the key question for the fed is the easy monitory poll say risk inflation down road. >> the labor market largely healed. as you see, employment is back above trend in services and manufacturing. today's fed policy seems not only unnecessary but brought with unappreciated risk. >> reporter: alan kruger will loom large. he was invited but couldn't attend and argued the market is tighter than believed risk inflation because those long-term unemployed and dropped out of the work force he believes are not coming back to work. >> long-term employment remains high and in my view, the evidence suggests the long-materilong-term unemployed kpes plus sure on the labor market and give up searching for a job. >> reporter: janet yell loen >> reporter: janet yell loe kno of his work. >> i think it's premature, frankly, to jump to that conclusion that that argument is correct and i've made some arguments in other remarks that i've given about why i think that the long-term unemployed are likely to move back more actively into the labor force. >> reporter: yellen got some backing in the most recent jobs

i think the fed is going to shift that light path and until the fed communicates -- the earlier the feds what it is doing, the better. >> the problem is there is a range of opinion out there. there are some people who agree with you, the folks at blackrock think we're going to see the fed move early in 2015 and there are like goldman sachs who think the fed is going to move considerably later in the year. -- because theat fed has not communicated that effectively? >> the fed could limit the range . the fed is still trying to -- it's not all janet yellen, it's a bunch of talented people in a talented staff. the sooner, the better. >> haven't we seen a lot of janet yellen? we hear from her all the time. why haven't we gotten that clarity? >> i think we hear a lot of fed officials and it's not uncommon at points like this in the economy. what i suggest might be helpful is crystallizing more clearly exactly what the fed's goals are. when i listen to chair yellen's speech in jackson hole, i was left with the question of what does the fed want? if you can't answer that, it's hard to communica

the fed has a neutral rate up around 3.75%. but, you know, the other thing that we keep bringing forward actually is that even the level that the fed will ultimately be able to stop at, i mean, people interchange the long run, that's going to be the highest that we'll get this cycle. but we sat at zero for an awful long time. and the idea that inflation, for example, that may not even be able to stop at that level. none of this is in the market but that's why -- >> so this is not just a reset of next year, it's the whole trajectory. so this month -- and i think increasingly over the next several months, the focus is not going to be on how much water we're taking out of the bucket, but in how much water is left in the bucket. and by that i mean the amount of slack in the economy. >> we were talking about slack -- >> for the economy. >> glad you confirmed that and it's going to look at things like people working part-time for economic reasons, the unemployment. the last number i calculated yesterday was nearly 20 million americans

if it's structural, then the fed needs to back off. s cyclical, monetary policy theory is that, yes, they nudge the unemployment rate back to the normal rate, but it cannot change the overall unemployment rate of the economy given what the underlying structural policy is. if it ends up being more in the charlie foster world of unemployment, the fed needs to back off. yellen says there's a lot of cyclical factors out there remaining so the fed has work to do. the question is one that miller's come up with, which is if the economy is so much closer to normal, how is it possible, and is it appropriate for monetary policy to be so far from wrong? >>. okay, steve, i'll let you go, you want to watch yellen, and no cameras allowed to watch that keynote. >> my eyes, that's it. those are the cameras. >> for the moment, thank you very much. we were down 11 points on the dow before janet yellen, got the details of what she was going to say, so net net, up 20 points, not a huge move. bonds moving sloie ining slight within the day's range before. an

i think the fed way overstepped their bounds. that being aside, not at all surprised with the light volume, dull markets. dull markets rally because pension and ira money coming in to buy. david: good point. >> look at the bond market. bond are awfully strong here. look at the u.s. dollar. those are warning signs. those are divergences. last thing i mentioned, berkshire hathaway, if you compare berkshire does to the general market, when berkshire is outperforming s&p that typically means we're coming to near-term top. right now berkshire is outbombing the s&p. david: that is interesting indicator. -- outperforming. >> when people want to risk they're willing to buy berkshire. when they don't want to risk, go to berkshire. when they have risk appetite, they go on their own. liz: teddy weisberg, you ran to our capras. he is catching his breath. i'm really interested to know, what you made what i've been calling all afternoon a fascinating market reaction. i think good news, good news. fed is finally discussing tightening rates. that

