to the rate changes. because as to amplify what director freidsaid, if we offer a much cleaner project -- product and we're offering incentives for businesses to get energy-efficiency and rooftop solar as part of the program; and suddenly suddenly their wasting of the energy has been less expensive, they have much less incentive to go with clean sf and that is a factor also regardless of the fact that it's transmission and distribution where the excess charges are going. that is going to affect both community choice and pg&e customers. we have got to really make sure that the staff studies and aware of dynamic of when we start rolling in customers, are they going to get a rate hit? that they think is coming from clean power sf? so we need to pay attention to that and be careful about how where we enroll customers and look at what is happening with the rates around that as well. to the item itself, it's a little behind. so it's good to see that it's moving forward. i just want to speak to the timeline. it l

lower the corporate rate, the individual rate on both sides. one of the keys to successful individual reform is to move away from a spending system that depends on an easily manipulative tax system. this will increase stability and lead to added employment and perhaps most likely increase revenues. as steve, dan and the doctor pointed out as well we should have no double taxation. lastly, reduce bad incentives. tax policy is essential. no more temporary tax policy. let's make it permanent. let's make a reform and do that for the sake of the country, economic growth, and for revenues. thank you. [ applause ] >> good morning. david introduced me as your recovering tax attorney, and you probably think that i'm going to start off with a lawyer joke, and i know a lot of them. but i quit using them because i found two things to be true one is, it irritated any lawyers in the audience and the second is everybody else thought they were true. so i am here as a proponent and have been if here for 25 years of getting rid of the income tax system we now hav

when the fed raises rates it's about reining in the economy. are two different beasts with two different consequences. we have to explore what's worked when rates goo go higher in a different kind of environment than we've seen before. we have to explore profiting from from the decline and how it's harder than it looks. then we have to return to the principles that brought us here the best ways to make money, regardless longer term of the fed. first, let's discuss some common misperceptions buts about why the stock market can go down on good news and up on bad news. in the old days before the great recession we had traditional interplay between the fed and the economy. the fed perceived this job as helping the economy create jobs when things were bad and slowing the economy to prevent inflaigs when things got better. makes sense. it's in everyone's interest -- except short sellers -- to have a vibrant economy. we wanted to put as many people to work in order for our nation to be strong and allow people to participate in the progress greatness,

the higher the rate the greater the noncompliance, the lower the rate the list of noncompliance. what do we have? they are avoiding taxes by exaggerating deductions. we have tax lawyers, tax accountants. luther wrote the first book in 1983, the number of people who practice law in new york city versus washington d.c. we found in the early 80s the number in washington had grown so rapidly that they caught up with the number of new york city except the number of lawyers in washington practice law. they does advising people on tax policies and so forth. we created a massive industry and in silicon valley before the bust i remember talking to 400 financial planners and all but two or three said that the tax rate below 19% that because we had high rates of 40% and 50% basically remember it is $2 of producing income come away better to concentrate on saving them producing income where you can put one for the other. simplicity, complexity, cost, rates, the whole package. it's not fair either. if you think about it, we have a wonderful legal system gradually evolving. you're illegally no

in fact it's the earnings rate, it's the ensigntive rate that really matters. let me take you through the incentive rate a person in the highest tax bracket before kennedy cut that tax rate from 91 to 70, if that person earned $1, they had to pay 91 cents in taxes. and their after-tax incentive for earning that dollar was 9 cents. all together? in the lowest bracket, the guy earned a buck, paid 20 cents in taxes and his or her incentive was 80 cents for earning that dollar. all together? after the tax cut, by cutting the highest rate from 91 to 70, the incentive the after-tax incentive rate for the person in the highest bracket went from 9 cents on the dollar to 30 cents on the dollar. now, after the kennedy tax cuts they earned $1 they paid 70 cents in taxes and they were allowed to keep 30 cents. if you look at from the standpoint of incentives that's 233% increase in incentives for a 23% cut in tax rates. that's 1:10 cost benefit ratio looking at static revenue loss to an incentive effect you get a 1:10 cost benefit ratio. you follow me on that? if you go to

