lethe me introduce governor waller. christopher waller took office as a member of the board of governors of the federal reserve system december 18, 2020, to fill an unexpired term ending january 31, 2030. prior to his appointment at the board come doctor waller served as executive vice president and director of research at the federal reserve bank of st. louis come begin in 2009. in addition to his experience in federal reserve system doctor waller served as a professor at the university of notre dame university of kentucky and indiana university. he also served as a research fellow at the center for european integration studies at the university of bonn. governor waller, thank you so much for being here today. [applause] >> are right. well, thank you michael and a guy for hosting this event. thank you all for coming. so last month i gave a speech entitled somethings got to give. that message was prompted by the fact that we were observing strong economic growth and employment data in the third quarter, while simultaneo

waller is a member of the federal board system.rior to his appointment to the board doctors 11 served as the vice president director of research at the federal reserve bank of st. louis beginning in 2009 in addition to his experience in the federal reserve system dr. waller served as a professor at the university of notre dame in university of kentucky and indiana university and served as a fellow for the center for european studies at the university of bonn. governor waller thank you so much for being here today. [applause] >> thank you mike and aei for hosting this event and thank you all for coming. last month i gave a speech entitled-somethings got to give. that message was prompted by the fact that we were to having strong economic growth while simultaneously saying a clear migration and personal consumption expenditures. while this was good news for employment growth the pace of real economic activity seemed inconsistent with continued progress for the open market goal of 2% inflation. so it seemed clear to me then that somet

governor waller's comments this week were played up a lot in the markets. the markets started pricing in the chance of a cut as soon as march and our view is that powell reiterated most exactly what he said at the. . november press conference he still has a strong bias to continue fighting inflation. this feeds into the view that the fed is likely to keep rates too high for too long. powell reiterated today that he is not entirely confident that the fed has done enough or held rates high enough for long enough to get inflation down to that 2% target sustainably. powell has been very clear all along that his bias is to ensure inflation gets down at the risk of over tightening, at the risk of hurting the economy. so, we heard the same thing we have been hearing from powell. we are long-duration and happy about the move, but we think the market is misinterpreting some kind of enormous fed pivot when powell has been consistent. sonali: do you think the market is getting ahead of itself? blake: i completely agree with jamie. when you look at what he said it was

chairman, fed governor waller says if inflation comes down the way it is, then we'll cut. now i'm paraphrasing obviously. how he answers that question, i could make the argument is everything today and the only thing. it will lead to you believe he is on that page that he, himself, is thinking about cutting because he believes that inflation is going to come down towards target, and if he pushes back on it, well, i don't know. >> so what he would say to that if he's asked that question -- >> he will be asked it by somebody. >> -- he would say, we're reviewing. we're going to review the data as it comes in. we have a couple of good data points. and we do see some slowing in the economy, so we will look at the data as it comes and revise. he may come out and say, and what would be changing -- game changing in terms of the market for the rest of the month, is if he removes that comment that we could still hike, right? there may be another hike. so that will be the only phrase you should be looking for because everything else is just really him massaging the dialogue. that and

you mentioned waller. waller is bulletproof st. louis research studies, academic research.n. she is a voice on labor economics. chairman powell, not so much. jonathan: the party started, chairman waller shows up with tequila, off to the races. lisa: that is what we heard, it is a fed pivot party and we are all invited. i have been invited to a different party. there has been a lot of pushback. there is the feeling of a soft landing and now you can feel the frustration in the white house. come on, the rest of the population, get on board with the soft landing. chairman jay powell will not comment at all but this will be the key question. will we get rate cuts for the right reason? will people start to question why they are pricing a bunch of basis points for rate cuts? andrew had the same year and projection for rate cuts as is priced in for the market but the reason why is different. tom: i wish that they would establish the reality, which is what the fancy people call ex-post, after the fact. he says we by code have to be after the fact. we don't know if it is this meeting

governor waller says that something appears to be giving at the pace of the economy.e to me, what is giving in the u.s. economy? lisa: there's a sense that people are looking for discounts. that consumers are trying to push back on the margins to high prices. a sense that certain consumers are having a difficult time. i think about the walmart ceo talking about deflation, saying that over the last 90 days they have seen a market deterioration in demand. maybe that is some of it. you look at small businesses, they are not doing well. if you look at their stocks and look at their capital objectives and how they will achieve them, this is a tough moment. they employ a lot of people. jon: the data that they get in the beige book, it has been telling them this for a while. august, we heard this in jackson hole, the same thing about things getting more difficult. stop hiking. lisa: he said that anecdotes have been a better guide than traditional data. mary has been thoughtful about this and focuses on the anecdotal data that she calls qualitative data. jon: it sounds fancie