activity and the data getting well ahead of the fed and the marketplace getting well ahead of the fed which i think is the biggest problem that we face is whether janet yellen can control and manage a fairly intensified policy debate, whereas the previous cheer bernanke and greenspan were able to control that dissent, control the policy. it's not obvious that janet yellen is able to do that. liz: all the more reason, jon, they are waiting to hear what she says on friday. keep it to today for a second. what jumped out on you in these minutes? >> i want to come back to what you were talking about about, fear and how that relates to the minutes. you know, i talked to a lot of officials in the last couple of months who have been really surprised and a little worried that the markets look complacent. they've been dropping all kinds of hints. yellen said in july, we might have to move rates sooner than we expected if the economy keeps improving more than we expected. liz: why is that fearful? why should i be scared that the economy is improving and see rates tighten a little bit, jon? >> th

the fed releases minutes from the june meeting. >> several. some. [laughter] >> words, syllables. we will try to glean what they are going to do. >> we suggest it. >> we suggest. [laughter] it will be an intellectual exercise for all of us. fed watchers. of any come out? -- have any come out? >> $5.2 billion for the second girders -- quarter. the other one that has just come out is lowe's. the second-biggest home-improvement retailer. profit beat analyst estimates. forecast isr sales up 4.5% versus the consensus of 5%. >> do they just underperform home depot every quarter? >> this is the 30th consecutive quarter that home depot sales have exceeded lowe's sales on a quarterly basis. >> for a while, lowe's was doing better than home depot. they had a targeted approach, women for instance. >> targeted not to be confused with hitting the target. [laughter] enough, enough. lowe's, staples, where are we? petsmart. after the bell, we have hewlett-packard. there you have it. >> hewlett-packard will be important. look for bloomberg television as afternoon for those rates -- reports. futures

accelerated, the fed could move up the timetable for a moving stimulus. neither draghi nor yellen made any new policy pronouncements and extensive interviews with federal reserve bank presidents show the real debate inside the federal reserve is between raising rates in the spring or the summer of 2015. >> i am holding to the mid 2015 view, as the time in which i think conditions will probably come to the to make it a sensible move. but as i just said, and as chair yellen said this morning, if we see very, very strong data, and they exceed expectations, then i think it could possibly be moved forward. but as of now i'm still -- i'm a mid 2015er. >> but jim bullard the st. louis fed president thinks an earlier move is warranted. >> i don't think a little more hawkish slant has to be bad news for the economy. it means that the committee could be more confident that the economy is going to imroffe in the future, and is going to be able to handle the high rates that will eventually come. >> a new appearance at the meeting this year was a small group of around

the first step comes when the fed raises the target.ther the fed raises the rate or reverse repose on the overnight basis, once they begin to do that, suddenly you can earn something if you take a profit somewhere in the market and leave it in cash. a zerohey get to about percent real fed funds rate, you will not see a lot of correction in the long and of the market. maybe the fund and. -- end. much.nk you so i appreciate it. still to come, and on the markets check. when bottom line continues in a moment. ♪ >> bloomberg television is on the markets. our senior markets corresponded julie hyman is standing by with the details. good afternoon. take a look at stocks. we may end the day over 2000 for the s&p 500. that would be the first close above that level ever. we briefly touched it yesterday but could not quite hold it. we had better than estimated economic data. energy stocks are leaving the game during the session. got a whopper of a deal. burger king buying tim hortons. third-largest the fast food company. burger king will relocate i

