Transcripts For FBC The Claman Countdown 20240712

Certainly through the channel i mentioned. Thank you. Thanks for taking my question. Chairman powell, [ inaudible ] to the policy framework, is the fed open to other measures of the economy such as income inequality and affordability of housing . So we monitor everything we think is important in the u. S. Economy and in a broad sense, all of it goes into thinking about Monetary Policy. You mentioned inequality. You know, disparities in income and in Financial Wellbeing by various demographic and racial categories, something we monitor carefully, inequality which i would point to its a multifaceted thing but i would point to the relative stagnation of incomes for people at the lower end of the income spectrum and also lower mobility. So those are things that hold back our economy. They are. The thing is, we dont really have the tools to address those. We have Interest Rates and Bank Supervision and Financial Stability policy and things like that, but we cant get at those things through our tools. When we lower the federal funds rate, that supports the economy across a broad range of people and activities but we cant we dont have the ability to target particular groups. Notwithstanding that, we do talk about it because these are important features of our economy and you know, i think those distributional issues are issues that are really for our elected officials. I would say i take them seriously as holding back our economy. The productive capacity of the economy is limited when not everyone has the opportunity, has the educational background, and the health care and all the things that you need to be an active participant in our work force. So i think we can, if we want to have the highest potential output and the best output for our economy, we need to have prosperity to be very broadly spread in the longer run, and again, i would just say the fed, we can talk about those things a lot and when we think of maximum employment in particular, we do look at individual groups, so the high unemployment in a particular racial group like africanamericans, when you know, we would look at that as we think about whether we are really at maximum employment. We would look at that along with a lot of other data. So the answer is we do look at all those things and do what we can with our tools but ultimately, these are issues for elected representatives. Thank you. Edward lawrence. Thank you, chairman powell, for the question. I just wanted some clarity here. At what point do you think its prudent to shift the bond purchases from market stability issue from shorter term maturities to longer term, more stimulus related . So we think that our asset purchases are doing both those things today. We think clearly, theres been great progress in terms of market function. If you remember early in the spring when the acute phase of the pandemic hit, market function was very low and its improved rapidly and in many respects is in a good place now. We also, though, think the asset purchases which total 120 billion a month which is much larger than, for example, the last Asset Purchase Program during the Global Financial crisis and the recovery therefrom, we think that thats also providing accommodative financial conditions and supporting growth and we think thats fine. We are also aware that there are ways we can adjust that, you know, to do various things, you know, make it smaller, make it larger and also target different sectors of the curve, and you know, we are going to continue to monitor developments and we are prepared to adjust our plans as appropriate. Thank you. Victoria. Thanks for taking my question. I wanted to ask about a couple of things. First of all, if we dont get a vaccine until well into next year, what does that mean for the economy . And then somewhat related, i was wondering if you could provide any more detail about the stress scenarios you all are going to release for the big banks and whether that is going to be another stress test, whether we are going to publicly see those results and what it might mean for bank payoffs. On the first one, whats happening is basically were learning to live with, right now, we are learning to live with covid which still spreads and were learning to engage in Economic Activity. All of this recovery that we have seen is in a context where, you know, where people are still at risk of catching it, and yet we are able to resume lots and lots of economic activities. And that involves as i mentioned, you know, i think the more social distancing we can preserve as we go back into the work force, wearing masks, keeping our distance, that kind of thing, the better well be able to get Economic Activity back up close to where it was. I do think, though, there are areas of the economy that are just going to really struggle until we have a vaccine thats in wide, you know, wide usage and is widely trusted. Those are the ones where people are getting really close together. I also think testing, to the extent you have cheap and rapid testing, you can do a lot with that in the work force. You can build confidence in the work force if you have regular, very regular testing that doesnt cost very much and you get the results really quickly. If you do that, you will be able to open a lot of work forces, particularly in cities where the overall case numbers are quite low, and that will help a lot. I think we are going to be finding lots and lots of ways to get out towards, you know, as far as we can. Theres always going to be that, for some time, theres going to be certain activities that will be hard to resume. So i think thats the only way to say it. I think trying to, you know, when we make a forecast, we make assessments about that, but its really hard to say. Theres no template here, theres no, you know, theres no experience with this. Frankly, for the last 60 days or so, the economys recovered faster than expected. And that may continue or not. We just dont know. I think we should do those things that we