Transcripts For FBC Mornings With Maria Bartiromo 20240714

Wall street Global Economy editor Jon Hilsenrath. Great to see you guys. We have a lot coming up. James carafano. Mohamed on the economy and markets, former pennsylvania governor on 2020 race and policy director Peter Navarro joins us talking trade, markets and the fed, dont miss a moment of it, big 3 hours, markets have a firmer tone, mix trading dayiest, we are waiting on crucial speech this morning from Federal Reserve jay powell, the central bank chief addressing commentary policy and future rate cuts, we have Jon Hilsenrath to tell us what youre expecting, jon. Jon itll be hard for powell to go on a limb, theres a lot of Division Within the fed itself. We talk about the pressure that powell is under from President Trump. President trump wants him to cut rates, theres some he is attendance as we reported earlier this week about half of the Regional Bank president s, one eager to move rates down at the last meeting, powell has to set the table carefully. You had exclusive and fantastic interview with yellen last week. Do they talk in terms of what hes doing . Jon i dont think he wants to be stepping on his feet, i think she feels like she dodged a bullet. Maria i bet. Jon powell is in so much pressure right now. One of the most Important Message that is came out of the interview, its not going into recession, theres a worry about downturn. She thinks theres enough confidence in the consumer. Maria what do you think about that . I think powell doesnt do as much as he probably should, one to have reasons that they are having problems with cutting rates, they still dont see 2008 raise rates as potential mistake cutting rates would be easy, right now they are talking why the economy why cutting rates if the economy is doing well. He didnt have to raise rates if there was no inflation. Thats the frainling issue that framing issue that theyre having. Maria you have to allocate capital, how do you see that and impact on markets . Two authorities, its disappointing that we place so much emphasis on what an organization that gets it right 50 of the time is going to do, look, at tend of the day these are just human beings with a crystal ball that is no clearer than anyone elses but we keep thinking like the wizard of oz, they can look into the future, if you ask powell, off the record, do you know whats going to happen, he will say i have no idea. To trustees people then to determine what to do with rates in the absence of zero knowledge, 100 of whats going to happen in the future is disappointing. I wish the fed would go away. I think the position of the fed is a challenging one, they have huge impact but zero credibility. Jon what would you put in his place . The market, the market determines bond rates. Jon theres a money supply out there, someone has to used to be tied to gold, it was all fixed. You have the fed determine the levers on the economy is silly. You cant do it, they missed the housing crisis. Jon i think people overstate how much the fed is influencing here, Interest Rates shouldnt be free market, the vast majority of Interest Rates are controlled by the free market, bond yields, Mortgage Rates, credit card rates all driven why couldnt you do it by algorithm what they do . They tried to manage like algorithm. Maria when the economy plummets, whose fault is it, the machine . Its like asking how is the baby without the maria yeah. Jon take 10dollar bill note on it, somebody has to manage what did we do before the fed . There was Gold Standard and that didnt go very well. We had recessions every 3 to 4 years in the 1800. They were cured quickly because the government stayed back out of it. Now you have ongoing, the fed manipulating, raising too much and raising too little. Maria yesterday liz peek told thaws the consumer Balance Sheet is up 26 trillion since 2008. Thats what we are talking about in terms of the backdrop here. Jon in terms of wealth. Maria right. I have to get to tax cuts and potential of it, first hauwei, resisting pressure, Chinese Telecom giant says its prepare today withstand u. S. Trade distinctions as it introduces ai chip, new ai chip from hauwei is only going to get the people who already think hauwei as National Security risk even more nervous about hauwei having this ai chip. Any thoughts . Well, i think ai chip from any credible chip manufacturer is something that for them to maintain relevance in marketplace they will have to come up. But i think all of that, the fact that they are coming up with a chip, i dont know if that really that really pans out. All right, we have been debating tax cuts all week, President Trump backtracking on the idea of more cuts earlier this week but then white house economy adviser larry kudlow told fox business something entirely different, watch this. You might see tax cuts 2. 0 which would drive additional tax relief and create tax incentives for middleclass folks, bluecollar workers, small businesses, additional incentives, additional tax cuts and you might see that during the campaign, to be perfectly honest. Maria my first question is why did President Trump backtrack that he was considered a payroll tax, indexing Capital Gains tax and now why larry kudlow talk about it happening throughout the campaign. An effort to move economy away from recession, they are placing out. Having said that a payroll tax cut is actually worthwhile considering because it has direct impact on consumption. So if we get into a situation where the economy is slowing down much faster than what all of us expected today, a payroll tax cut can have a meaningful impact immediately. The one way to think about the payroll tax is undoing some of the tariffs that are getting imposed which are effectively a tax on the consumer because they have to pay high crisis for foods. Maria why not stop the tariffs on china . I put that in different category because of National Security issues. Jon theres a lot of politics at play, republicans know that democrats will not go against and if they can frame its tax cut for the middle class. If democrats want want to spend more money and if republicans want to do it they will lower taxes. I think he pulled back because of political reasons, dont play that card right now, wait, play that card later and by the way, you can also throw in china tariffs are resolved right before the election. Jon theres a challenge which there arent a lot of tools in washington to deal with downturn if it happens. You know, weve got trillion dollar deficits staring in our face right now with 3 growth, or something near it. We will be talking in downturn scenario with fiscal stimulus, 2 trillion, how is this country prepare today let them get. Maria thats the danger of being so reliant on rates being at rockbottom levels, where do you go from here . Look at germany and look where the 10year is, quick break, we are looking at all of that today, hong kong protestors ready to get back on the streets, youtube takes down channels over misinformation details, we will take you there. The overstock. Com ceo shedding more light with the russian interference investigation, hes actually a government informant he says. Their bearnaise sauce here is the best in town. [ soft piano music playing ] mm, uh, what do you do for fun . Not this. Oh, what am i into . Mostly progressives name your price tool. Helps people find Coverage Options based on their budget. Flo has it, i want it, its a whole thing, and shes right there. Yeah, shes my ride. This dates lame. He has pics of you on his phone. Theyre very tasteful. 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Cheryl good morning, brazil, brflian president blaming fires on environmental groups, the groups blaming support for farmers using land for pasture, accused french president Emmanuel Macron as political gain as macron called International Crisis that was on twitter, forest produces 20 of the worlds oxygen, it may have seen more than 74,000 fire this is year alone. 737 max jets are moving towards a return to service. The stock was 4 after reports of faa conducted certification flight for the jet in 4 to 6 weeks. We are seeing little bit of boost this morning in premarket as you can see up just a fraction there. Well, never been shy about controversy, to sign as ceo of overstock. Com, he had an affair with russian spy and references to men in black, deep state and espionage, he followed that yesterday by saying he was becoming a distraction to company and allowing in bold and bears said he received fishy orders from former fbi official peter strzok. I figured out who sent me the requests, it was peter strzok, three officials, ive identified them to the to law enforcement, i believe theres a massive federal that is going to turn up that there was political espionage conducted through a number of different venues against Hillary Clinton and against rubio cruz and trump. I know for a fact, i know other people who were involved. It was my honor to help the men in black then and it was just the third time they came to me and i got some requests, i dont know who the hell it came from but it was fishy and 3 years im watching television and realize who it was, peter strzok and andy mccabe. Cheryl taking a look at the is to be, shares of overstock jumped 8 on the news that byrne was resigning, it was quite an interview. Maria yeah, i saw the interview, incredible, the more you peel back the onion on the corruption is incredible. Thank you so much. We have jay powell speaking, i had you had bullish stance on the market. Yes, we do, the reason for that is our thesis of going into 2019 was very simple, growth is moderating, moderating on a global basis but at the same time theres probably going to be more policy support in 2019 than was the case in 2018 and thats how things are playing out. Maria i want to talk about the backdrop of earnings, going to Fourth Quarter soon, we will take a short, gas fell short, secondquarter earnings missed expectation, what the ceo is saying there about backdrop, keep your pups close, the new study proving that many have been saying all along dogs are good for you health, yes, we agree. Back in a minute we all feel, we all love, we all cry. Its part of being human. Sonoma county declared a homeless emergency in 2018. You have to know the individuals youre serving to understand their needs. Working with ibm watson we can bring together data spread across dozens of departments. That gives us a fuller view of the people we serve. Dear tech, dear tech, we need to look after everyone in our community. And we want to help our fellow human beings. But how do i know if im im getting a good deal . I tell truecar my zip and which car i want and truecar shows the range of prices people in my area actually paid for the same car so i know if im getting a great price. This is how car buying was always meant to be. This is truecar. Maria welcome back, futures up this morning after fixed trading yesterday, dow futures up 78, s p 9 and nasdaq up 35, investors are waiting to hear what Federal Reserve chair jay powell in wyoming, he will speak at i believe 10 00 a. M. , 10 00 a. M. Jay powell today . Jon sounds right. Maria i think its 10 00 a. M. Market ceo and founder daniel hughes, great to see you. Great to see you, maria. Maria what would be a positive speech today . I think what they want to hear from powell is that the u. S. Markets are doing better, that the u. S. Economy is doing well and that globally we will try to hold off any kind of global contagent. We are shooting up bullets and perhaps hold up until later. Maria the president has said i want a 1point rate cut over time, what would be realistic, 50 basis points, what do you think . Jon the fed tend not to move in big steps unless they think theres a crisis happening, as long as they are convinced the economy is doing okay i think youre more likely to get a quarter point than half a point. Maria quarter point, look at you are noting your head. I think given the situation and the fed itself, given the agent of attention they have, expecting 50 basis points is very unrealistic, i think he has to carry the whole committee, so 25 basis points is probably the best expectation you can have, and will probably get it if youre lucky. Jon that probably annoys the president that powell has to be focused on building consensus from the group and the president wants strong leadership and in his mind he wants powell saying, this is what we are going. Thats now how the fed works. [laughter] the fed is always late to the game, last element to do something when it comes to some kind of stress in the market, yeah. Maria what about rates, why do you think we are seeing the situation with the 10year, 2year and 10year curve inverted yesterday. Almost 17 trillion in zero or negative Interest Rate environment and that may even hit the u. S. As well. I think its a big concern but theres a lot of worry and thats why we are seeing that, we will see that in the u. S. , we will certainly see it in developed europe and i think theres more of that to come. What about profits, we all know that rates are low and probably going lower, show the profit picture holding up for american companies, we know growth is slowing, sit happening on profit . Profits are still down thats because of taxrelated high that we had last year in 20172018. Having said that relative to expectations profits are probably doing better than people were expecting. I have a question for danielle, if someone gave you a thousand dollars or a Million Dollars where would you put it . If youre give get away money i would like to have some too. Thats a great question, i would like to look at sectors and markets that are really beaten up, i want to see a dumpsterdiver right now, im looking in europe, im looking certainly in the u. S. , semiconductor market, theres a lot of places where you can put money to work but you have to look at stocks that really are not being appreciated by the rest jon whats the rationale for europe, its beaten up and sign that things are turning around . Eventually you have markets turned and you want to be playing globally, imagine the game of twister, we are so intertwined with the rest of the companies in the world so we need to be playing in other areas rather than the u. S. Even the u. S. Is outperforming to the