>> i think that channeling their inner volcker is almost as though we are experiencing volcker 2.0. what's really disturbing is that back in july, they had very reasonable outlook for what they were going to do. they were going to raise interest rates in september and probably again in november, and then they were going to pause and just see how it all plays out. back in july, fed chair powell was saying that there's a lot of tightness in the pipeline, and that we shouldn't rush it, and then all of a sudden, the whole narrative changes with the jackson hole speech and now with the september press conference, suddenly, they are invoker mode. charles: you know, and to that point, i feel like they are playing to an audience of critics. you remember that senate hearing i think it was the senator from alabama said you know paul volcker, i feel like that they have fallen into a trap, and unfortunately, the majority of americans have to pay a price with that and if they go too far what would it look like on main street? >> well i think you're right. i think they made a mistake back in augu

i got to say i wish jay powell could be more like ben bernanke instead of paul volcker.lowly, scholarly. all powell wants to do is reconstruct some fantasy image of paul volcker 40 years ago, a larger than life superhero, who will cause all kinds of pain in the world for all your good. all it takes is courage. all it takes is courage. be like ben bernanke. it takes brains, sobrietity. good on you, my friend, ben bernanke. charles: wall street certainly loved his reign. wall street breaking down here somewhat, all the technical levels. looks like it will be tough near term. what are your thoughts how people make it through this near-term weakness? >> i think the first by word here is that it is just way too late to sell. by the time you say, right now we have 25% correction in the s&p. so what is your trigger? 26%? i'm sorry, that is not a time machine. fine you can go back to january if that is what you could do. you need to look at buying opportunities here. charles: all right. don, thank you so much, my friend. appreciate it. >> thank you, sir. charles: coming up, folk

i love this piece, it is about volcker. dani, good morning. dani: it is a market that is transfixed. i am chucking coffee this morning because i am unprepared if we have that all over again. the s&p ends down two point 5% on friday. unemployment is to let its lowest in decades, that's giving this market no comfort that we might see any pivot from this fed. continuing to see losses there. you're a stoxx 50 futures also in the red, down .7%. with the 100 futures not as bad -- ftse 100 futures not as bad, but british companies are buying back shares of the most rapid pace on record which may be giving us a left. i think it is all about process and volatility, not just equities. manus: that goes back to the whole concept of a var shock. i should say why i have come back to is simple, -- istanbul, a big shout out to be team. if you want more volatility, look around the whole of the region here. you talk about buybacks in u.k. stocks, because credit suisse as a monster debt buyback. lambasting the move of a cut of percent from opec. the oil is down

if you look at volcker is a -- chairman powell is invoking volcker's name, and his keeping at it book title because i think chairman powell thinks we have an inflation like we have in the '70s and '80s. chairman volcker increased interest rates from 10% to 20% in an inflationary environment that's twofold chairman powell and team have increased interest rates 13fold f and when the interest rates are written economists will say wow! what a shock to the system so i believe credit default swaps are going up in a reason and we will find out what those reasons are over time. >> a different base there, though cathie, let me ask you about your individual investments and you continue to buy roku, teledoc, and zoom. digital transformation will increase their value some argue, though that some of these businesses are more like features, video calling and telehealth have become commoditized by bigger and better capitalized players like amazon and microsoft what do you say to that? how does the valuation sort of account for that changing landscape? >> sure. before i do that, deirdre, i'd like go

until paul volcker, actually including even early paul volcker, the fed tried and failed to tame inflationthis is it, this is when we're going to get inflation urn control, and on each one of those four occasions, they paused for a u-turn before the job was done, and they paused in the u-turn because inflation was coming down -- although it was still elevated -- the unemployment rate and unemployment claims were ticking up, and there were concerns about market function and financial stability. so i think if we are, indeed, living some sort of repeat of the 1970s, the lesson is unless your name is paul volcker, you are probably going to have a pause or u-turn at some point along the way. dagen: but what -- it seems there's this disconnect, tyler, with what the biden administration is doing. and they're in utter denial about how their free-wheeling spending hat has not just fueled inflation, but continues to fuel if it. and he, biden made the comment over the weekend about republicans talking about big spending democrats. what was his response, get out of here, which is a non-response. that'

