janet yellen will testify in two weeks as well.ave been watching a special edition of"bloomberg markets -- of "bloomberg markets -- the fed decides." ♪ to "bloomberg markets." from bloomberg world headquarters here in new york, good afternoon. i'm betty liu. you's what we are watching. markets are taking a turn -- here is what we are watching. markets are taking a turn lower. the fed says it is closely monitoring global economic developments. hikes fort out rate the rest of the year? driving down the market, apple and boeing, falling the most since this summer as their forecasts fall short of estimates. is it a temporary blip or a sign of tougher times ahead? facebook is reporting after the bell. 10 mark zuckerberg impress investors again? -- can mark zuckerberg impress investors again? wr

finally, janet yellen put an end to the era of zero. ms. earlier today, the federal open market committee decided to raise the target range for the federal funds rate by one quarter percentage point, bringing it to one quarter to one half percent. this action marks the end of an extraordinary seven-year period during which the federal funds rate was held near zero to support the recovery of the economy from the worst financial crisis and recession since the great depression. >> i think she nailed it. it was like -- not too hot, not too cold, right down the center. >> that's right. >> just right, and i think that the most important thing, what you gave the market was clarity. the opportunity missed in september while the markets were so unsettled, because we had no clarity on their actions. in this case, they really expressed exactly what they're looking for, how they are looking at it, the forecast going forward. once again, she will say we are data dependent on the course going forward, but she gave such great clarity, the marketplace can

yellen is certainly not going to be as bearish on the outlook. bey could potentially hinting at increases the on the four they hinted at in december but i don't think they will talk about moving in the opposite direction. the only easing you will see may be hinting at a slower pace. here athe. plot looking my bloomberg terminal, seeing the probability of a rate hike is 0%. carl: that has been oscillating between september and november, so the markets have taken that a step further. david: we have not heard a lot from fed governors. it has been silence around this and when they meet, there will be no press conference to follow that. a press setting meeting. it is not a forecasting meeting, so that will not be part of the story. i don't think we get a whole lot from the fed that they could hint at downside risks which would delay expectations and push march off the table. david: as janet yellen sits there with her toolkit, looking at what is going on, is she worried about the same thing mario draghi is worried about? is she worried about a lot of t

surely there's some sense in what janet yellen is doing.he's giving herself more space to become more dovish in a few months' time if necessary. bank of japan has their meeting this february. they have such little room. maybe janet yellen is giving herself more room to be dovish. >> that sounds logical, but the problem is that central banks are where they are in part because of policies that had proceeded what they're currently doing. they left rates too low too long back in the 2000s and should have been raising rates much earlier. i don't believe you should raise rates, at least as much as they say they're going to, so late in the business cycle. also, keep this in mind. central banks, specifically had the fed, when they reverse, they reverse course quickly. yes, we need to see what's going to happen with the economy. the thing is, you look back before the 2000 recession, they went from a tightening bias to outright easing within eight weeks. if you look at the last financial crisis, the fed went even faster in terms of its switch from ev

stephanie: that is a problem janet yellen has.and how you decide what a good idea is. i'm guessing 10 years ago, you didn't say dating websites, they are going to be the next big thing? barry: of course i did. match.com as a tiny little thing in dallas for nothing. it was 15 years, maybe? i thought, what a great idea. stephanie: and today, what do you think is a great idea? barry: please. a lot of the things that our really is doing have good ideas. it does come down with everything. it comes down to how you hear. what does instinct tell you? because anybody can look at a serious figure and data. but you never have enough information to make a good decision. since you don't have enough information to make a decision -- for instance in the entertainment industry, no one knows anything, so what you've , what is something that interests you? david: you have a successful -- are you looking for acquisitions to take it over? we spent about $6 billion last year at expedia acquiring. expedia has grown enormously. it is truly travel throug

