the market geared toward some fed action here. if you look at inflation spreads out there, they seem to be signaling the markets want something. the fed chairman would be cautious about disappointing market expectations. i will tell you everything you put up there is speculation. it's good speculation but no explicit guidance from the federal reserve. >> those are all options we've heard from at least one reputable firm, one reputable voice out there as being possible, things the fed could or could do number four and do nothing. steve, stick around. as we head to the fed, a quick look at how stocks and bonds are trading. update on equity mark, dow jones industrial, nasdaq and s&p 500. all in the red not by much. nasdaq down .2, everyone on hold waiting for the fed. what about bond market. u.s. treasuries. what we're talking about, folks, fed, twist and everything really is going to impact that if they do something. right? go shorter, buy longer, try to push the long end down. ten-year yield 1.66%. bring in special gegs bill gross,

clearly, the fed is very accountable. we testify frequently, not just myself, but other members of the board or reserve bank presidents. we give speeches. we, you know, we hear and are at various events and so on. it's inherently difficult because the fed is a complicated institution, and you've seen the last four lectures these are not simple issues, but all we can do, i think, is do our best and hope that our educators, media, and so on will get into carrying the story and help people understand better. it is a difficult challenge. it is a difficult challenge, and it does reflect an attention that's been in the u.s. american feelings about central banks ever since the beginning. >> thank you, mr. chairman. earlier, you mentioned that the fed had several ways to undermind the large purchases of scales and efforts including funneling them back into the market. what guarantees investors are willing to buy back from them in the future? >> uh-huh. well, again, first of all, we have essentially three different types of tools w

and tom, the decision may hinge in part on where the fed's hawks and doves come down on the economy. >> tom: susie, this isn't ornithology, but rather inflation. hawks and doves disagree, often loudly, over fears of inflation. this week, we are taking a closer look at the federal reserve and its powerful role in the u.s. economy. tonight, darren gersh looks at whether the central bank is a house divided. >> reporter: there's so much attention focused on what ben bernanke says or does that it's easy to forget he can't act alone. when it comes to setting monetary policy, ben bernanke chairs a committee, and the differences of opinion on that committee are deep. >> there are the doves and then there are the hawks. there are folks in the middle trying to thread that needle, but the two different groups are as distinct as they've been in the time i've been watching the federal reserve. >> reporter: the hawks are federal reserve bank presidents. there's philadelphia's charles plosser; from dallas, richard fisher; and minneapolis' narayana kocherlakota. but voting on the fed's key interest

>> the fed outlook consistent with the statements. isn't that nice when that happens and doing hand holding for the potential of qe3 down the road. the selloff with no statement and then the market rallying seeing some read more carefully laying out the groundwork potentially for qe3 and a move around 1:00 when angela merkle came out saying that the bailout funds in europe do include the possibility of buying sovereign debt and quickly emphasized no plan to do that. a lot of moving parts since today and looking at what's going on elsewhere, the euro rally, as well. the dollar move to the downside in addition to that. >> thanks, bob. you will have to be speedy here, rick santelli. they say that the bond markets get it more right. what are they reading out of this? >> pretty much correct. the biggest mover holding on to the gains at a 30-year bond and to a lesser extent the 10s. short maturities were punished. but remember, this is not the real world. because they're buying the same dollar amounts as selling long term versus short term,

what the fed did today already. n't think it will prevent a weak economy from precysting. so there is still a good chance they will act more aggressively in the coming months. >> i think the next step would be a form of quantitative using. but there are other alternatives, again, related to confidence of how long they will keep interest rates low. >> bob, one of the questions had to do with low interest rates and the impact on the banking business and making it less attractive for banks to lend money, which the fed chair suggested he didn't believe. >> i thought it was good. it hurts bank's ability to make money on the spread, and investing in treasuries, but that makes it more important for banks to find borrowers and investments. >> do you think they're working hard enough? we keep hearing that banks are not lending enough right now. >> but they say they are. >> what's the reality do you think? >> i think their standards may be higher, but i think it takes two to tango and there is a problem on both sides. >> what

