Transcripts For CNBC Worldwide Exchange 20170921

Exchange on cnbc. Im wilfred frost. Im Courtney Reagan in for sara eisen nice to have you here today not on my own. Youre not on your own. We didnt strand you today very nice i feel relaxed good to have you back here lets have a look at the markets. The fed remains center on wall street today investors continue to digest the news that the central bank will begin winding down its 4 4. 5 trillion Balance Sheet next month. Yesterday the markets did not sell off the dow was up 0. 2 . The s p and nasdaq were either side of flat there was even room for bank stocks to rally the best part of a percent. Energy is the best performing sector bottom line is markets did not sell off theyre not selling off again today. Essentially flat in the premarket. Tenyear treasury note we did see a reaction. The peak was just shy of 2. 29 yields did increase. We are just slipping down a bit from there in general, the reaction was yields up a bit, and yield curve flattening a little bit. Of course yields had already ticked up in expectation of this decision over the prior couple of weeks a big move in the twoyear yield. Dont pay a lot of attention to it but a notable move since yesterday. We also got a Rate Decision overnight from the bank of japan. In a widely expected move, policymakers did leave rates unchanged at 0. 1 . Negative. Thats right. Which is a great reminder of how loose Monetary Policy is around the whole of the world, despite the fed exiting its qe program. Still negative base rate in japan and europe the yield on the tenyear at zero asia mostly lower except for the nikkei thats just a slight move to the upside Greater China also lower overnight. Of course paying attention to what happened here with the Federal Reserve and the stronger move in the dollar look at whats going on in europe higher across the board. Pretty much ever so slightly there. You can see in germany were stronger by 0. 3 in france, getting stronger here as the open wears on at 0. 6 higher financials higher on reports that a German Government on a merger between frances state backed bank and paribas. Oil prices jumped nearly 2 yesterday. They are giving back 0. 6 of that today wti above 50 a barrel dollar did strengthen markedly yesterday, even though yields did not move up much, saw a 0. 8 gain in the dollar it moved higher against currencies like the euro thats why youre seeing european stocks up today, because of that euro weakness. In general, not doing too much today. The euro is rebounding 0. 2 . Flat against the yen and the pound. It is up about a percent against the aussie dollar. An rba member said rates were not going up soon in australia so netanyanet the dollar is stronger total today. Gold prices were up slightly yesterday, but given back up those gains today. Down over a percent. 1300 is the price on gold. Lets get more on the reaction of the fed unwinding its Balance Sheet. Joining us is Larry Macdonald. Good morning to you. Thanks for joining us. Clearly well telegraphed this move to reduce the Balance Sheet. Also the other takeaways people have is december rate hike looks nailed on. And that further out the feds dot plots, their prediction of where rates will go has a big gap to where the market is theres one or two times a year where the street gets offsides relative to fed policy. This is one of them. Yesterday was just a kick off. Remember, weve got 62 trillion of gdp outside the United States 62 18 inside. U. S. Economists get caught up myopically on the 18 trillion in the gdp in the United States economy. But the dollar plunged almost 12 in 8 months. Thats having stimulative effect around the world like a boomerang, some of these things are starting to come back to the United States china ppi has been above 10 for six months oil prices, as you mentioned, have been surging because of Global Demand and supply issues. So you have a situation where the fed is behind the curve and theres surprises coming at us larry, well start to unwind this Balance Sheet predictably, gradually in the words of janet yellen were at 4. 5 trillion now. Before the crisis, we were at 1 trillion what do you think the ultimate goal is for where we want to see the Balance Sheet end up 2 1 2 years from now they want it below 3 trillion,now were at 4 trillion. But, you know, more importantly its about expectations. A month ago the street was telling us that they were not going to hike december and start the Balance Sheet. Now its looking like theyll walk and chew gum at the same time the fed will take the Balance Sheet down and start to hike at the same time which has never been done in the history of american finance. So that is a surprise. Quickly coming back to your first point. What could derail their plans to continue down the path or more importantly the u. S. Economy you are saying the dollar could, if the dollar does strengthen well see pressure on both of those factors . No, i think theyre behind the curve in the sense that think about the global picture stimulating the economy and thats creating some inflation pressures that are just starting to appear. Then you have tax cut coming, okay the chances of a tax cut are firm in washington with about 5 , 10 in august and now were up at 40 for this year. And