so why wouldn't the fed do anything? y to think about this is in the absence of it. i think it's inarguable that some of the stock market gains you see have been in anticipation of this. so then you say, okay, what if the fed doesn't do this? then you think, well, the market would be lower. how is that good for the recovery. i think you've had a de-klain in interest rates as a result of qe. and so you say to yourself, okay, in the absence of this where would interest rates be. they would be higher. how would that be better than the recovery? i think he's clear. it's a piece of the solution. and he's also said very definitively he needs congress to act as well. 'd like the private sector to step up. in terms of doing its part i think the federal reserve believes it's part of the solution. it's a mandate to go from maximum employment. hayes a tool do so and it's going put two and two gekt. >> bill gross, since december 2008 when the zero interest policy rate was enacted the dow has been higher one month after the fed decisi

tell me, do you think that the fed did the right thing if you were still work at the fed, would you have voted for this? >> boy, this is a really tough call, i think. because the economy certainly is not improving. and the fed is trying to do more. but there's so many other headwinds besides just what the fed can do. i mean the chairman talked about this in the press conference today. a lot of things that are outside of its ability to change. things like on uncertainty in europe, the fiscal cliff and uncertainty. i think it's very important that the fed make it clear that it is there to take out the risk of de flation or downside risks. but it's a little bit unclear how much help this can be going forward dchblt some help but i don't know how much. >> susie: well, that is the key question, isn't it? will this work? what do you think? >> and so i think as the chairman described in his jackson hole speech looking at the academic research, it does seem like these kinds of policy does help to reduce interest rates. you can see just in today's actions, mortgagebacked security rates started to

limit the fed's tools yes well first week the fed has a mandate but it's a very very modest maximum sustainable employment mean we don't know what it means in this economy it has been so injured and impaired by the serial bubbles in the massive debt build up we've had for thirty years so the idea that they have to target four percent or six percent or seven percent unemployment is wrong it's not even in the mandate likewise where do they get the idea that two percent inflation is in the mandate the statute doesn't say that in as a matter of fact every thirty years you would cut the purchasing power of the dollar and a half at two percent so they need to get off this mandate jag they need to forget about quantifying these things and then they need to begin to step back let the capital markets breathe and give us a chance to have some free market prices by that i mean free market interest rates i mean let the yield curve perform based on what thousands and and millions of investors think not what twelve people on the monetary policy bureau think and if we do that we can basically begin to crawl o

what the fed has promised to do now beginning in early two zero zero nine and extending all the way through to fifteen there is no precedent in history for a fed chairman saying i'm targeting the russell two thousand you know in index and very speculative and high high beta securities in order to levitate the wealth of the u.s. economy and fool people into thinking they're wealthier so they'll spend more and on down the line this is made up stuff it is very dangerous and it's. defies every principle that i think existed prior to the one nine hundred eighty whether you are on the conservative side or the more you know liberal side in those debates that happen prior to nine hundred eighty so we have really the fed has painted itself into a corner it has no clue on how to get out it says trust us when the time comes we'll know that we have to begin to on wind this massive balance sheet or begin to allow rates to rise but i think if they even hinted they were going to do that there would be a massive hissy fit in the financial markets be there or you know instantly and they would realize that t

you guys down there think the fed's going to do anything? if so, what do you think the market reaction will be? >> you know, i think he's gotten away -- the chairman has gotten away with the thought of a fed doing something has really sparked this rally. i would say it's pretty much 80% priced in. i know others would argue with me. if we do get some type of action, market probably right here at 1442 in the s&p cash, that's really your line in the sand. you've heard me talk about that line for a while. we can definitely move to 1500 if we confirm above that. >> steven weiss, back to the house. give me your view on where the market goes from here. sitting at multiyear highs. come off a pretty goot week for the s&p and nasdaq. dow as well has been participating, too. >> i think we go higher regardless of what the fed does or opportunity do. even if they come with some sort of easing, nobody knows what the impact of it's going to be. because they're pretty much out of bullets. so the market goes higher because as stephanie said, i agree with her,