thank you to _ adam waller and nigel parr. thank you to our— adam waller and nigel parr.alism and kindness. thank you to _ professionalism and kindness. thank you to the _ professionalism and kindness. thank you to the judge to ensuring a fair trial has— you to the judge to ensuring a fair trial has been carried out for all. thank— trial has been carried out for all. thank you — trial has been carried out for all. thank you to the prosecution for all of their— thank you to the prosecution for all of their hard work throughout and for advocating the brianna in such an outstanding way. thank you also to the _ an outstanding way. thank you also to the jury — an outstanding way. thank you also to the jury that making the right decision— to the jury that making the right decision based on the evidence. i understand how difficult this must have been for you all that you have worked _ have been for you all that you have worked hard and thanks to you, society— worked hard and thanks to you, society is— worked hard and thanks to you, society is now a safer place. thank you to _ so

waller was rogue or if he was speaking for someone or some people. so we'll find out. it will be interesting. steve, thanks. we'll see you for certain tomorrow after the decision is rendered and the news conference wraps up as well. >>> let's talk about oracle right now, guys, if we could. stock's down a lot. revenue miss. share's down. guidance was below expectations. bill baruke joins us now. he owns the stock. he said he's declared it's on the chopping block. are you selling it today? >> i'm not going to sell it today. it feels like it was about three months ago. i was sitting here saying the thing. it's a large number psychologically and technically. again, second bad quarter in a row. they're clearly not able to cam tall -- capitalize on the ai move. larry ellison was upbeat. i'm concerned about the scaleability of data centers though he is hyping the eps. the estimates for the next quarter out i'm concerned. if they work the eps at 132, 135, 139 is the estimate and the guide is 127, if they can hit that, it could really generate some serious free cash flow down t

what waller said what waller said was just -- i mean, it was just math i don't think you can repealhat, unless you say look, i believe six months from now, monetary policy needs to be tighter than it is right now the well, mr. chairman, on what basis would that be if, indeed, inflation has fallen there would be no rational for it so i think he does have to explain himself there. last time he was asked, he wouldn't field the question. i don't know that that's an option anymore we're not just talking about it, but we're pricing it in now. >> exactly very well said >> he's got to push back on that a little bit >> that will be tricky to thread that needle. we'll leave it there for now thank you both diane swank and steve liesman. >>> let's switch back to the markets. while most funds today specialized in certain industries or sectors to maximize returns, my next guest does the opposite with success her diversified capital fund is a go anywhere fund that can invest in anything from blue chips to small industrials to bonds, and it's outperformed 99% of its peers over the past 15 years. sh

governor chris waller said if inflation continues to fall than the fed in the next several months could be cutting interest rates. wonder if you could comment on whether you agree with governor waller on that the fed would become more restrictive if inflation fell please sir. >> a course that don'ted comment on any officials even those who work at the fed but i will try to answer your question more broadly. the way we are looking at it is really this, when we started out said the first question is how fast to move and we moved very fast. the second question is really how high to raise the policy rate and that's the question we are still on here. we are very focused on that and as i mentioned people generally think we are at or near that and think it's not likely that we will hike although we don't take that possibility off the table. when you get to that question and that's your answer there is a natural, naturally begins to be the next question which is what will become appropriate to begin dialing back the amount of policy restraints in place so that's really the next question. that's

i wonder if you could comment on whether you agree with fed governor waller on that. that the fed would become more restrictive if it wouldn't cut rates if inflation fell. thanks. fed chair powell: i will try to answer your question more broadly. the we we are looking at it is really this. when we started out, we set the question of how fast to move, and we moved very fast. the second question is really how high to raise the policy rate. and that's really the question we are still on here. we are very focused on that, as i mentioned, people generally think we are at or near that. and i think it's not likely that we will hike, but we will not take that possibility off the table. when you get to that question, and that is your answer, there is a natural -- naturally, it begins to be, the next question, which is, when will it become appropriate to dial back the amount of policy restraint in place? that's really the next question. that is what people are thinking about and talking about. i would just say this -- we are seeing strong growth that appears to be moderating. w

