steve liesman joins us now with the headlines. steve, what's he saying? >> reporter: he's saying we seem to be on track for a soft landing but it's too soon to declare victory. and just when you thought there might be victory, if inflation remains high, the fed may have to step on the brakes harder than it's been. i haven't heard him in the last, i don't know, 33 minutes of speaking, come down on the issue whether he believes the fed needs to do more or not. he does see higher yields out there but hasn't seen a rise in expectations which suggests an economic growth rise. inflation is headed down. the governor earlier today, scott, saying in a speech, "we will stay on the job to achieve our objective of 2% inflation. he did not hint whether he thinks the fed needed to hike again. you have to go to raphael b bostic. he used the frayed again that rates are, quote, sufficiently restrictive, which tells you he thinks they've done enough, but still a long way to go bringing inflation down. he thinks there's further to go keeping rates high but not higher than t

steve liesman, our senior economics reporter joining us with those comments from mary daly out of san francisco. >>> is jim too optimistic? let's go right there. is jim's forecast -- no, i want to have this debate. i want to have this debate. is jim's forecast too optimistic in the environment we seem to be finding ourselves in, yes or no? >> every sector in the s&p is now below its 50-day moving average. i know that doesn't matter to jim, and obviously that could change on a dime especially if we get a big event like a cpi report or an employment report that very substantially makes it clear that the fed can be done, and they are sufficiently restrictive, but for the current moment, the markets are breaking down. i do not think that the higher for longer had been fully priced into the market. i don't think it is yet. i think you're starting to see companies materially have adverse impacts in what they're saying on their business. you look at a company -- i think it was pet smart or petco, one of the pets, they went from selling bonds at 3% to 9%. you cannot tell me that happening acr

steve liesman, earnings. earnings, earnings, earnings. they're going to get hot and heavy starting next week. >> you could make the case with the stronger gdp growth, which this job market may be reflective of that's correct, sir -- that earnings may be understated. i want to throw a little cold water on the euphoria here, okay? because if rates are higher, that means the fed's not going to hike, rates are still higher, and it's almost worse than a federate hike, right? a federate hike, the market can decide to price it in or not place in. but when rates are higher, they're really higher for corporations. so, there's still that shoe to drop of higher rates. i think josh was really smart to talk about the balance sheet, right, and the cash flow that shannon was talking about. there are going to be companies that are going to be winners from this and companies that will be losers, but rates are still higher. it's not like yada, yada, yada, the economy is going to be fine. it's not going to be fine. there are trials and tribulations to go th

here to discuss what to expect is our senior economics correspondent, steve liesman. do you expect based on what some of the other fed speakers have been saying? >> well, we've been putting this all together, scott. i expect him to use the time the market is giving him. the first thing i did when lisa asked me to come on and talk about this story was to say, well, what has happened to the data since powell last spoke? i'm calling this the unofficial powell data dashboard. what you'll see is almost all the key economic indicators have trended up. there's that strong jobs report, the strong retail sales report just last week and the gdp now from the atlanta fed has been trending up. what's happened to the inflation numbers a little more mixed, scott. headline ppi trending up. core ppi down. core cpi was unchanged and went down. so i think he will look at this and will say, you know what, this is not the time to make a big decision. all the fed speakers so far, scott, have really not pushed back much on the market pricing. we do divide it into three camps here. first we

back to our steve liesman. jim kind of led us to this, steve, what are the odds of a hike not only in the meeting coming up in two weeks but the next meeting after that? everybody is trying to figure out when does a cut come? >> so they did take a modest step down. i'm not insulted by what jim said much. no problem with that. >> sorry, steve, i don't mean it that way. >> no worries, jim. no worries. we'll talk later. anyway, it's -- the probability for november is down. the probability for december is down. just call it a 4%, 3.5% for november and 39 for november. had been at 45. the key here, it's seen as dovish. and my colleague nick, for whom i have great respect, by the way, did take a dovish tack than i did, the only reason is that i have not, jim, i don't see the economy necessarily weakening the way it appears to need to keep the fed slooidelined. if powell is telling us the economy needs to weaken for me to be kept at bay and inflation to come down, and that economy doesn't weaken, and i'm at a point her

so let's go now to steve liesman with that embargo. steve? >> federal reserve officials in the september meeting judged that one more increase at a future meeting was likely appropriate. a majority pointed to upside inflation risk. for the record, this was back in september. we don't know if this still holds now. some at the time, however, judged that no further increase was warranted. so there's your split on the committee that we're hearing in the rhetoric out there from fed officials. all agreed it was critical for policy to be, quote, sufficiently restrictive. that's the term that chair powell has used to indicate when the fed would be done and all agreed once they got there, it should remain restrictive for some time. several saw policy at or near the peak, near means maybe one more hike, at means we're there already. all agreed that the committee was in a position to proceed carefully. we've heard that from several fed officials since the meeting. several say the balance sheet reduction can continue even when the fed is cutting rates. p