control to make sure that we can recover as quickly as possible, and the main thing again is wearing a mask and keeping your distance while youre in the work force. Thats something we can all do that will limit the spread and let people go back to work, avoid major outbreaks and things like that. In terms of the stress test, i really dont have, you know, we are getting ready quite soon to be making announcements and saying things publicly and theres not much i can say with you, nothing, really, i can say on that today. I dont have anything for you. Thank you. Good afternoon, chairman powell. You have emphasized many times, including today, that the fed can only lend and not spend and sometimes the latter is whats really needed. To the extent that a 600 billion Lending Program for small and Midsized Companies could help, what exactly is wrong with the design or function of the main street Lending Program which is purchased at 1. 4 billion in loans just now . Eric rosengren of the boston fed said recently congress should clarify how much risk it wants the program to take. But congress has already appropriated substantial funds for the programs and these are funds explicitly designed to absorb losses. Meanwhile, my colleagues who cover the Banking Sector say they are being told by commercial banks that the Treasury Department is advising them to target zero losses, zero losses, in main Street Program loans. So if i may, why is it that the Federal Reserve, the congress, and the treasury apparently cannot agree on a loss tolerance that should be applied to the main street Lending Program in a way that would allow badly needed credit to reach these companies . Thank you. Sure. So a couple things about main street. It reaches the whole nation. Its got more than half of the Banking Industry assets signed up among the banks that are part of it. Its making loans. The number is close to 2 billion now so the numbers are going up. Banks are joining, borrowers are coming. And its significant, its relatively small now but it can scale up in response to Economic Conditions should that be appropriate. You know, if you look out in the lending world, surveys generally find that borrowers are not citing credit restraints as a top problem. Thats a lot of ppp, credit lines, theres a lot of credit being let out there. But youre right, we are looking at some things. We are looking at some lenders are concerned about the underwriting expectations. So banks are going to their approach is likely to be that they are going to underwrite this loan roughly the same as they underwrite any loan. They are keeping part of it and you know, what we want to do is make sure that they know that they should take the payment deferrals and other things in place and also that, you know, its really a facility for companies or borrowers that dont have access to regular borrowing, otherwise why would we need main street. So thats what were working on. We will be doing some well be making some changes in that respect. I saw what president rosengren said. I cant really comment directly on that. I just would say that, you know, this is 133, if you look at the law under 133 its very clear that we are to make loans only to solvent borrowers and the cares act is quite specific in keeping all of the terms of section 133 in effect, including the requirement that we gather good evidence that the borrower is solvent. This law was amended in, you know, under in doddfrank. The idea was to make it challenging and put hurdles in place before making loans to the thinking was at the time to two banks. Now we are using that same law for smaller business borrowers and its not a perfect fit. I would also just say for many borrowers, they are in a situation where their business is still relatively shut down and they wont be able to service a loan, so they may need more fiscal support. Having said that, we are continuing to work to improve main street, to make it more broadly available. Make it available to pretty much any company that needs it and they can service a loan. Can you very briefly address reports the treasury is advising banks to target zero losses . Is that appropriate . I cant say i dont know about that. I havent heard those reports. You know, again, if you think about it, we werent we were going to have to go through the Banking System to do this. We arent going to have 100,000 or a million Loan Officers working for the fed or treasury. Banks like to make good loans. Thats what they do. They are trained to make good loans. You should expect that and we expect they will do some underwriting. We also want them to take some risk, obviously, because that was the point of it. The question is how do you dial that in. Its not an easy thing to do. You know, we are getting some loans made and are hopeful that will clarify this and credit will continue to flow. Thank you. Hi. Thanks for taking my question. Chair powell, you talked a couple times about parts of the economy that may not recover as fast as we have seen so far. Presumably you are referring to airlines, hotels, other parts of the economy that rely on close contact. How are you thinking about that in terms of this overall impact . Is that sector large enough to keep unemployment above, far above your maximum goals . Are you expecting that to come back with a vaccine or are a lot of those folks going to have to find new jobs in new industries and should we expect the fed will keep rates at zero until all that reallocation is done . Thank you. Of course, we cant be really sure we know the answers to those questions. But i would say the likely path is that the expansion will continue. As i said, its well along. It will move most easily through the parts of the economy, it will still take some time but the parts of the economy that werent exactly directly affected, that didnt involve getting people in large groups together to feed them, to fly them around, to put them in hotels, to entertain them, things like that. Those are going to be the places that are very challenging. So