This is real money. You are the most important part of the show. Join our live conversation for the next half hour at twitter at aj real money. Listen up. The Federal Reserve just signaled today the rates you pay already on hold for now. Thats good to know. The little foresight can help you make better Financial Decisions that will help you build your prosperity for tomorrow. If youre planning to buy a home tomorrow, the 30 year fixed rate is 4. 4 . While thats almost a full point higher than they were a year ago, that is still near historic lows. Knowing that the feds lending rate at near zero right now will hold means that you can probably hold out for a better home price and not worry as much about rising rates. On the retirement side knowing that cds and savings accounts will continue to yield low returns, means you still need to look at alternative lowrisk involvements right now that guarantee returns in this environment. Im going to talk to you visit investors about your options later in the show. Stay with he. As for my rosy interpretation of the feds action today it seems stock Market Investors did not believe me because stock sold off on the news. It took a nose dive before arriving at my interpretation of events just before the close. But it still gave up 114 points. Thats a loss of. 7 of 1 . What tripped up the market was the remark the new fed chair made during her firstever press conference as the new fed chair. She was trying to shed light on when the fed might start raising Interest Rates. I have to say i appreciate how direct she is when she speaks. The fed is expected to start raising Interest Rates after it stops its bondbuying Stimulus Program and thats expected to be sometime after this year. How long after that will they raise rates . Heres what she said. So the language that we use in this statement is considerable period. So i, you know, this is the kind of term, its hard to define, but probably means something on the order of around six months, that type of thing. But you know, it depends what the statement is saying, it depends on what the conditions are like. Well, investors took yellens guess as giving a solid date for higher Interest Rates. In this case mid 2015, which is apparently too soon for them. But yellen and the fed from emfaemphatic today the conditios depends on creating more jobs and raising inplace. Meaning a more robust economy. Not about dates. It will rise slowly when the fed decides to act, that could mean another shot in the arm for the Housing Market. For more on todays fed statement on what it means for housing and the wider economy joining me now is marty harris, chief economist at investment banks ubs. He previously worked for the Federal Reserve bank of new york and considered by many to be one of americas economic forecasters, and hes here with us. Thank you for being with us. Its always good to be your guest. Thank you, sir, what did you make of this. Was there anything that janet yellen said today that you werent expecting or that surprised you . Ill tell what you surprised me and probably set the bond market back. Thats when she said even after unemployment gets down to our goal of near full employment were still going to keep this funds rate relatively low. We may not raise it even then. That could suggest to investors that the fed two years down the road is going to be behind the curve. Theyre going to sit on this low rate too long, and eventually it feeds back on inflation, i think thats one reason why the bond market sold off. Also, this is condition fusing because the forecast, raised their forecast for the federal funds rate of 2016. She said dont listen to them. Listen to me. They put out a chart. A lot of people looked at that and said the rates are going up. Later in the show im going to talk about how you make money if you dont want to take a risk in a lowrate environment. Its hard to do that, but you touched on why its dangerous for the fed to keep low rates, you know, notwithstanding. A lot of people think its good idea. Housing will continue to go on. You talk about inflation. Its not something that we worry about all that much, but the fed does. The feds worry that inflation is too low. Inflation is a lagging indicator. Wages are a lagging indicators. They tell youthe fed needs to be more forward looking. When they let unemployment go as low as they said they were going to let it go, you do run the risk of higher rate pressures. They can keep the rates down if they communicated better than she did today, look, were also committed to containing inflation. I dont know if that got well committed. But once you convince the market, look, well do something about inflation when the time comes. If that is really convincing, then what happens the shortterm rates start to go up, but the longterm rates stay relatively low. I dont think she quite succeeded on that front today. What do you think of the reaction to her comments today . Do we think that were supposed to behow would you plan for this . She wanted us to be optimistic. Theyre going to keep rates low for a long time. That started to ignore some of the bond market realities that that bond market