i will ask former ambassador kurt volcker was on the show. russia promises consequences if the us goes through with plans to sent patriot missile defense systems to ukraine. this as the kremlin launches a barrage of missile attacks across the country. nate foy has the latest from kia. kyiv. (fisher investments) it's easy to think that all money managers are pretty much the same, but at fisher investments we're clearly different. (other money manager) different how? you sell high commission investment products, right? (fisher investments) nope. fisher avoids them. (other money manager) well, you must earn commissions on trades. (fisher investments) never at fisher. (other money manager) ok, then you probably sneak in some hidden and layered fees. (fisher investments) no. we structure our fees so we do better when our clients do better. that might be why most of our clients come from other money managers. at fisher investments, we're clearly different. chevy silverado factory-lifted trucks. where will they take you? ♪ ♪ (dog barks) ♪ silverado

he's determined to be paul volcker. so we go from 75 -50, by the way, charles, you remember that 50 used to be big. which in a world where we only had a quarter point rate hikes, and at the same time, i think he has every intention of keeping the liquidity draining from the system in the background with quantitative tightening which so few people talk about and yet, we are seeing lending really take a hit in the united states whether you're talking about public markets private markets bank lending. charles: right. great point. you know, and i don't think i'm talking about that enough and i need to because it's starting, you are starting to notice it on the fed balance sheet. in the meantime, the most telegraphed recession in history , except for morgan stanley, morgan stanley said na, first half maybe there's a 25% chance, second half maybe a 15% chance and they are saying no recession by end of 2024 that's where they got about a 35% so morgan stanley maybe an outlier not seeing recession. where do you see the economy 2

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ambassador volcker, we are 300 days into the war. president zelenskyy will soon be walking the halls of the white house. your thoughts on just the significance of this moment? >> well, i think this is terrific. first off if you remember back at the beginning of the phase of the conflict in february, people did not expect ukraine to survive or to prevail so for zelenskyy to be here and visiting president biden at the white house and to actually be pushing russian forces out of his country is a terrific thing. second it is important that zelenskyy knows ukraine is standing because of the help that the united states, the american people have given. he's grateful for that but also needs that to continue for ukraine to prevail. >> major spencer, what will you be listening for from both leaders in the coming hours? >> so i'm looking for what president zelenskyy will say. i don't know if you saw him in bakhmut, mercenaries trying to kill him yesterday. he is a modern winston churchill with an iphone so interested in what he will say but als

neil: so when a lot of people talk about jerome powell as searching for his inner paul volcker, do you think he has? >> i think it's a little early to make that judgment. i mean, this is the same guy who set there and let interest rates go negative for a while and not respond appropriately. i think that the earliest rise in interest rates was too low, too late, and the challenge he has right now is how much can he adjust it without screwing up the economy. neil: do you think it's already too late for that, that he has screwed it up, that we're going into a recession? >> i think the odds of us going into recession are very high, and whether that recession will be very painful or not, i think still remains to be seen but it's very hard for me to believe that we're not moving into an area with a lot higher interest rates and a lot of people sitting on the sidelines avoiding to make commitments. neil: so are you finding any so severely depressed assets, sam, to harken back to your grave dancer role, that you're pouncing? that there are areas that have been so clobbered, you're buying >> no

he wants to prove he is another paul volcker.at you brought up a point to me the first time you were on the show, correlation, for instance, relationship between inflation and crime being harbinger of things to come. it stuck with me because since that moment, almost a year ago, we've seen these sort of statistics go through the roof. so you know, certainly the fed, all those phds you talked about can understand if they push this economy off a cliff what might be around the corner? >> it is true that inflation tends to lead changes in the crime rate at least in the u.s. by about a year. unfortunately we haven't seen the statistics because the fbi has been having a terrible time getting local municipalities to report the crime rates which i don't think they want to report because they don't look very good. so -- charles: tom, let me ask you, i got a minute to go. about a headline yesterday. fx, 80 trillion global blind spot for global regulators. what is this all about? when we see a number like 80 trillion should we pay attention

year over year rollover math and the fed will look out aggressively and tighten historically, even volcker back in the 1980s, once the economy enters recession, rate cuts are coming and they come rather aggressively >> and then in a sense, if we are in a significant recession, what the fed does perhaps starts to matter less than what the economy is actually doing. i wonder, based on what we saw from november retail sales and given what you're saying about the fed being behind the curve, what do you expect the reaction to be to december retail sales a lot of people hoping that black friday cyberweek surge that we saw will hold up over the next ten days or so, but i think there are questions about that >> yeah. we can still see a splurge into year-end don't forget, america's motivation to spend is strong. what we've seen this year is an incredible push into credit card debt despite claims that there's all these excess savings, the spending patterns in terms of credit cards, vis-a-vis anything else indicates that a lot of americans are under stress companies are preparing for layoffs. we alre