if you look at it, kennedy cut the highest tax rate from 91 to 70, 23% cut and the lowest rate from 20 to 14, that is a 30% cut. if taxes were all that matter you would perfectly correct he would cut the lowest tax rates by more than the highest but remember taxes are not issue. people don't work to pay taxes. people work to get what they can after taxes. that very personal and private incentive that motivates them which is not exactly taxes. in fact it is earnings rate. it is incentive rate that really matters. let me take you through the incentive rate. a person in the highest tax bracket before kennedy cut that tax rate from 91 to 70, if that person earned a dollar they had to pay 91 cents in taxes. their after tax incentive for earning that dollar was nine cents. all together? in the lowest brac connects the guy earned a buck, paid 20 cents in taxes and his or her incentive was0 cents for earning that dollar. all together? after the tax cut, by cutting the highest rate from 91 to 70, the incentive the after tax incentive rate for the person in the highest bracket went from nine cen

it won't really have an impact on clean power sf and the rates- the not to exceed rates that you adopted. the new rate structure that has been adopted by the california puc for pg&e, redistributes costs between transmission and distribution functions, from high-usage tiers to the lower-usage tiers. the clean power sf program competes with pg&e's generation component of the rate, not the transmission and distribution component. so that generation rate was flattened several years ago for residential customers, which means that these customers pay the same rate for generation, regardless of how much they use. so the rate compression that the california puc adopted affects transmission and distribution costs, not generation, and the clean power sf program competes with the generation component of the pg&e supply -- of the pg&e bill. so we don't expect the adoption of these changes to pg&e's rates to affect the clean power sf program or its competitiveness or require a change in the not to exceed rates that you have already adopted. >> if we're -- if the customer is responsible for paying the

the world. and they might not do well. if interest ratesl, the haircut that's been put on annaly because of the risk value. it's attractive. >> i want to ask you about apple for the sake of i don't think anybody has asked you about it, while you used to be so associated with it, i think you said, did you think it was going to 4.25? >> i said, i started getting negative at 600, 610. and it went up to 700 and i was pounding the table negative and i said it's going to, i said i deeply believe it's going to 425 and of course did it did that. it kissed 300 handle. high 300s and we bought it. so we were, we were out, we bought it at 405 actually. and it went up to about 550 and we sold it we're out of it. having made money on both sides of it. apple is reasonably cheap stock. i think, given the pe and the cash position all that. yet one thing that troubles me about companies like that is it's so big. you wonder how you're going to be able to compound your growth at that type of size. and the apple watch, i don't know if that's really going to set

let's first consider the labor force participation rate. ontinued to decline substantially after the the pace ended, with of those declines slowing only over the past year or so, even as the unemployment rate has continued to fall. age people who are not in the labor force have chosen that status voluntarily. retirees,ould include teenagers and young adults in schools, and people staying home to care for children and other family members. market,the stronger job it is likely that many of these individuals would prefer not to work, and indeed a noticeable portion of the decline in labor force participation rate seen over the past decade or so clearly relates to the aging of baby boomers and their ongoing retirements. however, the pace of decline in the pursuit test in the precipitation rate -- theirrated as some lost jobs, became discouraged, and stopped looking for work. it appears that despite a drop in a person -- participation the pace of, this decline has slowed since early last year. i think a significant number of individuals still are

released it was a repeat of what the fed has been saying for some time. they could raise rates this year, but we do not know when. it is up to congress to drag something out of her today. julie hyman is on capitol hill to give us the highlights. dooley: i have the same information. emphasizingof free that the trajectory, the planned trajectory is that we see planned increases. she hedges as she so often does. economic conditions would likely make it appropriate to raise the federal fund rate target and normalizing the policy, however, the hedge comes, let me emphasize these are projections, not statements of intent. into stone.carved optimism getting to the target of 2%. she says there have been transitory items that have affected inflation. there is still slack in the labor market but she and the committee are confident. the international scene, the situation in greece remains difficult and china continues to grapple with the problems it has. again, optimism. economic growth abroad could pick up more quickly then observers generally anticipated. u.s. economy may also snap back