they will also be, you know, the places that are affected that way and thats going to be challenging for some time. It just is. We dont really know how long that will be. You know, its millions of people. As i mentioned, we had 11 million, Something Like 11 Million People in the Payroll Survey have gone back to work, out of 22 million who lost their jobs in march and april. Thats half of them. So 11 million, particularly at the pace of returning to work slows down, its going to leave a large group of people and it will be very meaningful from a Macro Economic standpoint. Our commitment is not to forget those people. As i mentioned, we want, you know, the sense of our Forward Guidance is that policy will remain as we have said highly accommodative until the expansion is well along, really very close to our goals, and even after, if we do lift off, we will keep policy accommodative until we actually have a moderate overshoot of inflation for some time. So those are powerful commitments that we think will support the full recovery, including those people, as long as it takes. Thank you. Mr. Chairman, Michael Mckie from Bloomberg Radio and television. Based on what you were just saying about keeping policy accommodative for a very long time into the recovery, lower for longer as far out as three years in your latest projections, is that basically it for the fed . In other words, since Interest Rates are your main tool, the things you can do would push down on Interest Rates but is it the case now that the only additional stimulus that can come to the economy is from the fiscal side . Well, no, i certainly would not say that we are out of ammo. Not at all. So first of all, we do have lots of tools. Weve got the lending tools, weve got the Balance Sheet, and weve got Forward Guidance, further Forward Guidance. So theres still plenty more that we can do. We do think that our rate policy stance is an appropriate one to support the economy. We think its powerful. As i mentioned, you know, this is the kind of guidance that will provide support for the economy over time. The idea being that policy will remain highly accommodative until the recovery is well along, really very close to our goals, and it will remain accommodative even after we lift off. I think thats a really strong place for rate policy to be. But again, we have the other margins that we can still use. So no, certainly we are not out of ammo. If i could follow up, in terms of the Balance Sheet, are you concerned that your actions are more likely to produce asset Price Inflation than goods and Services Inflation . In other words, are you risking a bubble on wall street . You know, so of course we monitor financial conditions very carefully. These are not new questions. These were questions that were very much in the air a decade ago and more, when the fed first started doing qe. I would say if you look at the long experience of, you know, the ten year, eight month expansion, the longest in our recorded history, included an awful lot of quantitative easing and low rates for seven years and i would say it was notable for the lack of the emergence of some sort of financial bubble, housing bubble or some kind of bubb bubble, the popping of which could threaten the expansion. That didnt happen. Frankly, it hasnt really happened around the world since then. That doesnt mean that it wont happen. Of course its something we monitor carefully. After the financial crisis we started a whole new division of the fed to focus on Financial Stability. We look at from every perspective, the fomc gets briefed on a quarterly basis. At the board here we talk about it more or less on an ongoing basis. It is something we monitor. But i dont know that the connection between asset purchases and Financial Stability is a particularly tight one. But again, we wont be just assuming that. We will be checking carefully as we go. By the way, the kinds of tools we would use to address those sorts of things are not really Monetary Policy. It would be more tools that strengthen the financial system. Thank you. Don lee . Chair powell, i would like to ask you about the labor market. As you know, in august, there were about 30 million persons claiming Unemployment Benefits. Yet the jobs report for august showed about 13. 5 million unemployed, about 6 million more than before the pandemic. I wonder how you reconcile that [ inaudible ] and labor Market Conditions are. I think the overall picture, take a step back from this, the overall picture is clear and that is that the labor market has been recovering but that its a long way, a long way from maximum employment. I think thats the bottom line on it. So within that, though, claims in particular, the number of claims, the quantity of claims and frankly, the fact that pua claims are new, the pandemic unemployment assistance claims, a new system that had to be set up, the actually counting of the claims is volatile and its very difficult to take much signal about the particular level. Because people were setting the systems up and when they got them set up, they counted them all at once and things like that. I think, though, what you have seen is the level, certainly the level of initial claims has declined very sharply from the very high levels of march and april, and is now at a lower level, continues either to be flat or gradually decline. Its worth noting thats good. Its worth noting that that level is maybe five times the level of what claims were. Claims were around 200,000, now they are 900,000, in that range weekly for initial claims. So that just tells you the labor market has improved but its a long, long way from maximum employment and it will be some time getting back there. I think thats the best way to think about it. Many parts of the economy, theres just a lot of disruption and its really hard to say precisely where we are. I will give you another example. We say unemployment is 8. 