tv Cavuto Coast to Coast FOX Business July 27, 2022 12:00pm-2:00pm EDT
stuart: i'm going with kenya. not bad at all. yet, cairo new york, that is the answer. it is believed to be 385 million years old. >> you don't remember it? stuart: very funny, very funny. times is up. great performance, grandchildren. glad you can come into the studio. have a great time tonight at the game. time's up, neil. it is yours. neil: beautiful kids. thank you, stuart. borrowing costs in a couple hours, they will be probably 3/4 of a point higher than they are now. the federal reserve expected to make announcement with another 75 basis point increase. shorter terms rate are rising, longer rates the federal reserve doesn't have crow, they have been going down week over week. that is flattening yield curve. some people interpret that as a sign things are slowing down if not heading into re session.
edward lawrence is at the white house. reporter: white house doesn't like to talk about the "r" word. brian deece equal two negative quarters don't equal negative. two wrongs don't make a right but two wrights maded first airplane. paul krugman said in an op-ed we might see a negative number tomorrow on gdp. eventually we might officially declared a recession by national economic bureau of research, that is not based on two quarters of negative economic growth. question look at 75 basis point rate hike. remember before june, that meeting, we got a huge inflation number and consumer sentiment missed expectations to the downside. that problem -- prompted that first 75 basis-point hike. we have bigger year-over-year inflation number and consumer sentiment. lowest numbers since february 2021.
some are saying maybe there is a full percentage point increase. but the vast majority are expecting that 75 basis-point move. as market experts say though inflation is really taking a toll. >> wall mortgage again comes out talks about the consumer just buying staples. their apparel continues to show higher inventory. inflation has finally come to a head with the consumer. this is why our thesis is we're going into a recession. reporter: now the fed chairman believes we can avoid a recession but think about this. at the beginning of this year the federal funds rate was about zero and most likely it will be after this meeting 2.25, 2.50 after today. that is a huge move for this federal reserve chairman who likes to move slowly to the upside or to the downside to try to ease the pain on the markets. one more note, president joe biden tested negative for the virus. negative possibly like the second quarter gdp coming out tomorrow. back to you. neil: so let me understand, edward, two wrongs don't make a
right but two writes can -- wrights can make a plane? understood. back-to-back excellent dad jokes. i appreciate speaking for all the dads out there. you are our idol. edward lawrence at the federal reserve. he brings it -- yeah, coming ugly sweaters you know the drill. you know the drill. welcome, young man. go to chris campbell, form err u.s. treasury secretary for financial institutions under donald trump. chris, good to have you. i notice something interesting, 10-year is going for 2.77%. when we are down presumably with the fed meeting today, we'll have the fed funds rate at about 2 1/2%. that is for overnight honey, one-day money. about as high as 10-year money. so i often think, forget about
the fixation with the inverted yield curve with the two-year eclipsing that of the 10-year by the widest margin in more than 20 years. get same amount of money committing it for a day? what is going on here? >> look, i think there is, neil as you know a lot of things outside the fed's control driving inflation. chairman powell is doing everything it can to get the inflation, his arms wrapped around inflation. i wouldn't be surprised if they go above 75 bps on the number exyou think it will go higher than 3/4 of a point. i wonder how the market may react to that? >> one of the reasons they might do it. with ppi numbers high as they were and cpi numbers not lowering at all, walmart, mcdonald's suggesting they will continue raising prices inflation is here. it is embedded and it is sticky.
so the fed will have to do something rather splashy in my opinion to get that down on under control. i've never been a huge fan looking at inversions and presticking a recession but i do believe we'll be in a recession. i think we'll have two negative quarters respectful of what the white house said usually mean as recession. so i think that we're likely going to be there and it will really squeeze the average american family. neil: i wonder if we don't, if the president knew something weigh didn't know, that is in recession. major investment firms, goldman sachs among them, it will be up, won't be up by much. they have since ratcheted up 2% growth for the quarter down to .7% but it still would be up rather than contracting. it might be just semantics at this point because certainly a lot of people feel that way, that this is hitting them hard. they don't need a number to
confirm, how do you look at consumer sentiment numbers, confidence numbers that are multidecade lows right now? >> look, i don't think the average american family doesn't have to look far. every time they pass a gas station they are reminded what those numbers are, if they have to buy milk or gas or whatever, any staples, those are all going up. the average american family just doesn't need to look far to realize that inflation is here and it is really hitting them hard. those on fixed incomes, the seniors, senior citizens of our country are going to also feel very squeezed. and so candidly, my fear this could be around for quite sometime. if we're in recession and inflation continues to rise you know, there is a word for that. it is called stagflation. we saw it in the '70s. neil: so you see that coming, we can't dodge that bullet or actually kind of hinting it is
already here? >> yeah. look we're going to see what the gdp numbers are in a couple hours but we'll see where those go but i think it's, a lot of this is emotional. markets are extremely emotional. people can talk themselves into recession. most firms that we speak to and average american families i talk to are already pulling back and we're going to have some significant problems ahead because of that. and so, you know, i think, you know, this is the reality will be the reality. it is going to be, we're going to feel enormous, perhaps several quarters of significant challenges. neil: we'll watch closely. chris campbell, thank you very much. that gdp report to which chris was referring was due out tomorrow morning. of course the fed decision what to do about interest rates the wrap-up of the latest fomc meeting that is due out less than two hours. expectations chris expect full point notwithstanding is 3/4 of
a percent report. gdp report it is fielder's choice. lot of people say it will be weak or negative. you need the second quarter to match the negative quarter we had in the first quarter to hit that classic definition of a recession. others are saying a big drop from where we were would only confirm the obvious that things are not what they were. so we'll know, we'll have a better idea certainly when the fed makes that decision coming up in a couple of hours and of course when we see that gdp report tomorrow morning 8:30 a.m. eastern time. let's go to lydia hu on other things that are affecting these markets. as you notice they're climbing this wall of worry even in the face of disappointing news we got out of some tech-heavy weights including microsoft and google parent alphabet but they are parsing through a lot of that stuff finding something good here. that might be a bullish sign in of itself lydia. what are you finding out? reporter: neil, we're finding out based on alphabet earnings
today there is encouraging news even though there was a narrow miss. there is really positive results because they did not miss in ad revenue. so that came in strong. the stock there is up. microsoft a narrow miss but really feeling encouraged there, very optimistic projection about their future, the forecast moving forward-looking extremely positive as well but coming up after the closing bell today facebook parent meta platforms is going to report second-quarter earnings. now in this area it is expected to show earnings revenue tumbled 28% from a year ago to 2.9 billion. meta is expected to post the company's first decline in revenue. we're looking to see revenue slip half a percent to 28.94 billion. analysts, neil, are predicting the company's largest drop in daily active users which will be the only second time ever this metric has declined for the
company. expectations are that the company will show about 1.96 billion daily active users as it is facing growing competition from other social media platforms like tiktok and like other tech companies meta has been also struggling with advertising. it has been hard hit by apple's io update. it makes it difficult for advertisers to target users. much of facebook value in its targeting capability and track users across third party sites. meanwhile the kardashian sisters are weighing in here on social media and they are criticizing instagram which is also owned by meta. they're really attacking recent changes to the app for what they say is trying to make instagram more like tiktok. i think probably not a good thing when the kardashians sisters with oversized social media presence weighs in here against a social media platform but what they don't like the push to focus on shorter videos rather than photos.