not the unemployment rate. employment rate. it is the proportion of people who have jobs relative to the working age population. that's the bottom line. that's the number you want to be thinking about. that number this month, was 59.3 and it ticked up a little bit last month, back down to 59.3. it has been pretty much stuck there for the past half year. the problem is what that says is that while we are growing jobs at a rate slightly better than population growth we are not making much of a dent into that at all. so when you were having a debate this morning and you were discussing how many jobs do we need to keep up with population? it is an easy calculation. all you do is you say, what's the target employment rate? the target employment rate should be about 61.5% of the population working. why? before the recession, with he had 63.5%. now, we art 59.3%. we have to adjust for demographics. get you up to 61.5%. that's where the 5 million jobs that you mentioned earlier this morning come from. we are down 5 mil

the expectation is that central bank will cut rates. e we were await -- we await the greek parliament vote. manus cranny will talk to us. manus: i think we will pick up on janet yellen in terms of the possibility of rate hikes. mark carney is the unreliable boyfriend, it was you who referred to the mansion speech. jonathan: a lot of people will say, i heard this before. we sat here asking, why is 2015 different? manus: wages. who cares about tumbling commodity. none of that will trump wages. that is based on the assumption there is a wage bubble on the way in the u.k.. we have a couple of great guests. the ceo of gam will join us. we will cover it all. janet yellen's testimony comes this afternoon. is china a threat? is it just a lot of retail investors? jonathan: another question, what a world where we start to get paid more and then the central bank hikes interest rates. another thing is the greek debate, the imf a big role but coming out and saying we need a b, c. nothing suggested that anyone was listening. manus: there is no debt re

so as the fed increases interest rates in the market we anticipa that those rates will change for federal student loenls and increase as well. >> starting next year, the federal loan rates are projected to top 5%. and rise above 6% for the 2018 2019 school year. though rates may increase loans are what he call a necessary evil. >> i care what they are because i'll have to worry about that later down the road. but i'm going to take them out regardle. >> reporte like millions of students the c of financing a college education won't deter him from getting a degree. for "nightly busine" >>> coming up drying up. how one california gardener stays in business despite the state' >>> here is what to watch tomorrow. we told you earlier, it is jobs day. we'll have the labor department's june employment number which could move the markets. al a read on employment with how many americans filed for unemploy benefits. d fiat chrysler will come under scrutiny about its low efforts to recall affected vehicles. that's what to watch tomorrow. >>> as soon as we turn the page on 2015, a number o20 company are

the unemployment rate stands at 1.3%. slightly below its level at the end of last year, and down more than 4 1/2 percentage points from its 10% peak meanwhile, monthly gains and nonfarmed payroll employment averaged about 210,000 over the first half of this year. somewhat less than the robust 260,000 average seen in 2014. it's still sufficient to bring the increase in employment since its trough to more than 12 million jobs. the number of people suffering long term unemployment these measures as well as the unemployment rate continue to indicate there's slack in labor markets. too many people are not searching for a job. but would likely do so if the labor market was stronger. although there are attentive signs, it continues to be relatively subdued. consistent with other indicators of slack market continues have improved substantially. they are not yet consistent with maximum employment even as the labor market was improve inging real gdp is now estimated to have been little changed in the first quarter after having risen