let's bring in steve liesman. steve, why do you think the fed seems to be leaning dovish at this point? >> well, i'm not quite so sure it's leaning as dovish as the market wants to hear right now. for sure they're leaning dovish on the near-term, and that dovishness has to do with whether they need to do another hike this year or even another hike in this cycle. both logan and jefferson, logan from the dallas fed, vice chair phil jefferson, suggested that hey, maybe we've done enough here but we're going to wait and see. they are both concerned about it. and you can see that in the probabilities, which i think are down for two reasons. i think the trade when it comes to israel and the terrorist attack by hamas, i believe that's part of it, you know, general risk off trade, but also the comments, if you look at the tale on the tape of these fed features, a big decline in the outlook for the last hike. however, what they're both suggesting is the possibility that because of stronger growth that maybe rates could be h

joining us is the president and ceo of the conference board and cnbc's steve liesman. what are the headlines on thes salary front? >> ceos are telling us, and we polled now at the conference board over 400 firms, they're telling us that this year salaries went up close to 4.5%. next year planning around 4%. that could be good news for consumers. if inflation does, in fact, come below that, then real earnings could grow. the question is, you know, is the consumer on edge or not? the retail sales data suggests they're still strong, even though you have the balance sheets worked down from the stimulus payments. so you would expect the consumers to start to be towards that edge. yet now we're thinking that the real earnings will grow. our consumer confidence index fell in september. but that was mostly the expectations index. they're feeling good about the current jobs, the current situation, but they're worried about the next six months where we are expecting a recession. so that says what about the holidays? because we're ramping into the next two months. it looks like c

our steve liesman. he way, tomorrow morning, steve has an exclusive interview with the atlantic fed president who has been one of the more dovish members, so look forward to his reaction at 7:30 a.m. eastern. >>> now joining me now is the chief market strategist at jefferies, and cnbc's rick san tell si here, as well. gentlemen, i'm struck, dave, by the reaction where bond yields are near their highs but stocks are near session highs, as well. >> it seems to be a pattern, kelly. the risk asset market in general, credit and equities are trading really well, even in the face of higher bond yields. the data that we are getting and the fact that this is a strong economy, as jay powell put it, and maybe policy suspect as restrictive as many people thought it was for a variety of reasons you have been discussing with the past two guests as well as those that jay discussed in his presentation. >> dave, you were one of the first people pounding the table on corporate credit. just very tactfully, very specificall

let's bring in steve liesman with those results steve?> kelly, this is an important meeting this week for what the fed is not going to do or is not likely to do which is to hike rates. it would mark the first consecutive two-meeting hold since early 2022 with the fed banking on the forecast for an economic slowdown that brings down inflation despite the strong growth we've had and still elevated inflation, keeping the fed on hold is for the following, slower growth and lower inflation brought on by monetary policy lags. higher bond yields keeping the fed at bay, as well as the forecast for reduced hiring and lower wage gains nabe reports that 27% of respondents are raising prices now that's down from 45% in the prior survey the lowest level we've seen since january 2021 for the first time in three years more respondents report falling employment than rising and goldman sachs out with a report this morning that sees inflation falling next year by a full percentage point all of this has the market convinced the fed ain't going anywhere any

we've said it on air steve liesman said that would be an odd thing to do it doesn't matter.st a good thing to do. >> you think households were more rational, re-fi'ing into low rates the way they did >> it was so great i think the chart you put up about disposable income and how it's going down, the savings are down well, one of the reasons we're such a robust economy is because people did the irrational thing. the government didn't want to do it didn't matter how much you told them long rates were going to go up it was just in their dna not to do it. >> richard fisher was on "squawk box" defending yellen saying you're not taking the full context of the time and place into account. >> very true >> it would have been more expensive. it was unclear whether there would be demand for that much. >> i think everybody should realize that, but we had a lot of people who said the yield curve means recession and we've had 4.9% gdp i would love to run the tape of everybody that said -- [ bell ringing ]. >> let's get the opening bell at the cnbc realtime exchange at the big board it's m

steve liesman is ready with that. what are the headlines right now, steve, from mr. waller, because he is a voting member? as you know, obviously it carries a little more weight when waller stocks, when powell speaks tomorrow. what are we learning? >> and waller's probably the senior economist among the governors and the fed, one of most outspoken. he says the fed can wait and watch and see how the economy evolves before figuring out what to do with policy here. he says recent data has been overwhelmingly positive for both maximum employment and stable prices. the fed's dual mandate. the question is whether all that have will continue. more poliicy tightening, inflation might not continue. housing inflation hasn't helped very much and the core services has not really slowed. some downward pressure from monetary policy and household spending and increases in interest rates. he's watching, scott, the recent run-up in yields and saying that could also play a factor. he was one of the more hawkish ones. we can be patient here so that patience continues even though things

