tv Cavuto Coast to Coast FOX Business December 2, 2015 12:00pm-2:01pm EST
the rest of the candidate crowd is just vying for second. one agrees says i'm not a fan of trump, i hope he's not our nominee but what goes on in this country squares me. neil: what you know i've got right here? . stuart: no. neil: i've got janet yellen's statement, i'm going to start reading it. top with that, huh? wait until we start this derivative slot thing, varney. you're going to go nuts. stuart: you're killing me. neil: thank you very, very much, stuart. we've got a lot of folks with who are really focused on what janel yellen is saying, especially when we heard from the chicago fed and said what you know? holding back on hiking interest rates, that's not a gimme, but it was a shift here on the thinking. now, we are told that later on this hour janet yellen is
going to spell out the case for making a rate hike. then again i have the statement here. and i could ignore the embargo, couldn't i? hello, i'm janet yellen. no. wouldn't that be funny? what would happen, connell, if i did it. >> i think you just did. neil: i did. tell us what's at stake. >> there goes what we have for journalism credibility. i feel silly reporting about all of this because you know more than i did and you might start laughing in the middle of my report bill we will have to see or hear what janet yellen will say, we will read in between the lines when she starts speaking at the economic club of washington d.c. but let's talk first to set it up about what those other fed officials have said the last couple of days. atlanta president said with some interesting comments saying now it's a pretty good time to think about raising
interest rates, and he says a rate hike would be a bode of conference, to spend, consume, and make investments, maybe not a good statement there from dennis lock heart but a different message from him, and we talked on the show yesterday from chicago fred president from charles evans. now, evans said essentially you know what? maybe we should wait awhile before hiking rates, even though he did say the pace at which rates go up is the important thing. he said he prefer to have more confidence than he does now that inflation is indeed beginning to head higher. so you have those two conflicting points of view from two regional fed presidents setting themselves up for you and only you have in front of you. neil: indeed and, by the way, she does make reference to those other two. >> there you go. yark with you anymore. neil: there's only one chairman, isn't there?
and she goes on to say -- >> is that a quote? [laughter] neil: i had you going. i know there were people -- he can't do that. all right, connell, thank you very much. we go back to him with dramatic updates as they become available. again, here's the drill. around 12:30 or so she's going to start making her speech but it's the q and a with reporters afterwards that she might tip a little bit more because reporters -- you know what we're like, we ask with questions, we want to get to the bottom of the issues that matter to the world. one of the things we could see in the bond market already is they're factoring in a rate hike and you don't see that any more dramatically than something called a two-year treasury note. ritz one that has been rocketing in yields. now, i know perspective is one thing but very close to 1% right now. at 5.5 year high, and it has been inching up the last few months on the indications that fed if you understand futures, that's how they trade on betting when and where they
will hike that essentially at 0%. they're betting a 75% of rate hike in two weeks. that's their betting. what's larry glazier betting on? we'll ask him. what do you think janet yellen is going to spell out? >> look, neil, it's time to make that policy change. give me a break, if they can't raise by a quarter percent, what does it say about our economic recovery? and for many people we look at those low interest rates and in part those low interest rates could be attributed to some of the challenges in why we've had such a weak and anemic recovery. so if the fed doesn't raise rates, they'll be accused of not being independent and potentially being political to support the current administration. and people will be yelling from the rooftops accusing them of that policy. so to maintain that credibility of independence, the fed needs to act. and. neil: what if not acting unanimously.
in other words, if you have a number -- you often do with big decisions. >> sure. neil: but if it gets to be three or four. >> well, i think that's a very good point and conceivable that's going to happen and we may not get to agreement here. what's also interesting is the fed and the current administration tend to be talking out of both sides of their mouth. on one hand you have president taking a victory lap which suggests a normal recovery; right? it suggests that we've normalized things and then a interest rate policy that suggests anything but a normal recovery. it suggests emergency accommodations that were necessary for a very short period of time, and they've outlived their useful life. so you can't have it both ways. either we're normalizing the economy and giving businesses a reason to have confidence, invest in plans and equipment or things are not okay and that's the message that's being sent right now. so just from a confidence level in the can say economy if you want to get middle class jobs created here, you have to normalize the interest rate policy for show businesses.
build that plant, build that equipment, higher that middle class worker, don't just buy your exerted and buy back your own stock, which is what they've been doing, and it's been accommodated by this low interest rate policy. neil: yeah, very cheap and easy money. you there very, very much. a lot of it depends on what janet yellen says. i'm going to tell you that she does start out with the word hello. not recall but it could be an adele song for all i know. but i'm just telling you i have it here. and some at the fed are going to be, like, you're not really going to read these embargo comments, are you? well, that depends if you give us janet yellen. in the meantime we are looking at a couple of things at why it's so important and why we are building a little bit of drama around it because it could represent the first time in almost a decade that interest rates will stat are the moving up and you know the drill here. one and rarely done. you follow a pattern either when you start raising them or
start lowering them, we certainly know that when we started lowering them and now the bet is when they will start hiking them but there is that opposition camp that says, you know, they're lowering them in europe, we've got a tense global environment, we've got terror, paris a couple of weeks ago, is this the environment to do this? when i talked to carly fiorina right after the fox business network debate, it was very interesting. i raised the issue of the federal reserve with her and she was saying back then -- and this was before paris, folks, they will find a reason not to raise rates. go back to time carly fiorina a few weeks ago. >> the thinking seems to be that the fed is going to raise rates next month. >> i'm going to make a bet with you. i'm going to make a bet and over over and over and won that bet. neil: why? >> because they always change their mind. my bet is they're not going to do anything until after the election. neil: you know, there is something to that because a
number of times we've expected the fed to move, and it hasn't moved. john layfield on that. what do you think? what do you think she's saying? come up, and find an excuse not to do something. >> well, the implication there is that some kind of conspiracy theory maybe that's true but i agree they won't raise rates. i don't think you have to look too hard to find reasons. look, gdp growth is down actually from the second quarter when it was at 3.9%. that's probably when they should have raised rates. it looks like this holiday spending is going to be tepid, manufacturing is at a six-year low. neil: jobs alarming strength 217,000, the prior month was revised upward, i'm not saying it's growing briskly, but it's growing. >> yeah. look, there's reasons on both sides. i don't see, though, this big recovery they're supposed to have and that's really the
only reason, either that or enfacing which is nonexistent to raise rates. if you want to resist it, i suppose that's the case, i see a case to stand still. neil: you know, what she was really getting at, john, is this notion that janet yellen is a democrat, she was picked by barack obama, and i've heard democrats say that about republican appointees, that they're going to do the white house's bidding. but donald trump has said much. what do you think of that when you get into that office and the chair, the federal reserve, you put political blinders on in this case you go ahead and raise rates regardless. >> i think that's what's supposed to happen. but it's pretty hard when did that your ideology anyway and you're a republican, you tend to want to favor the people who put you in that position, and i think that's what we're going to see with this rate increase this month. gary b is a 100% right, they should have raised a year ago and this issue to raise rates
to stop an overheating economy, we don't have that right now but when you look at what are has done, the s&p was at 797 on january of 2009 -- neil: let's say you don't and people expected that you might then do we tank like last time? >> yes. neil. that's what i was getting at. just taking a little while to get there. 70% of economists right now say they feel like they're going to raise, if they don't raise, i think the market is going to go down because what gary was saying people are worried about what is going on in the economy. cap spending and productivity hasn't increased because the fear of what's going on in the underlying economy and if they don't raise, i think the fears have some validity to them. neil: all right, guys, i want to the thank you very much, we're waiting on to get details on this in 15 minutes or so, janet yellen speaking on that. but i can tell you this is a barn burner.