rest of the world since the global crisis. Maria gary, real quick, do you agree with any of this. Danny makes a good point, the u. S. Consumer which is driving our economy outweigh the rest of the world, which is heavier on the scale. Maria good way to put it. We got good numbers yesterday and this week on on retail, so that has to tell you something. The power of the pocketbook and also credit in the u. S. Is booming. Maria short break. Hong kong unrest, massive protests expected again this week as youtube is removing videos over misinformation, some of that misinformation coming from china, retail earnings in focus, other retailers are seeing success, what the ceo says is to blame, back in a minute. So chantix can help you quit slow turkey. Rkey. Along with support, chantix is proven to help you quit. With chantix you can keep smoking at first and ease into quitting so when the day arrives, youll be more ready to kiss cigarettes goodbye. When you try to quit smoking, with or without chantix, you may have nicotine withdrawal symptoms. Stop chantix and get help right away if you have changes in behavior or thinking, aggression, hostility, depressed mood, suicidal thoughts or actions, seizures, new or worse heart or blood vessel problems, sleepwalking, or lifethreatening allergic and skin reactions. Decrease alcohol use. Use caution driving or operating machinery. Tell your doctor if youve had Mental Health problems. The most common side effect is nausea. Talk to your doctor about chantix. Maria welcome back, friday august 23rd, we are on countdown mode for jay powell, the world is wait to go see what the fed chair is saying at 10 00 a. M. Eastern in speech, what to expect, what it means for markets coming up. Right now markets are showing a higher open if for broader average, futures indicating gain of 75 points and nasdaq futures up higher by 34, bumpy day yesterday, the dow closed higher for second day in a row but majors were weaker, following inversion of 2year and 10year yield, globe markets this morning look like this, european indices higher across the board, dax up 40 points. In asia overnight mostly green, trade tensions between south korea and japan grow, we have another Interest Rate cut, sri lanka cutting deposit rates from 7 to 7 and a half percent. Hong kong braces for more protests, this as google removes Youtube Video claims the Chinese Government is post to go undermine protestors. Tough times for gap, clothing retailer seeing decline in demand for all of its brands, ceo blaming, quote, challenging environment, plus more reasons to have your dog in your life, new Study Reveals there are Health Benefits to having a furry friend, first top story this half an hour, two u. S. Army green berets killed in combat, they have been identified, Master Sergeant luis de leon, pushing u. S. Troops killed in afghanistan now to 14 this year. The more since 2014, joining me right now Vice President for National Security and Foreign Policy at the heritage foundation, Lieutenant Colonel james carafano. Maria reaction to whats taking place in afghanistan, the president talked a lot about bringing increasing numbers home, troops home, what do you think about whats taking place today. Tough up with, the president s job is to look forward and say what are American Interest and best way to protect them, not one soldier shouldnt put their life in place, security in afghanistan is very important. Taliban is 30 of the country, in 9 11 they controlled 70 of the country, its a much more stable thing, stability is important, its important for any strategic partner, its a tough challenge and they didnt come out with a decision, i think thats really kind of very interesting, i think a lot of us are skeptical that the deal with the taliban, allow the United States to withdraw significant presence as not gurantor. Maria the president is getting pushback from lindsey graham, jack king, if you bring the troops itll be another iraq, another opening for other terrorists to come in . Well, i think thats a real challenge for the for going down that direction because the u. S. Will not have a presence in the country, how will we sustain the Afghan Security forces to protect the government, how do we continue to ensure that women and children that their progress keeps there. The american lifeline is gurantaor, theres no safety net, lets say you do that, year and a half to the election if afghanistan melts down the way it did for iraq did for obama, obama wasnt up for reelection, trump was, this could getting usually, meltdown in afghanistan could look like saigon in 75 and that would not be a good picture. Maria city bracing for more demonstrations, airport was forced to close multiple times as you know as protestors staged a sitin, we know this google is admitting that it disabled more than 200 channels on youtube, they did that this week after the Company Learned that they were tied to misinformation about the protest, apparently china is putting this information about the protest that america is behind it, all this other stuff, whats your take on what this represents . Well, first of all smart for google and facebook to not only fight chinese misinformation and let people know that they are doing that helps credibility and legitimacy, basically the situation in hong kong is unchanged. Look, the government of china is happy to see hong kong taking town a page or two, they would like to see honing tong as unstable place to do business, business move to mainland, i think they are happy to see continue, theres sign that it is going to mainland, i think we are in for a status quo that goes on for some time, im not sure what tend game what the end game but i dont see military intervention at this point. Maria if there were military intervention, the u. S. Has made it clear that it is a basically no deal on trade if, in fact, the chinese come in, the president said that, go ahead. I think the u. S. Government has been very smart. Look, they have let china know if you intervene military you will pay a price. Maria exactly. The point is they will pay a price. Meanwhile the president is headed to g7, President Trump, 6 other world leaders, used to g. I think this is reality tv worth watching, a lot of fireworks, he will try to convince them on iran, they will not want to do that, they will talk about brexit in the background, likely on letting russia back in, i dont think that will happen. Lots of fireworks, i think this will be real good geo political theater. Maria great to see you, thank you so much, take good care, colonel, what do you think about brexit because this is probably the most important things for markets right now, dont you agree . Absolutely, i think a Nodeal Brexit would be quite bad not just for the uk but the european economy as well. Boris johnson said hes taking them out by the end of october . If i were trying to negotiate a better deal thats what i would say too but i think that theres enough pressure on him from businesses in europe to kind of be far more methodical and thoughtful about it because not only would it create a problem economically that will complicate situations meaningfully as well. We were talking about investing in europe in light of the risk of brexit, would you be putting money into europe right now . If youre investing money in europe its driven by very cheap valuations relative to anywhere else in the world. So, yes, the answer is yes but where things can come back. Maria i supported a couple of times, when kristin lagard before she gets there, she will be buying equities, ecb buys european equities . Its hard to say nothing could happen right now, the japanese did it but, i mean, it seems like a stretch but who the heck knows the japanese didnt have the germans, right . Maria anywhere to go on bonds, right . So maybe thats another stimulus, so we will see about that. Meanwhile theres this, Hawaiian Airline flight forced to make Emergency Landing when smoke fills the cabin, cheryl on headlines. Cheryl pilot declared information, emergency slides were deployed when the plane got on the ground, inbound from oakland, california, 7 passengers taken to hospital for smoke inhalation, faa will launch an investigation into incident. Old Navy Division was the problem, comparable sales at old navy are being spun off fell by 5 overall gap earnings per share coming up better than expected, company ceo says, quote, we are operating in a challenging environment. And the great news, maria, for dog owners, new study published by the mayo clinic, more likely dog owners to have healthier hearts, pup participants are more likely to exercise because you know what, you to take the dog out for a walk, i mean, all of my friends that have dogs are so fit and trim. Maria you have to run around with the dog, love it. Thank you, cheryl. Coming up countdown to jay powell, the world is watching to see what the Federal Reserve says 10 00 a. M. Eastern, jake powell takes the podium then, we will find out what is in the speech beforehand, what it means for marketing coming up, new conversation of monopoly, get this, its all about socialism, the internets response to monopoly socialism, plus we are looking at whats moving this morning, macys is lower and downgrade, take a look, good earnings, up 7 and hewlettpackard under pressure after the ceo steps down, back in a moment. Maria headlines across america for you, the sacramento reports light rail trains collided in North Sacramento injuring 27 passengers, likely the crash could affect this mornings commute, blue line train crashed into a test train last night about a mile from where the tracks crossed under interstate 80 and into sacramento city, that is the cause is still under investigation, the Chicago Tribune writes minimum pay for teachers ramp up to 40,000 in measure, governor says it is aimed at easing teacher shortages, the salary bump happening for 2023 school year, more teachers in the classroom, School Districts pay fulltime educator at least 23,000, the Houston Chronical this morning reporting north texas home has a racetrack in backyard and 6car garage but only 449,000, if you love nascar this house is for you, located about 4 hours north of houston, the home checks in at nearly 1800 square feet including 2 bedrooms and 3 and a half baths but the price, fullscale 1. 7mile racetrack right out the back door. Oh, god, big show this week, certainly a lot happening, take a look at the weeks moments from the program. Is there a real Downside Risk if the president doesnt do a deal with china . How would you get them to agree on bigticket items like intellectual property . First of all, theres very little point on making the deal if it cant be enforced. Maybe more important to make sure that its verifiable and enforceable. A deal with china over trade intellectual property to how the protestors are treated in hong kong. Maria that was significant. That is very significant. One more step if they would say there would be consequences if you chose violence and do not respect the peaceful protests and the United States will lead the world in sanctioning you for it. I am someone who thinks that we have to worry about what is happening in the world marketplace and our workers need to play in a level Playing Field and someone had to take china on and the president has, i dont always agree wit and the way hes doing it but we are doing it. President trump has been enormously supportive of the state of israel in the 2 and a half plus years hes been president. But in these comments that hes made in the last couple of weeks, including the last couple of days i dont think hes been helpful to israel because he puts american support for israel in a partisan context and the best thing about the relationship between the u. S. And israel is that it has been bipartisan. While the economy is the number one issue, its a gut feeling, people have to feel like the economy similar proving or not improving or feel like its not going in the right direction, are you putting more money away, are you saving for that vacation, did you buy the extra, you know, the blender, the appliance, the tv, that is largely a gut feeling, do you feel secure in where the economy is heading right now . More and more board games are coming out, huge renaissance, boom, board game cafes like the one i opened up are popping up in the country. People are looking for a way to inplug themselves, their kids, their family, unplug your game. Full debate and they are saying, you can saves 80,000 a year if you keep the home between 78 and 85degrees during the day, now, obviously in the summer months that can be challenging. Frightening stuff that the government is telling you what temperature, well, you have to have your thermostat at this or that. Maria some neighbors think the emojis are meant to mock them because they reported the home owner for illegal shortterm rentals back in may. [laughter] maria i can understand neighbors saying, okay, what about this hot pink emoji house. [laughter] maria funny. Cheryl the average 401 k balance also increased, get this, 106,000, up 2 , i leave when i can say it is safe to see your 401 k this morning. Maria first thing i did when i started working get 401 k . I think im almost at a million by the way after 25 years. [laughter] introducing the allnew chevy silverado. With fifty industryfirsts. Its the strongest, most advanced silverado ever. But how do i know if im im getting a good deal . I tell truecar my zip and which car i want and truecar shows the range of prices people in my area actually paid for the same car so i know if im getting a great price. This is how car buying was always meant to be. This is truecar. To the wait did frowe just winners. 