people, investors in the bond market who are going to determine your longterm Mortgage Rate heard this, and said im going to keep rates low even after unemployment is low. Thats not a good message for the bond market. Do you think it will follow suit . I think the bond market is going to go up in yield and the Mortgage Rates will go up in yield. This is probably a good time to nail that mortgage down. Good piece of advice. Always a pleasure to see you. Chief economist at ubs investment bank. Steep housing cuts. Houses lingering on the market. That formula makes cleveland, ohio, the top home buyers market in the country. But this isnt exactly a badge of honor. The area is still struggling to recover from the recession. Home prices have not increased since 2004. Poverty is increasing, and people there cant qualify for loans. Stan, thank you for being with us. Glad to be here, ali. My pleasure. Lets talk about cleveland. Cleveland is a story that didnt get as much uncle as other places. I know you gave it the ink but most people focused on detroit and the desolation even before the recession. But cleveland had similar problems. Oh, yes, both are manufacturing economies, both had boons before the 21st century. But clevelanders are proud to say theyre not from detroit. Draw us a picture for people who dont have a sense of it. Draw us a picture of the Housing Market in cleveland. Okay, its one of these things where cleveland is a very inexpensive Housing Market all the time. When you factor that into the Current Situation were going to become a buyers market by comparison to, you know, the top markets in the country, san jose and the rest. They look at the 35 largest metros, and we came out lowest. When i first got these stats i did a double take and thought, thats not the narratives im getting from the agents. When i started looking at it, yeah, i can see this. Thats why i reported it. You just heard my conversation with morrie, while the rates are going to main stay low. If youre going to buy a house, it might be a good time to lock in. Thats not entirely the problem for cleveland. People who are firsttime home buyers probably have parents who are saying, lock up the Interest Rates. It will be a great annuity for you. The problem is the accessibility of the loans. More people are having trouble qualifying for loans. People loaded with student debt have trouble. The saving grace is that our house something inexpensive. What about the city itself . Its a bifurcated place. Its a place with a lot of issues in terms of attracting people to cleveland. How is that doing . Yes, its ironic how that goes. Whats happened in the last turn is that downtown cleveland and entering suburbs and entering neighborhoods have really come back. I did a story how about in ohio city there are a dozen home sales for almost 300,000 in that neighborhood. We had never seen that before. It was one of these things people are having to pay for they want, it costs more, but the bottom line in this market is the rest of the country passed us in housing appreciation ten years ago. Has cleveland got the amenities and the jobs to keep that project tore goin goingtrajectory going . Thats one of the monologues in town. There is a push to create the economy, reduce reliance on the manufacturing economy, but one of the big advantages that we happen to have there is still a steel mill pushing out steel not far from here. Ford is going to increase production of trucks in avon lake, ohio. There are still some pretty good things happening in manufacturing. Do you want to know what the tightest market in northeast ohio, the industrial market. Part of that is because very little has been built for a very long time. This market sat on the sidelines in the 2000s. Our economy was just sucking the bricks. But then when we got our share during the real estate economy, during the boom, and our economy is not a real estate economy because we dont have population growth. But what we are is a place that makes things. Do you know who the second largest employer in the state of ohio . Who is that . Cleveland clinic. You know, if you would have given me a second i would have guessed that. When i was a kid in cleveland it was the steel mills. Thank you for drawing a bit of a picture of cleveland for us. We wish you continued good luck. Senior reporter at cleveland business. Thanks for having me. Lets keep talking about the housing economy. One of the biggest in the country, and if youre looking for a job, he said there are openings if you have the right skills. And the specific ways to grow your retirement nest egg. The story is right here. To know why these people keep on fighting. Its so seldom you get that access to the other side. Faultlines on the front lines with the taliban then an america tonight special edition, only on Al Jazeera America the outlook for interest aggravate means a lot for anyone in the market to buy a home. And that means its critical to Home Builders. Their confidence in february fell the most on record and rose less than expected in march. Lets get some perspective on that. One of the nations biggest Home Builders of Single Family detached