the fed creates it creates recessions and depressions that's the worst thing the fed does and so they can actually put us into a global depression in cahoots with the european central bank in the bank of japan their partners in in crime so it threatens everything it threatens everybody's economic future thirteen's our children's economic future it threatens our grandchildren i mean this could be go on for a very long time the hole that they're putting us in and yet they are immune from being questioned they're never to be touched but never to be inquired into bernanke and company should just be able to do whatever they want in a secret room in cahoots with the big banks and we're not allowed to know well ron paul is exactly right we have a right to know we have a need to know we need to if we can if we care about the economy we care about all our economic future than having prosperity and not all being in poverty we need to know what the federal reserve and it's going and it's composite in the banking industry are doing to us in of course the purpose is to stop them from doing thi

and what tricks will the fed pull out of it's had when the issues come to bear tomorrow? we have three stock pros weighing nonthe fed tomorrow. kids wanted a puppy, but they can be really expensive. so to save money i just found them a possum. dad, i think he's dead. probably just playin' possum. sfx: possum hisses there he is. there's an easier way to save. geico. fifteen minutes could save you fifteen percent or more on car insurance. recently, students from 31 countries took part in a science test. the top academic performers surprised some people. so did the country that came in 17th place. let's raise the bar and elevate our academic standards. let's do what's best for our students-by investing in our teachers. let's solve this. between taking insulin and testing my blood sugar... is this part of your life? freestyle lite test strips? why, are they any... beep! wow, that hardly needs any blood! yeah... and the unique zipwik tab targets the blood and pulls it in. so easy. freestyle lite needs just a third the blood of onetouch ultra. really? yep, which is great for peo

dated treasuries and buying long term ones it's just more free market arm twisting if you ask us and the fed says hey it's willing to do more to where do we go next well whales have been popular what about operation humpback whale by both the long and the short end and sell a bunch in the middle and there you have it will float that idea to our guest later and is this same force behind too big to fail banks driving anti-competitive behavior across the board be it on wall street or in government it is that problem enabled by a parasitic third party that exists in washington that is destroying the economy the party of institutionalized rent seekers jim rickards bestselling author of currency wars is here to explain and mickey mouse was beheaded on mercury does the phenomenon behind this sighting help to explain this spawning market trends we'll show you why we're asking let's get to today's capital account. what do you know today ben bernanke announced operation twist version two point zero i guess you could call it this afternoon and said that the fed is willing to do more to take further act

the bottom line, the fed's no longer the answer.t this point, they've pretty much done everything before the shouting on thursday's testimony before congress. the government should be a seller of debt, not a buyer. sadly, that's all that can be done by the federal reserve. it is at last out of bullets. the ones it is firing aren't as powerful as market forces which are sending rates far lower than bernanke ever dreamed of. at this point, even want. bill in arizona, please. bill. >> caller: hey, boo-yah from beautiful phoenix, arizona. >> you got the edge on me, partner. what's up? >> caller: i have a question about a stock i was hoping to fill in my portfolio. texas capital bank shares, inc. so far it's really held up well during the correction, especially for a financial. if tcbi isn't a buy what small cap should i look at instead? >> well, look, you've had great success with tcbi and i got to tell you, this is a bank in a growth area and that does matter. that said, i don't like the domestic bank stocks. i did like them for the lo

does the fed now raise their projections? ions will ultimately determine policy. if the fell marks down gdp and next marks up unemployment, that would be the underpinning for a more serious move. >> steve, i just wonder, in terms of the idea of outright purchasing, how much impact could that have when we already look at profiles, so much securities that have never been lower? >> i think that's a great question. i think the phet has to look at a couple things, two things exactly, cost and benefit. the cost to the fed is that it's harder to get out of the policy. the cost would come in credibility if it does something and has no effect. then the benefit would be, what if you're 1.6 on the ten-year note, 30-year mortgage ratings, they could come down more relative to the ten-year, but corporate borrowings are very low, i think they'll have to ask what benefit will it have? what strikes me, it's come down more because of the outlook of the economy than it has any expectation for the federal reserve. >> if the fed does nothing, inc

we talked about the fed. o zoom out for just one layer of detail because i think one way you'll understand this, in the way that i understand it, is that there are different pressures on the federal reserve to act in different ways. and what i see when i watched the testimony yesterday of the joint economic committee is that there's one political party that very explicitly is saying the kinds of things that you're saying. you're saying that inflation is higher than the official headline number. that the fed was doing things that is one of the unconventional things to increase the monetary supply and kick start the economy. that that's a disastrous path to follow. ron paul, obviously, has made these ideas quite famous, but it's spread throughout the republican party. it's kind of a central republican party. . >> i would say most don't understand how bad it's going to get when the fed finally does the right thing after having done the wrong thing for so long. banks are going to fail, the government is going to h