the monetary policy report yesterday states that the fed will keep the rates low even though quote the unemployment rate will be at our below its longer run normal level whatever that means. this is concerning to a lot of people because pushing the economy beyond its normal level can have negative affects as we have seen with economic bubbles in history. the financial market has become depended upon the policy regulations making transparency more importantly. the fed is often described as the world's most transparent central bank. or at least one of the most transparent. but it is worth noting in recent respect, federal open mark committee monetary decisions are less transparent than in other central banks including the european central bank and the bank of england. for example, the bank of england has more annual meetings and a shorter delay in publishing minutes than the federal reserve and both banks issue more monetary reports per year. in addition the european central bank has twice the number of press conferences. so you see some aspects of the fed's transparency could be improve

the interest rate could be linked to the growth rate of the economy.ll of those are ideas that have floated around for a long time. i have proposed in the coalition government of 2012 to actually tied the size of the primary surplus to the growth rate of the economy. back in the lenders do not want to do it. they were afraid of looking too soft, eventually they didn't. -- they did it. the lenders side has shown sucks ability. -- has shown flexibility. it is time for the greeks to start living reality and realizing we are part of europe. we not only have demands, we have obligations. guy: thank you very much. the former finance minister here in greece. jonathan: thank you very much. there are the thoughts of the former greek finance minister. take a listen to this. >> what ever the scenario is, at the end of the day, the eurozone can handle the sent -- a situation in terms of the structure of the banks, the exposure to the greek economy is different. what is important is greek -- greece is small, but the problem is complex. jonathan: those are the thoug

got the tax rate down to 50% and 28%. by the way i would say that that 1986 tax act, which cut the top tax rate to 20%, you will not believe this, but it is true , that passed 97-3 in the united states senate. so there was a very star consensus. even people like bill bradley said, yeah, we have to do this. the one thing that concerns me is the democrats don't team to be interested in this issue anymore. they don't seem to want to fix the tax system. they just want to keep raising rates, which i think would be very negative for the country. host: you say we, talking about president reagan, research director on privatization has held several different roles including how to president -- including founder and president. caller: out of a -- caller: morning on the that taxes are complicated. i have been looking at them since 1975. and so often, they change from year to year. which does make it difficult. i know that some people are talking about flat taxes. maybe that might help. and or the loopholes, but a taxes attacks. if it

let the rate go to 18 for corporate. and we may see some rate reductions. out there in the real world, people who have either tried it or are advocating it gave it up. and don't want to talk about it anymore. so there's not much stomach for actually doing this stuff. and i think it's really important to remember why it went down so high. under senator eisenhower, nobody paid it. 92% of the people were paying like 20%. we're talking about a tiny tiny fraction. not a third of the middleclass paying these high rates a that will hit them today. she's talking about high rates of tax and capital gains. it is just a tax. if it's in the form of dividends, it is a tax lawn after tax profits that are distributed. if it's on capital gains it's an after tax gain profit on the higher priced earnings. but in any case as we approach creating a tax base, we need gdp. for those of you who know how that is constructed, you don't have tax in gdp. there is no place for capital gains. you end up in double taxes. so we went out to the lowest rate. now, if you had, say, a 9% rate

the higher the rate they greater than i compliance. the lower the rate the last noncompliance. r reservations. lower rates. and so that cost, we have found a how many hundred billion dollars in unreported income. underreporting income. wrote the 1st book in 1983 the number of people who practice law in new york city versus washington dc. we found in the early '80s the number had grown so rapidly it caught up with the number in new york city. except they did not practice law. they advised people on tax policy, expenditure policy. we created this massive industry. in silicon valley a member talking to 400 financial planners. all but about two or three said you would have to look for other work. because we have high rates basically a dollars saved in tax purposes is $2 and producing income. way better to concentrate. so simplicity, complexity cost rates, the whole package. it is not fair. if you think about it we have a wonderful legal system that is gradually evolving. you're not supposed to discriminate on the basis of age, sex, gender, race religion, ethnicity. tax policy discri

