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tv   Countdown to the Closing Bell With Liz Claman  FOX Business  December 17, 2014 3:00pm-4:01pm EST

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that i think strengthens my confidence in that view and, you know, looking at the full range. it's likely to be the decision based on forecast and confidence in the forecast. >> michael flaherty reuters news. a lot of fo a lot a lot of folk of the focus has been left off and what would be the path after you make the first move? >> i think you raise a very important point, because although there is a great deal of market focus on the timing of liftoff, what ought to matter in thinking about the stance of policy is with the entire path of interest rates
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will look like, and i really don't have much for you, other than to say that they will be dated dependent, that over time, the stance of policy will be adjusted to try to keep the economy on a track, where we see continuing progress toward achieving our goals of maximum employment, and price stability. there's, you know, the federal funds rate has been sitting in 0 to quarter percent range now for six years, and we have a very large balance sheet. we're providing a very highly accommodative monetary policy, and even as we begin to normalize the stance of monetary policy, when that becomes appropriate, it's important to remember that monetary policy will still be very accommodative for a long
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time, and as we begin to normalize policy, we will be looking at unfolding economic developments, and as the economy strengthens, and we come closer to achieving our objectives, i think it's -- it's very likely that we will progress on the path of normalizing policy, but i can't tell you specifically, other than saying it will depend on progress and moves will be dated dependent. i can't say much more than th that. >> reporter: jerry allen, the committee's projections show unemployment running below your own views where unemployment should be the next several years does, that reflect desire on the part of the committee that the economy runs above potential for a while. what purpose it achieves? and related to the question
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that john asked earlier, you called the decline of inflation on expectations transitory, this decline has been pronounced in the five year forward, so we're talking about expectations many years from now would be below target and market participants see that as evidence of declining credibility in the committee's long-term objective. why do you still view that as transitory? >> so you -- your first question is why is it that the committee sees unemployment as declining slightly below its estimate of the longer run natural rate? and i think in part, the reason for that is that inflation is running below our objective, and the committee wants to see inflation move back toward our objective over time, and a short period of a very slight
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undershoot of unemployment below the natural rate will facilitate slightly faster return of inflation to our objective. it is, i should say, a very small undershoot in a situation where there is great uncertainty about exactly what constitutes maximum employment or a longer run normal rate of unemployment. we also do see the different measures of slack in the labor market point to different assessments of just what maximum employment is. the standard unemployment rate for quite some time now has been signaling a little bit less slack in the labor market than measures that are somewhat
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broader, that, for example, include the unusually large number of people who are part-time employed but would prefer full-time jobs, and the portion of the decline we've seen in labor force participation that looks like it would disappear or be eroded in a stronger economy, and so it may be that with a very small undershoot of this longer run normal level of the unemployment rate is measured by the standard unemployment rate. we'll be seeing some further progress on those other margins of slack, but it's important to point out that the committee is not anticipating an overshoot of its 2% inflation objective. and longer dated expectations. what i would say, we refer to
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this in the statement as inflation compensation rather than inflation expectations. the gap between the nominal yields on ten-year treasuryries, for example, and tips have declined that's inflation compensation, and five year, five year forwards as you said have also declined. that could reflect a change in inflation expectations, but it could also reflect changes in assessment of inflation risks. the risk premium that's necessary to compensate for inflation that might especially have fallen if the probabilities attach to high inflation have come down, and it can also reflect liquidity effects in markets and for example, it's sometimes the case that when there is a
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flight to safety that flight tends to be concentrated in nominal treasuries and compress the spread. the jury is out about how exactly to interpret that downward move in inflation compensation, and we indicated that we are monitoring inflation developments carefully. >> reporter: madam chair, peter koch of blumberg television. want to follow on the normalization once liftoff takes place. i know you said it is data dependent does that suggest to markets that the measured pace we've seen in previous tightening cycle the quarter increments that's not something the markets should expect? and what's your takeaway how effective the measured pace was in the previous tightening cycle? and follow up separately on the dissents, three dissents, notable number. what does that suggest about
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the debate around the table and ability to forage consensus. are you disappointed with the number of dissents? >> let me start with the number of dissents. there is a wide range of opinion in the committee. i think it's appropriate for people to be able to express their views, and in a sense you see dissents on both sides. i think the statement does a good job of reflecting what the majority of the committee thinks is appropriate policy. so at a time like this where we are making consequential decisions, i think it's very reasonable to see divergences of opinion. just remind me what was the other? about the measured pace?