4 but if you count those who were misidentified as employed when they are actually unemployed and you add back some part of the participation number, if you had a job and you were in the labor force in february and you lost it because of the pandemic, some of you are now being reported as out of the labor force but you know, i would more look at those people as unemployed. If you add those back, the level of unemployment is probably 3 higher. On the other hand, by that metric, the Unemployment Rate would have been in the 20s in april. So the improvement has been quite substantial under any measurement but the level is still quite high. Second followup, is it the feds aim to get back to 3. 5 or even lower . Yes. Absolutely. You know, i cant be precise about a particular number, but let me just say there was a lot to like about 3. 5 unemployment. Its not a magic number. No one would say that number is the touchstone or that is, you know, maximum employment. I would just say you ask about 3. 5 . 3. 5 Unemployment Rate showed, you know, gains being shared very widely across the income spectrum. In fact, going more to people at the bottom end of the spectrum. It showed Labor Force Participation coming up, up above many estimates of its trend, as people who had been out of the labor force were being pulled into a tight job market. Theres a lot to like about a tight job market, particularly in a world where we didnt see inflation. So yes, we would love to get back to that. We would like to get back rather than to a particular number, we would like to get back to a strong labor market, where wages are moving up, where people can find work, where Labor Force Participation is holding up nicely. Thats what we really would love to get back to. Of course, we need inflation to perform in line with our framework but the good news is we think we can have quite low unemployment without raising troubling inflation. Thank you. Nancy marshall. Chair powell, i want to follow up on the wealth gap issue. I know you have mentioned tools but are there things you can do possibly in the area of research and maybe expand your research on racial economic gaps . You know, we do, we are gifted with a substantial group of researchers who really cover the waterfront and we do a significant amount of research on Racial Disparities across multiple variables including wealth, as you ask about. So we do that. And we also, remember we have our division of consumer and Community Affairs which is present in communities around the country and the reserve banks all have very active Community Affairs groups. They are present in communities around the country. So it wasnt just the fed listens events. Its more just over a long period of time, we are in contact with people in those communities to understand their experience of the economy. We serve all maefrns aamericans know that and we will use our tools to reflect that fact. The answer is yes, we do quite a bit of research and i suppose we could do more but we really do a lot and we contribute to those fields and those assessments of the state of the economy, and we do that not just because its interesting and important but because its important for the economy and important for our mandate. We are assigned maximum employment. What does that mean . As i mentioned earlier, it doesnt mean a particular headline unemployment number. What it means is maximum employment. We look at many many different variables and ask ourselves whether those variables or labor Market Conditions are consistent with our assessments of what would constitute maximum employment and that would include all the things we are talking about. Thank you. Thanks for this. I want to go back to the new Forward Guidance that you have, and you said that its powerful but you have already had two dissenting voters on it and i was wondering if theres other people who argued against it and what do you say to the two who dissented . It looks like president kashkari wanted simpler Forward Guidance and president kaplan thought the present guidance was fine for now. How did you argue back on those arguments . Thank you. I wouldnt i dont want to comment particularly on the two dissenters but they dissented from of course different perspectives and that should be clear. Thats they are sort of on two sides of the discussion. I would say this. I am blessed with having a committee of highly thoughtful people who bring diverse Life Experiences and diverse careers and of course, diverse views to our work and i wouldnt have it any other way. I wouldnt. So i would just say in our discussions the last couple of days, the whole committee, everybody on the committee, is very supportive of the statement on longer running goals and Monetary Policy strategy and whats in there. Very very broad support. Unanimous support for that. Everyone sees the changes in the underlying economy and sees in their own way the need to address those and including the changes we made to the employment mandate and to inflation so that we are now in flexible average inflation targeting. Of course, there would be, you know, we are the first Major Central Bank to adopt this framework. Theres no cookbook, and we, you know, this is the first guidance under our new framework so of course there would be a wide range of views and you would expect that and its actually a healthy thing. So i welcome that discussion. I would also say this. You know, this is all about credibility and we understand perfectly that we have to earn credibility. This facility, this framework has to we have to support it with our actions. I think today is a very good first step in doing that. It is strong, powerful guidance. It ties in very nicely with the statement of longer running goals and Monetary Policy strategy. We had quite a robust discussion and there were different ideas on how to do this but thats just the way it is when you have a Diverse Group of highly thoughtful and effective people, and im pleased with where it came out. Thank you. Hannah lang . Hi, chair powell. Thanks so much for taking my question. I wanted to ask about commercial real estate. I know you had mentioned [ inaudible ] i was just wondering if you have had any other discussions on that and if theres any way the fed could step in in that area. Thank you for that question. You know, we actually spent quite a bit of time on this, as secretary mnuchin i think mentioned the other day, and ill say just a couple things. First, our facilities are essentially always, they have to be under the law, broadbased and not so much targeting any single sector. Also, its important to remember that cre, commercial real estate benefits from several of our existing facilities so the talf takes commercial mortgagebacked securities and sba commercial real estate deals, then the new york fed purchases agency cmsbs directly. In addition, i would say main street helps businesses pay their rent. So we are helping real estate, you know, in a number of other ways, commercial real estate. Also, cmbs issuance has resumed, spreads have tightened on cmbs. A couple of issues. One is just that commercial properties with cmbs loans often have covenants uniformally, i think, that forbid them to take on more debt. So you have a situation and you have a situation where without a legal change or some kind of innovation that defies discovery so far, you have a hard time providing mass relief with regard to real estate thats in commercial mortgagebacked securities. We are still working on it, still looking. I would say it may be that further support for commercial real estate will require further action from congress. For the last question, brian chung. Thank you, chair powell. It seems like a lot of the inflation framework is about keeping inflation expectations, but the average american [ inaudible ] why the fed is overshooting inflation. Whats your explanation to main street, to average people, on what the fed is trying to do here and what the outcome would be for those options. Thank you. Its a very important question. I actually spoke about that in my jackson hole remarks a couple weeks ago. Its not intuitive to people. It is intuitive that high inflation is a bad thing. Its less intuitive that inflation can be too low. And the way i would explain it is that inflation thats too low will mean that Interest Rates are lower. Theres an expectation of future inflation thats built into every interest rate, right, and the extent inflation gets lower and lower, Interest Rates get lower and lower and the fed will have less room to cut rates to support the economy. This isnt some idle academic theory. This is whats happening all over the world. If you look at many many large jurisdictions around the world, you are seeing that phenomenon. So we want inflation to be we want it to be 2 and we want it to average 2 . If inflation averages 2 , the public will expect that and that will be whats built into Interest Rates. Thats all we want. Were not looking to have high inflation. We just want inflation to average 2 . That means that, you know, in a down turn these days, what happens is inflation as is happening now, it moves down well below 2 . That means we have said we would like to see and we will conduct policy so that inflation moves for some time moderately above 2 . So it wont be these wont be large overshoots and they wont be permanent, but to help anchor inflation expectations, at 2 . So yes, its a challenging concept for a lot of people but nonetheless, the economic importance of it is large and you know, those are the people were serving and you know, we serve them best if we can actually achieve average 2 inflation, we believe. Thats why we changed our framework. Thank you. Thanks very much. Liz well, were watching some red on the screen that used to be green just about an hour ago. The fed effectively hooking up a fire hose to the punch bowl and for the most part, the markets initially loved it but you can see that we now have negative numbers for the s p 500 and the nasdaq is hitting session lows. S p is down 11, nasdaq down about 123. The moment the Federal Reserve released its calendar guidance basically saying dont expect any rate hikes for the next three and a half years, the dow which was already up 215 points, rocketed to session highs, spiking 369 points when it was at its session highs. But as you can see, we are looking at a dow that is up now just 80 points. They are looking as we see to powells promises. The s p did extend its gains up 27, just as the announcement was made at 2 00 p. M. Eastern. You can see now, we are getting some doubts that are creeping into the picture and no surprise that big techs titans are actually seeing the red. Facebook taking a big hit as it fights both potential federal trade Commission Antitrust action and a boycott over hate speech by social media celebs and we do have facebook down 3. 5 . Apple is down 2. 5 . Microsoft losing 1. 33 . Amazon down 1. 75 . Look at netflix, down 2 . Gold. Well, gold had been shining pretty green all day long, losing just a bit of that here, up about 4. 50 at the highs right before 2 00 p. M. But right now we see it down at 3. 60. Flip it other to the tenyear ty yield. This has been in a very tight range. About. 66 to. 67. Now you see it moving higher which is kind of odd. A fear trade would be lower but we are at. 688 at the moment. The volatility or fear index gives you the best indication of the flip for the s p and nasdaq, the down side. We have it moving higher right now. It had been lower all day. No fear, lot of complacency in the markets. You can see it is about flat but has spiked nearly 2 . At the moment we have the vix at 25. 