low rates are not the problem. what i'm concerned about now is that because we've delayed raising rates below that 6.5% rate now whye have no tools left. and what's your response? we have no tools to address the next recession. >> the time of the gentleman has expired. the chair recognizes the gentleman from florida mr. murphy. >> thank you chair yellen. thank you for being here. one of the biggest problems we have is the disappearing middle class. and one of the factors that isn't addressed in that conversation is often housing. and in a state like mine in florida, you go to areas like miami, coral gables a lot of growth. a lot of the numbers there for growth are through the roof, way better than ever expected. unfortunately that is not for folks that have the 700-plus credit scores and lower to middle-income families. they are not experiencing this bounce back. nor are they building that equity, i think, is important to getting to that middle class. so my question relates to regulation. and curious as to when you

>> the interest rate on the first mortgage is the market interest rate. out 4.25% these date. >> the interest rate was zero. there was two loans, one was the borrower taking the loan from the bank, we are assisting with the down payment. the interest rate was zero and we get a percentage from the gain when the home is sold. >> it doesn't look like a debt at all. it looks like more inequity. >> agreed. >> let's call it an inequity position then. >> one last point. i did read the publication of san francisco's housing crisis. there was a lot of great points. it was educational. one question i have, it looks like there is a discrepancy in the number of loans in what you report and what mr. shaw reported. can you expand on that. did you look at all the loans in your analysis? was there about 115 loans difference is what he sites. -- cites. >> i have not looked at the full data, the full bmr's. that maybe the difference. i did not see the information. >> i'm sure you will get a copy. it's a below market rate for housing. >> that is correct. >> so that's a conce

the u.k. will raise rates as well. mately, there is a debate about the capacity of the american cymer the british consumer, to tolerate higher interest rates. is that a concern for you for the business, in terms of the timing of interest rate hikes or is it something which lags and we don't need to worry about it for 18 months? keith: in the appliance business, interest rates and housing activity and consumer confidence and employment, those are the key variables that have high correlation to appliance demand. interest rates matter. but given the low rates they are coming from to go up 50 or 100 basis points is not going to dramatically affect the appliance demand. manus: thank you for joining us this morning on "the pulse." let's see what the department of justice and yourself can come up . that is keith mccloughlin, ceo of electrolux. some of the top headlines now on bloomberg. german lawmakers will have their say on greece's next bailout today. chancellor angela merkel just finished speaking. she said germany won't a

rate increases. as i indicated the entire path of rate increases does matter. there are are many reasons why the committee chose an appropriate path of rate increases is likely to be gradual. given that we have been at this for over six years, it has been a long time, so when we finally begin we will be looking at what the impact of those decisions are on the economy. that strikes me as a prudent approach to take. >> as you know the markets have been anticipating a rate increase for quite some time and then it will follow one of the meetings that has a press conference afterwards. currently there is a press press conference after every other meeting. as a result in the market view the fed only has two more chances to raise rates this year in september and november. would the fed fed feel comfortable raising rates for the first time without a press meeting scheduled afterwards. in other words are the july and october meetings on the table for rate increases? >> i've tried to emphasize that every meeting is a live meeting and we could make decisions at any meeting

. >> the great rate debate. why fewer top street wall street strategist think the federal reserve will hike rates in september. >> why fewer and fewer americans are buying their own home. that and more for the "nightly business report." >> a rebound on wall street. stocks halt their slide since the start of a two-day federal reserve policy meeting and away from china. by the close, it rose to 17630. and the s&p 500 gained 25. >> exxon mobile and chevron were big gainers today because of the rise in the price of oil today. >> and two earnings came from pfizer and merk. they were held for the pneumonia vaccine and the breast cancer drug. merck also raised their profit gains. >>> ford reported a blowout quarter. posted their best earnings in 15 years. north america is strong but there is a growing concern about the world's largest auto market china. >>> it may sound cliche but it is good business is booming for ford in north america where they just had their most profitable quarter ever. in part because of strong de