it's the minimum that the fed could have done. i think i'll be chartable and say that for those people that believe that bernanke will let the election year and campaign ge get in the way, he said he wouldn't, he would be more aggressive. but if ewe into the fundamentals, the central bank in one fell swoop just cut it's nominal gdp growth forecast for a year which matters for corporate profits. >> jeff, you had a piece talking about what markets wanted ahead of the fed meeting, did that get it? >> let's look at what they did want, one of the things is a bizaro economy where bad news is good news. they wanted to hear bernanke be concerned about where we're going because that means more easing. the other thing is they want zero interest all around. it's the only really room that the fed has to go right now because we have negative real yields now. so that's where they're going to be looking for qe 3 from welcome and it's qe candy and they're looking to keep going on the sugar high, so they got the bernanke blues. if you saw what the

what is the fed chief mr. bernanke going to say? how will he say enit and what will wall street say about what he says? >>> the first dow 30 ceo to respond to the decision. the ceo of caterpillar, the stock, hiring, the dollar, exports, the global growth story. >>> and speaking of a story, this is one whale of a story. wait until you see what our kate kelly has found out about the trader in the center of the jp morgan trading mess. he's known as the whale. all of that is straight ahead. >>> we start with my co-anchor at the ncse, brian shactman. >> look at the dow. almost positive in the average now down five points. we were down as many as 75 when the announcement came out. s&p and nasdaq off of the lows. you have gold was down about 28 bucks a few moneys after did decision came out. crude bouncing a bit off of the lows and really the theme trying to dissect it all. let's bring in mr. pisani. to me it seems like we're where we were yesterday. we have qe3 on the table and twist is extended. >> that's good point. the markets first dro

policies to bolster the economy and he argued fed policy would not lead to higher inflation down the road. darren gersh reports. >> reporter: moderate. that's how ben bernanke describes economic growth these days. it's not the kind of forecast that raises alarm bells, but with unemployment still high, it may also not be enough to put more people back to work. here's what's worrying bernanke. if, in the worst of the recession, fearful employers fired too many people, they may have hired most of those workers back by now. so, with hiring slowing, the economy will need an extra jolt to really get more people back to work again. >> so that is the essential decision, the central question we have to look at-- will there be enough growth going forward to make material progress in the unemployment rate? >> reporter: but with interest rates already so low, fed skeptics think the central bank is out of options. bernanke disagrees. he says the fed is confident it can ease interest rates even further, though he didn't say exactly how that might

and where the fed could head from here. all coming up on "mad money." [ mechanical humming ] [ male announcer ] we began with the rx. ♪ then we turned the page, creating the rx hybrid. ♪ now we've turned the page again with the all-new rx f sport. ♪ this is the next chapter for the rx. this is the next chapter for lexus. this is the pursuit of perfection. this is the next chapter for lexus. recently, students from 31 countries took part in a science test. the top academic performers surprised some people. so did the country that came in 17th place. let's raise the bar and elevate our academic standards. let's do what's best for our students-by investing in our teachers. let's solve this. >>> i don't want to downplay the awfulness of this moment in the stock market although we had a nice rally at the end of the day. i need to point out that even though things have gotten tough around here there's still some stocks worth speculating in and for at least doing homework on. sure, you have to be a lot more selective and careful bu

how bad would it have to get before the fed responds to that? >> they'll try to take out the tail risk of a deflationary stock and buy securities if need be if that happens. for europe for the u.s. to keep talking about chubby checker and twist and shout for europe the song i keep hearing is promises, promises. we never get the solution. they have the tools that could be used but they never actually use them so we'll have to wait and see on that. >> susie: we certainly will. hopefully you'll come back and talk to us more about it. thank you, randy. randall krozner. >> tom: our week-long focus on the federal reserve continues tomorrow, as we look at the differences between the goals of the federal reserve and the european central bank. >> susie: the spanish government said today it does not need a bailout, despite the rising cost of ensuring its i.o.u.'s. the nation's budget minister said spain has the support of its european partners, and european institutions. an independent audit of spain's financial system is due out tomorrow. many worry it wi