especially waller who mentioned we could cut rates in the next three-to-five months. happens, you are now going to start talking about potentially a january cut rather than a march cut. we are priced for about 50/50 for a march cut and the fed will see that bleed into the january meeting if you continue to see disinflation coming through. that would really shift the market. >> what about the projections? there were two rate cuts priced in. 50 basis points. if we get downward revision to that, would that be impactful for the market? >> it signals where the fed's direction of travel is and by acknowledging they are moving closer to the market as opposed to the market moving closer to the dots is a big shift. for the last year to 18 months, the fed was leading the market. for them to shift back and say we're actually going to add in one more cut for next year and that would be an understanding of saying actually we do think inflation is behind us. i think we will also see that in the projections for next year. >> let's talk about ecb. there are so many meetings this week

that is the salient point. >> that's why people reacted positively to what waller said, whereas steve liesman said the quiet part out loud, we shall see. >>> we'll take a quick break. when we come back lyrical asset management's andrew wellington will be live at post 9 today. his value fund is beating 96% of his peer this is year. he's going to give us top picks as we head into a new year. "halftime" back in two. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley. >>> welcome back. andrew wellington of lyrical asset management runs a value-based mutual fund that's up 19% this year. welcome back. a value investor up 19%. i look at your holdings, i don't know, this guy looks like a growth investor hiding out as a value guy. you have those kinds of stocks. >> we do. value and growth aren't always the best labels. i'll say our value bona fides are invaluable. we happen to find companies with great organic g

chairman fed governor chris waller said that if inflation continues to fall then the fed in the nexteral months could be cutting interest rates. i wonder if you could comment on whether you agree with fed governor waller on that that the fed will become more restrictive if did not cut rates if inflation fell. thank you. >> of course i don't comment on any other officials, even those who work in the fed. but i will try to answer your question more broadly. the way we are looking at it is really this. when we started out we said the first question is how fast to move and we moved very fast. the second question is, really, how high to raise the policy rate? and that's the question we are still on here. we are very focused on that, as i mentioned people generally think that we are at or near that and think it's not likely that we will hike, although we hundred -- did not take the possibility off the table. when you get to that question and that's your answer, there is a natural -- naturally the next question is when it becomes appropriate to begin dialing back the amount of college polic

waller came out and spoke the truth, he said, you know, said the quiet part outloud. if inflation goes down, we have to cut. it is a big change. mostly, by the way, these things get telegraphed one way or the other. there was a debate about whether waller came out and did it on purpose or was it just off the cuff, i kind of think it was a little bit off the cuff in that regard, but easings tend to be telegraphed. i thought this change was going to happen next month. i was going to go home and go o out for drinks last night. i didn't have a chance to do that. >> if you were a fed skeptic, a real skeptic, steve, you might think that the fed felt like they might be behind the eight-ball with this drop in ppi leading to a much softer eventually pci and they have to pivot and they have to send this message really fast. >> yeah, if you are dan and you refuse to celebrate for even a single day and want to find something to worry about, that's the thing to worry about. did they see something in the banking data, is the ten-year being down telling you something more ominous ab

that just extended the rally to where we are now. >> also, waller was an important voice when the fedurned uber hawkish and started quadrupling or tripling its rate hikes. he was an important turning point there. proved it again. >>> we're going to continue to talk about this incredible rally when we return. an analyst joins us with his top picks for social media stocks for 2024. taking another look at futures here as we head to the opening bell. we've gone positive on the dow, joining the s&p and the nasdaq, continuing this rally. are we going to hit that record closing high? we're going to watch that level carefully, 4,796. we'll be right back. you're probably not easily persuaded to switch mobile providers for your business. but what if we told you it's possible that comcast business mobile can save you up to 75% a year on your wireless bill versus the big three carriers? did we peak your interest? you can get two unlimited lines for just $30 each a month. there are no term contracts or line activation fees. and you can bring your own device. oh, and all on the most reliable 5g mob

fed governor chris waller said if inflation continues to fall then the fed in the next several months could be cutting interest rates. i wonder if you could comment on whether you agree with fed governor waller on that, that the fed would become more restrictive it wouldn't cut rates if inflation fell sir? >> i don't comment on any other officials even those who work at the fed but i will try to answer your question more broadly. the way we're looking at it is really this, when we started out, right, we said the first question is how fast to move and we moved very fast. the second question is, you know, really how high to raise the policy rate and that is really the question we're still on here. we're very focused on that as i mentioned. people generally think we're at or near that and think it is not likely we'll hike although they don't take that possibility off the table. so when you get to that question and that's your answer there is a, naturally it begins to be the next question which is, when it will become appropriate to begin dialing back the amount of policy restraint that i

