This may be a one off. The big question what it will do to the fed. Could weak retail sales cause a different approach to raising Interest Rates. Maybe the market likes it. It is tightrope the fed is walking and market is walking. Well talk all about it as we watch triple digit gains with our allstar panel next. Former george w. Bush advisor, karl rove, he is here to discuss new developments coming out of white house on infrastructure and immigration reform. That is next. I want to look back at the markets. Quite a turnaround from earlier in the session. I think people were pretty speakinged with that Consumer Price index number came in a little hotter than it would. Nicole. Hit nail on the head this morning when the Consumer Price index number comes in showing inflation, came in higher than we thought. Biggest onemonth jump. When people saw Rising Interest Rates they got a little spooked. Futures were down over 300 points at one point. You knew they would pick them up. They are buying up the dips. Everybody expects volatility. That is 182 points. That maybes it fourth day in a row of gains, taking a look at dow winners. Nike, Goldman Sachs, cisco systems, jpmorgan. Majority of stocks in the green. You27 names in the green. The rest are red today. You can see ibm, another winner there. Financials and tech are helping to lead the way. We see Rising Interest Rates. Financials on Rising Interest Rates. That is waiting for financials. That is sort of the play. See bank of america and citigroup and Goldman Sachs up 2 . A quick peek at the tech stocks. Also doing very well, apple, microsoft, ibm. With up arrows. They expect volatility to continue. Trish. Trish lots of volatility. You know it is good in some ways. It gives people opportunities to get in. Thanks, nicole. Keep checking in. With more kaltbaum capital management, gary kaltbaum. Janney Montgomery Scott chief strategist, mark luschini. Gary were you surprised with the cpi number this morning . No. Ive seeing inflation tick up. Moderate amount of inflation is not bad, but a lot of inflation is bad. Im not sure were there back. As far as markets i have thought a low was put on friday this is looking like the low. Youre getting strong action in financials, commodity, and growth high beta names are just rolling in here. So i dont think revisiting those lows anytime soon, im not sure we get to highs anytime soons but maybe we back and fill this is good action and quite surprising if you ask me. Trish unless you get more reads on inflation that suggest this wasnt a oneoff thing or wasnt or isnt as tempered as people hope, mark. Then, were looking at a whole new ball game. It is interesting, trish, because the fact of the matter it was most widelyanticipated cpi reading that i can recall. Werhere we got the number that market feared most. Came in higher than expected. It corroborated the number from the bls report. We showed wage gains surprisingly strong. I thought the Market Action severe premarket was probably the right one. It wasnt what the market wanted to see. Rally on weakerthanexpected retail sales and decline in the dollar. Not only boosting equity prices but putting a huge floor under commodities as well. I think there is a suspicion perhaps putting two together brings out Federal Reserve likely continued on intended pace but not have to be more aggressive which the market expects. Trish market is relieved, retail numbers that the consumer is not as strong as fed would like to see and we need to be aggressive by the ford. Gary, that onein if youre making 2. 9 more money, we saw Wage Inflation in the last jobs report, bonuses as a result of tax reform, companies are giving more money or raising wages wouldnt that theoretically correspond to increase in retail sales . Im pretty sure its a oneoff. The trend has been pretty darn good on the retail front. Watch retail stocks. They have been strong also. But i do have to add on the central bank front, the bank of england basically came out and said theyre not tightening. Europe, theyre not tightening and japan said, they will add to the easing going forward. If that doesnt backstop markets i dont know what does. I think were still in bigtime easy money. Were here at 1. 25 on fed fund which is still a joke. Easy money has been the formula for markets since 09. All this talk about tightening, i dont think so. Trish january cpi, half a percent growth. People were looking for. 3 of a percent. Gosh, there would have been a time, mark, that i would have welcomed any kind of percent growth. But half a percent is nothing to knees at. How do you think about inflation as we move forward here . Trish, it is interesting you say that. It only looks like one month. If you take the threemonth trailing moving average, it is 2. 