above 2%, will the fed remain easy. in other words, is it loosening up on its inflation target and that's going to be a big question the market's going to start debating right now. >> steve, thanks so much. we'll see you throughout the day here on cnbc. >>> now today is also an auction day but because the fed was timed at 12:15, then keep in mind we still have the statement and then we have the news conference, the 30-year auction was moved up to accommodate that. let's get to rick santelli in the mix. i know fed wants long-term interest rates to go down but we saw a spike in the ten-year today. how did the auction do, rick? >> even though the fed controls a good chunk of the treasury market, what they want and what they get is still determined by the guys behind me. it was a 30-year bond auction. if you bought into it you are really hurting right now. but of course settlement isn't for a few so we'll have to say. i saw 2s get up to 25 basis points but that's not the real story. as you go down the curve the moves are big

edition of the "closing bell." >>> still to come, fed up? why one prominent money manager says the central bank needs to reverse course on interest rates for the good of our economy. >>> plus, getting an earful. donald trump weighs in on today's fed announcement and why he thinks we'll have an economic meltdown if the president is re-elected. >>> also, wasted aid? is this the administration throwing away tax dollars by financially supporting unstable middle east governments? that and more is ahead on the "closing bell." >>> welcome back. a fed fueled rally on wall street today. the dow up 195 points. brian is back with us to tell us what's powering the dow higher right now. >> yeah, it's really interesting to look at. i mentioned it quickly on my tag. take a look at the top five performers on the dow. three were financials. you now have a nine handle on bank of america. jpmorgan chase has now made up all the losses incurred post the whale trade debacle. alcoa headed back toward double digits and $10 a share. bill, back to you. >> all righ

this is directly related to the fed. >> they're downgrading because of the fed. so who's being helped financially from the federal reserve's latest action to support the economy. robert frank breaks it down for us right now. robert. >> thanks, maria. the bank of england recently put out a report that qe in england has added nearly $1 trillion to their stock market, but 40% of those gains went to the wealthiest 5% in britain. it makes sense that qe in england mainly benefitted the british wealthy. the question is whether we'll have the same result here in the u.s. with bernanke's move yesterday, will it be a gift for the rich or a bailout for the broader economy? the top 5% of americans own 60% of all financial assets. they own more than 80% of the stocks. so far the fed's actions have helped stock markets but not homes or jobs. that's why the wealthy recovered much of their wealth while the rest of america is still struggling. bernanke says while focusing on mortgages, he's helping housing. but here many americans aren't able to get loans. i doubt many americans a

more easing from the fed at this point. plus, we have more on that horrible story out of the middle east. senseless violence, american death over nothing more than just a movie. we are looking more at our dependance on middle east oil in light of all of this and we'll cover that coming up in a moment. first, a look at wall street, the dow is up, up 13,333 hanging on to slight gains on the volume. the nasdaq is up just a point at 3,105. very wait and see, again, maria. >> it absolutely is. we're watching apple today. the stock is slightly higher after the company announced the launch of a new iphone 5. the phone has more bells and whistles than we expected. >>> and they may not be finished yet. there are rumors that tim cook may be coming back to the stage later in the convention there and maybe introducing something else. >> another product. >> maybe the mini ipad will finally be introduced at this particular event. in the meantime as the market hangs on the fed's every move, will investors get what they want after tomorrow'

breaking news from the fed. steve leisman is over there. what are we hearing? >> thanks very much, mandy. we have the quarterly economic projections up. members of the federal open market committee. 13 members now received the first rate hike. they did one of those cha cha slides, slide to the right in terms of when they think the first rate hike is going to come. what happened? six members -- the average rate hike -- average interest rate level in 2015 -- 1.55%. for 2014, 0.8%. that's down 30 base points. now let's look at the economic projections which i thought were kind of interesting. they downgraded 2012. you would expect that but they upgraded 2013 and '14 by 25 basis points for '13 and i think the fed showing those numbers are pretty strong. unchanged in the employment rate from the june forecast for unemployment in 2012 and for '13. actually brought it down for 2015. then of course -- '14. then we get the first look at the forecast for 2015 at 6.4% is the average unemployment projection of the 19 members

