Risks to the Economic Outlook. The fundamentals of the u. S. Economy remain strong. The Unemployment Rate has been near halfcentury lows for more than a year. The anticipation of job gains have been solid and wages have been rising. These strong labor Market Conditions have underpinned solid household spending, which has been the key driver of Economic Growth over the past year at the time of our fomc meeting in january, prospects for continued Economic Growth remained favorable, and we judged that Monetary Policy was well positioned to support that outlook. Since then, the spread of the coronavirus has brought new challenges and risks the virus has afflicted many communities around the world and our thoughts and prayers kgo out tho those who have been harmed its also disrupted Economic Activity in many countries and has prompted significant movements in Financial Markets the virus and the measures that are being take on the contain it will surely weigh on Economic Activity both here and abroad for some time. We are beginning to see the effects on the tourism and travel industries and we are hearing concerns from industries that rely on Global Supply chains the magnitude and persistence of the overall effects on the economy, however, remain highly uncertain, and the situation remains a fluid one. Against this background, the committee judged that the risks to the u. S. Outlook have changed materially in response, we have eased the stance of Monetary Policy to provide some more support to the economy. Of course the ultimate solutions to this challenge will come from others, particularly health professionals. We can and will do our part, however, to keep the u. S. Economy strong as we meet this challenge. As always, our actions are guided by our congressional mandate to promote maximum employment and price stability in the weeks and months ahead, we will continue to closely monitor developments and their implications for the Economic Outlook, and we will use our tools and act as appropriate to support the economy. Thank you, and ill be happy to take a few questions thank you wall street journal. Two questions. First, what changed between last week when many of your colleagues seemed to indicate it was still too soon to sell how much this might influence the outlook . What changed between last week and today . And then the how much of confidence do you have there will be a quick and relatively complete recover of Economic Activity after the peak of this virus has passed so, what changed . Of course weve been carefully monitoring the situation since it first became known and waiting to see how it would evolve i think weve come to the new now, that it is time for us to act in support of the economy. Once you reach that decision, we decided to go ahead. So what changed really was i would say over the course of the last couple weeks weve seen a broader spread of the virus, weve soon it begin to spread a bit here in the united states, but for us what really matters of course is not the epidemiology but the risk to the economy. So we saw a risk to the outlook for the economy and chose to act. In terms of my confidence that well return to what was your question, second question . How do you expect this the economy to recover from this do you see it as a persistent decline in activity or something relatively temporary and short lived . I dont think anybody knows how long it will be. I do know that the u. S. Economy is strong and we will get to the other side of this, and i fully expect that well return to, you know, solid growth and a solid labor market as well hi, mr. Powell. Tim tankersly, new york times. You said the ultimate solutions will come from others. First, is this a coordinated part of a coordinated action with other Central Banks and should we be expecting to see more as part of that second, what would you like to see from american fiscal policymakers in response to these new threats . Okay. So first question, we were in active discussions with Central Banks around the world on an ongoing basis as you would expect ive been in regular contact with Central Bank Leaders if around the world that will continue theyre doing what makes sense in their particular institutional context, but were all talking to teach v each other on an ongoing basis. Our action represent what is we think is the right policy for us you saw this mornings g7 statement of finance ministers and governors. I think that statement does reflect coordination at a high level in the form of a commitment to use all available tools including health care policy, fiscal policy, and Monetary Policy as appropriate so in terms of fiscal policy, we have a full plate with Monetary Policy, not our role to give advice to fiscal policymakers, but you saw the mention of the g7 statement as appropriate as well sorry Heather Scott with afp the g7 statement seemed to indicate that policymakers would use tools but were not going to do anything imminent does this contradict that, or is this in keeping with the statement by the g7 this morning . And can i ask what would cause you to take another step what would you be looking for as terms of the Economic Outlook or data so, the sense of the g7, you know, is to we have seven countries, obviously, and different policies, different situations, different mandates, a lot of overlap the sense of that is to get together as a group and say at a high level that these are the thing wes ear going to do, were going to use all of our tools in a strong way to try to support the economy. Thats a statement of general support. I think within that you will see actions. Youve seen our action and i think its up to individual countries, individual fiscal policies and individual Central Banks to do what theyre going to do. Its possible there will be some more formal coordination as we move forward in terms of moving forward, i would say that we do like our current policy stance. We think its appropriate to support achievement of our dualmandate goals, but as i said in my statement, were prepared to use our tools and act appropriately depending on the flow of events are you watching to change that i cant point to any one thing. Always a range of things heather long from the washington post. Theres been some rising concern about credit markets and possible insolvencies and defaults from businesses or individuals from the coronavirus. Can you speak to the fomc talking about this are we likely to see any emergency provisions from the cra act v8ed or things you normally do during a hurricane or that type of disruption to