. >> jim, it is likely knew what time it was because right now we'll go to steve liesman for the news steve? >> federal reserve raising the target range for the federal funds rate by 50 basis points to a new target range of 75 basis points to one percentage point the federal reserve increasing and says ongoingincreases will be appropriate the fed will need to reduce the balance sheet on june 1. it will ramp up the balance sheet reduction over time. it's going to begin with 47.5 billion dollars in balance sheet reduction through august and after that three-month period it's going to reduce the balance sheet to allow the runoff of $95 billion a month as expected and that will happen beginning in september that will be a total of 60 billion in treasurys running off the balance sheet and $30 billion in mortgages household and business spending remains strong and job gains have been robust and the russian invasion puts upward pressure on inflation and weighs on economic activity a very quick analysis, guys and there was one sentence that was more dovish than expected and a lot of other obs

the investment committee is with me with steve liesman. the gang is here josh brown, carrie firestone, pete najarian. we can show you where the market is now it is ugly 1161 that's the decline in the dow. almost 3.5%. s&p down by 4% bond yields are screaming higher 308 the yield on ten year note was 310. that's where the story lies now, the move in yields and dump back in stocks. >> i think that's accurate you're in a situation now where investors are looking at portfolios, looking at what's been working and what's not. and the only thing working this year is cash even short term bonds have been very treacherous you are seeing people basically throw in the towel i think a back to back situation like what we had, yesterday i was on overtime with you, the question was will there be follow through i said only if big tech decides to show up and follow through. there's no hope for anything else if that doesn't happen. today, big tech is leading us down this is what a bear market rally looks like we have been talking about it for weeks now. this

steve liesman is there you can bet on a question from steve.ou can get answers from jeffrey gundlach he will be here for overtime the cnbc survey polled managers where to invest between now and end of the year, taking obviously the fed into consideration. energy, the top pick from a sector level, followed by technology one interesting change from the last few weeks we polled them end of march. 62% financials were a top pick today, liz young, that answer is zero can you believe that nobody nobody nobody wants to invest in financials take sofi out of the answer. >> i'm a little surprised, there was nobody that tells me there's a decent opportunity, if you're a contrarian, there's a decent opportunity to buy for possible bounce if i am consistent with thoughts earlier in the show, if we have relaxation in fed policy and they don't need to get to the end as quickly as we are expecting now, you should see a come back in places like financials and industrials even small caps. i am a little surprised nobody wants financials i have been a financials bu

steve liesman, thank you >>> could it be that the tide of war has turned the desperate message today from ukrainian commander and why a plan to ban russian oil might not be as easy to execute as some eu leaders hoped. >>> the covid lockdown grows the new rules and what is now closed after just a few dozen new covid cases in beijing >> and are airline passengers behaving themselves again? we have got brand-new numbers just out from the faa. what happens when performance... meets power? you try crazy things... ...because you're crazy... ...and you like it. you get bigger... ...badder... ...faster. ♪ you can never have too much of a good thing... and power is a very good thing. ♪ >>> russian troops have breached the last ukrainian stronghold in mariupol, and there's a bloody battle under way inside. that's the new and dire message from ukrainian soldiers trapped and surrounded inside the azovstal steel plant the city's mayor says hundreds of civilians including 30 children are still inside there. new video shows the russians unleashing an ungodly amount of firepower on the steel plant p

steve liesman, thank you >>> could it be that the tide of war has turned the desperate message today from ukrainian commander and why a plan to ban russian oil might not be as easy to execute as some eu leaders hoped. >>> the covid lockdown grows the new rules and what is now closed after just a few dozen new covid cases in beijing >> and are airline passengers behaving themselves again? we have got brand-new numbers just out from the faa. ♪ ♪ i'm the latest hashtag challenge. and everyone on social media is trying me. i'm trending so hard that “hashtag common sense” can't keep up. this is going to get tens and tens of views. ♪ ♪ ( car crashing ) ♪ ♪ but if you don't have the right auto insurance coverage, you could be left to pay for this... yourself. call a local agent or 1-888-allstate for a quote today. >>> russian troops have breached the last ukrainian stronghold in mariupol, and there's a bloody battle under way inside. that's the new and dire message from ukrainian soldiers trapped and surrounded inside the azovstal steel plant the city's mayor says hundreds of civilians incl