janet yellen is very good at this. she's good leader.> yep. >> summarizes both sessions at the end of each session, but it's all done on a piece of paper, done sitting around that big mahogany table and done with a lot of comity and friendship. if you disagree, it's a wonderful institution, nobody holds it against you. i remember the first meeting i had with alan greenspan, the first chair i served under, he said speak to the truth, richard. that's what everybody tries do, give their views, it's the chair's job to pull it altogether into a final decision. >> we're all fascinated by it. we'll look at that statement closely. >> here's the point very quickly, it's a matter of the best judgment of 17 well-intentioned people sitting at the table just trying to get it right for the u.s. economy and for the united states citizenry. >> we'll leave it there on that nice note. thank you. richard fisher, former president of the dallas fed. >> thank you. >>> when we come back, the dean of valuation on why he's more worried about the markets this yea

thisation we see start with janet yellen's rate increase?t is much more china-related. you saw what happened to the it did the news cycle quite robustly. aboutple were not worried the valuation, that may not have picked up and caused much panic. i state -- i think we see some risk off trading. i'm more in the camp that we have to get off zero at some point and should tighten a bit more or the crash will be that much greater in the future. david: we heard of were meeting today in china. no real tangible outcome. what does this regulator have added disposal as it looks at the volatility, sees what thomas forecasting here, what is left in its tool chest? need anyu don't equities -- don't need any enemies when you have the government as your friend to prop up the equity markets. i think you have at least two major regulators fighting it out. one is trying to sport the right -- the equity markets and the others trying to move more toward a market regime. you have these conflicting signals making it to the public that only add to the disarray happ

yellen in the fed indicate a lower case of rate hikes. that is the discussion. ♪ anna: welcome back. let's get to bloomberg business. shares soared in extended trading. profit beat estimates of 1.6 billion users. about 80% of revenue came from mobile devices. using video. >> video is an important part of the facebook experience. continuing to invest is an important part of the loan people to share in gauging content. now, 100 million hours of video are watched daily on facebook. samsung is falling after missing estimates. well belowfell 39%, average forecasts of $4.5 billion. they have joined apple in warning of a tough 2016 in the tech sector. paypal host -- posted fourth-quarter revenue that beat estimates. ebay saw sales stall as sh oppers went elsewhere. results indicated carl icahn's plan to split them. for their drug continued to grow. sales increased. that is your bloomberg business flash. manus: the federal reserve chair janet yellen and colleagues have opened the door to change in their outlook for the u.s. economy. interest rate

the researchers saying eventually they will have to deal with janet yellen, because euro bound and q.ejonathan: if we are talking about a banking crisis, then i think they will copy what has happened in the west in terms of q.e. they have got the ability to do a lot of moves. fiscal moves, we have seen the moving, reducing interest rates. they will go further. draghi saying i will do whatever thanks. -- it takes. pboc will come out with a similar statement. francine: what is the fed's definition of "gradual"? we talk central bank diversions in the dollar next. ♪ francine: welcome back to "the pulse." u.s.later today, the federal reserve releases the minutes from the december 15 fomc meeting at which rates were raised. will we get clues about the timing of the next move? we hope so. the markets hope so. we continue the conversation with jonathan bell. thank you for sticking around. we were talking before about some of the calls we are getting from the u.s., and you are saying we should not worry about the strength of the economy till the summer. at the moment, the markets are thinking t

janet yellen says she is data dependent.e lagarde said janet yellen, across the pond, we are suffering. but janet yellen looked at the jobs number and said we are raising. changed frome has their perspective. globally, picture has not changed that much. we are still dealing with deflation. in hindsight, it will probably end up as i policy mistake. whether they admit to that is doubtful. for now, they will stick to the script. perhaps the more data dependent like.- than they would if they change spare to win, it would be in march or later. >> what data are they paying attention to? just u.s. or around the world at places like china to europe whether it makes sense? >> the only did they are dependent on is employment. that is the thing they have focused on more than anything else. rightly so. if you have substantial wage inflation, you will have a problem down the road. but the rest of the economy is not as strong. you look at the industrial ,ector, energy, materials transportation. all of them showing signs of weakness. it is

