Not spooked by anything happening at Federal Reserve and dow, nasdaq and s p at records at the moment after the Federal Reserve held rates stead i did for fifth meeting in the row and fed chair Jerome Powell answering questions for reporters. Lets go back there live. Early parts of the Pandemic Recovery have mostly been resolved. Youre seeing high job growth, youre seeing big increases in supply. Youre seeing strong wage growth but wage growth is gradually moderating down to more sustainable levels in many, many respects and the things are returning more to their state in 2019, which we can think of normal for this purpose. Thats job openings and quits and surveys of workers and businesses are interesting on this and how tight is the how easy to find a job and how easy it is to find a worker. Those have both those surveys have both come down. The labor market is in good shape. You know, you do see things like the low hiring rate. And people made the argument that if layoffs were to increase that would mean that the net would be fairly quick increases in unemployment. Thats something were watching and not seeing it. Of course initial claims are very, very low and if anything tracked very closely and when i say unexpected weakening of the labor market and expect the Unemployment Rate to, the forecast moving up to what we see as longer unsustainable level and thats just a peoples forecast and something thats unexpected and thats where ill leave it though. Reporter Steve Matthews with bloomburg. You mentioned at beginning of the press conference that the committee thought it might be appropriate to slow the pace of asset runoff fairly soon. Im wondering is, when you say fairly soon, does the Committee Meet about this again in may in a decision could be reach that had soon and was wondering it you describe the can she be of what the committee is discussing at 95 billion of caps right now would that be cut about in half or something in that nature . Thank you. So that is what were discussing essentially is not discussing many other Balance Sheet issues and well discuss in due course and what were really looking at is slowing the pace of runoff and not much in nbs but in treasuries and talking about going to a lower pace and i dont want to give you a specific number and havent had an agreement or decision and thats the idea. And thats what were looking at. And the in terms of timing, i said fairly soon. I wouldnt want to try and be more specific than that and you get the idea. The idea is this is in our longer run plans and we may be able to get to lower level and wed avoid the kind of frictions that can happen. Liquidity is not evenly distributed in the system and there can be times in the aggregate reserves are ample and abundant and parts that are not ample, there can be stress and can cause you to prematurely stop the process to avoid and it would be hard to restart we think. Something like that happened in 19 perhaps. Were looking at what would be a good time and structure and, you know, fairly soon is words that we use to mean fairly soon. And will there be a discussion about returning to all treasuries Balance Sheet at some point . Our longer run goal is to return to a Balance Sheet thats mostly treasuries. I expect once were through this, well come back to the other issues about composition and maturity and revisit and its not urgent right now and we want to get this decision made first and then we can when the time is right come back to the other issues. Reporter hi, victoria with politico. Can you talk about the outlook of the Banking Sector might impact the Balance Sheet plans s and deposits shrinking and seeing turbulence . Well be watching carefully but one of the reasons were slowing down, we will soon enough is we want to avoid any kind of that turbulence and not thinking about Banking Sector per se but we had some indicators and the last time. This is our second time in doing this, and i think well be paying a lot of attention to the things that started to happen and that foreshadowed what eventually happened at the end of that tightening cycle where we wound up in a short reserve situation and dont want to do that again. Now theres a better sense of what are the indicators and not so much in the Banking System as around for example where federal funds is trading relative to the administered rates. Where secured rates are relative to the administered rates and those sorts of things. Well always be watching the Banking System for similar signs though. Reporter is it also because youre not sure exactly how the reserves applied will react once the overnight repo facility drops near at zero . Well, i think we broadly think that once the overnight repo stabilizes either at zero or close to zero that as the Balance Sheet shrinks, we should expect and reserves decline pretty close to dollar for dollar with that. Thats what we think. Reporter hi, jay powell. Jean young with market news. I want to ask about the Balance Sheet. Will you you said that starting to taper sooner could get to, get you to a smaller Balance Sheet size and does that mean you dont have to make a decision on when to end qt at this point and will you be setting up the process for deciding that sooner or will you wait until were close to the end . Sort of ironic that by going lower you can get further and the idea is that with a smoother transition, you wont youll run much less risk of kind of liquidity