on one hand he wants to be volcker 2.0, maybe greater than volcker shoafing his reself and resolute. he will crush and tame inflation no matter what the cost, on the other hand sort of be old jay powell 1.0 who really did care about the negative harsh actions, harsh reaction and main street from fed policy. >> he has a really hard job, right? a lot of people that you just referred to didn't have social media in their face. they didn't have all the immediate data. they doesn't have algorithms trading. 80% of selling yesterday happened in the first half hour of the day. that is a tough mountain to move even if the data is working with you and if you have antiquated policy you get data on friday it is not included, there is so, so much happening here i think -- charles: here's the man. >> before i go into the details of today's meeting i would like to underscore for the american people that we understand the hardship that high inflation is causing and that we are strongly committed to bringing inflation back down to our 2% goal over the course of the year we've taken forceful actions to

regime , it took a decade of inflation to create the political environment that made volcker possible of that political environment was a much better fiscal outlook and more sustainable fiscal policy brought in under reagan. we're nowhere close to that, so my suspicion is the unemployment rate goes through 4%, and all those new throughout the federal reserve system are going to be pushing powell hard, in fact, that looks to already be started , to slow the process and even stop the process and pause, and so that has a lot to do with why we're optimistic for the first half of 2023. charles: i think there's speculation having to read outloud about lag effects was the faction of the fed, you're describing brainard and others. i've got a minute to go then, ba rry. so the economy, recession, fed watch how are you modeling this for 2023? what are you thinking that may happen for next year? >> so the overarching theme for the first half of the year is that the path from 9% cpi to 4% is very clear. goods prices are coming down. housing prices are coming down albeit with a lag in those measure

paul volcker's last book was called "keeping at it" so he wants to be a paul volcker kind of guy and look, we know what kind of mistakes happened back in the 70s and 80s. we know that stop and go when it comes to hiking rates to fight inflation. we know that doesn't work. if jay powell does the same thing, if he stops and goes, or cuts too early, he's going to look like the biggest fool in the room because he will have known when history has taught us , what we've learned from history and he will have gone against that so i do not expect him to do that. i expect him to keep rates higher for longer and unfortunately, that's probably going to bring a pretty nasty recession our way. neil: it sounds like and you've been very astute on this and ahead of the curve, mark, that he's now at the point of not caring. i'm not saying not caring about his job and all this but if he had a choice between knocking the hell out of inflation and knocking the hell out of the economy, he would pick knock ing the hell out of inflation and if it means the economy tanks so be it, that that is now very very

inflation , the way reagan did it in the early 80s was by stabilizing the value of the dollar, yes, and volcker head of the federal reserve then, brought on a terrible recession in the early 80s that brought prices down but it was what volcker and the head of the federal reserve that did after that recession and stabilizing the dollar instead of undermining it and in the 70s they always undermined it so if the federal reserve then goes about undermining the dollar again, inflation will come roar ing back again. they don't understand the disease which is why we're getting all of this economic malpractice of deliberately depressing the economy. neil: you know, i worry as well, steve, about companies and others that are using this as cover to keep increasing prices. maybe some perfectly justified in doing so, but others not, and that feeds on this , does it not >> it does, and until the companies actually see that it's going to be counter productive, that it can't be a cover of hey let's raise prices and raise them some more because people know when prices are going up so they are going to accept

after paul volcker's program he got it done 4% to stay there about four years. he never got it done in two. >> inflation itself has terrible corrosive effects on innocent people. for example the elderly. you can't put your money in the stock market when you're older most of us don't have the benefit for pensions so you have to have at least half a fixed income. raif you have 5% inflation plus taxes and all the rest you're getting clobbered by inflation. the other thing is an inflation distorts decision-making. it would be optimal but because of the institutional constraints it's often been viewed zero is an in possible number two hit. >> i don't agree but most people do think you have to have some inflation for the system so 2% is kind of a rough ballpark if you are behind in the eighth inning you basically put in the pinch-hitter and leave them alone that's the 2% rule. >> if you look at factors, what would you like to see economically? >> things beyond the federal reserve control. for example, global warming. we have people out there that say it's pooh-poohed.