then if you look at repatriation, in august the chances of repatriation were 5 , thousand 10 , now 10 . The biggest factor is harvey, irma and maria money youre talking about 80 billi n billion, stimulative cash that will come in in infrastructure that will come in in the fourth quarter. So the fed will have to raise rates more aggressively man the market suggests. We continue to follow the latest developments on Hurricane Maria. The storm is gaining strength after pounding puerto rico tamma reporter i want to give you an idea of what these 155mileperhour winds look like that came and tore up this island this was a wall from a small bank the sheet metal is twisted glass is blown out metal is wrapped around trees. This is the scene you will see over and over and over here in puerto rico as people wake up, as the sun comes up and they start to realize the extent of the damage it is just enormous. Rescue crews have not even been able to get out to some of the remote parts of the island to see who needs help what houses have been damaged. We know a lot of the roads have been turned into rivers. The freeways are impassable because of the water, because of the trees down, because of the power lines down its a very dangerous and fluid situation at this point. Back to you. Tammy, thank you. We hope you stay safe down there. Were also following the latest out of central mexico after a massive earthquake killed hundreds. Rescuers are franticly racing to find survivors buried under the mountains of rubble. Officials say at least 230 people have been killed, 100 of the deaths were in mexico city alone. President trumps deal with Congressional Democrats to keep the government funded is paying off in the polls john harwood joins us from washington with the details. Good morning weve got a new nbc news wall street journal poll out this morning it shows, as you indicated, that President Trump is doing slightly better in the wake of that deal with democrats, also his administrations response to Hurricane Harvey and irma. Hes got an Approval Rating now of 43 , up from 40 in august. His disapproval is slightly down what we see in the picture on tax reform is some soft ground that a strong argument might be able to have an impact on. First of all, when you ask people what do you want to happen to taxation for wealthy people and corporations, majority say it should go up so theres not a ground swell of support for tax cuts, certainly at the top end and for corporations on the other hand, when you ask people do you agree a Corporate Tax cut would involve job creation and cause companies to expand then you get a 54 majority saying i agree following that, if you ask overall what are your options . 4 want simply a Corporate Tax cut. Only about a quarter of people want only an individual tax cut. Another quarter say cut both the largest percentage of people say dont cut taxes at all what that tells you is that the American People have conflicting views on this question theyve been hearing about the deficit for years. Theyre susceptible to some argument and the ball is in the middle of the court and both democrats and republicans have a chance to move it as this debate plays out this fall. Theres a possibility for republicans as Larry Macdonald indicated in your segment earlier to have a get a tax cut through the congress, even though there is some Public Resistance its not that strong resistance. John, i wanted to ask about the Graham Cassidy healthcare bill the deadline is september 30th what do you think the prospects of that going through are . You spoke about the opinion polls rising because of a deal with democrats if. If that gets through, do we get back to a republicanonly agenda yes the prospects for Graham Cassidy are not great. Its not impossible but theres a significant amount of resistance within the Republican Caucus to the bill the arguments made to the bill are mostly we have to do it because we promised. Youve got 25 republican senators representing states that would lose money under Graham Cassidy they need 23 out of those 25 senators to vote for the bill. They dont have them at this point. You have rising opposition from industry groups, from insurers, also from the heart association, the american medical association. I think its an uphill fight for them i do think this is a distraction from the momentum on tax reform that they were hoping to generate in september. John, just quickly. Your takeaways from the u. N. General assembly this week or President Trumps contributions to it. What are the headlines in your eye . The rhetoric that the president used, and the rocket man comments threatening to totally destroy north korea, it may be as with many of the things that President Trump says, that people let that just sort of go past them and not focus on it too much you had criticism from people like Angela Merkel saying thats not what we should do. The reality is the u. S. Government across administrations, clinton, bush, obama, has been unable to stop north korea from advancing this program. There is no sign that the current tact is working. Well have to see whether the u. S. Government, china and others simply accommodate themselves to the fact that north korea will have nuclear weapons, or whether something is going to scramble this equation. John, thank you very much for that update. You bet other political news, twitter is growing the focus of senates russia probe. They will discuss the role the platform played in the distribution of russian dis information. Bot technology could have helped make Misleading Campaign tweets go viral facebook is also a focus of the senates probe no move in twitters share price this morning a story that just keeps on going. To the top corporate story, google made a billion dollar bet on phones. Landon dowdy joins us with more. Good morning good morning. Alphabets google announcing it signed a 1 1. 