the economy . We dont see any of that happening yet. Of course we are thinking about what we can do should those things happen. Theres no evidence yet. The economy continues to perform well as i mentioned, we do hear concerns particularly from those most directly exposed, but theres nothing in that nature, Financial Markets are functioning in an orderly manner and that sort of thing i think when it comes to those sorts of issues, though, the supervisors will be working with banks to assure they work with their barorrowers and that sorto thing. Those things are not upon us at the moment thank you brendan greely, financial times. Has the committee discussed any other Monetary Policy tools in addition to rate cuts and the pacing and timing of when they might be appropriate well, you know, were in the middle of a review of all of our tools. Back a few meetings we talked about what our tool kit is and put that in the minutes. But in the current context, no we diggs kugscussed the currente of policy and it was appropriate to make a change and did that today. Rich miller with bloomberg. Thanks for having the press conference could you take us through the reasoning behind the rate cut a little bit more in depth was there a some say this is a supplyside shock, rate cuts are not particularly suitable for this others say the supply side is more demand. I wonder if you could gives us a little more depth on the reasoning behind the rate cut. Thank you. Sure. Id be glad to so the Virus Outbreak is something that will require a multifaceted response, and that response will come in the first instance from Health Care Professionals and Health Policy experts. It will also come from fiscal authorities should they determine a response is appropriate. What could from other things, businesses, schools, state and local governments. Theres also a role for Monetary Policy it can be an effective tool to support overall Economic Activity we recognize a rate cut will not fix a broken supply change we get that. We do believe that our action will provide a meaningful boost to the economy more specifically, it will support accommodative financial conditions and avoid a tightening of financial conditions, and it will help boost household and Business Confidence thats why youre seeing Central Banks around the world responding as they see appropriate in their particular institutional context. Thanks. Ylan way from cnbc can you tell us what you would do if the virus ends up being contained fairly quickly would you envision the fed actually raising rates in short order if the economic damage doesnt occur the way that you potentially fear and i have a second question, which is President Trump was just tweeting about you this morning and talking about the feds need to cut rates. Did you feel any political pressure to make this move on your first question, were always going to set Monetary Policy at given time in a way that we think best serves our dualmandate goal ls simple as that when we if we get to a place where we think its an appropriate time to change the stance in Monetary Policy, we wont hesitate to do that. I would also say that its very important that people understand that we will always make our decisions based on the best thinking we have, based on our what we learn from our outreach to businesses, nonprofits, educational institutions that we get every cycle through the reserve banks, and the best analysis, the best Research Well always make our decisions in the interest of the American People to Carry Forward and try to achieve the mandates. So were never going to consider any Political Considerations whatsoever we will not do that, and its very important the public understand that. Chris from the associated press. You mentioned a little bit of outreach, some of the fed Bank President s were talking about last week how much they were going to listen to their contacts have you gotten reports from the ground from your business contacts, nonprofits and so forth that have affected your decisionmaking what are you hearing from all those folks . Thank you. So were we are hearing i would just say the effects are at a very early stage. You are hearing concerns from people, for example, in the travel business or the Hotel Business and things like that. Thats what youre hearing but you dont see things showing up in actual data. You do see them showing up in sort of sentiment forecast indicators and things like that. We expect that will continue it will probably grow. Thats one of the reasons why weve come to the view it would be appropriate for us today to move to support the economy. Thats what weve done thank you thanks very much. That is the fed chair a few headlines here the risks to the outlook in the u. S. Have changed materially ultimately the solutions will come from others he mentioned Health Care Professionals and fiscal authorities in active discussions with Central Banks that will continue, and has not looked at other measures yet steve liesman, what stood out to you . A reminder, the last time the fed did emergency rate cuts like this we didnt have journalists so hats off for taking questions from the press beyond that, i think its pretty much as expected he doesnt want to take back that rate cut, so he doesnt want to say, in answer to ylans question, we might take it back down the road. I think the Federal Reserve stands ready to do more if i listen to him. I also think i would prepare if i was an investor here for other rate cuts. There is now i think i saw here a 90 probability of a rate cut by the ecb next week of 10 basis points at next weeks meeting. I would expect the bank of canada this is the biggest shoe to drop but not necessarily the only shoe, carl steve, he was asked about credit issues, asked about impact on small, mediumsized businesses, sort of characterized it in an anecdotal beige bookie kind of way how important do they weigh that versus actual numbers once they start coming in . At this stage, that sort of anecdote is very important he must be hearing from different people about the possibility of bad outcomes here we had some of that in the cfo survey that we did earlier this week, if you remember, carl. Some folks had seen it lready. Some folks expected to see it. I think what the fed chairman thinks hes doing here is the appropriate preemptive action here, getting as far ahead as you can before the data come in and starts to, in his expectation, i think, begin to show the effects of this virus in the Economic Data its not there yet its in some of the anecdotes and theres more to come