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Ends saturday maria according to tweet from editorinchief of the english chinese paper, global times, futures are off of the highs, take a look, gain of 34 points, s p up 5 and a quarter and nasdaq up 19 and a half, so we are waiting to see what that may look like, retaliatory tariffs on u. S. Products. Meanwhile a socialism themed Monopoly Game hitting store shelfs lighting up controversy on social media, parody game, winning for capitalists offers players chance to contribute to Community Projects instead of buying properties and when you pass go, collect 50dollar living wage, joining us right now president of the florida base law firm tripp scott and ed, great to see you, thank you so much for coming. This is amazing to me but what youre hearing this election season is a little socialism versus capitalism in terms to have programs that we are hearing about in policies, whats your reaction . You know, look, in florida we are sitting here in florida sunshine but we are in the freest state in the country, our economy is booming and all about essentially two decade of state conservatorship. Enjoying bluestate refugees coming down from new york, connecticut and other areas to enjoy not just the sunshine but true capitalism and being free to pursue opportunities here in ft. Lauderdale and south florida and floured generally. Hey, ed, gary smith, im also in florida up in new york just for the day, i have to say im a little worrisome, we almost elected a democratic governor and looks like the urban areas of miami, orlando, et cetera, et cetera, in the next election could almost outweigh the right bent of the state, what are your thoughts on that . Well, you know, elections in florida are always historic as you know. Ive been through a couple of them myself in tight race where is the purplest of states, every time when we elect a governor it comes out by the slimmest of margins, this time we elected a good conservative in ron desantis who has led the state and by the way hes at 60 plus approval rate but addressing issues like we had the tide issues, red tide, some environmental issues, so reaching across the aisle and dealing with issues that are important to florida because after all, clean water, clean air are important to both conservatives and liberals in florida, look, i think thats important but i do think that the right issues, so i will give you one example, School Choice issues, we have a robust School Choice opportunity in Public School system in florida. That has actually helped, in fact, the last election when ron desantis won, he took 18 of africanamerican women, big number against andrew gillum. Maria residents in new york are flee to go florida, you wrote oped earlier this year for miami herald saying this, floridas low taxes and reasonable Regulatory Environment that attracts businesses here, florida ranks 6 for new business creation, florida balances budget and does so without income tax, new york can keep progressive government, ed, your thoughts on the exodus and do you worry look what happened to parts of texas . Dallas is purple, people started going to texas because they wanted the no income tax and then all of a sudden the population changes to start voting in democrats. So, maria, the same reason why people are attracted to florida i would suggest that they leave their leftleaning politics back in new york so when they come to florida they vote conservative. Maria yeah, good point, ed, great to see you, come back soon. Thank you. Thank you. Stay with us. But, uh. Whats up with your. Partner . Not again. Limu thats your reflection. Only pay for what you need. Liberty, liberty, liberty, liberty. Or. That you cant be both inside and outside. Most people havent driven a lincoln. Its the final days of the lincoln summer invitation event. Right now get 0 apr on all lincoln vehicles plus no payments for up to 90 days. Only at your lincoln dealer. Who used expedia to book the Vacation Rental which led to the discovery that sometimes a little down time can lift you right up. Expedia. Everything you need to go. Maria welcome back. Good friday morning, everybody. Thanks so much for joining us. Im maria bartiromo. It is friday, august 23rd. Your top stories right now. We are on countdown road to jay powell. The world is watching to see if he says anything about another Interest Rate cut, his speech is happening at 10 00 a. M. Eastern in jackson hole this morning. Futures are off of the highs this morning, dow futures up 45 points, s p up 6 and nasdaq up 23. Moments ago, the editor in chief of the english language chinese paper, the global times, tweeted what that beijing will soon unveil a plan to impose retaliatory tariffs on certain u. S. Products. The media follows what the government says so this is coming from beijing. This follows a bumpy day yesterday for stocks. The dow ended higher for a second day in a row but the other majors were weaker. The s p and nasdaq lower following another inversion of the two year an 10 year yields. European indices are higher across the board, fq100 up 45, dax up 25. In asia markets mostly higher. The kospi was down slightly. Trade tensions between south korea and japan continuing to grow. We have another rate cut overnight from sri lanka. The central bank there cutting rates by 50 basis points. They also lowered the standing deposit rate to 7 from 7. 5 . Hong kong is bracing for more protests. Multiple large demonstrations are expected today and throughout the weekend. We will have a live report in hong kong coming up. And then fighting annoying robocalls, Telecom Giants and lawmakers are coming together to combat the growing problem. Well tell you where that stands. The fast food wars getting spiceyer. Find out what mcdonalds is doing to deliver a blow to popeye and wendys. Our top story this hour, markets are eyeing the fed and waiting to see what we hear from jay powell. Futures are up ahead of his jackson hole speech a later today. Investors will be looking for clarity on future rate cuts and the action plan. The dollar is strengthening today. Take a look. It is higher and worrying some people that its going to cut into earnings later on in the year. Regional president s now speaking out against additional rate cuts, Kansas City Fed president ester george telling fox yesterday that no rate cut is needed citing the strong job market and low unemployment. Many are mirroring those sentiments. Joining us now is mohammed aliyon. Interesting Division Going on at the fed right now. What were seeing is an attempt, its not going to work, but an you attempt to dampen market expectations. The fed is in a loselose situation. What the fed is trying to do is get out of the corner. Theyre not going to but theyre trying. Maria what do you make of what the fed might say today. Where could he go in terms of giving us clarity on whether or not well see more rate cuts. I suspect chairman powell is going to try to he regain policy optionality. He used often fortunate phrase, midcycle adjustment. That was interpreted by the market that were not getting a whole cycle of cuts but just one or two cuts. Thats not what the market wants. You i suspect hes going to walk that back by stressing that the fed is respons responsive, by sg that the fed will look at markets. Hes not going to be specific as to what the fed is going to deliver. Maria hes got to do something because the rest of the world is stimulating. We have more than 35 Central Banks lowering Interest Rates this year, overnight we had another one in the emerging markets, sri lanka lowering its deposit rate, standing deposit rate by 50 basis points. Assess the world for us. Why are we seeing all these Central Banks globally cutting Interest Rates the way they are and explain the impact on the u. S. So for two reasons were seeing that. As someone who looks at whats already priced in by markets, markets are pricing 1,000 basis points of cuts around the world. Two reasons why. One is growth is slowing outside the u. S. And slowing significantly. So l Central Banks are reacting. And two, n no country wants a stronger currency. What do you do when you dont want a stronger currency, you lower Interest Rates. Thats why the dollar is at a high right now, were at a 12month high. Other countries ar are going far than we are in terms of loosening their policies. Maria how worried are you that the strengthening dollar will cut into the economic story here and cut into earnings. The multinationals will see a strong dollar as a real negative. Its a tough question. Our dollar is stronger because the economy is stronger. Maria right. Its a great story as far as why. Correct. So would i rather have a strong dollar and Strong Economy or weak dollar and weak economy. I would rather have a Strong Economy. Whats needed is for other countries to do more, europe in particular. The g7 meeting is an opportunity but global coordination is so low in terms of economic policies. We need europe to do more to stimulate their growth. Maria lets talk europe for a second. Theres a feeling the ecb will be creative and perhaps since they have no wiggle room in terms of lowering rates all that much more from here, buy equities. What do you say . I think theyre more likely o cut negative rates deep into negative territory as absurd as that sounds and more likely to restart the bond purchase program. Going to equities is possible but not likely at this stage. Maria what is the difference in your view with Christine Lagarde coming in . What kind of leadership does she exhibit versus mario draghi once she gets on the wheel. You and know that christine is amazing, that her ability to communicate and influence policies are great. The great hope with christine there, is that while continuing the ecb policy stand, she will be more effective in convincing governments they need to do more. The problem with the ecb is that it is the only game in town when it comes to policies in europe and it can not produce genuine growth. Maria youve got seven leaders meeting this weekend for the g7 meeting and currency has to be part of that conversation, right . You look at where the dollar is, theres also some conversation i was receipting one analyst reporter, from jp morgan, mention sed aed an fx transactix as a way to get the dollar lower. Whats your take. Imagine two l columns. What the g7 should be getting done, trade tensions, currency tensions, iran, south korea, japan, north korea, the list is really long and of course the threat of global recession versus another column, what are they going to collectively agree on. Were not going to get much done. In terms of what to look for, look for what comes out of bilateral meetings. Thats going to be the beat in this. Maria one on one. Its not going to be collective. A transaction tax has been talked about on and off for years. Its not going to happen. Maria do you believe the economy is slowing down in the United States . I know this is the best game in town globally speaking but so far the tariffs dont seem to have had all that big of an impact. Have been better than lowered expectations. So its not this whole yeahness that people are talking about in terms of the economy slowing down. Recession, where are you on this . I dont see a recession unless we get a big policy mistake or we talk ourselves into a recession. If you look at the economic indicators, its hard. But understand that we are a very strong house in the deteriorating global neighborhood. So we are going to import some of the weakness from abroad. We may slow to 2 to 2point 15 growth but were 2. 5 growth but were not going to a recession unless we make a mistake, like if we shut down the government for two to three months. That would be a policy mistake. It would dampen consumption investment immediately. The economy itself and consumer in particular is in a good place. Maria the journal out with an op ed titled 100 year treasury. They argue 5 o 50 or 100 years would reduce financing costs over the long term. The trump treasury can gradually stretch out the average duration of federal debt and reduce the chances of a steep future tax increase. Your reaction . Thats right. Maria like you like this. I like it. Other countries have done it. There are natural buyers of the long bonds and with Interest Rates so low, yes, we should be locking in these he very low Interest Rates. Maria we should be locking in these low Interest Rates and possibly doing something now while the economy is going well. Correct. You know f you were to look at what the u. S. Economy needs and look at the financing and the debt, the best thing right now is an infrastructure program, well targeted, that does two things. Ite enhances the supply side and productivity and gives a boost to dep manned i demand in the rd you can fund it at very low cost. This is the need here. Maria they cant get anything done. The dems dont want President Trump to have a victory. They cant even agree on usmca. Thats the irony which is both sides have talked about it and both sides agree that its desirable but like you say, its not feasible in this political environment. Maria when they come back in september, the priorities will likely be usmca and what about the china situation. Would it bother you as an investor, an adviser on economic issues, if the u. S. Does not do a deal with china . In my view, i dont see how a deal can get done because of these big ticket items like intellectual property theft and forced transfer of technology and currency manipulation. If i look to the next five to 10 years, we need to deal with this. Enough is enough in terms of an unlevel Playing Field, enough is enough in terms of intellectual property theft, forced transfers of technology, all the unfair subsidies. Over a five to 10 year time period its best for the Global Economy to get a fairer but still he free global system. Maria over the near term . Over the near term theres going to be a cost. Im of the view that these difficult decisions by definition involve shortterm costs but bigger longer term benefits. Maria would you recommend putting money into equities today . Last time you i was here i said look, be ready for volatility because youve got this tradeoff between weakening global fundamentals and hope about policy. Thats still the case. See how we felt over the last month andahalf when weve gone on this roller coaster, that will tell you whether youve got too much in equity. I think if you want to take on more risk youve got to be selective at this stage. Maria selective but do you think well see a big selloff is the bottom line, thats the question. Are we going to see markets react if a china deal doesnt get done, if the economy continues to slow down or would you look for opportunities to get in . Maria, you remember the important distinction. We as an economy are less exposed to weakness from the rest of of the world. But our multiplat rails multilp is more exposed. Are there going to be buying opportunities . Yes. Right now, make sure you have some dry powder available. You can get Good Companies at better prices with the worries about the global recession. Two weeks ago, thats all people were talking about. Maria thats true. Thank you so much for joining us. Coming up, hong kong is bracing for more protests this weekend, demonstrators are targeting the airport as youtube cracked down on misinformation. Then, taking on robocalls, the push to disconnect the annoying interruptions, weve got the strategy coming up. Stay with us. Dont believe me, just watch. Children yeah announcer ride the totally realistic traffic jam. Beep, beep, beep, beep children traffic jam announcer and the worlds first never bump bumper cars. Children never bump announcer its a real savings hootenanny with options that fit your budget. Thats fun for the whole family. Announcer only at progressive par. Maybe an insurance park was a bad idea. Yeah. Yep. 2,000 fence posts. 