gary, stay with us our senior economics reporter steve liesman who was part of that news conference, steve, and inthought asked the money question which turned the market about consideration of a 75 basis point hike >> reporter: yeah, it was the question to ask, and i was lucky to have it to be asked being up early in the roster there, but i think what's really important and i think i just heard the tail end of what gary was saying when i came. i think gary has this right. here's the deal. 50 is the new 25 and 75 is the new bell bottom jeans. and i mean that by it sounds like 50 is the new base case i think that's what gary was saying essentially let's listen to what he actually said and listen very carefully to what he says at the very end and we'll talk about it on the other side >> we need to really see that our expectation is being fulfilled, inflation, in fact, is under control and starting to come down. again, it's not like we would stop we would just go back to 25 basis point increases. it'll be a judgment call when these meetings arrive. again, our expectation is if we see wh

too much too little is there anything they can go back and fix now steve liesman is looking at the confidence in jay powell, steve. >> hey, kelly, yeah, during much of the pandemic, fed chair jay powell got high marks for -- of the economy, but the latest cnbc fed survey showing the outbreak of inflation and the new aggressive effort, the fed's going to embark upon to fight it taking a toll on how powell is viewed on wall street. take a look, during april 2020 and july 2020, the middle of the pandemic, he got a minuses for his economic leadership, slightly different question we asked this time, overall leadership, well, that's fallen now to a b minus for this may 2022 survey here now, transparency, he gets a b, but moving on now, communication a b minus, economic forecasting a d overall, and monetary policy he gets a c. why? well there's 100% chance of a 50 basis . point hike in may, 90% chance of 50 basis points in june 2 2.7 trillion expected to come off the balance sheet. and term gnat rate, 3.08%, four months earlier and 72 basis points higher than the march survey perhaps, on powell's ma

i want to bring in the other steve, liesman the reason being, what you heard minerd say, it plays into this conversation, what the fed is willing to do, to get demand down esther george told steve today, stock market, they don't have a big problem with the stock market going down. now, if the credit market seized up, maybe that would influence the fed more than the stock market, steve. what about this idea that minerd puts forth, that they are perhaps too aggressive in the face of what is an undeniably slowing economy? >> so, i think the jury is still out on that, scott i don't think you can say that definitively i think scott minerd has a point of view on that. i think let me preface what i'm about to say that ester george is a very nice person, one of the nicest fed persons i've known over the last two decades. she's sorry for the pain, but she's not about to do anything about lebenthal's pain i came here to figure out is there some threshold we're near of pain in the stock market. and esther george told me she's watching it, looking at it, aware of it, but it is not t

let's bring in steve liesman for more it's interesting how when you're a former fed official, you can say whatever you want and it makes me if other current fed officials actually think this, too. >> well, you know, i did a story on this a couple of weeks ago. what the fed officials were saying was the in office version of what ferguson said was they were not ruling out a recession. when you had powell come say there was some chance we would have a soft landing and you had other folks saying, would not rule out the possibility of a recession. i think it's in the realm of possibility, that you have a mild recession so, yeah, ferguson is just able to say out loud what i think, what i'm sure a lot of fed officials are thinking >> yeah, so 50 basis points then what do you think the burning questions are going to be at that press conference? >> so one of the interesting ideas and i'll credit christian from evercore on this one. fed speak has been a little unruly and i say that as a guy who able to process a lot of fed speak and often find it rulely, i guess is the best way to put it. but r

steve liesman is here with new economic data out today and what it's telling us. steve. >> yeah, kelly, we had some notable misses in the economic data to go along with the big housing miss, suggesting definitely some loss of economic momentum it's just also the high prices and rate hikes are catching up with companies and the economy and potentially the consumer here flash u.s. services businesses activity index at 53.5 thunderstorm a four-month low. the manufacturing output index at 55.2. that's a three-month low now, note both still signal expansion of the economy, just at a slower pace richmond fed, though, not signaling very much at all, down 23 that's the lowest since the pandemic began here. but michael england writes we've had a bad couple of days for the u.s. growth outlook, and we've trimmed our q2 gdp growth estimate to 3.4% from 3.6 with emerging downside risk that said, several economists remain upbeat on the consumer and spending despite warnings from walmart and target last week over at barclays they say the narrative of the demise of the u.s. consu

always great to speak with you steve liesman. >> see you guys later. >>> the devil is in the detail or in that extra one percentage point, guy, because that could make a big difference in terms of where the market should be. >> i agree with that where they're not getting help, them being the federal reserve is in the form of energy prices, which pete brought up, tim brought up, 100% to bring it up. they're resilient as can be. crude oil had every opportunity to break down a week and a half, two weeks ago when it was flirting with $93. it didn't do it. now we find ourselves north of 110 again and i think there's another high here especially just one more time if and when china does release the zero covid thing, that head wind is going to become an extraordinary tailwind energy play is intact. that's what the fed is up against. not winning that battle at all. >> and costco shares lower despite reporting a beat, revenue earnings of 304 a share. courtney has the latest from the conference call. >> the conference call is just ongoing. cfo on vacation in italy being run by the evp, bob nelso