problems, which can grow into shocks and which can cause you to stop the process prematurely. So thats where in terms of how it ends, were going to be monitoring carefully money Market Conditions and asking ourselves what theyre telling us about reservings. Are they right now wed characterize them as abun dent t and aiming were ample and little less than abundant. There isnt a, you know, theres not a dollar amount or percent of gdp where we think we have a really pretty clear understands that were going to be looking at what these, you know, whats happening in money markets and in particular a bunch of indicators tells us were getting close. Then you reach a point ultimately where you stop along the Balance Sheet to run off and you, from that point, theres another period which nonreserves, nonreserve liabilities grow organically like currency and that also shrinks reserves at very slow pace. Pace off slower pace of runoff and well have this soon and another time where you effectively hold the Balance Sheet and hold nonreserve liabilities to expand and then that ultimately brings you ideally in for, brings it into a nice easy landing at a level thats above what we think the lowest possible ample number would be. Were not trying for that. We want to have a cushion or buffer. We know that demand for reserves can be very volatile and we dont want to, again, find ourselves in a situation where theres not reserves and we have to turn around and buy assets and put reserves in the Banking System the way we did in 201 20. 2019 20. Reporter hi, Nancy Marshal again with marketplace. Chair powell, you said youre waiting to become more confident that inflation is getting to 2 goal before you cut rates. Sum up more specifically what data youre looking at that would give you that confidence . Sure, so were most importantly looking at the incoming inflation data and the contents of it and what theyre telling us. More confident that inflation is coming down towards 2 and well also be looking at all the other things that are happening in the economy and totality of the data including as we make that assessment and most important thing is inflation data coming in. Our target is not inflation but its wages. We would look to the fact that wanes are still coming in very strong, but theyve been wage increases that are saying wage increases have been quite strong but theyre gradually coming down to levels that are more sustainable overtime and thats what we want. We dont think that the inflation was not originally caused we think, i dont think by mostly by wages. That wasnt really the story but we think to get inflation back down to 2 sustain blizzard warnings, wed like to see continuing gradual movement of wage increases and high levels but back down to levels that are more sustainable over time. Reporter thank you, greg rob from market watch. Chair powell, could you say whether there were more officials that wanted to be care and feel go slower than about rates than were in the last meeting . Was there that sense of maybe its smart to wait . Thanks. Id put it this way. If you look at incoming inflation data that weve had for january and february, i think very broadly that we were right to wait till we were more confident and i think i didnt hear anyone dismissing it as not information that we should look at or anything like that. Generally speaking, it does go in the direction of saying, yes, its appropriate for us to be careful as we approach this question. Reporter thanks, chair powell. Brendan peterson with punch chair news. Central Bank Currency stuff. Weve been hearing a lot from republicans in congress about what the fed is or isnt doing in a digital dollar. Youve said to congress you were going to wait for approval before the fed does anything and launches anything but folks like House Majority whip tom emmer said that the fed is actively researching or hiring personnel for implications of the cdc and sure, ill try harder. We havent proposed or coming to a crossexamination we should propoise or anything like that that Congress Considers legislation to authorize a digital dollar and would take us the ability to do a cbdc or retail cbdc with the public and so were just a long, long way from that. What we are doing and every Major Central Bank is doing is trying to stay in the fran tiers of whats going on in Digital Finance and it has many, many different areas. Theyve become front burner in the last five or six years and we need to be knowledgeable about all that and we have people trying to understand things that are but wrong to say were working on a cbdc and we have a lab and will spring on congress in the right moment. We dont. I havent at all in my own mind made a decision that this is something that the u. S. Should be doing. And something we need to understand and we have people who are keeping up with that as part of the broader payments landscape. Thats how id characterize it. Reporter thank you, mark with bank rate. April 27 is the 13th anniversary since a fed chairman began holding regular news conferences. How important is that higher transparency been in your view both with the proper functioning of the central bank and also an n accomplishing your mission, and is there more that you and your colleagues can do on the transparency front and what might that look like . I generally think this movement started, you know, 30 years ago, 30 years ago when some academics positive that a