steve liesman is here with us. steve, this was quite a strong report nearly across-the-board of weakness. >> reporter: overall strength and everybody expected by now the summer boon we've seen would have worked its way through. it hasn't, courtney. for the month of june, sustained itself and now we get the september data and what's happening, courtney, two things. one, people are marking up the gdp, not just for this quarter which i guess apologies to the atlanta fed, which i've often reported has been way too high. this month it looks like in the 4%, 5% gdp range could be about right but it's flatter in the fourth quarter because of the starting point from september. the other thing it's doing, courtney, raising the odds of a fed rate hike. for the first time we are just about at the 50% level for january. that wasn't even in play. everybody thought if they didn't get it done this year, it was not going to get done at all. now they've transferred their fed anxiety from this year to the first month of next year. and

now and an fomc voting member is speaking out about the economy right now at a recent, vent and steve liesmanls. what can you tell us, steve? >> not just any voting member, dominic. it's phil jefferson who is the new vice chair of the federal reserve board of governors. he says financial conditions have tightened further. he says real long-term yields have risen significantly, and he will take financial market developments like these into account along with the incoming economic data when he figures out what policy is. the upward movement in yields could reflect the view that the economy is stronger, but it also reflect changing attitudes toward risk and towards the uncertainty that's out there. so he's not really telling you exactly how he would fall with these higher yields. he said the fed is in a position to proceed carefully and the fed is also in a, quote, sensitive period of risk management which means they're watching this stuff very closely. too soon to say, he says. we've tightened enough. particularly, to upside risk to inflation and the possibility that inflation expectations beco

paul donovan, and our very own steve liesman. >>> now to shares of amex.rican expression declining about 3% right now, after the company reaffirmed its full-year guidance this morning, despite posting a 36 cent earnings beat. as for its outlook, it's up nearly 60% from last year. amex is trading at its lowest level of the year and is the biggest point drag on the dow today. and speaking of which today's consumer stat is that 51%, about half of u.s. consumers, plan to spend more than $500 this holiday shopping season. that's a 15% increase from a year ago according to a new report from transunion. >>> coming up, energy stocks have some good-looking dividend yields. up next, we'll tell you which ones. plus, we're closing out our consumer week with a look at higher rates on main street. how are small businesses dealing with tighter lending standards? we'll ask joe biden's former nec deputy director. dow's down 102. welcome to ameriprise. i'm sam morrison. my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise fina

our reporter, steve liesman, is here with those results. steve?yeah, kelly, fascinating conversation ties right in. the american public, in the wake of this hamas terrorist attack on dame, strongly supports israelis over palestinians and a significant share want both sides treated the same, and the survey finding support for joe biden at nearly all-time lows. 39% saying that they favor israel over the palestinians, that compares to 34% in 2014 when there was a war in gaza, as well. 6% say they favor palestinians. 36%, though, want both sides treated the same. that is, however, sharply down from 2014. notice that 19% are unsure. that's a sign perhaps that the situation remains fluid because of a lot of the things you were just talking about. joe biden in tel aviv today promising an unprecedented aid package. the public is likely to report that, 74% saying military aid is an important priority for the u.s. government, followed by securing the mexican border, followed by humanitarian aid. but 61% supporting military aid for ukraine, not a lot of supp

steve liesman, thank very much.s well. >> steve will be speaking with atlanta fed president raphael bostic tomorrow morning 7:30 a.m. on "squawk box" and look forward to that and see what market response is. >> the take on the traders from rick santelli in chicago. rick? >> you know, fiscal dominance, i like that steve brought that up. that is a phrase i here ten times a day lately. what i hear it used most is, the way mr. powell should potentially address the notion that the fed is offsides when they go into the fiscal realm. fiscal dominance, the word dominance means chair powell you need to pay close attention. dominance is a significant word. just like the move in 2s and 10s spread. if you look at intraday of 2s, then two-day of twos you can see what's going on in the short end is different than what's going on on the long end. 10s versus yesterday, well, their yield is going to challenge 5% and probably get closer to it as the session wears on. that 2s to 10s spread hasn't been at minus 21 since september of la

steve liesman i say goodbye to you and thank you for being a part of this conversation. we welcome in now contributor joe terranova of virtus investment partner. you heard the professor lay out his case this can be good for stocks. liesman talking about what the fed may be do and what they may do. you need to make the investment decision, you to what? >> stocks in q4 will rally based on earnings and we've already been given a glimpse into what is coming with a lot of earnings revisions that moved higher towards q3 which is uncharacteristic relative to the past. i agree with professor siegel and the federal reserve should be done. i think the federal reserve unfortunately is adding to the bond markets volatility. >> a lot of people think they should be done, he says they are done. >> i think they are because of what we witnessed in the bond market? yes? >> i believe they are done because what has gone on in the long end of the curve is impacting the real economy. households, the corporations, the ability to get capital at reasonable yields, that's no longer present. that