yeah, steve also sort of getting right at the question thats been getting debated on our air all morning, which is how much are rate cuts actually going to quell the Economic Impact, the worst potential Economic Impact of a Coronavirus Spread here in the u. S. And to that it seems like hes saying that he recognizes a rate cut will not fix the rate of infection or supply chain considerations but it could have other effects, like boosting household confidence is that what you would have expected to hear from him on this i think so. He twice mentioned he thinks the front line of combatting this virus are the Health Care Workers in this country. I will say ive gotten negative commentary from some of the fed observers i follow one wrote a rate cut by the fed so early in the coronavirus episode is terribly ill considered at hfe, they said they dont believe cutting rates is constructive in resolving the supply shock indugsed by the outbreak one way to think about it is if your house is cold and you need to close the windows and turn up the heat, you dont keep the windows open because it went be enough you close the windows and turn on the heat. So in this case, the federate cuts are not going to solve the problems of the coronavirus, but its perhaps one part of the solution steve, i mean, you talk about fed observers. Rbc said a rate cut would set a dangerous precedent and the only action is what the s p is doing. Does this reinforce that view . I think it might. Theres always been some level where the Federal Reserve begins to be concerned about the economic effects of a downturn in the stock market. It may look and appear like its reacting to the absolute decline, but what they will tell you, whether or not this is real or not, i have no reason to doubt them, is that what theyre ultimately concerned about is a downdraft in the stock market creates possibility of Systemic Risk in the system, a serious downdraft, i mean, and economic effects all of its own, either through the wealth effect or through really what the most important thing, what they call the tightening of financial conditions equities are another way of raising money like a bond or debt is, and the lower stock prices go, the more expensive it is to raise money through equity, and thats a tightening of financial conditions that the Federal Reserve might want to counterbalance i dont think the first thousand mattered or the second thousand mattered i thought when you added the 3,000 and 4,000 additional points down in the dow, thats when the fed started to see, you know what, financial conditions are tightening beyond which they believe is appropriate for the economy. Given that, we know that the market was reacting to the fed at 10 00 a. M. When we had a big spike in reaction to this rate cut. Since then, its lost all of that steam right now the dow, s p, and nasdaq all trading close to the lows of the session again. So give than were certainly on a day where reacting to the fed or the fed reacting to the markets is a big part of the narrative, what are we to make of that . I think certainly the fed would prefer to have a positive market response here i think its going to look at the overall trade and tenor of the market here. I think it has to count some of yesterdays gains as part of inclusive of the reaction to thaila todays rate cut you had the chairman on friday essentially telegraph a rate cut that was coming in an extraordinary statement at 2 30 in the afternoon on friday the market reversed thereafter some of that trade off of the bottom has to be the market already counting on rate cuts. We were reporting several times during the day, even sunday night, the idea that more and more fed observers were starting to think about an emergency rate cut and that other central bankers or Central Banks would be involved. Yes, im sure the fed would prefer to have a positive outcome in the to dow here, but i think its also going to go back to that friday as the beginning of the event of the rate cuts that happened today. Steve liesman, its still early, though. Theres a lot of trading left in the day. Sure. Thank you our ylan moy was in the room and joining us from washington a lot of questions going the feds way including why now and whats changed in the last few days what was your sense of fed chair powells tone and what we learned in this first News Conference after a mayor cjor c like this . I think he was trying to project an aura of calm even with this extraordinary step i thought it was notable that he said that, you know, the ultimate solution here is not going to come from the fed it seems like the fed is sort of harkening back to a phrase they liked to use during the financial crisis, which is that the central bank cannot be the only game in town here so you heard him say that the g7 statement did point to the possibility of using fiscal measures as a way to respond to this health authoritiesies integral responding to this it would be up to congress to take some steps. There is an aid package under way, but that is not going to potentially be an economic stimulus we know that the president has already called for a payroll tax cut. Dont know yet if House Democrats would go along with that certainly, it does seem like there is growing pressure for additional stimulus beyond the monetary side. The fed is here saying they are acting now its up to everybody else to do the same certainly a recording on that as well. Two of the biggest flashpoints, biggest discussion points ive seen circulated in conversations on wall street today on the heels of this cut, you got right at it with the fed chair, both of those questions, the first being what happens after the threat from coronavirus abates, and what do they do in terms of chose rates after that happens, and also whether there has been any kind of pressure from the white house given the tweets weve gotten from President Trump in the last 24 hours yeah. On the first question of whether or not the fed would perhaps raise rates if the threat from coronavirus were to dissipate, you know, powell said that they are going to be monitoring this closely, that they do not he did not point to any specific data points or any specific numbers that they would be looking at in order to know that the threat has passed. They very much seem to be taking this on a daytoday basis the reason they had to act now is because they had decided to act now. Why wait until the fed holds its Committee Meeting later this month. If they came to a decision, they might as well act now. They seem to understand its a fluid