900 acres. 48 bales. All before lunch, which we caught last saturday. We earn our scars. We wear our work ethic. We work until the works done. And when it is, a few hours of shuteye to rest up for tomorrow, the day well finally get something done. youre smart,eatinally you already knew that. But its also great for finding the perfect used car. Youll see what a fair price is and you can connect with a truecar certified dealer. Now youre even smarter. This is truecar. Maria welcome back. It is just after 7 00 p. M. In the evening in hong kong. The city is gearing up for another round of protests tonight which again could target transportation. Susan lee joins me on the phone, she is in hong kong with more on whats planned this evening. Susan, good evening to you. Reporter we have a human chain link being called for tonight by protesters, similar to what they formed back in the late 1980s, the baltic way as it was called, formed across three countries. Protesters are calling this the hong kong way, hoping for a lot of hong kong citizens to link p arm in arm across the entire hong kong territory. Were in the central heart of hong kong just outside the famous building. Were seeing groups of people come into the section of the city, this is to form across probably most of hong kong, looking for 25 miles to be covered. Hong kong is not a big place. 25 miles would be a pretty significant part of the city and the territory itself. As you mentioned, the transport link, we are expecting a revisit to the hong kong airport on saturday morning. The injunction that has expired today but looks like the Hong Kong Court has extended that injunction, pending that new protests that are expected to take place at the hong kong airport tomorrow. Protesters are looking to disrupt transport. Maria were looking at this human link chain that you just mentioned, this is pretty extraordinary. I think what strikes me is who is on this link chain and its a lot of young people, susan. They are afraid for their futures. Reporter absolutely. Especially when you talk about the end of the one country, two systems, in just 30 years, less than 30 years, 2047. We still have 20 so odd years to go. They feel already their freedoms, their democracy has been slipping away quite quickly under chinese rule. What happens when it goes back to china, one country, one system, how do they fit into this and where are their freedoms and their future headed. Maria its unbelievable. When you look at hong kong, you have to say this is something that china could have been, free, dynamic, International Hub for global business, and yet not so because of different kind of policy, communism. Susan, thank you. Great reporting there the last couple of weeks. Susan leon the ground in hong kong. Now to the investigation into Jeffrey Epstein suicide. Jail workers are facing legal trouble. Cheryl casone with the details. Cheryl 20 jail workers have been subpoenaed as officials investigate why the alleged sex trafficker was lost alone and was left alone and unmonitored in his cell where he ultimately committed suicide. Investigators are trying to recreate what happened on the night epstein was found dead. He was taken off suicide watch 11 days before his death. We now know he signed a will two days before his death. Well, an nb star is awarded the president ial medal of freedom. Bob kussy received the honor from President Trump yesterday. He played for the Boston Celtics from 19 a 5 1950 to 1963. He went on to coach. The allstar told the president , only in america could my story have been told. And now were going to talk about chicken. The chicken wars are heating up. First, popeyes added a chicken sandwich to its menu. Now mcdate o mcdonalds introdua spicey barbecue chicken sandwich and tenders. Its breakfast somewhere. These menus are actually hot sellers for these whether its mcdonalds or burger king or chickfila. Maria last week you did whats the best chicken sandwich. Cheryl i say chickfila. Thats my personal opinion. Maria now home sales out later this morning. What to expect coming up. Then its that time of year, students headed back to school, buying more than just pencils and notebooks. The hot new gear, coming up. Im just ready to ride this chevy. Ride this chevy down a little back road. Get a little close, turn up the radio. Announcer only fidelity offers four zero Expense Ratio index funds directly to investors. And we have zero account fees for brokerage accounts. At fidelity those zeros really add up. Maybe ill win saved by zero theres a company thats talked than me jd power. People 448,134 to be exact. They answered 410 questions in 8 categories about vehicle quality. And when they were done, chevy earned more j. D. Power quality awards across cars, trucks and suvs than any other brand over the last four years. So on behalf of chevrolet, i want to say thank you, real people. Youre welcome. Were gonna need a bigger room. Sleep number 360 smart bed. Can it help keep us asleep . Yes, it senses your movements and automatically adjusts to keep you both comfortable. And now, all beds are on sale save 50 on the sleep number 360 limited Edition Smart bed. Plus free home delivery. Ends saturday. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Maria welcome back. Housing in focus, we are expecting new home Sales Numbers later this morning, around 10 0 a. M. Eastern. Joining us right now is Vining Sparks chief economist, craig dismuke. Do you think the level of Mortgage Rates at this point will be fuel for the Housing Market . Will we start seeing housing pick up as a result of these rock bottom rates or they havent kept up with other rates falling . I hope so. I looked at the 30 year Mortgage Rate yesterday, it was down to 355. The peak for new home sales in late 2017, Mortgage Rates were t 390. Theyre well below where they were at the end of 2017. Home sales are 10 lower than they were then. Theres a lag to that. Were waiting to see if we start to see home sales pick up. But the expectation is that we will see them start to pick up a little bit. Maria we want to get your take on the broad backdrop, the economy right now, also the Federal Reserve. Jay powell is going to speak today, ahead of that highly anticipated speech the two and 10 year yields inverted again yesterday. Clarity on the Interest Rate moves, how do you see it, will the fed address this . They need to. The economy is relatively stable. The consumer is very strong, personal consumption at 4. 3 in the second quarter, Unemployment Rate 3. 7. All the numbers on the consumer are strong. The problem is, even with a Strong Economy, when you have the yield curve invert, it can become causal, not just coincidence. Once you have shorter yield above longer yields, banks lose the incentive to lend, so credit creation slows down. Investors and businesses get anxious. They start slowing spending, slowing investment. If you dont address the yield curve and its allowed to persist out there in an inverted shape, it can trigger its own recession. Investment has already slowed down. We were talking earlier off offcamera whether that is enough to drive a recession. Maria you mean cap ex declining . Business investment. Do you think that is a threat in and of itself . And if not, what else would need to happen to throw the economy off course. You look back at the recessions during the modern fed era. There is precedent for the consumer not actually contracting, consumption contracting and Business Investment causing a recession. I think you would need to see with the consumer as strong as it is today, i think youre going o to need to see the consumer weaken a little bit before Business Investment can tip spite a recession. Business investment, it drags on growth. As long as the consumer is as strong as it is right now, i dont think its sufficient to overcome that. I think wouldnt you agree that business lack of Business Investment or lower growth in Business Investment slows down the growth rather than gets us into a recession because 70 of the economy is consumption and thats doing gang busters at the moment. Thats why the jobs reports are so important. Have you to watch maria the first friday of every month. You have to watch maria every day. Consumers keep spending. If the job market slows down, doesnt that change the game . It does p. Were seeing job growth slow a little bit. Its the weakest since 2012 as i recall. So thats something were watching closely. Remember, with the aging population we really only need to create 120,000 payrolls per month. Were still on balance, we still have a tightening labor market. Were watching that closely. It is slowing but we dont need it to be as fast as it has been. Do you you think the yield curve, the flattening of the yield curve today is as relevant given the overall lower level of rates, as it has been in the past and maybe we are focusing too much on that . I dont. And if you go back to 2007, there was a train of thought, because there were so many baby boomers about to retire, a migration out of equities into bonds and that was the reason the yield curve inverted in 2006 and there was not a recession coming. Give it 12 months and you see the biggest recession since the depression. It could simply mean the fed went too far, pushed rates too high. That was the case rates didnt look high in 06 or 07 but in retrospect they were too high. Maybe today 2 rates dont look high compared to negative rates in europe they are. We have to focus on real rates. Previously real rates werent negative. Close to zero or negative. Thats the biggest difference we have in this goround. One thing what thats interesting, if you look at the recessions during the modern era again, three of them preceded by inverted yield curves, all three times the fed kept hiking after the twos and tens inverted. They were afraid of inflation. The one you didnt have it was 1998 where you had the Asian Financial crisis, et cetera. Theres no inflation. The fed immediately cuts rates 50 basis points and another 25 basis points and push off the recession. So thats today, were at 1, 6 on inflation. They missed the inflation target, 124 of the last 130. Maria recession or no recession . If the fed is responsive and trade tensions simmer down, i dont think we have a re. Maria well see about the trade simmering down. Thats the one Million Dollar question. President trump tweeted on the state of the economy a moment ago. He said this, the economy is strong and good. Whereas the rest of the world is not doing so well. Despite this, the Fake News Media together with their partner, the democratic party, are working overtime to convince people that we are in or will soon be going into a recession. They are willing to lose their wealth, or a big part of it, just for the possibility of winning the election. It wont work because i always find a way to win especially for the people. The greatest Political Movement in the history of our country. Well have another big win in 2020 writes the president. He needs the economy to do well going into 2020. Craig, well see you soon. Thank you. Sanders climate plan, the president ial hopeful rolls out a 16 trillion, yeah, with a t, dollar initiative, what it means for the democrats coming. And hang up the phone, the push to disconnect annoying robocalls, details coming up. Chair is just a chair. That a handle is just a handle. Or. That you cant be both inside and outside. Most people havent driven a lincoln. Its the final days of the lincoln summer invitation event. Right now get 0 apr on all lincoln vehicles plus no payments for up to 90 days. Only at your lincoln dealer. light musical cords maria welcome back. Good friday morning, everybody. Thanks so much for joining us. Im maria bartiromo. It is friday, august 23rd. Your top stories right now 7 33 a. M. On the east coast. Were on countdown mode to jay powells speech. His speech is at 10 00 a. M. Eastern from jackson hole. What to expect, what it means for markets, coming up. Markets this morning are, well, we are off of the highs but not so far off. Following a tweet from the editor in chief of the english language chinese paper, saying that beijing will soon unveil a plan to impose retaliatory tariffs on certain u. S. Products. The dow industrials up 62 points right now, s p up 7, nasdaq up 25. It was a bumpy day yesterday. The dow was up by 49 points. The other major indices were lower. S p and nasdaq lower following another inversion of the two year and 10 year yield. Global markets are mostly higher, european indices are higher across the board, near the highs of the morning. Fq100 up a 56, cac in paris up 23, dax in germany higher by 40. In asia overnight it was mostly green, except for the kospi, it was down a fraction. Trade tensions continuing between south korea and japan. The Sri Lanka Central Bank lowered rates by 50 basis points. Protests are continuing in hong kong. Activists forming a human chain, holding hands, a human chain that we looked at earlier. The city is bracing for disruption you all weekend. Fighting annoying robocalls. Telecom giants and lawmakers are coming together to combat the growing problem. Its that time, backtoschool time. A look at some of the hottest products for students including fun and educational toys. Our top story this half hour, bernies Green Initiative, Bernie Sanders unveiling a 16 trillion climate plan he says will