rate increases. as i indicated, the entire path of rate increases does matter. there are many reasons why the committee judges and appropriate path of rate increases. it's likely to be gradual. at zeroat we have been for over six years, it has been a long time since we have raised rates. doing so when we finally begin in the deliberate and gradual way, looking at what the impact of those decisions are on the economy, strikes me as a prudent approach to take. >> as you know, the markets have been anticipating a rate increase for quite some time. it would follow one of the fomc meetings that has a press conference afterwards. there is currently a press conference after every other meeting. as a result, the fed only has two more chances to raise rates this year in the markets of you even though there is a meeting later this month and one in october. feduestion is -- would the feel comfortable raising rates for the first time at an fomc meeting without a press conference scheduled afterwards? are the july and october meetings on the table, so to speak, for rate incre

oliver: the concern is a little less on when the hike will be and at what rate. if we do get some clarity from the fed and we get some insight into what the fed's thinking, that can possibly move markets. again, it will have to be a big move. it will have to say we don't think the data is there but it is solid as we saw today. earnings season. we have been in the in between faith and perhaps the reason we saw the move down this week is because companies have been buybacks. there's not quite that support pillar there but a lot of investors want to see topline growth at this point, companies reporting numbers that are showing quarter over quarter growth. i think if you have that strength on the company site combined with the strong economic growth we have seen, you might have a solid week coming up. alcoa earnings out next week. thank you so much. other stories making headlines sales tax rates again despite the continuing weakness in the economy. unlessnomy minister said japan is hit by an exceptional economic crash, the rate will be lifted in april 2017. the govern

of the gradual rate increase on every day americans? >> of course there are risks to the recovery of tightening too soon. we have been highly focused on those risks. that is an important reason why we have left rates as how as they are in over six years they have been effectively 0. we have had recovery that has been been. growth have been slower than in most recovery. i agree there remain groups struggling in the labor department. we try to show in the monetary report the standard unemployment rate we looked at that is 5.3% may somewhat understate the real degree of slack that exist in the labor market. so we clearly want to see continued improvement in the labor market and we want to do nothing that would threaten that. on the other hand the labor market is getting closer in my view by almost any metric to a more normal state. the degree of monetary accommodation has been sufficient over a long period of time to generate pretty significant improvement in the labor market. they are diminishing and i think it does become appropriate to b

we had a big move up on the perception of higher rates. not translating at any appreciable move on the bottom line. some investor started exiting. banks usually sell going into the quarter. pnc gave some guidance. they expect modest growth in loans, net interest income is going to be unchanged. core earnings power is not changing that much for these banks in the third quarter, and that's a bit of a disappointment but the street everybody i talked to is still bullish because the one thesis for the second half is rates are going to be higher and everybody wants to own banks on that basis and the other argument is very simple. the banks are not particularly expensive. citi is only ten times earnings pna and u.s. bank corp. only 13. this is the anniversary of janet yellen came out and talked about small cap stocks substantially stretched stretched. it's up 90% since she made those comments. i wonder if she'll bring that up today? >> i think she knows better now than to mention the markets and valuations. we'll see what happens. with the yellen

rate increases. as i indicated, the entire path of rate increases does matter. there are many reasons why the committee judges in effect is an appropriate path of rate increases is likely to be gradual. given that we have been at zero for over six years, it's been a long time since we've raised rates. doing so when we finally begin in a deliberate and gradual way, looking at what the impact of those decisions are on the economy, strikes me as a prudent, a prudent approach to take. >> as you know, the markets have been anticipating a rate increase for quite some time and that it will follow one of the fomc meetings that has a press conference afterwards. currently there's a press conference after every other fomc. >> chair yellen addressing questions from the house financial services committee. covering a lot of topics, from the growth of the fed to the pace of rate hikes, asked about illiquidity in the bond market. steve liesman has been monitoring it all. >> i want to go over what she said about greece. basically that the market, the fomc was sort of neutral on