it was our very own steve liesman who asked the question to jay powell, is 75 basis points on the tablethat's not currently part of our thinking that sent the market sky high. we are still expect ing 50 basis points rising. is it ifgoing to abate inflation i'm afraid to say. it's hard to see at the moment at least that sky high 40-year allegation of over 8% in the states, hard to see it coming down in the very short term. elsewhere, fascinating story out of tiktok. it's going to start sharing ad revenue with its most successful creators they've got a new program called tiktok pulse how do you get paid? i'm sure you want to know. if you have 100,000 followers or more, you're a kreert, public figure or media publisher, you will be eligible to share some of the revenues. although we haven't seen the break down with how they will be shared with the creators >> as long as i still get my air fryer recipes and makeup tips, we'll be all good. kf >>> up next, michelle has your weekend forecast >> and ludacris. the way they exaggerate. or the surprises they initiate. otezla. it's a choice you can

steve liesman came on and we talked about real wages relative to where inflation is. how much has eroded in terms of spending power we agree that gas prices have been a major erosion of that spending power i get back to something anecdotal. i'm looking at restaurant sales up 22% relative to the same place in 2019 as we look off of normalized comps. ulta talked about where some of their dynamics in terms of getting back to work whether it's makeup of getting back at it >> i have a question >> you don't want to raise your hand >> i'm used to that, being in school so much if the fed wants them to slow down, the fed wants the -- >> she's pointing at me, too >> sorry so why are these good things the fed wants a slowdown of the economy so how do you get that you have to do something until it breaks and we haven't seen evidence of that yet >> we know the fed has to go another 150 basis points they don't know what the real neutral rate is. we know they have to do something yobeyond that. i don't think they're going to be therefore, they have a job to do we want the fed to do

steve liesman is joining us with more steve, i don't know if we believe this because we have seen a lota since the minutes were first taken. >> becky, overall, i think equity markets like what they heard with the may meeting minutes. rallied modestly after the release. morale i thie privatrally this g then moving to neutral c commentators sees seized on the pause. expediting the removal would leave the committee later this year to assess the policy firming. that is fed speak maybe we will chill for a bit. and agreement to go beyond neutral which is put in the range of 2.25% to 2.5% to slow the economy. res restrictive stance may become appropriate with the risk to the outlook. the minutes did not provide anything over the policy, but over the upside risk to inflation from the ukraine war and china lockdown and rising wages. the outlook eased back in futures markets. highest curve is may of 2023 it is now at 2.86. the august contract traded 50 basis points from the outlook for the fed. hard to square all of this except the fed may pause the progress this fall or ease back to 25 basis poi

steve liesman joins us with more on this.hat are really the high water points productivity down 7.5%, and what about the higher labor cost, up more than 11%. >> i'm going to take a step back and relax on these numbers i'm going to call it covid-ductivity. if you put up the quarterly change this productivity, can you see that, as you look at the left hand part of your chart before we had the pandemic, what you'll see is that it's pretty stable doesn't go up, doesn't go down a lot. then you look at it now. its if it goes up and down like this people go into the workforce, people leave the workforce look at that volatility you've had there. somewhere, if you draw a line between those peaks and valleys, there's a new average that comes out maybe a little higher on productivity because of some of the innovations from covid and people working at home but right now it's hard to discern. you had businesses adding workers in what ended up being a negative quarter for growth, adding like the economy was booming. a million and a half pe

let's get right to steve liesman in washington. steve?nutes showed the participants of the fed meeting in may agreed that they should move expeditiously toward neutral. likely appropriate at the next couple of meetings that meant the meeting they raised 50 at plus a couple more and this is the line that stood out for me

steve liesman is going to join us with a preview next ♪ ♪ bonnie boon i'm calling you out.t? we've got bonnie right here on a video call. we don't take kindly to video calls. oh, in that case just tap to send a message. we don't take kindly to messages neither. in that case how 'bout a ringcentral phone call. we don't take kindly to no... would you can it eugene! let's just hear her out. ha ha ha, i've been needing a new horse. we've got ourselves a deal. ♪ ♪ ♪ ringcentral ♪ this is not the stallion i was imagining. >>> good morning and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market sight at times square. i'm andrew ross sorkin along with joe kernen and becky quick. berkshire hathaway had its annual meeting, bringing it live to cnbc viewers live for the first time we're going to talk about that in a moment. nasdaq coming off of its worst month since 2008 this is about 2 1/2 hours before we're set to open, higher after a brutal week. nasdaq up by about 65 points s&p 500 up by about 16 points. let's show you treasury yields in just a moment t

