The job numbers did push Interest Rates higher and not enough to push stocks today. Even tech which is rallying as well it leads us to our talk of the tape whether this teetering rally goes much further in the weeks ahead, especially if the fed is finished lets ask professor Jeremy Siegel of the Wharton School hes back with us. Professor, its good to see you. We have a nice rally on our hands today. How does the market look to you now in what has been a very big and interesting and important week the market looks very strong, scott. Without question i think the bar is very high for the fed to do another increase i think you would have to see the next employment report to be very strong, Even Stronger than this one i think tuesdays Inflation Report would have to be much above expectation, and by the way, the first day of their june meeting they get the may Inflation Report, and that would have to be i think it would have to be a triple strong in my opinion, for them to raise again. I know we just reported that james board, who has been a superhawk thinks that one more 25basis point increase is called for, but he actually changed it, and suggested that we are in the zone of the maximum tightening of the fed, and i think thats where the market is taking its cue remember. Bullard even threw out the seven handle for the terminal rate remember that . It wasnt that long ago right when he was talking about maybe going to 7 . The needle has moved a little bit. Just let me ask you pointblank. Do you think the feds done . Was it ten, and thats it . Yeah. I think i think it is as i say, you know, if things really get much more, and the Unemployment Rate goes down to 2. 31, and we continue to see commodities pick up, which i think is a low proebability, i think the fed is done. That being said, at this point, the bar is also very high for a decrease in rates. I think that would only come with a negative payroll number, which by the way, i dont think we can rule out at all in the middle or second half of this year, but certainly, you know, that that certainly doesnt look imminent, but that would start the conversation dont forget, scott. We are entering into the Political Part of the 2024 race, you know, certainly the democrats and biden dont want to go in with a recession, and he if they see those payrolls are negative and Unemployment Rate go up, there will be a lot of pressure on chairman powell to say, hey. Listen maybe you should think about cutting those rates. I still think they will be cut by year end, and i think more than really what the what the fed is saying and what the market is saying. Do you think the fed made a mistake this week by raising rates again . I wouldnt have because i think theres a lot to play out with the cumulative effect of Monetary Policy, but, you know, its 25 basis points is that going to tank the economy . No the cumulative effect of the 500 basis points, plus the lending restriction which, now i think is equivalent to maybe even four or five basis point heights, i think is, you know, more than enough i dont like to see 11 consecutive monthly declines in the money supply ive voiced concern about that i think we need to start expanding that part of the Credit System again because i think without it, i think the risk of recession go up, but nonetheless, no. It was a stronger report than i expected even though we had revisions to february and march. Chairman powell this week of the Banking System for example declared it, quote, sound and resilient. Do you agree with that assessment by the chair . Well, i think he was i think the Regional Banks that are in the commercial lending certainly are im not going to say in trouble, but i think their profits are definitely going to be impaired and maybe wiped out. I dont think theres a bavnkin crisis i think the loan spigot from the fed is open, but i think its at 5 its not like the 1 they get on deposits so if deposits leave these banks, the banks will have recourse to the fed, but at a much higher rate so, you know, if theyre lending longterm mortgages, well, as we thought first, the republic at 2 , 2. 5 , and the borrowing from the fed is 5 , this is one of the problems of inverting the phillips excuse me. Inverting the term structure of rates that as you say, is low profits. I agree with him in terms of runs, in terms of impairment of the Banking System, you know, im not concerned. So if you think that the fed is, in fact, done, or at the very, very minimum, that the bar is now increasingly high to raise hates again, what does it mean for stocks now . Lets just say over the next few months, do you think well, i think that i think the stocks also just like the fed is going to be datadependent dont forget, you know, payroll can turn quickly, and what i hope is when it turns, the fed starts thinking about, okay. Lets start restoring a more natural rate lets talk about maybe increasing the money supply, credit again weve seen the last 11 months the dibiggest decline in 85 yea of the money supply which is, you know, something that i watch carefully. I hope that they respond that way. I think that certainly today, the reaction is theyre done theyll respond to a downturn, and as a result, you know, my original prediction, 10 to 15 on the s p maybe it will come true ive kind of downplayed it to 5 to 10 when i thought the fed wasnt getting it, but, you know, perhaps the fed now sees that its policy has been restrictive and will start on a more neutral course. Well, professor, lets