the unemployment rate has come down. it is 5.3%. y, -- >> that was michael mckee and kathleen hays speaking with eric rosengren. you can listen to their conversation on the bloomberg radio plus. caapp. scarlet: it is an and san francisco, 3 p.m. in new york, and 3:00 a.m. in hong kong. alix: it is the bloomberg market day. scarlet: good afternoon everyone. a look atant to get the markets this hour. you are looking at a triple digit rally for the dow, up by 233 points. this is a very surprising day, because for two days and low we movingosed below the 20 average. we have to wonder why. technically, we were not looking that good. are looking past the fact that greece and china much of an impact and it is all about turning season. alix: even though earnings revisions have come down over the last few months. scarlet:

the overall jobless rate, 12.7%. we're expecting the euro zone jobless rate. that should hold steady at just over 11%. >>> let's go back to earnings. france's biggest lender by ses t asse assets, bnp paribas. let's get out to stephane who has been speaking to the cfo. >> the bank posted much stronger than expected earnings in the second quarter. a loss of 4 billion euros last year when the bang had to pay a settlement to the u.s. department of justice. the revenue declined. all businesses per fomed well with almost a 16% rise of the revenue at the cib division. bnpparibas improved by 30 basis points. operating expenses remained under control with an 11% rise in terms of outlook, the bang believes that to the cost of risk will remain stable in the second half of this year. this is what the cfo told me. >> we'll refrain from giving forward looking outlooks. we do see that we have to see if they materialize further going forward. for the rest, we're focused on executing our industrial plan. which is very well on track, as you saw from the second quarter results. >

the mix. interest rate cuts. estors to utilize assets as far as their properties are concerned. we have seen strong-armed tactics for brokerage firms. we have seen managerial positions being restricted on what shares they can sell. all of this should see an equity market that is quite frankly flying. those of us who have sat through the last decade or couple of decades worth of action maybe the hairs on the back of our neck are standing up. when all these restrictions are taken away, how much of a rush will there before the exit door? anna: look at what the authorities are doing. it reminded me of some of the raised eyebrows when people talked about quantitative easing. as we are looking ahead to where the greek story goes, because that is preoccupying thought, there is the feeling, report that perhaps the banking sector could be open monday. christine lagarde said that this morning, it looks as if it is going to open monday morning. are we in for another rocky road depending on how that goes? alastair: we have se

the committee anticipates that it will be appropriate to raise the target rate for the federal some rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move act -- back to the 2% target over the medium-term. feel they arethey almost there. there were no dissents, no press conference today, they did not upgraded or economic forecast and there is no new. plot -- dot t we will have to wait for august for any further clues. this is definitely a statement towards the hawkish side. mark: michael mckee joining us from a very windy washington. thank you. scarlet: let's get straight to julie hyman for a look at how the markets are reacting. a leg up in u.s. stocks. julie: they are taking a leg up on this news even as this may be viewed as a more hawkish statement. pointing the arrow towards a rate increase. we are not there yet. we need to see some more labor market improvements. that seems to be reassuring to the stock market as we see another leg up in the s&p 500. all three major averages not up to the races, but a little higher than th

i will get closer to the rate hike. elsewhere euro-dollar is in the trade to look at. 882, dead flat. that sets us up, let's get straight to your equity market open. the futures are pretty much dead flat. paris went higher by about .25%. call it eight in the first couple of minutes of trading. we are dead on a 10% rally over the last eight days. things get interesting in the european market. let's give the asian market with you von -- yvonne. 3 yvonne: a pretty good note year for asian stocks. volatility has eased a bit. now greece seems to be a little bit less of a concern. we are seeing southeast asia markets closed today on holiday. chinese stocks rising the most than a week. erasing all the losses we saw this week, what a difference a week makes. we just got these headlines, the chinese securities headlines core says they have money on tap to support stocks. we talk about billions of dollars. very similar to how much was wiped out in value during that stock rout last week. the government still not done yet in terms o