neil: as if we didn't have enough anxiety with this speak on whether we're going to see a hint toward interest rate hike later this month, now we've got isis to worry about again and especially how effective they are with recruiting. jo ling kent on how they're doing with that. >> yes. that's right we're looking at a new report from george washington university, and i want to show you the stats of what's happening among americans who support isis online. george washington saying that 300 americans are actually actively supporting isis while there's 1,000 online across the country in all 50 states
that the fbi is also investigating. now, take a look who they are. the average age mostly 26 years old, mostly male, the arrests have happened in 21 states but led by new york and also minnesota. nearly all of them are u.s. citizens, 40% are converts to islam. now, 83% of the people who were surveyed in this study actually were arrested in 2015. you can see 51% attempted to travel abroad in 2015 and here's the stat that really brings it home. 27% of these isis supporters online have been involved actively in plots for attacks in the united states now. neil: that's pretty scary. jo ling, thank you very, very much. >> sure. neil: former police commissioner ray kelly joining us, in new york it's a big deal, as i'm sure it is in your town, community when they light the christmas tree and this just a few blocks from us now.
we can take a peek, guys, at 6th avenue right behind us here about a block or two away that we're going to see the lighting of the tree, not in time square but what the heck we'll showtime square. but the city is under heightened alert, you're going to see a greater police presence, if we can peek at police avenue because there was a police presence outside radio city music haul and right there of course where they're having the rockefeller christmas tree and, commissioner, you were telling me that these are very popular events for crowds. and terrorists know it, want to be terrorists know it, and you said sometimes effective just having a lot of police out there; right? >> yeah, sure it's a deterrent that's the operation in which we -- neil: how could it deter if these people are happy to kill themselves? >> well, they have to get the
bad checks and that sort of thing going forward but police officers that are not in uniform that are in the crowd as well. it's a heavily policed event, and i think it's appropriate. neil: and you dealt with this when you were commissioner and pretty scary time as well. but i am curious about the latest recruitment efforts where isis seems to be even now and even after paris and even after we've been taking out isis positions and all throughout syria and southern iraq and yet they are still affected. maybe because of all of that. >> yeah. well, al-qaeda did this. we've been experiencing this for quite a while. but isis has a tremendous facility on the social media on the internet with twitter. neil: what do they do? >> put out very sophisticated videos that almost always include some element of the world trade center attack. they want to show those buildings burning. but they're very well done and the basic message is your religion is under attack.
you have an obligation to defend it. now, the additional messages from isis. neil: who are they targeting. >> young men for the most part. young muslim men that they initially want to come to the middle east for the -- but now the message is do what you can where you are. neil: last time we were chatting about do what you can where you are now, we're told that a number of the isis recruits went to paris -- at least one through southern greece, maybe as many as three as part of this refugee wave, they didn't bring weapons with them but the weapons were waiting in paris. so obviously there were cells working already independently there. do you know or do we have to worry about similar cells in new york and chicago and a lot of cities? >> well, it's difficult to say. obviously there are individuals that are being watched.
