steve liesman has the story. >> thank you very much.ederal market committee, the kansas city fed who took office in august saying it's a public policy to remain restrictive at this time. he's setting a tight labor market and inflation running above 2% and reasons to stay on hold. he says the fed should wait for evidence that inflation is headed to 2%. inflation, he says, is a surprise to the upside, citing a 4% inflation in the first quarter. he's concerned about a slower improvement in supply chains, which helped inflation a lot last year. among the risks he cited, the returns of goods inflation. it was negative in the report this week. but that is -- he's concerned about global shipping disruptions and high prices of emergency, resilience to high rates from the economy. he says that makes the path of policy more uncertain. and job gains driving up housing inflation. there is good news in all this. he talks about the inbound in immigration easing labor market tightness. he says inflation has stepped down significantly, and the economy

steve liesman is at the fed in d.c. because we have the minutes later. bryn, to steve's point on the investment thesis intact, because the expectation is that earnings will be pretty good, right? hsbc says they're still too low. do we start getting these reports coming in and say, okay, that's why we thought the thesis was intact? >> i think it will come down to security and sector. it's easier to know what you don't want to own to say that's not intact. you don't want to own long duration bonds, small cap value, small cap growth. stick to high quality tech, the qs, energy, industrials -- which i know jim likes. you have to pick your spots. there will be a big separation especially in this earnings season because the analysts are reducing estimates. >> no, we went from 10% to 5% in terms of earnings growth. >> that's a huge deal. >> i understand. but when you've been at negative quarter after quarter for a while, you'll take the 5. >> we'll take the 5. analysts go too high when we come down. when small and mid cap growth will not suffer fools. if you slig

and our steve liesman has what it all means for the fed's next move. k it off with you. >> deidre, thanks. after ignoring the bond market, stocks are declining in tandem with rising bond yields. so what's bugging the bond yield? there is slowing progress on inflation. take a look here. between october and december last year, core pce fell from 3.4 to 2.9, a 34 basis point decline, but only 16 basis points since december. over that time, market-based five-year inflation have rounded it back up and now stand at 2.38. the market's confidence in a june rate cut has not disappeared but weakened. traders put the probability of that cut at 75% a few weeks ago, now around 59%. cuts are still on the table, and solidly in the fed and market's forecast. the cleveland fed said today that she is -- thinks it's appropriate to cut rates later this year, and the inflation picture has not changed much. that's because she expected inflation progress to slow. it remains likely inflation will decline to the 2% target over time. yet she's still not confident enough to cut n

let's get to steve liesman for more. steve? >> john, the outlook on the survey has turned more hawkish with respondents delaying the bulk of rate cuts amid a forecast for higher growth but higher inflation this year. take a look at the numbers. only one cut fully priced in for this year, that's in december. and that was compared to june being the pick in the prior survey. the group split on the possibility of that september cut. the 29 respondents see a 22% of a hike in the next year. 3.8% feds fund rate in 2025. so still cuts in the forecast, butnow next year and a bit less than had been forecast, that neutral rate ticking up by 0.2%, suggesting the fed is maybe not as tight as believed before -- when the fed started hiking. you can see right there, follow the blue bars for the current forecast, all up from the prior forecast by a cut or two. but it adds up over time. you can see there now 3.8%, seen as the neutral -- as the next year's number, the neutral 3.1 versus 3.3. one writes in -- >> that's more or less how the market

joining me now are my two guests, and cnbc senior economics reporter steve liesman with us. e, how surprised were you that gdp growth came in only at 1.6%, down from 3.4% people thought it might slow up, but maybe not that much. >> yeah, it was dmaeefinitely a surprise when you dig a little deeper, you don't see the weakness that everybody is afraid of in fact, you may be getting just the weakness that you wanted if you were hoping for a soft landing. when you look at the gdp, you see that consumer spending did slow a bit you see there was actually a decent pop back in business spending that was a good number there but then look what happened with inventories and trades add those two bottom numbers on the left together. it took off 1.1% it was a big surprise on the inventories. ly tell you, tyler, the second quarter forecast was raised, because of an inventory build in the first quarter. now we have had two negatives in a row. that's not the problem i wouldn't be trade thing market down based upon the weak economic growth numbers. what i would be concerned about are the infla

so maybe buying some staples positions fits as we bring in our senior economics reporter, steve liesman, into the conversation as we begin the fed meeting, the decision in the news conference tomorrow. as we know that things have taken a more hawkish turn, steve. >> yeah, they've begun to dial out rate hikes this year, scott, along with the futures market. more hawkish. a couple things in this survey, the only 50% or greater month for a rate cut is december now. they're 48 and 48 in september. they have an average 1.6 cuts dialed in. you can see here what you're looking at is something different, scott. that is the actual futures market, and that's come off a lot from this morning's eci index. the market has price wise thrown out june, thrown out july, and now pretty much working on throwing out september, which is in line with our forecast, scott, at that 50% range. it's really up in the air now, a jump ball. i don't know what you want to call it, whether or not there's one or two cuts in year and whether there's any at all. they did move cuts into 2025. so we do have that in front of