the damage downstream of the waller bridge near forest hill. this is what it looked like in june. the dam is usually put up during the warmer months to hold back the water in the dry season. this is an august where visitors can line up closer to get a view. >> that view now flooded. you know, that we see that the river flows are about 1600 cubic feet per second. we want to lower that down so it doesn't damage it. also to let the clear passage of the go through the river. rodriguez says the dam typically creates a pool of water that raises cinema waters well levels in the area. this is early, but you can never, you know, prepared to soon. we've been working all summer. also on our flood control channels or streaming program. so everything is open for these rains to come through and with dry days ahead. it's always nice to have a break to give that time water to seep in sonoma county. gayle ong kron. 4 news. >> a person was hospitalized after their car crashed into a ditch in napa. cal fire in napa county fire responding today to monticello road. you can see the car suffered some se

the damage downstream of the waller bridge near forest hill. this is what it looked like in june. the dam is usually put up during the warmer months to hold back the water in the dry season. this is an august where visitors can line up closer to get a view. >> that view now flooded. you know, that we see that the river flows are about 1600 cubic feet per second. we want to lower that down so it doesn't damage it. also to let the clear passage of the go through the river. rodriguez says the dam typically creates a pool of water that rises to number waters. well, levels in the area. this is early, but you could never, you know, prepared to soon. we've been working all summer. also on our flood control channels or streaming program. so everything is open for these rains to come through and with dry days ahead. it's always nice to have a break. >> to give that time, water to seep in sonoma county. gayle ong kron. 4 news. >> happening tonight, devil's slide. southbound highway one will be closed overnight due to drain cleary cleaning from all of the rain. of course, we're talking about

the damage downstream of the waller bridge near forest hill. this is what it looked like in june. the dam is usually put up during the warmer months to hold back the water in the dry season. this is an august where visitors can line up closer to get a view. >> that view now flooded. you know, that we that the river flows are about 1600 cubic feet per second. we want to lower that down so it doesn't damage it. also to let the clear passage of the go through the river. rodriguez says the dam typically creates a pool of water that raises cinema waters well levels in the area. this is early, but you can never, you know, prepared to soon. we've been working all summer. also, honor flood control channels or streaming program. so everything is open for these rains to come through and with dry days ahead. it's always nice to have a break. >> to give that time, water to seep in sonoma county. gayle ong kron. 4 news. >> taking a live look at sfo now where more than 300 flights were delayed yesterday after the faa issued a ground delay for all planes coming into san francisco. as of right no

the damage downstream of the waller bridge near forest hill. this is what it looked like in june. the dam is usually put up during the warmer months to hold back the water in the dry season. this is an august where visitors can line up closer to get a view. >> that view now flooded. you know, that we see that the river flows are about 1600 cubic feet per second. we want to lower that down so it doesn't damage it. also to let the clear passage of the go through the river. rodriguez says the dam typically creates a pool of water that raises cinema waters well levels in the area. this is early, but you can never, you know, prepared to soon. we've been working all summer. also on our flood control channels or streaming program. so everything is open for these rains to come through and with dry days ahead. it's always nice to have a break to give that time water to seep in sonoma county. gayle ong kron. 4 news. >> take a look at this. the wet weather weather caused a big rock slide on highway 50 near south lake tahoe last night. shutting it down for about 3 hours today. crews they spen

officials and what they said publicly, you want to see more progress like what we have seen with chris waller of several months of progress. like what we have seen before you feel comfortable cutting interest rates. i think a lot ev lot of people t seen that as january, but a rate cut which says you could get a rate cut in march. markets see may more likely sdplclikely. >> we have been focused on inflation because it is a core problem the last couple years. we have not talked about much or framed the discussion about the economic growth picture. what would happen with the economic growth story if we he st started to see signs of weakness in the economy? not a huge recession, but bigger slowdown than fed policymakers expecting? >> when you talk to economists about this, this is the easiest possible scenario for the fed because if they saw a slowdown in economic data and it came simultaneous with the pulldown in inflation, the prescription is easy. you cut rates. that is a good suggestion you have lower interest rates. that may be the easiest scenario for the fed. it is one of a number of outco

congressman like waller, congressman jamaal bowman, thank you much for joining us for all of that. and, more on our breaking news. federal prosecutors slapping new criminal charges against hunter biden. eric holder responds, ahead. >>> new tonight, a hanukkah warning about antisemitism from some of the gentleman dug am of. >> we've seen the president of some of our most elite universities literally unable to denounce calling for the genocide of as antisemitic. the lack of moral clarity is simply unacceptable. >> reporter: and, up next, laura coates is going to discuss the controversy on college campuses with former attorney eric holder. stay right here on cnn.