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there certainly has been no decision on the part of the committee to move at a measured pace or to use language like that. i think quite a few people looking back on the use of that language in the -- i can't remember if it was 12 or 16 meetings where there were 25-basis-point moves would probably not like to repeat a sequence in which there was a measured pace in 25-basis-point moves at every meeting. so i certainly don't want to encourage you to think that there will be a repeat of that. many members of the committee participants have said that they think policy should be based on the actual evolution of economic activity and inflation which tends to be variable over time. and that's why i say i anticipate, it will be data dependent. we have continued to provide
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guidance, the same guidance that we have for some time that says we anticipate unemployment and inflation are near mandate consistent levels, that economic conditions may for some time warrant keeping the target federal funds rate below the levels the committee views as normal in the longer run. i know that's a mouthful but, it says in effect, that the committee believes that the economic conditions that have made recovery difficult. we're getting beyond them. they are optimistic that those conditions will lift. they see the longer run normal lift of interest rates as around 3.75%, so there's no view in the committee that there is secular stagnation in the sense we won't eventually
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get back to historically normal levels of interest rates, but they have said, you know, the economy is required to get where it is, a good deal of monetary policy accommodation. we expect to be able to normalize policy, but until those conditions have lifted that have held back economic activity, monetary policy will need to stay accommodative. so in that sense, perhaps that's equivalent to saying that the path of normalization is anticipated to be relatively gradual, but again, the path of rates will depend on how economic conditions evolve, and that's nothing more than an expectation on the part of the committee. >> reporter: pedro de costa
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with dow jones news wires. when i asked about the new york fed, the new york fed in the news a lot lately. president dudley was invited to congress to testify about conflicts of interest there. you had things like the cigar tapes. the biden report and the revelation that a former new york fed official was exchanging information with someone at goldman sachs who is also had new york fed connections. i just wonder, and also there was a scandal during the crisis related to steven friedman and new york fed and purchase of goldman sachs stock. do you see the new york fed as a black mark on the fed system because of the recurring scandals? have you talked to bill dudley about reforming the image of that particular regional fed? and do you think a person that spent 21 years of his career at goldman sachs is in a position to regain public credibility about conflicts of interest? >> well, let me say that i -- i
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think it's very important for the federal reserve system to have confidence in the quality of its supervision, and i do have -- i have a good deal of confidence in the quality of our supervision program for the banking organizations, we supervise in general and that applies to the largest banking organizations. we rely on examiners who are in the field and at the reserve banks to be providing information about what's happening in those organizations, but that information feeds into a process in which it is not individuals at any single reserve bank, but at the board, it's a board-led process, and it involves senior officials at a number of different reserve banks. it's also a multidisciplinary
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process that involves not only people from supervision, but those from markets, from economic research, experts who focus on financial stability all come together to evaluate the information that they have and to assign supervisory ratings and decide on the appropriate program for all of those large institutions. we've strengthened the process of supervision enormously since the crisis, and i feel -- i feel a very good sense of confidence in how we're carrying that out. now, it is important to make sure that we have fed into this process all the information that's relevant to make the
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right decisions, and when there are individuals who are examiners who may disagree with others in their team about how to interpret what's going on at a particular institution, it's important that there be channels by which they can make sure that disagreements are fed up to the highest levels. this is true throughout the work we do. we do economic forecasting, and the fomc receives information to help us make decisions, but obviously there are disagreements about among economists about how to interpret developments. it's also important for us there to make sure we understand alternative views. so this is important in supervision. we've announced that the board has undertaken a review of whether or not there are appropriate mechanisms in place
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in all of the reserve banks, that individuals who disagree with decisions can make those -- make their own views known and feed into the process and we've also asked our inspector general to look into that. >> reporter: jeff kearns from blumberg news. i'd like to give off monetary policy and ask you about the federal reserve's relationship with congress. specifically how worried are you about legislation that has been proposed and may be proposed in the next congress that would reduce fed independence? would you see yourself trying to fight back or see yourself trying to go congress to work with them to do more with transparency or something else to reduce their concerns without making them law? and if there were bills sent to
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the white house, would you talk to the president about vetoing them, or do you have any confidence that he would veto bills that would reduce the fed's independence? thanks. >> so, let me simply say that congress has assigned us important tasks in monetary policy and in other roles that we perform, and the federal reserve is highly focused on attempting to carry out the mandates that congress has givens you in the area of monetary policy. it's our dual mandate to promote maximum employment and price stability, and that's what we're working on. you know, i would say that the ability of the central bank to make the decisions about monetary policy, that it regards as in the best longer run interests of the economy,
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free of short run political interference, is very important to the effective conduct of monetary policy, and i think history shows not only in the united states but around the world that central bank independence promotes better economic performance. so i do think central bank independence is very important, and that it's important to make sure that we can make the decisions we think are best free of short run political interference with, respect to monetary policy. we should be accountable, and we are accountable, to congress in explaining what we do. i believe strongly in transparency. and i believe strongly that we should communicate as clearly what we're doing in the rationale for doing it, and
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very open to looking for ways ourselves to improve our communications and transparency, and working with congress to do that, but i would be very concerned about actions. back in 1978, congress explicitly passed legislation to ensure that there would be no gao audits of monetary policy decision-making, namely policy audits. i certainly hope that will -- that will continue, and i will try to forcefully make the case for why that's important. >> reporter: and the veto? >> i cannot attempt to speak for the white house to do that. >> reporter: peter barnes of fox business, i will stay off interest rates and want to wish you a happy holidays.