instagram ceo shared a video on twitter to explain the recent changes to the platform. he essentially said, listen the app will continue to support photos but he believes it will become more video focused over time since that what is people are liking and sharing an consuming. still seems like many users seem to agree with the kardashians. another post is urging the company, to quote make instagram instagram again. it has garnered more than million 1/2 likes. meta platform is trading up today, looks more than 5% higher today but it is down 56% from a year ago. neil? neil: wild stuff. thank you for that, lydia hu. we're going to wait on meta when its numbers come out but as lydia pointed out, it is among the technology issues that has just been beaten up mercilessly. lost more than half of its value. you might see a lot of
technology stocks coming back in the face of disappointing news is the market saying we can't beat these guys down anymore. we've already overdone it. ray wang on that. ray, do you think that is coming into play here even with the disappointing numbers from microsoft and google where a lot of folks are saying we get it, things are slowing down the environment is not good. google intimated that. not everything was bad. advertising revenue was supposedly strong or stronger. i wonder if it is market's way built in for bad news and also built in for anything that might be less than bad? what do you think? >> a lot of it has been priced in and the megacap stocks are basically showing what's going on. there is still growth. tech is tell a growth category. everybody who is still waiting, hey, 11,000 was the floor on the nasdaq. we're getting to the 12,000 territory. are we going to miss this party, or should we wait a little bit. we're almost at the hesitation
point. if you look at earnings closely, look at couple areas. like google cloud, microsoft azure growing 46 to 47% year-over-year and that is the enterprise spend that means business-to-business is doing well. they're still signing long-term contracts which are important and of course we also notice not all digital advertising is the same. if you're in search definitely very good. if you're in social, not so good and we're going to find out how amazon did in commerce. neil: you know you were mentioning that and facebook in general mark zuckerberg was addressing the troops, workers there, i don't think all of them appreciated the gravity of the situation he was laying out, challenging times, all but telegraphing people lose their jobs, along comes a questioner very interested in vacation policies, whether the company will retain meta days extra time off during covid, seemed totally apart from the urgency of the
situation, he picked out that question to say, essentially are you nuts, are you crazy? so he is bristling. what are you doing when you're hearing this type of talk back and forth from some workers? >> you are. silicon valley has had it really good. a lot of workers for lack of a better word have been coddled. they have extremely generous policies. the ship is burning. you got to do something. you actually have to get back to work. people have to hustle. people have to figure out how to innovate and figure out how to cut costs. a lot of these workers has not gone through a downturn. it has been a while in the valley. it will take time. them get there. it is reflective of the valley work culture sometimes. neil: the boss is saying this is crazy. there are problems going on here. it is not the world it was. it's a different world. i don't know what happened to the worker we'll see. ray, look forward to talking to you later. i remember few years ago, we
were interviewing job candidates, one woman, very nice young woman, first question want to know about benefits, vacation policy all the rest, but that was the first thing, when i brought up you know, you don't have a job yet you're asking for time off from the job. bottom line here, not only me but others didn't hire her but got a job at another news network. anyway i found that interesting at the time. we have a lot more coming up. you are watching fox business.