fed chair yellen didn't get to explain what the fed did. there's no new set of economic forecasts. the next time we'll hear from the fed on any of that is in the middle of february, i think february 10th, when chair yellen testifies before congress. we'll have another ten days or so before we actually hear what the fed is thinking about this. my sense is the fed is concerned about global growth but probably not as concerned as financial markets are. but they are concerned. the market right now only has the fed hiking rates one time this year. the fed says it's still going to do four hikes this the year. that's got to meet in the middle. my guess is it probably meets closer to what the market thinks than the fed thinks but we have another ten days or so to wait that out. we won't know until then. >> john, there is a lot of rumor going around in the market and a lot of fear in parts of the market, despite today's big move to the upside, about things like sovereign debt defaults, currency defaults, things we have seen in the past. are those valid? the market seems to think that they a

tough tight rope to walk for janet yellen in terms of phrasing this statement. she's got to instill confidence that the domestic situation is good but not suggest she's not even considering what's happening around the rest of the world. >> i would say she also has to quiet the critics a little bit or just be aware of the fact you have major investors saying that the fed needs to be easing, not tightening. >> i think that's going to be a bigger theme, pushing back on the critics. i think she will maintain quite a serious level of hawkishness and suggest we are still on this rate hiking path. but she'll focus her attention on saying that the u.s. economy is ready for that. these international situations, while she's aware of them, while she's aware of market volatility, she'll focus on the market. >> jobs, confidence held up. consumer confidence, which is a big deal, considering the market turmoil. the only other factor i would point out, which is important and really ties in how important the fed is to the rest of the world and corporate america, the strong dolla

. >> janet yellen did not say when they would raise interest rates.y may have deleted patient from the actual language of the statement, but it certainly was not deleted from their modus operandi. this is a fed that will be very slow to raise rates and janet yellen sent a signal to the financial markets, which they heard loud and clear based on market reaction, not the dollar matters. while the fed does not like to talk about the exchange rate, the dollar is important for the inflation trend in the u.s., which is this inflationary right now, and it also matters for economic momentum. >> the most important thing she said is that they will not raise rates until they are confident inflation is moving back in the direction of the 2% target. at the same time, they admitted they miss their forecast. inflation would be about half of what they projected as early as december. at this point, they are waiting for inflation to go up, they are not saying when that will happen. it is going to be lower for a longer that resulted in a forecast change policy pad. they

if janet yellen is not raising rates in march, that means she's scared; right?ing too much about the stock market. >> she's scared. liz: charlie, thank you. >> she's scared about the economy. i'm telling you. she's scared. liz: this is what i deal with every day. closing bell -- >> scared. liz: nine minutes away. he's channeling steven. we're nine minutes away. the dow is up 363 points 16,432. you guys have to see how this plays out. the market set to close the second straight week of gains. january 1 to forget. we're going to spin it forward and find out what you should do in february. the prize etf that you should be picking right now. countdown coming right back ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ then, a brutal act of teterror here at home.. it's time for a tested and proven leader who won't try to contain isis. jeb bush has a plan... to destroy them. and keep america safe. jeb bush: the united states should not delay in leading a global coalition to take out isis with overwhelming force. announcer: tested and proven leadershi

stephanie: you have got to say what is janet yellen thinking? janet yellen is data dependent. she has to put blinders on with all of this. lots of data, lots of thoughts from a lot of world leaders from davos here it -- from davos. david: let's get thoughts from matt miller back in new york. matt: we have seen massive rallies, especially in asia, with the nikkei, big gains in japan. 6% there, and the hang seng up 2.9%. the shanghai, pop -- the shanghai comp up. check out europe. we have rallies there as well. that is a live trade right now. the stock 600, the broadest measure there, up 3%. the's the stoxx 600, broadest measure there, up 3%. keep in mind, the cac and the dax are in bear markets, had reached a 20% job from their highs. was justie -- the ftse about there. crude -- yesterday they switched over the contracts. that may have changed pricing a bit because we closed wednesday at $285, then opened up within the margin contract. 54 -- $1.54 -- correlated to s&p futures over the last couple of weeks. check out s&p futures and you will see gains there as well. actually, 25

