To Monetary Policy. Rates will be staying where they are right now, which is close to zero, of course. Until at the very least the jobless rate falls to 6. 5 . We can only cross our fingers wherefore when that might be. Ben bernanke says these changes will make the central bank more transparent adding they can only help the markets. The central bank ramped up its Asset Purchase Program adding 40 billion to its 40 billion a month purchases of mortgagebacked bonds. He spoke about the objectives during wednesdays news conference. The asset purchases and the rate increases have different objectives. The asset purchases are about creating near term momentum in the economy, trying to strengthen growth and job creation in the near term. And the increases in the federal funds rate are about objectives. On that note, lets get dinos take on the latest move. Grpg month. For you, this was expected. The 85 billion was expected. The move to the thresholds, that is, i think, we expected it was happened. It was signaled, but a lot of people thought it would happen later, maybe that it would happen sort of by march. So is it going to be different . I think the number was it was interesting. So lets take each one of them. The inflation rate 2. 5 . Lets remember, in january, they set up an inflation target of 2 for the headline pce, as its called. So now theyve already moved it, theyve moved the goal post a little bit. They were saying our target was 2 . Now theyre saying maybe they can live with 2. 5 . Theyre saying maybe these new thresholds will be reasonable ones. They can move them up or down as their own analysis dictates. On the unemployment side, Charlie Evans first pushed this and he pushed it at 7 and its now gone to 6. 5 . Even the big proponents of this have had these targets moved. Now, lets step back. What did this replace . This replaced a time horizon commitment. The fed had said were going to be accommodative until at least mid 2015. So then it moved and they said, well, were going to be accommodative until we get these inflation and unemployment numbers to these levels. Is this a really big change . Im not sure that it is. I mean your gamble is we could be at 6. 5 unemployment by mid 2016. I think, you know, the point is that the bigger issue is what are the asset pure chases . At what pace are these asset purchases and how long will they do them . As long as they are not committing themselves and not tying themselves to anything, all theyre saying is they have been tying themselves to a date, now theyre tying themselves to a number. Were going to be in here for a long time. Weve got qe now. We already knew we had qe. 85 billion, qe, the market was down 2 points yesterday on qe perpetual. Now we know were going to go to get the 6. 5 before we stop. If were in a new normal, like pimco says and like ryan hart, were never getting to 6. 5 . So this is qe perpetual for as long as it takes. The bang foreour buck were getting with all of these accommodative moves is getting slimmer and slimmer for market participants. Is this not worrisome to you that 85 billion a month doesnt move the markets and now we dont know when its going to end . I thought this was going to go on for a had very long time. Thats why when he said time horizon in 2015 but than he said why do you think its the same thing, then . But why didnt wall street main line this yesterday . Why wasnt this the fix they needed . Because they had specd it. The fed had already told you. Enough people said that they were going to were in permanent you and no now, this is a remarkable thing. A couple of years ago when they first did this, it was extraordinary. It was an emergency measure. Now, it is the standard. Weve got a weak, crippled economy and i cant believe we didnt get much fed support because we have no fiscal support. We have no fiscal support. Fiscal is going to be going the other way. And youre talking about 1 trillion of asset purchases now is the annual run rate spop that is now baked into the marketplace. Its billed its baked into asset prices and now its you know, what people are going to be betting on over time is it increased or decreased over time . All right. Have we not been lulled into you know, anything bernanke does now doesnt shock us or surprise us. Isnt this extraordinary . You know, a few years ago, there were all kinds of things that i would v never happened. Now if people ask me if such and such is possible, i say anything is possible. One of the things that i did think immediately yesterday was ben bernanke may not have this job in two years, right . People talk about that. He may decide he doesnt want to do it. He was asked about it. But he may ultimately be locked in. He may be locking in his successor and his successor after that into this type of thinking and this type of program. How hard is it to get out of this later . It is going to be extremely hard to get out of this, regardless of who the leader is, because, again, it is now you know, this is no longer an extraordinary measure. You did this during the emergency and then its time to get out. Now were you know, were in a bit of a quasi equilibrium here and this is how were running Monetary Policy now. So to now being doing a regime shift out of this, it is going to be very, very difficult and its going to be time consuming. It will be risky and the markets arent going to like it when when it comes. What does it say about the underlying fundamental strength of our economy and whether we have longterm structural problems being glossed over . We have a lot of longterm structural issues to confront. And the fed is, you know, the impact on the economy has not been strong. We have seen 2 growth since the recovery started. Markets have reacted more than the economy. And now the effect on markets is leading to to think of a you know, we always have to come up with met fors like this is. Slogan . No. Im worried about rise above because when we get to the debt ceiling, you cant use rise above. You have to stay below. Stay below. So were going to have to change it. No, but i think it might be a big boat thats got a bunch of holes and the water is coming in and you have the fed putting water out as fast as it can. Instead of fixing