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it does make sense from what you've been seeing for a lot of homebuilders whose own confidence index plummeted to lows we have not seen in the better part of what, 21 years. this cements a lot of people in the housing industry, the fear is we're well off our highs, things are slowing down not everywhere but this is the surest sign yet, in future activity might not be nearly as much going forward. keeping an eye on that. keeping on the price of gasoline. that has been steady as she goes, down a lot from where weigh were. 40 days running of consistently sliding gas prices. there is offset to this, other type of gas, natural gas prices are soaring. the president focusing tapping more oil from the strategic petroleum reserve to keep the good news at the pump going. hillary vaughn following that. reporter: hi, neil. white house thinks doing that has had a big impact on high gas
prices so they are doing it again. >> the president is focused on taking actions like historic step to put a million barrels a day of oil on to the market. because we know, we now have seen in the data that that helps to reduce energy prices. reporter: the treasury department estimating that the release of millions of barrels of u.s. oil reserves has brought gas down by about 40 cents a gallon. but some analysts do not agree. gas buddy patrick de haan tweeting this, i do not agree with the notion that the white house release of oil from the spr is the key catalyst pushing gas prices down. most of the decline is due to potential economic slowdown, rising interest rates and limited improvement in refined product inventories. republicans think the white house is out of touch for celebrating a 40-cent drop in gas saying prices are still way up compared to previous years. >> why doesn't president biden
become like a real person. isn't great we're paying less for gas, not knowing we're paying less for gas because they're not driving. these gas prices are still punishing the american people. reporter: there is no guarranty that the oil release from the reserves will stay here in america. past releases have been shipped overseas and sold to countries like china. a department of energy spokesperson telling fox business because they cannot tell the buyers of this reserve what to do with it after they deliver it but a source that used to run the fossil energy agency at the department of energy tell me they absolutely can can add anti-export stipulations to the sales of reserve oil but the administration is just not doing it. neil? neil: hillary, i noticed you're at the white house. that is very different when you're at the capitol chasing poor people down the hall and all that. you can't do that about the people that are there, executive branch, that includes the president of the united states i assume. it has got to be a little weird
for you, isn't it? reporter: it is. i feel a little constrained being here. i do like running around the capitol i'm free to rome and track people down. neil: you roam around there they shoot you. you have to be careful. be careful. thank you very much, hillary vaughn at the white house. we have a lot more coming up including the controversy over nancy pelosi who wants to go to taiwan. china not at all keen on the idea. a lot of other democrats including president of the united states not too keen on the idea. republicans like the idea. it is weird. like upside down world. the message they're sending after this. ♪. thinkorswim® by td ameritrade
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♪. neil: all right. the president has a big phone call tomorrow. it is like a zoom call but without a zoom call. i imagine they use something a tad more advanced when they talk to each other. the president by the way testing negative for covid today. so he ended his isolation. i think that was going on five days he was going to have the conversation with president xi of china anyway. backdrop, of tensions what his joint chiefs of staff, china bellicose behavior in the pacific, south china sea and militarization of all the island and threatening taiwan and dust-up of nancy pelosi going to taiwan, it should be an interesting conversation. gillian turner following all of that in washington. reporter: neil, the president will use a sivits. that is shorthand for video teleconference tore talking to heads of states.
mike mccaul said any member who wants to go should. that is in reference to nancy pelosi's invitation for republicans to join her in taiwan. comes after a president biden phone call to xi tomorrow as you just mentioned. the timing of pelosi's trip is very sensitive. he is gaming out his own political future right now. he is about to seek an unprecedented third term in communist party meetings next month. sources say that is one of the primary reasons that she is going on this trip. the pelosi trip is causing headaches for the white house. >> i will reserve on that issue, understanding the question there are a number of different analyses of that question. you can rest assured we're looking into and looking underneath and around al of them and we'll come back with that issue when the president has more to say. reporter: another reason for the biden-xi call, biden plans to raise prospect of rolling back
key tariffs on china. back to the trip, chinese communist officials do not want speaker pelosi in taiwan. yesterday the defense minister warned that they're prepared to meet the challenge military. listen. >> translator: chinese side will take strong measures to safeguard our strong territory integrity. the u.s. must assume full responsibility for any severe consequence rising thereof. reporter: speaker in unenviable position jeopardizing national security or her own security going on this trip or appearing to bow to chinese pressure if she doesn't go. neil. >> great reporting my friend. gillian turner in washington. want to go to rebeccah heinrich what is she makes of all of this. rebecca, hudson institute senior fellow there. rebecca, it is locked in place, if she backs out of the trip, even mitch mcconnell and other prominent representatives certainly wouldn't look good that we cowed to pressure or she
did. what do you think? >> i think she should go. i also think that the trip should be bipartisan just like it was back in 19978, newt gingrich, speaker of thes who he brought congressman dingell with him. it should be bipartisan, all these republicans, all these republicans saying she should go i will go with you. the every single one of them to show solidarity to bolster up her couplerrage the better. president biden said three different times he will defend taiwan and white house walked his statements back three different times. this trip would be more than symbolic. i think it would be shoring up u.s. credibility in resolve defending taiwan. neil: you mentioned last timing is like this happened, newt gingrich and other democrats, that was 25 years ago. it's a different world. china is in a different place. it militarized scores of islands in the neighborhood. i'm wondering whether we're playing with fire. democrats seem to be senses we
are. republicans say the hell with it if we want to go we can. if anyone in the power structure either party wants to go they should. so how would the chinese respond if after all of this nancy pelosi still goes and to your point, maybe even bring as couple of republicans with her? i just can't, to your point see her backing out without this looking like we caved? >> that's right. i think that the chinese will think that they had to do something. i'm quite confident that it is not going to be harming the speaker but of course our military should be very clear nobody should lay a hand on the american speaker of the house. that we will defend -- neil: would they do something like that, rebecca? talk about playing with fire, that is almost world war iii right there? >> that is exactly right, neil. that is essentially what they're implying. and i'm, i don't think that's what they would do but of course i should always say we should have humility what our adversaries will and won't do.
