you're no paul volcker. i remember paul volcker. you're no paul volcker and i feel like he is trying too hard. now wedded to this thing he will not pause but they may make him pause, no? >> i'm concerned. he should have paused two or three meetings ago. giving time, 25, 50, we're finally talking about a 25 and potential pause but even then i think he will be more hawkish. reality q4 had inflation on the core cpi an allized 3.2%. that is not horrible. that was for a full quarter with housing overstated because they're using bad calculations. charles: right. >> i think they're supposed to be hey, let's not push it. charles: they believe once the housing data catches up to where it really is they will find themself in a real predictment. fourth quarter gdp beat top line but driven by inventories. consumer spending was a big piece. are we seeing enough weakness in the consumer for the fed to pay attention? >> i think we are. we're seeing without inflation that number would have been worse. i really focus on the inventory. we had a stagg

you go back to when paul volcker was running the fed. we had three months of declining inflation and the fed started cutting interest rates and inflation shot up again. the fed was forced to raise rates again and then we went into a second recession in the 1980's. all of the central bankers know that lesson and they are not going to be interested in going too fast to end this. they may dial back there increases and they may be getting close to the end, although the ecb has farther to go. but nobody is calling it quits yet. kriti: something we will keep an eye on. mike mckee, thank you as always. let's continue with that conversation. julia coronado, president and founder of macropolicy perspectives. thank you for your time. you heard mike talk about anything can happen. the jury is out but what are the odds, in your opinion, of that kind of second peak when it comes to inflation? this is not just a one-way street? dr. coronado: i think the odds are pretty low. i think we have gotten accumulation of evidence that inflation has turned the

volcker, and he has been using comments that sound like something paul volcker would say, so, look, you know as far as the fed goes i think they are going to stay the course hike two is time next two meetings i think actually going to hike, even higher than the markets pricing in right now markets pricing in 4.69 i think they go to 5 1/4. maria: a that is what jamie dimon said 5% i think 6% ceo of jpmorgan told me this week tie already take-aways from this report? >> i think two main takeaways maria, so first is we are starting to see the -- those long variable monetary o policy lag begin to kick in, in the sense the most interest rate sensitive sector starting to see demand cool, first housing housing will related services, secondly autos, those are two most interest rate sensitive components u.s. economy to a lesser extent there is big ticket consumer durable items purchased with credit. i think my second takeaway is related to stephanie's profits of recession point which is that to get any sort of landing, one of two things is going to have to happen. i either inflation price inf

i think though, kelly, i would be more inclined in their camp, to kind of keep at it, to use paul volcker's terms, because inflapgs, once established is hard to defeat we passed a $1.8 trillion stimulus package 60% is indexed to inflation, so the costs is 8.7%. the labor markets are still tight, and financial conditions are actually about as easy now, as they were before the russia/ukraine war i would argue they should -- i week in the five buckets of water category, make sure that fire is out before they pull their punches. hopefully, they can engineer a soft landing as paul is hoping or forecasting. >> let me turn back to you, paul, why do you think you're likely to -- you know the dat better than anybody. we're not making this stuff up this isn't about what the bond market thinking. this is the data itself. we've never had a period that hasn't been followedby a recession. why do you think this is going to be different? >> the dominant thing is the labor market is still incredibly sturdy also, i think a lot of the data of the leading economic indicators as well as what's going on with the

volcker's book is in front of, apparently, jay powell's desk. they still worry about the '70s when inflation came down and then came right back up. i think with china reopening, oil's catching a bid i'm not clear the fed is going to say all clear if they don't say that, all of this could once again collapse and we're right back where we started a couple months ago. >> okay. so, got to buy it, i got a fade it and your point of view, which is what this is you have to settle this now. there's only three of you, so it all falls on your shoulders here >> well, the market is rallying because it was oversold. we've talked about this for a while, about how i felt that the bias of every expert, every strategist, almost everyone you listen to would say, because of what the fed is doing and because of inflation, we can't buy the market but the market has been composed of many sectors that have been in their own recession, that have fallen stocks 50%, 60%, 70%. our job is to buy low and sell high and you you just can't put a blanket statement that the marke

nabe, they will present secretary janet yellen with the paul volcker lifetime achievement award. she will be the keynote speaker at the conference in march. everyone talking about volckerresque, bringing in austerity, deliberately creating two million unemployment, crushing the economy. essentially an award for, yeah, you know what? maybe when we come out of those ashes we're better off for it but odd she would be getting this award in my mind? >> nabe stands for the national association of business economists. you know who is the most important in the world is to business taxation? it's janet yellen. because yes, congress legislates certain things about the tax code. most of the important details in the tax code are shaped by the guidance that is put in place almost unilaterally by the treasury secretary. i have got a great idea. let's give her an award. let's pay her a speaking fee to come to talk to us. oh, besides i wasn't available. they offered it had to me first. charles: i don't think your fee would be the same. i know it would be nice but not going to be the same. i have