governor waller made some ruffles in the market earlier in the week where he suggested that potentiallys are on the table into next year. i don't imagine there will be must see tv later today. kriti: a lot to watch for for investors and economist. emily rowland, we thank you for joining the program. i have some breaking news to bring here, sandra day o'connor who became the decisive vote on abortion, religion and race and other hot button social issues during her history making tenure has died. she was 93. still ahead, after a two-year delay, tesla finally delivers cyber trucks to customers. that's next. this is bloomberg. ♪ j.p. morgan wealth management knows it's easy to get lost in investment research. get help with j.p morgan personal advisors. hey, david! ready to get started? work with advisors who create a plan with you, and help you find the right investments. so great getting to know you, let's take a look at your new investment plan. ok, great! this should have you moving in the right direction. thanks jen. get ongoing advice; and manage your investments in the chase mobile ap

the waller theory is that inflation will come down as a result of which we can keep rates relatively tight but we can still cut. when does that switch to we are in recession and we are cutting to protect the economy? and when does the market figure out the transition from one to the other? >> good question and i think that mike's answer gives you the detail. when you look at gdp now for q4, we are about to the levels where golden set -- goldman sachs analysis shows that it starts about halfway through to be relatively on target, we are at 1.2 percent. if you think about where the economy is, to percent being potential, 1% is slow but not a recession. we are at those levels and when we start to get to it being really negative is when we start seeing jobs numbers that are negative or this gdp flirting with 0%. that is when you start to think the recession is in there and these rate cuts are conservative because potentially you would have more cuts than six if it were a recession. alix: i love the way that morgan stanley put it, to defend against cut rates it is maintaining restrictiven

the fed recently -- waller himself said we need to see financial conditions tightening. they just said it again. i can't see them having to get to that stage of cutting rates, certainly not what's price, without seeing some tangible kind of movement and risk assets. guy: your point this morning when i read your piece, that it needs to do more. how far away are we from the point where the fed needs to lead it into what we're seeing in terms of market pricing quite heavily? >> here is one thing. do we make a new high in equities or get a recession? you have to favor the new high right now, 5%. whether that creates what happened before everyone says, my god of creates its own momentum, and then the fed will start to get potentially quite concerned about that because good work they have done inflation will really start to look in danger. and these financial conditions plus the other stuff, they start to see inflation potentially coming back next year. i think the rate cuts right now are misplaced. the next thing could be a rate hike next year. alix: services, pretty strong.

but the news conference and whether the chair himself has asked which he probably will be and what wallershes back in any way that the market could take as being more hawkish. beale have to wait and see, obviously. >> the committee's outlook and it's one of those meetings where they'll have the outlook and they're giving themselveses a lot of time to get to 2% on the target. inflation is down more than they thought it would be at this point based on the september projections, so it seems as if they have room for things to just kind of develop from here while they don't do much of anything. i don't think anybody should come out and endorse 120 basis points of rate cut which is is what's in the fed funds futures curve, but it doesn't matter and i don't want really think that's in the stock market, that expectation. >> yeah. good stuff. i'll see you in a couple of hours on "closing bell." that's micke santoli our senior markets commentator. we'll do final trades next. ♪ ♪ ♪ ♪ at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite, backed

. >> do you think waller's comments are consensus, we can have benign series of cuts? >> it's ideal for a soft landing which the markets have priced in and the probability of that has risen given the developments in inflation and employment. but it's not 100% guaranteed. there are risks on both sides of the distribution. >> if the market is prematurely excited about rate cuts, what does that risk look like at this point in time in terms of the way the market is currently pricing things in? >> you mentioned there's been some broadening out in market equity performance. that's very, very encouraging. what we would like to see is not just the magic seven outperforming but spreading to smaller companies, companies not levered to a.i. specifically. and they've been more stung by higher rates. especially in refinancings increase next year, it would be helpful for them if nominal rates decline because they finance themselves in nominal terms, of course. >> on the jobs number on friday, you look at consensus for q3, the street sees us bottoming out in the 30 to 50k range, do y