i'm sure it has a lot in there about the '70s and volcker and getting angry 2x4s in the mail nothing i don't think so part is mainly because there's so much anger in the country in general now, it's horrible, not necessarily directed at the fed, and i'm sure jay powell is happy about that, but who knows when some kind of appearinger bursts out anywhere these days. but the point is that the powell fed is not going to have to put the economy through the kind of wringer that the volcker fed did. paul volcker inherited an inflation problem vastly, vastly larger, deeper, stronger, more ingrained than jay powell has to deal with now. not to minimize what powell is dealing with it's a serious issue but, you know, paul volcker had to wrestle with the 800-pound gorilla of inflation, and he did. >> i can't wait to get ahold of the book it sounds fantastic. we appreciate the guidance as always we'll talk soon. thank you. >> thanks, bye >>> still to come, we're going to talk energy prices and the diesel shortage in the u.s nat gas touched its lowest level since march earlier today. trading highe

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that would become my way of doing what paul volcker wanted to do. he said let the interest rate go where it wants to go. i'm going to carry out a practical application of the quantitive theory of money. at the affluence he meeting of october 1979, the instructions going forward from that policymaking committee were targeting the federal funds rate from eight to 14% meaning interest rates will go where they go. he wanted to narrow the money supply. so, i think the reason the fed is hesitating, they went from 9 trillion in june 1 they started saying they were going to sell off the portfolio by letting the maturing debt runoff. i looked at the numbers last thursday, they publish the numbers every thursday and the average is still over 8.8%. i think they are afraid that if they actively get it, you allow price discovery, you would engage with markets and let them tell you what the rate of return should be on the securities and what they will pay for them, that would be healthy for financial markets and for the fed. they are concerned they will lose more

recession, then deeper recession, then finally you will see inflation that, happened in 80s, with volckerce for everyone, only way to break it -- >> michael kantrowitz here fromp piper sandler. >> is it jump in. >> absolutely, if you think about the with a powell is saying unemployment rate way to do it we noticed hit economy i interpret that powell trying to hit earnings that is the way to get people to get laid off right what intel did you are going to benefit employment or benefit earnings can't have strong employment strong earnings into the future at this point thops do you believe the fed is is starring at one mandate is there anything employment side can change their mind? first of all, to begin with yes, i think you are looking at inflation that is mandate, it is way too high for anyone's tolerance over any reasonable period of time, so that is it. now, as -- right now, 3 1/2% if you watch, that unemployment rises, the discussion will turn, to -- well you can't have unemployment, and no one wants it i certainly don't, so we have to reverse, to reverse early, you get more inflation

decade-long ptsd on the side of the border is the idea that in the 1970's, this is the mistake paul volcker made. they may be pulled back to soon. do you think that fear will resonate in canada? charles: the fear could be there. i think it was explained well in the press conference. there is the risk of doing too much too quickly but also doing too little. if we look at policy, we are well above the neutral rate which the bank of canada thinks is between 2% and 3%. may be closer to 2% given the debt in the economy. we should start to see the impact on growth. but the bank of canada is not telling you they are done. they say, do not expect 75. we will continue to increase but expect more 25 basis point increase depending on where inflation is going. jon: some people saw the headline and wondered whether you might to see similar language coming from the u.s. federal reserve. as you look at the differences between these economies, how would you answer that question? charles: i think in the u.s. there is still more to do. they are probably still looking at more increase. they do not have the sa