more transparent central bank and public understands your reaction that the markets do your work and react to the data. So it all happens that way. Theres been a march towards greater and Greater Transparency and that certainly chairman advance that had and chair yet and we went from four press conferences a year to eight so now every meeting really is live now. I think thats a good innovation. I wouldnt want to turn it back. We also have done a bunch of other things and we have a annual supervision report, Financial Stability report. I mean, theres a long list of things weve done. I think you nothing comes to mind as desperately in need of doing it and were very transparent and no shortage of foc participants speaking to the public through the media and that channel is full i would say. So i think its generally broadly helped and made things better. Reporter any day you want to put that genie back in the bottle somewhat . Of course. Not. [ laughter ]. Reporter jennifer with yahoo finance. Not to harp too much more on confidence and inflation but you did say earlier in this press conference that the reason inflation data hasnt raised anyones conference but when you testified before the senate a couple weeks ago you told lawmakers youre not far from receiving the competence needed on inflation to begin cutting rates. Are you still of that belief or not . What are we to take by those words, not far . So let me say my main message at in those two days of hearings was really that the chit tee needs to see more evidence to build our confidence and that inflation is moving down sustain sustain blizzard ws towards the 2 goal and building rates that were more confident and if thats a case, i said that any number of times and part of the main message and repeat that had today in our statement. I to the language you mentioned, i pointed out we made significant progress over the past year and what were looking for now is confirmation that that progress will continue. We had a series of inflation readings over the second half of last year and were really much lower we didnt overreact as i mentioned but thats what i had in mind. Reporter given that you said pce for february 2. 8 the estimate and that we have been seeing pce, core pce coming down by a percent every month, wouldnt you be at about 2. 4 this summer, june july, to a point where you could cut then . Well, you know, well have to see how the data comes in. We would of course love to get great inflation data and got really good inflation data in the second part of next year and didnt overreact and we said we needed to see more, and we said it would be bumpy and now we have january and february, which ive talked about a couple of times. Were looking for more good data and would certainly welcome it. Thank you. Thank you. Liz things that go bump in the night did not spook fed chair Jerome Powell. Rock solid on every attempt to shake him off and push him off, you know, hopefully to push him at least on behalf of some of the questions to alter that 2 inflation target, which for the moment were above. He repeated multiple times the 2 inflation target is where the fed is squarely aiming. Were looking at full blown record highs and the thats partially why the dough jones is jumping 373 points and s p gaining 43 points and nasdaq up 192 and russell is loving this. Up 34 points or 1. 7 and dow jones up 1. 6 or 255 points. All right, so this would bring the fed funds rate to 4. 6 if there are three cuts. The bulls not racing any time and dow at session highs right this minute up 381 points. That is, ill repeat it again, a record. S p topping the 5,200 level for the very first time. Right now were at 5,221. Any gain for the s p is a record. Folks, the number to watch for a record close for the nasdaq is a gain of more than 108 points, were at a gain of 190 points. Theres real action in treasury yields, and the action is south. They are pulling back. Okay, the 10year yield, down 1. 1 basis points for the second day from the highest since november and then the two year yield, which most closely tracks the Federal Reserves policymakers and what they think and what they do, below 4. 7 for the second day. Look at this pullback of 6 basis points at the moment to 4. 628 . Gold jumping and jumped again immediately after the announcement. Earlier the interday around 2,179,000 an ounce and now a gain of 28. Bitcoin is interesting and its higher. When we say higher, it got a lot higher when chair powell just said, this was all happening as we spoke, he was asked about a digital Federal Reserve coin, a central bank coin. He has said thats not in the works. He reiterated that, but said we want to be at the frontier of these kinds of things, and he said its important to move these types of issues to the front burner. There is no secret lab where theyre cooking up a digital currency, but he did say very interested in making sure that they are on this case. Now, i was looking at bitcoin, if you could just keep it up there. Before 2 00 p. M. Eastern when the announcement was made, bitcoin at 64,110. Okay. Now its at 65,292. Take that what you think from it, but i think thats pretty interesting when the Federal Reserve chair says we want to be on the frontier. In the meantime, take a look at oil. Oil is off the 82 a barrel mark and at 81. 