1 billion agreement with htc to boost the smartphon hardware business, this could further googles ambitions in the mobile phone and Virtual Reality industries this is googles second major move into phone hardware the first attempt didnt go that well they brought Motorola Mobility for 12. 5 billion in 2012 and sold it off to lonovo for less than 3 billion two years later in a blog post they said this deal with htc will help the family of made by google products look at the stocks shares of htc spiked overnight google shares down slightly in early trading. Back over to you thank you very much im fascinated by this htc originally was the big highend android smartphonemaker, long before samsu samsung. Its share price soared up, twofold, three fold. It was the First Company to invest in beats headphones, it bought it outright, it sold it apple purchased soon after its interesting to see google doing this htc in the past has made some of the best smartphones, im sure with googles backing it can once again in the past, when softwaremakers have invested in hardware t hasnt worked. But the price is low relative to google a much more dominant player here still ahead on Worldwide Exchange a double dose of hacking news an update on that massive breach at equifax, full details of that. And janet yellen rips wells fargo over the fake account bank scandal. ll tell you what she said when Worldwide Exchange returns. Cds, baseball cards. Your old magic set . And this wrestling ticket. Which you still owe me for. Seriously . 25 . I didnt even want to go. Ahhh, your diary. Mom says its totally natural. 25 is nothing. Abracadabra, bro. The bank of america mobile banking app. The fast, secure and simple way to send money. You myour joints. Thing for your heart. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Welcome back to Worldwide Exchange. Lets get you up to speed on market action. The key takeaway from the feds actions yesterday was that we didnt see a selloff 0. 2 of gains for the dow. The s p 500 and nasdaq either side of the flat line. A little bit of gains for banks, bit of gains for Energy Stocks we are in the red in the future market, but nothing too pronounced the nasdaq down more than the others in terms of percentage share losses in general just 5 points or so south for the dow. Treasuries saw a move higher in yields, a slight flattening of the yield curve, but not that pronounced, given that yields had been rising. The peak we saw in the tenyear was 2. 29 , just shy of that level. We are down from that this morning. 2. 27 . Courtney thank you very much so making other headlines. The s. E. C. Says it was hacked. The Government Agency says cybercriminals infiltrated the Electronic System that stores corporate filings. Its called edgar. The s. E. C. Says the hack happened last year but wasnt discovered until last month. An investigation is underway on whether the hackers made illegal stock trades based off of the stolen information. We have a big update on the equifax hack the wall street journal reports hackers roamed undetected in that companys Computer Network for more than four months before its Security Team uncovered the data breach the information was reportedly revealed bythe Security Firm fireeye, which equifax hired to help investigate the incident. In another black eye for equifax, the company has deleted a series of tweets that sent victims of the data breach to a phishing website in a statement equifax says all posts using the wrong link have been taken down and that it apologizes for the confusion holy cow this is not Getting Better not Getting Better. Its not. Well see what it does to the share price at the open. Already down 13 , 14 . Yes im surprised its not down more. Janet yellen ripping into wells fargo during yesterdays fed news conference. Yellen says the bank could face more penalties for opening up of millions of unauthorized accounts i consider the behavior of wells fargo towards its customers to have been egregious and unacceptable we take our supervision responsibilities at the company very seriously we are attempting to understand what the root causes of those problems are and to address them and we im not able to discuss confidential supervisory information and not yet able to tell you what actions we may take but i do want to say were committed to taking the actions we regarded as necessary this is frankly extraordinary to hear this very strong words so severe and so late in the game this scandal broke over a year ago. The initial action was taken by the cfpb, and the fed has not really done anything yet as senator warren points out, the fed has the ability to remove Board Members