the other thing is when paul volcker was going through this process, he was raising interest rates aull percentage point every month. so, you know, these are not unprecedented moves. arthel: then why, if it's not unprecedented, clearly wall street doesn't like it -- [laughter] what's it going to take for wall street to stabilize? >> i think they're going to have to get inflation under control, and that doesn't mean 2%, but it certainly means, say, getting it down to 4. the important thing to remember here is that in the past after volcker contained it, we averaged 4% inflation for ten year years. that's not optimal, and interest rates were higher than in the recent past. but wall street managed to deal with that. it's a matter of going through this transition. a recession, there's going to be some corporate bankruptcies that probably should happen anyway, and then the economy will readjust and get on a flight path again. and at that point, wall street would learn, heck, we can live with 6% interest rates because, after all, 4% inflation, that's a real rate of 2, that's a fair price t

i'm old enough to member the early 1980's when paul volcker persisted for a while. he did pivot, even when inflation was high in 1982 because we were going into recession. i think it is under stick to think that the fed will sit on its hands if we go into a deep recession and receive inflation coming down. especially because we are already doing to which is adding pressure on the economy. this is a global tightening cycle, potentially a global recession. i find hard to believe the fed sits on its hands. jonathan: i wonder how much longer we will be doing qt for. this is toxic for a lot of people. bear market bonds, bear market stocks. down 3.7% on the nasdaq. yields are climbing higher. on the two-year, four basis points. -- a haven like bonds? gargi: i think they will start behaving like bonds. there will be a balance in your portfolio that will be beneficial in an equity market selloff. that will happen once we get to that level of yields that is very attractive to u.s. and non-us investors. i think that could summer should be somewhere around 4% -- i think that c

when i was 7 years old paul volcker raised rates, i almost went back to 6 years old, along u.s.0% to 15% and we survived. kristen: i'm excited about decker's outdoor, this is the company that makes sheepskin boots, people you love or hate to love or love to hate, been in the hot shoe for a long time but they turned into a steady moneymaker but what is exciting is there running shoes, this is not like a -- nike level brand awareness but they are number 2 in specialty running, it is not a one trick pony it can find and grow. >> i'm looking at ticker symbol see cj, uranium miner, taking half of westinghouse electric which does nuclear services, the market hated it, stock dropped 20% but an interesting deal, could allow takeover services for nuclear plants because russia will not do servicing anymore. it is an interesting it is interesting deal and interesting stock. jack: thanks for that explanation. to read more check out barron.com. that is all for us, see you next week on "barron's roundtable". the fox studios in new york city, this is maria bartiromo's "wall street." maria: and

neil: that was paul volcker example, right? >> what paul volcker did, wasn't so much a recession.recessions before that. what he did afterwards, stabilized value of the dollar, plus ronald reagan put in tax cuts and deregulation. a stable dollar, vibrant economy. by golly we had two wonderful decades. unfortunately this administration is going out of its way to put obstacles in the way, whether it is energy, whether it is small businesses, regulators. the sec 500 page document rule on climate change for crying out loud which is going to hurt a lot of small businesses. neil: you're exaggerating, it was 498 pages. [laughter] >> my math. neil: i see your point but what is wild to me, how the markets are digesting this. they seem to be betting interest rates will keep going up, the fed might overdo it but it will be a small price to pay. actually it is a very big price to pay. >> it is also going to have, which they will have thrown in their faces, overseas repercussions. one, a lot of developing countries took on a lot of debt when the money was free. now the money is no longer free.

think about volcker.ut how great paul volcker was, but that was a couple of years of serious pain. you have to have a stiff backbone to say stay with us in the end this is going to work, right? >> well that's true, but there's also more to a productive economy than monetary policy. basically, the central bank should just deliver stable money , and then we rely on tax and regulatory issues or policies and trade and energy policies. that's what contributes to the productive potential of an economy, so that people have more opportunity to have a more prosperous future and you have an economy that actually produces goods and services and that's how you resolve a lack of supply. what we have is everyone relying on central banks to raise interest rates to crush demand, and i don't think that the central banks have made such a great case for saying that by raising unemployment and curtailing growth, you're going to have a better outcome, when it really is a matter of maybe you're hurting supply more than demand