another point point too, we keep calling china a competitor. that was something that the trump administration started we're in great power competition. the kind of language we're talking about now, threatening the american speaker of the house with a trip to taiwan which she is perfectly allowed to go to. we're in different situation. chinese communist party is clearly an enemy. one other point i would make, neil, the speaker's national security advisor, told the chinese and chinese objected to the trip in to taiwan in '97, that the chinese communist party does not dictate the travel of the american speaker. it is up to the speaker of the house to determine if that is true. that will be a big i am indicator where china is, china, who is calling the shots in the indopacific more broadly. neil: is it my imagination, rebecca, are the chinese doing a lot more, a lot more quickly, buying up all this land in the united states, particularly florida, some of those in
florida, very near military bases, that is side issue, on going military activity in the south china sea, prompting air raid drills in taiwan, it is really speeding up and you would think given the problems in ukraine that russia is having and china and economic power in its own right that wouldn't ever want to risk the same type of boycotts and penalties, would not be doing this but it is. what do you think? >> i think it sense as weakness on the part of this administration. i think they are sensing that now is the time, if they're going to do something big not the time to do it. this buying up american land, that is literally owning the united states of america, something that our country should prohibit, not allow. tiktok should be banned in the united states. these dji drones owned by the communist party shouldn't be allowed in the united states. so many things the united states is still permitting. the enemy is inside of the gate at you point out, neil.
yes the military activity is continuing. this is why i'm so concerned. all of these activities are bolstered by the fact that the chinese communist party so so confident in their military. taiwan, taiwan is really the prize for them. that is why the contest over taiwan is so important. united states cannot per minimum them to take the island force, a democratic ally of united states. with all the problems we discussed we have got to get the military piece right even as we take care of all the other domestic problems. neil: you're right, about the signals we send. great job again. rebecca line exon all -- heinrichs on all of that. meantime have you been on a delayed or canceled flight, have you said i want to go after these guys. you don't want to be canceling the flight with one of the people on the flight is a united states senator, or over last couple weeks several u.s. senators, for good measure the transportation secretary of the
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♪. neil: all right. you know hell hath no fury like a u.s. senator whose flight is canceled. all of sudden that senator promises investigations and whether the airlines are screwing up on the job. there have been a lot of them go through this. it extends all the to pete buttigieg. remember when his flight was canceled, well, whatever it is the latest day or week. madison alworth at newark
liberty international airport with more on all of this. hey, madison. reporter: hey, neil. so the newest solution being thrown at this massive airline problem, it is massive fines. senators elizabeth warren and alex padilla are pushing the department of trans transportation, push fines up to $37,000 a violation either being significantly delayed flight or a canceled flight. it is just one of the proposals they laid out in the letter to the department of transportation. it is not just fines. they're also hoping to address this overall chaos we're seeing at airports. just giving you an example in 2022 over 122,000 flights have been canceled. so what are they looking at? addition to the fines the senators are pushing the d.o.t. to use its existing authority to protect consumers. they're asking for the creation of concrete rules around refunds and delays rather than current system which is case-by-case basis.
that also varies depending what airline you're flying. they want the d.o.t. to address increasing consolidation within the industry. we reached out to airlines for america, the industry trade group fora comment. they shared with fox business, u.s. airlines strive to provide safe consistent travel and increase operational liability. that is in the enough for senators who are experiencing the travel struggles that everyday americans have been dealing with for months. one of the most recent cases two days ago senator kristin gillibrand was stuck in new york after two different flights were seriously delayed. she traveled from long island, jfk. was still worried she wouldn't get back to d.c. in time to vote. she is vowing to the investigate the industry. neil, if you've been a traveler this sum or this spring you've been experiencing delays an cancellations you know it is going for quite some time. important to look where we stand today alone. we have seen 1600 plus delays. in terms of cancellation we're
at 249 cancellations. it is a problem we're seeing throughout the summer. these lawmakers are hoping maybe to do something about it. neil? neil: it is a good thing they experience what everyone has been experiencing because then they can act on it, presumably they will. we'll see where it goes. madison, thank you, very, very much. my next guest promises no matter what you're dealing with at the airport at least when you get to his hotels he will help you forget all about them. jay stein, dream hotel group ceo. very electric, getting very, very popular all across the world. jay, good to have you. >> neil, great to be back. neil: how is the environment right now? you seem to be building at a furious pace. you're certainly all over new york and vegas breaking ground. so business is obviously promising but in the middle of all of this you have spot fears of a recession and all of this is going to peter out, do you worry about that? >> i do worry about the recessions. i do worry about people being
nervous about spending money. as you know we came back from being closed in many of our hotels better after year. particularly in new york city we got hit hardest. we have six hotels in manhattan, the dream downtown, dream midtown, the time hotel here in new york. for us to get reopened last year around may to where we are now i never thought we would bounce back this quickly. so it has been a great return. couple of bumps in the road. different omicron and different variants out there certainly slowed, picked back up. all in all we're at about 2019 pace and i would take that every day of the week. neil: how do you distinguish that? dreams are beautiful. a lot in architecture and comfortable rooms. they're not cheap. i'm wondering what your price point is and how you differentiate yourself particularly in vegas where
you're expanding? how would you describe where you are? >> yeah. so we're in the upper scale in most of our projects, just below the luxury level except for the chatwell that we opened up in upstate new york. an uber-luxury, high-end. average rate $3,000 a night. neil: is that right? >> yeah. it is a small property. neil: i know exactly where it is. whose booking these? >> neil, perfect for you. a lot of high net worth people and it is all inclusive. not just the room price for that but includes top shelf liquors, all your activities -- neil: the only reason, i don't want to get distracted here, i understand that one is booked solid. hard to get into. that flies in the face of what you're hearing of all the doom m and gloom reports. maybe that is what
american express was talking about, they see travel booming at the high-end. that is pretty high-end there. >> yeah, we've been experiencing that since covid really started. once the high-end started to come back, people felt comfortable to travel. that increased the most and adr in that area was easiest for us to achieve. i agree with american exercise. neil: i'm curious about the foreign buyers, you have operations abroad but a lot of your customers are coming from abroad to spend some time in new york, california, other locales, but i'm wondering if that base is potentially shrinking and how you make up for that? >> so you know it started to bounce back and then different variants it slowed down a bit. the change in the euro, in the pound to the dollar hurts a
little bit. but, you know that business is not back nearly as much as we would like to see it but it will be, once we solve or get through this omicron with people afraid to travel and war in ukraine and things like that. that will slow down. there is tremendous pent-up demand especially from europe to come to the u.s. from the uk which is probably our biggest feeder market. so there is great opportunity there for us to enhance but once that gets very strong, we're already starting to see americans now getting comfortable going back over to europe. it kind of balances itself out. neil: they are beautiful hotels and it is expanding, that is good to see for your workers, for those who want to visit to take it all in. jay stein, thank you very much. good seeing you. >> pleasure, neil, thanks. neil: dream hotel group ceo. they are very, you know it's a little different and in this environment people apparently seeking out a little different even if they might pay a little more for it.