is this a repeat of the volcker era? he says there's a super cycle underway when it comes to commodities. energy stocks won't be a part of it. he's expecting a 20% drop in the sector. what do you make of that? manus: it's the battle of the big heads of wall street, will senses this is a bear market rally. he reckons 3500 was a good entry point. it's interesting that you reflect back on the 1970's. that's when arthur burns capitulated at the fed, rolling down on those rates. that's the big debate for 2023. manus: it is. we will talk about it for the markets. you are still seeing them flying high. you are seeing green on the screen across the world. take a look at the msci asia pacific index. up 1.2%. the sentiment goes on. a lot of this has to do with the chinese reopening. inflation measures coming down a little bit. consumer indicators showing inflation easing. does that create more room for the pboc to ease even further? that's the thought that is driving the markets this morning. take a look at euro stocks futures. up

is he willing to truly crush this economy just to be rendered as volcker 2.0?een saying he hears a higher calling. you wants to ranch back control of making interest rate policy for the country and put that back in the control of the federal reserve and that means breaking the fed put, investors assumption that there will always be a next pivot and the fed will always bail them out. he wants to break the mindset going into 2023. investors are ill prepared for his resolution. charles: after the accommodated fed for so long, that is a lump of coal after all the lumps we took this year. thank you both very much. have a great weekend, merry christmas. another wildcard from the fed to contend with or wildfire, one. $7 trillion on the way. the omnibus bill passed the senate and the house. let's bring in rebecca walt'ser. this is loaded to the gills. i'm sorry? we don't have rebecca right now. for those who don't know about this, it is loaded to the gills with pork pork pork and all that stuff will contribute to inflation. there are some good things when it comes to r

in paul volcker's year, it is not. we are going to get there. one thing they learned, do not start selling because that is the key. tom: we have to go. thank you so much. quincy krosby with the kurds to be in the market. i mentioned this to arjun adams the other day. -- martin adams the other day. you have to be in the market to play. that is martin adams 101. lisa a: which market? i think this is an important question because there is a huge tailwind of interest rates going down through decades. this is a serious question. tom: speaking of tailwinds, in pittsburgh, pennsylvania, good morning. freezing traded 23 degrees to minus two below zero in the next four hours. lisa a: is either not make it out, i am blaming you tom. keep it up with the weather reports. tom: the winds never stops. good morning pittsburgh, pennsylvania. stay warm up there. coming up at 8:00. on mr. minerd, bob diamond. lisa m: keeping you up-to-date with news from around the world, with the first word, i am lisa mateo. north korea fired ballistic missiles. north korean lead

is not going to pivot the way everyone believes he will because he's not trying to make the paul volckeristake of getting interest rates under control. stuart: fed watching is so complicated, isn't it? this happened, that happened, who knows? thanks for joining us. i am sure you will be watching this afternoon. let's look at the movers today. caesar's down 2%. lauren: bank of america downgraded both, the gaming industry faces a growth slowdown as we enter potential recession. stuart: best buy down 2%. lauren: they take the price target to 69 from 80. they don't believe best buy will see earnings growth in the near and medium term. that's concerning and demand slowdown during recession. stuart: i don't know, via satellite, i don't know them. lauren: it had been a 4%, and out is up 2. partnership with micro soft help to deliver internet to 10 million people around the world. when you tie up with microsoft you get again. it was up 4% but it is interesting microsoft is also higher. stuart: let's get back to harry and megan. there dark you --docuseries streamed since its debut last week, mart

but right now powell is so focused on his place next to volcker. teaches us something always unaccounted for. there is always a surprise out there. you know history of the market better than anybody else what surprise in 2023 nobody talking about? >> i tell you, charles, something good happens. i used to work with callie. big fan of callie. everybody saying same thing first half of next year will be terrible. that is what i key hearing. when everybody thinking alike somebody isn't thinking said general patton. first first quarter is best out of entire four year cycle. i looked before on air, higher 17 times since end of the world war ii. the surprise maybe we get a good bounce first half of the year because literally no one is talking about. charles: ryan, way too optimistic, greats for twitter hate. a lot of love on this show. merry christmas. talk to you again soon. >> see you charles. charles: grab a pen and pad. we'll go to fundamental school. this is what you need to know if you want to be a successful investor. none better than phil blancato