, what happened and why and cannot be put back together, joining us on your congressman mike mike wallerke the senate was making progress then it had a setback, can a border bill be passed in this current political environment? >> is going to have to be this is an exit essential threat to our country, you're talking about 10 million migrants have crossed the southern border since joe biden took office. many illegally, the asylum process fundamentally broken taking 2 - 3 years to hear the cases and when they are finally heard two thirds are rejected, this is unsustainable yet cities like new york crumbling under the pressure of it despite their sanctuary city policies clearly failing to work in mayor adams coming hand-in-hand demanding more from more federal dollars, chuck schumer is a senate majority leader from new york, he needs to do something about immigration. house republicans passed hr to back it may, chuck schumer has done absolutely nothing on the border, he has a responsibility to act so the summit democrats need to work with the house to pass immigration reform specifically fo

we heard from ackman expecting rate cuts as soon as the first quarter and similar commentary from wallerg rates effectively they're having a more restrictive policy and the cpi, the cpi report this month, if you take out food, shelter and energy, we are up 2% year over year which is where the fed wants us to be so we have to be patient to let that work its way into the system. but i think that bodes well for risk assets. we think the rally has come but think it's here to stay for the holiday party and could see risk assets continue to move higher. >> with so much optimism in mind, how do you see the day ahead? what's your wex word of the day. >> it's catch-up and that's for today and really the rest of the year, so i think that there's going to be a lot of windowdressing between now and year end with some of the big institutional managers that have been all year under weight equities and in particular the magnificent seven so if you look at long positions across hedge fund portfolios, magnificent seven represents 13% which is twice what it was in january but still half the weight of the

i think waller let the cat out of the bag.hawkish and came out a little more doveish. we'll see. but it is what it is. used car prices are down 14 months in a row, shelter starting to finally crack. those two reasons are half of the reasons -- that's a big reason we have sticky inflation. if inflation could come back for the right reasons, like i talked about with supply chains opening up, the fed is probably going to cut. we think it will be in the middle of the year. in '95 the market took off before the cuts came. it looks like what we're seeing in our opinion. maria: let's preview the week ahead. it's a bic week. we've got the -- big week. we've got the jobs data on friday, the jolts report out tomorrow, the adp out on wednesday, the november jobs report out on friday. in addition to that, liz peek, it's a big week for technology, in washington the major banks and ceos, jp morgan, bank of america, wells fargo, citigroup, morgan stanley and bny melon set to testify in front of the senate banking committee on wednesday. one

as of now, the signaling and what we heard from waller the other day, they are saying we are done andt's a question of how hard do they stick to the higher for longer and how long. that's more top of mind. kailey: the million dollar question. there is the idea there is more pain to come. when you look at the corporate activity, it doesn't signal that they are feeling much pain. occidental with almost $11 billion deal today and a huge chunk of that will be financed through debt. what is that signal to you as to how tight things are? >> people are revising their forecasts for next year. the cuts are yet to be felt so we will continue to track this. it's important to say a big part of this huge rally we saw mood positioning from investors to bearish to somewhat bullish. if before, the surprises were more to the downside and investors were positioning helping the rally, now we are close to neutral. many of those asset classes are affected by this. there isn't that much support for this type of technical rally. you could argue that in fact it's the opposite and small surprises good really

of course now as we are getting even better numbers, inflation is come down so much, waller, chairman really want to hit the soft landing completely and see very little damage to the labor market. we don't see that as a likely outcome. for us to get to 4% probably includes the recession which helps to pull inflation down even more. we have to respect the data, too. there is still good chance they pull off this soft landing. alix: kathy, i'm curious how this feeds enough financial conditions. there is warning that the easing of financial conditions is superseding the fed in damaging its credibility. how does the fed manage this? the data supports maybe their view but the market is already front running this. >> yeah, that is a risk. mohamed el-erian pointing that out and you can see unwound the tightening financial conditions that were put in place since october -- in september they came out with a higher for longer mantra the federal reserve and increase their estimates and now all of that has been unwound. it is a bit of a risk but maybe appropriate. maybe this helps soften the blow