expand the conversation if we could, bring in malcolm ethridge, and Brynn Talkington i think the professor is making an interesting point, and i wish i shared his optimism that the fed is absolutely done here and not planning already their next hike in june and i say that because the wage report was the biggest, most important piece of it. The fact that Wage Inflation is on the rise means a real inflation is probably on the rise too. If hes right, and dthe fed done, is that bullish . Does that make you feel more positive it makes me more bullish that by the end of the year, were going to be in positive territory. I dont think were going to get that cut that the market is hoping for, and i dont think thats going to matter whether were in the negative or positive territory i think just knowing where were going to stop is what really gives the all clear signal to the markets that now we can start to make our bets and actually feel good about buying into companies longer term. You made the argument all along. Dont fight the fed. If theres nothing left to fight, are you more positive on where we go from here . So ive always felt this year that theres such a wide range of outcomes and a good example today, there was a tremendous amount of Short Covering finally in the Regional Banks where you saw Companies Like pacwest up 80 or 85 i think we have these cracks in the system, and so i definitely think its positive if they stop i dont think they needed to do the 25 basis points. I also think that he said this banking crisis is over i hope those words dont come back to haunt him later on because we really need this Regional Bank, the whole sector, the 4,200 or 4,300 banks to be solid. I think im still in the camp that there are other little land mines out there, and if the fed stops here, at least everyone can just, like, start doing math equations again about lending, about mortgages and not consistently trying to do resetting their Interest Rates because the fed is going to overtighten. I also think i would be, you know, interested in professor siegel, the only reason i feel like they would lower rates later this year is if an event occurs Strong Enough to say they need to pivot. So to me, that would be a negative the markets would go lower, you know, and you would have this event. So i think the narrative of were just going to start cutting rates for no reason is not is not correct, and there would be a massive event, you know, you could go to the Regional Banks and pick one of those. So im still in that cautious camps of wide range of jutoutcos and thats why i have a lot of cover calls on the portfolios because i dont think stocks are going to run away from me. Great points you make professor, what do you say about that wouldnt the idea that the fed has to cut thats not a how could that be viewed as a positive i dont know if there has to be a major banking event i think if you get payrolls negative, you are going to get pressure to cut, and the Unemployment Rate rising either of those two factors i think will put cut onto the plate of the Federal Reserve because i do think now, lets talk about malcolm mentioned Wage Inflation one thing that surprised me i listened very closely to the News Conference afterwards, and i heard powell say, i dont think wages are higher wages are the cause of inflation that surprised me because i thought that that was his position earlier on. Ive taken the position that we have to have a rise in the real wages because there was a structural shift after the pandemic, one that jay powell mentioned in his november conference youve got to have real wages rise somewhat relative to prices to bring people back into the labor market i think that has happened. I think theres a little bit more than that happened, and i think to be obsessed with wages go up by 4 dont forget. Over these last three years since the pandemic, wages have lagged inflation by every measure. So its hard for me to sort of say, oh my goodness. Now we should press them down even more so people are further behind theres got to be an adjustment, and yes. That will make Service Inflation a little bit higher, but as i say, we need those people in that Service Sector that accepts that, and will normalize that labor force and the labor on the good side is already under control. Malcolm, you want to respond . Yeah, i want to point out that on the flip side, the professor is talking about payrolls being able to come in line pretty quickly and adjust back to where they should be, but we have to also consider the fact that along with Wage Inflation, weve now seen unemployment hit the lowest level it has since the late 60s rie , right . We cant just gloss over the fact that while were talking about dire situation with lending and Small Businesses cant do their business, and were also seeing unemployment continue to go downward. At the same time that the fed is doing its work, and so i think that pressure is moving against where they actually want to land which is 2 . Professor, do you think the chances of a soft landing are increasing or decreasing i mean, you could say, look at the jobs increasing, but the flip side likes it so much maybe theyre decreasing. You could say by the body language powell had, you know what dont forget the fed late last year probably were going to have a 1 percentage point rise in the Unemployment Rate. So far we have had a slight decline, and i agree with malcolm that i was shocked at 3. 