pay for itself. The vermont senator says the plan will end unemployment, adding millions of new jobs. Hes looking for total Renewable Energy by 2020 and carbon free nation by 2050. Joining me now, ed rendell. Thank you for joining us. My pleasure, maria. Maria let me ask you, ed, about this plan because 16 trillion paying for itself, im skeptical. What do you think . You should be skeptical. Just like when President Trump said increased revenue will pay for the tax cut. Now we have the greatest deficits in history. Thats a promise that you may p promise that may come true way down the road. The american taxpayer is looking to whats going to happen in the next few years. If thats a tax increase maria youre gottin getting of course. Im asking about the Green Initiative from Bernie Sanders and why it is that youve got sanders 16 trillion climate plan, he says it will create 20 million jobs. Youre a moderate democrat. Youve been that way and with practical ideas for a long time but youve got these ideas on the severe left that dont make a lot of sense. So tell us how you look at the party today in terms of all of this progressiveness. Well, i think its very dangerous for us to overpromise. Its very dangerous for us to make claims that are not sustainable. We cant have 100 Renewable Energy by 2020. The only way that could happen, maria, is if all of us agree to have four hours of electricity a day. Those claims are not achieveable. We should aspire to having Energy Produced by only Renewable Energy. Thats a good aspiration. But realistically, thats 20, 25, 30 years down the road. We should start taking steps in that direction. We have to tell the American People the truth. Like the Green New Deal, that every american would be guaranteed a job. Thats probably not going to happen. We shouldnt overpromise. The danger is, theres someone in the trump campaign, some bright guy with a calculator or computer, i guess, calculators dont exist anymore. Maria i still use a calculator. So do i. S hehes sitting there totalinp the promises we made and theyll come out with a bill and say mrl cost you x thousand dollars a year more in taxes and it will be a credible claim and we cant afford that. Thats why we have to win. I believe we have a great opportunity to win. Polls reflect that. We have to elect a a moderate left of center. Maria who do you think is best positioned to win . No question, joe biden. One, because of his personal popularity and two, because hes a moderate. 70 of democrats want a moderate left of center, want someone who can win. Maria thats what im saying. Thats why i brought up the plan. Im happy to go back to taxes and trump in a second. But go ahead, jump in here. Im confused. Are you do you think sanders Green New Deal is a good thing or bad thing . Where are you on that . I agree with the aspirations. I dont agree that its achieveable at the level that bernie says. Lets talk about another issue. Hes talking about basically giving the government what was it, 16 trillion, its going to pay for itself. Can we give government any amount of money and its going to pay for itself . If so, then why not give them 30 trillion. It sounds like a fantastic deal. Well, there are some things that actually do generate jobs and revenue. But usually not at the level that politicians talk about. And again, i called it a tax cut, i think thats a fair analogy. President trump told us the tax cut would pay for itself. We wouldnt have big deficits. And weve got deficits at record levels. The difference with a tax cut, ed u i ed, it allows people keep their own money. Green new deal basically takes money from your pocket and puts it in the governments pocket and expecting them to spend it better than the private citizen of thats the problem i have whether we call it Green New Deal or any other Big Government program. How about infrastructure. Do you think government should spend money on infrastructure . I think it should be privatized like the original turnpikes and subway system. That brings me to the question that i want todd ask. Do you think it is as part of the agenda for the democrats that they come up with a package for 2020, with respect to infrastructure, would that be popular, something that we could work on together . Absolutely. I think its a shame and a disgrace on everybody in washington, we havent put politics aside because the american infrastructure is crumbling. Were at an economic disadvantage in the global marketplace and we should put all politics behind us and do a workable infrastructure bill. And i think we can do it and i think infrastructure does pay for itself. It pays for itself in increased productivity, pays for itself in cutting waste, it pays for even if you have a tax increase for the gas tax, that gas tax increase is a lot less than what you pay if you blow out one tire on a bad road. Maria well, listen, ed, i know you are worried about deficits, a trillion dollar deficit and i think its in order to be honest, we have to be honest, that the debt doubled under president obama. Maria from 10 to 20 trillion. Now the administration is talking about further tax cuts. So is this what is bothering you, is that your issue . . Or your issue is the tax plan the first tax plan . The tax cut itself is exploding the deficit. As for the contention that it put money into peoples pockets, it put most of the money that went into peoples pockets that didnt need it. Maria thats not true. They cut taxes on every income level, ed rendell, you know that. The vast majority of the tax cut went to people like you and me who dont need it. Maria corporations which are you saying you would rather the Corporate Tax rate at 35 . Answer the question. The bulk of the plan was about the Corporate Tax rate. Do you want the Corporate Tax rate at 35 or do you want it 21 . I would have cut it but not to 21 . I would have cut it to 25 . Maria its a pleasure to see you as always, ed rendell. Thank you. Thanks, guys. Have a good weekend. Maria coming up, tackling robocalls, the strategy to disconnect annoying interruptions, its getting worse out there. And backtoschool gear has never been hipper, what kids need to rule the classroom with, coming up. Im coming out so you better get this party started. Im coming up, im coming. Im coming out so you better get this party started. Pumping up the volume but perhaps this year, a more exhilarating endeavor awaits. Defy the laws of human nature,at the summer of audi sales event. Get exceptional offers now. Maria welcome back. Hanging up on those row bowl calls, companies pledging to offer free Call Blocking technology and trace illegal calls. Grady trumbull is in chicago with the details. Good morning to you. Reporter good morning. Dont you love the robocalls you get . Now theres an agreement between the attorneys general and Major Telecom Service Provider providd the country, including at t, verizon, tmobile, sprint and century link. They agreed to do three things. The first, provide Call Blocking technology. The next is to trace and investigate illegal calls. And finally, identify how row he bow callers are use robocallers are using u. S. Networks, what entities are behind the robocalls. You know how big of a problem it is. Here are the numbers. In july of 2017, there were almost 84 million robocalls every single day and the problem is only growing, about 150 million just last month. Connell mcshane spoke to one of the attorneys general joining the force, this task force, and heres what she had to say about this pact. Our phone providers, they hold the key to kingdom. It was great to have them at the table, being willing to use the technology they have. Now weve just got to make sure they use it and we encourage others to use it so we can stop the calls. Reporter this agreement is voluntary at this point. Officials think preventing robocalls from getting onto u. S. Networks in the first place will be more effective than trying to prosecute individual robocalls themselves. The agreement doesnt include, though, the internet based phone Service Providers which is a major source of the row he bow. Robocalls. There are apps available from at t, verizon and Third Party Apps including one called robo killer and my personal favorite, because of the name, no mo robo. Maria i like it. Grady, thank you so much. Those calls sure are annoying. Coming up, u. S. China trade tensions, Peter Navarro joins me live to talk about the ongoing negotiations with beijing and the rock bottom rates. Plus, back to school again, the latest gear to ace science, technology and math class, weaver got it all here, back in a minute. Ive got to go back, back, back to school again. Introducing the allnew chevy silverado. With fifty industryfirsts. Its the strongest, most advanced silverado ever. From the 5am wakers, to the 6am sleepers. Everyone uses their phone differently and in different places. Thats why Xfinity Mobile created a Wireless Network that auto connects you to millions of secure wifi hot spots. And the best lte everywhere else. Xfinity mobile is a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Click, call or visit a store today. Up in the morning and out to school. The teacher is teaching the golden rule. American history and practical math. You study hard, hoping to pass. Maria welcome back. Parents may say its the most wonderful time of the year when the kids head back to school. This morning were taking a look at some of the hottest new toys, yes, toys, but theyre deb signed tdesignedto help your ch. Joining us now is the editor in chief of the toy insider, marisa debartolo. What im loving about what you brought today is these are toys that are about science and stem. Science, technology, engineering and math to get kids back into the swing of learning. We have to he get them used to that again. Well start with coding critters. This is actually a great example of screenfree coding. Kids get this Little Critter here and a cute little storybook and play set and they actually can program in this guys movements and how hes going to move around his little habe. Maria you actually begin to learn about coding. Exactly. He stays on the table. Maria i like it. That is cool. This is really cool. This is called surprise ride of. This is a subscription stem box service. So basically parents can buy a 12 or sixmonth subscription. Youre going to get one of these boxes delivered tour door at the start of each month and each one has a different little science experiment and activity that kids can complete and then theyre left with a great keepsake. Check out my cool volcano. Maria you made this. Yep, it looks great. You can you put a little solution in there and it will make it fizz right over. Maria i love it. Science project. This is ooze lab. We have the alien slime lab and soap and bath bomb lab. Kids are making it themselves. Maria Everybody Loves slime. Exactly. They can complete science experiment as well, once theyre finished conducting their little experiment. Maria you can do a science experiment. Whats the age . Is this only kids . I would actually like to do this. I say that the plus on the package, like eight plus, it can go up to whatever number you want, i think. This is really great. This guy, our robot friend is named arty 3000. Inside is a different marker that kids can put in and hes going to teach you coding skills with the help of a tablet. So you see as he rolls around here, hes leaving a little mark on the table so maria youre doing that with what youre doing on your ipad. You can control him like a ic car or do coding techniques. Maria i love it. Just 70 too. Maria 70. I havent been asking the prices. Whats the average price . Everything on this end of the table, coding critters is 39, stem kits are 24 and the science labs are about 29. 99. Maria not bad. Affordable. Once kids are ready to go back to school, they have to have the right gear. These are cool. This is the mimo power desk. This gives phone a full charge four times. So you can make sure that kids phones are staying charged while theyre at school. These actually look like different little nintendo video games, old school nes controller, so very trendy. Maria youve got backpacks, the regular stuff. Exactly. Maria typical things like this. I love the stem toys. Isnt that great. Maria really great. Thank you so much. Marisa, that toy girl. We will take a break. When we come back, Peter Navarro is with me live to talk about tensions with china and the fed and rates. This as hong kong is bracing for another round of demonstrations this weekend, protesters are headed there right now, next hour, right here, mornings with maria. Back in a moment. Its a beautiful morning. Oh, the birds keep singing his old song. Ive got to get on my way. It was that voice asking me, is your daughter ok . Thats where i felt relief. Were the rivera family and we plan to be with usaa for life. See how much you can save with usaa insurance. Dexperience thrillingn operformance. O see how much you can save now at the lexus golden opportunity sales event. Get 0. 