confirm janet yellen's action?s it say she will need to be more proactive as we go into the year? >> the three or four fed steps -- dan fisher and janet yellen seem to control, probably are on track at least in terms of their verbiage. i don't think it is possible to raise interest rates by 100 basis points in the celebrity this levered economy. >> is this a federal reserve that must pay attention to international affairs? bill: serving in the past few weeks, they have to take into consideration global affairs and movement of currencies. will they? i think it is number three or four on their list. >> we will drill deeper into china's issues. we showcase the work slightly debate. week's top business news, including more bad news for chipotle and vw. ♪ ♪ welcome back to "bloomberg best," i'm david gora. our view of the week's top stories begins with a high-powered transportation partnership. general motors is getting a lyft.boost to liftin they plan on developing a fleet of self driving cars. we are really aligned ab

they want iraq, syria, gem yellen.e kreef eight this with stupid -- we created this with stupid leadership. we have to do something about it. it's something we have to do. i'm representing you. i'm not taking any money. some of these guys are getting millions. some people i know, some are nice people and some are bad people. but some are not good people. they have no interest in our country. these people and politicians will do exactly as they are told by their lobbyists, special interests and their donors. me, i'll do the right thing. when ford moves to mexico i'm going to talk them out of it. when nabisco moves their plant from chicago to mexico i'm going to talk them out of it. it will be easy. so i started and talked about border. strong on immigration and illegal immigration. took a lot of heat. but you have wouldn't be talking about that subject if i didn't bring it up. i talked about isis. but what happened is after paris, we had 130 people killed -- and by the way, i toiled common core is dead and second amendm

lou: i think yellen knows they made a big mistake on the 16th of december. they spit into the wind. and things -- these are consequences i think in part as a result of that. not all of it, but part of it. thanks for being here. let's hope neither of you get scared of it. up next, the market plunges. fears over china to blame in the minds of most. but should we be worried about this economy and what you should if you had a dollar for every dollar car insurance companies say they'll save you by switching, you'd have like a ton of dollars. but how are they saving you those dollars? a lot of companies might answer "um..." or "no comment". then there's esurance - born online, raised by technology and majors in efficiency. so whatever they save, you save: hassle, time, paper work, hair tearing out and, yes, especially dollars. that's auto and home insurance for the modern world. esurance. backed by allstate. click or call. lou: joining me now the host of risks and reward *, when need to figure out what going on here. let's start with what seems to be played as the obvious. chain today is

confirm -- does this report confirm janet yellen's action?oes it say she will need to be more proactive as we go into the year? >> the three or four fed steps stan fisher and janet yellen seem to control, probably are on track at least in terms of their verbiage. i don't think it is possible to raise interest rates by 100 basis points in this levered economy. and this levered global economy which reflects the stronger dollar. i think the fed at the moment will talk that talk. >> is this a federal reserve that must pay attention to international affairs? >> certainly in the past several weeks and what we have seen with china, they have to take into consideration global affairs and movement of currencies. etc. will they? i think it is number three or four on their list. >> we will drill deeper into china's issues later in the program. we showcase the work slightly debate. coming up, more of the week's top business news, including more bad news for chipotle and vw. ♪ ♪ david: welcome back to "bloomberg best," i'm david gora. our view of the week

i don't think carney meant to criticize janet yellen. the fed is looking at the situation right now and will come to a similar conclusion that the risks to the outlook have risen and particularly, that it would take longer for them patient to go back to target. we just have to accept that over the past month or two, things have changed, particularly with the inflation outlook and it's normal that central banks react to this. have a global situation where there is a global savings glut that is depressing demand and interest rates. we have an oil glut that is depressing inflation and it's just normal that central banks react to those two glut by adding to the money glut. betty: and now they are getting themselves out of. back on china, the interpretation seems to be the numbers are not great, they were better than the lowest estimates but they show there is a slowing chinese economy and strangely enough, the interpretation was china is going to add more stimulus. do you subscribe to that? you really have to look at old china and new china.