situation. On the political pressure, he was very clear that the fed makes its decision by looking at the Economic Data and making informed analysis. The fed does not cave to any political pressure he wanted to make sure the public understood that point but of course it is hard to ignore the very pointed tweet that came from President Trump steve mnuchin, the treasury secretary, is on capitol hill today and said at a hearing that he supports the federate cuts. So you have to wonder how much that all sort of plays into the political pressure that is riding on the fed. Its a lot for powell to stand up to. Ylan, you were v you started the morning covering mnuchin stocks are now below the level before the fed announcement came on mnuchin, ylan, he continues to tell lawmakers hes talked about infrastructure spending. Theres a flash head on the tape that hes happy to discuss reinstating state and local Tax Deductions with the president going back to that whole salt saga its hard to understand what the universe of possibility is in terms of policy. Right thats something that weve been trying to chase down as well there are a lot of ideas that are being floated out there. It appears theres a lot of spaghetti being thrown against the wall right now to find out not only what stick bus what sends markets higher, what markets will respond to. The political reality is that any type of fiscal measure will have to be negotiated with congress and with democrats so this initial aid package is a good litmus test for whether or not they can actually negotiate in good faith and get something done and get something done quickly. After that is when i would expect to see any type of additional fiscal stimulus measure being discussed. Right now capitol hill is consumed with the immediate need to pass an emergency funding bill for the coronaVirus Outbreak thank you for bringing us the latest in the room for the fed chairs press conference that just wrapped a few moments ago. Meantime, stocks, you heard carl mention, are at session lows, the dow down 521 points. On he we have two guests joining us here at post 9 theyve been sitting through this conference. Good morning, gentlemen. John, ill start with you. The fact that we did get this 50 basis points cut from the fed today and the swings weve seen in the market subsequently on the comments from the fed chair, its a big deal, right i mean, this is the first time weve seen one of these occur between a scheduled policy meeting since the 2008 financial crisis, first time its been a cut this big since the financial sacrifice. Are you surprised by this . Specifically, the Market Reaction you know, i dont think anything would surprise me right now in a sense that what you have here is you have the market is reacting to it. Initially, it was very pleased when it heard the news that it considers. The reality, theres still so many uncertainties, and if anything, the fed chair made it very clear and i think, you know, the issue is really krco a corona, not the federate cut the Federal Reserve remains sensitive to both Economic Risks within the economy as well as to the Business Community and what it thinks. I dont think hes playing to the stock market i think hes playing to main street and not playing but delivering a message you know, were here, were still sensitive. The extraordinary thing since 2018 when bernanke and hank pawlson got together is the sensitivity the government has shown to crises that come up im not equating this with 2008 in any way i keep thinking sars, came to pass im thinking ebola, came to pass with a lot less damage than was expected Morgans Point is we didnt get emergency rate cuts during sars we got them in 08 we did, but this is a very different Federal Reserve. Remember, sars was 2002 to 2003. It was before the crisis the Federal Reserve has changed its way that it responds, its activity, its sensitivity to the economy and its recognition of the global sixes lituations like never soon ive been in this business 37 years, sometime between may and july, and the Federal Reserve has never been as effective as it has been. Remember, a lot of people thought in 08 it was going to be pushing against the string in terms of affecting the economic outcome and the market liquidity. It wasnt. It succeeded i think this was a good effort if anything it shows were not asleep at the wheel, were doing what we can. I think the next thing is it pushes it onto the administration wheres the fiscal stimulus . It pushes it to congress thats what counts here. Good news, both china and the u. S. Are not afraid of fiscal stimulus their history shows it ben, is that how you see it this is extremely important the fed is the only game in town here we talk a lot about fiscal policy here. Theres not a lot of muscle memory for using fiscal policy to respond to anything outside a recession. It will take a long time to loosen up the pursestrings to get a few billion dollars for masks or what not. Monetary policy is the only game in town. When the history books are written, reflecting back on todays Monetary Policy, these will be held up as archetypes of the fed engineering a soft landing. Precious little ammunition to deploy against it. That is driving headlong into using them once in the 2019 to recalibrate policy and again now to preemptively strike against this threat you think this is a heroic move on their part i think honestly this is exactly what they v thneed to do they dont have that much ammunition to deploy if they do it earlier and more aggressively they can get away with using less at the end of the day. You make us sound like germany, averse to any kind of fiscal moves youre looking at the same screen i am. Longterm Interest Rates are almost 1 . Youre within spitting distance of that and you have to use your ammunition wisely. This Market Action seems strange to me. If the feds goal is to increase confidence, it seems like they injected volatility. So what do we read from that in the context of the big drop that we saw, the roaring comeback yesterday, then the fed comes in, maybe a couple days ago, the fed comes in, does this cut, the market spikings and boom, now were down 1. 