we learn what the refunding announcement will be for the next quarter. >> rick, thank you >>> steve liesmant now with more on all of this, too. steve, what do you think about the data >> i think the data is a little problematic, in that we're still going at plus 1% the fed has not been all that concerned about the 1% it's just that it's not coming down is a concern that they may have it's something that powell does look at relatively closely i just wonder in this discussion, guys, are we having a debate about how to sell the debt or how much debt to sell? i think if you -- >> both. >> i think the concern that i have had for a long time is that spending looks like it's out of control. the packages that were put forward by the biden administration were too high now, the question becomes that given that, should the treasury have been selling more longer-term debt and how much longer-term debt? they did sell longer-term debt the average duration did go up but the question is, by how much and should it have dramatically gone up? there are arguments out there that essentially short-term debt is l

so let's go now to steve liesman with that embargo. steve? officials in the september meeting judged that one more increase at a future meeting was likely appropriate. a majority pointed to upside inflation risk. for the record, this was back in september. we don't know if this still holds now. some at the time, however, judged that no further increase was warranted. so there's your split on the committee that we're hearing in the rhetoric out there from fed officials. all agreed it was critical for policy to be, quote, sufficiently restrictive. that's the term that chair powell has used to indicate when the fed would be done and all agreed once they got there, it should remai

so, let's bring in steve liesman. and tell white house you've learned, steve, and what does it mean >> i thought it was interesting that karen said it was fine. i guess you could argue that in the october to december quarter, they're going to be issuing $776 billion of debt, and the good news is, that's quite a bit below the number they had, by $76 billion, they estimated in july, and then they said, $816 billion in the next quarter, so, i guess it's fine that it's less than we thought it was, but it's hard to argue that it's fine that we're issuing $1.6 trillion of debt over a two-quarter period in the first half of the fiscal year. i don't think that is fine, and it's unclear whether or not we ever quite reach a top or where we find that top in the five-year, so long as it's unclear that we have a handle on what's going on with revenue and spending in this country we did apparently get something of a boost in revenue from d deferred taxes in california, some other states also did that. the irs also, because of some

rick, thank. >>> steve liesman joins us now with more. money never sleeps, pal. it's on the other side of the world, steve. things can happen anywhere, anytime. >> and it would affect us right here. but, joe, i can tell you, having talked to foreign trader, they hate the idea they have to wake up at whatever time to get the u.s. jobs report. they say they'll be happy once the trade in india is not reliant upon what happens in the u.s. we heard how global the whole thing is. m these are good numbers for housing. i do see, by the way, a little bit of movement upward in interest rates. i guess rick and i fundamentally disagree on the main cause of this rise in rates here. i see it very much as a response to stronger growth. it looks like every time these stronger numbers come out, the yields do, indeed, pop. yesterday was a good example. if you look back at the 10-year if mid-july onwards, i see it was -- mid-july was when that retail sales report came out for june, and you had that surge then. issuance is definitely an issue, but i'm not saying it's the whole issue.

where are you, steve liesman?a of a higher long-term rate. i think ultimately that leads to at least one good development. if and when we can get inflation under control, the fed can start to ease back on the short end. i think bostic may be a little pessimistic about the ability of the fed to cut rates next year. if we do get inflation under control, a lot depends on what happens with oil and how that works through the economy right now. but you can imagine a situation where the funds rate comes down, maybe somewhere below 5% and you get a flat or a slightly inuninverted or disinverted or up wi upward sloping yield curve. i think the fed is talking tougher than they feel. yesterday one of the things ways trying to report, andrew, is if you look at the dot plot, there is a bunch of folks down at 4.25, 4.5 for next year, none of those folks have been talking or if they have been talking, they might have each changed their mind for september there are a few doves out there. just hard to find right now. >> i'm puttin

let's bring in steve liesman. steve, we talked about this earlier today, how does a fed handle this consumer, seemingly unstoppable, as rates keep rising? maybe they're not moving because it's expensive to do so, but they are still buying everything else. >> well, i think the word we keep hearing from the fed is patience. there's a couple camps at the fed. there's a smaller camp of folks who say for sure we want a hike, there's another camp of folks who say, i could hike, but right now, i want to take some time to -- too look at the data and be patient about it, and a third camp that says, we're there, we're at the peak rate right now. and i think the data is going to dictate where the fed ultimatery ends up. and by that, i mean, if this strength continues, which is no guarantee it will, i want to offer some support to those who said, you know what, this data is, indeed, subject to revisions -- the trouble with it is, we've had several months now of really strong consumer data, so, even if it is revised downward, i