the holes but the problem is, if they cant fix the holes, right . So because of our inability to because congress fit the structure stuff. And there are demographic issues that are, you know, not under anybodys control. But, you know, we do have this problem with the Labor Force Participation going down, we have people exiting the labor force because theyre discouraged and in some places its the if i were running this country, i would be taking bernanke to dinner every night and getting him whatever he wants. Because its really masking the inability for us to govern. And the economy wouldnt even be doing 2 if it wasnt for the fed at this point. I think thats and that is politically if youre bernanke, the bronc thing to do or maybe the right thing to do for the country is to stop and say you guys over there figure it out. Multiply by times 12 by three . The value is going to be 4 trillion in another year. Thats about 25 of gdp. Sounds like a lot. Boj has more, ecb mass more. Swiss national bank, way more. So i mean, there are no limits that were approaching. So i wouldnt be shocked if a year from now were here and were talking about 4 trillion unemployment to a number thats even bigger. Lets check on, you know, the markets which are like that boat. Even after all this, weve got nothing. Were just trying to tread water and were indicated down about 9 points on the dow. After it was all said and done yesterday, were supposed to open higher. Yes. I dont know what you said later on in your conference. Did you do it . Ray dalio made comments latter in the day. De . About corporate bonts bonds and he thinks this whole thing at some point is going to implode. Steve galio was there. Yeah. It was a pretty interesting day. But i think his comments moved some people, too. Did we broadcast ray dalion . I dont know if we broadcast him live. We should grab some clips and play them on squawk. Dino, did you have something . I think youre on track in terms of the economy. The economy is weak. Should i be wishing things just bottomed on their own so that we could start policing i mean, you know, what will be great would be a surge in productivity. You know, a surge of demands externally. I cant get here any earlier. Were here at 3 30 in the morning. You know, can this economy be more productive . Go to bed at 8 00. Can that happen . Can we get a surge of external demand . And those things are unlikely or cant be predicted. Andrew got in earlier today than ever. I did. I was coming from the concert last night. No, i wasnt. Lets check out the situation in crude today. 86. Were used to that now, too. Its like, okay, 86 is fine. The tenyear, and this, when we used to go and see greenspan down in washington, he said Everything Else you have on your ticker, i need to see the 10 year. I need to see that every morning. Nothing has happened in the ten year for the last i dont know. Its just not as interesting as it used to be to watch. When its manipulated, its not that interesting. One of the things about qe is that its volatility. And you have seen implied vols down in all Asset Classes, including bonds. Because things normally are volatile, that just shows us once again this is not letting things letting the chips fall where they may. Yeah. I think its baked into the cake. But i think hes on to something. The fact that the fed is there, the fact that the fed is trying to get ahead of the fiscal cliff and weve got these big bond buying programs. And the last time, remember, in august of 2011 when we had the last showdown, what happened . Bonds rallied. And you said you want this to be fixed. You almost need the markets to be more volatile than they are. Thats one of the theories that people have thrown out there is that the politicians wont do something until the markets forced them to do it. Lets get to kelly evans, talk to the Global Markets. Kelly, i want to tie this to you, tie this to your purview over there. Every year, i get a tie from van ek and i got the first one was bernanke, a picture of him in a helicopter. And then i got one with draghi and a can and euro signs. Yesterday, its back to bernanke with the helicopter, but its alternating with draghi with euros because now he is out helicopter draghi. So were all in concert in a world that cant seem to exist without liquidity. We wasnt do anything based on our feds. Its not a great world to be in. Well, ben bernanke has given a great analogy. Its funny you bring that up today because its partly what were seeing as we look over to the italian and spanish debt auctions that havent wrapped up their fund rt for the end of the year. Its still a weak session for european equities. Just in fact last couple of minutes, weve had news from the euro group where after last night, it agreed on a common supervisor, the ecb under margo draghi. This morning, they agreed finally on the disbursement of aid to greece. Some says it removed uncertainty. Other investors, not so sure. I wanted to show you the italian curve, italy and spanl wrapping up their fundraising for the year. Their auctions werent all of that huge, but we are seeing yields fall, prices rise across the board as investors did show up. If we flip over to spain in particular, we can take a look at the threeyear over here. A bid to cover ratio of 4. 8 . One indication certainly of the kind of indications there are where the ecb is expected to be the most active if and when these countries have to access their bailout programs. Now were seeing prices in spain sell off a little bit. The tenyear, just under 5. 4 is the level there. For the longer dated papers, investors are a little bit more wary. Now, that news coming out of the euro group meeting, i wanted to show you the euro dollar as we wrap up todays Global Market support. Its still down. 1 , 1. 