let's get right to steve liesman in washington. steve?tyler, thanks very much the minutes showed the participants of the fed meeting in may agreed that they should move expeditiously toward neutral. likely appropriate at the next couple of meetings that meant the meeting they raised 50 at plus a couple more and this is the line that stood out for me they said a restrictive stance on monetary policy may well become appropriate that means raising the rate above neutral to try to reduce economic growth. the fed acknowledged the challenges of fighting inflation and keeping labor markets strong, a polite way of saying they could not assure a soft landing. they did say, however, they should assess the risk to the economy later this year for rate hikes and that is embracing this idea for rafael bostic has to getting to neutral and looking around a number supported selling the mortgage-backed securities and several saw potential for, quote, unanticipated effects in financial markets from the runoff of the balance sheet and there was concern also

our steve liesman has more on what to expect, even though it's certainly a lagging print, steve. >> yeahmarkets will look to the minutes of the early may meeting for any light they can shed on whether the fed will require rates rising that it all ends up in recession that is, just how high will the fed go there are three views. the neutral view, 2.5% to 3%, that's a bit above neutral, and then a lot above neutral to restrain the economy the question is how many fed officials fall into each of those camps there. take a look at this. the terminal rate. that's the highest rate in the fed funds futures curve, falling from 341 earlier this month to 293, and now it's the june contract that's the highest, meaning over the cycle, about 50 basis points have been baked out. in fact, markets you now even baking in an easing at the end of next year that outlook, of course, requires a belief that inflation is on the way down, and the economy has weakened to the point that the fed thinking it's made a mistake >> steve, i was going to ask a question, which is that -- as you say, a lot of this rests on

without hiking more. >> jim, it is likely knew what time it was because right now we'll go to steve liesman the federal funds rate by 50 basis points to a new target range of 75 basis points to one percentage point the federal reserve increasing and says ongoingincreases will be appropriate the fed will need to reduce the balance sheet on june 1. it will ramp up the balance sheet reduction over time. it's going to begin with 47.5 billion dollars in balance sheet reduction through august and after that three-month period it's going to reduce the balance sheet to

. >>> we're going to turn back to the broader markets, giving bay the gains from yesterday steve liesmanp spark a rally when the fed chair answered it. what do we know now? >> i'm going to have to ask powell another question. there's a lot of discussion whether fed chair powell took off that 75 base rate hike off the table. some are predicting stability, others are criticizing it for putting the fed further behind the curve. here's what the fed chair said >> 75 basis-point increase is not something that the committee is actively considering. >> that sounds dovish. and then one wrote -- waiting this long to normalize policy increases the odds the fed will ultimately have to engineer -- and now we see it peaking, christian from evercore -- while praising -- warned, quote, it's too much too soon in economic space for the fed to allow financial conditions to ease very substantially on a sustained basis, as this would work against the needed cooling economic activity to bring it under control. the danger here is powell has to backtrack and remind marks that the fed is not really its friend ri

steve liesman joins us from washington with the big takeaways. hi, steve. >> reporter: fed officials in the main meeting agreed they should move the funds rate to neutral and good agreement they may eventually have to raise rates above that level to slow the economy in order to fight inflation. they say, quote, restrictive stance on monetary policy may become appropriate the fed raised rates 50 basis points and expected them to do so at least two more meetings in a row. officials overall had a fairly down beat yield. wage pressure expected to continue new pressures coming from the china lockdown and the ukraine war. prices were being passed on to consumers. a risk of expectations against that backdrop, decent growth saying they expected the economy to rebound from negative growth and consumer spending should be robust the ministry suggested some support for a positive rate hike once the fed is around 2% to 2.5% at 1:00 p.m. in an exclusive interview. mike >> we'll need to tune in for that thank you very much. for more on the action in the markets

bond market is leading the whole thing, and it's just overly, overdoing it, and let's bring in steve liesman on that note, specifically, steve, on the note of whether if this sort of upset in the market persists, is it going to force the fed's hand to ease off because then you're going to have real questions about the fed's cred >> let me answer that question, good afternoon, by the way, scott, and your fabulous panel there. great discussion i'm going to answer that in two ways one is i do think there's a pressure point for powell when it comes to the stock market, and second, i don't think we've reached it yet, and that is not the indication in the market, and i want to give you a very quick narrative here which is that on friday morning at 8:30 you have the employment cost index come out that's a measure that powell said he's watching you also have the fed's preferred inflation indicator, the pce index come out, and both of those were high, and may be higher than expected the result was that bond yields rose, and the outlook for fed rate hikes rose as well and the market went down notice w