earnings, stocks actually bottomed in 1982 months before -- start to rally, sorry, months before volckerlly changed policy and then erased all of the losses in a few months so there's a lot that can go right going into the next year even when earnings are depressed. maria: well, we might have seen the worst on inflation but have we seen the worst on economic growth? we've got the final read on third quarter gdp out this week, november's personal consumption expenditures index also out this week on friday, nancy. and there are so many expectations that we are in recession in the first half of the new year so what's your take on the macro story? >> yeah. i think we're definitely he slowing and when we go into a recession is just a question of time and the nber where they declare it. we know we're slowing. we've been positioning our portfolios for stocks that will do well in a slowing growth environment so take a name like steel dynamics, it's an early cyclical, got a yield of 1.2%. they've been raising it 16% per year. this is a companies that's embraced digital in the production of steel

may be comparable to '82 when paul volcker, ronald reagan worked together to whip inflation.flation. we've seen inflation, core inflation is it really, federal reserve chairman saying it move sideways. see it come down a little bit. again in the same spot it was in july of this year. so are you concerned about that core inflation and where we are right now? >> yeah. again what happens in a recession that has stagflation like we see right now is that wage inflation becomes like a lower bound for price inflation because firms will go out of business if they can't have their prices go up in order to labor costs. so what happened it gone down that far. edward: we're coming up to hard break. hate to do this appreciate your time. really good insights. we'll have more on the market the coming up next. .. just a moment of your time, everyone! (whispering) keep it together, turkey. singlecare, the app that truly helps you save on your meds. is that... yeah, he's here every day. do you use singlecare? no, i have insurance. oh, singlecare can actually beat your co-pay. singlecare can al

it ran on for years until paul volcker raise interest rates high enough to truly tame inflation. we have to understand inflation is like a cancer on the economy. it eats away everything, primarily wage gains by people and howell he is simply saying we are going to have to keep doing this until there is clear evidence that inflation is coming down regardless how much markets a big him to slow down on those interest rate increases. it's not going to start. >> the alternative argument would be inflation has peaked, prices are coming down. the yield curve, interest rates is averted, we are starting to make more progress on inflation and the risks of a recession are rising and you are hearing that from democrats like lisbeth warren and others warning powell and the fed could put the economy in the drink. what is your response to that? >> quite astonishing watching the media frame this suggesting we had seen this dramatic fall in inflation. what powell is saying is what everyone can see, inflation is still running at 7% increase, core is well above 6 going seen modest changes but we ar

i don't want to be arthur burns, i want to be paul volcker. that is what concerns me.g effect and pounding away because he has drawn a line in the sand. do you like that at all? >> i don't like that he says it. i don't think we should do monetary policy by historical comparison with events themselves are not comparable. the fed helped create inflation and housing but the fed had nothing to do with chinese supply chain issues breaking down. anyone looking at the inflation data can see much of it is coming down and it has nothing to do with trying to put millions of people out of work. the problem is an economic principle that is wrong, phillips curve. the tradeoff on employment and inflation. it has been wrong since the '70s, it is wrong now. economic growth is not inflationary. charles: that is interesting because i thought they were moving away from the phillips curve for a while there. let me ask you about the market itself. you've been focused on the dividend ideas. they have done extremely well, everyone is piling in, if the fed steps away would that make equities,

advance economy is whether that crisis in latin america because that borrowed the like crazy and when volcker jacked up their fed funds rate to 20% of course max they got argentina. brazil defaulted. but in advanced economies, it was not that that after the global crisis where the debt problem has of that mortgage, that's bank that so we had that that but because it was a demand shock a credit crunch that led to a collapse of demand with low relation or and so we could have very and unconventional money that if fiscal and credit easing. what i'm saying in the book that is today we are facing we have a number of negative aggregate supply shocks that are stagflation in the short run. the initial impact of covid now that shock on commodity prices coming from the russian invasion of ukraine and three, the zero covid policy of china. but then in chapter five, i identify at least 11 other factors that are medium, long term that going to be stagflation, reducing potential growth, increasing the cost of production. so we stagflation very negative aggregate supply shocks, but we also have debt ratios