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>> thank you. >> reporter: and second ask but the russian economy, did that come up in your meeting in the discussion of global economic developments. there's a lot of concern with the drop in oil prices, the russian economy could be in some trouble. russia owes a lot of money to u.s. and foreign banks and russian companies. is there any concern about default? any concern about possible contagion? and if so, is the fed taking any steps to prepare for that? thank you. >> well, we certainly did review global economic developments, including developments in the russian economy. clearly, russia has been hit very hard by the decline in oil prices, and the ruble has depreciated enormously in value, and this is posing a series of very difficult economic conditions in the
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russian economy. of course, we discussed what the potential spillovers are to the united states, which could occur both through trade and financial linkages, but these linkages are actually relatively small. russia accounts for less than 1% of u.s. trade volume, and u.s. banks' exposure to russian residents is really quite small in terms of relative to their capital. in terms of the portfolios of u.s. residents, there are russian securities, but they account for a very small share. so i expect that the linkages back the spillovers to the united states, both through trade and financial channels
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would be small. europe, of course, is somewhat more exposed to russia, both because russia is an important supplier of oil and natural gas to europe, and the financial linkages are somewhat greater. but in the case of the united states, i see the spillover is pretty small, but we're obviously watching that closely. >> reporter: greg rapp from market watch. also happy holidays. >> thank you, same to you. >> reporter: there's a contagion risk from low oil prices that people are talking about in the markets. what does it mean to the banks that have lent into the oil patch with a low oil prices, and i guess you know, you're warnings about leverage loans,
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have you made warnings about leverage lending, are you worried they haven't been heeded? thank you. >> so, there is some -- you're talking about in the united states exposure? we have seen impacts of lower oil prices on the spreads for high-yield bonds, where there's exposure to oil companies that may see distress or decline in their earnings, and we have seen some increase in spreads on high yield bonds more generally, i think for the banking system as a whole, the exposure to oil, i'm not aware of significant issues there.