the question is are they communicating with other individuals who they -- the whole notion of encryption now complicates that monitoring in terms of connectivity between these people. i think that's a fair operating premise that there are cells who are willing to kill themselves to conduct a terrorist act. that's what you have to assume as you engage in this busy of investigation. neil: you know, when you look around a crowd and we always talk about if you see something, say something, but you're very observant, i notice you're talking here and looking around and even in these characters -- kidding guys. the cameras all go out. but what do you look for? what would you say the people who are out of place and just don't seem to -- i guess with the dzhokhar tsarnaev brothers they seemed detached. >> i guess it's look at the
life through the prism of 9/11, something out of the ordinary, it's difficult to give a specific description as to what you're looking for. but something that just doesn't fit. there's no such thing as a dumb call. call law enforcement. see something, say something. neil: what do you think what the governor's doing, if you see something, text something. >> somehow communicate it. yeah, i think that's helpful. keep people aware. neil: you're looking at a crowd that doesn't fit and you're looking at individuals in there and there are thousands of them crammed in that little block radius. what do you do? >> it's difficult. no question about it. but if you look at somebody -- obviously somebody trying to get a bag in, that sort of thing. neil: not allowing bags or anything like that. >> right. and also, you know, people who look out of place. it's difficult to say with precision what that means. but they just don't go. tonight, for instance, is very much a family affair. so you may look for things
that don't coincide with that. neil: gotcha. commissioner, very good to see you. >> good to see you. neil: thankless task. and, by the way, commissioner here went ahead and ticketed everyone in the studio because something just did not look right. in the meantime we are waiting on janet yellen, i told you she's going to be making a statement, i told you as well we have her embargoed statement, and i told you as well right here it's a doozy. she's going to spell out whether she will or will not raise rates. she will always articulate justifications for either option. talk about detail. that's all i can tell you. we'll have more after this
flat, if anything going down. what would happen then? again, i told you about this embargo speech but, you know, this is not about the drama and me and what i have. sometimes i share it with my friends. blake berman now is going to be joining us and he too has an embargo and what he think so is an embargo. anyway, blake, what are you learning? >> well, neil, janet yellen is setting the stage for a rate hike in a couple of weeks now later this motif december. she's about to give a speech here in washington d.c. to an economic group just minutes from now, and i want to read you a few packages of what she's about to say -- she says or will say, and i'm quoting here on balanced economic and financial information received since our october meeting has been consistent with our expectations of continued improvement in the labor market. and as i have noted she says or will say continued improvement in the labor market, helps confidence that inflation will move back to our 2% offensive over the
medium turn. so yellen is setting the stage there. as far as pace goes, she says, and i'm quoting here, the committee anticipates after employment are near consistent levels, economic conditions may for some time warrant keeping the target federal fund rate targets level below the committee's views as normal in the longer run. she has mentioned this before, neil, she is reiterating and making it clear once again that if indeed a rate hike does come down the line that the pace might not be as dramatic as some might one wish or some might call for. and i want to read to you, neil, the very last line she gives or will give in this 14-page speech just moments from now be with it's a wink and a nod. a little smile on her face. she says and quoting beginning to normalize the stance of policy will do so being a testament to how far our economy has done in recovering. she goes on to say in that sense speaking of a hike
potentially it is a day i expect we are all looking forward to. again, janet yellen said to speak here moments from now and follow by a question-and-answer session. neil: so that last line you alluded to and quoted is janet yellen unleashed that's like man of my sights pretty much. >> yeah. and you can almost -- she says it's a day we're all looking forward to. as i read it -- neil: you get excited. >> her saying it with a smile on her face almost, and i've got to imagine, folks, when she actually does deliver this how she conveys that might be telling too. neil: absolutely because, you know, john's organ rall speech was fine on paper but his deliver a home run. thank you very, very much. blake berman, again, blake's point here if it's true that janet yellen is laying the ground for a rate hike, in other words, they might keep rates below what some members
might consider to be adequate levels and whether that means, whether that could mean that we still have rates very low, maybe for a while, i'm not saying one and done but is it your sense that it might not be no more than a couple of rate hikes over this cycle, what do you think? >> yeah. i think so, neil, i don't think there's any real point where the economy is and where inflation is currently and probably where it's heading to think that the fed would do any more than one or two rate increases in this cycle. and so, you know, it's curious what they call transitory periods when discussion inflation, we were probably approaching a year of transitory period. i don't know what the next phase of this is but, you know, without much inphrasing it's hard to think that the fed will do a whole lot with rate increase. stuart: do you expect there to be a lot of members on the federal market committee who doubt that this is the time to do it? we talk about the chicago, federal reserve president who
sees the pace eventually going for higher rates but doesn't want to see it right away in two weeks? >> yeah. i think, you know, if there is a hyper dove on the committee, it is charles evans, and i think he made his points known today. dennis lockheart was a dove and certainly still is and all voted today in speech. so i think the committee is slowing turning toward the obvious unless we get some kind of crazy number out of the employment on friday that the fed is going to go in two weeks and almost a consensus way. neil: all right. we will watch very, very closely. thank you again very, very much we told you the outlines of jabet yellen's remarks and what she's looking forward to. this should be an upbeat for her, a brilliant wonk this is as cuckoo crazy as she gets, the optimistic perfect pitch in this economy that the warn the slight up particular in rates. that doesn't mean it's a gimme, and we'll see this out
in the q and a with reporters shortly after her remarks. but we are already seeing for the dollar index that our currency remains the draw. and that's because we have rates going up, a stable economy and the rest of the world not so much. if that doesn't make us the greatest story on this planet, the least awful one. stick around
neil: for my own embargo copy of june at yell and world marks, let's start with, wish you were here, neil. one of the reasons we could see a rate hike in her eyes. a reflection of the markets. look at these technology stocks. the economist say they reflect. that is always in the eye of the ball holder. certain stocks. running away. doing this. anyone's guess. i do want to go in and talk about politics.
i did not first touch on these outside dynamics. how this changes the rates. all of a sudden, they start picking up. they start reversing. what do you make of that? >> hillary clinton and the democrats are very afraid of making a mistake and having the economy going the wrong direction. neil: get out of the way. a rate hike now. i had one before blake. that is just me. you know, we may keep rates low even though many of us of greek they should be higher. a little lower than you would think. >> the pertinent way of doing it. on both sides of the aisle, i would think that folks would be okay with that.
a little bit of a ticking time bomb for hillary clinton. anything that goes from south will really be at her feet. it could be problematic. stuart: thinking of marco rubio. as often as the jobs are there. just lousy jobs. i am wondering how that is helping the campaign. with donors, he is scoring well. seeing him as a old friend. what do you make of that push of mark. >> i think that marco rubio is certainly on the rise. rubio is getting a really hard second look. contributed millions of dollars to that. seeing him continue to flounder. 5% or so. really not going anywhere in the key states that really matter.
a second look from those folks. neil: what he is claiming to do. both claiming to do on he half of marco rubio. they are maybe waiting for a while. what do you make of this? >> at this point in time, i do not know how much outside billions, and, again, it will never be billions. i do not know how much of an impact that will make on donald trump. they certainly do not seem to want to take on a guy like him. having a monster of a machine for small donors out there. i just do not think this will sway any of these early stays. neil: donald trump continues to move on? >> he will continue to move on.
i really do not think $10 million up or down from marco rubio will be a game changer. who has built the best infrastructure so far? i think ted cruz probably has a better infrastructure right now. it is built to last. faltering and going to the finals. >> that is very interesting. good seeing you. >> talking about marco rubio. he will be my guest. fox news channel. they are lining up for him. as well as the federal reserve. likely doing it in a couple of weeks. like carly fio reena questioning the fed. we will have that later on today. meanwhile, russia and turkey.nt,
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neil: already started the economic club. starting with hello. and then the adel song. she had heard from others that rates go up in a couple of weeks. we will keep an eye on it. a half-an-hour. anyway, we are also following this video getting into us. reminding you how tough this migrant situation is getting to be. a migrant clash with police. very, very violent. i know it is easy to lash out at them. these guys have been waiting they are, in some cases, four months. someone will do something, spend
enough with these other camps that did not pan out. shortage of food. shortage of supplies. no one in the world really wants them and they are outnumbered. we will keep an eye on it for you. also keeping an eye on other tensions going on. the russia turkey situation. the very latest with that. connell: the russians. the turkish president and his family have been benefiting from the own legal smuggling of oil. tying up the french turkish president. a russian defense official held a tax briefing. they presented what they said were satellite images. tanker trucks loading up oil. they are held by isis.