bernanke and now yellen. they meet often with the treasury secretary in the president coordinating federal reserve policy with the government which might be appropriate for a crisis but i think at least until now and at some point janet yellen is going to have to tell jack lew the treasury secretary that she is running the fed or the fed's independence will be compromised. >> do you believe the historic period of interest rates is leading to asset inflation and if so could that have negative repercussions? >> it did have negative repercussions. it's just hard to tell. it's hard to tell how distorted they are it has there was a lot of capital out there so if he said let's have rates at a more national level what would that ye? i doubt it would be up to 6%. there's a lot of capital and their weren't a lot of people who wanted to borrow or invest. it's possible but it's hard to know these things. it's to me obvious bubbles as with the real estate crisis. not that i said it was obvious then but these things are e

third, fed chair janet yellen's influence and the unanimous decision.e head of macroeconomic policy at merrill lynch. marketnce served as monitoring at the new york fed herself. questions --ng cohesion among fed officials seems to be an obsession with investors. why is that when we have a unanimous decision and pretty much everyone has agreed to the fact that liftoff should happen? karen: that is a great question. we went to this meeting in december knowing that there was discord between members in the committee. on one hand, there was questioning on whether we thought and flesh and was scheduled to go up as many were forecasting could on the other hand, janet yellen was doubling down on her argument that we expect inflation to beehive. we went into the meeting with different speeds and different outlooks on where inflation might go and where those risks are. what is interesting is that we got a full consensus at the meeting. what that really tells us is that shery ahn found a way to ring everyone on board. the minutes will show us how she managed to do

scarlet: secret assizes janet yellen. what about -- as he could assizes janet yellen.ly put --ruleig group proposals proposals. one is liquidity requirement that would affect bond etf's, and derivative use, and the bond liquidity issue would wreak havoc on things like hyg. what he is saying is you guys love these tools, speak up about this. there is a thought that it is more press-induced. the press has been talking about the bond etf's and leveraged etf's there have not been any cases of investors being harmed. it is all, oh, it could happen. he says we go back to high-priced mutual funds or buying bonds themselves. scarlet: he says don't push us back into the dark ages of investing. was talking about the aging of the financial industry, saying we really are an old industry, second only to walmart readers. eric: he has a great silent has the audience rolling. he is serious, though. the average age is 50 and they are worried about millenials. 66% of the plan to use a different advisor. he was trying to say, look here is how i engage social media. he was giving kicks an

of course, we're not getting an actual statement from janet yellen. we'll have to read the printed statement to decipher what exactly is going on there. we can't ignore the difference here between what the fed intends to do or they say they intend to do with four rate hikes this year, and the markets still factoring in just one. >> midyear, exactly. it's earnings instead we focus on, whether we're looking at an earnings recession. expectations are we should be looking at a drop in earnings some 5%. >> our guest coming up from rbc markets is quite bullish on the earnings picture. we'll talk about that in a little bit. meanwhile, let's give you a look at what u.s. markets are looking like today. they're called to open lower. the dow jones off about 90 points. this is a pattern we're seeing day after day. after a strong rally, we tend to get negative sentiment into the next day. if you look at the picture here in europe, we are down in negative territory, but the losses are fairly muted at this stage. again, investors taking their cue from the move in oi

you hear this from janet yellen and ben bernanke. here's what i think i'm going to do. and by the way, if you would enact some structural reform and fiscal reform, that would really help. in the meantime, i'm alone doing my job. anytime you want indexed to reform, i'm waiting here in frankfurt. thed: i was struck by station he drooped between the economy at home, and abroad. i imagine it's a distinction you will see drawn tomorrow as well. brendan: my favorite quote was lingering concern. the fed have lingering concerns about was happening abroad. the context is now completely different. it's been a month. what we saw in the fall was turbulence in the shanghai composite, stock movements, equity movement. now we are seeing capital outflows, things that are of much greater concern, change in the gdp numbers. if they have lingering concerns then, i would say they might have upgraded to urgent. and i would use the word urgent in the statement. they are absolutely looking abroad, just like europe is. and adjusting note of levity in that speech with him pointing out that desp

