Emerging says one analyst and its not too late to get in on the action he is here with the trade and the upside of this industry. Now a check on the markets the major averages are rebounding, but the chart of the day right now once again goes to new York Community bank corps. Believe it or not. Down more than 40 so far on reports thousand that the bank is seeking a major Capital Infusion from outside. And thats where we are going to start with these green markets, a very deep red picture, and leslie picker has the details on nycb so it appears to be that this would be an Equity Capital raise, and that they reached out to a variety of investment firms. My understanding in talking with a couple of indirect sources over the last few minutes or so is that this is likely a lot of these conversations are more in the private realm opposed to public investors and that they have been going on for quite sometime, because one of my Big Questions was, why is this coming out on a wednesday typically when Something Like this happens, it would be pulled together over a weekend because if it does leak to the market, Something Like this could happen you could see shares down more than 42 so it sounds like these conversations have been ongoing. That was something when the company hosted a Conference Call earlier last month, after moodys downgraded some of its credit ratings, the chairman at the executive chairman at the time newly appointed, ultimately became ceo last week. But at the time, he hosted a Conference Call withable abnaly and said everything was on the table in terms of shoring up confidence in the company. So Capital Raise is certainly something that people have been questioning for quite some time. And analysts, at least one analyst put in a report that, you know, it was possible that an Equity Capital raise could be coming there are other options, as well, that they could consider but at least according to reports from the wall street journal and reuters, this is one that is in focus right now, and a raise at these depressed valuations, 1. 86 a share, would be obviously dilutive to shareholders at these levels since they have plummeted so significantly this year. That bit of news, like you said, would make a Capital Raise much cheaper for somebody who would look to come in and inject that capital at these depressed prices you covered a lot of these Regional Banks and the failures from last fall these are some of the levels kind of below that 2, 3 per share mark, where there starts to become speculation, at least about deal talks, right . About maybe who is going to come in and buy them, what it could look like. Outside of a direct infusion from an outside source, is there a chance this gets taken over . I havent heard anything about actual takeover talks at these levels i mean, there are a whole host of regional stocks that were a dollar a share during the crisis ultimately they rebounded and still with us today. So its really difficult to tell kind of which way the fork in the road goes for new York Community bank but obviously, its a dire situation. Its one in which, you know, there are likely a bunch of investment firms that play in this area, are taking a look but there are asset sales that would be on the table in order to tighten up that Balance Sheet a bit more discussions with investors it sounds like a lot of those are involved in private investors at this juncture so well see what happens. But its obviously a very precarious situation, and a plummet of 42 today makes things more challenging for this company. Well watch those shares for sure leslie, thank you very much. We want to get to the other big market story so far right now, thats fed chair jay powell wrapping up day one of his testimony before the House Financial Services committee reiterating that he expects Interest Rates to come down this year, but isnt ready yet to say just when. Steve liesman is here with more on those details day one of the testimony formally known as humphrey hawkins. What did we learn headline wise, steve . I think the headline is the Federal Reserve is the chair sees the economy continuing to remain strong, sees the labor market continuing to be strong, as well. But also he sees inflation coming down, and this that context, he said that hes he believes that Interest Rates can come down significantly over the next several years not just this year, but also next year. He also, i would say, dom, put the bar not as high as maybe we thought it was he said theyre just looking for a bit more evidence that inflation is continuing to come down and also in that context, were looking for better inflation readings not better inflation readings than we have had, just the same ones weve had. I dont know if we have that bite, if we could run it, guys if not, i think ill just paraphrase it, dom okay. Just paraphrase it for us here just that, he said were looking for a bit more evidence, the same Inflation Numbers we have, not better numbers we reiterated what hes said in his press conferences before, that the fed can begin cutting before the inflation rates get to 2 . So thats the remark that was getting the most attention there, one of them steve, stick with us here. Also joining me on the conversation is the chief Investment Officer and a cnbc contributor. And mark zanldy, chief economist at moodys analytics peter, ill start with you just because youre sitting next to me the comments, the takeaway here is maybe, trying to, again, temper the expectations that the market has the markets been tempered over the course of the last three to four weeks, arguably has anything really changed with that picture nothing today i