9 apr for 60 months on all 2019 models. Experience amazing at your lexus dealer. We all feel, we all love, we all cry. Its part of being human. Sonoma county declared a homeless emergency in 2018. You have to know the individuals youre serving to understand their needs. Working with ibm watson we can bring together data spread across dozens of departments. That gives us a fuller view of the people we serve. Dear tech, dear tech, we need to look after everyone in our community. And we want to help our fellow human beings. Welcome back. Good friday morning. Thanks so much nor joining us. Im maria bartiromo. Friday, august 23 happy friday your top stories just before 8 00 a. M. On the east coast, we are on countsdown mode to jay powell to see what fed chair says 10 a. M. Eastern jackson hole what to expect what it means coming up china trade you turmoil continuing editor in chief english language chinese paper global times tweeting beijing will soon unovercame plan to impose retaliatory he tariffs on certain u. S. Products to say u. S. Will feel the pain. According to that newspaper gets directives from the government markets higher futures indicating gain 83 points on dow industrials, s p 500 up nine nasdaq futures up 29 high of the morning right here follow a bumpy day yesterday ending the day with dow up 49 points major detections down as you can see s p, nasdaq lower following yet another inversion two year and 10year yield yesterday, Global Markets this morning higher european detections higher across the board ft 100 up 49 cac quarante in paris up 4 dax in germany up 47, in asia overnight most of green except for kospi in korea, down slightly afraid tensions between south korea japan continuing to grow there was a central bank overnight that cut Interest Rates this time from Sri Lanka Central Bank cutting rates 50 basis the points. Protestings in monday morning hong live pictures right now take a look at what is takinging place, tifrts taking to streets the city bracing for disruption all weekend we will fic you there. Overstock dot com ceo resigned explosive comments on alleged ties to o government probe 2016 election what he says former fbi official peter strzok told him to he do terrifying moment at Yellowstone Park contaminate speedy took tourists inti surprise on video wait till you see this stories this friday morning joining me to break it down, gary bsmith inhe is very toe, Jon Hilsenrath, great to see everybody. Great a big day on markets the economy, jay pawel to peak. Doubt to reset narrative i hope does that if not, probe about goebbels level of turmoil in the markets. I think he cant get ahead of members of his Committee Want to see how economy does before, if he ub make a commitment to keep pushing rates lower, so i think you know maybe the market pays expecting a little bit too much out of him. Maria he has to address inversion he has to address two and 10 year what do you my question why . Okay. Why do we think the fed or the government or whoever it needs to do something, we talked about it first you know, hour, jon about what happens before the fed he said well we had a lot of recessions allotted more, that is what the economy does it goes up, it goes down, retailers, manufactures if given chance to adapt do so very efficient quick manner why you see retailers doing so well. Some of them. I think. I dont know if we want to have that [laughter] no, no, no. But that is what i am saying i think placing too much emphasis on what powell says. The word is it can be how should it be what the world is how you deal with it, to the context what fed says matters a lot want to pay great deal of attention to it. I dont want to change topic but during the break asking the gentlemen on panel what would you pay to buy greenland what is it worth president wants to giant landmass. We. As nation borrow a trillion dollars a year would that take it . A trillion bucks . I he have we have breaking news china is announcing new tariff rates to apply as a result this market has completely reversed course here is the news, beijing will raise the import tariff rate on some goods, it will apply to that 75 billion dollars worth of goods and in a nanosecond this market reversed course dow industrials down 91 points joining me right now on breaking news, is office of trade anding Manufacturing Policy director, Peter Navarro it is good to see you timing is everything isnt it my friend. You cant make this up. So here you are sitting here we are about he not planned. Maria im sorry . This is not planned, by the way. Maria no, but the by a he is out saying what it is going to do 75 billion dollars is . Worse than you expected . Look, we know china is going to do what it is going to do here is the thing what is really interesting in two 405 years that the president has been in office, he has galvanized the person people capitol hill behind china policy, chinas deals flood communities fentanyl everything in en the risk for china when it does things like this simply to galvanize support even more for the president , so look we are going to have negotiations, what i am told today to be honest maria is ecb g7, the fed jackson hole from a market point of view i think that is really important. 75 billion dollars worth of tariffs in terms of what the combined 30 there would economy, is not something stock market to worry about, we are cool here, so no but it is peter it is you saw what was just happening when you first sat down in that seat this market was up 80 points, right now we are down 127, so you know what comes out of the white house comes out of beijing impacting markets directly here is what we know. My. Maria china says flu tariff rates some u. S. Goods take effect september 1 on december 15. It says new tariff rates levied on 5078 u. S. Products and says new tariff rates imposed on some goods ranging from 15 to 10 . Is that the level you would have expected retaliation 5 osh lower. Negotiations continue hidden closed doors going to resume talks in september. In terms of the world economy, in terms of the u. S. Economy, i think that really matters here what European Central bank is about to do, which is lower Interest Rates. I think that is good for america, because stronger europe is going to mean more export demand for american exports but more subtly, as fed meets in jackson hole, if European Central bank is lowering Interest Rates, going to quantitative easing more, that is going to put added pressure, on the fed, but my admonition is dont play checkers in a chess world central banking around the world is a chess match. And we cant be making decisions that Federal Reserve in isolation when you have over 30 countries in the recessed of the world lowering rates one of our biggest trading partners about to engage in o monetary easing for me this is bullish the fact ecb is about to engage in monetary easing i think there is talk about germany back up socalled black zero policy fiscal austerity possibly going to a fiscal stimulus mostly people agree very good for europe the president and first lady are getting on plane tonighting to to europe. One of the things that will happen, is the president will talking to boris johnson, there is a good probability that by october 30th brexitited issue will be settled one way or the other request is that important in as investors are waiting for that to happen sat on sidelines dont the know where to deploy capital uighurs that is settled one way or the other two things are going to happen very, very bullish, one. Maria no, i understand what you are saying peter and i also a trade deal going to get a trade deal this is important, maria this is the kind of stuff that is important. Off aing trade deal with united kingdom, quickly would be very good for both sides of the pond here. Maria are you saying that getting a trade deal with china is not important . I am in the saying in a at all what i am saying is that weve gone through this negotiations now dating back to maralago in spring of 2017 gone through five differents decision modes every time we have negotiated with them tried to move the football, they have backed away, and we have taken measures, through all of that time we have had a very Strong Economy we have had a very strong stock market they look at data understands even though relationship is very important to get right yes. The amount of money tr ive had is not material in terms of macrogrowth what is going to happen in jackson hole today what is going to happen at g over the weekend, will be ecb does, where germany has fiscal stimulus whether we get out of brexit those are kinds of things, that investors are going to be looking at, in this chessboard which includes Central Bank Chess and also, whoa we need to do maria, look, the difference here between good policy globally and not good policy is u. S. Is going to grow either 2 , under trump Strong Economy, or if the fed does its job cuts rates congress does its job passes usmca, the ecb does its job cuts rates germany does its job fiscal stimulus Great Britain gets as you deal i get that peters, by the way, i am totally sensitive to your positioning where you dont want to make waves, you dont want to go and talk too much about you know, what is going on between china and the u. S. Behind scenes you want to talk about Monetary Policy the global central bank. Sure. Maria i get that i am getting there i am going back to that. The fact is, right now, you are joining me in middle of this breaking news story markets have completely reversed course, because of what just came out of china you have been the hawk in this situation you have been guy saying china has been doing these seven sins, intellectual property test forced transfer Technology Currency manipulation defense and all nine yards i got that my issue is i have to get your tape on ways going on on the breaking news news, china is as i had right now this morning, that it plans to raise import tariff rates on some u. S. As good as going to have new tariff rates that apply to 75 billion dollars worth u. S. Goods new tariff rates imposed on u. S. Goods ranging from 5 to 10 , 57 billion dollars worth u. S. Goods taxed from 5 to 10 , this is likely going to impact people, and that is forcing home to think economy slows down, what is the impact, of these tariffed increases tariff increases on consumer peter . Do you think this is a claist to slow down this economy . Absolutely not. I mean, the beauty of the trump tariffs pain on them not pain on us as we applied tariffs to chinese products, weve seen clearly and jerry explained how exactly this working beautiful segment you did on that what chinese have been doing slashing prices, cutting the value of the chinese yuan 12 , and meanwhile, on this side, of the pacific was people have been doing is looking for other suppliers, investing here in america, adjusting and overtime what were going to have is a more resilient and diversefied Global Supply chain more investment in in america i think the way china is reacting to this whole thing is simply reenforcing america perception of china as bad architect if you think about it the beauty of this you have said so much president has been saying it everybody has been saying it we to me china steals massively from us we know they are killing americans with fentanyl we know they manipulate currency so so when americans understand that, and then when china tries to bully us that strengths our revolve in terms pure macro impact it is not large. What is important he over time if we get that china relation right get them to biography like other actors in the world asks economy and stop stealing our stuff, that is next leg of Global Growth that is what President Trump is fighting for you have been among the most articulate in materialize of explaining the National Security risks that are coming from china, you sand secretary pompeo by the way, but still markets are reacting because they want to see some kind of a deal. Would the president consider, a small deal . Just of doing something with trade and putting the big ticket items aside . I think i know the answer what does your gut say. So you know maria the last thing, that i am going to do right here, talking with you, is speculate and the second to last thing im going to do is try to negotiate in public. This is job of the best United States trade rep in history Bob Lighthizer working with treasury secretary behind closed doors. In terms of investors, look, if this step by china should have already been baked into the market Everybody Knows kind what have the dance the china does, but the point here is from a macro point of view what happens in jackson hole today at g7 tomorrow. Jackson hole what is happening in jackson hole is not the reason the economy went from 3. 1 First Quarter to 2. 1 second. Hang on hang on let me jackson hole not reason capex down 6 10 of a percent the rfrn for that you know i know trade uncertainty. Dont say i know. Okay what do you know . What i know q12019, 3 growth rate the if you will point attributed directly to tariffs on china. We cut trade deficit we grow faster beauty of cutting trade deficit with china. What happened in q2 if you look at numbers exports tell on currency effect associated with higher Interest Rates, jay powell and fed started raising rates00 base points we saw dollar go up by 10 we can do everything right in fact President Trump is doing everything rate tax cuts deregulation, trade reforms unleashing our energy sector. O i dont disagree i understand, i understand, the National Security issues, i totally get that. But look at this market, look at this volatility that it has caused now axios is reporting that President Trump and the white house in a bind with china claiming retail trade deal with beijing is tough improbable. Axios i always want to have a rule named after me call this navarros rule. Maria all right. If you read anything in the newspaper that quotes Unnamed White House officials it is it is 99 likely to be 235u8z there is a small handful of people in the white house that deal with trade issues Lighthizer Mnuchin ross, kudlow and milmyself noth out between us five senior fiblz are saying something reporters making this stuff up or trying to push the president or the policy in one way or the other. Maria you journal, by the way, the journal says. Dont mention the wall street journal. I got to take that they say. The wall street journal not the main street journal. You are involvement in this one oped quote you President Trump quote trade rasputin. We are all china hawks in this country whether mike pompeo or chuck schumer, or a harris harvardharris poll that says, we are the public is behind president donald j. Trump standing up to china as it chosen one, look, for investors, here is what i am saying, what is important over the next three to six months are things other thwhat happens with china that is long term thing what is important today with a jay powell says in jackson hole you to President Trump interacts withs europeans whether ecb is going to account rates when germany is going to do fiscal stimulus whether we can get a trade deal with Great Britain, and over time look we are doing our job President Trump is doing his job. Maria yee. We need congress to do their jo about. We need the fed to do their job, let me say one other thing maria about the Federal Reserve, because i have gone listening to your show yesterday, i heard one of the fed governors say we got Unemployment Rate 3. 6 , that is all we care about everything good. Okay . Are their the wrong be the objective function the idea not to minimize the Unemployment Rate it is to maximize growth. So in a trump economy you get half of 3. 