so far wells fargo removed three members, added one of a total of 15 clearly not drastic changes to the board. Very interesting to hear janet yellen speak so strongly does that mean theyll start to act more strongly on that particular topic of changing Board Members . Well have to wait and see this was the most significant thing we heard from the fed on this issue coming fairly late. Yes that is true thats a good point. On the same topic this week, a memo released by the House Financial Services committee revealed that the cfb considered fining wells fargo 10 billion, before finally settling in on 100 million. A split there. Senator warren has been critical of wells fargo but a being defender of the cfpb in the past i guess shes stuck in the middle there either way, clearly the fine that the cfpb could impose feels fairly small i dont think they can go back and increase the fed still to come, one chipmaker is spiking on a cnbc report that its teaming up with tesla the name of that mover, you have to stick wh usit thats coming up were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Good morning welcome back to Worldwide Exchange. Im wilfred frost. We have a news alert on china. S p lowering the rating on china to a plus from double a minus a small downgrade, but significant to note. Probably more a reactive thing from s p as to predictive. Still to come, meal prep firms on the move. Well tell you about the merger thats lifting those stocks. And trudeau is trending again. Why internets favorite Prime Minister is in the spotlight for his choice of accessory. Stay tuned, youre watching Worldwide Exchange on cnbc an october to remember the fed says it will reverse its historic stimulus next month but what will happen when the training wheels come off serious about smartphones, google announces plans to purchase htcs phone division. And another deal on the memory the largest grocer in the United States is getting in on the Meal Kit Delivery business. Its thursday, september 21, 2017, youre watching Worldwide Exchange on cnbc. Good morning very warm welcome to Worldwide Exchange on cnbc. Im wilfred frost. Im courtney reggen in for sara eisen lets check in on the global markets. Look at futures, relatively mixed to flat on the session, now were down we know this could change any moment we have a number of hours left to go until the opening bell sounds look at the tenyear note. We you have a move up yesterday on the fed announcement. We ticked back down just a touch. The peak yesterday was 2. 29, now sitting at 2. 27 for the tenyear note we had a touch of a run up going into the fed meeting yesterday still a lot of discussion Going Forward about what everything means with the statement being a little bit more hawkish than some had expected. Lets look at markets around the world. Asia down a bit today. Its off by twothirds of a percent two tenths of a percent for shanghai and korea slight gain force t percent for shanghai and korea slight gain force t for the nik. European trade getting a bounce after the fed meeting yesterday. European markets enjoying the softness in the euro they saw yesterday. Moving on to broader markets an update on the price of oil. Yesterday we actually saw wpi tick down slightly, Still Holding that 50 per barrel range, which is where were holding now. We should note we moved over into the november contract for wti, but paying attention to the stronger dollar when it comes to the price of oil, as well as those inventories which are higher for the Third Straight week we can see brent is down slightly here, 0. 4 . Look at whats going on with the dollar we saw the tlar fidollar firm ah feds decision yesterday marginal moves here the morning after the feds decision lets round things out with the price of gold. A slight move higher yesterday, but this morning we are under a bit of pressure, down 1. 3 or so right about bangon 1300 check that out there we go love when that happens. Just changed. Moving on to corporate news. Google is betting big on smartphone hardware. The company is paying 1. 1 billion in crash for htcs pixel division as part of the deal google will gain 2,000 htc employees this is the second move into hardware it first attempt didnt work so well the deal is subject to Regulatory Approvals but is expected to close by early 2018. Google stock down fractionally in the premarket lets go to twitter, its a growing focus of the senates russia probe the social Media Company will meet with Intelligence Committee staff to discuss the role its flat form played in the distribution of russian disinformation investigators focusing on the prominence of bots, automated accounted used to post and amplify information. The technology could have helped make Misleading Campaign tweets go viral facebook is a focus of the senates probe now to a merger in the meal kit space. Landon dowdy joins us withlicios albertsons saying it will buy the Meal Delivery service plated this is the largest supermarket, one of the largest chains, and theyre trying to attract more customers to their stores. The move comes less than a month after amazon entered the grocery market buying up whole foods plate launched in 2012 and is one of the top five food prep services, behind blue apron and hello fresh. Grocery startups