4 that ties the low, and let me tell you if that continues to go down 3. 3, 3. 2, 3. 1, you know, a year and a half ago, i interviewed James Bullard and he thought it was going down to 3. 5 by a the end of 2022, and if that continues to go down, that would be ammunition for continued rise of Interest Rates by the fed now i dont think thats going to happen, but that is one thing that im certainly watching, and certainly did surprise me, 3. 4 today. Lets be honest bryn, the Unemployment Rate is falling. The fed is not exactly getting what it want when it comes to my word, not theirs, cracking the labor market it depends how much and how intent they are in getting to the point, and it may take longer than anybody thought. Well, the problem they have is that were still short, what . 4 million or 4. 5 million workers, and i dont think outside of california with silicon valley, i dont think unless we have some event, youre going to see some structural move higher in unemployment just because were still short those workers, and people are still trying to hire, and so from the feds perspective with a very, very blunt instrument of raising rates, if unemployment is their key, they will definitely overtighten, and so i just think were in such a unique environment in the job market because we are so short those workers, but i will say by june by the end of june, even if cpi grows month over month at. 4 , were going to have a three handle on cpi just because of the dropoff of the first half of 2022 so i think once we see cpis in the threes later on this summer, i think that gives the fed further ammunition not not to move higher, and be more datadependent. All right were going to leave it there. Bryn, thank you. Malcolm, to you as well. Good to have you here onset. Professor, its wonderful to talk to you after an incredibly busy week. Thats professor siegel. We get to the twitter question of the day does todays job report put june back on the table for a hike yes, or no head to cnbcclosingbell on twitter to vote. Well share the results in the hour. Coming up, former Federal Reserve vice chair rich clarida is with us we get his take on the next steps and what it might mean for the economy. Mike santoli just caught up with a longtime berkshire investor where hes seeing growth in the space. Well do it next youre watching closing bell on cnbc. swords clashing had enough . No. Arthritis. Here. Aspercreme arthritis. Full prescriptionstrength . Reduces inflammation . Thank the gods. Dont thank them too soon. Kick pain in the aspercreme. Municipal bonds dont usually get the Media Coverage the stock market does. In fact, most people dont find them all that exciting. 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Chr chri kri kristina we saw quarter one revenues grow surging 15 today, and i talked with the cfo yesterday she said this was a turning point. It was a rally in crypto prices and costcutting analysts seemed to be cautious given the s. E. C. Has given warning it might sue coinbase. Monolithic power is giving a beat on the top and bottom line. That has a number of analysts cutting their price on the stock, and sharing the components heading for their worst day since march, 2020. You can see the stock is down over 10 scott . Kristina, thank you Berkshire Hathaways meeting kicking off in omaha mike santoli just caught up with a longtime berkshire investor and he joins us now. What did you learn well, scott, this is tom russo of garden, russo, and quinn. He met Warren Buffett and owned the stock for most of that time. Hes a global Value Investor in the buffett mold himself, and one of the things he looks for is consumer facing, often founder and familycontrolled businesses that have these longterm, durable franchises and then hes got to evaluate when these competitive advantages are depleting or going away we talked about alphabet, and one of his big holdings and i asked him if his ai threat so search concerns him. Heres what he said today. I have to distinguish between volatility and risk. Whats the risk that that google is going to lose out to chat whats the risk of that, and i dont think i dont describe a high likelihood. Its not a big risk. Not a big risk to the longterm Business Opportunity for alphabet is what hes saying, but yeah a lot of volatility in the stock, and obviously the emotion of the moment kind of can carry some stocks pretty far from the direction of intrinsic value, and thats one thing people domcome to omaha on this weekend to be reminded of. I hope, mike, this weekend, and i presume it will happen at some point, that buffetts going to be asked about all of this hype around ai and what he thinks about it, and, you know, look he has at times over the decades scoffed at these new technologies and the hype around them when it comes to how they would invest it was famous obviously with the dot com bubble, and he was proven to be right with the dot com crash. How do you think he would address that issue my guess is that he would certainly defer to the fact that theres a lot of disruption in innovation going on. Clearly hes been close to microsoft, bill gates at times he kind of has a window on that world, and hes also conceded that hes missed some big technologicals my guess is he would say, where is it in terms of a product . Where is it in terms of a profit stream thats going to be developed out of all of this consumer interest, out of all of this investment, and out of all of this buzz, and once were there, you can probably see what c