we have a lot more coming up including joe rogan going after tiktok. those of certain age, of course my teenage sons, they're not very big on any government interference with tiktok, i like to tell them that china is that government interference. they say leave it alone. apparently the powers that be in washington are saying, not so fast. after this. ♪ like many families, the auburns value time spent together. to share wisdom... i got some of my gold before i came to this country. i got some of my gold before you passed the bread. encourage one another... i can buy gold for this?! you can buy gold for this. and talk about life's wins and misses. responsibly sourced like my gold but not responsibly cooked. because at the end of the day,
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♪. >> so all your apps and all your file names, all the things you have filed away on your phone, they have access to that it ends with china having all of your data. neil: all right, joe rogan, not a big fan of tiktok right now. it is interesting what this argument here that china is sort of pulling all the strings and spying on you, collecting all the data on you that young people in this country that have been driving the success of tiktok, largely seen as source for dancing videos, the like, they're not too keen on all the regulatory move, especially the move push to get rid of tiktok in this country. ray wang, constellation research
ceo. what he makes of this dust-up. are we headed toward tiktok not being allowed in the united states? where is this going do you think, ray? >> really depends on the involvement of congress their ability what is safe, national security what they fit. we're trading privacy for security, privacy for convenience, privacy for discount. this tiktok thing is a security issue because of tracking an profiling of individuals that happen on the back end. for the same reason china has data breach security laws they see their companies doing business in other countries wanting them to have the same type of security standards. we don't do the same thing. we don't reciprocate on the back end. neil: if we pull it from this country that will angry a lot of users in this country because that eclipsed the by a mile. >> we only do that from national
security perspective, turkey, indonesia, and india, tiktok is banned forever. in indonesia they took that away, bangladesh and pakistan, ban them for three months. they see what happens, ban them again for three months. neil: ray, more political question, i guess i'm curious, and you follow technology better than many, i'm curious if things change and the republicans take the house or the senate or both, what will be the approach to handling companies, not only like tiktok, some of the big players, googles, the metas? is it going to be a different environment? will it be a tough environment for technology companies? how do you see it? >> i think both parties are basically worried about big tech's influence but they also worry about china's dominance and it is the balance between the two that seem to shape our policy. we need some of that apparatus, some capabilities to build a.i.,
quantum, new sets of technologies. on the other hand we don't want those companies to be dominant that they crowd out other industries, that we don't have that level of competition. in china they don't care. they're building their dominant companies. they take them down, they have taken down a lot of chinese tech companies with a crackdown in next two years. that will not change on based on party or proclivity whether we got after it apps for national security. more on the republican side. big tech regulation, trying to keep big tech digital due opolies out of the market. neil: we talked a little bit about google and microsoft absorbing the body blows you would think come with the disappointing earnings and revenues in each and i'm wondering we touched how much the stocks have been battered, poised for a comeback. they're well off the lows, most
are still in bear market territory, then some. so how do you see this going? >> i think investors starting to realize that growth will still come from tech, right? apple and amazon earnings coming up. we have service now later today and you will see some trends, right? cloud enterprise companies, sales force, adobe, service now and n individual yeahs they will do well. despite growth rates slowing down they're making billions of dollars. apple we wait for the consumer sentiment will be. amazon the question how well they do in prime. what is the advertising revenue look like. what is happening in terms of the cloud revenue which is always the hot area. of course some of the other things they have been exploring what core business and prime are doing. those are questions people will be asking. tech is doing well, right? they're still generating profits. very few other companies are. neil: thank you, my friend, ray wang, following all of that. bank of america says rate hikes might be in the near-term future, as soon as next year
we'll start seeing rate cuts because things will have slowed down that much. more after this. .. if you shop at walmart, you get it. ♪ you know how to spend a little less to get a little more to make life a little better. ♪ >> tech: need to get your windshield fixed? safelite makes it easy. to make life a little better. >> tech vo: you can schedule in just a few clicks. and we'll come to you with a replacement you can trust. >> man: looks great. >> tech: that's service on your time. schedule now. >> singers: ♪ safelite repair, safelite replace. ♪
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>> i think we are in a recession. interest rates have gone up, economy is slowing down. >> it is going to get worse because prices are going up and employment pay not going as fast. neil: of the kind of news they don't like to hear it is on that environment from the federal reserve addressing the run-up in those prices with higher rates, an hour from now, the lending rate called federal funds, it is a full point, don't know if that will happen. it is not the consumer his friends but that could be the case. connell mcshane breaking apart what has a lot of americans saying what they are saying and fearing what they are fearing. >> reporter: they are articulated better than either of us could because that is what people are feeling.