volcker who i worked for many many many decades ago. i kind of like what jay powell is saying right now. cavuto/kudlow play book, price stability breeds growth. he actually said that, neil. neil: he's actually following up larry: regulator of the year which is better than turning off your gas burners. neil: don't even get me into that one. you can't do italian sausage. larry: that's right and you can't order out pizza and warm it up. neil: no it's impossible. larry kudlow 4:00 p.m. eastern time on this fine network, makes you think he has connections, i mean, like nobody's business. in the meantime we're talking about nobody's business we have a rally continuing here so this year is looking better certainly than the last year optimism about that inflation picture that larry alluded to, we are expected or at least the hope is or the markets might be getting ahead of themselves if not that we'll see more signs that at least run-away inflation is kind of maybe walking just fast right now. there is a difference. the dow up 180 points stay w

if powell says we're going to pause after pledging not to pause because he wanted to be paul volcker 2.0, that would probably serve the same purpose at least from a short-term basis as a rate official pivot, wouldn't it? >> it certainly would, charles. no doubt tomorrow if he speaks if he gives any indianacation after pause, we would see a huge rally in the markets and we would have to put some cash to work. the huge problem if they pause, you will see asset prices rip. there is a tough price trying to keep inflation down. that pause or pivot talk is counterintuitive to what they're trying to accomplish. charles: earnings season kicks off this week. 36% of banks post their numbers. what are you expecting? >> i don't think friday will be a good day from the banks. jamie dimon will pay close attention to. he doesn't bs anyone. he will tell us exactly how it is. i think the underlying message will be the economy is slowing and consumer has blown through the excess savings. we'll be in a tough spot for them here in the next several months. charles: jpmorgan actually saying they crossed u

after paul volcker won the battle against inflation. we think it is a double-edged sword. in the short-term, opec will be very tight in terms of supply. china reopening will provide a support for commodity prices. we think oil will hold steady. in the second half of this year, they could pick up, but not in a big way. they could hold steady. longer-term, we are seeing energy transition away from fossil fuel toward solar power and renewable energy. but that is a longer-term story. it will not happen this year. yvonne: happy new year. let's get to the first word news. >> chinese regulators have approved a plan to raise $1.5 billion for ant's consumer unit. they will control half of its shares after the deal. kevin mccarthy has fallen short of women in the speakership after three rounds of voting. it is the first time since 19 23 that i house speaker has not been selected during the first round. ftx founder sam bankman-fried reed has pleaded not guilty to criminal charges and will face trial in october. he is accused of illegally diverting massive songs of consumer -- massive

volcker's days. it is because they really made a terrible blunder in leaving policy too easy for too long after 2020 and throughout 2021. they were in a deep hole with the federal fund rated zero and inflation surgery past 8% at one point, peaking at 9.1%. the real interest rates were in negative territory more so than they had ever been. they have moved aggressively but real interest rates, the nominal federal funds rate is still negative today. the fed knows they have more work to do and they will do maybe another few times before it is over but what the markets refused to accept is once they get the federal funds rate where they want it, they are going to hold it there for a long time to make certain they reenter inflationary expectations. >> does china rescue the u.s. and the rest of the road from recession? price it does not. i go back to the time after the global financial crisis, china was surging at 7.5%. that really cushioned the world, it was close to going back into recession. they are not

and as paul volcker once wittily said about every ten years we have the greatest crisis in 50 years. oh, no, the the events of 2020 were hardly the first to demonstrate that highly intelligent, highly knowledge able people in positions of great authority may still be unable to anticipate what crises future may bring. and john maynard keynes in 1937 described the uncertainty very well or knowledge of the future, he wrote, is fluctuating, vague and uncertain about these matters. there is no scientific basis which to form any calculable probability. whatever note, all financial models run on calculable probabilities. keynes continued that our expectation of the future being based so flimsy a foundation is subject to sudden violent changes. the practice of certainty and security suddenly breaks down new fears and hopes will, without warning, take charge of human conduct. the year 2020 certainly brought such and violent changes and new fear marked the first half of the year as people were afraid not only for their lives but also for their money. at the same time, now, a key problem with u

volcker era, and everyone understands the big historical lesson there, which is you don't want to cut too quickly. so there are two separate elements of history that are relevant here and i think the fed having had historically high inflation and moved very, very quickly is a bit more anxious about replaying the stop/start of the '70s and early '80s that let inflation expectations get out of control that is i think a little bit of the difference here. the fed really wants to put a stake through the heart of inflation. the markets i think may not be as concerned as the fed is about really making sure they won the inflation battle. >> i understand your perspective on the psyche of jay powell and the psyche of this board of governors, if you will, right now. the question is, what is the pivot point at which if there is a pivot point in terms of shifting that psyche, when you think you would know that. is that a -- an april situation. is that a -- something that comes later, and then, therefore, the equity markets right now are making a gamble, something on the order of close to 12 months