will things get you thinkly if the fed disappoints. are tim freeman, and nathan bathrack. what's your tame, bill and i have been talking about whether expectations are getting way too high now in terms of what fed may do tomorrow. are you expecting easing by the fed tomorrow in some form? >> i think the market will get disappointed in the fed, but what will the ecb do overfight. what's the french prime minister going to say, what will grease vote on? >> you're expecting a lot, huh? >> yeah, there's so many pieces moving this market. >> what would the easing look like? a continuation of operation twist? they will not cut interest rates lower, right? >> they will buy mortgages, they will drive it down further for refinancing and keep pushing money into the risk trade. >> what's the market telling you right now. we had a good rally going into the greek elections and a reallyly coming out as well. >> the market screams when you look at the structure valuetity about the liquidity being added by the central banks and the liquidity being adde

the fed is wrapping up it's two-day policy setting meeting. onomists seem to suggest the most likely outcome is an extension of "operation twist" set to expire in two weeks. that program lets the central bank sell shorter term securities and buy longer term bonds. the fed is going to be releasing its statement at 12:30 eastern time. then chairman ben bernanke will be holding a news conference at 2 p.m. eastern. you can watch coverage here on cnbc. >>> european stocks are choppy in early trading. investors are also waiting to hear from the fed. treasury secretary tim geithner speaking on the sidelines of the g-20 summit. >> we're encouraged by what we heard from the european leaders today and by the broad focus of what we're seeing, the need to strengthen economic growth. >> french president hollande says italy proposed using bailout fund. he is calling the idea one worth exploring. he plans to talk about the subject in rome on friday at a meeting between him along with leaders of germany, spain and italy. the real question is, what angela merke

the dollar actually rose against the yen on hopes for a monary easing from the fed. but the upward trend eased off a touch later, wednesday in new york, as the extent of the measures were made pretty clear. the euro however, has gained. and is holding its ground now at the upper 100 yen levels. let's not forget it was trading at the upper 99 to 100 yen levels just in the last couple of details. now, a proposal by italy for europe's rescue funds, to buy weaker eurozone sovereign debt is on the table. however, it needs germany's approval. th will be a big focus for currency markets, and of course how that relates to the stock markets as well. but coming up later today, eurozone finance ministers are going to be meeting in luxembourg, and apparently they'll be talking about unifying the oversight of the financial sector a topic covered at the g-20 meeting in mexico. still a lot of focus there op the eurozone as we move forward. the nikkei and topix higher this morning. >> ramin, thank you for that update, from the tokyo stock exchange. >>> now, i'll leave you with a eck

the moves were a little bit light as market players were waiting for the fed meeting. but now that's out of the way, the next focus is really on how eu leaders are going to come up with any plans to enhance eurozone rescue funds. and also, how it's going to be dealing to ease some of the pressure off the austerity plan that is pegged for greece. especially now that the pro-austerity coalition government just took power on wednesday. so that's the next focus, really, for a lot of the market players. now, the euro and the dollar had a little bit of a volatile trade ahead of the fed meeting. and we did see some particular moves for the dollar, gaining a little bit, then easing back off. let's have a look at the exact currency levels for this thursday morning here in japan. the dollar actually rose against the yen on hopes for a monetary easing from the fed. but the upward trend eased off a touch later, wednesday in new york, as the extent of the measures were made pretty clear. the euro, however, has gained. and is holding its ground now at the upper 100 yen levels. let's

the fed is behind on this part of what's going on in the world. >> the fed is behind meaning you thinkould have brought it early center >> yeah. it's coming. it's a coming attraction. it's really unique what's going down in europe. the achilles heel of europe. >> why should our fed act more aggressively than their central bank. >> when they look at how our economy shall do they should be more pessimistic in the second half of next year. in terms of risk managers and buying insurance. insurance would be more aggressive on quantitative easing as other central banks will be. yep. i'm not saying that will solve the problem but that's what central banks have to do. >> for the fed -- you think the fed is behind the curve. what about ecb. >> they are way behind the curve but embroiled in politics of not making it easy for those countries to get out of their problem. politics are mixed with economics in a financial crises. that's deadly. >> they don't have a dual mandate. >> single mandate. >> the fed is like -- nothing theoretically can stop them. they have total cover. >> they do now especia

that -- what that does is to soent mutes thimpact of the fed's actions. that being said, i don't think it's at all accurate the federal reserve policy is not helping the broad public. first of all, many americans are able to take advantage of lower interest rates. many people have refinanced or bought homes. others have taken out loans to buy cars, auto loans are cheap and broadly available. so there has been impact through lower interest rates. but i think more broadly is the indirect effects. if a firm has a low o cost pital and we he seen a lot corporrrowate bog last couple years, then 'r m likely to expand, to add pil, to add products, and to which the payrolls have thoue increased the last few years has been disappointing, there have been significant increases and the unemployment rate has come down by two percentage points. some of that comes from the broad impact of fed policy on spendi, instment and effecaffect the broad itl by hiring and b promoting demand for products that people are producing. >> to kevin. and then ov to marcy. hi, than. vin hw