so some of those in that latter camp argue inflation is low so the fed should do more to help with the john situation but we'll look at this assumption about inflation with bob english who is in the studio and he'll tell us how to factor in the role played by shadow banking plus the political establishment buys first of four with the d.n.c. getting underway today after the r n c wrapped up last week at a time when distrust in political institutions though has been eroded by malfeasance corruption dysfunction are students at harvard preparing for their entry into the ruling class with cheating and their intro to congress klaus will tell you about it let's get to today's capital account. all right so seemingly the latest in the debate over if and when q e three will happen and how and if ben bernanke you will justify it seems to center on the issue of unemployment with unemployment stuck above eight percent and achieving maximum employment being one of the fed official mandates whatever you may think of the fed's true mission the debate is whether u.s. unemployment woes are cyclical so t

the fed gave eighty eight billion dollars of profits back to congress so the estimates are the fed is directly probably subsidizing our budget deficit by between one hundred fifty to two hundred fifty billion a year so it's not insignificant in fact it's very substantial becoming one of the biggest line items aha well how nice of them you know the deficit needs all the help it can get but i can imagine that this has some impact on distorting markets to put it mildly and possibly some impact on confidence in the u.s. dollar as the reserve currency as the world still currently looks at it to be so what does it have that the fed is it has this large of a controlling stake in the market was the purchaser of sixty one percent of the treasuries that the treasury issued last year according to one figure i saw yeah i think it's starting to make people question you know what is the value of treasuries how should we be looking at them and i think you know a lot of people look at historical data and show what's the dividend yield on the s. and p. five hundred versus treasuries and by that measur

the fed has a dual mandate. of the mandate requirements is trying to provide full employment and the fed is going to try to approach that mandate, trying to sort of satisfy that mandate by lowering interest rates, especially with regards to the housing market. that's a positive. it eventually will, the idea is that it will eventually encourage people to go out and try to seek a new mortgage and hopefully help rebound what we're seeing in the housing market and eventually the items that go along with the housing market. will it actually happen? that is a question has yet to be seen. a big question mark behind it. what it is doing is removing uncertainty from the overall market and that's a positive. tracy: maury, i don't know, no one is jumping for mortgages these days with rates as low as they are. what did you think of what ben bernanke announced today? do you agree with it? >> i think this was a very clever way to expand your balance sheet in what i would call a politically correct fashion. that the fed has bee

this is a vote of no-confidence in the fed. will creator prospectors looking for gold because that is what everybody has to hold because no one wants to own dollars and no one is going to want to own treasury or any bond denominated dollars because the fed will destroy the currency. it won't revive the economy but it will destroy the currency which will destroy the economy in the process. dennis: people say qe2 didn't work will qe 3 work? >> it is often with good start with the equity markets but questionable in the bond market. as peter brought out may be the expectation is we could see an increase in inflationary expectations and that is possibly wide bond prices are coming down. as a result investors will put my money out of bonds. where will i look for better alternative? that could end up supporting equity prices in the near term. dennis: thanks to our entire all-star panel. a great job. appreciate your time and your insight. cheryl: phil flynn and peter schiff and nicole petallides, we really appreciate your time. coming u

and what he recommends or eventually supports is for the fed to target nominal g.d.p. what do you think of this and what effect would it have you and i were talking before and you mention the slingshot sure. my back up a little bit before that because when the fed decides to arbitrarily target a metric and this was the original operate in twist in the fifty's or sixty's there surrendering control of their balance sheet they're saying we're going to put a yield ceiling on long term rates in other words we're going to buy as much paper is necessary to keep those yield ceilings in place but that means that they don't have control over their balance sheet anymore and it's the same thing with nominal g.d.p. targeting although it's really not pointed out in the speech or the text of the that that's what's going on but what i think is interesting is if you read some of the analyses of that it sounded like he was coming out against q.e. but what he could be coming out with is kind of an unlimited q.e. entail it reaches certain targets right right because q.e. is all about stati