34 and this has been slow moved to the downside here. Powell was asked about resent hotter than expected inflation reports weve been seeing. The january report in particular, were talking about cpi and then ppi spooked the markets that day, but powell not spooked. The january number, which was very high, the january cpi and pce numbers were quite high. Theres reason to think that there could be seasonal effects there. But nonetheless we dont want to be completely dismissive of it. The february number was high, higher than expectations, but we have it at currently well below 30basis points and core pce, which is not terribly high. Its not like the january number. I take the two of them together and i think they havent really changed the overall story. Liz joining me now, first on fox business since the Federal Reserve decision, Morton School profession sore emeritus jeremy siegle. Theres confidence inflation is moving back to the 2 target and any of that surprise you and what do you think would move him to start cutting . Well, liz, he was more doveish than even i thought. I thought he was going to be a bit more hawkish, and i think thats why the markets are certainly moving up. That was unexpected weakening of the labor market and when he uttered those words and saw that you had a shy run on that, the dow and the market jumped. If hes going to be responsive to any weakening, thats what the market really wants and so they like that, not overreacting to the fact it is a slow path down to 2 . Yeah, it was a bullish news conference, and certainly a bullish report. Liz i should say. The markets are charging higher, and i am looking at the vicks. The vicks right now down 5 before the 2 00 p. M. Announcement. Im a nerd, i keep all of these things together, the vicks was just up about 1 . Up 1 and now down 5 so clearly the markets absolutely love this. Still on track, the socalled dot plot taking the temperature of each of the voting members still shows they believe there will be three rate cuts by the end of this year. Do you really think thats going to happen when we have a pretty Strong Economy here . Economy. Yeah, and by the way, three by the skin of your teeth, actually eight that thought one or less and then nine that thought i mean two or less and nine that thought three. It was really pretty divided. I actually thought it was going to go to just two rate cuts and not three rate cuts, which might have changed some of the headlines, even if just one person changes his or her opinion. I think whats really important that we all remember is they really dont know how these numbers are going to evolve. It is, you know, meeting by meeting and the next meeting is may 1 so, you know, weve got the rest of march and all of april and, you know, then they sit down and make their decision. So dont, you know, pin any special insight that they know exactly where inflation or the economy is going to go. We do see, by the way, that goods prices, sensitive commodity prices. You showed oil, it is certainly down today but other sensitive commodity prices, which have been in almost a year down trend, you know, copper, iron, and the others, have stopped going down. So thats sort of disinflation is not there. One source that is and he did mention it briefly is that terrible lag rental component of his indexes that he thinks is going to kick in on the downside. He says we dont know when, but we expect that by the second half of the year to push those inflation rates down, which would lead to probably some more rate cuts. Liz so many renters are hoping for that trajectory as well for prices to come down. Before we go, jeremy, youve got to tell me because you have predicted bubbles bursting and then they have popped. Do you see anything that looks truly like a bubble that is close to popping . Liz, you asked me the question, im going to ask more, is this 1996 97 on the way to 2000 . First ophiology, were nowhere near 2000 or 1999, you know, i mean the pe ratios of these big tech stocks were 150200 then and now weve got 30, 35. Were really not anywhere there. Could we get there . You know, some people say every 25 years theres a mania cycle that was a 50 50 of the mid 70s and it was 2000s and now were at 2024. Im not making a prediction but saying we aint there now. Liz checking nvidias farred price to earnings ratio, 36. Not unreasonable at all. Liz okay, dr. Siegle, wonderful to have you. Thank you so much. Look at the dow, folks. Up even 400 points at the moment. We told you earlier, all three majors on track for record closes but by far the best percentage performer and small and mid caps and russell 2000, theres a lot of experts on in the past and a couple of weeks predicting this, and here we go. We have it up about just under 2 to 2,074, gain of 38 points. Lets take it right to the floor show because we need much more post game coverage of this fed meeting. Joining me is jp morgan chief Market Strategist gab retoan toes and andy brenner. Andy, todays meeting going into it and the markets were like a coiled spring. Here they are. They are like a, you know, shrinky going way sky high; right . Absolutely, liz. You pointed out and people looking for two rate cuts for this year rather than the three. They got the three back as well as paul was doveish. You mentioned what he said about rents, which i think is key. Its nice to see Old College ProfessorJeremy Siegel talk about it and he pointed out the same thing so he taught us well. The fed was somewhat doveish and, liz, one thing that came out this week and not part of