the tanker trucks moving into turkey. proving that it is connected? no. he has denied this all along. if they were to approve this, he would resign. that is how strongly he feels about it. taking steps to prevent this from going on. i think that is about right. things get even more tense as things go even further. neil: you think about typical vladimir putin. a jet shot down. not the immediate response. not blowing up something. obviously there is a lot at stake. he is not performing as you
think he would or responding as you think he would. >> i guess. being able to consider the consequences of that. a military response at this point. maybe considering different options. going to the heart. a liar. a criminal. those are deep accusations. they are not violent ones. neil: it is weird. thank you, connell. very, very much. david put trey is. they all teamed up to write a letter to lawmakers to urge them to cool it on this refugee crackdown. north carolina republican congressman, what do you think they are saying? this move against the refugees order. coming to the united states. sending the wrong message about
who we are as a country. what do you think? connell: well, neil, we have been messaging for three and a half years. that has not worked. that is why we have the refugee problem right now. i do not know about sending the wrong message with the right message. i met with ambassadors surrounding that area. they believe that we have to deal with the problem. we take more refugees. we address the problem in the region. that is where they are affected most. neil: the rationale, going slow here. slipping through the cracks. there is another view. talking about a. joined at the hip. this treatment will agree the very that we are trying to stop.
i don't know if you're watching the tv screen right now, but they have this on the border with migrants that just want to stop waiting outside. their argument, this argument that you get from merkel and others, this will get worse. this weight and delay will be even more terrifying. >> we did hear from a lot of the experts that we have to address the situation. you mentioned aside. that is really rich. neil: i saw the irony everywhere. this notion that they will say something bad will happen, it is because of those darn u.s. congressmen. getting into countries. >> we put forth a reasonable vetting process. to suggest that because our
welcome mat is large enough, we are creating the kind of extremist terrorist activity. that is just not a cause and effect. i had a 8000 people in north carolina. this was predominant. how many people -- if we bring these refugees in. we are not there with the vetting process just yet. neil: obviously, close to 50 congressmen agree with you. congressman, always good to have you on. >> it is great to be with you. thanks. neil: janet yellen is speaking right now. outlining a plan. the federal reserve president is one that seems to be the scales in favor of a rate hike in two weeks.
a two-day meeting. the federal reserve. she is a brilliant. 300. me, the same source. the idea is putting a number front of the decimal points. i do not know. plenty of reasons to just pull back. could you imagine, after all of this from europe, can you imagine just as a european union is lowering rates again, we are raising them. can you imagine how that will go down? just saying. she is very, very smart. she is a huge yankee fan. [vet] two yearly physicals down.
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call unitedhealthcare today. ♪ neil: we are focusing on janet yellen. sort of outlining her plan. due to justifying a hike in rate. it could come in two weeks. december 16 meeting. a number that do not share that view. a lot of weak economic news as well. it would justify this in the world would not be as upset. many in the world would be upset. many thought that the paris developments at lease provided an excuse to hold off. janet yellen is not about mindset. we will learn more when she speaks to the press.
taking their questions. energy-related issues. oil more to the point. a surprise run-up in oil inventories. maybe it could print demand all the more. it is hard to say. i have had many issues to raise. with me, matt mcdonald. federal workers getting paid a lot of money. just to stay home. what she is outlining? what do you think? >> having the dollar strengthened. again, people on wall street talking about this pace of the increases. down dramatically. she is doing it at a very solid soft market.
neil: watching the stock market? >> yes. we are also watching the head of the jobs report. the rate of growth is lower. still strong about raising rates in advance. a mediocre job. >> it was good. what is the estimate? >> goldman sachs, 200,000, 215. that is right. it is lower the rate of growth than it was last year. neil: federal government workers. what is going on, senator chuck grassley, finally saying enough is enough. getting paid to sit at home.
you are put on administrative leave for misconduct. definitively saying what is misconduct. a lot of federal workers are paid to sit at home. 57,000 workers. more than $3000. >> you are paid. you get to build up your pensions. you know, you move up the pay scale as well. you could be sent home for watching corn. a fight with your boss. the problem is, the rules are really slippery. it is not set in stone what defines conduct. neil: the governor workers at
neil: close to wrapping up her rub marks. wish you were here. you heard that one. what are you laughing at? dagen: loving your aura. neil: dagen was supposed to appear later. that is not a sure thing now. first, i want to look at how this falls out. if rates start going up. douglas holt he can. we had this other issue that we would explore. a lot of money. a lot of money that will carry a little higher rate. talking trillions.
what do you think? a quarter point. maybe fixed around that level. maybe a little higher. what do you think? >> i think that this will end the guessing game by central banks around the globe and investors in the u.s. that is a good thing. i think that it is overdue, quite frankly. how fast do they raise rates. there is a tension between how cautious janet yellen likes to be. and the fact that they really do not like to make big moves during the election season. rate increases in 2016. neil: the closing in on 1% now.
it is a five and a half year high. what happens in this environment? play it out. >> i think with any rate increase, there are winners and there are losers. there are folks that will be upset about the fed raising rates. changing the price they pay for car loans, home mortgages, were evolving credit, you name it. on the other side, folks that have gotten no return on the money they parked in banks. that will be good news for them. you can be sure that regardless how the fed manages this formalized nation, number one they will be constantly criticize. there will always be a group that is upset about the pace or the size of the move. they are really in unchartered
territory. neil: donald trump says that she is doing the administrators dating. doing everything she can as a democrat to help hillary clinton. similar charges that you get out of a democrat when you get a republican in there. cynical and jaded when it comes to yellen. what do you think? >> i do not think that that is true. i think that janet is a very independent fed chair. she was not the obama administration first choice. larry summers was. i do not think on the merit that it is true that she is doing everything she can to help democrats. in the crisis, when they talked about the kinds of things that needed to be done to save the u.s. economy and in the aftermath, the growth of dood-frank in all the financial regulations, genuinely independent have been tarnished.
