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Transcripts for CNN CNN Newsroom 20240604 17:34:00

that jerome powell should be out as fed chair and some top economists are giving the fed pretty low marks when it comes to the dual challenges that they re working here. how do you see it? well. one of the reasons i became an economist is because i care deeply about unemployment and the dignity that work brings , and it s worth celebrating the fact that right now unemployment is awfully close to being at a 50 year low. so we face our challenges for sure. that s the inflation challenge. but let s also celebrate the really good news, which is people that want work can find work, and i should also say that there s a lot of really bad behavior coming out of silicon valley over the past week, but the fed and the treasury have done a i think terrific job coming the public and stopping what could have been contagion in its footsteps . and so i m not expecting to see a lot more financial distress and the really great news will be all the headlines. we don t read and i want all your viewers to

Transcripts for CNN CNN Newsroom 20240604 17:32:00

alright we re hell. we ll be watching with you coming up soon here in about an hour right now i want to bring in university of michigan economics professor justin wolfers, professor. always great to have you to explain some of these things to us at this time. when i think a lot of people are a little uncertain. i wonder if you think that the fed is watching these expectations. are they see is the fed looking at this saying okay if we do more than 25 basis points, banks may spook and factoring that into the calculus or no unquestionably. yes so there are really good debates to be had about whether we should raise interest rates by a little bit by a lot or pause right now, but i m certain that the fed has one really important objective, which is you can achieve what it wants on its inflation site by moving the interest rate and not harm financial stability if it shows itself to be really predictable. and j. powers fed has been wonderfully boring, lee splendidly predictable if you listen

Transcripts for CNN CNN Newsroom 20240604 17:29:00

school will be out of session for the rest of the week. stay with cnn for updates on this breaking story. we will bring those to you. here in less than one hour. federal reserve chair jerome powell will announce his latest move on interest rates and what he does will have big consequences for home prices. credit card bill student loans, car loans, another rate hike means those all get more expensive for you. mortgage rates alone have skyrocketed because of the fed s war on inflation 6.6% right now, believe it or not, they were even higher before this banking turmoil began. and that is the fed s other goal today, trying to calm those fears. there s about the banking sector. it s a very tiny needle that the fed is trying to thread here, and we have cnn business correspondent rachel solomon following this closely elyse rate hike inevitable today or is a pause still possible. well brianna pauses. certainly possible. there s certainly a chance. although that is the minority

Transcripts for CNN CNN Newsroom 20240604 17:30:00

view. most traders eight out of 10 9 out of 10 are largely expecting a rate hike up a quarter of a percent. even fact we do see a rate hike brianna. that would be the ninth rate hike in about a year and i can show you all of the rate hikes over this most recent rate hiking cycle you can see started in march with 25 basis points or a quarter of 1% and it has gone on and on. and on now, on the one hand that has made as you pointed out rates for practically everything high. a er right. it has made credit card rates spike. it has made mortgage rates spike, and that is the point. the fed is trying to get assist, stop spending as much so that helps on the inflation front. the other side of this, however, is that those higher rates have created vulnerabilities for some of these banks, right and that s what we saw with svb. and so that is the needle that the fed has to thread. that is the sort of fine line that powell, the federal reserve chairman, has to strike when we hear from him in almost

Transcripts for CNN CNN Newsroom 20240604 17:33:00

you what it s about to do, and so right now, markets say there s an 85% chance of it. 25 basis point rise and the 15% chance of no rise whatsoever, and i think there s no chance that they re going to try anything outside of those two main expected outcomes. what are you listening for? i mean, aside from what the rate hike may be, or may not be, what are you listening for? in the explanation. yes so if the federal ex not to change the interest rate, the most important question here is it just playing white and see that is this a right rise, delayed or right rise denied. i think there s a very strong case for the fed to do a little less right now than it might otherwise do while it just waits for things to shake out realized , then that means that if rates don t rise by much today, they may catch up by the next meeting or the meeting after democratic senator elizabeth warren says

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