here's one question for the fed. are they going to destroy the dollar and revive consumer commodity inflation and here's a second question for the fed, a tough one. is this a fed gone rogue with massive new pump priming that will manipulate the november election? in other words, folks, politics. first-up, stocks soar on over 200 point gain today. cnbc's own brian shactman joins us now with the rundown. good evening. >> good evening, larry. the rally chock-full of superlatives. you can argue the merits behind it but hard to argue with it. dow higher all three components, had the highest close since december of 2007. we all know what happened in the interim. i will talk about volume at the nysc, the highest since june. look at bernanke. the impact of the fomc. all you have to see, this is when the announcement came out and when bernanke started talking and spikes levels off at the close but 200 plus points on the dow. financials dominated the dow. bank of america usually trades thr 330 million shares. home depot hit a n

stocks soaring today on the latest fed move to help stimulate the economy. the major averages surging to multiyear highs. oil prices hitting a four-month high today. gold and silver rallying to six-month highs. does this latest fed move mean the economy is worse off than we thought? also ahead, donald trump says the head is doing more harm than good. should ben bernanke be fired if mitt romney wins the election? he joins us live in a few minutes. first, let's look at how the market is settling. volume picking up today. check that out. 722 million shares traded. the market up 1.5% up on the dow. s&p 500 tonight with financials also higher. technology up 23 points. the s&p 500 at 1459. talking about the highest close on the standard and poors since december 31st of 2007. federal reserve action certainly stimulating the markets today. that's for sure. is the short-term gain eventually going to create long-term pain? ben pace is the u.s. chief investment officer or deutsch bank. also in the conversation, our own steve liesman and rick santelli. >> we love it nea

the fed can just do the thing.iderman would say, with great power comes great responsibility. and so the fed is very cautious in the use of its powers. by law, they need to try to keep unemployment and inflation low, but over the last two years or so inflation has been very low and unemployment has been very, very high. and they've not been doing all that much about it. earlier today, however, bernanke said, finally, that the fed has decided to do something big about unemployment. something big enough that it might actually help. he said they were going to buy hundreds of billions of dollars of government and housing bonds and keep buying them for as long as it takes to get the recovery back on solid footing and then keep buying them as long as it takes after that to be sure the recovery is on solid footing. the way their plan works if it works is that by buying all of these bonds, they're going to drive down long-term interest rates which will give businesses and investors more reason to spend the money now as opp

the fed action has unintended consequences for others. and it's not only stronger euro, we've also seen upward pressure on emerging market currencies in the past. i think emerging markets at this point or many countries would not want to see their currencies appreciating. plus their growth is suffering. but these are the unintended consequences. i don't think this is a consideration for the fed. i think the fed wants to do what's right for the u.s. economy. >> steve, what affect does the stock market have on the fed's decision-making process right now? we're at 4 1/2-year highs, the dow, s&p, nasdaq has performed, as well. does that take pressure off for the fed to act? >> i think the other way around. i think our survey and i know the fed does its own survey, as well, very similar, some overlap in terms responding. that's responsible for where the market is right now it's not earnings outlooks which have basically been coming down. bernanke sees the market as a major conduit for spreading wealth, and perhaps consumer spending, as well. so

it does not make for a good back drop if the fed does qe 3 next months. we have a situation where they are taking money and risk off the table. >> you are willing to take some. beginning with energy transfer partners. etp one of of your new picks. a lot of folks move in with a yelled. -- yield. but the share performance has been negative since the springtime. >> they have made a majoracquis. the stock has not risen with the increase in energy. it offers a good situation for a long term investor. next year they should start incross -- increasing for distribution and you have an 8 and a half percent yield and it should increase next year. >> that is hard to beat. >> you are also looking to theu. exc. one of the largest power companies out there. a difficult -- difficult tend play. we sold some in the mid 40s and we are buying it back in the mid 30s here. five and three quarters difficult and hitting new lows. and the stocks are down and for long term investors it's a good situation that i think can provide good total rush. >> some of these power companiee ca