something important to the credibility. something that needs to be restored in a great way. neil: thank you very much. neil: now to david walker. a very expensive thing. liabilities, you name it. just going up a little bit. you can do the math. if i could, i would do it as well. i do not have time. dave has done it. he is saying this will be very pricey. even the slightest uptick. >> good to be back with you neil. we will start seeing the fed gradually increase the discount rate. allies for a long time. i think it is also important for you to know that the ceo and the
estimate of future budget projections, they would assume that there would be some normalization of interest rates. this is already baked into the cake. i do think what we have to recognize is what we have to focus on. down to about 16% by 2030-2035. that could be done in a pro- growth way. it will require tough choices. a more intelligent way to deal with discretionary spending. the fastest growing expense by the cbo would be interest. a combination of more dead. and expected normalization of interest rates. what do you get for interest? nothing.
neil: we are not going -- i am paraphrasing. we may keep rates lower than we think we should other wise be. maybe a rate hike or two. >> i think what she is saying they will not do what they did back in the early 90s. they increased the discount rate. an extended period of time. i think they will be more cautious. you will probably see more than one hike. they need some room. they do not have any room to be able to do anything right now. i do not think that they will do too much too fast. i do not think you will see a
series of rate increases over an extended grade of time. >> you think that the rate hike is justified. >> i think that it is likely. yes. yes, sir. i will answer your question very directly, neil. neil: okay. that is what i admire about you. >> i just did. i came back. i think it is justifiable. they need to be cautious. neil: thank you, my friends. janet yellen. issue close? ending up her rub marks? anyway, we are watching this here. they can be very telling. a lot of them will start prepping her with time range. how much. scott martin, charles payne. why do you think? >> the federal reserve will definitely raise interest rates.
it would take something extraordinary in terms of a very weak jobs report. >> you can pick numbers out of that and say don't. >> you are watching the unemployment rate. there is weakness disappearing in various parts of the economy. the manufacturing report yesterday. the unemployment rate at 5%. slack in the economy. and unemployment rate going below 5%. you will keep them at zero. this is not a crisis economy. the biggest is communicating. what are they telling the markets? they look like they were going to-september. one thing. backing off.
there was out word this agreement. she laid down the law and said -- neil: that could change. unemployment argument. where is wage growth? i get the unemployment argument. wage growth should be a lot stronger. that is why they have not moved. they do not have to. to say that they will do one hike just to get it in the bucket, in case we get weakness next year is crazy. >> may have put themselves in the corner. do you think that she regrets that? >> i think that dagen is right. communication with wall street is paramount here. >> let's say that it does not
happen. >> i think that the market will go down. did market use credibility? let's not forget what alan greenspan did. dagen: they do not want to let excess build even more auto sales. they need to send a signal. if they do not move, then it is bad. neil: without neil cavuto and his expert coverage -- [laughter] more after this. ♪ sure, tv has evolved over the years.
>> short-term rates. i think markets. it would not be very long. we know it has been seven years. it would not be very long before short-term rates are rising. the fact that we thought it would be a long time before it would be appropriate for term rates. they work in tandem to push down longer-term rates. policy was effective. we saw that yields on private borrowing rates. they went down across the board. asset prices moved up. stock market prices and housing prices. it helped to boost spending. checking this inflationary
pressures that could inconceivably led to disinflation. we are not the only country that undertook such policies. recently, the ecb that has been engaged in japan as well. similar kinds of asset purchases. studies in all of the countries. they show similar results. the policies were affective. it is a very outset, i think the asset or chooses we undertook had a very large effect. i think it is probably because financial markets were very stressed at the time. purchases really seen in a turbulent environment have a big effect over time. scaling back our estimate somewhat. still think it is effective.
giving you a sense. one pretty recent study suggests doing those purchases. we probably now would have an unemployment rate over 6%. that may be a gauge of what it accomplished. what i have done anything differently? i think the one thing is over time, i think we learned that our first couple programs had six quantities we announced we would purchased. certain volume of securities. our second program was targeted at 600 ilion dollars. i think something turned out to be more effective is what we did with our third row graham.
make it open ended to tie your purchases to a goal that we wish to see considerable improvement in the labor markets. we were willing to do what it takes to achieve that. i think that has a confidence boosting effect. suggesting that the data was doing more or vice versa. i think i would not regret what we did in the first two programs, but i think the third approach was affect this. >> transparency was not the round then at the fed. under ben bernanke and you, transparency has become more common. in hindsight, do you think that it is as much of a virtue as you thought at the time with the vice chair? or do you think the old times were better.
>> it was august of 94. february of 1994. the first time ever, to the best of my knowledge in its history that the fed even announced the change publicly made in an announcement. there had been a change in policy after a decision was made. alan greenspan thought, for the first time in many years that the committee was going to the 3% level they were at in 94. important to actually tell the world it was such a decision to be made rather than allowing to and for airport movements in money markets. it has been a long road since then. greater transparency. it is definitely something that i support. i think it has been a virtue.
i think we have made very important strides in becoming more transparent. it is important for two different reasons. first of all, independent central bank. have a great deal of impacts on our decisions with the economy. a democratic society. especially an organization like ours. the duty to explain its actions to the people and also to the collective representatives in congress. now, we have press conferences four times a year. we present economic rejections. we have speeches. testimony. talk a great deal more. something we have done that i think has been very effective and is important, 2012, the committee, for the first time,
agreed to and explicit statement concerning our monetary policy goals and strategies. we articulated our interpretation of price stability. according to this pce price index of 2%. in conjunction with that statement, here is how we will manage trade-offs if we face them. we also offer every three months. this is not a committee wide statement. each individual we publish, the individual forecast, both economic forecasts and company policy assumptions have used each participant to what would be appropriate policy to accomplish the path of the
economy. the committee wide statement of explicitly hearing our goals. here are our strategies. here is a view on the part of participants. how we think it will evolve. how policy will evolve with it. full-blown game plans for conducting monetary policy. >> why do you think it is greater transparency that some people running for president and some members of congress do not seem to like the fed that much. legislation that constrains what we do now. why do you think we have this concern? >> well, let me just say, the federal reserve is a nonpartisan
institution. we take our responsibility for that accountability. seriously. members of congress. not only republicans, but democrats as well. proposing a variety of ideas. bold publicly and draft legislation as well as privately about changes that should be made that have the federal reserve operating. it is up to congress. we are a creature of congress. the federal reserve was established by congress with legislation and it is up to congress to consider changes and whether or not they are appropriate. on both sides of the aisle in the house, members often did
come to us and ask us our views. we provide feedback on our views or legislation. there has been a push in congress alone. it sounds like greater transparency. this, in particular, i always do offer my views about what i am asked by congress. about particular legislation. the fed invariance of it. well, i say for transparency, i think i have said repeatedly and would like to say again here, the fed is audited. this is not about the fed's financial statements. we have public accountants.