i bet yellen backs away from the ra hikscenario, while couple of s this year? will yellen s or will llen say n that we've rais rates seen mmodity pric dline, which may t be as tempary as we thou we've got to goack to being da dependent. wa until wsee infonbefore tightening ginsga. in this case, weave a ll t's e. no mte hers the ttom line. this week we've had host of coanierepo se et darn gnumbers. the scks geroedrememberou're tting themt priceshat ount to al bargains and iyou get a green lighfrom the fed, ilplenty to buy in retailstauras, and evenechnology as declis ve bome horrdous a the feds to blamfoatevhina and oil t ken away already. o frank ew yoo art. frk. >> cler: h a y, jim? >> i good, jimhow about you? >> caller: i goo thyou for king my ll, jim. >> thank y. >> calr: my questi i have some diey, you ow, an st f weeks isn't nothins oi w dai hed it was downgraded. ion't kno ithat time to mo on to somhing else? >>here are lots of peoplwho like ttre sn. th a looking at it statically, sang bob eiger can't fix whateverecne there is in espn, therefor the compy

can janet yellen do policy ?a's >> a she is trying to get back to full employment. , those who have education tend to do well throughout recessions. we are trying to get everyone on board. they are taking a long time now. we are looking at where we are creating more middle income jobs. tom: may be it is not a secondary important characteristic. >> we are not quite seeing the improvement we would like. questionimportant something we are near full employment, others do not. the arch political debate in america. feeling in this kind of environment is important. it goes back to capital spending, back to wage growth. it is wage growth the fed and janet yellen will have to focus on? cost get the employment index, it is a quarterly data series. it has started to move higher. we could get to a nasty situation for the fed. we could see a slowdown and the rest of the world dragging down growth. it is a difficult spot. the ends being amplified by the oil crisis? >> in the world, we would say -- nois no other is this can the

lou: i think yellen knows they made a big mistake on the 16th of december. they spit into the wind.hings -- these are consequences i think in part as a result of that. not all of it, but part of it. thanks for being here. let's hope neither of you get scared of it. up next, the market plunges. fears over china to blame in the minds of most. but should we be worried about this economy and what you should do with your 401k? here next. [ music and whistling ] when you go the extra mile to help business owners save on commercial auto insurance, you tend to draw a following. [ brakes screech ] flo: unh... [ tires squeal, brakes screech, horn honks ] ooh, ooh! [ back-up beeping, honking ] a truckload of discounts for your business -- now, that's progressive. i'm mary ellen, and i quit smoking with chantix. i have smoked for thirty years and by taking chantix, i was able to quit in three months. and that was amazing. along with support, chantix (varenicline) is proven to help people quit smoking. it absolutely reduced my urge to smoke. some people had changes in behavior, thinking or mood,

charles: the markets get slammed as janet yellen and the feds keep the blinders on. in their words, the commission in an upswing. facebook exploding to the up side after an amazing earnings report. iran threatening the u.s. navy as a doomsday clock shows only three minute remain between now and midnight. the world is on fire. donald trump announcing he will not attend the fox news debate tomorrow evening and his supporters are loving it. the question is, is it a mistake? some will say this is a page out of ronald reagans play book. back in 1980 he decided to skip the iowa primary and he went on to win the whole ball of wax. but here is some key tacts everyone needs to consider. coasting. reagan had a huge lead in the polls. he felt secure. novel. this was the first gop debate since 1948. it seemed like a novel thing and unimportant. lost. ronald reagan lost. george bush gained track after the debate and he won. not only did ronald reagan learn the importance of debates. after winning that state primary reagan fired his campaign manager. so is missing debate for any r

janet yellen?ed again. >> i think the good news today ratifies what the fed did with raised rates, a small amount it t. as has that the u.s. economy is relatively insulated from the rest of the world. we forget that. what happens in the u.s. is mainly because of u.s. factors. sure, trade matters, sure we care about china, but the strength comes from domestic factors. stephanie: but we have not seen the numbers out of u.s. companies. and there are a lot of foreign companies that sell stuff to america. do you agree with this point was that the u.s. is insulated? >> i agree with the insulation, but when you look at the numbers there is a different story. 50% coming from overseas, the dollar being so strong cannot help u.s. companies. and when you talk about china, china realizes they have the service currency on the planet, and that is not helping exports when the domestic economy is slowing. erik: regardless of what you invest in, whether it is sovereign debt, emerging markets, do you have to have a