paul volcker who in the early 1980s headed up the federal reserve and killed terrible inflation at a very high cost have been inflicting us in the '70s because in the '70s they would fight it, not only can and that would come back worse than before. so we went through a very grim period and early 80s to finally stop at once and for all. and he rolls, we did an interview with him a couple of years ago, and he, four years ago, and he would roll his eyes at the idea that 2% inflation is good. in terms of the stability of the dollar you want, you don't want inflation or deflation. you want flation. this is a very subtle point. you may get prices going up because of supply and demand. for example, a hotel in cambodia, very poor country is going to be a lot cheaper than hotel room, say in singapore, a very prosperous country. when a country becomes more prosperous and people's salaries are going up in real terms, then they not only start to buy more things but they're going to want more services. for example, take somebody who cuts hair. a barber. a barber, if the country becomes more pros

huge tailwind it's been for all assets as we've had lower and lower interest rates really since the volcker era, but particularly, you know, since the early '90s. so as rates go higher, it's almost inevitable that we have more multiple complexion presentation -- compression. and the probability of a recession is so much higher now than we're more than likely going to have another leg down driven by cut equity earnings forecasts over the next several quarters, maria, unfortunately. maria: you're also looking at globalization which held down inflation, helped cause profit margins to go up. now we're talking about a profits recession. we'll hear from corporate america in the next two weeks as the third quarter earnings season will begin in a week and a half. what about what happened in britain this week with massive disruption in markets over debt worries and a new tax cut plan from new leadership in the u.k.? >> yeah, look, unfortunately, we've had to remind the crowd recently that when recessions happen, earnings don't go up, they go down. and we do think in this earnings season you're going

know, one thing in another i was able to publish a number of major major books by people like paul volcker the great fed chair earning jordan the great civil rights leader george soros who obviously doesn't do it for the money. i was able to find the wesley clarke when he came back after having won the war in kosovo was able to agree with me on a contract without having to pay ridiculous amounts of money. so there was a way to do it, but you had to have an approach that i was able to take because of my experience and most people choose or can't do that. and so what happens is they go into an auction. they meet with the public figure. sometimes that public figure doesn't even show up for the meeting. and there's an auction and then they write i have somebody write the book for me. it's just you know, it's not a good process in my view, but that's the process. so peter austenos, let's go back to your work with presidents. did you make money on the art of the deal? and what were you what were you dealing? what were you dealing with president trump? oh god the art of the deal. is a remote is t

that was the mistake volcker made in 1980 where inflation expectations hadn't come down very much.ed out and as a result, the fed had to get out a baseball bat and do a lot of damage to the economy that's not what the fed should pursue i think they have learned their lesson i think they're aware of what happened during the volcker period but, you know, you never know. central banks make mistakes. central banks sometimes cave in. i hope they don't do it in this situation. >> always great to get your insights thank you. >> my pleasure. >> focus on that 5% you just put out there, too >>> meantime, getting breaking news gm quarterly sales crossing the tape let's get to phil lebeau >> carl, for the third quarter general motor sales increased 24%. that's just a smidge under the edmunds estimate of an increase of 24.6% keep in mind, the third quarter of last year, they shut down production in malaysia because of covid-19. they had a bunch of issues there. this is what we're seeing with all of the automakers. sort of lumpy results here these are coming in a tad light of expectations. but t

the situation that arthur burns faced and the one that paul volcker tried to resolve. >> and you get into reputational issues as well just if you're keeping score, 19% off the high, sounds like three of three of you say this say bear market bounce as markets continue to climb, the chart master is looking at one group that could act as some good insurance for your portfolio, carter. >> sure. so, there is managed care. if you think about it, the beauty of this particular area of the market well healthcare is that it is truly domestic, right? managed care stocks, health insurance stocks don't care about putin or oil or the u.s. dollar and they are tremendous long term performers. since its inception, managed care doubled the performance the entire s&p healthcare sector it looks like more of the same let's look at a few charts the first is a comparative chart, you can see two lines, two colors and one, of course, the top one, that's the s&p 500 managed care subindustry group humana, united health care, molin and so forth the laggard is the s&p let's look at the five year basis compared t