the federal reserve banks. this is about the independence of the fed. there are members of congress who would like to see diminished independence and monetary policymaking. the fed, something i strongly oppose. i think countries, not only the united states, the 70s when one of my predecessors had to take very strong actions to bring inflation down and similar names have occurred around the world. it is able to take tough decisions. not subjected to short-term political pressures. we have learned in modern times, results in better economic outcomes. >> speaking about transparency,
i know the fomc will meet in a few weeks. would you like to get a more precise -- what they may do? were you saying in your remarks that whatever the fed may do, the fomc may do in december, it may do it consistently for another year or so. the last time they increased, it did it fairly consistently. it did not do something just one time. were your remarks designed to say something like that again? >> i appreciate you asking that question. i think it is very important for me to emphasize this. there is no such plan. what we do if we decide to raise rates after that, there is no plan to proceed over time and
some mechanical work calendar -based way. the actual path will follow. it will depend entirely on how incoming data influences our assessment of the outlook. the first step is not meaning we have embarked on some predetermined path of regular moves. because i noted in my remarks, the recovery from the financial crisis has been very slow. the so-called neutral rate of interest that i talked about. it appears to be quite low. we do not really know where it will go. we think that it will rise over time. this is really turning out to be a very different cycle in past cycles. i would point out, we are
producing every three months projections of all of the fomc participants of the path policy that they would regard as appropriate. if the economy eve all his with their expectations. looking at that, you get a sense of what committee members are expecting. likely to happen. i think it is fair to say that most participants do anticipate a series of interest rate increases. what they anticipate is gradual. that kind of response is the economy will continue and move back. >> do you feel that it has to be unanimous? a two thirds one third?
we have a range of views at the table, and, especially at important points when policy decisions are made, the public should expect that there are a range of views being represented. i think falling into a pattern of group think is a very bad thing that can get organizations in trouble and i will say that the fomc is an organization that does not suffer from group think. so, i don't need unanimity. i think we have to tolerate some
dissent. nevertheless, i think for the fomc to be successful and to communicate a coherent policy to the public, we do need a certain degree of consensus. and i think one of the strengths of the committee is we do try to find common ground, we do try to come together, and while there are some dissents, and i wouldn't try to stifle dissents, and i would even expect some at critical junctures, we do try to find common ground and try to conduct policies that will be supportive. >> is being chairman of the federal reserve as great as you thought it was going to be? [laughter]. what are the greatest challenges of this job and what are the pleasures of it, other than this interview? [laughter] >> it's a wonderful job and i am tremendously honored to have been selected for it. i feel that it's a huge responsibility but, you know,
one of the pleasures is, when we lived through a terrible financial crisis think the economy is on the road to recovery. we're doing well. a pleasure to me is to sit down and work with my colleagues to try to devise a set of policies that will foster recovery. and i would say as important we are working together to try to insure that the economy will not have the another devastating financial crisis to to strengthen the financial system and greatly impositive our ability to -- improve our ability to spot potential financial disruptions or sources of systemic risk. the federal reserve, i have spent a good share of my career in it.
as i said it's a non-partisan organization. it is very much devoted to the public interests and there are a wonderful group of people and days when i get to interact a lot with the thoughtful and intelligent, and public-spirited colleagues i work with is really one of the pleasures of the job. >> final question i would like to ask you is, what message would you like to give to the american people about what the federal reserve is actually doing and how it operates? the average person who may not be an economist may be confused about what the federal reserve does every day and why it does what it does. what message would you like to give to the american people about that? >> i guess i would tell the american people the federal reserve is devoted to their interests and we're doing everything we possibly can to help achieve economic conditions in this country in which american families can prosper
and thrive. and, trying to pursue the dual mandate that congress gave us, namely, full employment and price stability. there is a very good way to promote those interests. and, you know, it's very clear that the ability to find a job that's commensurate with one's skills in a reasonable amount of time is key for families to be able to pursue their dreams and put food on the tables of their families. so, we want to make sure we don't have chronic job shortages, situations where one person's success in finding a job essentially deprives someone else of an opportunity to work. and we know that polls all around the world show that high and unstable inflation is a source of great anxiety and
distress to people. so, keeping inflation low and stable so people know that they can plan for their retirement, that they can undertake financial transactions, understanding what they mean, in real terms, i think that improves people's lives. again, some comments i made, let me repeat in this context. the federal reserve is a public-spirited, non-partisan institution. we operate in a non-political pay. we try to make decisions based on objective evidence and careful analysis that will be in the best interests of the american people. we try to be transparent and explain what we're doing. and let me also say i'd like the federal reserve to know that, i'd like to the public to know
that the federal reserve is filled with good, capable and dedicated people. >> your predecessor, by the way, once when he tried to refinance mortgage on his house got turned down. that never happened to you, did it? >> not yet. >> okay. [laughter]. i want to thank you very much for an interesting speech. [applause] thank you. neil: you've been listening to janet yellen at the economic club. the guy asking questions, david rubenstein, cofounder and ceo of carlyle group. one of the largest private equity firms. i don't know whether journalist questions were channeled to him. it appeared he was acted as emcee and host and he got out some more pressing points. you hear janet yellen rates will go up but not a lot of them but not dramatically or swiftly. they will go up maybe as soon as two weeks from now. one thing very telling in her comments whether it has to be unanimous decision to do so, she said, i think i'm quasi-quoting
accurately here, we don't need unanimity. i could tolerate some dissent. i can tolerate some dissent. pretty strong. fed chairman -- dagen is here. scott martin is here. >> you need to do a brooklyn accent if you're going to imitate janet yellen. >> scottish one. neil: dr. evil. a little dissent. >> more like -- >> exactly. that too. >> she said i wouldn't try to stifle dissent but she said the first step doesn't mean that we're embarking on some predetermined path. and i think that it is pretty clear that the federal reserve in a couple of weeks is he going to raise interest rates for the first time. by the way, i want to point this out, from anthony scaramucci this morning. the last time the federal reserve raised interest rates in the spring of 2006. the iphone didn't even exist.