have been hot lately attracting more than 1 billion in venture funding last year plated ceos commenting on the deal saying we no longer have to play the game of just spending money in the media to go out and reach folks it uniquely positions us in the market blue apron up more than 2 . Back over to you. Thank you very much blue apron has seen the sgok the oth stock go the other way most of the time. Tesla is teaming up with amd to develop an Artificial Intelligence chip for selfdriving cars. The company is already running tests on the new chip. Tesla has more than 50 employees involved in that particular project. Apple says its new watch is having some technical issues the Company Confirming a wifi glitch is disrupting cellular kekti connectivity apple says it is working on a software fix shares are down slightly this is one of the big critiques of the apple watch so far. Adarko petroleums board okaying a 2 2. 5 billion buyback share program. Shares are higher by almost 4. 7 . On the wall street agenda a pair of economic reports weekly jobless claims at 8 30 a. M. Claims may reflect more of the impact of Hurricane Irma this past week. Also at 8 30, look for the september philly fed survey. Moving on to our top trending stories, Justin Trudeaus socks are going viral once again he was supporting some chewbacca socks at an event yesterday. It has people talking on twitter. William shatner saying justin trudeau, i thought we were friends, question mark chewbacca socks, question mark mr. Shatner was on squawk box yesterday. This is not the first time hes pulled out some star wars socks. Theyre getting more and more edgy to have a character on the socks, credit. I like it we have some big news for fans of will and grace for the First Time Ever all 194 episodes of the show will be available for streaming. The series will be available to stream today on the nbc app, hulu and on demand this is a week ahead of the highly anticipated revival premiering on thursday, september 28th get your fill, review what happened in the past before we pick up the revival, which im pumped about i never really watched will and grace. It was more friends for me i liked both. How many episodes of friends in total 470 no i would have put it at roughly that 236. Thats it just from google. I think i saw every one of them definitely did. Watched another one last night. I think they should do that for friends as well. Wills will be pleased. Fedex is helping Hurricane Irma victims they are air lifting tons of stillwarm barbecue to those aftfected in the florida keys kind of an odd help. A morale boost yeah. If someone shipped in my favorite ohio food force s for e during a tough time, i would appreciate it. I wonder if basics and water would be a better First Response hopefully they have that. This is extra. This is the bonus. Class pass is shaking things up in the fitness we wont talk about that. Forget it. Not good enough story not good enough done with it we will tease coming up, well dive into googles deal with htc will it help the companys smartphone game . And all the hemaotr in headlines coming up on Worldwide Exchange. This is not a cloud. This is a tomato tracked from farm to table on a blockchain, helping keep shoppers safe. This is a financial Transaction Secure from hacks and threats others cant see. This is a skyscraper whose elevators use iot data and ai to help thousands get to work safely and efficiently. This is not the cloud you know. This is the ibm cloud. The ibm cloud is the cloud for enterprise. Yours. The s. E. C. Says it was hacked the Government Agency says cybercriminals infiltrated its Electronic System that stores corporate filings called edgar the s. E. C. Says the hack happened last year but wasnt discovered until last month. An investigation is underway on whether the hackers made illegal stock trades based off of the stolen information. We have a big update on the equifax hack the wall street journal reports hackers roamed undetected in that companys Computer Network for more than four months before its Security Team uncovered the data breach the information was reportedly revealed by the Security Firm fireeye, which equifax hired to help investigate the incident. In another black eye for equifax, the company has deleted a series of tweets that sent victims of the data breach to a phishing website in a statement equifax says all posts using the wrong link have been taken down and that it apologizes for the confusion were continuing to follow the latest developments on Hurricane Maria the storm is regaining strength after pounding puerto rico the entire island is without power right now. Puerto ricos governor says it could remain that way for months maria unleashed winds and catastrophic flooding across much of the u. S. Territory the storm is now getting stronger as it pulls away from puerto rico and heads towards the Dominican Republic well bring you the latest throughout the day on cnbc such a serious story. We are following the latest out of central mexico after a massive earthquake killed hundreds there rescuers are franticly racing to find survivors buried under the mountains of rubble. At least 230 people have been killed 100 of those deaths in mexico city alone well be back on worldwide exan thhe latest in a