think powell just reiterated what we heard from a lot of other fed members. Hes juggling some complicated stuff here its not just okay, we raised sharply. Were going to tweak here and there and cut a little bit i mean, twoyear inflation break evens or 50 basis points over the past month gasoline prices are at the highest levels since early november container shipping prices have jumped so i mentioned that, because goods prices have fallen sharply, but now are at risk of rebounding again, while the service side could continue to moderate with rental prices. The point being that theres a lot of confusing mixed messages here i dont think jay powell, its in his interest or really even can push that much ahead in terms of expectations, because he doesnt even know i think he does not want to start cutting rates and watch inflation rise right back up in his face again, and he whats being restricted right now the markets are not being restricted if you have a commercial real estate loan, yeah, youre being res restricted but the restrictive or not restrictive policy, it depends on who you are mark, the central bankers in america, and even fed chair jay powell today alluded to this, that the strength of the econom is what is leading to the ability to be a little more patient with regard to the ability to cut Interest Rates or have to cut Interest Rates does that still play out now, given this transitionary, confusing data that we have . Well, my view is the economy is resilient, its fine, its okay, but it feels soft to me in some key places. The job market in particular you look under the hood. For example today, we got data from the Job Opening Labor Turnover survey. You can see hiring rates are way down from where they were, and across the board, across all industry hours worked have fallen sharply, really back to levels you dont see except in a recession. The only thing the labor market that is keeping it together is layoffs are just extraordinarily low. It just feels very fragile to me and then the Financial System, all this discussion around nycb, thats symptomatic of a broader set of stresses on the system, that goes right back to what the feds doing. So its a balance of risks its a matter of judgment. In my view, the risk is now higher that the fed is going to keep rates too high, too long, undermine the economy and the Financial System a and to what end . In my view, they all but achieved their target at 3. 7 employment, inflation is coming in nicely. Exclude the cost of shelter, and were back to target and then some so why why maintain this tight policy in the context of an economy that, you know, is, i think, a bit fragile. Steve, can you put the risk reward story on it for us i understand what mark is saying i also understand what peter is saying but theres a conversation thats being had right now among all of these central planners about where the greater risk lies is it the fact that we could set ourselves into a deeper recession, or is it that inflation rears its ugly head in a fairly significant way all over again whats the balance of scales right now . Dom, youre a reporter, you have two smart guys making good points on this, and you end up in the middle here on this i think i like peters point, which is something ive been talking about for a bit, which is if it aint broken, how much fixing should the fed do to the funds rate right now i dont know that i see all the fragility that mark sees we may have had a bout of economic weakness in january that might have been more weather related and oneoffs than we had actual gathering weakness in the economy. And i also think that the feds litmus test for cutting rates is not that heavy right now we talked about that a second ago. The idea they want a bit more evidence i think theyre going to cut, but i think theyre going to cut modestly and see how things go i do think the bigger issue here begins whether or not the fed can do the Monetary Policy walk and do the regulatory chewing gum at the same time by that, i mean can they work with the banks, and i mean the treasury and the Federal Reserve both and other bank regulators, to get them to shore up their Balance Sheets and make sure this Office Real Estate thing does not become systemic risk, while they take their time and do what just the economic fundamentals suggest they ought to do for Interest Rates so i dont know if thats possible but if they are, indeed, working as the chair says behind the scenes with the banks, we can maybe take that off the table and say, you know what theres going to be losses and risks, maybe some Bank Failures here, but that does not become a systemic issue that should drive the train when it comes to Monetary Policy. Lets add another layer to this everybody stick around, because where the rubber meets the road is in the bond market and Interest Rates lets bring in Rick Santelli for a closer look at the move we are seeing in yields so far today, we are seeing a bit of a move higher in Government Bond prices, and a move lower in those yields absolutely, dom you know, we could all talk about the stronger economy, but the stronger economy at a period where we have so much debt, would most likely have a larger effect on whats going on in longer rates but everything has been going down say anecdotal evidence if you please, but some of the spat of weaker data is what many investors are hanging their hat on theyre making a bet that will continue if you look at 2s and 10s on one chart today, were making our low yields of our session around the weaker data, whether it was aep or the benchmark revisions, the one traders paid attention to was last month, went from over 9 million