steve liesman and the next move plus leslie picker and phil lebeau looks ahead to united results out art with you. unequivocally strong retail sales number for september. it collides with a bunch of fed speakers who have, i think, in general been expressing no real hurry to do anything else on rates. we did have them talking about lags and the consumer that's been stronger in some pockets. how does it all net out to you? >> well, first, let's talk retail sales. for the moment it looks like a game changer in terms of fed policy and the last quarter point hike, mike. what's happened is november is not really in play. it's mod west when it comes to e probability. and now january is the new place where they're starting to talk about a rate hike there. we started to price one in over 50%. so what's happened -- and i will layer in barkin saying we can be patient but that means not doing anything immediately. when they do get around to doing something, it seems the markets are starting to think more and more it may be a rate hike. this comes after feeling definitive of fed speak saying, you

news, fed chair jerome powell about to speak at the economic club of new york and let's get to steve liesmanver to you. >> thanks. in a speech or opening statement that turns hawkish, turns dovish, the fed chair says continued economic strength could warrant further tightening of monetary policy. inflation, he says, is still too high. he does note the string of

. >>> let's get to steve liesman with some breaking news on the fed. fed governor chris waller now, he had been one of the earlier, most hawkish members of the fed, but that changed in september when i did an interview with him in early september, and he's talking again, and again he's repeating this idea of the federal reserve could wait and see what happens on rates. that was interesting when he said that back in september and everybody thought that they were going to hold, but here they are, coming up closely into that november meeting and he's still saying that the fed can wait and see about raising rates again. he said, it's hard to see a link between mideast violence and fed policy. i'll get back to that in a second. but he says the last three months of inflation data look very good. it's astounding how resilient the job market has been. and suggesting, guys, that the market can do some of the work for the federal reserve. very interesting coming from waller, he's one of the thought leaders on the fmoc. he is a voter all of the time, and he had b

. >> steve liesman, who is speaking now? >> the cleveland fed president sticking to her hawkish guns. she says she supports the for holding rates restrictive for some time. tilted to the upside and goes on to say we are likely at or near a holding point at the funds rate. she thinks appropriate to keep the funds rate at that peak for some time. a limb bit more give here later on. whether the fed needs to haike, risk on both sides, tightening too much, too little, policymakers need to be nimble. the rise in the ten year was larger than she was expecting. and if it's sustained this rise could help moderate demand, ostensibly the idea of doing the fed's work for it. events in the middle east, she says, are still unfolding and adding to uncertainty that's out there. on the outlook, mester will say consumer business and business spending are expected to moderate, growth expected to slow below trend next year. labor market conditions, contradictory here. paint a picture of moderation and resilient, wage pressures are easing by som

let's get to steve liesman with those headlines. >> fed officials saying the interest rate is "sufficientlytrictive." that's the benchmark forged by fed chair jay powell to determine if the fed could stop at current levels. very much in a place he told reporters earlier today where we can be patient. but the fed vice chair michael barr yesterday said the fed is at or near that level, but not quite as definitive. the comment would mark it as an outlier with several fed officials suggesting that they would favor an additional hike of 19 members forecasting one more hike this year. in fact, the probability of a final hike this year rising this morning to 31% for november, 47% for december after a strong job openings report implying continued strength in the labor market. and suggesting the fed should. hike again doesn't offer much relief. he said the feds should hold rate at current levels for a long time and well into 2024. asked about surging long-term bond yields as dom just said, hit new 16-year highs of 4.78 right now. he said higher rates will help the fed restrain the economy with corpo

i'm becky quick with steve liesman and an mike santoli. >> i think the market will listen closely.s. if you look at the fed probability and short-term rates, you will take it. there is lot of uncertainty with

i'm becky quick with steve liesman and mike santoli.h the markets this morning and after a relatively rough day for the markets yesterday, where you had the dow off by 1% and the s&p and the nasdaq down by more on a percentage basis, it was the weakest performance for stocks since october 3rd, you're now looking at futures relatively flat. dow futures off by about 4. s&p futures up fractionally. nasdaq indicated up by 31 points, partially because of some strength with some of the earnings last night. you have to be looking at netflix to see the shares there and the reflection of what is happening. treasuries have been the real story. treasury yields this morning look like the ten-year is actually just below 5%, at 4.95%. the two-year sitting just above 5.2%. and that 30-year still situated above 5%. >>> american airlines reporting quarterly results. let's get right to phil, planes, trains and automobiles, lebeau with the numbers. >> this is a beat on the bottom line for american airlines in the third quarter, earning 38 cents a share. s