couple minutes this actually makes sense. Now on the next page youll see a breakdown of costs. What . Its just. We were going to ask about it but we werent sure when. So thanks. Ye its a big deal. And its how edward jones makes sense of investing. We get a gift for mom and dad. , and every year, we split it equally. Except for one of us. I write them a poem instead and one for each of you too that ones actually yours. That one. Regardless, were stuck with the bill. To many, words are the most valuable currency. Last i checked, stores dont take words. Some do. Not everyone can be the poetic voice of a generation. I know, right . Such a burden. The bank of america mobile banking app. The fast, secure and simple way to send money. The proxy battle between prok Procter Gamble and trian is heating up the intention is to put a spotlight on the problems, so that a lot of smart people can get around a table and start debating how do you fix it agree on a plan and lock arms and go for it. Hear the full interview, which also included ed breen, check out deliveringalpha. Com. Those interviews just posted in the last 24 hours, amongst all sorts of great content time for our mustreads. My pick is in the financial times. Google htc engaged tone off the back of the news that google invested to buy htcs smartphone business and hire 200 staff. The waning force of most smartphonemaker against the combined might of apple and samsung makes google vulnerable. Android powers samsung phones, but the Korean Company is keen on making homegrown software and so Google Alphabet would like its own compelling home grown hardware it goes through and compares some of the recent failed attempts for softwaremakers to buy hardwaremakers, microsoft buying nokia which did not work well in the end it concludes this is a good deal for google its an interesting analysis on the deal a bigger deal than the headline 1. 1 billion figure suggests. It deserves more focus hardware and software seem like they fit together easily, but it doesnt always work well see if Going Forward things look different. My pick is in the new york times, written by phillip klein. Graham cassidy has one great idea he says grahamcassidy has a great desire, that Household Income is much higher in np than in arkansas, Heart Disease and obesity are much bigger problems in mississippi than in colorado. He add theres are 50 opportunities to experiment. An interesting idea. Maybe we need to look more closely at the systems in europe you guys have figured it out we cant quite get there despite these years to figure it out certainly not perfect in europe as my good friend joe kernen points out on the topic of mr. Kernen, we are approaching the top of the hour lets preview whats coming up on squawk box. Representative jennifer gonzalez, puerto ricos sole representative in the ung congress will be joining the team then chairman Jeb Hensarling will stop by. And hyperloops ceo will talk valuations his company try going faster than ever before and becky sits down with Actor Mark Wahlberg and sean cooms and their take on the entertainment business now thats an awesome looking interview. Looking forward to that and much more squawk box coming up in about 11 minutes time. Ill be there as well for most of it. Im looking forward to see how becky refers to puff is it diddy, puff daddy . Sean its not allowed to be puff anymore. That was decades ago i dont know. However becky frames it, its the right way. I like that i hope she goes with marky mark as well yeah. Thats the way i know him. In political news, back to the mustread i was talking about. Senate republicans announce plans to vote next week on the latest bid to scrap obamacare. President trump and republican supporters of the Graham Cassidy bill have been working to secure enough votes to pass the bill. President trump said they have the support of 47 or 48 out of the 50 senators necessary. That will be a pretty partisan vote if it passes. The United States is weighing on whether to abandon the iran nuclear deal. President trump told reporters hes made his decision but wouldnt say what the decision was. Irans president vowed his country will not be the first to violate the agreement. Under the program, iran agreed to restrict its Nuclear Program in return for the loosening of economic sanctions that crippled its economy. Twitter is a growing focus of the senates russia probe the social Media Company will meet with Senate Intelligence staff to discuss the role its platform played in the distribution of russian disinformation they are look at bots. S p lowering its Credit Rating on china to plus. And janet yellen says there is a big mysteries in the market heres what she said yesterday for a number of year theres were understandable reasons for that shortfall they included a lot of slack in the labor market which my judgment is largely disappeared. Very large reductions in energy prices, and a large appreciation of the dollar that lowered import prices starting in mid 2014 this year the short fall of inflation from 2 when none of those factors is operative is more of a mystery. I will not say the committee clearly understands what the causes are of that with us now is Michelle Girard from Natwest Markets it is a bit of a mystery that we vent got