they can do tactical cuts, like waller was saying. a lot of people are saying if they stay higher for longer and push back, those who say there will be a recession say there are more odds of recession, then, it could be a deeper recession. it is kind of interesting. if we get a hard landing, we will see a lot more than 125 basis points of cuts. that is bad news. alix: and i was saying earlier that cuts versus easing are different. you can cut versus ease because you have to because of her arrest session issue, then those cuts look from within the market. what is happening right now? in the bond market, why are we up 10 points on the two-year? liz: i do not want to sound like an old crotchety lady saying chillax, but the market has moved so much. look at how much we went up pricewise in november. the 10 year yield was down some sickly basis points -- if you look at it, maybe some of the pricing edged off a little bit, but this is just a market saying we cannot know in a straight line. we had some people saying over the weekend that we

i'm guided by comments by fed governor chris waller who just said hey, of course we're going to do thatcause we're not going to be tighter than we need to be. so the fed will come down if inflation keeps coming down, or at least maintaining current levels by this time, say, in the summer or the spring of next year. >> greg, what would you add to that, and what did we learn this morning from the data? >> well, i think we are seeing a soft landing in terms of economic data. i think steve is absolutely on point when it comes to the dynamics that have been very encouraging. we have seen inflation come down quite significantly. we haven't seen the type of economic pain that the fed itself was warning us about in this environment. the key question for '24 is whether the runway is long enough to sustain that soft landing, or whether we enter an environment where there is much softer growth. with regards to the fed, i do think the fed is going to pivot. it's not going to announce it at the december fomc meeting, but it will likely quickly pivot towards how to recalibrate monetary policy for nex

waller circus in the direction that a reduction of inflation is going to be enough to reduce rates.the past, the fed and powell have pointed us in the direction of what's happening with the wage story and the unemployment story and other metrics. which metric do you think the fed is focusing on? >> they look at the mosaic. if you look at the fed model, takes it -- it takes in every data point. when investors and myself analyze the market, you cannot focus on a single data point. when you think about the wage data and how that might fit into the core services component. that's incredibly important because services wages continue to grow rapidly. part of that causes going to get passed on the to the consumer. because of that, you will see stickier inflation in the services sector going forward. i think that's part of the story. the good thing coming out of today's inflation report is the fact that goods prices are still flat or flatish and the big concern is if we have a re-acceleration in goods prices, that's the impetus for inflation to go back up. from powell's point of view, he al

waller doing regarding how it can cut on inflation rather than growth. mike: you are absolutely right. this is the best of all worlds time for inflation coming down, because the comparisons with last year are so good. we were seeing inflation skyrocketing at this time last year. so, we come down on a year-over-year basis much more. there are things that might start rising again. we will soon be in the period, for the example where you used, where efforts start to go back up again where people are buying their spring trips to europe and the caribbean. used cars have come down a lot. they should be another subtraction from inflation in the month of november when we get those figures next week. but they will find out at some point. a lot of that is going to depend on housing. housing has come down, but it should have come down more if you are comparing it to overall rents. so, they could still be in the pipeline, but now we have heard that rent prices are going up again. so, we will have to see if we get any kind of a break on the inflation. probably not th

in fact, you can date back -- not date that far back, but date back the last week, it was waller whoply said the obvious, right? you remember when we reported that, kelly? when he said, look, if inflation falls, the fed can lower rates because otherwise, we're going to be tighter than we intend to be. so that's just -- so it's not like a tightening to loosen conditions. it's a tightening to keep things as tight as they were. they're going to have to do that, and it will be hard to explain, i think, given if the inflation numbers go the way they're projected to go, it's going to be hard to explain why they're not doing it. >> all right. we'll leave it there. kathy, we'll see what happens in another six weeks or so. could be quite a lot. we appreciate your time. >>> now, the markets are hoping for a goldilocks outcome for the economy. take a look at shares of american express, off the session lows after the ceo said october billings were not as strong as q3. what do we make of it all? we love these data points from these conferences, michael, because it gives us this a close to a realt

i'm sure waller's name comes up at the news conference where someone asks is he speaking for himself of the committee that cuts, if inflation continues to come down like it has come are coming. >> the answer may even be located in the summary of economic projections rate collectively they will say here's where we think that funds will be and where we think inflation will be and here's where we think unemployment and the rest of it . it would be consistent with the view to say we don't want to become increment to meet more restrictive as inflation goes down. the take away will be no hurry to make a change. longer rather than higher is the mantra and the fed fund future pricing stuff in is a little noisy at this point. if it's beyond a couple of months it's really noisy. in march of this year after svd, we were expecting three cuts by the end of this year and that was a 16-month span. and stocks are up 18% since march so it shows you that it's a little bit of a what if exercise as opposed to a projection. the market is ready for what will happen? >> mega caps did a nice move into the c