and the questions of the path forward steve liesman filed this report. >> the big miss that exaggerates on inflation based by the federal reserve and the u.s. economy details of the report show gdp at 1.6% down from 3.4% in the fourth quarter consumer spending was okay at 2.5% after strong numbers in the fourth quarter business spending was up 3.2% compared to 0.7% in the fourth quarter. inconvconvventories and trade tf at 0.9%. those two combined were a big reason for the miss compared to the estimate of 2.4% what it means is the core of the economy, business and consumer spending, is doing fine. easing a bit from the fourth quarter as would be expected in the soft landing scenario. the inflations numbers were not fine they took off from the top line. core and headline inflation numbers rose in the report core pce up from 2% erasing a half year of progress. the bull manyk in inflation that drove down the rate cut from june to july and then september being a money bet, but that number has been declining now a 59% probability of that first rate cut the modest slowdown in the numbers when

steve liesman and brian rose with the latest on the economy and the fed. why next week could be critical and wells fargo's mark smith on how to position amid all the noise. let's start with greg brue, iran, and energy analyst greg, good to have you with us >> thanks for having me on >> so, are we at a point, given what i would characterize as the tempered response by israel to iran's attack last weekend, and in turn, what seems like iran's tempered response to what israel has done can we close this chapter now? is that likely >> i think we can close this chapter for precisely the two reasons you gave first, israel's response to iran's historic attack does look pretty measured, right as far as we can tell, israel did three things it launched air strikes against iran's allies in syria, it launched a drone attack inside iran using its covert elements, something that it's done in the past and launched missiles into iran but on a small scale. so by all appearances, what israel did seems to be pretty limited. that's one element to suggest we're in a deescalatory

steve liesman is back, along with cnbc contributor peter. ere just reporting that chair powell supposed to be talking about canada, but he says the fed does not have the confidence to cut rates in the foreseeable future, can stay here as long as needed, as this economy remains hot, inflation is stubborn. but the labor market seems fine. i thought he was talking about canada. >> he could have stuck to can dashgs but he came out of the box with something to say about interest rates and inflation. he's not happy, he's not happy that bond yields are not happy. i guess the stock market probably looks like it came from this brief selloff there. but what he's saying is he does not have the confidence. he said that inflation is not running the way they thought it was going to run. it's running hotter than they expected. and this is not giving them the confidence to cut. i don't believe he's taking cuts off the table. there was an interesting comment this morning from vice chair jefferson where he did not discuss cutting rates. he said current rates l

. >>> yields look ahead toward big reports this week and our senior economics reporter steve liesman joins with us what's driving those moves, steve? >> jon, the combination of data, fed speak and technicals inside the bond market not calling into question the market's belief in a june fed rate cut. take a look here the probability of the june rate cut, trading money at the lowest levels we've seen after trading near 75% two weeks ago and 62% last week. so it's a sinking probability there. what's more, the futures market is now growing in fact, more hawkish than the fed itself is. the january fed funds contract and that's above the median forecast of 4.6 for the year-end fund rate and it is a bit above, but it had been below for a very long time. all of this happening alongside a surge in yields of both the two and the ten-year. the two-year rising a strong 9 basis points where it closed on thursday afternoon. while yields started the morning higher, they got an extra boost from stronger than expected ism manufacturing data in the rear-view mirror and that is the february inflation re

let's get to steve liesman with all the details. steve? >> hey, melissa. yeah, after today's high level fed speech from the chair and the vice chair, based both on what they've said and not said, there's a case to be made the fed's base case has moved away from cuts, likely being appropriate. jay powell saying this afternoon in a conversation with the canadian central bank that the fed's restrictive policy needs further time to work. he went on to say, he noted a lack of further progress on inflation this year. he said the recent data has not given the fed greater confidence to cut. progress is taking longer than expected to achieve the confidence to cut. and the fed can maintain that restrictive rate as long as is needed. what powell didn't say maybe equality important, remember back in -- earlier this month, he said, if the economy evolves broadly as we expect, we see it as likely to be appropriate to begin lowering the policy rate at some point this year. that was not part of his remarks today. fed vice chair jefferson used that same language in late fe

st steve liesman, thank you very much. we have ten-year treasury notes up for auction and rick santelli is tracking that action. rick? >> deidre, this was one nasty auction. keep in mind that we are up big on yields, whether it's the short end that's up over 22 basis points, or our tens that are up almost 19 basis points. we tried to auction off 39 billion ten, and do keep in mind, this is a reopening. this is the second time we're adding into an original issue. each time, each iteration gets a smidge weaker. so i give this auction a d, and maybe that was kind, because 39 billion tens came off at 4.56. here's the problem. the one issue market, at 1:00 eastern when it buttoned up, was basically 4.529. let's call it 4.53. that means it tailed three full basis points. that is big. as you look at the intraday chart, you can see clearly that yields moved up a bit on that. but it wasn't only pricing, which i said you have to be a little more generous on your grading, but all the metrics were nasty. 2.34 bid to cover, the worst s

let me get to steve liesman because we do have the breaking headlines from fed chair powell. he is speaking at stanford university. what is he saying, steve? >> reporter: if the economy evolves as expected, it will be appropriate to lower rates at some point this year, but the fed chair speaking at the stanford graduate school of business says it will not be appropriate without greater confidence inflation is coming down. he cites the fed policy statement in making that comment. he said the fed has time to let incoming data guide its decisions and the policy rate, though, is likely at its peak. that's the good news. inflation, he says, has come down significantly, but it is still running above the fed's 2% target. the job of sustainably returning it to target, quote, is not yet done. then he talks about the recent economic reports on jobs and inflation. they have come in, he says, higher than had been expected, but they do not, quote, materially change the overall picture. so what he's looking for is he sees solid growth in the economy, labor markets rebalancing, getting a lit