don't miss steve liesman's interview with raphael bostic coming up at 13:30 cet. >> if you want to getnvolved with the conversation over powell's speech, follow us on x or tweet us. we are @cnbcjulianna and i am @cnbcjou. >>> and we will take a closer look at the market action after the break. that's coming up on "street signs." you deserve better than that. i'm hungry, i'm in a hurry, i don't have time to make anything healthy. you could if you had a blendjet. blendjet? it's the portable blender that makes the healthy choice the most convenient choice. i don't know. it seems like a hassle. hahaha! wrong. just pour in some milk, add some frozen fruit, and bam! you've got a nutritious and delicious smoothie. mmm! that is good. you're welcome, sad office guy. get yours today at blendjet.com are we in in an ad? we sure are. when we started our business we were paying an arm and a leg for postage. i remember setting up shipstation. one or two clicks and everything was up and running. i was printing out labels and saving money. shipstation saves us so much time. it makes it really easy and

let's bring in cnbc senior economics reporter steve liesman. most, if not all of it, steve, has been better than expected. >> a pretty good week, sara. i guess there's a lot to worry about, a lot to complain about it was a week of mostly stronger growth growth tended to exceed estimates and the prior readings with inflation remaining a bit sticky here. that's probably the rub. and all continuing to raise questions about the strength of the economy in the months ahead. take a look at this graphic we prepared here. arrow is helping you figure out gdp accelerated sharply. came in above estimates. that had already been revised higher core pce in line with estimates. personal income a little light relative to estimates and below the prior month. but the bigger story, consumer spending beating estimates with a persistent theme here of stronger consumer spending all this week and all last week. stronger than most forecasts durable's higher than estimates. this is interesting because it shows some rebounding of business investment. it had been weak in t

let's get out to steve liesman who gets out the headlines. steve? >> kelly, thanks. the fed's vice chair is saying that the key question is not whether the fed hikes again and how long the fed remains restrictive. full effects of tightening are yet to come. that's him weighing in on an important debate among fed officials and it's not done with the lags yet. he said the fed can proceed carefully at this point. the economy is showing more resilience than he expected. he sees a higher probability now that the fed can avoid a large increase -- can avoid large increases in the unemployment rate and the degree of job losses you might usually see with the amount of policy tightening that they've had recently. he says they're making progress bringing labor supply and demand back into balancing and he expects the gdp to moderate below potential for next year with some softening in the labor market and it's important, he says, for the fed to monitor and how tightening is affecting bank credit and he says core loan growth is stagnant in banks of all sizes and financial stabili

our steve liesman.ng morgan stanley shares slumping in a moment. don't go anywhere. >>> morgan stanley continues to be one of the outstanding laggards of the day, one of the worst performers on the s&p on the back of its latest results. let's get back to leslie picker, talk about some of the headlines today. hi, leslie. >> hey, carl, quite a pronounced negative move for morgan stanley here, despite beating on the top and bottom lines, shares under pressure amid a clear and continued slump in investment banking, a decline in net interest income and wealth management, and a turnaround in part depends on the macro, something ceo james gorman offered a generous amount of commentary on. he talked about the surge in rates, saying, what's remarkable is that we haven't had a recession, and i personally don't think we're going to. he talked about mop their policy, as it relates to the deposit mix within the firm's wealth franchise as well as what it means for deal activity. >> i suspect the fed will do one more

next week and everybody watches that one >>> let's begin with the latest read on the economy and steve liesman, we have had a lot of data this week, steve. >> yeah, it's been a good one, tyler, if you are an economics reporter even if you like the economy, because it was mostly stronger growth, growth tended to exceed estimates with inflation, however, remaining sticky. but curiously, fed rate hikes are now less in play, as i'll show you in a seconds on the expectation that the robust economic readings won't last core pce prices we got this morning, higher than the prior reading in line with estimates personal income, a little light relative to the estimates and below the prior month. but consumer spending, beating the estimates with a persistent theme here of a stronger consumer than most forecasts real gdp we learned accelerated from the upside and came in above estimates that are be already, by the way, higher. there is some rebound in business investment, which had been weak in the gdp report. all of this seemed to cement the market's expectation for no change in next week's meeting with a

the federal deficit and the cost of servicing debt amid this higher interest rate environments steve liesman has the results of cnbc's latest fed survey hi, steve. >> yeah, dom, it's like the fed has taken the number two spot among concerns the size of the debt, the growth rate, and the cost to service it have now become significant concerns among participants in the fed survey but there are differences over what to do about them. let's go through the data here 87%, very or somewhat concerned over the size of the debt. 100% are worried about the speed with which the deficit is actually growing and 90% are concerned about the cost of servicing that debt. moving on, the federal government should cut spending 42% say that's how to deal with it 7% say raise tax revenue 45% say do both. the philadelphia trust company writes in through the survey -- this is realistic and provides investors an opportunity to receive a good return. however, consumer borrowing costs have been increasing in tan tell that makes the huge federal deficit even more worrisome, reflecting the view of a lot of the participan