volatility here not exist tent, at least right now even with the fed minutes today. a little bit of that drop. but when the got it all back and heading to the close, near at least session mys. another thing that a lot of traders are talking about is this idea that geopolitical risks are still evident and still in the marketplace but they're not being paid to as much attention right now and the real catalyst will happen on friday with jackson hole with both janet yellen of the fed and mario draghi speaking. that may spend a few waves through the overall market. >> 40 seconds. i wrote a radio commentary earlier today that said basically if you had basically done nothing two months ago, played past all the noise and the geopolitical stuff, you would be ahead of the game right now, right? >> you would be ahead of the game, tyler. we've been telling our clients, these geopolitical events only have a small probability of turning into something bad. dom hit the nail on the head. low volume, good fundamentals. reasonable valuations, good, not great fundmentals. this mark is

anything in the fed minutes that jumps out at you? entioned second-quarter quarter gdp, while the rebound, was not a lock oster. if you take a look at it, you get a two point 2% year-over-year. that is right smack in line with of 2.1% toecast 2014 2.3%. the other thing that they highlight is the labor market, which is steadily improving. expected, butas it is possible that they are raising rates in january or march of next year. >> the 10 year, the yield is that 2.44%. is that where he would be after the release of these minutes? >> it is up a few basis rights, but not a big reaction. what we are seeing here is room to leave the door open for a , but not wanting the markets overreact. >> overreact in the sense that maybe if you are looking at it. charter or something else that you don't know which way they the fedg to move? is intentionally not trying to tibbets hand right now? >> the chart says one thing, geopolitical events say another thing. it is really pushing this flight to quality flight to safety here . there is a little bit of

the fed really did know nothing. economy collapsed as the fed held tight to the view that there was nothing at all and it was the work economic policy blunder since the hoover administration. the fed ultimately reversed itself in a better late than never affair. here's something i didn't know at the time and it cuts to the core of how useless the monthly fed minutes are. the fed releases full transcripts and five years after their meeting so i later learned that the fed met soon after my stock trading appearance and as the five-year-old transcripts my reen action came up in the conversation and it came up as a laugh line. they actually made a plan to ridicule my prognostication. it was a very dark comedy. here's where the fed minutes come in, the fed released the minutes of the previous meeting. . the minutes emphasized that the fed would cut rates if needed and things were nowhere near that dire. when i read that i was like the people now who think these are all important. when i read i actually believed that i and m

the fed sneezes and this or that happens. i don't see how that environment is healthy at all. >> brian, i love it, just for the record. >> we got very dependent on every word that came out of the fed's mouth. where the comma was, et cetera, et cetera. and appropriately so. because we were in unchartered waters. when we get to the point, i think we're getting there, where they get their wishes, a little more real growth, a few more jobs, a little more inflation, you know, it's not that they become unimportant. macros. watch real gdp, watch the weekly unemployment claims, watch monthly job numbers and most importantly watch earnings. if they're okay, the fed will continue to recede in my judgment. >> remember, too, the central banks have inserted themselves over the last five years into the normal -- >> that's what i mean. i'm not blaming you or us necessarily. we've bought into it, jim, we've bought into that. >> there's nothing to buy into. you can't judge it. they're there. they are controlling a lot of the price discovery pr

the fed printed a trillion dollars, to ignore the influence of the fed, regardless of the economic environment, earnings environment is a mistake, after qe 1 and qe 2, the s&p fell about 15 to 20%. it feels great when qe is on, but there's a flip side to what the fed is doing. we pull forward a lot of returns, we're going to have pay back -- qe is a form of tightening, and then we have potential shrinking -- >> pulling away -- >> pulling away qe. the gains we've seen over the past few years has pulled forward potential earnings. earnings can be okay this year, but we have well more than a price set in. >> some of the gains that we otherwise would have had from the real economy have been brought forward and are, therefore, vulnerable. >> well, the fed is definitely supported the equity markets with these low rates and again the qe will end in october. the bond buying portion will end in october. the fed is not going to raise rates. they're going to keep interest rates very accommodated, well into 2015. as long as we don't see any big spike in price inflation or wage influgs, and with the slack