let's talk about the fed which was the money story. what would you like the fed to do when they meet this month? >> i think they should continue what they have been doing. i heard some of the prior conversation, well, what do we see from 69 to '82. we have more recent set of examples. the federal reserve has been very energyic putting money into the economy in a variety of ways including to help stimulate the european banks to do the same and the results have been all good. all these people have been predicting inflation could not have been more wrong. for several years now the fed has been taking this active role and there has been no increase in inflation. taxpayers made money off it thanks to legislation put through. there are no secret deals. everybody knows what is happening. i think it has helped the situation from being worse. we had this terrible recession that we began the, 2009 with. we have had the terrible problem in europe which is holding us down. the fed played a very important role here and i think time has come and i w

now the fed. but is this more akin to a movement when central bank was propping up global command or more akin to 2010 when it reignited talk about currency wars? >> it certainly could reignite it. if you look at most of the central bank, all the commodity central bank, they've been complaining for quite some time, but they're the most relick tant of all to do anything about it. central banks in scandinavia getting concerned. you obviously can't have everybody needing to devalue their currency to try to get a gain in the export market. and if you look it at the various regions, if you look at europe as opposed to u.s., you would say there's a much greater need for europe to devalue the euro to try to generate some export growth there because they're already in recession. same would apply for the uk, they're much more reliant on external growth than they are domestically. so there isn't that strong a case for the u.s. to need to devalue the dollar. >> what the fed seems to be doing is coming out wi

road map is morning begins at the fed. will bernanke give the markets qe3 and how long rates will remain low at the feds press conference today. >> some say it's a significant redesign. others say it's a sleeper. whatever you think of the iphone 5, it's keeping apple shares moving higher. >> number of big downgrades this morning. citi cutting ratings on intel. amd says pcs are losing the battle against tablets and smart phones. >> and a very special guest. the ceo of j. crew. of course, we start this morning with the fed. markets looking to open higher ahead of the fed's late es monetary policy meeting. the fed will announce a decision at 12:15 p.m. eastern time. and this is large lly a wait an see as markets are largely anticipating the fed to hand it what it wants and that would be more stimulus. >> we've had a lot of news items in the last few weeks that were delivered that were better than expected or expected as someone who follows stocks, i can tell you this is i think not make or break. i was just listening to super

and till further notice because unlike what the fed has done in the past where it said ok we're going to buy this amount of treasuries or mortgage backed securities it. we're going to start on this date and we're going to end on this date what's different this time is the fed saying we're going to buy forty billion dollars in mortgage backed securities a month and we're going to do this and till we decide not to and ben bernanke in his statements today and in the fed's press release said that this is going to continue until the labor market gets to where they want it and improve significantly but there's no set timeline so that's what really makes it different this time also the fed is targeting mortgage backed securities so it's obviously trying to target the mortgage market in the housing market thereby by directing it specifically to mortgage backed securities as opposed to treasuries in government bonds which have monetize the debt so those are a couple differences in terms of what exactly the fed's program is also the fed some changes that said that it will keep a very accommodat

all right everyone is digesting the fed's q.e. infinity and now it's meant still that came out yesterday and of course the other thing we've heard a lot about ben bernanke you talked about it quite to quite an extent yesterday in the press conference about the fiscal cliff and what fiscal policy makers are doing the heavy lifting the fed is doing but can't do alone so so what could fiscal authorities be doing the central planners sitting not at the federal reserve but sitting over in congress or the white house well or what should they not be doing is really the question to joining me to talk about it is edward harrison founder of credit write downs and nice to have you back on the show and we're going to be a long time it has been so let's start with the fed because i do want to touch on q.e. because we haven't had a chance to talk about it now you put this into a broader perspective in your thoughts about q.e. in terms of what central banks all over the world are doing to make up for what you say or what fiscal agents are doing f