>> i don't remember my parents talk about the volcker era.talking about the fed chair but they were is a time they were talking about we had 17% mortgages. i always thought i would love to on some of those treasuries. >> you don't unwind everything that's happened in between the old normal and the new old normal. if we talk about you had to pay 13% on a mortgage but if you go back to that which is that do to home values? what does that do to the availability, credit to people who are buying for the first time? that would be pretty bad. [laughter] >> this is the reason why we need to see a slowdown. >> it's a really good point. i was looking at the two-year treasury yields, still at 4.4% that is where -- below where the fed said it's going to be. >> may be the defenses -- the fed is going to cut rates. we will get a view on how much people continue to spend dissipate -- despite some of the headway. this is bloomberg. >> keeping you up-to-date with news around the world. putin says the relations are the best in history. jay said china is ready

we think there is an imposter behind that paul volcker mask that you have on it's just going to be interesting to see who is right. one reason pointed out here. i was shocked. last december, the median forecast for this 2022 is .75 to 1. in june, 3.25 to 3.5 in september, 4.25 to 4.5. it is now 5. steve, that's crazy that everybody could have been so wrong. why try to make any forecast when it i is obviously you haven idea one more thing and i'll let you go is there -- do you think -- although it was unanimous yesterday, do you think there is anyone there that is when they are meeting in closed doors saying, jay, i think we have gone -- i don't think we know about the effects of what we have already done. i think we should be slowing down is anyone saying that? they seem to say that in public a little bit or at least with body language. >> i don't think those ideas are mutually exclusive you have somebody saying we need to be careful here it is important to point out the statement itself with the concept of the fed being mindful of cumulative rate hikes today and lags of fed policy powell talk

paul volcker. do have what it takes? can you stay the course?nts to see people lose their jobs. jay powell started his remarks today after they made this decision at 2:30 eastern time during a press conference, saying that the american people clearly want they will push hard. that is what they have to do to bring down inflation. yes, the 50 basis point hike instead of 75. dated four in a row. 425 rate hikes this year. that's a lot of tightening. it's another reason why people will think, gee, that will come down. it will not be a problem. look at the dots. this was another, not a surprise, a lot of people figured it was possible that the federal reserve would raise the terminal rate for 2023 to 5.1%. a lot were still thinking for .8 percent, especially after cpi, consumer prices, came in lower than expected for the second month in a row. the message was very different. the fed sees inflation will be higher next week, 3.5%. 3.1% is what they forecasted at the september meeting when they changed their summary of economic projections and there. for

. >> i was alive in volcker and i wanted him to believe he was too high i would have been like arthur burns. the other guy that didn't want it i would have probably been a stop and start person to make it worse. >> it made such a huge toll on the economy. >> it was. >> deep recession. >> shock and autowe to try to s inflation. it is really hard to walk in and ask for a raise after that happens. >> i have feet of clay now the idea of kill the housing market and kill the consumer and kill the stock market. kill the industry. it is opposite of what we like to do. if we could do it with the supply side -- >> that takes years. inflation is a horrible tapeworm that eats everything. >> people that do are out of money before the next paycheck. >>> turning to energy. we have been watching wti. if you check it out, you see crude oil prices up 1.8% on wti. brent crude up 1.8%. it has been brutal for equities. that pushed the spdr energy up 50% by the year to date. in 2022, crude oil climbed 5% and natural gas was a big gainer it was pushed higher by the wash on ukraine and the moscow and energy

host: next, volcker in minnesota. caller: good morning. would like to know what is going on because there is so much talk. i would like to see it black and white, what really the matter is. this website says this and this website says that. i would like to check this personally. then i can have an opinion and invest emotions. what is going on is an awful lot of talk. i would definitely like to know what is going on. thanks. host: steve in ohio. go ahead. caller: hello c-span, good morning and good morning america . i would call him president trump if he deserved any amount of respect but unfortunately he does not sigh will call him donald duck. he is ducking his taxes. like he has ruined every other institution in this country. he has gotten his tentacles into the irs now. obviously the guy is a grifter and a swindler. just hope and pray that you 30% of americans who support him wake up. host: that will do it for us. we are going to take a quick break is coming up, homeless committee member from texas, al green will discuss border policy a

and most people consider paul pl volcker to be a hero because the then-federal chairman got inflation down. a lot of people think that the chair of the federal reserve then did it all by himself by raising interest rates so high causing unemployment to go up so high causing a lot of pain, he didn't do it alone. congress helped him. when the reagan administration came in, the first thing it did, it cut taxes which was ininflationary -- inflationary. no question. but then the reagan administration and the united states congress worked with the fed-- worked with the federal reserve whereby the federal reserve would raise interest rates but congress tried to slow the growth in spending, not cut spending in the sense of our budget this year will be less than last year, just slowing the growth in spending and slowing debt accumulation. and that's how we conquered, other than now, the worst inflationary period in the united states. it wasn't just the federal reserve. congress did its part. we have to slow the rate of growth in our budget, and we have to slow the accumulation of debt. now, yo