she concluded by referencing the fed's most recent statement. if the economy picks up faster than expected, and it has been doing that, then rate increases could come sooner. if not, the phase gets low. nothing to see here from jackson hole. keep your eye on the economic data instead. get a live report from michael mckee in jackson hole at the bottom of the hour. and also, european central bank president mario draghi speaks at the symposium 2:30, new york time. this is been a boom town in iraq. developers pouring billions into the segment -- into the sector in recent years. but the threat of the islamic state has put these ambitious expansion plans on hold. >> just a couple of hours from the iraqi conflict zone since this small slice of the american dream. kurdistan's first self-proclaimed subdivision. >> how much does one of these houses cost? around $3000. -- $300,000. he is a courteous but this time between virginia and iraq. see most of the developers in this area, even in lebanon or turkey, they start to move to do business here. sank $6 mil

the fed is part of the reason the economy is getting better and that's why the market -- the fed is just- you can't make the leap right from fed to stock market? you need to go through the economy? >> the both the economy and the stock market have done better as a result of the fed than they would have done without the fed. no question. so it's direct and it's also linked. >> miles, janet yellen last week inferred that there may be an acceleration of when the next rate hike when the first rate hike will happen. has the market factored that in to itself in the equation? >> not everybody agrees she said that by the way -- >> that's where i was going to go. i'm not sure she really said that or intended to if in fact she did -- >> she has no idea -- >> could say the economy continues to accelerate, and they do move up the first rate hike. does it have an impact on the momentum of the market? >> i think in a positive way. because what it's saying is the economy and earnings are getting better a little faster than we previously thought. that's good news. >> i would jump on one point. the piece

it depends on when you think the fed might enact this normalization. ty believed it was sometime summer 2015 -- i may have to ask jacob that is. is it time to start thinking about a, and the answer would be sooner rather than later we would have to get that communication. >> i wouldn't be surprised if the timeline moves up a bit. if you trust the fed is a group of responsible policy makers, who always and have said already when things normalize, we will act on rates, then basically if they start raising rates, it means they project and give you the message not to fear it. >> the way we read the fed minutes, normally when we saw we can react more quickly, if the data comes in better, there's another line we could act more slow will you. and paying a little more attention to the possible trajectory. >> maybe. interest rates are so low. not raising rates, but coming to a situation where possible are both -- where would you lower it? >> both the fed and many other central banks are waiting eagerly where they could race and lower rates. at this stage it's a

the fed met this week. lot of things going on for the markets to think about, and especially international concerns as well, the argentinean debt default. here's the s&p. this is what traders watch. ordinarily, i would show you the dow for the week, but the s&p is what the traders watch all the time. they took out what were considered support levels of 1,950. we took out 1,930. we're right now 1,925 and down 2.65% for the week. this is the worst week for the s&p in two years, for whatever it's worth. when up, yields on the ten-year for a time very volatile week, especially after the fed meeting. a lot of the data coming out, that second-quarter gdp report that came out on wednesday as well. but today, coming back again with that less-than-expected job growth number that we got this morning from the federal government. and for the week, the ten-year yield is up about 1%. one more thing, volatility, the fear indicator, also big move higher, and it's up 34% on the week at 17. independent investor david darst he

the fed is saying there's nothing going on. janet yellen's speech, the most important thing to listen for, but i don't think she'll articulate it is that she isn't aiming at 2% inflation. she thinks we should go to 2.5%. she thinks we've been below average for so long, we should go above. basically she's going to hint that we shouldn't act for a long time. >> pippa, you are with us for half an hour. you're out with a new book which we'll talk about in our next chat, which is coming up. get your e-mails in. if you have any questions, worldwide@cnbc.com. @cnbcwex or direct to me, @louisabojesen. pippa is on twitter. >> @dr.pippam. >>> united airlines are trying to we know the hearts of business travelers through their stomachs. they're replacing small snacks with full meals. passengers on flights will be getting meals like chicken mozzarel mozzarella. the upgraded service is expected to begin in february. those of you writing in saying that you do appreciate good foods on flights. do you fly? >> i try not to. >>> bad news for jell