9 . So that is a little bit more aggressive than i think even the fed would like to see necessarily. So well have to watch it, if this develops a i along a more certain pattern of wage increases. The bond market is watching it. We have the 10year hitting a fouryear high. Can we show you the yield on 10year right now . Gosh, were getting close to 3 . That said, i do want to point out, i mean, hey, if someone said can i borrow money for 10 years from you, gary, and you said, sure, 3 , youre going to really let them borrow for 10 years at 3 . Even though everybody is freaking out because these yields are moving higher, i would still point out they are historically low. It is pretty pessimistic to think you will lend someone, in this case the u. S. Government for 10 years, all you will get a 3 whoop tee do return. So on comparison basis, it is higher but historically its nothing. It is a drop in the bucket. Come visit me at 4 , when i think there could be real trouble. Look, for me it is not the news. It is always how the market reacts to the news. Markets acting real strong here in spite of some of the stuff we think is not so great. I think, im just hoping we back and fill a little bit here, and then getgoing higher. Im liking what i have seen the last few days and lets hope it continues. Remind everyone a little inflation is necessary. You know why . Encourages people to do things today instead of waiting until next month or six months from now or year from now. If you think something going on sale, why get it now . If you think you can borrow cheaper next month, why take out a loan right now . Inflation is a important part of our economic health. We just dont want too much of it. Gary, mark. Thanks, good to see you guys. Turning to politics, President Trump pushing ahead with his next legislative agenda, infrastructure. He held a bipartisan meeting where he urged lawmakers to Work Together to fix our crumbling infrastructure system. For the latest we have blake burman at the white house. Reporter a lot of key players on the hill at white house, seven republicans, five democratses both from the house and senate, both the white house feels will be the eventual decisionmakers that will have influence up on capitol hill. The president thinks ultimately they will come up with a solution on infrastructure. He touted how his plan trying to put the onus on state and local governments. For them to choose the projects they want, the most important projects because they know best, the need their people. So we want the states to be very much involved in the choice of where this money goes. Reporter now the numbers are important here because the plan puts 200 billion in federal money, essentially hard money right into infrastructure needs and what theyre trying to do here is to incentivize about 1. 5 trillion more. Essentially leverage that one of the ways theyre trying to incentivize is through Public Private partnerships. The white house though conceding that at least in the case of roads, that could lead to more tolls. In many cases you have seen some of the projects across the midwest where there is actual revenue from say toll roads and other projects that come in. We think there is actually a significant opportunity and private investment will come alongside. Reporter trish, that is not flying with democrats. Chuck schumer calling this trump toll plan. They want to see 200 billion of that hard money, although the Administration Says eventually it will branch out into the trillion dollar plus range. In all of this, they can not use the measure of reconciliation, 51 votes in the senate. They need 60. It will need democratic support. Why you saw at white house, democrats, nearly half and half sitting at the table alongside with the president. Trish as they should. They should welcome infrastructure. For many as you point out, it is not enough. Nancy pelosi is calling it puny. Feels like crumbs. Reporter democrats want to see this as high as a trillion dollars in hard money but it is not going that high. Trish blake burman, thank you so much. Joining me fox news contributor, former deputy chief of staff to president george w. Bush mr. Karl rove. Karl, really, is this puny . I was talking to John Garamendi just yesterday from california, democrat. He would like to see 2 trillion. Yeah. Trish i did remind him that 200 million in seed money, if you get private companies involved, that can then turn into 1 1 2. And thats, that is a big deal i mean thats, thats real money. I think you have to divide this into three parts. The idea that the federal government is going to step up to say to states and local communities, if you want to undertake a project, we will give you 15 cents out of every dollar you want to spend on it is not going to generate a lot of activity because a lot of states dont have the 85 or the 85cent match that that would require. Theyre hardpressed as it is. Trish yeah. On the other hand if you did this in the Public Private partnerships, you would be in a place where you could get a lot of activity. In fact some Public Private partnerships require no federal dollars. One of the biggest things that could happen here was, the president supported this last year, turn the air Traffic Control system in the United States, take it away from the federal government, by it to a quasiprivate corporation in essence funded by airlines, funded by airports. Has all the people who have a, an interest in this, sitting around the table. Get the government out of it. This is how most other major industrialized countries handle air Traffic Control. It would cause immediate savings, i am people i cant think improvement, big economic growth. Big advantages to the transportation industry. We get from point a to point b cheaper and faster t doesnt require the federal government to put up a lot of money. It requires the federal government to get out of the way. Trish that is the fundamental difference between pelosis view of things, schumers view of things and the conservative, fiscally conservative view on things. Right. Trish you want more private industry. Yeah. Look, the state and local governments and the federal government and the private sector will benefit from the third part of the infrastructure plan which is, get rid of unnecessary regulations that cause these projects to be tied up in endlessly in litigation and endlessly delayed for years and years and years. So i think it