5 , nearly 2 on major indices that doesnt seem like theres any scenario where thats what you want to see happen i think the market in effect it wasnt quite buy the rumor, but it was buy the expectation and tesell the news. In addition, the tape is running stories about sell a half a point, though very possible with a Market Driven by algorithmic trading. When they go wild, they tend to oversell and overbuy too we saw overbid beginning of the year, a large portion of that, then overselling just last week. So at this point, you know, i look at it, and i think what you need to realize is know what you own and why you own it and have a good idea how its going to perform. Consider the fact, are you a nearterm trader are you leveraged . Are you an intermediate to longterm investor three, five, seven years out this is probably in here if you have the guts to do it on a day when the market is dropping a nice piece of change, so to speak. Thats up to the individual investor and their advisers. You were about to say were in bargain territory right here knowing how q1 is coming in much less q2 . Its early but its a great time to build shopping lists and in some cases for some investors who are more aggressively positioned, the type of people who dont want to look back after Something Like this has passed and go if i only bought, they probably will jump in its not telling you when to buy. It is telling you what to buy. As you look across your portfolio, what do you want to be levered to when things get better the answer is equities do we expect bond yields to surge when things get better, not to the extent that equities are going to rip theres always that persistent bid for safety that will be there until we get that recession wipeout. If youre choosing where you want exposure, youre choosing equities, maybe taking out insurance with additional treasuries here. When you say that, im looking at the dow down 2 , the s p down 1. 7 , every sector in the s p is in the red, broad based buying or are there certain sectors that investors should potentially be considering more than others you can draw everything back to rates defense versus cyclicals this is about rates going down and staying down the higher duration sectors are the ones youll want to be in. Thinking about tech is being highly levered to that, that persistent change were seeing in the nature of Interest Rates in this country. Were talking a lot about coronavirus and the fed, a lot of stuff that we dont know how its going to pan out. Nope. Also super tuesday. Not talking about that we have a biden surge thats happening. How much is what the action were seeing today suggesting that the president s talking about Bernie Sanders obliterate that line of thinking . How much should we be thinking about the results tonight affecting the markets tomorrow i think the focus is on corona i think the election or todays super tuesday is more of a secondary item but certainly very important even if bernie does well. If he does well, its still about corona and you have to remember that bernie would be running it would be more likely to be running versus trump. You still have the Democratic Convention to go i would say tonight, i want to be watching what happens tonight on the screen as it develops but my real play here is im waiting for somebody to come up with an immunitization that has a good chance to get approved, that can make an effort, and greater efficacy in dealing with those who fall ill and containing this thing. We continue to like cyclicals. We think the defensive stuff is overpriced at this level bonds are ridiculously priced right now, especially when you anticipate when we get beyond this remember what happened in china. The growth rate in terms of the increases in illness has started to roll over that will happen here, and outside particularly in the developed and more advanced emerging market nations. We can look towards that gentlemen thanks for joining us john and ben thanks. Back to our eamon javers to the white house for reaction eamon, on the north lawn there, what should we be thinking about from the trump administrations perspective with this rate cut, what the president was calling for, and also the political winds that are blowing reporter look, one interesting piece of color here, john, officials wont say that the president watch that would press conference that we saw from powell just now nape oar not sure they can continuer firm that but the president was scheduled to leave the white house for an event across town. They were scheduled to leave about 10 45 in the motor aicade. That motorcade held with everybody waiting to go until 11 13 a. M. When the president emerged from the white house, jumped in there and off they went what else happened at 11 13 a. M. Jay powell finished up his News Conference at that same moment the president emerged from the white house and jumped in the motorcade and off they went. Not saying for sure he watched this presser but something kept the president for exactly the same amount of time as the press conference lasted today. White house officials tell me the president is paying close attention to what the fed is doing here eamon, thanks for that. Seems like well talk to you again, maybe 15 minutes or so. Eamon javers at the white hous we want to watch yields. Rick santelli is in chicago. Hey, rick. Hi, carl. As i look up at the board, i want the viewers to be with me here we settled yesterday at 1. 16, the tens, the dow was up, what, 5plus percent, and when the announcement came about a 50 basis points cut, we were at 1. 13, down three now at 1. 02, so down 11 from where we were and a boatload from the 1. 16. I dont see the point. How do we know if the fed did the right thing . To be fair, we need to see where the markets close. But if we evaluate them real time marked to the current market, i dont know, i think john said it best, wow, why did you welcome it the correlation is so clear. Everybody on this floor understands. Bah went down. The actual vix this announcement could kick up. Two aficionados waited for the bond markets to close. Maybe do it on an evening or sunday night it doesnt make sense. The other issue, carl, is anybody out there ever heard of this weird oldschool term called tough love . You always give the kids everything they want im hearing theyll maybe take it back. Give your kid an Ice Cream Cone with two scoop, he eats one scoop, and all of a sudden you take it away give me a break. Theyll never be able to take it back unless the economy zooms, and we can only hope i guess the final analysis, whether this is a good idea or not, is that everybody defending it is talking about fiscal stimulus needed. Lets look at that why havent we done any fiscal stimulus probably because congress was in impeachment mode forever and you cant be building bridges and people may get infected. Let me think have i missed anything morgan, back to you. Rick santelli, thank you. Robinhood is down again. Kate rooney has that story from one market kate hey, morgan robin has seen its second day of major outages, leaving clients unable to trade the market swings the technical issues started monday morning and through the close yesterday, equities, crypto and options trading down right now as well as email support. They were last valued at 7. 