for that we'll turn to steve liesman. >> new york fed releasing survey of household consumer expectations and sees the one-year expectations rising to the highest level since june. but not that high. the one-year coming in at 3.7%. that is up just a tick. still well below the 6, 7 high point in june 2022. the three-year ticking up 0.2% to 2.3%. that is below the 4% high we had there. what hasn't moved is the five-year, it actually came down. i think that's probably the one between the three and the five-year is the one the fed follows most carefully with concern about expectations. some other things, expected price decline for college, gas, medical care and rent, i would have thought gas would have gone up and driven the thing higher. it did not. expectations for food prices surged 0.3 percentage points to 5.6% year over year. americans grew more confident in their job market possibilities, concerned about losing their job declined. confidence in finding a new job if they left, that increased. but there were concerns about missing debt payment. in fact, that gauge reached the highest leve

. >>> steve liesman has been pouring over the fed beige book. let's get to him for the details. what are we learning? >> more like speed reading rather than pouring over it. little to no change. consumer spending said to be mixed to improved, but some are reporting a slowing in consumer travel and yet uptick in business travel in a few districts. there was a modest decline in loan demand at banks. rates also said to be slightly increasing at this point. and multiple districts report improving outlook in the manufacturing sector. and i'll say that these economic anecdotes may take on more added importance because it seems like more and more fed officials are relying on anecdotes rather than the data. data has been strong, but seems like the anecdotes seem to be a bit weaker. outlook for the economy is generally stable or slightly weaker. holiday shopping krouts said to be mixed. labor market continues to seize with improvements in retention. less pushback on wage offers. but employers continue to have to modify the contracts to offset higher labor costs including offering things

steve liesman, we appreciate it. >>> let's get the latest on the bond market.fter the auction about an hour ago. rick santelli joining us from chicago. it was interesting, not only the immediate yields in stocks but that it continued. >> yeah, and this is much different actually than yesterday's tenure, which was also a very poor auction. having back-to-back long-dated treasury yields with soft auctions, that's important. and listen, i agree with steve. always following the fed is important. they're a mighty organization, right? but let me see. am i going to worry about maybe a quarter point in december or am i going to worry about almost 20 basis points today in 30-year bonds? the market right now is in control, and that is something that has changed. now, as you look at 2s, 10s, and 30s on one chart week to date, you can see what i'm talking about. boy, they all popped. and 30-year now joins 10-year in the highest yields going back to 2007. yesterday it was 2010 for 30-year. on tuesday it was 2011. and boy, it is zooming. and today at the auction, we had the

in the meantime we have breaking news to steve liesman. what do you have >> scott, the u.s. treasury announcing its borrowing needs for october and december, saying it will be $776 billion. a couple context, little context on that. $76 billion below the prior estimate made in july, however it is record borrowing still for that quarter the october-december quarter was held by revenues from defer taxes in places like california and the irs from some natural disasters allowed them to defer taxes and now they're being et paid it is offset by slightly higher spending as well the first estimate for the january to march quarter $816 billion. maybe a bit above some of the system i've seen on the street that is record borrowing for the quarter. however, the treasury is going to maintain a balance of $750 billion, a cash balance for both quarters that's a bit higher than i thought, so that ends up increasing the amount the treasury needs to borrow we have seen estimates up $700 billion. the treasury being more prudent given the way the politics are going, keeping a slightly higher cas

steve liesman joining me now for cnbc on msnbc. things, what is going on here, and could this mean action from the fed? >> well, i'll take them one by one, what's going on here is very strong job growth, not only s ts month off the charts, but they revised up the prior twomonths. the good news partf that is it came with modest job growth -- msorry, wage gains. if those wage gains had been higher, it would have ignited more concerns about inflation. instead, the stock market is sort of rallying on this number after being spooked by it early on, they decided, hey, this is okay. we can have strong job growth if we have people coing into the work force, and wage gains are muted 4.2% year-over-year down from 4.3. that's good news for the stock market. why? because it means to answer your second question that the fed may not have to hike. now, don't get too excited because yields are pretty high, mortgage rates are high. your credit card interest rate is going to be high right now but that's the market doing its thing. it may mean the ma

josh, shannon, and joe as well as steve liesman, our senior economics reporter.ck the markets. it certainly looks different now than it did then. we're at the highs of the day.