. >> to steve liesman. he has breaking news now, the cleveland fed president loretta mester is speaking now. >> loretta mester, as you say, scott, says it's appropriate to cut rates later if the economy evolves as she expects. she says there has been substantial progress on inflation, and she expects that progress to continue. in fact, adding, the inflation picture in her mind hasn't changed much despite the firmer readings in january and february. she does it or had expected inflation progress to slow. so what she saw the last two months was very much in line with what she expected. the most likely scenario inflation continues to decline towards the 2% target over time. now she's not quite ready to cut just yet saying she needs to see more monthly readings on inflation, quote, to raise my confidence. does not expect to have enough by the next meeting, enough confidence, that is, or enough data. she says they are coming back to better balance, but points out the bigger risk right now is cutting too early. i

. >> for more, whether or not there could be a rate hike in the cards, let's bring in cnbc's steve liesman. great to have you with us. at what point is it not a blip, not a bump in terms of these inflation readings, steve? >> well, you know the old saying, two points to draw a line, three points to draw a trend, or there's the other saying which is, three strikes and you're out. i think we're kind of -- we're there, but i don't think we're actually out. let me just tell you what comes next in the next sort of story of inflation. we start tomorrow, guys, near-term, we have the inflation action continues with the wholesale price report. that's supposed to be better behaved than consumer prices, believe it or not. all the closely watched indices there, you can see, are supposed to come down. that will be good news. and that will lead to a better forecast, or a more accurate forecast, for the core pce. you can see, that's been running about a percentage point better than the cpi. has shown some increased improvement better than the cpi. we'll get that report at the end of the month. now, futur

. >> steve liesman, our senior economic correspondent has been on this very question throughout the day, and steve, i think you called it a hawkish tilt as you sort of looked at the current makeup of the fed speakers who matter most in the days prior, and who are starting to ma maybe lean towards being a little more hawkishment . i should say as i ask you that, not exactly the fed chair, and that's important. >> i think the fed chair still is sort of in the middle, gauging his committee, guides his committee. i think what's happened, stcott is the dots leaned hawkish and then the rhetoric leaned hawkish. i think we're hearing the reflection of this movement of the dots essentially to the right. you had people give up the idea that maybe you would do more than three cuts and then you just barely hung on to the median of three cuts in the dot. you also had people move up their sense of where neutral is and other rhetorics come along with that. which you know, you kind of in this environment, scott, you started to think about a hawk as somebody who thinks maybe more probability on the idea

steve liesman is joining us with the latest. >> mike, i think what happened as you look at the traderough the futures markets and this morning, i think it was revealed that what happened friday was a flight to safety. you take a look at the ten-year yield and it looks like a "v." we have basically put it back. you had a surge above 450. it was like, okay, we take notice of that and then coming back and it went down to below 405. >> the ten-year yield. >> it locks in the feeling of the market. go back and look at the january's fed fund contract. it shot straight up last week. you look at the cliff at yosemite. that's what it looks like. it added .25% for the fed. there is the cliff. you can see it. what time was that, leslie? wednesday at 8:30 with the cpi number coming in. you see they flirted with taking that off. whenyou listen to fed officials these days and geopolitical risks were on their radar. which way on their radar for inflation upside. a pure surge in the cost of oil. that looks to be today to be flat. there's no additional risk there. it's just one of the things the marke

let's talk with cnbc reporter steve liesman. steve, what did we hear?kets largely unchanged. >> yeah, they seem to be. powell is saying in a speech today that if the economy evolves as expected, it will be appropriate to lower rates at some point this year, but he did embue some bout as to the timing, saying inflation has come down significantly but still above target. the job of reducing inflation is not yet done, and he still needs greater confidence in the inflation numbers and the trajectory in order to cut interest rates. speaking at the stanford business school of business, he said reports have come in higher than expected but have not materially changed the overall picture of declining inflation. he says he wasn't clear if the reports were just bumps along the road towards the 2% inflation or the start of something a little more worrisome. so what happened? it drifted a bit higher with more of a chance of a cut. a few points higher than it's been with greater confidence of a cut in the market, though. you can see there for the july and the septem

steve liesman joins us now with more. we'll get to seth in a second. what do you think, steve?on't have fop i'm going to move on and talk about the data here for a second. this is the -- andrew did a nice job of selling this number and the tease leading up to it. this is an important number. it's probably the most significant number when it comes to wage inflation that's watched by the fed. and rick did a nice job of saying, it wasn't good news at all. i want to explain how we got that bad news. before i say that, i'll tell you that the doves, those who were looking for lower rates perhaps or rate cuts this year, they were banking on this number coming in where it was expected to be, at 1%. the 1-2 is a big, significant, and important miss in the debate over the federal reserve here. how we got here, maybe the one tiny bit of good news, is that maybe there was at least an acceleration in the wage component. that was still evaluated at 1.1 compared to 1.1. it was an elevation in the benefits component, which went up to 1.1 from 1.07%. it wasn't really so much an acceleration of