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this is the kind of thing that is part of risk management for banking organizations and the kind of thing they look at. stress tests. but the movements in oil prices have been very large, and undoubtedly unexpected. in terms of leverage and whether or not levered into these could be badly affected by movements in oil prices, leverage in the financial system in general is way down from the levels before the crisis, so it's not a major concern that there are levered into these that would be badly affected by this. but we will have to watch carefully. there have been large and unexpected movements in oil
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prices. >> reporter: good afternoon, chair yellen, steve beckner, i will go back to interest rates, if you don't mind. it's a question about balance sheet effects on the overall appropriate level of monetary policy, and reaffirming the reinvestment policy, the fomc says once again that this will help maintain accommodative financial conditions. in the past it said that the large portfolio securities will exert a downward effect on long-term interest rates. as you look forward to raising short-term rates, to what extent does the fomc need to take into account the residual accommodative effect of maintaining a large balance sheet? >> so i agree, and that's why
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we stated it that we typically think of the monetary policy impact of our asset purchases as depending on the stock of assets that we hold on our balance sheet rather than the flow of purchases, and so we're reminding the public that we continue to hold a large stock of assets, and that is tending to push down term premiums and longer term yields. we made clear or tried to make clear when we issued our normalization principles in september, that we intend to use changes in our target for the federal funds rate as the main tool that we will actively use to adjust financial conditions. rather than actively planning
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to sell the assets that we put on tour, balance sheets. sometime after we begin raising our targets for short-term interest rates, depending on economic and financial conditions, we're likely to reduce your cease reinvestment and gradually run down the stock of our assets. but our active tool for adjusting monetary, the stance of monetary policy so that it is appropriate for the economic needs of the country, that will be done through adjusting our short-term target range for the federal funds rate. >> reporter: kevin hall, i can't believe nobody's asked you the most important question about what's going on with your
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san francisco 49ers, since everybody wished you a happy holiday. can you talk a little bit about housing? few things are more important to americans than wealth creation in housing, you noted it continues to be a drag. mr. dudley was relatively upbeat in his forecast. i don't know if you share it on the committee. what do you think is holding housing back? what can congress do? what will you tell congress in the coming year? and a clarification on the dudley question from earlier, you didn't mention him by name in being pleased by quality of supervision, are you pleased with mr. dudley's handling of events? >> let me start with that, i have great confidence in president dudley. he's done a fine job in running the new york fed. i want to be clear i have great confidence in him, he's a distinguished public servant, and he has worked very hard in the aftermath of the crisis to
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make sure that the new york fed is doing all that needs to do to contribute to the work that we do both in financial stability and in supervision. and let's see, the other question that you asked was about -- >> reporter: housing? >> about housing. i've been surprised that housing hasn't recovered more robustly than it has. in part, i think, it reflects tight credit continuing, tight credit conditions for any borrower that doesn't have really pristine credit, you know credit ratings, and my hope is that situation will ease over time. in addition, household formation has been very depressed.
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and my expectation is, as the labor market continues to improve and households feel better about their financial condition that we will see household formation pick up and somewhat stronger recovery than we've seen thus far in housing. >> okay, thank you. liz: and breaking news! janet yellen, the federal reserve chair wrapping up her news conference giving the markets an early christmas present. never has so much world attention been so focused on two seemingly innocuous words, considerable time. that, of course refers to how long the federal reserve intends to keep historically low interest rates at the same level. they kept that in. what is perceived to be a
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shocking move by some, the fed kept the words in the language all but conceding strong economic signs here in the u.s., turmoil in russia and a severe drop in oil prices is weighing on the fed's minds. either way the markets loved it. look at the dow jones industrials, up 267 points, just touching session highs a moment ago. janet yellen saying that this last fed meeting of the year, quote, the fed can be patient in normalize the stance of monetary policy. the word patient is brand new. the market made stunning moves. light sweet crude, which while down two pennies right now had been earlier backup 2.5%, now up 3.3 cents, rather, a very volatile day. as soon as the announcement was made, investors cheered the fed's new language. get off oil for a second. dow industrials up 175 point just before the fed announcement at 2:00 p.m. eastern. can we show that? and really took off jumping 125 points in four minutes for the
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dow jones industrials, up about 270 points at the moment. but at 3:01 p.m. eastern time, the market started to lose half of the gains and as we see, regained them, the s&p up 37 points, a near 2% gain and a high of the session, at it for the nasdaq. up 88 points. when the fed decision came out, the nasdaq was up 42. the russell 2000 turned positive for the year 2014 after the statement. the dow transports tacking on 40 points today. let's go back to oil. oil's behavior, why is it volatile? before the fed meeting, weekly inventory numbers showed a big build in weekly stocks. oil failed to make new lows so as soon as that happened, in came the traders who saw opportunity, jumped in, started buying contracts. up 2.5% and at 2:51 eastern time, negative, up about 12 cents at the moment.
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treasuries, for those of you in treasuries, a good trade, the price began falling before the announcement with yields moving higher. here's the 10-year yield to 2.13%. this is the long bond. the 30-year, that yield marched to highest levels of the session which were 2.75%. we're just slightly backstepping at 2.74%. the dollar, absolutely loves this news, which is interesting. usually dollar negative when the fed is showing a strong presence. the dollar posted strongest number against, for example, when you're talking about what's a flight to quality, that would be the swiss frank, strongest number against the swiss frank since december 9th. one of the most muscly decisions in a long time. harvey rosenblum, jerry
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o'driscoll, and jim bianco and traders at the new york stock exchange, cme and the nymex. phil flynn first, we have peter barnes at the federal reserve. phil, treasuries dropped, yields jumped. the dollar is high-fiving and stocks are drinking red bull. why do the markets love this in essence status quo. >> we are the best game in town. that's all what it's about, liz. when we see the problems overseas and the fed is talking about normalizing policy, raising interest rates, that is a big positive, but you know what i love? i love what peter barnes said. he didn't let janet yellen go by on this oil sell-off as a net positive, he dug down into the question to get janet yellen to say we are worried about what's going on. liz: do we have peter there? not quite yet. >> i'm here. liz: can you hear us?