today, the state of california issued a revision to number of jobs in 2023, which originally said theyve created 325,000 jobs. Then they revised that to 50,000 jobs. The fed is looking at back ward and bad information. I think the economy is much slower and i think the number of rate cuts the fed will be surprised that therell be more than just the three theyre predicting for this year. Liz does that then mean theyll be forced to move maybe a little sooner and going into today, the may fed funds future is 99 odds no move and 12 rate and therell be a cut. Tiny percentage and i dont know, maybe the market sees something there. Not going to it with 81 type thing against me. Im going to go and stick with june. June has been my expectation for the last few months and im going to stay there and the fed has got some kind of lock not to disrupt the election. I dont know whether they really do worry about that or not. I think they do so if they dono start by june and can move in july and then let the strategists talk about november, september and december. Liz why are equities roaring so sky high right now . Equities heard everything they wanted to hear and repeat from the december fed pivot which was theyre no longer afraid of stronger growth. Doesnt mean inflation is going to be knocked off course. Theyre aware of bumps in the road and next move is a cut and much more responsive to weaker Economic Data and willing to cut more if need be. Thats a per spect set. Liz they up the 2024 gdp forecast and put that up on the screen and went from 2. 1, two, 2. 4 and it was 1. 4 . Why dont we see. Am i getting that wrong . I thought gdp was 2. 4. It was 1. 4 at december and then up to 2 . Liz yeah, thats what it should be. Clearly more comfortable that growth is strong and economy can withstand higher rates but theres no reason to be concerned about this. The last rate hike was in and july of last year real plus inflation with higher earnings and expect the fed to be there as growth slows. Liz talking about one month up to the 12 month because those yields are coming down more resiptously, are they not right now . Because the fed is there and going to remain slow, youre going to have six month bills and three month bills, whatever five and three eighths, 540 and seems to me that because i figured id get this question today. You need to barbell it and barbell between Investment Grade to possibly high yield corporates and short rates and they need to look at positive carry and if you can get positive carry, i think you weigh on this. Im a little skeptical buying ten years at 426, 427, 428. I think the max numb is 3 l 5. Liz 5. 31 and 5. 46 . Those are great yields, liz. Liz why not . Why not. Keep rolling them over. Thats what ive been doing. I worry a tiny bit about the reinvestment risk and the reason is at the moment, investors are pretty bang on with the fed for this year and next year. The trick is when the fed starts cutting rates, which we think june looks pretty reasonable, those forward looking rates can fall pretty quickly as it finally becomes clear, were getting going and eventually rates are lower and extend duration a bit from the t bills into more intermediate kind of treasury notes and treasury bills and thats where youve gotten the most last year and a lot of investors looking a the that as a sweet spot. Liz seeing 5 . Is it really worth 500 basis points though. It also gives you protection in case of a recession to take more risk in parts of the portfolio like stocks and high yield credit. Liz great to see you both. Gab rendgabriela and andy. Amazing to see the dow up 388 points and thats a record and all time record and get you some individual stock stories that are perhaps driving the broader market. Chipotle mexican grill, the big burrito and stock had a record high after 10 00 a. M. Eastern blasting through the 3,000 level for the first time ever. It topped out at 3,023 and now at 2900 and up 3. 6 and serving as hot sauce on the stock, mexican food chain board approved a a 50 for 1 stock split and first split ever. It lowers price of shares without affecting the companys valuation and makes them more affordable for those that want to buy the stock. If the split is approved at upcoming annual meeting on june 6, existing shareholders rexiphoadditional 49 shares for each one they own and if you arent a shareholder and you want to buy one, price going down to about 56, 58. Thats a moving target. Investors are breaking up with signa jewelers after Engagement Ring retailer issued a soft fiscal year Sales Outlook and blames diamond discounting at independent jewelers as well as soft valentines day season. Industry data shows jewelers are discounting price of natural diamonds due to the rise in popularity of labgrown stones. So a decade in, lab growns are starting to be more popular here. Signa jewelers down Signet Jewelers down 11. 5 . Top golf callaway grands trading higher after being halted after denying a report of potential sale of the company. The stock hit a hole in one after a report from a south koreaen newspaper indicating the golf which i am the company may be up for sale and the plan is to spin off the top golf equipment business and sell the callaway golf equipment and apparel business for about 2. 