6 Unemployment Rate, but you could also have hundreds of thousands of more workers not workforce at higher Labor Force Participation rate if the Federal Reserve played chess, and responded to the Interest Rate cuts all around the world we cannot have 200 basis point spread between our rates, and europes rates not expect the trade behaviorism to drain blood out of life this have economy, and for bad things to happen. So so these are these are the things that but all connected peter youve got the Federal Reserve, two hourstime we hear from from jay powell but you have got the president saying he wants one point cut from the fed, and part of the reason that we are seeing slowdown is some uncertainty around trade so it is i dont buy that. You dont buy it at all in other words, you think fed narrative i can guarantee you this i can guarantee this if Federal Reserve had not raised a hundred basis points we would have been hitting 3 , now as far as the rest of the world slowing down, look at europe, look high tax environment high regulation environment. Really. Maria do you think ecb should buy equities christine la gar comi lagarde coming in ecb how does that fit. I watched your segment Mohamed Elerian fed is right going to cut rates more more quantitative easing i think 50 billion euros a month. And that is going to be stimulative, and here is the thing if the Federal Reserve does not take note of that and match that chess move that is going to harmony our economy we will get a 4ri69 from ecb, lift from lift from ecb off set by currency effect unless fed matches that chess he move. We have not sri lanka another he emerging Market Central Bank lowering Interest Rates what are we up to 35 Central Banks lowering rates or doing o some kind of surplus peter . They are normal adjustments to a global slowdown. One person in this whole global banned marching opposite direction u. S. Fed. Maria why do you think that is . Why . Why is in the a different c ex. I think electronically boards of governors talk whole idea they sympathy in a static way if Unemployment Rates 3. 6 they dont have to do anything, but my point is, if Unemployment Rate is 3. 6 , growth rate is 2 , about we could do a lot better focusing to maximizeing the growth rate instead, if we get to 3 , and we add hundreds of thousands of americans into the labor force raise that Labor Force Participation rate low by historic standards we can do that, by the way, we have already added a million people. Maria yeah. Offside lines that is better reality for this country, 3 growth 3. 6 unemployment. Versus the feds vision so the fed is kind of like were dynamicly scoring our Economic Policy they seem to some governors there dont get it. Maria is there any reason to believe is there any reason to believe 10 does not take effect on september 1 . On chinese goods . You take me back to china. Peter markets falling out of bed i have to well what i am o focused on i urge investors focus on jpmorgja Jay Powell Jackson hole. A quick break we will come back to you. Guys, i want you to meet someone. This is jamie. Youre going to be seeing a lot more of him now. Im not calling him dad. Oh, nno. Look, [sighs] i get it. Some new guy comes in helping your mom bundle and save with progressive, but hey, were all in this together. Right, champ . Im getting more nuggets. How about some carrots . You dont want to ruin your dinner. Youre not my dad thats fair. Overstepped. Thats fair. To the wait did frowe just winners. Prouders everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy a new samsung note. Click, call or visit a store today. Maria breaking news from china a wild 30 minutes reuters reporting beijing will raise the import tariff rate on 75 billion dollars worth of u. S. Goods going into china, back with me now director for the office trade Manufacturing Policy he Peter Navarro i want to wrap this up with a look at economy we as you a direct impact of the trade war with beijing announce five to 10 percent tax rates on 75 billion dollars of u. S. Goods market was up 80 points now down 144 points, what do you want to say to those people who he say this is this is evidence the trade tariffs that are in place are worsening Economic Conditions and market conditions, and they are seeing china retaliate as you expected them to do . So whats lets start with observation that smart investors here not day traders or short sellers, need to see these kinds of events as traps to stay away from okay . We had a little swing from where futures were to where they are now. But. Maria now we are at lows 165. In scheme of things the bullish scenario weve got truceo trump economy solid as a rock, trade reforms getting us to to 2 only way recession in the distant future if democrats in white house full stop, congress has to do their part i think they will passing usmca we know that Europe Central Bank getting ready for a monetary easing that is going to be really good for u. S. Economy because it is going to boost our export the demand only good for u. S. Economy if fed also lowers rates in that chess match to match the cut, other things in play, are the germany fiscal surplus possibilities, and near certainty that the brexit issue is going to be he resolved the or thing trade fight. Hold on i am not done yet we have had Central Banks 30 continue to lower rates at some point that kicking in in terms of slowdown. And china, i mean for me, the bigger news for china will likely be the announcement of a second fiscal stimulus will help emerging markets commodities it is not just that u. S. Is strong the Counter Cyclical positive direction forces are in play we just havity patient. Maria s i will bringing in panel in a disconnect when a do you want to hear from jay powell in an hour and half what is most important to hear from jay powell from your standpoint . Uh number one that the most important thing is is to grow maximize growth rate of the economy, not minimize the employment rate, do grow without causing inflation. So that is number one, number two, i would like to see some acknowledgement of the chess match here, when other Central Banks around the world are lowering their rates that does have negative currency effects and we need to match them so that would be very useful. Maria . Okay. Most thing the most important thing would i love to hear from jay powell today america we have your back that is all he has to say. Maria okay all right that is an important point, and the final question. Very important point. Maria final questionee peter market is reacting down 175 points to beijing move because market sees the trade war and this retaliation from beijing, as evidence that prices are going higher, and the economy is going to slow. Do you agree . No, i dont agree. Weve had a tariffs in place for a very long time, china is bearing the entire burden slashing their prices, slashing the currency value and by the way, they are hemorrhaging, hemorrhaging supply chain out to rest of the world and back here in herk. And that is good for america, bottom line america is united behind President Trump stopping china from stealing our Technology Intellectual Property and killing americans with fentanyl. And i think, for investors, be assured of this, negotiations will continue as they have been they will be done behind closed doors and following navarros rule if you hear anything about negotiations doesnt quote somebody specifically, on that trade team, then you are getting lied to. Maria letter all right peter when a you said is what were going to believe big interview withe Peter Navarro in face of breaking news joining us right now to acting at a congressman hours judiciary member Louie Gohmert good to see you are you surprised beijing comes back with a punch in the face 75 taxed o 10 . We make a move they dont want to loss face they make a move not that big a move like peter was saying they are hemorrhaging, and supplyside, and so they have got enough problems in hong kong to last thing they need is for the biggest economy in the world, us, to you know be in a tariff war with them so i think i am grateful we have a president that understands how badly we were losing the import export war with china it is time to make it mutually beneficial i think this is totally import export worry all other things seven sins as Peter Navarro calls it. You betcha you bet those are huge problems, they have been stealing them for years, so thankfully we have a president standing up to them and it is about time. Let me. By the way, if the fed yeah if the if you know peter was saying, if he said we will have americas back they have that had democrats back for years he lowering rates doing everything they could to make obama economy look better than it was. Then they turn around and hurt the trump lets not forget on heels of the worst recession in a generation so that was after 2007 you are right whole Administration Obama administration you know presidency he had rock bottom line rates that was a result of what we had just come through, we were lived through that as gary bsmith, Jon Hilsenrath here let me get reaction Louie Gohmert with us from Judiciary Committee but your reaction to what took place talk being to Peter Navarro as soon as about to begin conversation beijing no foundations retaliatory moves. All the things that mr. Navarro said about fed, and reaction, and currency, complications things like that, are absolutely correct. That is if if the fed doesnt react accordingly to what is happening everywhere else, in the process of not reacting they will basically have the significantly negative effect on u. S. Economy because of the dollar. However, all the things that he says about trade and tariffs, and impact on growth is just not true. You know. We know that. It is a Fiscal Consolidation tax on u. S. Consumer and, therefore, as a result there is an impact on growth rate. And if the 300billiondollar taxes, will probably shave off a half percent market gave verdict instantly. Maria true. You cant say it doesnt matter. The markets pricing in furlt developments saw it right there. I said isnt it true that business spending went down because of the trade uncertainty he said no. That is just not true we talked to ceos all the time, and they say tariff is the biggest uncertainty for them to increase investment, whether likes that ordinance not cant change the fact that is how they feel. I do kind of agree with him though look. He said one very important thing he said we have tariffs in place for a while, the economy keeps doing well we saw that from the retailers you can we talked in the break, amongst three of us, that part of the reason trump wanted to scale back on tariffs to not impact u. S. Consumer weve had tariffs yesterday the consumers are ask you executing well positive guidance baked toys r us ceo mentioned former cconfidentiality agreemento the other day on show said we have not seen an impact from these tariffs on consumer goods yet. Yet. Maria this is speculation all speculation. We have steen impact of all of this from a Business Investment. Maria that is true. That i agree with. Business investment that is channel that this is working through, the consumer piece happens less what has to happen first before anything happens to consumers is in hiring process, we have seen ours work slow i think the big question i can say to have you keep watching the show first friday every month, because job growth slows then we see consumer ask let me let me say goodbye about to congressmanly he gohmert i wanted to ask about Patrick Byrne the fbi scandal that will wait another day we so appreciate your time this morning. Maria keep that in mind the bigger effect on the economy, has been when fed talks about recession. Drops the market 800 points, that has real effect when fed is negative like that. Maria no doubt why we are focused on an hour and half hear from jay powell has speech in jackson hole congressman always a a pleasure to see you thanks for rolling with it today, with all the breaking news, joining the conversation right now here on set strategic securities partner head of policy research dan, you have incredible research love your work. Thank you. Maria thank you for joining us lay it out china retaliating today reaction. If you lessen to peter says tariffs he relatively small we keep escalating the compounding effect is starting to impact growth here in the United States, it is if we just got rid of all tariffs fed wouldnt be too tight now weve joint problem, where we have ask escalating tariffs fed rivent to be able to cut rates starting to create a bit of nuisance on u. S. Economy. If cant get rid of the tariffs because of seven sins forced transfer technology, you know the the fact theft of intellectual property in the event north american currency manipulation does he have another lever . Let me first say that we were very close to a deal in april that was far more progress than they reneged. They reneged on it now in a sayings you have to say do we cant to deescalate and win on nafta win on uk trade they are escalating, and they are escalating and not getting these other policy victories so we are going to have to figure out that i thinks consumer is a lagging indicator. Absolutely, absolutely. The benefits of tax cuts productivity increases eventually going to start to fade this is high stakes game one year before deflects for the president i think Washington Post article was trying to say the debate going on amongst trump a narrative standpoint sort of going on a false narrative from standpoint articulateing that trade tariffs dont have impact, basically eating at their credibility, i think in fed the thing they can say is that look economy is very strong this is the time for us to make sure that we get a fair trade deal, for that we may be willing to pay a little bit of a price collectively get this out entire nation is behind that i think that will probably win them more applaud plaudits. You you could say negotiate he has said i guess that trade negotiations with china are really important, we have to follow through on them. But, you know, if there is a a little bit of an Economic Impact we are going to deal with that the economic back a second, dan how much is the the total tariffs how much is that . Versus the size of gdp. 20 drldz. You are talking 140 billion dollars u. S. China retaliation come on. Drop in bucket. 