we've seen numbers that illustrate how the consumer is getting hit. time and time again, what kind of consumer is hit. we at this level are back where we were in february last year. the overall number doesn't matter but back to that level that is when the pandemic was concerned number one. now it is inflation. walmart spoke to the disproportionate impact inflations are having on low income americans, food and gas prices up so much walmart shoppers are not buying as much of other items, not buying as much in the appliance section and what have you, stock price is having a good day today. and with the federal reserve to be ahead of the federal reserve
and now the final point, another way of illustrating how consumer pain is not evenly distributed, new numbers from folks at iowa state university shows a nation divided to some degree. rural americans are getting destroyed by inflation, making up 91% of their take-home pay, for urban americans it is not as bad and discretionary income illustrates it even more. discretionary income is down by 13% for people who live in cities, down 49%. that is a lot. the cost of living goes up more, making money more expensive. for some folks in the economy, lower income americans. lauren: i want to pick your
brain how much the fed continues tightening and how long. a little later, lydia is breaking apart this other mantle, bringing what the federal reserve can and won't control, that can stop those rate hikes. the rate hikes, slowdown or recession at the least so it is a battle. what's the latest? >> we have an expected 75 basis point rate hike, wall street working to shut down long-term rates. it is continuing to invert what normally would signal recession but the silver lining is the
market is doing the fed's job slowing things down. the fed is assuring rates go higher and markets assuring not all rates, elongated inversion like this would be back in the 20062007 time period, that foreshadowed the recession, leading to the 2001-2003 stock market meltdown, whether we have entered a recession, the white house, second straight quarter of negative growth will put us into a technical recession but some experts have a more upbeat prediction, goldman sachs, second-quarter down from the first quarter but not contracting, likely up 0.7%, the white house says drivers are getting relief as president biden plans to sell $20 million from the strategic
petroleum reserve he argued were driving down gas prices, down $0.50 from a month ago. of high-stakes economic news with the federal reserve interest rate decision coming later today, jerome powell walking a tightrope as we get more news of layoffs, adjusting accordingly. neil: many viewers keeping track, you have been working, the end of august and they blame me for your work schedules. lighten up on lydia, but i tell from an inverted yield curve, time stops for no one. >> i feel great, it is my pleasure, love what i do, love being on your show, doesn't feel like work. neil: downtown they are having
a potential garbage strike, a little hot, a little nasty, you can get down there pretty fast. you are the best, don't put her out there and do these crazy things. neither is pregnant but -- talking about the inverted yield curve, the federal reserve raises rates, federal funds money is 2.5% and 10 year is a little north of 2.75%, that is weird. money yields as much as committing it for 10 years, what do you make of that?
>> makes no sense when you think about it, there should be a curve to interest rates over time, completely logical but the market is signaling if you are buying long-term debt, chasing that because they are fearful of the slowdown ahead. what no one focuses on is this is rough on the lending world because they bank on short-term rates being lower than long-term rates which is the way they lend and it's bad for lenders, one of the things you need is availability of credit because that's the lubricant that helps commerce work. we have an environment if lenders don't lend in this environment which will stymie growth.
neil: fed funds, clicking off their teeth, it should mirror whatever the inflation rate close to it, that is unrealistic in an environment where inflation north of 9% but the sentiment is the more the fed hikes the more likely inflation rate goes down and they don't have to get to that level. where is this going? bank of america said the fed will be cutting rates. do you by that? been nobel pri in economics, signaling information signals and how markets and buyers and consumers and producers react to signals as opposed to specific prices which are a
form of signal and may have accomplished huge parts of the mission and the other thing we talked about, this was sort of a synthetic inflation created by idiotic let's shut down the economy policies, they could get away more traditionally than a multi-year build inflation. not saying that i know that but there are strange signals in the environment that suggest that is a possibility. if i were a betting man i bet it goes away faster than we guessed it would? neil: we might see signs of it coming down, the more worrisome commodities, not across-the-board, the resilience of the consumer, not across the board but american
express makes note of it, and is it your sense we dodge a recession? we have something that speaks of a slowdown that won't be around very long. >> a slowdown, the definition of recession, and i do think it is relatively short-lived but it will take smart fiscal policy to get us out of it and this administration hasn't been smart on fiscal policy, we have a broken supply chain and the only way to ramp up the economy is to fix the supply side of the economy and i worry higher interest rates and inverted yield curve aren't exactly factors that help the supply-side of the economy.
neil: we could be in for a stretch. >> interesting comment mitch made about fixing the supply chain, they kind of need the world, broken supply chain mean suppliers are not capable of giving me what i want and that is happening in all kinds of sectors, getting people back to work, don't know how interest sensitive it is when i am only running two shifts instead of 3 because the -- i couldn't get the labor. my only point is there may be stay puffs marshmallow man overinflated the goes away faster when you fix some of
these human and labor problems that don't necessarily take gigantic investments so it is possible. stuart: thank you very much. we were mentioning chipotle and mcdonald's, they have pretty good quarters, brewing customers, still buying stocks even in the face of prices raised again and again. stocks urging 9%, now announcing it will raise prices again but doesn't spell out the details, to apply to all items, they are going up as well. if customers are paying that, i wonder for how long, after this.
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jackie? >> reporter: the fbi and doj have been accused by what senator chuck grassley called highly credible will some blowers, and president biden's on hunter by dismissing information. and he told fox, and what people don't want to investigate. >> talk about being investigated his credibility, fbi. party and power individuals.