it hadn't even come out. so they're going to move but i think what is giving markets some solace, some peace -- >> you were pointing out look at oil, showing in and out of this $40 level. >> right. the dollar index is at a 12 1/2-year high. oil is collapsing. two year yield is highest as you've been pointing out since may of 2010. all signs say they go. neil: if that happens, those could be negative consequences of higher rates, depending on your point of view. people like cheap gas. that's a fine consequence but what would be the fallout, connell? when you talk to people about, all right, rates go up on the 15th or 16th. then what? >> then we start, i've been known to be wrong in the past but i always thought we could withstand a quarter point increase. neil: the fear it is done in steps, right? >> i think dagen point about once we start raising rates doesn't mean we're off to the races. that is essentially what evans is talking about yesterday. they may not agree time they
announce raising rates but said the pace is -- neil: fed president, what he is saying, i can't fight this. it is going to happen. >> right. neil: i found it interesting her, we don't need unanimity, but when does it get to be worrisome or confidence in the fed compromised when you have five or six people saying this is not a good idea? >> that's right. i think we're almost already there. if you look back in history at the fed's record when it comes to economic data, predictions of future growth. the record is about as bad as that of the philadelphia 76ers nba basketball team. it's a terrible. >> oh, okay. >> how could you possibly be confident in this fed to say, we think this is good time to raise rates because the economy will grow. neil: join the federal open market committee? >> they might beat the knicks tonight. >> what horrible thing is going to happen? >> here's what i don't get. not so much horrible, why do we need quarter-point raise right now we did it and let's hold off?
remember, 50% or there abouts of s&p 500 companies earnings that you own in your 401(k) come from overseas. >> why do we need zero percent interest rates if you have a decent economy creating 200,000 jobs? >> we have no wage growth. inflation is down. inflation is nowhere to be found. about. dp growth is pretty weak. >> unemployment 5%. neil: more is good than bad? >> i think you just don't have to. look around the globe. every other central bank is stimulating. you have inflation everywhere. neil: we're raising rates while they're cutting them. next week european union could be cutting. >> that is a good point. you don't want to be only one out there. >> why are you trying to be mr. everybody likes me today? >> i think scott has knicks tickets tonight. >> i know, mike breen's doubleganger. neil: is that necessary? making very coagent point. >> whether i is what?
>> i don't mako gent points. i do not want to be confused. >> i think now the time is raise interest rates. i think scott martin is out of his mind that is what i was going to say. neil: we'll take a little break here. all of this occurs as presidential race heats up. we're getting dramatic poll shifts that might or might not be moved by what the federal reserve does. stick around.oe you're watching fox business. using wellness to keep away illness. and believing a single life can be made better by millions of others. as a health services and innovation company optum powers modern healthcare by connecting every part of it. so while the world keeps searching for healthier we're here to make healthier happen. jeb bufrom our president:h you will not hear we are at
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>> time for fox business brief, which gets me off the panel a few minutes with time by myself in the spotlight to look at amazon, trading all-time highs. can we get security in here please. stocks are up at all-time highs. not only today, go stocks biggest winners in the s&p 500 for the entire year. we have our top 10 list of s&p 500. that is how i know that, avnet flicks and amazon activation. -- activision. number six is vulcan materials and verisign. soros corporation and what is number nine s&p 500 for the year? come on. guesses? starbucks. nobody knew that. alphabet, is number 10. i say google you say alphabet. the panel, esteemed panel come being back with more analysis of janet yellen's comments. boy, oil is only 40 bucks. we'll be back. i've been called a control freak...
enthusiast. mmm, a perfect 177-degrees. and that's why this road warrior rents from national. i can bypass the counter and go straight to my car. and i don't have to talk to any humans, unless i want to. and i don't. and national lets me choose any car in the aisle. control. it's so, what's the word?... sexy. go national. go like a pro. neil: i was worried we didn't have enough loud people on the set. then i thought, wait a minute, where's gasparino? >> hello. >> neil. neil. neil. neil: this is not a "star wars" character. you're doing steven lieb, right? >> neil. neil: okay. okay. >> he's okay. >> no he's not. neil: that's debatable.
scott and i are in the camp that despite all momentum building, i don't see a rate hike coming in two weeks. i know that is by far the consensus. what do you think? >> i think that is the consensus and if they don't, that would be problem for markets. market was trade off significantly. it would allegedly signal there is recession coming or strong enough economic slowdown but you know, listen. janet yellen is above everything else a dove and in my whole, i think her whole modus operandi going into this to look for reasons not to raise and -- neil: carly fiorina was saying that. after the debate, that she thinks they will come up with any excuse they can to avoid it. >> it has been their modus operandi to make excuses not to raise. >> think they sit tight. neil: you think they should. >> i don't think there is any reason to raise. >> i gave you the reasons why they will move because they have telegraphed they are growing to do this. neil: if they doesn't do that, dagen --
>> if they didn't move? if they didn't do that line in the sand thing would we even be talking about this? >> if they had moved in september which i think they were -- neil: i'm talking about he have when they all but telegraphed this -- >> they would be moving with unemployment at 5% and job growth we've gotten in recent months. i want to say this one thing though. she made the point how they are politically independent, if you will. i think that when you have people accusing her of being a political pawn of the white house, doesn't that make you want to move and say, you know what? i'm no one's pawn? i will move if i think that it's just. >> put the economy at risk. she even looks like a dove which is a great point to make. this is the goofy part. neil: how do you look like a dove? >> white hair. skin. >> she is from brooklyn. >> she is tough on inside. >> went to high school with friend of mine. neil: this is great stuff. >> if things were so good and growth was just right around the corner and we were looking higher rates why is oil getting
smoked? >> how do you have zero percent interest rates and 4% unemployment rate which we're probably going to have? hard to rationalize. >> thank you. neil: here's the word, to scott's point and my own, could be crazy they don't, they don't hike for whatever reason. >> market is going to trade off. neil: i do think that it will trade off a lot. >> yes. probably that's what the expectation is, so, yeah. whatever they want or what is built in as expectation. >> it would extend the signal, the economy is weak. what are they not telling us that they don't, that they have told us the last three months that they are going to move? >> neil! i knew i would get your attention by doing that. >> on many levels you do that. >> are you reading bernanke's bank or have you read it? i been through half of it. neil: wait until you get to the money supply debate. >> the fed as an institution
gets locked into a modus operandi and i think they may at this point be locked into raising rates no matter which way we go. neil: and that would be bad? >> who knows. would i say this, the time to have raised rates looking for opportunity time would be year ago and not now. >> let's go back in time to do it. >> "hot tub time machine." >> not just "hot tub time machine." hot tub fed time machine. neil: you've been working really hard. >> i would imagine getting janet yellen in hot tub than larry summers. there you go. >> neil! neil! neil: it is getting nasty between turkey and russia, you know that we're also getting polls out that could benefit one senator who seemed to be the default fault of the establishment. hail mary pass we're seeing reflected by key donors. not going to tell you his name. rhymes with rubio. wait a minute. wait a second. >> neil!