>> i would like to end the fed. the reality of course meets the road and we probably have to audit the fed and curtail the power of the fed but the reason people are so scared in government and the fed is so scared of the gold standard is because the gold standard means your dollar has a certain value in the can't spend more than what you've got. so politicians can't stand the gold standard because it means you can't do deficit spending. they are scared to death of the power of it and of course it leads to the unemployed. you have a gold standard so the fed is against it, of course they are but here's a number that will shock all of you. if you had a million dollars in the year 1913 and he really believed in the dollar and you had a million million dollars and you kept it in your mattress until today, today would have the buying power of $20,000. >> even less. >> nell it's funny. i wanted to look up the exact number. if you have a million dollars in gold in the year 1913 and you kept it until today, it's worth $62,50

maybe the fed is as well. be a three day assault by your mother has become a week long consumption by children. stephen sadove used to make sure you spend the money on cosmetics sakse you got the kids fifth avenue elevator. i have done this back to school thing. you guys are criminals. it is terrible. what is the state of the american consumer now? >> i think it is gradual. you are starting to see some decent numbers being put on the board in the last month or so, but it is off of a weaker base last year. the high end is holding up pretty well, but the middle and lower ends of the market are very tough. >> is there a metal? -- sa middle? >> i think there is a bifurcation as we speak. a sure, there is a middle america that is struggling. they are having a tough time making ends meet, and they are looking for deals and value and discounting is prevalent. thesaw it and all earnings numbers. >> who is trying to own a middle ground you are talking about? >> depending on how you are finding it, macy's is doing a gre

the fed survey and the leading economic indicators. on the earnings front, we'll hear from dollar tree, from hormell foods, sears holding, gap, salesford.com, fresh market and gamestop, as well. >>> now, we probably all feel like we could do with a little bit more sleep. where in the world are you most likely to miss out on valuable shut eye? how much do you sleep per night? >> six hours. >> everybody is saying six. no more? >> rarely. >> you go to bed at, what, midnight? yeah. >> get up at 6:00? >> yeah. >> ow. head to our cnbc.com site to read more about where the cities are, where residents on average get less than six hours and who the most well rested residents are, where in the world people will sleep the most. you've been tweeting in, tony frata tweets me and says sleep is overrated. i used to say you can sleep when you get old and now i'm older and i think sleep is underrated. keep your e-mails coming, keep your tweets coming. >>> still to come on the show, the grass is always greener on the other side, especially when you pain

i would audit the fed. >> the question is would you curtail the power of that or would you end of the fed or what exactly -- >> i would like to end the fed. reality of course we would probably have to audit event and curtail the power of the fed. but the reason people are so scared in government and the fed is so scared of a gold standard is because the gold standard danger dollar has a certain value and you can't spend more than what you've got. so politicians can't stand the gold standard because it means you can do deficit spending. they are scared to death of the power of it and, of course, it leads to the fed being unemployed. you don't need that anymore if you have a gold standard. they are against it. here's a number that will shock all of you. if you had $1 million in the 1913, if you read believe in the doll that injured $1 million kept it in your mattress until today, today would have the buying power of $20,000. that's the exact number of about two months ago. when i finished my book i want to look up the exact number. if you had $1 million in gold in the 1913 and you kept

everybody trying to figure out, get ahead of the fed's next move. t going to get that until we get additional data. but i'm not expecting the market to get more volatile from here. >> carter, what do you think about the 1,860 trend line? >> well, we're more in the 1,760, not 1,860 camp. >> they've been great sales of vol, and great opportunities. if you're one of these buying the dippers, wait until it gets back to the trend line. i wouldn't try to do it beforehand. >>> coming up next, we'll tell you what went wrong with the safety trade, when "options action" returns. five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. when the world moves, with the mobile trader app. futures move first.