the credibility of the fbi is at stake here. >> recounted events between july and october of 2020 before the election when the fbi gave republicans are investigating hunter the runaround and the gop was advancing foreign disinformation. >> and didn't suspected it. >> the doj confirmed they received grassley's letter, did not have further comments. a source told fox the federal investigation into hunter's taxes reached a critical stage saying officials are trying to determine whether to charge
hunter with various violations including foreign lobbying violations. neil: it appears to be doing just the opposite when it comes to investigating donald trump, the washington post reporting a criminal probe is being conducted into efforts the former president had to overturn 2020 election. gets complicated. a lot more complicated than that. and explaining it clearly. what is going on here. >> investigating the attack on the capital and phony pro-trump electors to say president biden won to overturn the election. washington post reporting basket is questioning witnesses about their conversations about donald trump, and merrick garland refuses to say whether the department of justice is
investigating the former president, his department will prosecute those if the leads are guilty. >> anyone currently responsible for attempting to interfere with the transfer of legitimate lawful transfer of power from one administration to the next. >> reporter: the post report investigator questions focus on the fake elector scheme led by trump's outside lawyers rudy giuliani and john eastman. investigator sees eastman's phone. and jeffrey clark's phone and chief of staff mark meadows's phone records, the congressional january 6th committee investigating the former president, one republican senator says questions overcharges wait until after the committee finishes its work. >> do you think donald trump should face criminal charges? >> i'm going to leave that up to the justice department. we ought to wait until we get the report from the january 6th
commission before any of us make any decision you are asking me about? >> reporter: mike pence's lawyer greg jacob and chief of staff mark short have appeared before a grand jury in washington. neil: richardson. the chips in science act, 64-33, a lot of republicans support as law, heads up to the house for a vote likely this weekend some differences with what the senate came through to make the semi conductor industry more competitive, less reliant on china and gets complicated, overwhelmingly approved in the senate and on its way to the house. more on that in the significance of today's vote after this. ♪♪
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neil: the senate passed a $280 billion bill shoring up tech manufacturing, semi conductor, a lot less on china. now heads to the house, this was a bigger than excited bipartisan vote. >> we don't have programming on the high seas. neil: we don't have programming in the united states. it is a bipartisan measure passed better than 64 votes so it had bipartisan support. let's go to senate foreign relations committee key player bill haggerty on that.
what did you like about it? >> it is a complex bill but it has to do with our security and economy. you know what we've been through with the chip shortage in america, we need to reassure the supply chain from china. we have become too dependent on a country that doesn't have our best interests at heart, my overarching concern. i was able to negotiate, it takes too long. when i called ceos, why weren't they manufacturing chips, it takes 5 years to obtain a permit. they have an agreement, house leadership agreed as soon as
they are back, this will compress the timeline making us more competitive. i hope to get that down to 18 months allowing us to speed up the implementation of the expansion of supply making this more effective, with the permitting process we have seen in years. neil: what startled me, when they were kicking this around, a $60 billion measure, 80 something, don't know what the final figure would be. a $39 billion fund providing direct federal assistance, expansion of manufacturing facilities in the us. the semi conductor, chipmakers offered anything on their own that they could rely less, produce less in asia to make this happen. >> what they told us is if we
don't create an environment for them it is on the permitting process shrinking that down, those investments are going to go to china, asia and europe. neil: if you make these guarantees and they still have to fill these in china and doing business in china it sounds like they are getting their cake and eating to. >> this process will help us, and get supply chains to move back, manufacturers i talked to don't like the strategic position they are in. the gm plant in springfield tennessee, long line of cars that are waiting for chips. clients are not happy with this, we need to sure the capacity now and chip manufacturers understand this and facilitating the process. getting plant facilities in place with my legislation, and larger legislation brings targeted subsidies to
facilitate that as well. neil: it will not influence whether any of these companies nor is it required to, they need asia for the time being with a won't pool out pell-mell. >> the legislation doesn't require that. there's a lot to incentivize given their predatory behavior. over time we will be able to put significant improvement to our national security and economic security as we reassure these supply chains. neil: bill haggerty of tennessee. back with jack haggerty, hope it wasn't a chip problem. where does this stand and what is the likely course from here? >> they have to get this through the house of representatives, it is done at the end of this week. there's another week before the
august recess. this is the issue they want to get done, and in the house of representatives the issue is trying to deal with other issues before the recess. one issue on the table that they are not going to get done, the legalization of marijuana, democrats want to decriminalize marijuana at the federal level, senate majority leader chuck schumer is the main sponsor. >> the states to legalize cannabis, there's not been an increase in crime and drug use, it makes a great deal of sense to do it. >> reporter: some say prosecuting marijuana cases is a waste of time, and one study revealed an increase in car
crashes, they are skeptical of legalization. >> it has no accepted medical use. it is dangerous and addictive. that's not my judgment or even the dea's judgment, that is what the fda found in 2016 during the administration of president barack obama. >> we don't think they will get this on the floor anytime soon. it is not have 60 votes in the senate. the past few minutes, 64-33, all the nos came from the gop. mitch mcconnell voted yes despite the growing price tag. >> this is about national security, and about making sure we have adequate supply of things that are indispensable. i wish it were inexpensive but in this situation it is not.
>> reporter: many conservatives believe the the bill is a handout to one industry and too expensive. the bill goes to the house. neil: we are half-an-hour from finding out interest rate in this country, expected to hike the bank lending rate by 75 basis points, to think we started from 0 and we could be up to 2.5%. by the end of the year close to 3.544%. that is called fast, superfast. will be a superheadache? after this. ♪♪ it's going to be a long long time ♪♪ ♪♪
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>> out! >> reporter: oh my god! you look like 4 july. makes me want a hot dog real bad. neil: we debated that but i wasn't part of the the day. hotdogs are very big, people love them. if you are an iconic player like coney island of scranton, pennsylvania, off the charge and not just hotdogs, peter vettori, a lot of the items you put into that has been going up. good to have you. how are you doing? >> put a good. neil: i'm hearing from mcdonald's and chipotle about
price increases, customers are paying that and their sales look good. how about you? >> the first 6 months of this year we did pretty good, better than i thought and when i started doing the figures, the costs were higher, that's not good. our hot dog is $3.20. it is superhigh. it has come to the point i raise them now so it is 10% to 15%. neil: how do you think customers will react.