. >> on that note let's bring in our own steve liesman. so much to unpack there in what she said the market is wonderingif the fed is going to back off, frankly, given the tightening we've seen in financial conditions and worries about the economy. >> that was not the impression i got from esther george that is certainly not her opinion that the fed has a job to do and the rest of the fed are squarely focused on that job which is bringing down inflation. they're aware of what's happening in equity markets. they're watching it. there's always some measure of concern but right now they still see the equity markets as a conduit to transmit monetary policy, which is through tighter financial conditions and eventually as well some impact from the wealth effect, kelly. yes, they're aware of what's going on i think esther george is aware but because of the imperson tiff of dealing with inflation. >> but in what she was talking about there, is she trying to signal some flexibility, if it looks like we're going into recession? the unspoken thing ab

on that note, bring in steve liesman.e're trying to get our arms around what's going on from a business standpoint relative to consumer standpoint, one seems to see deterioration somewhat rapidly, the other one seems reasonably strong. reasonably >> so i think it might be worthwhile for purposes of the fascinating conversation you had to ask yourself what you might have expected to be happening about now. go back and look at the two year back in october of last year where it was 0.26% before powell shifted, you worked in the 2.46, 2.50, 225 basis points of tightening to the economy. you would think you expect to start hearing some sounds of softening in the economy, some warnings from companies. i don't think that if you were sitting there expecting everything to go along hunky dory after 200 basis points of tightening, i am not sure you were paying attention. what i would do is ask myself am i hearing worse things than i might have expected realistically or hearing pretty much what i expected >> worse, worse. how can it

. >> it's still on the table okay >> let's get to senior economics reporter steve liesman interesting how the markets respond and how the traders actually process his words, steve. >> yes it's interesting the fed and the fed chair powell delivered what they were expecting to deliver, 50 base point rate hike today. a plan to slash the balance sheet. but powell threw the market a bone and the market went scurrying. take a look at the big change. you want to look at the equity market i'm looking at fed projects here before this meeting, there was a 51% probability according to of a 75 basis point rate hike at one of the meetings may was existent back then, june and july after towle powell, it is now down to 7% i don't know if you have 0.7% of a person there who can vouch for that, melissa. but here is the whole spectrum of where the fed futures market is priced now. down 10, 15 basis points on each so still very aggressive here for sure, but not necessarily as aggressive as it had been. look, you have to remember this, melissa. powell instead of saying hey, we're not going to 75, he repl

could be more of a sigh of relief, but buying, when something unexpectedly positive occurs when steve liesman asked if the fed is thinking of going 75 basis points at the next meeting. talk about prepare for the worst and expect the worst with the market readying itself for another plunge and you saw it abo table. >> buy. >> we were off to the races including those who know and is paid to be short at every turn this year. it was amazing it was i was watching and thinking all right, it's going to go down what is going to save it the shorts are coming in, the sell the futures. boom. close. case closed. no 75. today put behind us and the 75 basis points hike is no longer ahead of us, i get to go back to earnings season mode even if we got the non-farm payroll report from friday. and for my observations until the 75 basis points hike was removed from the game plan i could tell we weren't getting the pin action that i hoped for when i go bowling as i did just last week. what does that mean? you can't get a 27 or 310 in this, even if like me, you have your own ball and shoes. or put it together ano

steve liesman joins us i understand people buy bonds when there's flux in the other markets, but 275 to be where we are, steve. >> joe, we have come down quite a ways we're going to look at the minutestoday from the fed's early may meeting. is any helight they can shed. how high will the fed go three views, the neutral view, 2, 2.5%. the a, 2.5 to 3.5% and then there's 3.5 or higher, which is a lot above neutral, the one the market fears most >>> minutes of the fed meeting will be scrutinized. meanwhile, market pricing as joe was just talking about, has sharply brought down the estimate of how far the fed will go into the middle category. the terminal rate is falling from 3.41 from the august contract, it's now at 295 for the july contract. about 50 basis points has been baked out of the outlackook forh fed. citi writes about the minutes. particularly hawkish would be if officials are relatively dismissive of the tightening a couple more meetings, following which the fed should showdown its hiking pace that would be in line with those who want the fed to stick around after september.