former us ambassador to nato kurt volcker gives us the state of play next.iver) conventional thinking would say verizon has the largest and fastest 5g network. but, they don't. they only cover select cities with 5g. and with coverage of over 96% of interstate highway miles, they've got us covered. i'd like to thank our sponsor liberty mutual. they customize your car insurance, so you only pay for what you need. contestants ready? go! only pay for what you need. jingle: liberty. liberty. liberty. liberty. stuart: an american illegally detained in iran for 6 years has been freed, just flown to the united arab emirates for major heart surgery, it is unclear when he might return to the united states, was arrested after traveling to iran, detained on spying charges. mexico could soon launch a commercial airline run by the military. ashley, are they going to have soldiers on the planes? ashley: flight attendants carry machine guns that are mandatory, without complaining about the food. i'm getting. mexico is debating whether to create an airline that will fly to c

still had, arizona congressman andy biggs, former us ambassador to nato kurt volcker, ben dominic andional standards way down and teachers union has to take its share of responsibly. the elections, an opportunity to hold the union accountable. that is "my take" and it is next. ♪ >> the problem in america is we are suffering under biden policies, doesn't matter what the color of your skin is. i think president biden is beginning to realize his vice president is giving him trouble? >> strong numbers, no chance the fed will pivot. >> the fed does nothing. they will pay a heavy price, in the future, the cost of

that takes you back to paul volcker and the fight for inflation back in the 1980's. continuing to grind higher on u.s. yields. 135 is what we are getting on the bloomberg u.s. dollar index. brent crude is lower by 0.4%. let's get with francine lacqua who is outside the houses of parliament. such a crucial take for the u.k. politics. we keep talking about the history making moves that we are seeing. a new prime minister and the race for the next premiership. i love that we have sent our resident italian to the houses of parliament to discuss the italian-fication of u.k. politics. francine: there are so many foreigners in london and some of them including me, vote and it is important to look at what happens in the u.k. in the future. three main questions here. is this a new conservative party that is less about ideology but also a lot more about pragmatism? we found out yesterday on how they will vote. it is impossible that more than three mp's are going to go through the round of voting and it is likely we will end up with those from monday. the one question the marke

at the skill of the issues facing the fed actually are grater today than -- greater than the paul volcker. he hike the rights to around 20% -- he hiked rates due to around 20%. >> chair powell has on top of this financial stability. if they pivot, it will be because of financial stability and will not be because they are deciding to not look at inflation anymore. annabelle: it is pretty clear that the risk of recession is weighing on energy markets? it has been a major contributor to the wild swings. it has made it difficult for investors to know when and what to buy in the energy space. sam from equity group investment is not immune to this challenge, he spoke to us about how his asset picks up distressed oil assets back in 2019. take a listen. >> has a volatility in the energy space has been so extreme that the volatility -- the volatility in the energy space has been so extreme. that shifted between that and 128. that is an incredible level of volatility. it makes making investments extraordinarily difficult and challenging. haidi: our next guest says this is not a area to be on carefu

don't think the fed should have price controls i think they should let rates seek their level the way volcker the balance sheet striefrpg it dramatically i think they should do that but they don't do that. are there not going to do it i think you will see raises, a secular decline if you look at core inflation, it has been rising stll steadily all this time you can't look at spot commodity prices highly volatile indices core is right thing with high gas price all that, too high now falling too low there is no control over inflation yet. the balance sheet has not been brought down economic growth not there to supply more goods to reduce inflation. we have a long-term problem going to take a political solution not yet decided. >> markets at lows of the morning down 220 dow industrials, on very worries that we're seeing a real slowdown in the economy as things are getting more expensive from the borrowing, to essentials like food, and fuels so art what kind of a 2023 are you expecting? >> well i think today is 1978 maria. i think we're going to take house and maybe even senate i think a good cha