1 150e billion dollars tax cuts this year 150 billion dollars cuts. I get. You it is if supply chains costs are going up totally i am not saying going into recession, but the fed has to cut here, the Trump Administration needs to deescalate or riching will continue. My point, are we overreacting to a you talked about you talked to almost 30 trillion dollars gdp into economy. The amount of tariffed even if they are all collected which they are not there is work arounds companies starting to work out negotiations with chinese manufactures directly going to other countries but lets stipulate that everything single dollar of tariff is collected isnt it still a very small impact on economy . Hold on let him answer. That is like going from 3 to 2 gdp that is that is the as to we always talking about that small percentage of growth over the years. You are slowing down you are transitioning from 3 to 22 . I go 2 . I go back to National Security issues there isnt a lot of alternatives here china is a bad actor they break promises up and down the street broke promises at wto probing promises in hong kong you quantity a trust bad actor. Instead of saying no impact. Maria that is a fair statement this is an incredible 1 2 an hour you guys, i am about to speak Peter Navarro trade director at the white house, and right before we are about to speak beijing announces it is going to tax 75 billion dollars of u. S. Goodss 2w5e7b and 10 her Peter Navarro responded. I think, the the risk here for china when it does things like this, is simply to galvanize support even more for the president so look we are going to have negotiations, 75 billion dollars worth of tariffs in terms of what the combined 30 trilliondollar economy. Is not something for stock market to worry about, we are cool here. Were cool here but the stock market went from up 80 points to now down 138 Jon Hilsenrath. Other thing struck me about what navarro said his arguments for why we should not be too concerned, china is stimulating, germany is stimulating all these Central Banks. 35 strCentral Banks cut rate. Keysnian stimulus trrlt cuts is that something is we want, this the economy so strong do we need all stimulus right now i thought it was flats do keysnian still lus i didnt think republican did that. All fairness to navarro all things in slowing Global Economy are good things, everyone should do that the. You dont have wiggle room when we need wiggle room. Indeed i think one of the things that we have to make sure, is that we dont get into a recession, so if there is going to be tariff wars the Central Banks providing support is critical for us to keep out of out of Central Banks you have got a problem because Interest Rates are already negative in most parts of the world, in developed world and close to zero here in u. S. So that leaves fiscal policy and skwloort why we are talking payroll tax talking about well was cap gains tax nexting what about that conversation. I believe the president is going back to indexing cap gains particularly if nothing else happens. Maria is that a good idea. I would support the idea, of doing it now legally it will be challenged because itself going to do by executive order if he tries payroll tax cut the cost for nancy pelosi to do payroll tax cut out of this world probably something he wouldnt be able to do. They fight over tax cuts versus spending everybody ignores deficit. You he mentioned the fed lowering rates. Yep. Do you think the fed by you know pulling on leaves backandforth can keep us out of a recession do you think they can look into future. Maria a good question a lot of people say, i dont care if 50 basis points not taking away pain from uncertainty around trade. Doesnt hurt. There is demand for dollars fed has to make dollars available why they would be cutting rates. As we do tariffs money flows into u. S. That is what the bernanke did same in 2012, 8 weeks before obama got elected, qe 3. We got that report that i questioned at the time i dont know i thought fudging numbers i really did all of a sudden a 4 number . Right before election . And you look at it, they were worried congress was going to mess up on fiscal cliff here we have a trade policy era happening doesnt matter if fed doesnt like trumps policy should be there to let me say this. Trade story if fed doesnt cut Interest Rates if dollar is going to get stronger. Correct. Dollar is getting stronger i got to get fed has to cut rates because it cant have a strong dollar that will have a negative impact. Maria ask will we know if a cut happens in september, in the next hour and half . We are going to hear from jay powell 10 a. M. In jackson hole Edward Lawrence in jackson hole find out what he is hearing on the ground edward. Reporter maria all eyes on that speech Federal Reserve chairman Jerome Powell 90 minutes looking for so much is focused on Global Economic slowdown, how much is on the uncertainty, now in that uncertainty, we are talking about trade, the tariffs, now in the past Federal Reserve chairman powell said prolonged tariffs would be greatered a veers effect on u. S. Economy now the dispute with china dragging on more than a year two sides major differences and now appearing to escalate the retaliation against each other, we are also looking for signs of if powell open to rate cut how much that could be, past two weeks we heard from two voting members of the committee one saying that we need more accommodations to get inflation in target other said fed met mda low unemployment stable prices two of 10 votes the chairman comments willaway heavily how that Committee Goes maria. We will wait we are going to hear from jay powell in hour and 15 minutes probably one of the best panels here, in terms of Monetary Policy fiscal policy stand by gentlemen we want to take a short break then come back talk about this we have sad news to report, breaking news right now billionaire o former executive preponderance Coke Industries david coke died from Company Statement he retired from come industries last year at the time retirement worth estimated 51 billion dollars made him 11th richest person in the world no cause of death was given david was 79 koch was 79 years old. Maria welcome back Federal Reserve chairman jay powell begins speech in hour and 10 minutes waiting to hear what he says about Monetary Policy ive got outstanding panel host of Varney Company Stuart Varney weigh in a wild 40 minutes, market up 80 now we are down 124 on this beijing retaliation. That is china trade that pushed us down. You are right maria what it was about 20 odd minutes ago the dow going to upper 80, 90, a hundred points nowdown a hundred points you are right china trade set the market lower. My point is this, i want to know from from jay powell today is he going to keep up with europeans . Who and japanese who have been reducing rates dramatically below zero is he going to try to verse this inverted yield curve does he want to do that will he try to do that . Will he end would that end the market signaling recession i am looking for i would expect going to cut rates rapidly we shall see our job i think i want to make clear for viewers our job is to offer clarity, to using plain english tell insurers exactly what is going on. Maria right. You know what i dont like jargon dont want qe 3 the rest i dont want to do that i want to officer clarity so Everybody Knows precisely what jay powell said that is my job everybodys job. Maria i know that if anybody starts bringing up sophisticated words you are going to have that buzzer going right . ]buzzr]. We will see you 10 minutes thank you so much. Varney company top of the hour 9 a. M. Eastern after mornings with maria, we will take a break when we come back breaking news this morning out of china a sharp selloff hour before openly before jay powell will speak beijing will raise import tariff rates 75 billion dollars u. S. Goods between 5 and 10 monitoring reaction all morning long. And well be right back. This was me before liberty mutucustomized my car insurance, so i only pay for what i need. And this is me now any physical changes to this mans appearance are purely coincidental. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. Introducing the allnew chevy silverado. With fifty industryfirsts. Its the strongest, most advanced silverado ever. Youre smart,eat you already knew that. But its also great for finding the perfect used car. 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Goods, 5 to 10 tariff market waga was up 80 points as soon as that crossed markets turned entirely and then some as you can see, gerri willis on the floor of the New York Stock Exchange saw whiplash gerri good morning to you. That is right it was a whiplash according to machine down 145 dow down 145 major turnaround, 200 point turn aboutaround traders dont like this at all, because what do moe know the end of the summer nobody here volume light, headlines can bang indices around you are seeing reuters reporting agriculture crowd ail small aircraft cars item that are going to be tariffed by china oil trader this morning telling me that purchases of oil by china had already retracted already moved back interesting maybe knew this was coming. Traders down here saying not expecting any resolution any time soon, many saying they are not even expecting anything until just before or after the election. But they are deeply concerned about what is going on in markets today because, maria as you wl know when you have big headlines low volume the impacts can be exaggerated traders watching it i looking at the charles bradys list of about 23 trade Stocks Companies rely heavily on trade with china almost all down only three higher this morning so it preopenly a busy day back to you. Maria certainly a severe kneejerk reaction the market is down not down that much down a third of a percent 88 points bigger story a completely lets wrap this up, guys. What was most important in terms of what you heard today . Dan, kick us off. China election interference will be bigger than anything of russia interference. They are going right after politically targeted industries in key trump states with their tariffs. China trade is not going away. The fed needs to take the baton and be the leader. Maria what should the u. S. Do . I think the president should index Capital Gains to inflation sometime early next year but hes got limited tools other than trying to get nafta through congress. Im going to disagree with dan and probably the rest of the panel, except maybe christian. I think the fed should do nothing. Maria do nothing . I think the fed should do nothing. I think we are starting to become addicted that the government and the fed can run the economy. We are fighting the tariffs for the seven sins. Let them exist. Let manufacturers, importers, exporters, react. Let the market work. The fed, even if they reduced half a basis point, cant change the economy. They can only change sentiment so let people say oh, my gosh, prices are higher, ill go elsewhere, just like the retailers have reacted to changing environment. The u. S. Economy can also. We dont need to rely on the fed. Maria if they dont do anything, do we go into recession . Lets just say we went into recession. It will be short. It will be long. Maria come on. You cant you cant dictate whether we go into recession or not based on what the fed is going to do. Gary is a man from a different century. Im a man who believes in small government, that the government cant control things. Youre on the opposite end. The point is we live [ speaking simultaneously ] he was being sarcastic. Maria what do you say . I think the two key things at the moment is trade and the fed. On trade front we are probably not going to get anything. For the markets to move higher, we need to get something from the fed. Whether that is today or in september or october, thats what we have to figure out. Maria okay. I think today is going to be an interesting study of jay powells leadership which is something that you raised. I think his instinct and the feds instinct is to move in a very glacial pace, and the question hes got to answer for himself right now, his committee is not ready to move aggressively on Interest Rates, is does he want to push them farther than they are prepared to go. His speech is likely going to be about a lot of longterm issues. At most we will get a couple paragraphs of hints of how hes looking about the future but in that, we will see how far hes willing to push it. Maria how divided is the Federal Reserve right now . From my colleagues reporting, half of the Regional Bank president s were not ready to move before this last meeting. Thankfully, there are other people in the fomc who are not fed president s. If powell wants in september or october he can probably carry the committee. Maria what do you think . How divided is the fed and how impactful is this beijing retaliation . There are two members who want a 50 basis point cut. The real fed funds rate is above the fiveyear inflation expectations. Good things dont happen when that occurs. Thats why the fed needs to cut 50 basis points. You will start to see fed members starting to get more dovish because they are starting to realize the trade issue is not going away. Remember, when the president proposed tariffs on mexican goods in early may, that was a gamechanging moment in the fomc, where they started realizing maybe this isnt a negotiation and a longer fight. Maria fantastic conversation. Gentlemen, i wish you a wonderful weekend. Thank you for the excitement. You got it all here. Have a fabulous weekend, everybody. See you next time. Stuart good morning, maria. Good morning, everyone. Im here, okay. On this program, were always trying to offer clarity. We want you to know exactly whats going on. So we use plain language, no jargon. Thats not easy when you are dealing with the Federal Reserve but thats our job today, explain in everyday terms what jay powell is going to do with Interest Rates. One hour from now, well know. So will you. Will rates come down . By how much . And when . Will mr. Powell respond to the rate cutting pressure from the president . Will he have to match the huge rate cuts of europe and japan . Does he feel the need to reverse