. >> we want to talk to steve liesman and see really, steve, what do you think today's data means for the fed? they have to put it together in a data soup, right some pieces are hot, some pieces are hold, so what is jay powell thinking >> and how hot are the matzah balls. this is an important question within my family i separate this into the soup and the matzah balls are two different parts. the growth part of the report does not concern me. the weakness that shannon spoke of is real, it is down it is the weakness we wanted the weakness was all part of that fabulous softlanding scenario that no one this coveted. if you look at the gdp report, take out the trade and the inventory which were 1.1%. look at domestic purchases there were some issues inside the consumer spending that sharon is right to point out crank it along on the growth side i have to fight one more time what everyone wants to know tomorrow where the surprise are coming from. what you want to listen for, does rick come on and say that the pce for march came in at 0.3 but the higher inflation numbers we got came from an

steve liesman joining us now with a preview. steve? >> yeah, the number of the week here, andrew.ths of stubborn inflation data, some relief in the consumer price index that could put the fed more firmly on the track to cutting rates this year. equal concerns there, no progress, and the fed will have to stay higher for longer or think about raising rates further if it wants to hit the 2% target. looking for 0.3% on the headline, down from 0.4. that's the good news there. the core also seen coming down. the headline goes up because of basic, but the core down a tick, slow progress we have seen. forecasters see the cpi getting some help from falling auto prices and auto insurance costs along potentially with airfares. but commodity prices have also been surging, fed officials likely overlook this unless the price increases start to bleed into other areas of the economy. most of their focus is going to be on the service sector. year over year inflation has been stuck north of 5% and also focusing on housing, a glimmer of hope last month when a key housing inflation gauge fell by .2%.

that level, and i don't have any significant resistance between 467 and the 5%. >> thank you. >>> steve liesman you looking through? >> last number we get before tomorrow's gdp number, it will affect them. used at part of inputs the revision, down, february reported influence i can't find it. keep looking for it. shipment number. capital goods number, aircraft shipments a number feeding into gdp. whether that would revise down from february. i don't know if rick is still there, but yesterday he reported the pmi numbers at 9:45. if you have a two-day chart of the ten year or two year, either one. never seen the market react to the pmi numbers at 9:45 the way they did yesterday huge declines with the notion this was a leading edge of the swelling economy just want to be careful of this number it did come in hot on the headline number, but take up the transportation tremendous volatility from boeing orders. jo know the exact number like to three in january, four in february -- number goes up and down why we look at capital ex a aircraft investment. watching this a.i. stuff how much money pummellin

. >>> steve liesman brought up this idea maybe it's even better if a raid -- does that, a fed put.o you great with that? >> i think it's an indicator that you may see stronger economic growth. certainly the labor market has been above anybody ace expectations. i think you make a good point. >> finally, carl, the start of earns season. could it be that they have an ability to rattle market? >> certainly you saw a difference, and i think you're going to get some separation, as companies begin to not only report what happened in the first quarter, but if they're willing to, give projections on what they see next? >> thank you, karl. we'll be watching tomorrow. >>> treasury secretary janet yellen arriving in china today for four days of meetings with chinese officials. for more on whom she's meeting and what they will talk about, let's bring in meg been cassella. >> she'll be pressing on areas of concern and looking for room for cooperation, as well as the head of the chinese central bank, and american business leaders working in china. a major focus will be investment in solar cells,

summer to something interpreted as we just don't have enough data >> let's bring in our expert, steve liesman. how about that are we expecting a changes in language from chair powell >> yeah, i think he has to skew more hawkish about the current data, but i got to throw something back the thing i'm interested in here, scott is -- this maybe sound sect derivative, but powell have the confident he will get the confidence? in other words, did she is forecasts remain that inflation will come down in the future that's the forecast of the fomc. do they feel secure about that so, it's really not a matter of are they abandoning cuts, because i don't think they're doing that i think they're delaying them. i think that's a big difference in that for the market i suspect they're going to hold on to the confident, inflation will be coming down. what he will do is excuse more hawkish. at least, if he does skew more hawkish, what happens to stocks? first off, i think the confidence is not there. it's amazing that even one data point is sufficient to -- but pces are better. it's most certainly different. i