steve liesman joins us with more on what he's seeing with this. steve, what do you think?bit less than have been expected but still, that's a big number to the upside. i'm looking at used cars falling 2.5%, apparel falling 0.8%. looks like there was a surprise in shelter. i want to find the owner's equivalent rent. that was 0.6%. it ticked back up, which is contrary to expectations. on the other hand, we did have a decline in medical services, up 0.3% on that and also transportation services were up 0.7% with a 4.9% increase in airline fares. that may also be passing along higher fuel costs into the ticket price there. i think this is the kind of thing that tests the market's mettle for figuring out, is the fed really done here? i think it is, and i think there is some tolerance for this kind of oscillation in the number, a bit of higher on the headline, but right in line on the year over year when it comes to services, and while i'm talking to you guys, i want to see the fed probabilities if they have changed at all, and they did a little for december. they remain below 1

steve liesman has more with the report. steve, people are paying attention. >> they heare, becky.cast could send into a selloff. that could drive yields up. this could calm fears of the fed to easily hike again in the face of better economic strength. the numbers we are looking for is 170. 187 was the prior number. a tick down in the unemployment rate to 3.7. hourly wages is supposed to be higher than last month. the year over year is 3.3%. over at citi, they expect all elements of the september employment report to indicate a tighter labor market. job growth has slowed from a three-month average from 400,000 a year ago to 150,000 now. it remains above the longer number of 100,000. wage growth is elevated to the pre-pandemic era. steven stanley is saying it is signaling cooling and weak and it is out pacing consensus expectations which remains healthy. the sharp rise of the ten-year did not come along with rate hikes priced in. a 22% chance of hike in november and 34% for december. markets have taken the cue from the fed speak this week. you have an edge off the ten-year. that spe

that's coming up at 8:30 eastern time less than an hour and a half from now steve liesman joins with view of what to expect and we're looking for some pretty big numbers, steve >> yeah. becky, we're going to get what for some in the market is the troubling news, the economy did very well in the third quarter the fed said it thinks the economy has to slow down in order to bring inflation down. and ease back on interest rates. gdp seen accelerated to 4.7% in the third quarter. that's up from an average, you can see there of 2.3% overthe prior three quarters it is more than double what is called the estimated potential of the economy, that is a growth rate seen as being noninflationary. the fact is the economic resilience we are seeing in the u.s. means that you have to adjust your distribution of probabilities around forward inflation higher than before how can you not when we have q3 gdp at 5%? well, despite that widespread view, inflation has come down fairly sharply, even while the economy has grown at or above potential as you saw there and unemployment stayed low. that raises quest

for that we'll turn to steve liesman. >> new york fed releasing survey of household consumer expectationss rising to the highest level since june. but not that high. the

steve liesman joins us.re on display every day as prices crash. >> only have to look at 7%. it's more now the decline in the past several weeks to appreciate the risk and risk freeh treasury markets. those losses can mount in a hur. we talked to the bond fund managers how to manage the risks. pimco's cio dan ison tells me his risk the inflation is still a material risk, high devils of debt are still a problem and could be and some investors are demanding default. the economy has been strong and you saw the move this morning with the jolts report. that could push up as it did interest rates further. now, iverson recommending investors look to extent the average duration in their bond portfolios. don't buy on the short end. he's taking the duration up to 4.7 years. still low but the highest since 2014. all of that points up a risk that many sitting in cash in those short-term bills may not have thought about called rollover risk. the juicy money market yields that can disappear quickly if the fed starts to cut

economist and steve liesman. rom the data we just got? >> yeah, i guess i'll disagree with rick. if you look at how the market has surprised an upside. it moved pretty sharply through the months of july and august but also the government was surprising the market with issuing debts. i in the discussion, stronger economic grote and as well as more talkish fed talk. when i look at this number today, becky, i seeing about i'm going to get too excited o up side or the and when i look at how the fed funds market has reacted, which is almost not at all, and higher yield, what we've seen is there in not a higher inflation component to it as every speaker and almost every wall street analyst has noted, these are rise. >> all right, joe. you get to decide who's right. >> no, i'm going to have to go with steve. i would asked one of the factors that have pushed this mild is the aushia relieve. which means if the b.o.j. comes up and they come off that could be beneficial for treasury as it stabilizes the dollar and its sellin

let's get to steve liesman with some of the details. >> americans down on the economy, down on stocksretirement. take a look at the outlook here. i'll cut to the chase. this is one of the largest gap between those who were negative saying it's a bad time to invest in stocks. you got to go back. here in 2020, we had a big gap and, again, back here, coming out of the financial crisis we had a very large gap right there. where do people see opportunity? interestingly, realize estate s coming down. it goes on as well when you look at real estate was 39% in april, 2022, now it's 32%. stocks, you can see here, they're up just a little bit 17%. a little bit more interest, but maybe not as much as you would have thought when it comes to interest in savings investments and cds. crypto coming way down. first got into our list a year or so ago and it was pretty high. it was as high as 17. now it's down to 18%. let's look at those with actual money in the market with $50,000 or more. more positive on stocks. that's a good sign. but getting a little more interest in treasuries if you add in corpor