98 billion. Up next, President Joe Biden on the ground right now in arizona seeing where close to 20 billion from the bipartisan chips act will go first. Intels growing Semiconductor Foundry gets the nod. How will the semiconductor standout bring ship making home to america, grow it and how will it help intel move up along the line that is still growing of ai chip makers. Intel ceo Pat Gellsinger about to step on to the screen and reveal his plans and brad gersner is here and talking about whether itll be successful kicking china in the chips link and the Federal Reserve role in keeping you as tech vie rant and in the lead. Before any gain on s p would mark 19th record of the year and seeing a gain here and big one and see whats pushing it and names trying to get it there. Well, paramount global, ford motor, Generac Holdings and albermar. Pat gelsinger, brad berstner and more coming up. Dont go away. Fisher Investments in this market, youll find Fisher Investments is different than other money managers. other money manager different how . Arent we all just looking for the hottest stocks . Fisher Investments nope. We use diversified strategies to position our clients portfolios for their longterm goals. other money manager but you still sell investments that generate high commissions for you, right . 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And we could all unexperience this whole session. Okay, thats uncalled for. Liz that is a rally and record s p and nasdaq at all time records and faked or dreaded dot plot shows Federal Reserve fishes still expect three rate cuts this year, despite lately weve seen firming inflation and central bank leaving rates unchanged for fifth straight meeting but what is wall street saying about powells remarks and nonmoves, i guess, charlie . Ill say what i said on the show a month ago, the consensus among the wall street fed watchers and best ones on wall street are larry fink is larry fink. Theyre going to theyre on schedule and he said this a month ago and others saying too, theyre on schedule to do it three times, cut three times and first one in june and then lets see what happens. One thing to appreciate about Jerome Powell. He always telegraphed and really worried about the market. Fed chairman are not supposed to be worried about the market. Be that as it may, he is. Thats why the general consensus among people like fink and others, is that the june rate cut of 25basis points is baked in. Hes not going to because the markets will go wickedly shout if that doesnt happen. This is borrowing some mayor yak we out of the blue wacky inflation out of the blue numbers and rates are at 3, hes still worried about a recession because theres other numbers that show a slow down. June is baked in. Obviously if Inflation Numbers after june look sticky and look like theyre rising, all bets are off on the other two. Liz i say two. I thought larry predicted a possible two cuts. Yeah, he did but said three so there could be three. Be that as it may, the june thing is baked in and gets into the weirdness of Jerome Powell and again, fed chairs are not supposed to worry about the stock market and worry about other things and not supposed to worry about what were seeing on the screen. But he does. And hes really worried. If they dont cut in june that theres going to be, you know, armageddon here. I think you see, again, barring something really dramatic, and weve on this show reported this well before anybody else. June cut, smallish, 25. Wait and see after that and if he has droughtiers, two more at 25. Thats all i have to say about this matter. Liz okay. Good. Shes so happy im done. Liz done. I want to see explosions go off. Liz thank you, charlie. Breaking news, President Joe Biden in chandler, arizona, right now after just wrapping up remarks on his investing in america agenda. Moments ago the president toured intels chip manufacturing in the state where the Company Became the first to receive the long awaited chips and science act money. The 8. 5 billion infusion it received from the government will help expand the chandler, arizona, campus and intels operations in oregon and ohio as well. The Biden Administration also awarded intel with up to 11 billion in federal loans along with the 25 investment tax credit on more than 100 billion in qualified investments intel makes. Its a monumental day for intel and for Ceo Pat Gelsinger who joining us now. Pat, congratulations on finally receiving the grant. Id love to say its like having a baby but thats only nine months and gestation of elephants at 22 months. Thats taken white awhile. Liz, its been quite the journey and thank you for having me on the show and always a pleasure to meet with you and its a bit over three years ago i took the job and really started to throw ourselves behind getting the chips act across the line. Huge bipartisan support for it and august of 22, signing of white house along with the president and now here we are. Liz where do you plan, pat, to commit the first chunk of it, and how big will that amount be . Specifically where would we see it as taxpayers and investors . Yeah, across the four projects we have here in arizona for refurbishment and new facilities youre seeing behind us and i always like to remind people, these are some of the largest Construction Projects on earth being building the smallest things that have ever been built on earth and also at new mexico site, which is the most advanced packaging thats being done anywhere in the planet. Itll be in our oregon site, which is really the research hub, the crown jewel of advanced