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. >>> as dom mentioned red tretai sales down lower and senior economics reporter steve liesman. it's like a game of limbo, steve, with the lowering rate cut expectation, will we fall over? >> believe you can get under that bar at any level. a stronger retail sales report this morn as jon suggested and by the way, we have upward revisions to prior months raise the outlook while reducing getting the bar down to the ground. here are the headline numbers and retail up 07. the estimate was 3 and they took january and ratcheted up to 0.9. autos, 1.1 which is measly and still pretty strong and an estimate of 0.5 and they ratcheted it up from 0.6 to 0.3. remember amazon had the promotional week and there are also issues where easter was compared to the prior year and they were spending at bricks and mortar stores and up 1.1, bricks and mortar building materials and part of of that is price is clothing down, as well and the retail control group and that feeds into the gdp numbers and has forecasters upping its outlook for first quarter growth and the atlanta fed raising their bar from 2.8

says more cuts are needed joining us now are my two guests and cnbc's senior economics reporter steve liesman joins us, as well. steve, let me begin with you take us through this morning's numbers, tell us why they are the favored measure of the fed, and why i feel as though some of the momentum in the reduction of inflation has been quelled we don't have as much momentum >> yeah, i think you're right to feel that way, tyler it is really backed up by the data the fed follows the pce because they think it's a better gauge of overall inflation in the economy. it de-emphasizes economy, has more medical care in it. we could have an argument over it some people like the cpi better. what happened this morning is we dodged a bit of a bullet it wasn't as bad as it could have been. we knew yesterday that the quarterly inflation number was higher than had been expected. we wanted to know this morning when it was higher we learned it was more in january than it was in march and so it's a little bit more in the rear-view mirror and where we thought we had an outside inflation number, which was in the jan

our senior economics reporter steve liesman has the latest and for the potential market impact, we're joined by andres garcia steve, what did powell say, and how big a sort of textural change is it >> he went away from saying cuts were likely, but didn't say they were off the table at all. but this new rhetoric where they're mulling not to cut at all this year raises the question of whether they're overreacting to recent data and changed the goal post. in march, the average fed official forecast core pce would end the year at 2.6% the first quarter average is going to be around 2.8%. while it a es true that progress is slow, the fed is just 0.2% from its year-end target in the context of falling to 2.6%, the average fed official forecast 75 basis points off the top. should rate cuts be off the table with inflation running just 0.2% hotter than forecast for the entire year? now, to be sure, the fed warned it wouldn't cut it had the confidence inflation was moving to target, around fed chair powell said recent numbers undermined that confidence but he didn't repeat prior language where

steve liesman. >>> stocks are mixed here just one hour into trading. dow is higher.tinues to lose ground the nasdaq is down a full percent. it's been a tough week for the nasdaq week to date now, 4.5% lower senior markets commentator mike santoli, almost combined you with rick, here to break down the action what happened this week? >> what happened this week was you had this continued unwind of this idea that we can have it all in the markets, which is, you can have the strong economy, earnings upturn, you can have bond yields stay tame, fed easing into all of that and then what happened is the momentum break, which is now still unspooling five straight down days. i think the result of that plus today and the overnight selloff in the futures, you have gotten the market at least short term technically getting oversold and the conditions there where we should bounce soon you see every rally in the last few days get sold down, but in a very orderly way and this tells me it's systemic unwind of these mechanical strategies and it's not yet being met with fundamental dip b

we'll have the headlines from steve liesman once we know what he is saying and that plays into our conversation. kari, the next step is things have moved in this market or investors are starting to buy things on the expectation that rates were going to start coming down like small and mid caps, for example. jpmorgan's retail flows, not institutional like from other firms. big retail buying. uptick in small and mid cap. are we getting offsides as wolfe suggests? are we subscribing to them breaking out? not quite yet, they say. >> i would say not quite yet. and those retail flows can move around a lot. you can have a couple of very big days on the down side and that would wipe out the retail buying. i would just like to point out on the question about inflation and what happens with cuts or not cuts, someone like einhorn has been a gold bug for years, and he has bought gold in the past, i think big sizes of gold, he believes in gold. i don't think that because he's buying gold, we should therefore assume that this is something brand-new for him that inflation, he believes, is going to be higher -

our senior economic reporter steve liesman with a fresh look at the cnbc fed survey hey, steve. >> good, carl. yeah, the cnbc fed survey forecasters after the numbers last week they ratcheted up q2 growth but also ratcheted up the outlook for 2024 inflation upgrading growth we've seen that, but it's the most substantial inflation nupg a while for this survey here take a look at the numbers after a weaker than expected gdp the stronger consumer spending data, the 29 respondents boosted second quarter growth from 2.1 we have no data, this is the early forecast what they did is -- what they missed in q1 into q2 higher starting point for consumption. inflation is now sooep send and ending the year above 3% up from 2.7. that number is in line with the fed's forecast for core pce for 2024, cpi running at 2.6, but above the target range, you figure that cpi runs a half point hotter than the pce. about half of respondents say the recent run of higher inflation is a blip. half say it could be the beginning of a longer term stall in inflation that's going to keep inflation stuck around 3 if the f

steve liesman is here with more on what it all means. ed there, crushed, trounced, call it a big gain in jobs in march and beat of expectations leading to doubts about how much and when the fed may cut rates. whether it needs to cut or should cut at all. non-farm payrolls 303 versus an estimate of 200,000 up from the prior month 270. this story at the top of the range we were talking about the last couple days would make the fed consider the job market was not loosening but heating up. the unemployment rate did tick down, right on the estimate but down a tick from the prior month. average hourly workweek up 0.1%. 34.3 hours. participation rate healthy at 62.7. richmond fed president tom barkin on the wire calling it a quite strong jobs report. i think that's pretty good, that characterization. net revisions to the two prior months adding 22,000 jobs. boosting the three-month average to a pretty red hot 276,000. jobs were concentrated. health care, 72, government up 71. the biggest chunk was local government. leisure and hospitality has be