>> i wouldn't say people are getting used to this but only tolerate for so long, but that's the one thing of this. in all my years, 50 years in the business, once these prices are where they are they won't go back down. gasoline went down a little, diesel fuel hasn't moved and surcharges when they deliver and you won't see those disappear. we hope for the best. >> i ordered 40 of the texas wieners, do you still have a party pack, that is a draw. >> that the big draw.
that goes up a little too. neil: i didn't get a thank you card but that's okay. >> in your condition, it is advertised. neil: i deserved that. i would be curious. there are areas people will stop if prices go high, don't know if it applies to what you saw, texas burger and the wiener of course, so many, do you have the garlic truffle fries? >> that is the other one. stuart: i won't get into that. >> we have the same stuff. neil: i understood. keep it simple. i have a theory, unless prices double or triple they will
stick around but i'm wondering, how do they play this game? >> when the pandemic was going on and didn't have people sitting here selling the normal amount of hotdogs and take out only. the money is made in soda water, beverages. that is where mcdonald's, how they do it too. when not selling those things, you're depending on the profits from that hotdog that is minimal. trying to keep the price down. once we raise it, when my grandfather was alive, raised from 25 to 30 and people were screaming. that is a big jump over 10%.
i understood that. you don't get that much anymore. neil: in the soda era, i was once a manager and that is where we made the money so we are kindred spirits even though i had this condition that shouldn't be eating all the hotdogs but they are so good, i wish you well, great stuff, great people and i think they will stick around but i will talk about the car you made to my cardiologist. it is an institution and if you don't go there, you should be put in an institution. that's how good it is. more after this. so to help you remember that liberty mutual customizes your home insurance, here's a pool party.
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he does raise a point. the vast majority of people says 3 quarters. economy is probably in a recession. that is what people are saying on the street. don't listen to the biden administration's spin on this and also take out to quarters of negative growth. that is a wishy-washy statistic. it is the underlying fact, slowing corporate earnings, lower job growth recently. you can look at the bond market, pricing in a recession, down today. all factors are saying we are there. how far do we land? powell will air on the safe side and not try to crush the economy. how long might this last? if the fed is continuing to be dedicated to get rid of
inflation and quarter points don't do what he could be raising quarter points into next year. the market says he will get rid of it by next year but it is the market and there's a good chance inflation is so embedded in the system because of unprecedented monetary and fiscal stimulus that could be raising interest rates well into next year and here is where it gets interesting for the markets. the initial thing you will see is markets positive on the news. the real question if we have a recession you see corporate earnings trail off and markets are in for a bumpy ride. it will be interesting to see the language he uses. sometimes it is more than the interest rate increase, nice to see what he says going forward. neil: back with connell mcshane, jackie, it is 3 quarters of a point.
everyone is wondering what is next? will it be a similar thoughts increase? it is 2. 5%. that's a big pickup in rates. >> reporter: we have seen some slowdown in the economy. the fed isn't going to take its foot off the gas so through the end of the year we will continue to see rate hikes, another one or 2 of 70 basis points and taper back slowly. as you all have been discussing do we get a hard or soft landing. i'm not taking the best off today that he might go ahead and whack the market with one point. it is still possible. watch and see. bottom line, inflation is a serious problem. i think it's a supply-side problem, with rate increases it
will help, but if they are not going to fix all the underlying problems, and more policy wise. neil: a lot of folks are hit by this, definition of a recession doesn't much matter. what are you hearing? >> the gdp report comes out especially if it is negative, are we in a recession your point is what we are hearing. if it affects you and your life is negatively impacted that is a recession. lower income versus people on higher income, and how it is impacting them. people in rural areas are feeling it more and because inflation is something, higher
gas prices, and after he makes his decision presuming 75, looking at past quotes, over and over he tried to drill home the fact that he would rather make the mistake of going too far on the inflation side to restore price stability. if you hold him to his word there is more to come, and on that end of it to hammer inflation. neil: i don't think it is warranted. when i hear the 70s comparison. it is a bumpy ride.
let's say i am right which would be scary. lauren: with respect to the 70s and 80s, i wasn't living through it. i talked to a lot of people, it was extremely painful. >> it was extremely painful across the country in certain areas and income classes, not sure it's the main level of pain, but watching companies. neil: forget what happens today moving to the september meeting, is that every quarter point hike? >> i do and goldman sachs forecasting more hikes.
connell: i would be curious to see how much they hint about that today or be vague in the discussions and pressed in the press conference about it but another 75 would seem to be the way we are headed. neil: then we are -- we will spare you that image. thank you very much. the dow is up 104 points, waiting to see how much higher they go. . .
neil: all right. well some folks say we're in for another rate hike. that isn't a shock. the only debate if there is one how much of one. that seems to be going around75 basis point idea. some are saying full point. whether or not queer in a recession or not. sew much my friend charles payne to address in a matter of seconds. charles: neil, we live for these days. thank you very much, my friend. good afternoon, i'm charles payne. this is "making money." as neil mentioned. investors are bracing for a 75 basis point hike for the federal reserve. what happens after that, i will have the john madden moment to guide you through what the ultimate battle is. you have twin economic evils, runaway inflation on one side, maybe a deep recession on the other. folks are feeling pessimistic about tomorrow's gdp report. i have chris lowe the feeling
how we're in permanent decline could affected trends. stocks rallying continues. the big question how long will it go on and how can you make money from it? at 2:30 jerome powell will take the podium. it is a foregone conclusion he will do. we'll scrutinize every word. we'll cut if the market goes haywire. here is edward lawrence. reporter: so the federal reserve has now raised interest rates 75 basis points as expected. recent indicators show that the spending a production have softened, spending and product have softened that is in the statement. federal reserve say job gains are robust going forward. inflation remains elevated, due to imbalances due to the pandemic. the fed blames invasion of ukraine, putting upward pressure on inflation and weighing on global activity but the fed removed language about