the fed is committing 267 billion to extend its operation twist program. this is 45 minutes. >> good afternoon. before we get to questions, i'll summarize today's policy action by the federal market committee and place the committee's decision in the context of our economic outlook and collective judgment about the appropriate path of monetary policy. as indicated in the statement released earlier this afternoon, the committee is maintaining a highly accommodative policy. we decided to keep the target range for the federal funds rate to 0 or one-fourth percent and anticipate economic conditions are likely to warrant low funds rate through late 2014. in addition the committee decided to continue through the end of the year our program of lengthening maturity of our securities holdings, rather than completing the program this month as previously scheduled. specifically, the committee intends to purchase treasury securities with remaining maturities of 6 years to 30 years at the current pace and to sell or redeem an equal amount of treasury securities with the

right now the fed is not succeeding on either count. which raises the question whether it is really trying hard enough. >> if bernanke stood up and pounded the table and said i will not let this be merely a faltering recovery, i want a strong recovery and i will do everything i can no matter what. that is going to cause businesses to invest. >> reporter: but most economists expect to see small moves and not table pounding when the fed chairman faces reporters this wednesday. darren gersh, "n.b.r.," washington. >> susie: our next guest says the next six months will be quote "difficult" for the markets. he's john manley, chief equity strategist at wells fargo advantage funds. hi, john, welcome. so much for that big fat greek relief rally everybody was counting on for today. what is your take on-- take on today's market action? >> i think we saw the rally on thursday and friday. i think the market traded off in may in anticipation of this and spanish issues. and i think it was expected to a certain degree that we get a good result out of gr

depends on which side of the aisle you're on. we will talk fed, fed, fed, next. park miles card from capital one, thor's couture gets the most rewards of any small business credit card. your boa! [ garth ] thor's small business earns double miles on every purchase, every day! ahh, the new fabrics, put it on my spark card. [ garth ] why settle for less? the spiked heels are working. wait! [ garth ] great businesses deserve the most rewards! [ male announcer ] the spark business card from capital one. choose unlimited rewards with double miles or 2% cash back on every purchase, every day! what's in your wallet? [ cheers and applause ] if you made a list of countries from around the world... ...with the best math scores. ...the united states would be on that list. in 25th place. let's raise academic standards across the nation. let's get back to the head of the class. let's solve this. more than 50 times a day? so brighten your smile a healthy way with listerine® whitening plus restoring rinse. it's the only rinse that makes your teeth two shades whiter and two times

really based on what the assumptions for an adverse an area that the fed came up with with the wisdom out of their own academic papers combined with what banks are theoretically supposed to do exactly so what if you just want to work save invest and live without scanning frantically through policy statements press releases and federal reserve minutes every time you go to open your wallet well our next guest has some solutions of his own that maybe will be a little more concise than those fed documents he's mike moloney founder of gold silver dot com and author of guide to investing and gold and silver it's part of the rich dad poor dad series and just the person to talk about all of this so first thanks so much for being on the show thank you lauren how are you doing i'm doing well it's nice to see it looks like a beautiful day in the leg great day to talk about the fed i guess there's some sunshine where you are maybe less if this but that is what everybody is looking at it whether or not there is going to be q e three and this is really been this speculation or the question since at

the fed plays a very important roll in our economy. you have six huge financial institutions having assets equivalent to two thirds of the gdp for the united states. do you want people like jamie dimon sitting on the fed, i think that is an apparent conflict of interest. >> what do you think of congressman dating the fed. >> we just talked to bernanke and i raised that question, and he said congressman dated that i'm not criticizing the fed per se. during the wall street bait out period, among other things, and jamie dimon is not the only one. the fed provided $390 billion in low interest lows to jpmorgan chase alone while jamie die monois sitting on the new york fed. >> well, let me give you another example, because there is all of this talk and attacks of congress that they really don't understand the complexities of what goes on on wall street. don't have an understanding of how some of these instruments work, and you really need bankers or people who are doing this so actually create an education for some of these guys. >> that's a