been one of the most aggressive interest rate hiking campaigns, if you will, since going back to the volckerat kind of damage could be done to this economy it could be severe, could it not? >> i would view the outlook as having 2 million job losses for the u.s. the unemployment rate rising above 5% over the course of next year, even if the federal reserve were to limit additional rate hikes think about what's happened. mortgage purchase applications volume are off 50% home sales have fallen 35% housing job losses have been zero the pace of construction right now is really where we were when the sales pace was higher and mortgage rates were lower. now, that's one micro example just to understand that it takes time it's planning a house, building a house is 12 months this is one we easily understand the fact there are very strong impacts on trade, which is impacting, again, marketing, sales, finance positions throughout the economy, this takes time in the past, it has and it's going to right now it might happen a little faster. when i said, by the way, when the fed pivots, when ultimately they

business environment not just use a very blunt instrument in interest rates as was done under paul volcker we had reagan that lowered interest rates which created the boom of the 80's, i'm very concerned that they are following a playbook from the past and not taking consideration, all the heavy impacts like assault on domestic energy from the biden administration and, of course, as you mentioned continued spending. they are fighting each other. maria: yeah, for sure. you're right. congressman, we will keep watching all of that. thank you very much for being here. >> thank you so much, maria. maria: quick break, then deal back on, elon musk potentially avoiding a legal battle with twitter agreeing to his original terms for the twitter takeover deal. we will talk about it. stay with us. ♪ ♪ ♪ maria: welcome back, wednesday october 5th, take a look at markets where we are looking at a pullback after two days of strong rallies, s&p 500 down 28 and nasdaq lower by 84 after pulling back from a strong start to the fourth quarter with two days of major gains, dow industrials yesterday up another

if you look at what paul volcker did under comparable circumstances, raised them more rapidly. inflation remains stubborn especially in europe, european central bank is lagging. will we have a recession? probably, that follows tightening, the price we pay when we have inflation 10%. in a lot of ways this is the hangover after the big party. spending all that money and all the cash still laying on people checking accounts is giving the economy difficulty in the form of inflation and the only way to solve it is to suck the liquidity out and that is what the fed is trying to do. neil: part of the problem -- >> in europe, the european central bank is lagging get and that's why the currency is falling and the japanese are going in the other direction. it is heard that it exacerbates the difficulties. hard to escape the need for tightening once the fed gets going and somewhere or another you pay for it, out consequence for the purchase of it for the united states. neil: when we see another gain like that in the stock market, in the next 3 hours, it narrows yesterday, strong advance.

view, jay powell has over and over receive -- referred to that era of the 1970's, the 80's, paul volcker, they should not have paused when they did, they need to go full out and to go full out and be aggressive on inflation. is not that the message that the bank of canada and ecb is listening to as well? michael: the situation of europe is different than the u.s., where we had contributions to inflation, significant contributions from the stimulus package, with more money chasing fewer goods. the problem is that the europeans have particularly the war in ukraine and energy prices and the ecb can do a lot about that. because energy prices are so high, they anticipate they are going to have or are already in a recession. their view on what they need to do to try to get inflation down is a little different than the fed's. the fed wants to kill off demand. ecb knows it has a hard time doing that with recession in the forecast. canada is somewhere in between. they are in for a significant slowdown if not recession, so the bank of canada is careful as well. laxalt out --kriti: i want to ask ab

i certainly don't think it's going to be like the financial crisis or what paul volcker needed to dorrible things that happened after the pandemic started. but i do think the unemployment rate's likely to rise, perhaps towards 6%, and you know, that's a very real and not an easy thing. but i think what people need to understand is that it is better to do that sooner rather than to allow inflation to accelerate and allow everybody to expect inflation, at which point you'll have a much greater set of difficulties. >> so mr. secretary, what if anything can the biden administration do and the federal reserve do right now to avoid this recession you fear that could hit us next year? >> i think the fed has to do what it -- has to do what's necessary to contain inflation. i think the biden administration could think about a range of measures to reduce costs. making it easier for business -- for energy companies to start drilling or fracking for oil and natural gas. reducing tariffs where that would mean lower prices and less inflationary pressure. doing away with regulations like the jones