we are even hawks like loretta master and christopher waller came out and said inflation is coming downrally for november is the cpi. that came out on november 14 and we sell some information and data from the pce that inflation is falling. i'm looking to see what powell is going to say today. i don't think he'll say anything new. i think he'll be a cut-and-paste that we will be data dependent inflation is coming down and let's see if jay powell is as stubborn then inflation i think that's a risk to the market. maria: rebecca jump in one of the reasons the market has been so strong is the expectation that rates will go down. if rates go down in the fed is forced to cut isn't that in response to exactly what jamie dimon is talking about a potential recession. >> exactly the whole story that we had bad news is good news, the market is anticipating that things are slowing down and even though cpi is coming down it reminds with the beginning of japan and stagflation, deflation we push so hard to get people to stop spending and stop having money and savings that now the savings have dwindled

the damage downstream of the waller bridge near forest hill. this is what it looked like in june. dam is usually put up during the warmer months to hold back the water in the dry season. this is an august where visitors can line up closer to get a view. >> that view now flooded. now that we see that the river flows are about 1600 cubic feet per second. we want to lower that down so it doesn't damage it. also to let the clear passage of the go through the river. rodriguez says the dam typically creates a pool of water that raises cinema waters well levels in the area. this is early, but you can never, you know, prepared to soon. we've been working all summer. also, honor flood control channels or streaming program. so everything is open for these rains to come through and with dry days ahead. it's always nice to have a break. >> to give that time, water to seep in sonoma county. gayle ong kron. 4 news. let's stay in the north bay, the city of petaluma is offering free sandbags. they're available at the city corporation yard on. >> hopper street and that's behind the goodwill. if yo

hyperreactive but there were some important changes that took place starting with the christopher waller month. the signals are ready to cut rates so my theme for next year is yesterday's tightening becomes tomorrow's stimulus. i do not think this is the consensus yet. there are a lot of people to get on the bandwagon still. >> it feels like it's the consensus, doesn't it? we have priced in all these cuts . we are all giddy about the prospects the fed has made the great pivot of 2023 and that will save the date for '24 and beyond. >> i think there are a few things i would consider. number one, if you go through everyone is saying a soft landing is the consensus. i don't see that yet. you go to bloomberg survey and economist at the 50/50 odds of a recession next year. that's number one. look at strategists forecasts for next year. the average strategist forecast is 4833 for the s&p 500. we are 2% of that right now. 2.5% right now. we have quantitatively studied that and when the s&p 500 gets within 5% or the targets are less than 5% above the s&p 500, it's positive for the market going fo

the damage downstream of the waller bridge near forest hill. this is what it looked like in june. the dam is usually put up during the warmer months to hold back the water in the dry season. this is an august where visitors can line up closer to get a view. >> that view now flooded. you know, that we see that the river flows are about 1600 cubic feet per second. we want to lower that down so it doesn't damage it. also to let the clear passage of the go through the river. rodriguez says the dam typically creates a pool of water that raises sonoma water as well levels in the area. this is early, but you can never, you know, prepared to soon. we've been working all summer. also, honor flood control channels or streaming program. so everything is open for these rains to come through and with dry days ahead. it's always nice to have a break to give that time water to seep in sonoma county. gayle ong kron. 4 news. >> you might have been caught in this. i know i was. and here's the reason why. well, the chp says wet roads on 5.80, in dublin and played a role in this crash involving a bus

the damage downstream of the waller bridge near forest hill. this is what it looked like in june. the dam is usually put up during the warmer months to hold back the water in the dry season. this is an august where visitors can line up closer to get a view. >> that view now flooded. now that we see that the river flows are about 1600 cubic feet per second. we want to lower that down so it doesn't damage it. also to let the clear passage of the go through the river. rodriguez says the dam typically creates a pool of water that raises cinema waters well levels in the area. this is early, but you could never, you know, prepared to soon. we've been working all summer. also, honor flood control channels or streaming program. so everything is open for these rains to come through and with dry days ahead. it's always nice to have a break. >> to give that time, water to seep in sonoma county. gayle ong kron, 4 news and the east bay. yet chp, same wet roads of i-80 in dublin played a role in this crash. >> involving a bus and a big rig. dirt was being carried by that they were going to spil