technology and research. And then of course the silicon heart land in ohio, which will be the next major manufacturing site for us for not the note that one that comes up here but the one after that thatll be a couple of years from now and most advanced manufacturing building what i believe will be the ai chip hub of the nation. Liz i was amused to hear another Business Network this morning dices the decision about the government giving such a big amount and saying youre building older generation less modern chips and amd and nvidia are deep in new ai chips. Somebody didnt do their homework and that foundry signed a deal with microsoft to produce ai accelerators and give us more detail on how modern these chips truly will be and when theyll start shi shi shipping and whent will they do regarding ai . Yeah, clearly were on a journey to rebuild leadership position and as we finish that journey, theyll be manufactured here at arizona that silty and subsequently in ohio. These are the most advanced chips in the world. As people measure these, theyll be below two man a meter chips and well advanced beyond any thats being built giorgini taiwan by taiwan or any others you mentioned touchdown catch. The most advanced chips in the world will get built right here. And of course we see in many different areas and pcs theyll provide and networking components and cell phones and ai chips has been like the super charger to the industry right now. We expect well be building many of those ai chips not just intels chips but for entry participants as well. For that, they need the most advanced technology to build the most advanced ai and thats exactly what were going to do at these facilities and across the nation. Liz thats Pat Gelsinger of intel and now bring in nvidia shareholder tech venture capitalist star known for his early stage Winning Investments among them google, meta, booking. Com, snow flake and nvidia. Brad gerstner is the founder and host of bg2 podcast, which i love. Brad, you just heard Pat Gelsinger on intel chips award and its bringing Critical Semiconductor supply chain back state side. Is the chips act something you believe will work . I mean, it was great first great to be here, liz. Im a big fan of yours as well, and it was great to hear pat make that case. As an american, you cant help but be excited about on shoring American Manufacturing and one of the most critically important areas, you know, that we face, which is super building the next generation of Super Computers and chips that power them. But, we have our concerns about the ability of these companies to compete with the tsmcs of the world, nvidias of the world and i dont think its an either or. I think its an and. The u. S. Should be investing in its own capabilities, but we also should acknowledge accident you know, if you listen to founder of tsmc, morris chang that ran a foundry in texas and theyll tell you the difficulties and we can read about them and theyre having in arizona and i dont want a Single Thread to intels success. Americas ai success needs to be multithreaded. It should, you know, we dont want to be dependent upon die wan and should be en pie wan and encourage tissue taiwan and chip mother and fathering in vietnam, india, korea, other nations that help us diversify our supply chain away from taiwan, a sing the threaded dependency upon taiwan and not place or recreate the dependency on u. S. Fabs that may or may not be able to compete with fabs an the world. Liz i get it, but taiwan semi has not done rnd here at all. Intel has. This chips act is expected to give money to names like wolf, wolf speed, on, semiconductor. I dont know the list because theyre giving it out in drips and drabs, dont we want to get it away from the asian markets, which caused so many problems because they were intertwined with china, which during the pandemic showed they couldnt function . 100 . You know, i think the Prior Administration did a lot. Listen, tsmc is building fabs and next generation fabs in arizona in order to reduce this dependency so this isnt a question about whether we should be building fabs in the u. S. , its not a question about whether we should be encouraging fabs to be built across the world in countries that are more politically aligned with the United States. This is really just a question about intel and intel fabs and, you know, while i wish them luck, part of the reason were in this problem or in this challenge today is because we didnt keep pace at intel with tsmc and other fab manufacturers and other designers around the world. Best of breed chips and fabs in the world in taiwan. We need to make sure we encourage them to be built in a lot of other places, and i hope that intel is successful building them in the United States as well. Liz. The ai arms race and if you believe about every smart person in Silicon Valley or wall street is generational. It is sort of one of these faze shifts thats unbelievable and nvidia is top holding altimeter and nvidia unveiled blackwell platform and all the chips unbelievably powerful for artificial intelligence, but then youve got amd, the chip makers, kla, youve got asml and of course as always so many other names. Is there a winner emerging im sure youre going to say nvidia but in that chip world, is there another winner emerging at the moment . Well, lets say this, if you rewind the clock 20 years ago, there were a lot more chip manufacturers around the