even volcker himself paused for a moment. and that's why everyone is say, hey, you know what?tart looking at 1930. because this notion that you're going to be to beinger-esque and no matter what the numbers say, it's a legitimate fear. stuart: tough start for your monday morning for invest if possessor, isn't it? >> it is, indeed. stuart: let's get to lauren with the movers, and i see wynn resorts -- lauren: oh, look at that. too stuart i know what's wrong, that's china locking down because of some covid which would really hurt macao. lauren: that is absolutely the story is, why wynn resort is the worst performer. and i ask add to that, citigroup cut its estimates on macau -- stuart: what is with china and this zero covid policy? lauren: i know. i wonder after the weekend if they start to loosen up a little bit. maybe they just immediate to get to that and then they can loosing up and meet the world where the world is because this is hitting their economy. stuart: it sure is. rivian, they're down sharply now. lauren: they've recalled nearly all of their vehicles, let's say 13,

would point more to the early 1980s when we had the inflation in the '70s and then chairman paul volcker, who i worked under was fighting inflation and we had a very deep recession. there were a lot of parallels. i hope it won't be that bad. but if it is like just the early 1990s, that is good. but i think it could be worse than that but not as bad as 2008. >> when we look at where we're at, i spoke with heather buschy this morning and asked about whether there is recession planning in the white house. there wasn't a clear answer. i understand that the administration probably doesn't want to deal with the r-word right now. but wouldn't there have to be some planning happening and if not how concerning would that be to you? >> well, they're clearly planning for the election right now. and probably overjoyed that the gdp number came in well. but going forward, in terms of tax revenues, what they're plans are for dealing with the recession, i'm sure they're starting to think about it. i don't think it is going to be so easy to deal with because unlike the last few episodes where we had big

charles: that is one of the main lessons they keep refer towing the mistake that even paul volcker himself made pausing for a moment. everyone keeps talking about the fed. they will break something. everyone keeps saying they will break something. what will they break? one thing we see breaking down is housing, right? as we see mortgage rates go down, housing just turning, home prices turning negative for the first time. what else has to be vulnerable or maybe potentially break for a reason for them to at least pause? >> well, housing is clearly breaking. that is an important leading indicator more broadly for the economy. to your point what it would take get a more sustainable move in the market, rallies by the way can happen all the time. some of the swiftest rallies occurred historically in bear markets. we'll probably get plenty of those. i do think you will need to see stabilization in housing especially leading indicators like the housing market index by the nahb. that is a builders sentiment index. i think global pmis, ism in the u.s., pmis globally are still in a downdraft, stabili

necessary steps to ramp this down, it's hurting markets and part of the issue is that unlike the volcker era where eventually the reagan administration got in line to add in fiscal tightening so you had the government and the fed kind of working hand in hand, the biden administration is actively making the fed's job harder and i think voters sense that, they get there is a callusness towards just he throw a check at it, throw more liquidity at problems voters are facing. maria: it's a perfectly fine question for steven doocy. the day before president biden said if the democrats ho onto te majority in congress the first thing he's going to do is codify roe v wade and make it possible to have an you abortion in your ninth month as if that's what people are talking about. no comment on i'm going to do first and foremost kill inflation. i'm going to make sure that families are not paying upwards of whatever for oil prices. no, the first thing he's going to do is make it possible to have an abortion in your ninth month. >> yeah, the two top priorities right now for the democrats are abortion