homes. His Company Built 6,000 homes last year up from 4,000 in 2011. Nowhere near the 21,000 homes that they built just before things got tough in the market. So youve got a real perspective on this. Welcome. Glad to be here. This home builder confidence, theyre asking people like you and your company what you think about whats going on. From your mouth, how do you think the home market is. Its moving around. Last year it started off with a bang. Towards the tail end of the year it started to get a little choppy. The winter was terrible in terms of weather, and that didnt help. That eroded confidence of the Home Builders. In the last few weeks, frankly, i think things are concerning around and i think the new survey is going to show much more positive results. Someone who is selling their own home does it effect big Home Builders like you, too . Sure, we have operations in minneapolis, new jersey, washington, they were all affected. No one wants to go out and shop for a home if there is eight inches of snow on the ground and its freezing and cold. The idea that Mortgage Rates could still go up even though the fed said were not moving until the middle of 2015, the Mortgage Rates are a percent higher than a year ago, and they might inch up. Does that have a substantial impact if the Interest Rates go from 4. 4 to 5 . I dont think that will be a problem. In 1981, 1982 Mortgage Rates went 18 and we built more housing as a nation that year than this last year. Peoples memories are short. Housing demand is driven by household creation. Thats positive. They might have to taper what they expect to buy, it might not be a 4,000 squarsquarefoot ho. It mighting a townhouse, but theyll create shelter. We have this weird recovery where young people are not getting the jobs they thought they were going to get because older people are hanging on to those jobs. Do you see fewer younger buyers. What is important demographics are a longterm trend in almost every demographer, they all are projecting this decade about 1. 4 million to 1. 5 million households per year being added to the population. Thats a big number. A little bigger than last decade. The issue is when do they come in, and theres a little bit of pentup demand, but its been coming loose the last year or two. What do you think about peoples ability to get mortgages. This is an important thing for your business. Sure, clearly more challenging than it was ten years ago. But its slowly getting back to normal. The pendulum reacted, and moved far to the other direction after the subprime mess and everyone got overly restrictive. I think thats going to slowly begin easing and getting back to normal. Youve done a good job adapting to the market without going all over the map. You were dealing with a particular segment. You added luxury homes. You added homes for different segments of the population. Tell me where you see growth and where you see weakness. If you look at pure demographics, there should be a lot of growth of the 55 and over. Of the 14 million projected households, i think close to 60plus percent about that percent is going to be over a 55. Thats an important niche. One weve been active in and its an important one. Back in 2005 when you built over 20,000 homes versus 6,000 last year. What feels good to you . Well, continued growth, weve grown 50 over the last two years. I think we have a lot of growth trajectory behind us. Weve been buying a lot of land, we have the capital to grow. I dont have a set number but i think were going to see significant growth. And i at this theyll continue to see it continue. Is it difficult to finding land . No, weve been finding opportunities. As home goes up, land prices go up, and that causes land sellers to say okay, im willing to sell now where they might not have sold over the last two years because prices have been lower. Thank you, presiden. Low Interest Rates are great if youre buying a house. Its not great if youre saving for retirement. Stay with us. Youre watching real money. Talking about the 15 billiondollar toddler Formula Market twiced as growing up milk products. Yes, ali its fortified cows milk expensive and cleverly marketed. Its a branding scheme to compensate for formula losses. Because breastfeeding has made a comeback . Yes. That should an great show that is the stream right after real money. Stocks might have fall an bit today, but the reality is 30 gains in 2013 and continued record highs set by the broader stock market have pushed americans Retirement Savings to record levels. Fidelity investments, the largest provider of retirement plans said the largest accounts was 89,000 at the end of last year. For vanguard, 101,650. Thats the highest level for vanguard since 1999 when it began tracking the data. But there is good reason to be concern as it might not continue its historic rise. The rates we pay for borrowing will stay put for now. But as this economy continues to improve inflation will rise and so will Interest Rates. That will change the rate of return on different assets that are probably in your retirement account. So its time to pay more attention to how you are generating income. If you think