60. Lets bring in our expert panel to really kind of translate whats going on. Andy brenner along with Federal Reserve skeptic and gold bull Euro Pacific Capital president , peter schiff. Peter, the q a was going fine, then the vix suddenly, the fear index, down all day, flipped to the upside. Investors had penciled in zero rates for a few years, okay, but nearly four years of zero to. 25 . Should they live on the edge and put it all in pen now . You know, they can actually tattoo it on their arms. But the problem is, you know, eventually the fed is going to have to let Interest Rates go up. If it doesnt want the dollar to become worthless. I thought one of the funniest comments other than the fact that powell denied that we even have any asset bubbles, i dont know where hes living, but he claimed that the reason too low inflation is bad and the fed needs to fight that is he said if inflation is too low, its going to lead to Interest Rates being too low. But he wants low Interest Rates. They are already at zero. The feds goal is low Interest Rates. How can the fed say low inflation is a problem if the only problem that we get from low inflation is low Interest Rates . He thinks thats the solution to every problem. Liz andy, what jumps out at you here . Peter is certainly, i know intellectually correct, we would probably have to see higher rates because inflation, by the way, folks, inflation is well below 2 which is the feds now median target rate, but when we start to see hyperinflation, correct me if im wrong, it goes quickly and does that not risk putting the Federal Reserve behind the curve . Absolutely. That could definitely happen. Thats not going to happen in the near term. The reason the markets are off today is because people were, believe it or not, even more dovish. The fed was not as dovish as they expected. The fed is not increasing qe. The hefed is not yield curve capping, not buying long range. They think the economy is better, even had one dissent because he thought the economy is better and fed is going too far. The fed has capped pretty much their Balance Sheet at 7. 1 trillion is the high that it got in june and its done nothing the last 12 weeks. But on the good side of things, the Corporate Bond market, the new issue market, is on fire. Already, one and a half trillion has been issued in new issue ig this year and that is what is promoting and pushing the equities better and today, you set a record globally of 2. 61 trillion, all currencies, all things, even high yield has set a record. Are there bubbles . Liz i am telling you, i know, i know, but this is what makes me a little bit nervous, andy, and peter talks about, you know, bubbles and the fed doesnt seem to see it, but there have got to be dislocations. I was on a webex call today and i have to tell you, the equity and derivative strategist chief said he noted that investors, we all know that big tech and the big five names and the fangs, blah, blah, blah, have all done well but not only are investors pouring into that and paying a very high premium for the equities themselves, but the Options Market is starting to look like a pocket of risk. They are paying premiums and theres a lot of money going in there. What distortions do you see, peter . First of all, the fed knows theres a bubble because any time the air starts coming out of it, its there to blow more into it. All of its policies are deliberately designed to maintain that bubble. The irony is that everything the fed is doing to inflate asset bubbles is actually deflating real Economic Growth on main street. The fed is the biggest enemy of legitimate Economic Growth because its so fixated on maintaining these asset bubbles that it now denies exists. Liz last fed meeting before the elections. He made no bones about it, congress has got to move on fiscal stimulus. He cant just be there holding up, you know, be the three legs of the stool. Its just impossible. Do you think that we might see some gyrations if congress cannot get it together and cannot come out with some type of stimulus plan . We absolutely do not, repeat, do not need a stimulus plan. We dont need more money being thrown. We need an infrastructure plan. Theres no way you are going to get one between now and the election. It will have to wait until after the election. The fed is there planning to do stuff. I dont really think it matters who wins from a market standpoint. The fed will still be there. Im telling you, you got to look at the Corporate Bond program. Thats the one thats really working. All these other fed programs are not working right now. Powell kind of kicked it around. As far as bubbles, im not saying there are no bubbles. Just look at the nasdaq. Just look at where the 200 Day Moving Average is in the nasdaq. You are down another 2,000 points. Yeah. The feds going to be there. The fed doesnt have to be there. Thats the problem. We dont need more Infrastructure Spending either. We cant afford that. We are broke. We dont want the government creating money and spending it. We want the government to stop spending so that they can free up those resources back to the private sector, where they are needed. Everything the government is doing, all these Government Spending programs, are making the economy weaker, not stronger. I guess peter is not a believer of the modern monetary theory. Nothing modern about that. Its not even theoretical because it doesnt work. Its not working. Liz its ticking higher. All right. [ speaking simultaneously ] its working for me. But not for the country. Liz indeed. Gold hit some good numbers lately. Great to have you both, gentlemen. Thank you so much. We cannot ignore the debut of snowflake, sparking an immediate meltup in the Cloud Software firms stock. It was priced at 120. Can we see it . Here it goes. Priced at 120, its at 262. 80 right now. It opened on the nyse at 245, spiked up more than 300 bucks. I believe at the high it was 319. So yeah, im wondering how thats going to age because its pulled back markedly from there. But the valuation, nearly 68 billion, the likes of Warren Buffetts Berkshire Hathaway even took the plunge, investing 550 billion in the companys ipo. The largest ipo for a Software Company ever. Let me flip it to fed ex. We cannot ignore some old school names here. Its christmas in september for fed ex investors. The stock hitting a twoyear high after reporting record revenue, fueled by pandemic demand, price hikes and lower fuel costs. Rival ups is down about. 