the fed sees the neutral rate at 3.75%.at 2%, and we see them taking the time to get there. the overall bond market is attractive, which means it will generate income for our investors. we can get 4% to 5% in height fro high-quality bond portfolios. you.ank coming up, labor secretary tom perez joins us after the break to give us the white house pause take on this jobs number -- white house's take on this jobs number. ♪ >> we have been following the july payroll report that came in that 209,000, under estimates. we are stabilizing in the stock market. for the white house response and their take on the economy we are joined by labor secretary tom perez. good to speak with you again. we have several months of pretty decent job growth, and revisions were up to 15,000 jobs. are you ready to say that this economy has in fact turned the corner? report,is another solid it shows that we are sustaining the omentum of rod based -- momentum of broad-based growth. this report is very consistent with the other positive indicators we have

that is good from the fed perspective. that was a bit of a bubble. han use a dull blunt knife of rate hike to cut the whole forest rather than trim some overgrowth. the fear we are more fragile. after last summer's taper tantrum, the housing market is not doing as well as fed would like to see. shows fragility in underlying u.s. economy. generated jobs and re-engage a lot of people. the fear if you raise rates too early, there is no safety net. no going back. there is no stimulus. if we do it too quickly we're in another recession. liz: i see their fear. they don't want to be blamed with that. what are you worried about? this argentinian default on debt, did that freak you out? people say yesterday was that, others say no way. >> argentina, come on, like a bad, groundhog day. keeps happening over and over again, though nobody learns anything from it. i don't understand, argentina. it is what it is. i was glad the germans won the world cup. but, a broader spectrum, you know, ukraine, germany, italy, they depend on oil from the ukraine. the gas coming i

but what we know is the fed is committed. despite the fact that monetary policy is a blunt instrument, not a surgical tool, we know the fed is committed to supporting this economic recovery so, when they decide to increase rates, it's going to be because thai look they've looked at a big mosaic and feel comfortable. >> what does an investor do at this point? >> it's all about time horizons. for the investor that has a long enough time horizon, they need to have adequate exposure to stocks. >> what does that mean the if i'm looking at investments over the next five years? >> that means you need some exposure to stocks. especially if you need to fund a retirement or an education. what we're seeing is several investors that worry us. those that are risk averse. they're sitting in cash and levels are really high. then a cohort of investors that wants to be in it, that has watched this five-year bull market. experiencing feelings of regret, wu doesn't know when to get in. they're waiting for that correction. exactly. then another c

growth, you're still going to do better. >> what about the fed? he risks to being as bullish as you guys are? there still are geopolitical concerns, although no one seems to care from a market standpoint, dave. >> well, i think until the fed stops keeping rates where they are, so, once the rates start to move up, that's a bigger concern, but the market doesn't usually react until about 15 months after that. so, i feel like we still have somewhere around a year or two left in this bull market. >> so, what you're telling me, then, guys, is no matter what happens, as long as the fed is still partying, we're partying, too? >> no, i mean, there's always things that can go wrong. i mean, first of all, and i agree with what dave is saying, when the fed starts moving, it normally takes a year, two years before it's a problem. but if inflation starts to pick up and they get behind the curve, that would be a problem. and also remember, this is unconventional wei unconventional way in with qe, it will be unconventional out. >> there's got to be a lot of risk

about where the fed wants inflation. i don't know where you're going on that. and germany is selling for zero. yeah, zero just to protect the money. the stock market is just left. liz: andy brenner was here friday saying can you believe that german bonds, supposed to be aaa and all of that, that they are now at zero. points are excellent. phil what is working as well as stocks is the entire energy complex is moving higher. what's going on there? >> mainly rbob there is refining issues in st. john, a refinery is going to come down. gasoline led this rally today and it's driving the market. this comes on the day that aaa says that this labor day we're going to have more people traveling than the last six years, we're going to have big numbers there. gas prices at the lowest level that we've seen since 2010, but forget about that when you have refining problems. we're seeing that. we saw good pop on natural gas after a bearish report. injection of 88 billion cubic feet. supplies are 19% below the five year average. we're getting hot temperatures in the midwest, bet