to under 9 million. You can call it anecdotal if you want, but theres been a lot of weaker data and weve been cascading lower. Boom, right before low, the new York Community bank story hits the wires, and thats what moved the market look at the timing of Interest Rates against that stock before it was halted. The timing matches up perfectly. And i agree with everybody today, the line that all of my sources found the most interesting is, we dont need to see 2 to start easing you could say what you want about that comment, but when you put it together with almost likely the highest rates are here, most likely were going to cut this year. If it seems as if Steve Liesman deems this dovish, its hard to argue with that. Jay powell certainly seems like hes looking for any excuse to find that doorway to walk through on the easing front. Finally, if you look at the longer charts, one month on 2s and s10s, were a little longer term than one month on 10s based on where they are set up now and we havent had any big debt auctions debt auctions next week, youll see the influences, because a lot of the good news is built in the market this weaker database is going to be imperative to keep these yields down where theyre at Rick Santelli, thank you very much if that wasnt enough in terms of layers for you, we have more to lay on top of that mortgage numbers came out this morning, and demand shot up even as rates didnt move that much for mortgages. Diana olig is here to tell us the context around that story in housing and why people seem to be transacting a bit more. And still, Mortgage Rates remain stubbornly high, above 7 and still there now. The average on the 30year fixed is 7. 03 , according to Mortgage News Daily and it didnt move last week so demand for mortgages from home buyers shot up 11 compared with the previous week 8 lower than the same week one year ago one note from the Mortgage Bankers association, fha loans drove a lot of it. These are loans often used by firsttime buyers because they have lower down payments so it showed how sensitive these buyers are, because rates didnt go up. So they also pointed to new listings in fact, there were nearly 15 more homes actively for sale in february compared with a year ago, and homes priced in the 200,000 to 350,000 range grew by 25 from a year ago, outpacing all other price categories so were now looking at the highest inventory overall since 2020, the start of the pandemic. So the big question, dom, will all that new supply take some of the heat off of the home prices, which are still hitting record highs. This is the ka anyconundrum. Lets bring everybody back into the conversation peter, i will start with you here again the housing dynamic is one that is going to perplex and make the feds job that much harder shelter costs you mentioned and mark mentioned it, a higher percentage of some of these inflationary stories is it enough, this dynamic, to get the Housing Market going to bring some of those transactions back and netnet, will that be good for the economy and the rate picture Going Forward so add what diana said, you need a lot more supply you think where is that going to come from . Ive been saying you need baby boomers to start down sizing i dont see any other massive amount of supply that can come from, other than that area, in addition to new builds so i see this existing home market that could last and for every new home thats not bought, a new one or a new buyer buying an existing home, theres now paint, carpet, flooring, or stuff thats not transacting in, because no one is moving. So this is a very difficult situation. Even lower Interest Rates, im not sure if that will make the difference on the supply side. Mark, how pivotal is the residential Housing Market and its unlocking, its unfreezing to the next step possibly, hopefully, hypothetically higher for the u. S. Economy dom, let me answer the question a little different way, bringing you back to the fed if you look at inflation, and if inflation is above target because of the cost of housing services, you want to get that down to peters point and you need more supply, and the way you get more supply is you ease up on the Banking System you bring down Interest Rates, allow the yield curve to become more sloped, so banks can extend more credit to the multifamily Developers Talk to any multifamily developer, particularly in the affordable part of the rental market, the biggest problem is getting any credit at all at an Interest Rate that makes economic sense if youre at the fed, you think how do i want to get inflation back down to target . I need to get more supply. And the answer isnt higher Interest Rates, its lower im not arguing for aggressive interest cuts. Lets just quarter point each quarter to get more supply and get inflation back in the bottle steve, you keep kind of moving your head around here i feel like youre chomping at the bit right now. What do you think . Well, i just want to point out how much i love diana and how great she does covering the real estate business but its only one component of the economy. And i dont think its an important component. I dont want to down play it but i want to point your attention, dom, to the business round table survey today it came out, its up double dim double digits. Sales expected sales cap ex, both up double digits. So when i look at the outlook for the economy, that places another big factor for me in whats the what the fed ought to be doing and what the outlook ought to be. And theres notion out there from bostic, which is a little more hawkish here, which he said hes concerned about this pent up exuberance thats out there this busi