. >> steve liesman said these numbers have to hit exactly where expectations are or the fed will have almost a forced hand. we'll see what happens when we get them. >>> let's get to the judge and "the half." >>> carl, thanks so much. welcome to "the halftime report." i'm scott wapner. front and center this hour, the great wait almost over. tomorrow morning's cpi report looming large especially large, the investment committee debating the road ahead. joining me for the hour josh brown, joe terranova, steph any link, brian belski and rob sechan. let's check the markets. we are lower across the board. yields are lower, too, as we have this great wait almost over. basely very cool is good. in line is good. anything other than that and all bets are off. >> i never like that. i'm going to be looking at rent equivalents to see how the figures come in. you have to ask yourself where are we on sentiment? where are we on positioning? i do believe in the last week and a half we've worked off some of the overbought conditions. i think we've added a little bit of an element of bearishness into the

steve liesman has been tracking that and what it might mean for the fed.ng. markets dodging a bullet this morning saved by a couple hundredths of a point where the higher than expected inflation for the first quarter was concentrated in january more than it was in february and march and we knew january was lousy. because it wasn't bad doesn't mean it was good the headline year over year rate, it went the wrong way up a tick progress on the core has stalled to a creep so there wasn't much change in the outlook for the fed. bettors on the june cut look likely to lose strong down in inflation in july for it to be in the money and it's not that has pushed most hopes for a cut to september and beyond. if you add in the beat on consumer spending, which has been pretty strong, put that together with sticky inflation, there's a chorus of folks who say the fed may not get the window to cut and may not need to since current rates do not seem to be weighing heavily on the consumer the fed reiterates it believes the current rate for now is sufficient for the fed to hi

steve liesman is monitoring a very busy day of fed speak. steve? >> hey, mike, thanks.t harker becoming the latest official to complain that inflation is still too high, but not saying much else on monetary policy, but hold on because there are four more fed speakers speaking on the outlook this afternoon and this morning including barkin, goolsbee, kashkari and mester. several themes have emerged in the fed speak this week. 17 of 19 have forecasted at least one cut this year with the meeting of three. these cuts are forecast, not promised, with most saying something like it's likely appropriate to ease some time this year. notice no time there. cuts are data dependent with several couching their forecast with the phrase "if if the economy evolves as expected" for most is confidence in declining inflation, but there is no particular rush we keep hearing with several saying policy is well positioned for whatever comes next. we have time, some have said. officials have started to speak about the speed of the decline in inflation as the key to when and how much they reduce

that's steve liesman.ow from bertha coombs. >>> the commander of iran's revolutionary guard warned today that, quote, our brave men will punish the zionist regime. his comments come as thousands gathered in tehran for funerals of seven guard members killed in an air strike in syria earlier this week. that strike widely attributed to israel destroyed the iranian consulate in damascus. >>> mcdonald's announced today it is buying all 225 of the franchise locations in israel after months of lower sales from pro-palestinian boycotts. the franchises had been owned by an israeli businessman. the company did not disclose the purchase price. >>> and bronny james, son of superstar lebron james, is entering the 2024 nba draft. at the same time, though, he is entering the college transfer portal to keep his eligibility before making a final decision. the 19-year-old, who played a shortened freshman season at the university of southern california after suffering cardiac arrest at a summer workout, made that announcemen

economist at bnp, along with cnbc's senior economist reporter steve liesman. gentlemen, welcome to both of you. carl, let me begin with you. are you seeing signs of a somewhat slower economy, and is that one reason why you're still predicting a july rate cut >> well, i think we are seeing some moderation in the pace of economic activity. i will be -- my own team's forecasting about 2.7% growth in q1 so still a robust pace, but cooler than what we saw in the prior two quarters but i think what we need to focus on at the moment, you know, it's very well advertised and well discussed in economic circles, including from the fed, that we're in the midst of some degree of a labor supply shock, which means that given, you know, two sources, one immigration, another is labor force participation, we have a lot more workers, we have a bigger economy than we realized. so we have to accept some of that frothier economic data, with not the same perception of what the inflationary consequences will be so a prime example of that, if we could just look back to the last jobs r