8 billion. The company late last night saying they were up and running, but by this morning tweeting theyre still experiencing down time users are not holding back on twitter and some very colorful commentary and complaints. Many of its 10 million users claiming that plan to leave the platform, others threatening a Class Action Lawsuit one user was stuck in a short position against the s p hes watching as those losses balloon. The legal implications are unclear at this point. Robinhood users agreement is 44 pages. Theres a line here on page 15 that says robin hood does not warrant that these channels will be available and error free every minute of the day. Some legal analysts tell me finra and the s. E. C. Require robin hood to have a backup plan in the event of a Natural Disaster or outage like this a former s. E. C. Official says this raises red flags for regulators the s. E. C. Declines to comment a risky position to be in if youre a platform named after a vigilante. Bob pisani and mike santoli join us at post 9 lots of Market Action to talk about, guys. Bob, first of all that robin hood thing, come on. The second day of that is the problem. Well have the sec stek ta. E. C. About it the structure itself has held up well hopefully well get an update in a couple minutes we had two votes by investors on the s. E. C. s announcement today. We had the initial vote by everyone who said, oh, yeah, s. E. C. Getting a head of the curve, excuse me, the fed getting a head of the curve, thats great idea. Initially market moved up. We had the other crowd come in after that saying this looks like they wasted bullets needlessly or that theyre showing excessive concern and panic. We saw some consumer names move up initially on this, home depot and nike, but a lot of stuff that would have been affected by the Global Economy and by the coronavirus never moved. Industrials never moved. Banks never moved. The travel stocks never moved. Right now the crowd saying they wasted their bullets is winning, but stick around another hour. Maybe that cl change what did mover rates. We saw them go higher, now lower. Pressure on the ten. Is that pulling markets down as we speak i think general reaction was we can put this in the books now its difficult to see if were prebared for whatever the news flow is right now on one side you have the criticism theyre wasting ammunition without really knowing what theyre shooting at on the other side, they must know something is really bad and theyre rushing to catch up to it i think the lack of clarity just about the economic pace right now and the likely impact of all these measures being taken is whats weighing on the markets you know what is weighing on the markets . Up 4. 5 yesterday and thats a kind of agitated market, very twitchy, and when you have one of these big rebounds off of a very sharp correction, its just a little bit fragile this was what got said after our first 3 move, they tend not to come in singles or dibbles. Once they start, they come to come in big clugs sters. Look at exxon a rate cut you would think would stimulate demand in some way and that might help consumption and certainly demand for gasoline, for example. So you would think exxon might move little on that. There was no reaction at all in any of the Energy Stocks there was no reaction in the industrials. I think its more important to watch the Energy Stocks there because implicitly you think this would have a demand difference the market is saying its not going to have that much impact that i think is a very interesting way to look at it. Industrials you can argue, well, it wont solve the problem theyll still see demand reduction because of coronavirus but you would think there would be stimulus effects on the Energy Stocks from the fed and theyre not. Traded from, what, 33. 90 at the highs down to 28. 5 thats your range of things are perfect to were really back to where we were last summer. Youre kind of knocking around in the middle of that not being sure what to make of the latest move in the bond market and the rest of it its very hard to extrapolate from here and to infer a very clear message from what the market is struggling with right now. Maybe it does seem like it was clumsy timing. On whose part because we were only down from the highest levels in the history of the world more short term tactically. You didnt do it friday. People thought youd do it over the weekend. You didnt maybe yesterdays rally and you didnt have to do it i think the stat nick that meict message is a secondary factor, but its hard to necessarily say heres exactly what the market is upset with. I have to ask again about super tuesday because cant forget, it is super tuesday. Weve been talking for weeks if not months about how much clarity there is going to be politically after we see not just who wins but by how much. How much of a reaction for the rest of the week, mike, should we expect based on i dont know at this point whether a Bernie Sanders win, the market likes, because they think trump could beat him or a joe biden win, the market likes because i dont know because, you know, the most market unfriendly option is off the table. Exactly hard to tease that apart. Yesterdays rally was an amazing rorschach test because you had people say it was moderates consolidating behind biden that was part of what the rally was. Literally i had people telling me at the end of the day then you had other folks saying its expectations of whats going on with the fed or its just we had mega oversold conditions and the rubber band was pulled so tight it snapped back i think its hard to tease all of this out. What i see, just watch the markets, stop having your own opinion. Watch. The market moved on the fed today. Obviously the market is making some kind of bet on whether its the right timing or not. The market moved as soon as coronavirus headlines got really serious. Its hard for me to say, aha, the market moved when sanders won in vermont dramatically. We could see an upswing. I can point it to you on coronavirus and the fed. Its really diffuse when you start dealing with the political issues thats the only fair way to say it the president is talking to the National Association of counties