the only thing that matters is the impact on the fed. not too hot or not too cool. 209,000 -- that's my typo there. the participation rate, people coming into the workforce, what does that mean? that's janet yellen's theory here of why she has room to be calm with interest rates because there are people coming into the workforce. there's a vast pool of people that are not working that if the economy is doing better, they can come back. markets saying even if the economy is booming, if wages are not rising at a reasonable rate to help boost incomes and there are no signs of inflationary pressures in the market the fed has nothing to do here. not quite as robust as anticipated and will not force the conversation about an earlier rate hike that hawkist folks at the fed like plosser and fisher would like to be having. fisher said this on "squawk box" about the conversation regarding interest rates at the federal reserve -- >> i feel personally that we're closer to lift-off than we were, people felt we were, the market assumed we were, some ti

david: also with inflation picking up and employment dropping, is the fed behind the curve when it comesg interest rates? one fed member certainly thinks so. so why didn't he dissent at the last meeting? dallas fed president richard fisher, a man who knows both the markets and the fedex extraordinarily well, joining us in just a moment. ♪ david: well last week's fed meeting had at least one big surprise. dallas fed president richard fisher was not the lone hawkish dissenter. in fact that distinction went to philadelphia fed president charles plosser who complained that the fed commitment to low rates was long term. let's ask him. of the federal reserve bank of dallas ceo, richard fisher. you're not often called a dove. you have to admit that but people were surprised you were not the dissenting voice. here is what mr. plosser said why he was the dissenter. he said the fund rate setting remains well behind what i consider to be appropriate, given our goals. do you disagree with president plosser on that? >> david, just so you know, on any though logically speaking doves are member of pige

the fed meets today. licy watchers in washington are watching anymore -- that closely. 298,000 is the number on the jobless claims. coming out better than people had anticipated. is that good news? >> certainly. one of the greatest things that has been going on. simply put, know what is getting laid off anymore. -- no one is getting laid off anymore. consumers spend money because they don't have any fear of being laid off. that is an increasingly normal view for someone to have in the labor force right now. >> confidence is a key component of overall economic growth. interesting because labor is going to be a big theme this year at jackson hole. thoughtspate hearing on structural changes. what are you watching for most carefully from janet yellen? >> it is pretty clear that she is going to be somewhat dovish relative to market views. , sheu look at janet yellen is clear that there is labor capacity in the marketplace. she thinks there is more the fed can do to help. >> politically speaking, what else is sh

you think the fed won't raise rates until 2016. >> we think it's a much more cautious fed than other players in the market might believe. we also think when the fed goes to raise rates, as they want to right now around mid-2015, they're not going to be able to. they won't be able to communicate well to markets and market volatility or tighter market conditions will lead janet yellen to delay. >> this is an interesting conundrum. the fed is stuck in positions and people can't figure out if the move is for rates to tick higher or lower. not because of what the fed is doing but how the market looks at things and how the bond market drives things. >> absolutely. but what we do know is the fed is committed, despite the fact monetary policy is a blunt instrument, not a surgical tool, we know the fed is committed to support this economic recovery. when they decide to increase rates, whenever it is, it's going to be because they looked at a big mosaic of economic data and they feel comfortable the economy doesn't need more support. >> what does the investor do at this point. is that an argume

the fed and the markets. there's more rate high talks. l fed presidents weighing in on cnbc today. >>> and then there is the fed and housing. what a rising interest rate environment might well mean for mortgage rates and the housing market. which has benefitted so much from those very low mortgage rates. sue herera is on vacation and susan lee from cnbc asia joins us for the hour. susan? >> hey, tyler, despite all the talk of the fed making a move, stocks are up anyway. the s&p hitting a new all-time intraday high a