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the best question. i kept thinking, she's conceding that russia does matter. >> she is. and i mean i was actually shocked that we had to wait until the 15th go get to it. this is all that the global markets are focused on right now is this sharp drop on oil prices as phil was talking about, and the possible contagion effects on europe and the united states and banks in europe that have $600 billion in russian debt and whether or not we'll see another 98 defaulting contagion. when they finally picked me, i was thrilled to ask the question, and she said yes, of course, we're watching the situation, it did come up in the meeting, but she did not say. liz: i immediately tweeted it out. if you want the exact quote, i believe she in essence said yes, we did include russia. now i would have to say, jon
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hilsenrath who follows us on the "wall street journal" is one of the predictors of this, saying they will jettison the words considerable time, we'll keep rates low for a considerable amount of time. between the 8th and today, a lot changed, jerry. do you believe they didn't get rid of the words keeping rates low for a considerable period of time, we are seeing trends coming out of russia that could affect us? >> i think russia plays into it. i think the low oil prices play into it. the u.s. is an island of prosperity in a sea of stagnation globally. i don't know how much longer that can last. i don't think the fed wants to do anything to change that. liz: okay, let me bring harvey in? why wouldn't we raise interest rates at some point in 2015. is that off the table from what you heard today? >> i don't believe it's off the table, number one.
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number two, the timing may have moved up. there is a lot of global uncertainty, russia being just one of those things, but undue caution is going to be exercised here, if they were to raise rates and something broke overseas, everybody would say where was the fed? what were they thinking at the time they made that decision? so they're going to be very, very cautious in make any rate moves. let me add one last thing, when you look at united states, half of the federal reserve districts, half of the 12, if we measure by the level of employment in those regions, are still in recession, they have not gotten back to the level of employment that they had in late 2007 when the u.s. economy entered recession. so while we might talk about the u.s. being a sea of -- an island of prosperity, that prosperity does not exist in every place in the united states. liz: so perhaps we are not
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quite ready to tighten interest rates. now to the traders, keith bliss, i need your opinion and eye on the ground of what it was like when that announcement came out? we saw the markets really gyrate, skyrocket, moderate and now back near session highs. >> it was parabolic, it was quite extraordinary. and i think the phrase considerable time has its own wikipedia page at this point. liz: i'll check. >> it's grown a following of its own. i think why the fed has kept that in the language for two reasons, the fomc gets excitedly more dovish with the reconstitution of that group, and you saw the dissentors, the two hawks and fisher had to get in the dissent. the deflationary poll of the world. we have not seen the impact of the oil inputs into manufactured goods into the
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u.s., that will be filtering down in the system in the next few months, and you're going to see retailers and other companies have a hard time trying to raise prices in the face of that when input costs are lower and the demand is strangled and the wage growth is still not going to be there. those are the problems that the fed is dealing with, and keeping that language in there. liz: to harvey's point, i want to bring in peter armandia, well before we heard from the federal reserve we saw oil spiking by 2.5%. am i incorrect? i saw a huge build in inventories, i thought because they didn't make a low on the numbers, you saw the speculators, the traders started trading on this. now we did go down and now we're up to 6 pennies. >> we spiked because of the announcements, everything was freaked out because of the announcements. i think there is one big point, nobody is thinking about here in terms of the ruble and russian oil production. if the ruble is down 40% and
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their cost is based upon rubles and oil falls 30%, are they really economically in that bad of shape? nobody has brought up that notion yet, and i think that needs to be looked at. liz: peter, again, you actually brought up the notion of russia. do you think that the fed has now put russian metrics like the rts, denominated in dollars, we watch that closely as well. the ruble tanking and maybe domino effect as part of data dashboard which used to have housing numbers and durable goods in there? >> well, i think the risk -- liz: i'm sorry, i meant peter barnes. >> oh, yeah. i think clearly they have to, particularly since russia is the second or third largest oil producer, but i'm not sure who was speaking, but i have read analysts saying if you isolate and price everything in dollars back home, the russian economy
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isn't getting hit that hard, and also one thing the fed chair did not bring up was the fact they have reserves of 4, 5, $600 billion which should help them get through, carry debt at least and pay debt for the foreseeable future. liz: tim bianco, you are looking at research and saying where will see find strength for investors watching and saying great, my 401(k) has reflated definitely today. my 529's look good, pension might look better if it is stock specific. is there a place that looks better now than others? >> well, you have to really take a look at what the fed did today and put it into the larger context. i think that the fed made a gutless decision, to be honest with you. they want to raise rates in the middle of next year. they need to, word considerable time.