they do not need to commit to the first rate hike date. they will be somewhat vague as far as timing of the first rate hike. olivia: what are you looking for in the statement? >> same. i do not think they are going to take any action, as you indicated. i think you will see change in the language to say the economy is in better balance now. which leads up to what you were speculating on. an interest rate in september and october. they are trying to pad the market for what is coming rather than do anything today. olivia: in the new economic assessment, you think janet yellen will signal the fed believes the u.s. economy is improving? >> yes. and better balanced last time it was out of balance. we will see that language continue towards predicting some change in the rates. pimm: john, do you concur? what should investors do? >> i think that is right. i think the focus will be on how they characterize the labor market. we've seen the unemployment rate fall towards 5.3%. janet yellen still thinks there is lack. that will be the focus on how they

we have a low per dissipation rate. thepation rate is the lowest since 1977 when i was in government. it reflects the fact that a lot of older people have retired after they lost their jobs in a great recession paired younger people cannot get jobs right out of college so they're living with their parents were going to graduate school. many times, parents are anxious to get their kids out of the house or they get internships for them and sometimes they pay people to take their children in internships because the kids are at home and sometimes parents do not want them. >> we have not gotten too, there is that problem but it just seems like even though housing is recovering, and you see the stock markets and they are shaky . they are the shakiest they have been in quite some time, we have not seen a liftoff in the economy. business seems to be doing well. you're doing great business. we have not seen the liftoff in the economy. why? david: it may not be the case you will grow at four or 5% after a recession and a longer. we u

the unemployment rate is about twice the amount of 25 and older with the rate declined substantially. when it comes to education we find all the teachers are given day of her over younger teachers. new york city has unqualified teachers who are being paid rather than being fired. even though it is impossible to find unqualified teachers in elementary or secondary school. economic studies have shown with just an average teacher at the lifetime earnings rose by $250,000. so there's a lot we have to gain by letting children have the best future they have. then when it comes to college 70% of students have some college debt and the average debt is $27000. so that's a lot of debt and it didn't used to be like that 10 years ago, 20 years ago. the federal government subsidizing more and more college loan colleges by raising their tuition and this is just a lose-lose issue ration. plus high school guidance counselors and a four-year college, even some of them graduating with degrees that make it difficult to find jobs. some of them don't even graduate at all without a college education. when

more substantive highlights on the topic of rate increases. there was also a spirited exchange between she and sean duffy. duffy as well as the chairman of the house financial services committee have been requesting information from yellen and from the fed regarding the leak of information in october of 2012, allegedly leading to a special medlinby a firm called global advisors, and intelligence firm that sells information to hedge funds and other investors. on the day before the minutes were released from september 2012, this report came out detailing what the minutes would say. there has been this ongoing investigation of that. both doffing and has sterling say that the fed has not been forthcoming. duffy says the fed is trying to sweep this under the rug and accused yellen of not being forthcoming with information. betty: thank you so much. julie hyman right there with some of the highlights. the testimony continuing could remy has been looking at how the markets are. basicallythat we are a racing those gains from earlier. ramy: nearly a rac

we discount future cash flows and the lower the interest rate the lower the discount rate. that should boost any valuation of the net present value of future corporate income streams so you think all right there's a very direct mechanism. however, both empirically and these rhettically there's problems with the argumentation. first, if you're a rational expectations investor realize that quantitative easing and ultralow interest rates are a temporary policy. so you should not be val ewing corporate prospects ten years out based on whatever the current short-term or long-term rates are today. secondly sophisticated investors should be using an overall cost of equity, not only the risk-free rate the interest rate, but an equity market premium. and we've done modeling at mckin zi estimating what is the cost of equity. we find it is a very stable figure over many decades ranging between 7% and 8% for u.s. equities for instance. and this holds true since the recession. so, even if investors believe the risk rate has gone down, apparently increasing the equity market risk premium