this inflation what adds to that is the fact that the dot plots, the way the fed predicts where Interest Rates will go Going Forward predicts quite a few hikes down the line despite this lack of inflation i think the fed chair spent a lot of time at the press conference yesterday trying to explain why that would be the case she was asked a couple times how does the fedex plaed explain wh raising Interest Rates when inflation is a problem they said the inflation will move to a 2 target for the medium term. Thats rooted in a belief that as long as the labor markets are as tight as they are, and were hearing though its much slower than the fed would think, there is evidence that wages are moving up. I think its hard for this fed to believe that you will not get inflation at some point moving back up. Of course the fed makes the case policy takes a long time to work you cant get behind the curve we want to avoid a situation where we wait too long and have to do more on Interest Rates the last thing is Financial Market conditions, everybody talks about that, the fact that weve seen actually Interest Rates in the market coming down even as the fed raised Interest Rates, and the equity market moving higher that is providing stimulus to the economy, that suggests the fed needs do less what if tax reform passes and we see growth above 3 how does that change what the fed is thinking about . A lot of it first, i think if we were to get the growth, but inflation stayed pretty tame, you know, i think you would still be able to say that the fed wouldnt necessarily have to get as aggressive as maybe you would fear in terms of raising Interest Rates so i think a lot would depend on whether or not there are inflationary consequences. A lot could increase productivity and give us Growth Without the inflation concern. Certainly if we were to see something as broad based as what we had thought about earlier in the year, i think the fed would certainly be considering whether or not even or whether or not they would continue to move at as a gradual pace as weve seen. To what expent do you thiten the weaker u. S. Economy hasdolls allowed the economy to grow, and does that derail plans to continue down the tightening path certainly the dollar is derailing the fed in the past. In 15 and 16, the strength of the dollar played a role in the feds decision to do less on Interest Rates its a very different situation now, i would say, for the dollar Going Forward. Actually in contrast to those past couple of years, were looking at a situation where other Central Banks are also beginning to think about removing accommodation so it is not the fed going it alone and every time they hike the dollar strengthens i see less upside risk to the dollar even if the fed stays the course of raising Interest Rates. Even in the next six months the bank of japan confirming theyre at minus 0. 1 . Theres been a bit of rhetoric from the ecb and mario draghi but theyre quite a ways away from taking the action we saw from janet yellen yesterday. We are talking about degrees. Our view is that the dollar will appreciate so we may be up 2 , 3 , 4 i dont think thats enough to derail kind of what the path that the fed has laid out, like we saw in 15 and 16 when we had a much sharper appreciation. Short on the u. S. Economy, Larry Macdonald was with us earlier, he was very positive and bullish about the gdp effect from hurricane rebuilding. Whats your position on that thats the thing. Nearterm were certainly going to seed ed adverse impact, but n 2018 that will give a boost to the economy. Typically its drawn out, not visible. Its not like you look at up with quarter and say that 5 growth was because of the hurricane. Right but you can make the case it could easily add a couple tenths on to gdp growth the other thing people are watching is perhaps inflation impacts as well. You are going to see more pressure on resources, both labor and commodities as you have that extra rebuilding effort going on. You have a rate hike in december how many next year four. I think theyll stay on this path of one per quarter. Thats not far off from the fed. The fed said three is appropriate. Great to see you. Thank you thats it for Worldwide Exchange. We have full coverage of the business day ahead on cnbc quk xhout the day sawbo is next the long unwinding road. Got it the fed announcing plans to start shrinking its 4 4. 5 trillion Balance Sheet market impacts straight ahead. A pop in the polls, President Trumps Approval Rating ticks up. And new poling data on tax reform a live report from washington. Google making a billion dollar bet on smartphones. We have the details. Its thursday, september 21, 2017 squawk box begins now. Live from new york where business never sleeps, this is squawk box. Good morning welcome to squawk box here on cnbc we are live from the Nasdaq Market site in times square. Im kelly evans along with joe kernen becky and and drandrew are off y our guest host is here today different venue i feel like it should be p. M. , fast money desk. Plug number one got it in already. Fast money, fast money fast money you know what is the opposite of slow what show are you on . Fast money. What time 5 00. What Network Still this network. Have you seen this show i have. Never miss