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that word is important. they kept the word in and introduced a new word. why did they do that? simple. the stock market had a bad week. and unfortunately the history of this fed for the last four years nothing but emotional reactions to the market. that's why you're seeing the reaction to the market. liz: jerry o'driscoll, to you, is that a fair assessment? >> they react to the stock market more than they used to. liz: really? >> i never bought into they were definitely going to raise rates in 15. that's not a foregone conclusion in my mind. liz: harvey thinks it is. >> 15 of the 17 members said they're going to raise rates as of now, and i happen to be in the camp they're not going to raise rates in 15 either. liz: but it's jaded to continue to get better, and i'm with harvey on this. at some point, don't we have to? >> well, there's two questions there. there's what should policy be, and i'm in that camp they should have never done qe3, they should have raised rates
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years ago. what matters is what they are going to do and matters what data do they look at? gdp employment is backwards. unfortunately forward data means financial markets. when financial markets are unstable, they start up the printing presses. liz: keith, hold on. before we go, keith do the gains hold in the markets. we are now up nearly 300 points on the dow industrials and the s&p hit the year we're in, 2014 at the moment. up 41 point. two more points, the nasdaq is up 100. do they hold? >> i believe they do. what everybody is saying is accurate. the market is going to react to the fed and liked what they heard. i'm sure the imbalances largely on the buy side. people are chasing yield and have to get in on the trade. liz: we're watching it, 16 minutes left before the closing bell rings. thanks to floor show. peter barnes asked the very question that needed to be
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asked. harvey rosenblum, former dallas fed president and jerry o'driscoll economic adviser along with jim bianco of bianco research and, of course keith bliss and peter armandio. look at these gains. big gains in just final minutes. you're making money. hope you stayed in the market. we've got you covered to the close. don't fight the tape. and new fallout from the threat against movie theaters showing sony's "the interview." four movie theaters and chains saying no go. they will not show the movie why. can we not catch these hackers as they continue to release on a daily sometimes three times a day data. that's next.
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. liz: quite a stunning and major shift in policy here in the u.s. that was announced. president obama today in what had been kept very secret announcing big steps to normalize relations with cuba. of course, there are two sides to. this not everybody is happy with the announcement. we head to rich edson in washington. rich. >> reporter: most significant change since the kennedy administration relaxing travel bans, a regular american can't just go, there you have to be part of business or educational purpose. white house says this reverses a failed policy. >> we will end an outdated approach that for decades failed to advance our interests, and instead, we will begin to normalize relations between our two countries. through these changes, we intend to create more
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opportunities for the children and cuban people. >> my interest in cuba is not economic. my interest in cuba is democracy and freedom. and let free cuban people choose what economic model they want to follow. nothing the president has done will advance the cause. on the contrary, it will set it back. >> reporter: the agreements will allow u.s. telecom companies to install more equipment with cuba. it relies a lot on them relaxing restrictions on their side and, of course, liz, how this plays out in congress. back to you. liz: we'll hear more about this i am sure, rich edson thank you so much. why haven't the hackers who have been attacking sony been exposed? have they won? after a warning threatening 9/11-type attacks on theaters that would show a sony movie supposed to be coming out today, the new york city premiere of the north korean parody called "the interview" has been canceled. and in the latest development, the four largest u.s. movie chains have opted not to show
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the movie until, this is the caveat until the conclusion of the federal authorities investigation into the three-week-old cyberattack. now you can see all of the chains and stocks moving higher. that was a lovely picture of james franko. does it mean that the hackers, so-called guardians of peace get their way and win? will sony and the movie theaters cave and not release or show the movie at all, even via streaming? what does it mean for sony's bottom line and change the way the movie's are financed. joining us adam shapiro outside a theater that would have shown it and wade bradley and gary snoop wall ceo. gary, what is the latest on the theaters who will not show "the interview"? >> well, the latest is a surprise in that the theater chains are now saying they're