productivity number that has ignited a debate about whether or not the data signal a boom or a blip and steve liesman the latest on that. a debate with the fed and economists you've got to love to see the fur fly. >> well, there are members of each side within each group, right? you have the fed folks who are optimists and pessimists and some economists, as well the growth in productivity is the biggest part in how the economy grows, and whether we're seeing a post pandemic noise in the data, or is it a real boom here's the data for the five years before the pandemic. productivity grew at a trend like 4.4%. through the first quarter of last year, it dropped to 1.3, followed by a really worrying decline. but it's come back the past three quarters have seen an off the chart number average of 3.7% chicago fed president austan goolsbee laid out how critical it is for the fed to get this right. >> that's fundamentally going to change everything about the economy, in a way. and it would have direct implications for monetary policy it would put us back in an environment that would very much be like the late

senior economics reporter steve liesman is here. it's nuanced, but it is there. >> exactly, nuanced, but it is definitely there. the fed has been unanimous when it comes to policy coming to zero in the face of the pandemic and hiking to battle inflation and everyone agreed. some divisions are showing when it comes to the issue of cutting interest rates with some of the new hawkish expressing more skepticism about reducing rates and the inflation outlook and we call it. where is it? the new hawkish wing develops. these folks -- neel kashkari last week talking about the issue and if inflation stalls, maybe no cuts at all. kashkari said it out loud. chris waller said it already, he thinks it's prudent to hold higher than previously thought at the current rate and lori logan, and the fed governor bowman gives a whole speech about all of the inflation risks that are out there and of course, we have bostick is on our air and where's the chair and that's what matters the most for this whole discussion and i say it puts itself in the center

>> look, you know, i don't bet against steve liesman.interesting thing is, never do that, right? the interesting thing is, you saw this blowout number in january, but then it was revised down to something that was much more realistic last month. so there's this gap between the actual job report number, and then what it turned out to be. you know, recruiter sentiment stayed flat at 2.9 out of 5. candidate sentiment dropped town to 3.4 out of 5 to 3.5 out of 5. we saw the open jobs that the recruiters are working on also drop from 12 to 10. so that's pretty significant. keep in mind, it was around 20 open jobs during the hiring frenzy. so there was a lot of hiring going on, the recruiters were working on lots of open jobs. >> talk about where we're seeing the openings. i'm looking at your notes, valuable college education, not what it used to be. >> right. so, again, you mentioned a tight job market. think about if you're going to go fishing in a different pool, i don't need a college education. we saw the need for college education from a

. >> well, somewhere steve liesman will be smiling. i think real rates haven't been this high in a long time although we're stuck and the ned has acknowledged we're stuck on inflation coming down to their level, i think it's a pretty interesting -- steve -- i think he's right there's inflation everywhere which is why there's no way they're going to cut in june it's impossible. it's actually technically impossible we have one more cpi number in april. the may cpi comes out the morning of the june meeting. that can't even opine on that. june is gone i think september is a real question i think the fact that people have come in from 5 to 2, i think 2 is challenging back to are higher rates ultimately net good for the consumer, courtney is right to signal those that are actually net positive in terms of their balance sheet. i think it's the opposite for much of, call it the middle class, even middle class baby boomers, so people that don't have a lot of savings. what's interesting about this whole theory and this conversation is, yesterday

thank you, steve liesman, interesting take on the consumer.f nike, live from paris, unveiling new uniforms for the summer olympics. we'll be right back. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire >>> welcome back to "squawk on the street." i'm bertha coombs with your cnbc news update. the u.s. is restricting travel for its staff in israel as tel aviv reportedly prepares for an iranian attack this weekend. the security alert restricts u.s. employees and their family members from personal travel in certain parts of israel out of an abundance of caution. india, france and other countries have issued similar warnings to their citizens. >>> russia is reviewing a peace proposal from 2022 that ukraine had previously rejected. the kremlin said today that the draft agreement could serve as a starting point for talks to end the war. russia has dismissed ukraine's proposal wh

steve liesman, thank you. >> ai for the fed. >> there you go. well, our next guest says don't fear higher rates, you know? embrace them that means the return to a more prosperous time. the bigger worry should be the macro conditions that would force the fed to cut joining me now for more is chris grisanti senior portfolio manager at mai capital management chris, welcome so things are pretty good and that's why the fed's doing what it's doing or not doing what it's not doing and you say that's fine. why? i think it's more than fine, jon. i think it's necessary you don't want lower rates because lower rates don't happen by themselves. the fed isn't a santa claus is going to give lower rate as a gift they'll lower rates when things start to slow down i would much rather live with higher rates and a stronger economy. look, every economy, every market has problems of one kind or another otherwise i would be out of a job as a strategist, but this problem which is inflation's running a little hot and rates are a little high and that's an equity problem

steve liesman, thank you very much. let's turn back to you, serat.ttle while, but you have been really a strong exponent of materials. >> i have, and the main reason for that is if you look at the lack of supply, copper -- there hasn't been a copper mill in ten years, and if you look at the demand for copper whether it's coming from china now, but we were talking about before, data centers, right? evs and hybrids, all the power that's going into building all these chips, that's all copper-related. all the new construction takes copper. so those are things that we think, you know, you can play it through tech resources, right? you can even steel companies like cleveland cliffs, i think the demand for these products and they have been so out of favor like people haven't looked at it for ten years, and if you go back to the early 2000s, that's where a lot of the money was made. the other part was the dollar. as the dollar gets stronger, people buy more of these, and that puts the price up as well. i think that's a very important part of a diverse portfo