75 . It has yet to report its earnings so its not yet catching fed exs wave. Then, well, new york giants fans may be unhappy with their team, but draftking investors love the giants. Draftking hitting a record at this hour, up 6 to 51. 18 after the platform signed an exclusive multiyear Sports Betting deal with the giants. All right. It does appear Consumer Spending is slowing in the last month, in august. Did you see retail sales . We are trying to get all this in front of you so you can make your own decision in investing. Retail sales growth lost momentum in august while sales did climb for a Third Straight month. Thats the good news. August sales were not as strong as expected. You can see the miss there. They rose. 6 . Expectations,. 7 . Exautos. One area that did see a very strong rise in sales, bars and restaurants, as people ventured out and began to eat out more and order more. So as extended Unemployment Benefits were cut for millions, are we now seeing the fallout, particularly as we are seeing a rise of permanently unemployed workers in america . To our traders, teddy and phil, coming off what the Federal Reserve has just said, no rate hikes for the next three and a half years. I dont know, who can see that far out . I wish i had that xray vision. Teddy, what do you do when you see that but you also hear the fed saying that unemployment has come down markedly and yet we are seeing a lack of spending fallout. Tell me, what would you sell, what would you buy . I think its time to maybe take some profits, right . Well, maybe take a little money off the table, because if you have been lucky enough to own home depot or walmart or lowes, target, you can pick your poison, you have had tremendous returns over the last couple of years. So maybe you take a little money off the table. But i dont see this as necessarily a negative. The fact is the employment numbers continue to improve better than expectations. The economy is coming out of a deep dive because of the pandemic. We still might get a second stimulus package. I actually think that rather than taking money off the table, from a trading point of view is the smart thing to do, i would be looking for an opportunity on a selloff to commit new money, and in particular to a company like walmart. I think the glass is absolutely half full, not half empty. The consumer has actually never been in better shape. Savings rates are at alltime highs. Money is being spent. Just because you have one bad month doesnt make a recession. Liz what do you think, phil . Is there anything you would sell and i would note that in the aftermarket, oil is back above 40 a barrel. We havent seen that in awhile. We havent. Not since the holiday. You know, its almost a pattern, every threeday holiday you get [ inaudible ]. The Energy Companies are leading the way back up. They have been beat up here a little bit. I think teddy is absolutely right. Remember, last month we had [ inaudible ] and this week we [ inaudible ]. You mentioned bars and restaurants have started to really come back a little bit and people went to the bar and probably forgot their amazon password when they got home so they are probably [ inaudible ]. Liz okay. So you are going to be able to get more [ inaudible ]. The employment picture is going to get better. There is no doubt in washington the pressure to get a stimulus package is rising. Both sides are pointing the fingers at both sides and the polls are going to shift one way or another. Somebodys going to get the blame. Liz i dont know. Phils energy is so hot, he burns the broadband lines. Youre in and out. Great to see you. Thank you as always. We are seeing the dow up 172, kind of scratching back some of the earlier moves lower. But weve got the claman countdown much more. Well be right back. This is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Liz all right. Weve got a fox business alert. Take a look at oracle. Oracle has reversed course. It had been up slightly just before noon. It is now turning negative after one of president trumps most trusted voices just tossed cold water on the potential for a quick resolution and approval of an oracle tiktok, again, im not going to call it a deal, charlie. Im going to call it a friendship because its not a sale or deal. What have you got here . What are we hearing now from the president s inner circle . Charlie well, i dont know who you are referring to, one of their top people throwing i mean, someone go public with this . Liz kudlow. Kudlow. Charlie okay. Heres what we reported earlier and what i can advance now. There is a battle in the white house right now over whether to approve this deal. I didnt know larry larry didnt figure into my liz let me just clarify. Let me let you know. Kudlow says security and ownership are important to donald trump when it comes to a tiktok deal. Charlie well, you know, the oracle deal with tiktok does not provide ownership. I mean, its not a sale. Its a joint venture with the chinese and they control, they still own, they basically still own the property. Its being licensed to a separate company and that company is being run by oracle. There are even reports that that separate company will be majority owned by bytedance which i did not know that. I saw that in the journal today. I saw that, i didnt have that level of detail. I just knew there was a separate company that would license the the tiktok app and its algorithm that would still be owned by the chinese and this is really the case that separate company has to be a chinese company, majority owned, i dont know how they approve this. But heres what we know. Again, this is my reporting. I did not know larry was in the middle of this thing. But from what i understood, it was attorney general barr, it was secretary of state mike pompeo who were and to some extent, navarro, Peter Navarro, the trade adviser, antichina hawk, who is putting up some degree of resistance to this deal while cfius, the council of Foreign Investment in the u. S. , run by treasury secretary mnuchin, and wilbur ross, the commerce secretary, they were for it. So cfius was