i don't think carney meant to criticize janet yellen. if the fed looked at the situation right now they would come to a similar conclusion havethe risks to outlook risen and particularly that it will take longer for inflation to go back to target. i think we just have to accept that over the past month or two, things have changed, particularly with the inflation outlook, and i think it is normal that some banks -- central banks react to this. there is a global savings glut that is depressing demand and interest rates. oil glut that is depressing inflation. it is normal that central banks react to those two gluts by adding to the money glut, for which they are responsible. betty: and which they are now getting themselves out of. though, thea, interpretation seemed to be that the numbers are not great. better than some of the lowest estimates. but they show there is a slowing chinese economy, and strangely enough, the interpretation was china is going to add more stimulus into the economy. do you subscribe to that? iachim: well, first of a

economy, a sign, say some fed watchers, that janet yellen and friends are a little more worried than they were just six weeks ago. those renewed concerns pressured stocks, so did the fact that the fed didn't explicitly take a rate hike off the table for march when it meets next. the dow jones industrial average dropped 222 points to 15,944. the nasdaq fell 99. the s&p 500 lost 20. hampton pearson has more now on what's worrying the central bank. >> reporter: the first federal reserve meeting of 2016 ended with monetary policymakers keeping interest rates unchanged but pledging to closely monitor the global economy and financial markets. since the mid-december rate hike, major markets and oil prices have declined and china's economy has struggled. the initial market reaction was negative because monetary policymakers gave no hints they plan to slow future rate hikes. >> 2016 levels of global leverage make it very hard in my opinion to emphasize 5% unemployment when oil and commodity prices are deflating by 50% year over year. >> reporter: the fed said while overall economic growth has

and with janet yellen, an obama nominee. since the crisis the government accountability office conducted audits of the activities. many relate to the financial crisis, include the fed's emergency lending activities. and there should be -- there is more and there should be more. the fed is transparent and accountable in the following ways. let me list them. this is not an out-and-out defense of the fed. they should be open to criticism and there is still much to criticize about them. but this legislation really solves nothing except to politicize the fed. the chair has required -- these are the ways that the fed is transparent and accountable. the chair of the federal reserve is required to testify before the senate banking committee and the house financial services committee twice a year on monetary policy. in practice she'll testify at additional hearings on other topics. the governors of the federal reserve and senior staff -- that's others of the nine members of the federal reserve -- testify dozens more times every year.

yellen when she next makes her comments? do you expect her to reference the market volatility?o you expect her to try to reassure the markets? >> i would say no, unless solidity reassures the market. i expect that when the statement comes out next week, unless something -- you know, who knows what might happen next week, but if nothing wild happens i expect a statement from the fomc to look a lot like the previous one, a kind of a status quo statement. she is no doubt scratching her head about what's going on, wondering if the fed should adjust its policy. but it's way, way too early to say anything like that publicly. so i don't think she will. >> let's turn away a little bit from the fed and toward the economy more broadly. today's unemployment claims were higher than i think a lot of people expected. yesterday inflation news basically zero inflation. and earlier this week china's slowing. are you concerned about the pace of growth in the u.s. economy? does this look like a good or a healthy economy to you? >> it looks like a mediocre economy, which unfortunately is what it's

i bet yellen backs away from the rate hike scenario, while crushing the auto and housing cycles, but does she say we need a couple of hikes this year? or will yellen say now that commodity prices decline, which may not be as temporary as we thought, we've got to go back to being data dependent. wait until we see more inflation before tightening begins again. in this case, we have a rally, let's build one. no matter, here's the bottom line. this week we've had a host of companies report some pretty darn good numbers. if their stocks get rocked, remember you're getting them at prices that amount to real bargains and if you get a green light from the fed, still plenty to buy in retail, restaurants, and even technology as declines have become horrendous and the feds to blame for whatever china and oil haven't taken away already. i'd like to go to frank in new york to start. frank. >> caller: how are you, jim? >> i'm good, jim, how about you? >> caller: i'm good. thank you for taking my call, jim. >> thank you. >> caller: my question is, i have some disney, you know, and the last few week