is unlikely theyre going to get much if anything at all on the federal, local government, State Government cooperation. They will get on some of the Public Private partnership. The big impact is regulatory relief it gives people involved in these projects. Trish let me ask you about the topic de jure. I dont want to spend too much time on it, but frankly i think its a big distraction right now. The whole rob porter thing thing and timing were hearing christopher wray, different than what the white house told us, is this going to be costly to the administration in any view . I think it already has cost him some credibility but there is a deeper issue here which is, who is in charge of making these decisions . In january, 25th, 2017, rob porters wife first wife, talked with the fbi and told them about the incident in italy. By march they had a preliminary report. I assumed they talked to the second wife by then the by july they had their final report, gave it to the white house. That report obviously had to contain information about both incidents, with both wives, maybe even the third woman who is not his wife. The question, who did this go in the white hat to and why did the issues languish as long as it did. Trish someone was protecting him . Well, look, somebody needs to have, somebody needs to be held to account because somebody should have looked at that, said this person will never get a clearance. He is one of the most sensitive jobs of the white house. We may like him personally but things in his background could put him at risk. He may be blackmailed over these things. He has no business here. We need to move on. By july of last year, there were at least enough serious questions the white house went back to the fbi, asked them to look into additional things. They were told by the fbi conclusively in november what it was. Ive seen leaks from the fbi protecting themselves they said, by june we had told them it was unlikely he could ever justify getting a clearance. And yet it languishes to this year and gives the administration, i hate to say it a black eye. These were terrible instances. Im shocked by them. This is a man who on the hill had an impeccable reputation for his efficiency and his leadership. It is a great family. His father served in the administrations of several republican president s, highly respected professor at Harvard Business but this was shocking. Something happened over a period of months to allow him to continue to work at the white house. Trish they need to get management, chain of command in line over there. Perhaps someone, someones head will roll as a result of that misstep. Very quickly before i let you go, will we get anywhere on immigration, karl . I hope so. There is piece in the wall street journal i commend it to you. It is insightful, wellwritten, tight. Trish is it yours . I strongly recommend it to you. I make the case for why contrary to conventional wisdom there is a path that is, that is popular with the American People. It requires balance but also requires some adult leadership in congress with both sides stepping back and saying in order to solve this issue we, each side needs to do something that is popular with the American People but is not popular among some of our, some of our base or among some of our supporters but it is a popular, broadlypopular among the American People. I write about it tomorrow in the wall street journal. Trish i love reading your columns, karl. We love talking to you. Come back soon. Thank you, trish. Trish after nineyear bull market is it time for a year or two of a bearish market . I dont think so. I really dont but somebody here does and he is one of our favorite guys, veteran market watcher Dennis Gartman. He is going to explain whether or not you should be selling into this market as were up 200 points. Next. Think your Large Cap Equity Fund has exposure to Energy Infrastructure mlps . Think again. Its time to shake up your lineup. 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Were climbing because everybody says, i dont care about inflation. That reading came in hotter than expected. Maybe the weak retail Sales Numbers that the economy is not as hot as people think and of course the fed will have to stay active. I dont know i like that scenario very much because i would like to get off the fed sugar high. Editor and publisher of the gartman letter, Dennis Gartman who is getting increasingly worried. In an email this morning i told you, dennis, i am worried about inflation. I did not like what i saw this morning. Your thoughts . And you shouldnt. I mean we are seeing inflationary pressures begin to show up around the board. Were seeing grain prices turning higher. Were seeing meat prices turning higher. Cotton prices are turning higher. Look at gold it is up demonstrably more than the stock market, opening up sharply which shows you at times markets can remain illogical. Look what is going on in the bond market. The bond market is saying great 35year bull market in bond ended 16, 17 months ago. Bear market is trending in bonds. Not quickly but over a period of time. But there are clearly inflationary concerns abounding. Your concerns i think was wellplaced. Trish i was a little surprised it came in higher than expected. I expected a little inflation. You have to see this over the course of months to get a real picture here, dennis. Yeah. Trish i do think it is appropriate to have inflation in our economy. We should have inflation. We havent had enough. That is in some ways we have deflationary environment is much harder to fight. That is kind of a d