poised to approve it but then came this backlash inside the administration and thats, from what i understand, what caused delay. For all i know, this thing is going to be locked up after the bell. I have no idea. I dont have that level of detail. Sometimes these things move fast. But this clearly, it should have been announced by now. Late yesterday, people close to the deal were telling us that they believed it was going to be done at the end of the day yesterday or early this morning. They were telling me, these are people working on the deal, it would almost have to be done by that timetable to get the necessary paperwork ready for the data transfer. So this delay theoretically should pose a huge problem for whatever deal this is. Again, its not a sale. That went out the window when microsoft backed out. Microsoft wanted to buy it, control the whole thing, essentially make it a part of microsoft. The chinese nixed that when they passed the new import rules. They basically, i mean, listen, they were not going to be oneupped by donald trump. Remember, trump was using this basically saying that china was spying on us using the tiktok software to do that on its users. Whether that was true or not, there was never any evidence. China obviously had its nose out of joint because of that and did him one better and say no sale whatsoever to any american firm, even as microsoft was ready to buy it. One thing we have learned from this whole thing is microsoft was probably the only company capable of doing the outright buy, and to reconfigure the code and everything. Oracle doesnt have that level of expertise, from what i understand, or that Balance Sheet to buy it. It costs a 30 billion price tag. But this is fascinating. It is a battle inside the white house. The battle lines are drawn. The fact that larry would say that, come out and say that, that ownership is a key thing, i dont know how you get around this. Liz let me give you the exact quote. Oracles tiktok bid leaves u. S. Security concerns unaddressed. Kudlow says security and ownership are important to donald trump when it comes to the tiktok deal. U. S. Is in a deep review of the process. I have reached out to Peter Navarro, who is the biggest china hawk, and peter i think, i think it is weird the biggest china hawk out there Peter Navarro is keeping quiet on this, why so quiet on this one of all things . Liz he is probably haranging people inside of the white house. We should point out oracle is very politically tied into this white house. Larry ellison, bigtime trump supporter. Point out general atlantic, sequoia partners, are big time gopers, it reaches to crony capitalism if they al this thing to go. Im sorry, it is so obvious. Liz moment by moment, were getting news on the tape. Charlie, thank you very much. Lets take a check here, four minutes before the closing bell ring, federal chair Jerome Powell said you can relax three 1 2 years. Well not be raising rates. I cant believe that, right . Many expected a couple of years. We have the election looming in the balance, what is the trade now . That is the question we pose to our countdown closers. Wilmington trust, part of m t bank and Emerald Asset Management joe besecker. Luke to you first. I dont know if we can relax. We can certainly not expect rate hikes next couple years. The fed communicated the past couple of weeks. There is still a lot of uncertainty what they may or may not do. We talked about them holding their cards pretty close to the vest. They left out a lot of details about the average inflation targeting. How they will view unemployment. They only talked about that in pretty vague terms a Little Information about quantitative easing today, but not a whole lot. Rate hikes what they told us about today, not expecting rate hikes for the next several years. That is more information that the market was expecting. The saw the market go up as powell gave in more details during the press conference, pricing in more expectations. There is still not a lot known what the fed might do next couple years, liz. Liz what we know joe, that they will be highly accommodative. That does not work into the entire picture exogenous events. These are unexpected black swan things, what is the trade right now for your clients, joe . So the thing is is that you could look at it twoways as far as the fed. We choose to look at it lower for longer, they are going to be our friend. So were looking at emerald like we do with the 2000 Company Businesses look for opportunities not as obvious. You and i talked about overstock last time we talked. The stock was under 18. It is like 73, 74 now. Liz wow. You had me on and we put it out there. But now we like other types of things. Liz, knock knock . Whos there . Liz whos there . Rv. Are we red very to talk about explosion in rv and camping market. We love this space. The only time i had an rv for our clients. Not really for an rver myself. I was on camping world car. We love winnebago. We have the space, thor and some others. We love the space because people are doing this in droves. One quick point. 4. 1 billion tiktoks on rv and camping. I just cant believe that. Just shows interest. [closing bell rings] bottom line the company will grow. We love it. Liz got it. Joe and luke tilly, great to have you. We have fumble ad gain for the dow of more than 300 points. Still [inaudible]. Connell to revive the economy. The dow hitting session highs after the Federal Reserve came out and expects to keep Interest Rates near zero for three more years. Then we really lost momentum in the last hour of trading and it was weakness in the big tech stocks again that was tracking on the markets. Well try to put it all together for you. Im connell mcshane. Melissa im melissa francis. This is after the bell. The dow in the green for the fourth trading day. S p, nasdaq, closing near the lows of the day. Fox Business Team coverage for you now. Edward lawrence in washington. Gerri willis watching the markets and blake burman is at the white house. Lets start with