seems like jay powell is determined to prove he is going to be paul volcker.e painted himself into a corner after the transitory debacle, bank of england set our market lower only buying bonds for another three days. there are mixed messages today. are they now going to be wedded to these proclamations to the point they make big mistakes? >> bank of england definitely has a credibility problem, the fed also so. if you look at inflation expectations they have been well-contained this whole cycle. the issue with credit is more communications problem. the fed hasn't communicated what it has done. the transitory issue doesn't look good until president biden gave powell the nod for third term they got hawkish. charles: you suggesting he might have known it wasn't transitory but didn't want to step on the president's toes? >> there is timeline issue but communication point the fed has had errors. the market not worried about inflation, even though at 40-year high. the market is not worried about inflation, see it in the five-year swap rate. you don't have it here. c

also jay powell is in a tougher environment than what previous chair paul volcker was in the 1980's when rein in inflation. the fed will be pivoting to a smaller pace of rate hikes moving forward is one of the things helping a little bit of investor sentiment this morning. the market, moving higher. some factors could be waiting on the outlook today. really coming through and what we are seeing particularly for u.s. futures. when you take a look at big tech earnings, dropping after hours today. you can see alphabet after its earnings miss, microsoft, really weighing on the earnings -- the strong dollar really weighing on the earnings. texas instruments, flagging a weak fourth-quarter outlook. a big miss on third-quarter numbers. it does not pretend well for the tech heavy index's career. the other factor of course weighing on the outlook is what happens in the china session as well when that gets underway. take a look at what we are seeing in terms of foreigners. a lot of trepidation around if foreign investors can return to the market. whether or not it will be net positive or net negat

paul volcker stopped short of 2%. the second time around.e are going to be doomed to that stop-start-stop-start that is going to leave us with a decade of inflation that will make it back down to 2%? vincent: two points, one, we've got an old look from monetary policy now. the fed is talking about policy, they are responding to events, not applying to leave them. that sounds 1970's already. the second part is, yeah, i think inflation will prevail above fed gold. i don't think that far above gold. we are not talking about 5% were 6% or 7% inflation. it is that it is something in the low threes or the high two's, something that the fed could plausibly say, well, we are only one recession away, let's opportunistically wait for disinflation down the road. bad for fixed income investors, bad for markets. if 2% is your goal, you should get there. they are just going to say let's take our time getting there. jonathan: you make it sound very simple when you put it like that. just one recession away. vincent: it is also painful because there are peop

salvage this, it is because right now his job is so hard his job is so hard right now because even when volcker -- nobody likes to kill an economy to tame inflation. it is, like, you know, the worst -- like the least worst option maybe we can do it -- that's why i said -- >> he's in a pickle. one day he's the worst person in the world. the next day he's the best person in the -- >> but do you concede that it is great to have the u.s. economy as the backdrop? >> we got inflation. do i need to concede this? >> we had some previous conversations. there are certain things about europe you like that we don't do here, right? >> i don't i think they're totally messed up i think that pure form of capitalism in the private sector and free markets is a better way to go than the entitlement state. we talked about this a million times. i think that's responsible for a lot of our exceptionalism, which i still think is -- >> unparalleled. >> unparalleled in the world >> i always say still got to be earned, but life is relative. >> when i was in high school, there were two kinds of bumper stickers america, lo

he brought volcker in to deal with it. you couldn't be tougher than that.ns want to focus the election on inflation, crime, the border, but there's one issue that just came through with talking to sean there. the crime issue is not the democrats fault. if you look at the republicans and how they defended what happened on september -- on january 6th, just think about that guy crashing through the speaker's door into the speaker's lobby and all that anger and fury of people who were breaking the law. they were breaking down the capitol of the united states. the center of our democracy. and they're being rooted for it after the fact -- after the fact by republicans. kevin mccarthy. go ahead, break down the capitol, go ahead, total disorder, bring down our republic, don't let them count the electoral votes. none of that matters. dr. oz believes in that. he's supporting trump. so you have to get back to the question of our constitution and who cares about law and order and the capitol cops who were the good guys, like that guy who saved mitt romney by taking him