0.3%, down to 1.8%. that's exactly, by the way, the consensus for the number, the gdp number being reported tomorrow at 8:30 by the bureau -- by the bea here's some of the forecast, amherst went down by .5 to 2.3 barclays hfe, 2% and atlanta fed at 1.3 going down by .3% no data yet for the third quarter. the forecast is 2% this is what we're seeing him, somewhat of a reversal of the unexpected strength from trade and inventories in the third quarter. looks like the inventory rundown in the second quarter might be more sharper than first estimated. >> thanks for update green light capital announcing their new positions in their investor letter. >> they added new positions in dillard's and scientific games as well as chemours. einhorn says there's a sign the economy may be slowing and some have become xlasents and for chewy that said those those who thought june was the pig kahuna, they

that defines success to me >> steve liesman has the fed decision >> the federal reserve cutting interest rates by a quarter point. the federal reserve cutting interest rates bay quarty a qua point. the federal reserve ending its balance sheet reduction two months earlier than planned. instead of september it's now this month the federal reserve citing imply k implications of global development and muted inflation. it says the expansion is likely to continue but says uncertai y uncertainties about the outlook remain on forward guidance and what the fed will do next, the committee contemplates -- as the committee contemplates the future target range of the federal funds rate it will act as appropriate to expand the expansion the vote, 8-2. two dissents esther george of kansas city and eric rosengren of boston both wanted to keep rates unchanged. on the economic outlook, surprisingly the same from the month or months when they didn't cut rates. they say the labor market remains strong economic activity rising at a moderate rate. unemployment remains slow. household spending appears to have

joining me now is megan green an author of this piece and our steve liesman to talk about the setup of this meeting. when you say pointless is that because you think it wouldn't accomplish anything? >> yes >> in a nutshell. >> i don't think the cost of borrowing is really a constraint on activity these days that's particularly if you're looking at the economy, the real weakness is for businesses and so if you look at businesses, the nfib survey even shows that the little guys are hardly having any problems getting access to credit it's not the cost of borrowing that's an issue. if you cut rates further, it's hardly going to really boost growth in that sense. >> it's interesting, we talk about if you go back to the fall when stocks were last at all time highs, the ten-year was based on 3 1/4 we've come all the way down to 2%, okay, and doesn't that -- in part because the fed has reacted to it, take the rate hikes off the table this year et cetera, do they need to deliver a rate cut now when that repricing has already worked its way through >> yeah, i mean, i guess it was evans or i can'

chicago fed president charlie evans makes new comments to steve liesman. the headlines. >> he said that he needs to cut rates back to 50 waives poibasis and wants to make it more economic economical he said that is he worried about potential global growth and trade tensions he says the central bank should not be in the bit of providing excess stimulus to improve growth powell and evans talked today, and 100% of rate cut in july, 76% of another rate cut come september and 56% in december. so three rate cuts pretty much built into the fed funds future market at this point >> we'll bring in art laffer thanks for joining us. want to get your reaction on these comments from evans and also how likely it is that we see as many as three cut this is year >> well, i think steve is right when charles evans said that we have a cut 50 basis points, maybe more, you see a lot of softness in the rest of the world 1k3e79 for the u.except f the u.s. could well afford to have lower rates i think it is time for it. it is natural that the fed would follow the market and 50 bas

to steve liesman for the beige book report. >> expanded at a modest pace some districts have seen healthyansion. others said activity declined modestly or was flat overall, however, the outlook was positive for modest growth in the months ahead. two very big issues in the beige book here. tariffs and labor shortages. i'll go through each separately. on the tariff issue, widespread concerns about trade-related uncertainty. you heard the federal reserve chairman talk about that quite a bit. there were some increases in input costs from tariffs and rising labor costs, as well. but competition was set to