today, their legislative conference he said he would be going to tennessee on friday in the wake of the deadly tornadoes. A busy week for the president on that front he talked about the fed move take a listen. Do it a little bit more you want to be competitive with these other countries. They have lower rates because their feds, their currencies are cut to a level and their rate is cut. They play with their currency, they play with the value of their currencies and we dont do that we dont do that we have a different kind of a theory going, and it really puts us at and i dont say necessarily to do it, but we have to be competitive with other countries. When were paying two points more than germany or more than other countries, we should be paying less than everybody else. We have the dollar we have the strength we have the greatest country on earth. We should be paying less so the federate is too high. Its very simple its too high. It puts us at a competitive disadvantage, especially when it comes to exporting our product to other countries the other countries love that. I dont like it at all so i v vd like to see our feld lead rather than being led not a single mention of the coronavirus in that statement. You could have run that sound bite a year ago. It will probably remain a steady metsssage from that side the dollar is down is he using the virus as an excuse he wanted zero or negative before the virus whether the president wants it or it works tosay this economy could be running hotter under other terms, that seem s to be the message. On this rate cut today, the dollar has come down, and if you talk to people in the currency market, because we have room to further ease, we still have positive rates, that actually creates downside possibility for the dollar if thats really what youre worried about still a long day ahead. Bob, mike, than you. Lets get over to diana olick who has a check on rates and how the feds move is hitting the big Home Builders right now. Stocks of the big builders jumped on the rate cut and theyre Still Holding mostly in the green. The Home Building etf is off the session high but up about 5 week to date, on pace for its best week since june 7th and out of correction territory led by lennar, pul tte, horton the drop by the central bank is a result of high volatility in the markets and concern that the coronavirus will impact the economy. That will keep investors in the bond market. Were seeing yields lower, hence driving everything in the mortgage world lower the average rate on a 30year fixed hit 3. 13 on monday, matching its record low mortgage refis are surging on the news, but there are big question marks for the spring Housing Market buyers could pull back if theyre worried about the market and their jobs the S P Real Estate sector is in the green. Thats made up of reets, which are a lowyield play diana olick, thank you. Also with us now, first for his take on the Market Reaction is ed yardeni thanks for joining us by phone right now. Want your reaction both to this cut by the fed today and also the pretty wild swings were seeing in the stock market in response absolutely. I dont think anybodys really surprised by what the fed did. It would have been very disappointing if they did 25 basis points i would not have been surprised if they did 100 basis points so, as a matter of fact, i wrote that up on monday. I was half right we got 50 basis points this is all signaled by Jerome Powell on friday when he issued a statement saying the fed would do whatever is necessary to help the economy overcome the coronavirus. And the bond markets been anticipating that the fed would do exactly what they have done so theres kind of sell on the news going on here, a little built bit of recognition that theres nothing the fed can do love to cure us of this virus plague that seems to be spreading around the world and i think its got on the point where a lot of us have come to conclude that will have i mean, enough already the fed cant control everything by i wish we had more time today. Appreciate that very much. Pleasure. We will talk to you soon. The selloff here obviously still in place the dow is down 4 2. The feds rate cut got some support from the former council of economic advisors chair he said you should judge this move by the success on the bond market the Interest Rate on the ten year note is south of 103. Jason fuhrman joins us on the phone. Good to talk to you as well. Good to be here you still feel good about this i mean, i dont think there is a whole lot the fed kd do but this is certainly on the plus side the ledger, what they did today. They surprised on the upside thats why you are seeing a weaker dollar. Thats why you are seeing Interest Rates down. Those are the things that matter the most in the economy. They cant stop a recession if supply chains completely freeze up, but they can, you know, do what they can do, and thats what they have done today. And indicated they will continue to do if they need to. Yeah. He even said, cuts will not reduce the rate of infection it wont fix a broken supply chain. What do you think happened between powells statement on friday and 10 00 this morning . Was it a accepsense that fiscal policy was going to be stubborn to come to fruition. Yeah. Was he briefed by Health Officials . What do you think happened we are justlearning more every day. I was never worried about displays chain disruptions in china coming down the [ no audio ] and rhode island and new york, around the country is just its just growing. And this is exponential. Thats the way Something Like this works and each day, we are learning more i know could he have acted on friday sure does it matter that he took two extra days not at all. Jason, i want to get your thoughts, given the fact we are seeing these massive swing in the market, if you are, you know, somebody who is not day trading not paying attention to the margaret every day but is invested in the market you are tuning in now, seeing this do cuts by the fed actually help to quell your fears and help i guess support or sustain household confidence when seeing 700plus moves in the dow in the course of a couple of minutes. I think this is less about confidence and more about, you know, the actual you know, what the Interest Rate is, what the value of the dollar is what that will mean for, you know, american exports, for, you know, borrowing in america, mortgages and the like i think confidence here matters, too. Its just you know, its hard you know, 24 hours from now people are going to forget this move pie