i mean, did you sleep at all, leaseman steve liesman joins us now was it a kid on christmas eve?y god, what, santa, were you able to sleep at all last night? or too excited >> no, joe the fed, as you know, section pe expected, give me your evaluation thereof here's the deal. the fedex p expected to rate hi. the process is going to end in recession, most believe. 100% chance of a 50-point base hike will be announced tomorrow. 9 90% chance they do it begin in june this is six months earlier than the previous survey. and there's terminal rate, 3.08%. that's expected to be reached in august 2023, four months earlier than the previous survey, and 72 basis points higher than the march survey so here's the new outlook for the fed, which is anywhere from 60-80 basis points higher at every point than it was in march 2, 0 march. 233 by december. despite the massive and unprecedented shift in outlook between meetings, these respondents are below. respondents still think on average that the tightening process does not end well. 57% it will result in a recession. and 10% just don't know. amon

december 13th and 14th so steve liesman has been using january fed funds and that's the 31 of the ofy and february 1st and it's cleaner and let's do a three-day of january fed funds and what's interesting here on tuesday they made their low-yield the low price close and 97.115 it's only moved up a bit and as you see it now it's 97.16+ it's still implying 325 basis points of tightening and no matter what the fed does the marks, the referee behind the scenes for days like today courtney, back to you. >> nervousness in the markets to put it lightly, rick thank you. >> a volatile session for oil which is closing toward day. pippa stephens is at the cnbc commodity desk what's the action? >> crude moving between gains and losses before ending the day here modestly higher and opec and its allies met today deciding to boost output by 432,000 barrels per day, although i should note that it's been consistently missing goals and it also remains in focus let's check on prices and a third of 1% at 108.22. brent rising two-thirds of 1% and nat gas continues to be the story here, surging 4.4% to $8

. >> i may see you guys later on i am going to head back to my desk >>> it's jobs friday steve liesman a preview. a lot riding on this, and it's hard to say how the market will react no matter what the numbers are. >> i have an answer. i want to walk you through what we're looking for here you have the turmoil in the markets, fear of recession, looking for another strong jobs report there's a reason here for concern about weakness, and i'll go through this. 400,000, that's down a little bit from the 431 that we had last month unemployment rate ticking down again. i think that will be one of the all-time lows we've ever had average ouhourly wages, 0.4. there are some worries that hiring could be weak, coming from concerns from the war in ukraine or the rising energy prices and inflation bigger worry, there may not be enough workers to hire steven stanley of amhurst writing the main question is how long businesses will be able to true in hundreds of thousands of new workers before the pool of workers begins to dry up and morgan stanley says we continue to expect labor force draws people

. >> steve liesman cnbc. thanks for taking my question, mr. chairman. you talked about using 50 basis point rate hikes or the possibility of them in coming meetings. might there be something larger than 50? is 75 or a percentage point possible? perhaps you could walk us through your calibration. why one meeting should we expect a 50? why something bigger, why something smaller? what is the reasoning for the level of the amount of tightening? thank you. >> sure. so 75 basis point increase is something the committee is not actively considering. what we are doing, we raised 50 basis points today. we said that again, assuming that economic and financial conditions evolve in ways that are consistent with our expectations there is a broad sense on the committee that additional 50 basis increases, 50 basis point increases should be on the table for the next couple meetings. we'll make the decisions at the meetings of course and we'll be paying close attention to incoming data, evolving outlook and financial conditions. finally we'll be communicating to the pub

the investment committee is with me with steve liesman., carrie firestone, pete najarian. we can show you where the market is now it is ugly 1161 that's the decline in the dow. almost 3.5%. s&p down by

steve liesman, let -- steve, thank you. >> yeah., which is what we do on cnbc. david, the drop in housing, you know, higher interest rates, this is what the fed is trying to get so perhaps they won't have to do as much as the market thinking if it's starting to work >> we did. as diana pointed out, that is not often the case, that kind of sudden move of that type consumer staples, perhaps holding up better. joining us now, former goldman sachs asset management, jim o'neill. always good to have you here, jim. you ended a recent piece with a question things are changing quickly. are we headed into a global recession? >> i think it's touch and go, to be quite honest. you look at the chinese numbers published just after i wrote that piece they were even worse than i expected china has been the bigger single driver of the global economy if that's a sign of what is going on during their lockdown, it's bad what you guys are just touching on there, fascinating to listen to the discussion, if the fed keeps sticking to this seeming tightening

and steve liesman has more for us steve. >> yeah, good morning.he more dovish fed officials, now increasing hauhaub i hawkish. he is suggesting that they will need to weaken consumer spending he told reuters that are these stronger balance sheets leading people to spend more or be more confident to just change their behavior, their spending patterns and is that more sustainable, in which case the fed maybe has to be even more aggressive more aggressive rate hikes along with a plan to rapidly reduce the balance sheet has uncertain economic consequences. and kashkari said he could not guarantee a soft landing for the economy from these rate hikes. he said, quote, we know we have to get inflation down. we are doing everything we can to achieve a soft landing but i'll be honest with you, i don't know the odds of us pulling that off. okay so fed futures markets have not embraced that tougher talk just yet. still priced for an additional 100 basis points of tightening by august, another by the end of the year, leading to a top price right now of 310 abo