kinds of moves in the market we are seeing but let's bring in our senior economics correspondent steve liesman who has been following what has been one of the more busy days in a while. i think seven in total today seems to be the last and maybe at this moment the most powerful suggesting that if inflation continues to do what it's doing him a maybe we don't do anything. >> if i could provide a little context on what we are talking about here, it's not a huge move to the downside, i think mike would concur with that but it did go straight down around 2:00. what happened that we are still wondering about? what we do know was in the middle of that, -- said what for some is the quiet part out loud. he said if inflation continues to move sideways it makes me wonder if we should cut rates at all. we've had many analysts talking about this idea. of course it's been on the air. we can't remember a time it's been said. that goes along with a lot of other folks out there saying we are going to take our time on this. anticipate cuts later this year. inflation is still too high. one comment from goolsby

and manhattan institute's senior fellow and our very own steve liesman. bers a lot for people to get their heads around. >> yes thank you, becky i'm trying to figure out how we got here, but i have seen very modest upward revisions. i can't -- i don't see -- out to the -- where the action must have taken place, but let me just say i think we dodged a bullet this number went into with the following metric in place. 0.3 poor march good. 0.4 bad. got the 0.3. i do not see, please, correct me, rick, if i'm wrong i don't see an upward revision for february either. i see february still at 0.3. that didn't change rick's assessment is 100% right. we have made progress. that progress has stalled. but what didn't happen, at least in the first iteration of this number, is we didn't get an upward wrevision or higher than expected number for march. to the extent that quarterly number caused everybody to freak out yesterday was higher than expected looks like it happened in january. why is that important? well, because we knew january was weird. we had a lot of seasonal

steve liesman joins us now with more. hey, steve. >> hey, joe, good morning.l and several other fed officials offering some assurances that if the the economy evolves as expected it will be appropriate to lower rates at some point this year. get used to those words. a lot of people are saying them. but that leaves plenty of doubt as to the timing and the amount of rate cuts. we had atlanta fed president raphael bostic on "squawk" yesterday, he backed a single cut in the fourth quarter. the forecast is for three cuts beginning we don't know when. fed officials making clear they're watching a couple of factors most closely. the speed and the amount of decline in inflation are important to them, whether that progress on inflation is slow or fast, and that's going to determine the speed and amount of rate cuts. whether the economy remains strong or weakens from those rate hikes and the big question that they're puzzling with right now, january, february firm ware inflation numbers, a blip on the way to some better improvement. all of that is introduced, down into

. >> when wie come back, steve liesman has more on the hawk versus dove dynamic inside the central bankconnect between consumers and the nation's economic data. more on this hot button issue that could loom large during this year's esenalacpridti re. "squawk box" will be right back. he stops!... for the championship! [crowds cheering] nice shot, marcus! sweet, turn simulation off. tssk, tssk, not so fast. what, why? did you forget marcus? forget what? your chem exam? uggh? flashcard time! the atomic weight of boron. the future isn't scary, not investing in it is. 100 innovative companies, one etf. before investing, carefully read and consider fund investment objectives, risks, charges expenses and more prospectus at invesco.com. encore energy, america's clean energy company, now in production in south texas. energizing america with reliable and affordable uranium for nuclear energy fuel from our environmentally friendly extraction process. encore energy. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match i

one and only steve liesman gracing us with his presence. here at the table with a preview of what investors and economists are expecting. sir? >> thank you, andrew. >> hot or cold? >> hot is a possibility here. markets are awaiting a potentially pivotal jobs report. digesting those comments from the fed president, fed is may fought knee to cut rates at all. non-farm payrolls 200k. upside possibility there given the inputs i've read. seeing until now. versus 275. slowdown but still a high rate here. unemployment rate seen ticking down. perhaps it was pushed higher by an anomaly last month with teenage unemployment rate. average hourly ly rate 0.3. that's up. year over year declines because of base effects there. fed says less focused and payroll growth and how many jobs the economy can create without causing inflation because of a boost to immigration. the dls data, 3.3 million among foreign born population the past two years. native population declined. another chart. labor tightness, fed officials think is key to sticky service inflation,

let's get right out to steve liesman to talk more about this.gn. hiring more people. in this instance market's lower. might be because of concern what that means for potential rate cuts from the fed? >> yeah. of course, trying to restore the connection with raphael bostic. hopefully that will happen soon. becky, i guess i've stopped being surprised by job surprises. seems like that is the norm and somehow some way we've got to adjust or readjust our expectations on jobs. i don't know if you remember, but several months ago i did a story about the ghost workers. in other words, atting more workers than the economy seemed capable of delivering. there's a nice story in "the journal" from the brookings institute stud fri wendy allegedberg, a frequentguest on "squawk" immigration may be playing a role. if that's true more workers, a bigger pool mean where is we're drawing them from and essentially not necessarily inflationary to be adding these workers, because they're there and we're not so much paying up for them. that said, there's a couple intere