the fed and be focused on whatever the latest case of coronavirus that they are hearing about is their confidence on this only lasts so long in terms of most investors. I would just sleep easy, try not to watch cnbc, and check what is happening to your stocks on any given day. Hey i am just kidding of course watch cnbc, just dont trade every minute based on it for most investments. We are okay with that okay with that more information is better than none jason, thank you, again. We will talk to you soon bob pisani is here at post 9 with the s. E. C. Director of trading and markets Brett Redfern. The crazy market volatility put unprecedented stress on the u. S. Trading system. Friday saw the largest Trading Volume for u. S. Equities in history. Almost three times normal levels that kind of frayeding volume catches the attention. S. E. C. Joined now by Brett Redfern director of trading and markets for the s. E. C. He has been monitoring all of the Trading Volumes to make sure the system is running smoothly thank you for joining us how is the u. S. System holding up whats the verdict we have seen extraordinary market activity. You mentioned the high volume we saw friday i think one thing we look at closely is methods traffic we have seen that in some cases dully doubling i will tell you our markets have held up very well. They have been orderly they are functioning very well we have seen very few technical glitches, few system glitches. Our systems are ibt anding resilientsy and integrity. In the past we have had systems come down. Is thering in new the s. E. C. Or the he can changes are doing to have more robust connectivity, less issues . Thats a good question. We all remember time in the past when we saw more out ans and glitches and thing like that happening. Et cetera impressive that we are not seeing that right now. I think the he can changes have made a significant amount of investment in the infrastructure i would also say the s. E. C. Has put in a number of different rules and other procedures in place systems, compliance and integrity. It says you have to have backup systems, you have to test your systems. You have to make sure your systems are resilient and capable of handling a lot of messy traffic like this. I think those things are helping. Brett, you are in regular touch with Government Agencies, you meet with them to discuss market traffic and whats going on with the fed and other Government Agencies out there, with treasury. Can you characterize your meetings in the last week with them what have you been discussing . What have they been telling you. I think it is important to point out we talk on a frequent basis, to the fed, to treasury, with other regulators of Financial Markets. I would say those meetings definitely picked up in the last week because, you know, we are seeing a lot of thing. What we try to do is we try to share observations, what are you seeing what are the potential risks that you see that kind of communication and cooperation i think is very helpful. I would say that it is a very good working relationship across the official sector. Leon cooperman who is a frequent guest here was on last week he called for bringing back the uptick rule that went away several years ago. Have you ever looked at this is there a reason why we should consider bringing it back . Is there a position with the s. E. C. Would it do anything if we did bring it back . One thing, bob, we put in place an annual turntive uptick rule it is called short sale rule 201. We have a mechanism in place to make sure that short sellers at a certain point arent sought of pushing the market down. Effectively if the markets drop by 10 then short sellers have to post on the offer side of market that slows them down thats an initiative that was put in place after the financial cries toys help deal with those concerns about short sellers last question, brett. We have had very high volatility, traders come on and complain about a lack of liquidity where the market makes bids and asks tend to dry up in times of high volatility has the s. E. C. Studied this . Is this a real phenomenon . Does it exist . Have anything the s. E. C. Can do about it if it does exist . We do a lot of things in the market we are looking for limit down halts. Self help declarings and also looking for micro bursts of activity that can cause liquidity gaps in the market sometimes that may or may not relate to Market Participants that are out there we are also talking to Market Participants all the time. We are calling banks, exchanges, Market Makers, clearing firms. Thats part of our monitoring effort as well we are not seeing Market Makers pull out of the market the best way to characterize it is to say there is always buyers, there is always sellers, people want to get something done, it is going to get done. Brett redfern director of trading and markets for the s. E. C. Thank you for joining us thank for having me on. Jon, i dont have all, a good grade here tremendous vos, higher Trading Volumes than we have ever seen in history and the systems are holding up very well. [ no audio ] the president s call for the fed to follow europe and cut more rick fed was talking about the greenback, the dollar. He is unhappy with the dollars strength, should and sometimes does correlate with our rates being higher on a relative basis than many of the negative and lower rates in europe and japan and elsewhere. The problem is his logic is that if you are a middle class american here in the borders this country, the stronger this is, the more of all the imports you get to buy you get to buy more foreignmade cars at a cheaper price, cameras, electronics all of that is cheaper when it is going the other way he is talking about is if this gets bigger exports. The multinationals i am not saying there is anything among with multinationals but really it is the benefit of multinationals and those who hold their shares versus middle class and people big thing. I like cheap thing and competitive disadvantage with europe . Who wins we win back to carl, john, and mogan. Wapner has a big show, lazry, rick reiner, scott minor,al layer yad. Lets get to the half. Another volatile day for the market with your money once again front and Center Welcome to the halftime report. I am scott wapner. The committee is here. Jim lebenthal is here along with josh brown, shannon saccocia, mack lazby, the chairman and ceo of the Avenue Capital group. Steve liesman, our senior economics reporter all over todays move from the fed. From new york, rick reader, black rocks cio o