markets are set for the fed chair's speech. minister seekign aid from terminally, as angela merkel meets poroshenko tomorrow. ash alert. a volcanic eruption threatens flights. a warm welcome to "the pulse" live from london. i am an edwards. economic symposium in jackson hole is officially underway. markets around the world can set their clock for the first keynote speech from fed chair janet yellen. yesterday, michael mckee caught up with kansas city fed chair after george. -- esther george. he asked her about the international impacts of monetary policy. >> we live in the global world, obviously, and the connections are growing between our countries as the fed thinks about monetary policy. it is focused on the u.s. and its mandate, but we talk about the geopolitical risk, we talk about what is happening in the economies of other countries because w we affect each other. >> has mario draghi called? >> mario draghi has it well in hand, i am sure. draghi, our next guest says that the ecb president could steal the spotlight at jack

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>> i think we probably know where the fed is going. they will get there or how they will get there, but we know the direction. that seems to be to a degree the case. foreign policy, we can have some very nasty surprises. we can have a very nasty surprise in ukraine, very nasty surprises in the middle east, which could disrupt the energy market, so i would have to say the big unknowns are more important than the fed. >> people vote with their pocketbooks before foreign policy unless we declare war. they goes back to the idea of the big unknown. and finally -- neither. daschle interest lobbyists will wins -- a special interest lobbyists will win as usual. >> that is the cynical view. there is an issue on top of my tonight at metlife stadium here in new york, the giants will be playing the jets. is the mascot of metlife. the big question is, and bob hormats, feel free to way -- who will start for the jets? geno smith or michael vick? >> i have to ponder that question. it is well above my pay grade. >> you interviewed >> i am a couple of w

done on what the fed is going to do. th david robin of new edge managing, we have both of these men, but john will do the deep dive into now what happens friday when fed chief janet yellen takes to the podium and speaks at jackson hole. what is she going to say? the most important things to anticipate and why the market had a little bit of a hiccup as soon as it heard from the fed minutes that a lot of these voters feel the labor market is starting to look better. will we see interest rates higher rather is an sooner rather is an later and david robin will give you the investment play, where is the trade and rise of the drones, part iii and wait till you see what we had been studio. it is that thing. that is a fixed wing lankester by precision hawk which is very into super smart drones that have artificial intelligence within them. wait until you hear the applications of what that drone can do. it is in studio, a fox business exclusive, president and co-founder with us live. melissa: i can't wait to see that. thank you so

how many divisions does the fed have? the russian ukraine fed on the other hand is everything to do with interest rates. our bond markets have been flooded. china pulled money out of europe. the prospect of another breakdown. that's the way they think over there. it wasn't long before demand. now you didn't fear that long. we're seeing poland talking about needing to strengthen the eastern flank of nato. you may think that sounds crazy but these countries believe it and putin doesn't seem to be playing by any discernible rules in the west. they want to put more tanks and missiles on the ukrainian border. these types of sanctions have produced hot wars more often than not. i think the western leaders need putin to be rational but maybe in this case being rational means taking back a big part, not all of it, but a big part of what you r5rd as your country before joining a battle of encirclement against you. he thinks he's being rational and he can't figure out why the united states is telling him what he's doing. if he invad

used the keynote speech to outline fed policies to come. net yellen will do, but she is likely to split the difference. u.s. labor market still mean improvement. also update your dashboard. the indicator she uses to judge the american economy. another key issue at this conference is likely to be what happens when central-bank policies around the world start to decouple? if the fed and the bank of england raise rates next year, well the eurozone continues with qe policies. mario draghi will give a luncheon address here. howstors will be looking at bad he thinks things are in the bankone and whether his will adopt some sort of qe policies. the japanese central bank head will discuss the latest. this year, it is mostly academics in attendance. wall street and city economists not invited. michael mckee, bloomberg, jackson hole. >> very nice. tom, thanks for coming in. what is going to be the focus for you? the divergent central-bank policies we're seeing painted around the world at the moment? >> i think they are less divergent than we think. u.