nasdaq notably outperforming our steve liesman joins us, fresh off the exclusive interview with estheresther george, the kansas city fed president, she acknowledged the impact, but she did not sound like a fed official ready to reverse course based on the sell-off so far. >> this is a time of uncertainty. it's been a rough week in the equity markets i think the combination of the uncertainty going on in the world, the fact the fed is beginning a rate hike regime causes investors to try to figure out where do theysettle on how valuations might come out? i think in respects, not surprising you see this volatility. on the other hand, not to be dismissed, to watch and see what signals it's offering, which we've been seeing for a while. >> so she added that fed policy isn't -- just part of the way fed policy works by tightening financial conditions, and reducing the wealth effect george did say she's committed to 50 basis-point hikes, and she held out some hope that there could be a limit to how far the fed has to go, base odd what she's seeing in the economic. >> where the shift might come

. >>> our steve liesman has more on the fed survey. good morning >> good morning.the survey expect an aggressive fed, several believe it will lead to rece recession, but there's a thought that some of the worst might have been priced in. the average outlook 4363 admittedly 2that's a huge range, and then december 2023 goes to 4490 with a range, but that average is up 8%, compared to the current level. also, we have this risk/reward ratio. we ask the people what's a chance of 10% increase or decline over the next six months so some sense that make risks are balanced here. two thirds are still staying they're extremely, or at least somewhat high. on the macro front, 74% saying inflation has already beat, just 7% in march, so the idea of the 8.5% -- here's the fed outlook -- 90% chance they do another hike in june, after that it falls off 2.7 trillion on the balance sheet, reduction expected over the next 2 years, 5 months that's quite a bit earlier than the previous survey. there's the terminal rate, 3.08%. that's earlier than we saw in the march survey we have not se

. >> steve liesman, thank you. >>> where account investors find opportunities? and john stolfis scott,i'll start with you we'r currently -- do you stick with that target? it's been not only a whiplash week, but an incredibly tough start to the year. >> it's a fair point i would say our 4700 target implies some degree of soft landing in the underlying nick circumstance we know we have fed tightening ahead. we were looking for four 50 base-point moves we've got gotten one in addition to march, so it's still premature to say how that would impact underlying economic conditions earnings growth has lee main strong, so i think what is critical is you do get the fed moving back toward a night rule policy benchmark if we can get there with some slowdown in earnings, but, again, soft landing type earnings, i think there's a path forward to the up side from here we've been most focused in navigating this volatility by playing themes such as quality, those companies that have some built-in inflation resistance, if you will, with strong balance sheets, answer strong profita

steve liesman joins us now on his confirmation and some media he did after that. >> yeah, and the outlook here, carl whether there's a soft landing or not as he said, is possible, but not assured. it's going to depend on how high rates go and how fast, but neither powell nor any fed official has explained with much precision just how much rates have to rise to beat back inflation and there's speculation they may go further than the market has priced in. hitting a terminal rate or the highest rate in this cycle of 3% in august of 2023. that would mark one of the most aggressive rate hike cycles in decades, but could it go higher? here's some reasons why that could happen for example, the fed would need to adopt a restrictive policy to combat inflation an upward shift in the long run inflation or the neutral rate. a wage price spiral and end to factors that have kept inflation in check for example, globalization, savings and progress on technology jeffries writes quote, the fed funds rate will probably have to rise north of 4% in order to break inflation's back however, recent evidence from

it's fed day i'm sorry, steve it's steve liesman did you sleep last night sunny guess you don't sleep all week with a week like this. >> >> no, joe. i haven't slept. i wrote a song, if there's any time left to borrow, i'll sleep tomorrow. >> that sounds like a dead cover. >> i can get you the lyrics, joe. it's part of my fourth e.p. album, my vanity album. >> is that true? >> i actually did some recording, yes, on original stuff. >> yay he's got an e.p. >> it's not finished i've got some rough stuff. you know who i work with, joe? shaun peleton, the drummer for "saturday night live." >> no kidding. >> yeah. >> >> you are a renaissance man. >> it's forthcoming. let's talk about the fed here. let me do the day job because the night job doesn't pay at all, joe this is a historic day as what it's expected there will be a fast and tourous tightening cycle, one that will riden from the '80s. the fed funds market once again raising its outlook for how fast and furious this cycle will be joe said it already. $95 billion monthly balance sheet reduction. everybody's looking for the phrase where