world and chip designers around the world. The chip industry itself is consolidated and, you know, in the case of nvidia, they took a bet around parallel computing that nobody else really focused on. It was the ark tech travion green drove gaming and the architecture that drove very limited applications and parallel computing and just so happens its the architecture thats driving transformer models that sit under all of ai compute. Now nvidia managed to not only build an ai chip but a chip that will replace on the accelerated platform a lot of things we traditionally relied on cpus to build. Its great for america and nvidia is a American Company and 2 trillion business and it is the single best chip and its likely to be the single best chip. Theres no big dispute over the course of the next 23 years and its hard to know three years and beyond. I will just tell you this, nvidia not only has the lead today, but its executing at a higher level than any other company i see including amd, including a6 being built by hyper scalers produced in the intel fabs. I think a market where its winner take almost all today is likely to evolve into a market thats going to be winner take most. Nvidia will continue to be on top of the heat, but i believe the infringing and trips out of amazon in the hunt and microsoft have a6 in the hunt and intel will produce some stuff and amd will do things. Liz brad, qualcomm, i have listened to amon very closely. They are already trying to disrupt the whole process by bringing these chips, these a. I. Chips right to the devices so there isnt a lag time. There is also the privacy. You know how this goes, microsoft explorer owned world, he can employerer and google came in you were a investor in, blew away everybody. Third came in can win, can they not. It is not a question who went first or second. Qualcomm came in on the edge. What were talking about a we have a trillion dollars of global data centers. Think of this as the brain that drives all the worlds compute functions. That is the brain before we even have a. I. Work flows and work loads on those data centers. That is going to be replaced because they deappreciate over four to five years. When it is replaced it is likely to be replaced with accelerated compute. On top of this we have step function in the amount of the supercomputer the world wants. Nvidia, jenson estimated were going from a trillion to two trillion dollars worth of replacement and those a. I. Work loads today can only be run on in video chips. In the future i expect well have a lot run on the edge with qualcomm chips. Apple as teased at least the small language models they want to put on their devices. Were in the very, very early innings here. This is not dominated by any one company for the duration of a. I. Liz did it surprise you apple is in talks with google, alphabet, using gemini, the a. I. Platform that they have, generative a. I. Platform . That is pretty interesting . Well you know, liz, you may have heard us talk on the pg 2 pod the other week about apple what theyre doing. I think when you think about apple you have to think about three things. Number one they have a megasearch deal today with google, where google reportedly pays them 20 billion to be the default Search Engine on the apple device. They will also put we speculate a small language model that will allow them to build the worlds best personal assistant with memory on the device. Think about a siri that actually worked. It would be terrific. In the middle they have what i call generative search. These are Companies Like open openai or gemini, the user can create videos or ask Knowledge Graph questions and i think what you are going to see on apple if i had my guess, my sense they talk to all those companies, openai, gemini and i think they will let the consumers choose. At the end of day apples north star is building best piece of hardware that thrills their customers and their customers dont want to be hardwired to gemini. Liz we have a minute left, brad. The Federal Reserve left rates unchanged for the fifth meeting in a row, 5. 25, 5 1 2 . Stocks run up pretty dramatically already. It is a backdrop less predictable, risk on. Are you starting to feel a little squirrely about so much riskon behavior . I think if you look at the markets today, you know, theyre bouncing because they pulled back really concerned that the gdp might be a little too hot, pce, might be a little too hot and we might not get the rate cuts expected in the future. I think today it is steady as she goes. Were in the early phase of the shift. Gdp growth expected out of the fed coming just over 2 . The glide path on inflation looks to be steady but yes we have to be cognizant of price point entry. But let me get this plug in, liz. When you see what is happening in the market today, when you think about the next 10 years of American Innovation and ingenuity. It is important we put forward a piece of legislation im working on, 401 k account for every child at birth, to keep them going to be capitalist. Liz got you. Less than half the people under age of 40 need believe in capitalism, we need them to believe in capitalism. [closing bell rings] liz brad, we want you to come back with more on that. Dow at alltime records. See you tomorrow. Larry hello, folks, welcome to kudlow, im larry kudlow. So jay powells fed performance it is the hottest broadway show around. So far he is sticking with the