>> that is the job of the fed. they have a dual mandate. [talking over each other] dave: their job is not to make sure the market goes up. their job is to make sure unemployment stays down and they have failed at that job. >> that is one of their mandates. they are here to prevent inflation. obviously we are not in an inflationary environment. the employment issue is obviously a bigger issue for more people but unfortunately corporations are doing the best they ever have because of the efficiency. getting people trained for the job out there we had a recent record in the number of available positions but don't have people trained for those positions. the market doesn't care. we are talking nonsense at this point. the market doesn't care and we're seeing all-time record profits in corporations and that is how you measure the economy. dave: if the slowness of the economy hits corporate earnings because as we just heard from meg whitman, hp is doing okay but they are firing people. they are letting people go to become more efficient. that is wh

the primary driver is the fed. the central bank pledge to go spend $40 billion a month to buy mortgage bonds for as long as it deems necessary, it plans to keep short term interest rates at record lows. that's right, you heard correct, at least through mid 2015. and that is six months longer than previously planned. ben bernanke says he is ready to try other measures if hiring doesn't pick up, so you're talking about a full court press here. here he is speaking to the financial press yesterday. >> the employment situation, however, remains a grave concern. while the economy appears to be on a path of moderate recovery, it isn't growing fast enough to make significant progress reducing unemployment rate. you fewer than half of the 8 million jobs lost in the recession have been restored. and at 8.1%, the unemployment rate is nearly unchanged since the beginning of the year and is well above normal levels. >> we will talk about the fed this morning, ask what's next if anything, ask if any of these measures are actually

these are your headlines for thursday september twelfth two thousand and twelve the fed gave markets more of that in the rug and they have become addicted to announcing q we to infinity and beyond you could say that the fed announced it will buy forty billion dollars in mortgage backed securities per month leaving it open ended and it will just keep doing it until the labor market improves now the fed committed to an extremely accommodative stance even after the economy strengthens extending guidance for reserve to but to what end while stocks are up also gold was up big today player from gloom and doom publisher mark wagner and an editorial from the official chinese news agency shane walk more is that massive spending to boost china's economy could be detrimental so how does this way into the calculus of china's policies growth or slowdown and multiple outlets are reporting john kors i met with officials from the department of justice last week this is close to a year after m.f. global failed we're not letting this news get drowned out by the fed we'll talk about it let's get to toda

fed chairman. he's criticized the latest round of fed stimulus, qe3. omething mitt romney could do to get your support? >> probably not at this stage, because i'm concerned, as much about the foreign policy as domestic policy and monetary policy. but i feel good that he and i have had discussions on the fed, and he has made some statements, and he supports, you know, this position now about auditing the fed. so i would say that is very good. but there -- you know, we had a lot of debates and we got along quite well, but we had a lot of disagreements on the policy or what the role of government ought to be. >> you don't like his foreign policy position. do you like barack obama's any better? >> not much. because i don't like the foreign policy since woodrow wilson, you know? because we have become, you know, this policemen of the world. and we're broke. and we have an empire, and just look at what's happening in the middle east today. 11 embassies have been involved in anti-american demonstrations, that people around the world are sick and tired of us te

good news and bad news from what the feds said. the good news is the fed's going to be there. the bad news is the fed needs to be there. finally, we look at this, it could fail. it just might not work. you might get high unemployment. you might get high inflation. then which mandate does ben bernanke choose? >> yeah, that's something rick santelli has been talking about today. what are you expecting next week, rick? >> i think from a data side, i always enjoy when we get a couple housing numbers, existing home sales, starts. that's going to be good. i also want to see how the market digests what happened yesterday with the fed and what is ongoing with regard to europe. i haven't been or wouldn't think that we'd see a big correction in stocks. although, i'll tell you by the behavior today, i'd be a little more cautious. feds and central banks around the world have always tried to leave their imprint on interest rates. i find it fascinating that the market, despite all the ownership that the fed has in terms of inventory of treasuries, for example, to see rates move up as much as