steve liesman checking the pulse and joins us we've had conversations. we hear from snap the consumers are gone it's bifurcated or something, isn't it >> exactly, like the offerings of mini vans that are out there. economists are pushing back against the conclusion of consumer week, which is we we'v drawn from walmart they remain in good shape, and shoppers have the means to keep spending barclays says the narrative of the demise of the u.s. consumer is highly exaggerated. the aggregate data suggests that the consumer is still spending consumers are sitting on a massive pile of cash households held an extra 24$4 trillion in bank accounts. to be sure, there are a lot of ch challenges a reverse wealth effect from the equity selloff could mean decline, but because so many people are employed, the total amount of wages paid to all workers is rising faster than inflation. j.p. morgan writes, we think real spending is still on track for a solid increase in the second quarter, around 34rs, even anticipating some softness in may and june. huge savings won't be a

of the biggest retailers like target and walmart helping to stoke it selloff let's get over to steve liesmanial guest you're going to want to listen to. steve, good morning. >> becky, good morning i'm here in kansas city, with kansas city fed president esther george doing interviews the way we used to do interviews, which is live and in person. thank you so much for joining us >> morning. >> i want to talk about the market the last few days of the it's gone down and it's weak this morning talk to me about the way you look at the stock market in terms of the economic impact does it get to a point where you feel like financial conditions have tightened too much? >> so looking at the stock market is an important price signal, as many others are to watch and see, and this is a time of unternsy it's been a rough week in the equity markets, and i think the combination of the uncertainty going on in the world, the fact that the fed is beginning a rate hike regime causes investors to try to figure out where do they settle on how valuations might come out so i think in some respects, not surprising t

the fed, it's a very strange thing to say you have to kill the economy i was going to say after steve liesman it, two things happened he did clean up those comments in an npr interview later where he suggested that it wasn't off the table. >> not npr it was market place. >> market place is on npr. >> yes, but it's a separate company. >> and then, and then ben bernanke, i don't know if we showed the tape. he actually said that he did not believe 75 was off the table at all. so i think you could be headed there at least >> i think what, honestly, i think what powell said at the point when liesman asked him is it's not on the table right now. he changed his mind pretty quickly after hearing other numbers that came through. meantime, the ten-year yields came down this week, which is pretty crazy all right. there you go ten-year, 2.87% for the ten-year yield right now. when we come back after this break, former energy secretary, rick perry, will join us to talk about oil and gas prices in fact, oil prices i think this morning are around $111. check out the futures, too dow futures indicated up by

let's get to steve liesman now who is taking a look at just how high rates could go. h, whether there's a soft landing or not as fed chair jay powell said is possible but not assured, is going to depend on how far the fed raises rates and how fast it does so. but no one has said with any precision how far the fed will go, and there's speck haulationt could go further they see it at 2.7% on the funds rate, hitting a terminal rate of 3% in august 2023. but maybe it could go higher here are some reasons why. the need for the fed to adopt a restrictive policy to combat inflation. an upward shift in the long-run inflation and wrong-run neutral rate and more importantly, an end to factors that have kept inflation in check globalization, immigration, excess savings and technological progress and then this, the fed funds rate will probably have to rise to 4%. recent evidence from unit labor costs and jolts suggests the n floor may be shifting higher how much higher? one where the adjusted rate is above zero 5% not out of the question factor in 1% a long-term average real funds

mcdonald's saying we're gone >> steve liesman talked about this he lived in russia it was symbolic of the soviet union. does this mean mcdonald's will go away or will they sell the business, but license the brand to a russian operator? i don't know >> i believe and unless i'm reading this incorrectly i believe they're out and those businesses -- >> those mcdonald's will be gone no golden arches >> maybe somebody can buy? i don't believe mcdonald's as we here know it will be in russia >> this goes back to the mcdonald's theory. no two countries with a mcdonald's have gone to war together once you reach that economic development level where you have a very strong middle class that brings mcdonald's in, they don't go to war. that is being challenged broadly here >> the question i ask is what does every other american business do? is this the beginning of the -- we saw it. mcdonald's is one of the first to temporarily step back now they're the first to permanently step back. are we going to see a wave of this going forward we obviously see with the oil companies. whether you see it with m

. >> let's get to steve liesman who is looking at slower growth perhaps but no recession at least for>> yeah, joe, this is a confusing one. the new forecast shows economists marking down their forecast for this year and next for gdp, upping their inflation outlooks but offering some contradictions about whether the 53 forecasters in the survey are predicting a recession or whether they're not. let's go through it. the may survey from the national association for business economy shows the median forecast for 2022 going down from 1.9% from 2.8% that's a sharp decline then it goes to 2.1 to 2.3 for 2 2023 that's less growth but not too shabby you look at the quarterly growth rates, it shows a decent rebound from the surprise first quarter contraction, and then a gradual shift. the median for each quarter remains positive there's no consensus call in the number for an economic contraction. okay, when asked when the next recession will begin, though, 52% say it's going to happen sometime in the next two years, about half of those see it happening in the second half of 2023 our other parts