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not going to show the movie. originally it was just the sunshine where the film would have premiered on new york city thursday. that's been canceled along with regal cinemas, amc not going to show the film. roughly 18,000 theaters controlled by the largest movie theater chains in the country. as you pointed out, they haven't identified who's behind the hack. we spoke with a new promo saying you have to be careful pointing the finger at any one group. >> i think we will come to the conclusion that this is a set of hacktivists patrolling sone theme. is a freedom of expression, right? the way that we produce movies is a freedom of expression. >> reporter: and so the movie not only canceled here for the premiere thursday night in new
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york, but now the christmas premiere nationwide on hold because the theater chains are not going to show it. which sony said would be all right with them. sony said the chains could violate the contracts they have and not show it. liz: they should release it via streaming everywhere. ten bucks, people can see what the controversy is. get the movie seen, there is no decision to do that just yet. adam, thank you very much. bring in two guests, gary a cybersecurity expert and wade who looks at how movies are financed. wade, begin with you, does this change the way movies and movie companies are going to do anything, and will this hurt freedom of speech? >> i think ultimately it's not going to hurt freedom of speech, americans are very smart crew, and we understand that we're not going to allow this to occur. sony is likely to do a release,
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stream it over video, put a premium price on it and i think almost every household in america will purchase it just to be defiant towards the hacktivists. liz: i love that. they were talking about that on howard stern, stick it to the hackers by releasing it via streaming and everybody will see it. let me get to gary, who's behind this? it looks very obvious it's the north koreans but you wonder, wait a minute, are we missing something here? >> i believe the north korean government is responsible and the guardians of peace is their 6,000 member cyberarmy. liz: why? what's your evidence? . >> i have access to evidence that is not public. and part of it is the attack, the malware was written in the korean language. liz: you have seen that? >> i've seen that. liz: you've seen that? why can't we catch these guys? aren't we the best in the world on this type of stuff?
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>> i'll call it the year of the rat, remote access trojans, hard to detect where the malware came from once it's inside the network. they can attack through a chinese server, even a server in the u.s. and gain control of sony's network from the inside out. liz: they sure seem smart and down for the count in the north korean country, are they getting help from the chinese or someone else? >> north korea does get help from time to time, they only have 400 ip addresses on the public internet. 200 on the chinese network. liz: wade, quickly, does sony survive this? >> absolutely. they come through this. they have shown tremendous integrity and strength of character, they supported the artists, supported the product, but also at the same time, been concerned about the consumers that would go and see the film in a theater or setting. liz: all i can say, we're hoping they get the bad guys here. thanks to adam, wade, and gary.
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closing bell, we're five minutes away, what a rally, are we holding? stay tuned. right back on more when it comes to the fed and how they kept in considerable time? here's a question for you: when electricity is generated with natural gas instead of today's most used source, how much are co2 emissions reduced? up to 30%? 45%? 60%? the answer is... up to 60% less. and that's a big reason why the u.s. is a world leader in reducing co2 emissions. take the energy quiz -- round 2. energy lives here.
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liz: christmas exist come early for people long the market. >> if you're talking to charlie gasparino, anthony scaramucci told awe about a week ago, the considerable time language would be left in. it was. that pleased the market. nicole petallides at nyse watching all ups and downs of the market, mostly up although there was a slight pullback after initial enthusiasm. what was that about? >> we saw the markets jump that is the cue we should take. dow fin i canning up nearly 300 points. not too far off the highs of the day. they left in the considerable time language. they can be patient normalizing
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monetary policy. all 10 sectors higher today. [closing bell ringing] liz: energy really gyrated. really fascinating day. one of the biggest rally days post-federal reserve meeting. david: look at pyramid. we focus on the dow jones industrial average. but that pyramid gets bigger as you go down the indices. nasdaq did better than both. big winner, small and mid-sized caps loving what happened today. both the prize of oil. we can't forget what drove markets up in the beginning, oil begins to find a ground. might be temporary. at least for today it found a floor in which it built a little bit even though after-hours it's trading is mixed. but a very busy day in the markets. huge day in the markets. we have a lot to talk about. "after the bell" starts right now.

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