3056. That would tell you that the resolution is largely priced in. Now as focus moves into the start of next year, a couple of the key questions will be how much mario draghi follows ben bernan bernankes caps, maybe even cutting into positive territory. Expect to hear plenty more about that in the weeks to come. But for now, some resolution means this is front and center for these fiscal cliffs. Back over to you guys. Kelly, have your bookers called yet . Do you know . Have you tried to it may be better for you to call him directly instead of a booker. Can you get him on . Dont you want to interview him . Hes very charming, too. Look, maybe, joe, if you help us out. If we all ask nicely enough we can have him come on and explain why he is or isnt trying to dodge higher french tax rates. He, though, has been one of the more outspoke nn france about high tax rates overtime and even warning sarkozy about raising taxes. Im sure if anyone, hes happy to make this an issue. Did you see his net worth, supposedly . 120 million and i dont know whether thats euros or dollars. Hes made a lot of movies. Hes very charming in the airplane, if you remember. Joe, are you skulking at 120 million of in the net worth . Am i what . Can you scoffing, saying that 120 million is extraordinarily low . No. Shes hearing the audio from the audio room. No, that wasnt me. That was a sound track of a french guy that we ran long ago on the show. No, i god bless him. For an actor to accrue that much i think is great. And i like him. I like his movies. I think he ought to get going and order salad a few more times, but didnt he have a problem in an airplane . I think that was him, yeah. The aisles were clogged. Thanks, kelly. Yeah, youre right. I hate the when that happens. Its been more than a month sips the election. Next well have the post election nnz wall street journal results. Find out how the American People about washington, the cliff cliff and as we head to action, well check out the price of gold. This is america. We dont let frequent heartburn come between us and what we love. So if youre one of them people who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morning. 24 hours. Zero heartburn. Lets get the National Forecast now from the channels wolf reynolds. Are you mad . Im not mad. I answer to wolf reynolds, reynolds wolf, i answer to everything. And then at home i hear all different kinds of names together. Theyre both actor names that people make up to be cool. Either way, its good. Its republicynolds wolf. Lets show you whats happening out west. We have spotty showers along the coast and snow showers along the coast. Still scattered snow showers in parts of the lets see, parts of the mountains in california. Not only portions of the san gabrielle mountains, but also the mountains in sierra, nevada. Its going to cause some backups in places. San diego, you might have a few delays there. In vegas, miami and new york, minor to no delays whatsoever. Thats the good news. Very quickly, lets talk about the east coast. So far, so good. Scattered showers on parts of the coast, but new york city expecting a high of 45 today. Mostly sunny in the ohio valley, into parts of the northeast. Still scattered showers in parts of south florida getting very close to the record, the yearly record of rainfall in miami. As we wrap it up, from fargo and on the other side of the river, expect snow showers. Still balmy, beautiful showers in dallas. Mostly sunny and 65. Back to you. Reynolds, thanks so much. Thanks for flag along. You bet, guys. Americans want action when it comes to the fiscal cliff. John, youll give us some of the highlights, but with what weve told them about what will happen if we go over, i guess we shouldnt be too shocked that they dont want to go over. Weve basically said there could be a recession, there could be millions of job losses and Everything Else. So i guess we probably shouldnt be surprised by that. No, we shouldnt. Theyve gotten the message. Theyve absorbed it. Weve asked in the survey how serious a problem is the fiscal cliff . And you get 68 of the people saying its a very serious problem, which tells you something when youre talking about something abstract like tax and budget politics which people dont ordinarily Pay Attention to. Theyve gotten it. But what were seeing in this poll, joe, is the after glow of the election. Typically when president s get reelected, the partisan fighting stops. Their numbers rise. The president s Approval Rating 53 . When you ask, who do you trust to handle the fiscal cliff, it shows how the president has the upper hand. 38 say they trust president obama. Thats twice as many as trust speaker boehner, although the 38 , of course, is under 50 . 38 . Oh, man. But when you look at the potential solutions, does obama have a mandate . We asked that question. You see very big numbers, 68 says he has a mandate to cut taxes for people who earn less than 250k. 65 say he has a mandate to raise taxes on the wealthy while cutting spending. Both elements are important. And when you ask about eliminating the bush tax cuts for people who make more than 250,000, 59 say he has a mandate to do that. So the president clearly has the whip hand in the negotiations, but, of course, members of congress dont respond to national polls. Theyre fought elected nationally like the president. Theyre responding to their districtes and thats why we have a Different Number to solve. I saw a number on nightly last night that was sadly low. We try to make something out of it. Who would you blame if we go over . And it was 19 to 24. That was weird, wasnt it . Thats where well, i think in some respects 19 we plame i think the president and 24 would blame thats not very thats like 24 . Thats all you can get for that . You cant even make a story out of that, can you . Well, i think there is a certain on both your houses if that happens. But look, it is clear, president obama has the high side of Public Opinion in a macro level. But, john, to campaign individual districts . For me, that bothers me. I understand ginning up public support, but beaches and campaigns, its govern, govern, govern, stay in washington, be with these people. Govern. Getting people to im getting email every day. I got one from i dont know, from his people, joe, call your congressman, call your congressman. And i finally wrote back on one of them. Youre still campaigning . Would you please start governing . And they sent Something Back to me, if you have comment on policy, snd it to this meal. But i finally sent it back and said would you please just youre in. Youre in for four more years. You dont need the crosssection of the U