stocks are too risky there are ways to make sure, we think, that youre beating the rate of inflation. Otherwise youre not making any money at all. Doug flynn is here to help. He said a little bit of Research Goes a long way in accumulating longterm savings. Doug, can my viewer, who might be a little afraid of markets generally, or might be very afraid specifically of a market that is run. Up as much as it has done in the last year and bit, can they make money without exposure to stocks . Well, you can. Its more difficult on the bond side. And as you get older and you want to protect more you do need the offsetting of the stock market with some fixed income. And on the bond side you can, but you have to get away from thinking about both the stock market in terms of s p and dow. You have to get away those standard things that we simplify the stock and bond markets with. Doug, you and i showresearch shows 36 of workers have received 1,000 or less for retirement. If youre very young, you know, early years it may not matter as much. But if you have very little money youre loathed to get involved in the stock market, but you got to beat inflation. What is the safest thing you can do and get a better rate of return than inflation . Well, inflation, cds are not going to do it. Traditional bonds are not going to do it. Traditional bonds after inflation especially in a rising rate environment willyoull actually lose money because the Interest Rates that youre going to get oftentimes will be less than the rate of inflation. So you need to look beyond that and really to make this simple on the bond side you want to look at the multi sector bond category as the area you want to focus in on. Why that is important is because there have been 12 times in the last five years that Interest Rates on the tenyear treasury have gone up. These Little Pockets of time. In 11 of those 12 times the total bond market index was negative. However, the category of multi sector bond was positive in 10 of those 12 times. Why is that . Mainly what youre doing is turning over your choice of underlying Bond Investments to a Portfolio Management who has more tools in the toolbox than you might think of just government bonds. They might have corporate bonds, high yield bonds, all sorts of Different Things in there, and youre looking for an Opportunistic Fixed Income fund that will get you a little bit higher yield. With that comes more risk, because its not so much treasury. But i might argue, what has more risk, thats the bond side. Should people consider dividend yelling stock funds or Real Estate Investment trusts. They should. You can drill down. There are etfs, and operating the s p 500 in different areas. One of those areas we like are low volatility. You can separate it to the growth area and low volatility area. When you focus on the low volatility areas of the s p youre typically going to get a 1 pick up in dividend. When the market turns around negatively you have got a little bit of a cushion there because these are dividend payers. You want to look at dividend growers. Those are the types of things that will help you keep pace with inflation and give you an upside. So you dont have to have all the same market risks that you would have with the general stock market because in there are Growth Stocks that are aggressive. You can pars that out and look at these alternatives. Reality investment trusts. What i caution people to do is when you look at these you can choose in any fund a high risk one, a mod raidrisk one, and a lowrisk one. You cant get away from stocks, but you can focus on the one that is have a little bit more down side protection but when the market goss up 32 you might only go up 20. Dogdoug, always a pleasure to talking with you. Thank you for your insight on this. Thank you, ali. All right, today on twitter and facebook ive been asking you Interest Rates will stay low for a while. How do you invest safely in this environment . Tell me what you think by tweeting me at ali velshi or on facebook. These guys work at firms that have soupedup securitiers that can actually automatically process thousands of trades a second with no human involvement. High frequency trading accounts is more than half of all the stock traded today. We learned that schneiderman has convinced a canadaen company, they also cut the cord to high speed traders. The direct access high speed firms is not illegally, but High Frequency traders can make big profits that are not available to other investors. For my money its good that regulators are taking steps to make sure that markets are not giving elite traders the leg up. Im ali velshi. Well have more tomorrow. These protestors have decided that today they will be arrested these people have chased a president from power, theyve torn down a state. Whats clear is that people dont just need protection, they need assistance. Hi im Lisa Fletcher and youre in the stream. A special milk for toddlers. Its a booming business for formula companies. Is it good for toddlers or just good for the bottom line . My cohost wajahat ali is here. These companies have fightd out theres a figured out theres a market for toddler