at ally bank no branches equals great rates. it's a fact. kind of like playing the boss equals the boss wins. wow! we were in a german dance group. i wore lederhosen. so i just started poking around on ancestry. then, i decided to have my dna tested through ancestry dna. it turns out i'm scottish. so, i traded in my lederhosen for a kilt.
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call now, request your free decision guide and start gathering the information you need to help you keep rolling with confidence. go long™. ♪ neil: there is a danger when you're raising are traits -- interest rates, could be beneficial for party that wants in on white house. these are national poll numbers coming in. is quinnepiac, look who is surging to number two? marco rubio. donald trump is still on top but more of the movement of rubio. you see this in various states, iowa, south carolina, new hampshire of course. where that surge seems to be gaining. so too donor support although some big donors are still holding back. now we're asking, whether what happened today on interest rates or being telegraphed on interest rates changes things. charlie gasparino, what do you
think? >> i don't think so. you know -- neil: that they -- >> if we have a recession next year, it is going to be a real problem or economic slowdown will be a real problem for hillary clinton because she has to campaign on something. listen, she was part of this administration. neil: big economic improvement. that is what she will campaign on. unless it turns south fast. >> or othernumbers come out to show it is not really good. the republicans will have to make that case. already hearing donald do it. donald in very flamboyant way. neil: worst economy. >> 40% unemployment. 40 or 20, i can't remember. >> 40, 20, what difference does it make. neil: whatever he says is liz nating, scott. i challenged you during the break. >> i think it is resonating. neil: they're not buying 5% unemployment. >> nor should they be. they're not feeling it. it comes down to economic policy, which i think on republican side we have been okay what they will do
differently and how they will things things. but it remains -- neil: they are in the big on detail. >> they have detailed plans. >> the tax plans are detailed. >> you don't think the tax plans are detailed? neil: how is this going to change, when it comes to spending? what will you do on spending? jeb bush, who has not been richly rewarded in the polls for this. >> they have been playing good politics. shouldn't talk too much about spending. don't want to get caught. >> we need to rebuild our military to the best in the world. >> we all want to say, because i guess we're a business network benefits us to say the economy will be biggest issue like the last election. but last fox polamalu terrorism sky rocketed to the top of the list. that helped rubio. >> terrorism always has a bilge impact. 9/11 did have economic impact.
>> we're seeing economic impact or at least a shift of behavior because of terrorist attacks. >> where? >> starting to see the saving rate going up. people were shopping for automobiles. neil: does that help chris christie making terror his center fees issue. >> the thing driving election what is happening in the economy and world in the few months leading up to the presidential election, separating these candidates from one another, they sound awfully similar. >> seems like when it comes to talking about foreign policy is something that helped rubio. it is his comfort zone to be talking about it. whether his experience is there obviously as first-term senator he is comfortable talking about foreign policy. >> trump has a good foreign policy. if you're not american, don't show up. >> when he says bomb the suckers, we need the best military in the world, rebuild it but i don't want to be the world's policeman.
we're spending money on military and not use it. >> that is exactly where people are on issue. bomb you know what on them. don't put too many of our boys. neil: we also have a tape delay. >> what did i say? neil: scott, do you think that if terror becomes the issue, interest rates suddenly disappear as an issue? >> i think interest rates will still be front and center because -- neil: what if they're only a quarter or half-point higher a year from now? >> it is the progress fed is trying to make, neil, towards higher rates that signal the fed is choking off easy money, which the stock market loves, american consumers loved which companies love because they borrowed. if that goes away -- >> savers have gotten the shaft past seven years, time to reward them. >> i was quoting somebody when i used expletive. neil: i have a bunch message, neil, please call roger ailes. call the legal defense team. please call your wife.
we have a car waiting for you outside to take you home. wow. >> so much to do. >> we still have a 4:00 show to do. neil: we'll have a little bit more. update on oil, slip-sliding away, real, real fast. not just coins incidental, we'll explore what is going on right after this. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet?
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neil: this is not ail janet yellen's doing. oil supply report said we have a lot of more of that stuff we thought. the fact it is priced in dollars and dollars are getting richer and fact interest rates will likely go higher, that is the market's view, not necessarily my view but saying that's the view that they will continue to slip slide away. now we have gas just over two dollars. you have a beige book and trish regan all over that. trish: we heard from janet yellen earlier this hour. she is the setting the stage for a potential rate hike.
right now, breaking as i speak, we're waiting on latest read on the economy out of the federal reserve. it is the beige book. i'm trish riege -- trish regan, everyone. this is "the intelligence report. this is biggie. because this will be a indicator whether the federal reserve feels it is ready to hike rates at its next meeting on december 15th. we have blake burman with the beige book ready! reporter: trish, good afternoon to you. economic act increased at modest pace in most of the 12 regions according to the latest survey at beige book. to the upside consumer spending increased in nearly all districts. vehicle sales were described as robust. housing markets improved. home prices increased. so demands for loans with it. to the downside manufacturing was described as mixed in recent weeks. stronger dollar, low commodity prices, weak global demand to blame.