That that ratio will continue to rise in an unsustainable fashion , so the addition to the debt taking what is already a significant problem and making it worse is, it is of concern to me and i think it does suggest that in some future downturn which, well, could occur just for whatever reason, the amount of fiscal space that would exist for fiscal policy to play an active role may well be limited. Sam and then victoria. Sam flemming. A couple of longer term questions. First of all midway through the year you talked about issues of whether inflation targets might need to be raised and a lot more debate in the fed system since this. It may not be an imminent issue but is it something the fed should discuss over the coming years some sort of change to the target and second of all the amount of stimulus tools that the fed may have at its disposal in the next downturn strikes are fairly limit limited. One of the incoming governors, Marvin Goodfriend talked about the merits of negative Interest Rates. I just wondered whether youll see that as a potential we are going to continue monitoring fed chair janet yellen and her final News Conference but we want to take you to the white house for President Trumps closing arguments on tax reform. President trump were joined today by college students, young entrepreneurs, families, workers , mothers, and fathers from all over our nation. You make this country run, its an honor to be with you and an honor to have you at the white house and thank you all for being here. Really fantastic. Thank you. [applause] President Trump great people. President trump as a promise i promised a massive tax cut for the every day working families who are the backbone and the heartbeat of our country. Now were just days away, i hope , i hope, you know what that means, right, from keeping that promise and delivering a truly amazing victory for American Families. We want to give you, the American People, a giant tax cut for christmas and when i say giant, i mean giant. [applause] President Trump as we speak, congress has reached an agreement on tax legislation that will deliver more jobs, higher wages, and massive tax relief for American Families and for american companies. The typical family of four earning 75,000 will see an income tax cutoff more than 2000 slashing their tax bill in half. Its going to be a lot of money, and have an extra 2000 but there are many more things than that. Our plan expands the Child Tax Credit for working families. Youll hear the numbers very soon but theyre even larger than anticipated. It nearly doubles the amount of income taxed at the rate of zero i dont know if any of you are paying zero. I hope youre not. I hope youre paying above that, but a lot of people who are having it a little bit tough are going to be paying zero. It closes special interest loopholes. It lowers tax rates for families and our plan also cuts taxes on businesses which is expected, raised income by an average of more than 4000, so your income goes up. Its like having a 4000 increase which isnt bad, which isnt bad. Its a lot of money to spend, a lot of jobs are going to be created with the money that you spend, very special, and it makes america competitive again, so we can bring back that simple but beautiful phrase, youve heard it before, made in the usa right . I dont know if theyve heard it but youve heard it. [applause] President Trump our current tax code is burden some, complex and profoundly unfair. It has exported our jobs, closed our factories, and left millions of parents worried that their children might be the first generation to have less opportunity than the last. Our factories have left so many of them, gone, but theyre all coming back and you see it even before we do this, theyre starting to come back. Our country is starting to do really well again and as a country, were being respected again. Were being respected again. Im here today to tell you that we will never let bad things happen with respect to the economy of our country. Were not going to lose our businesses again like has happened over the last number of decades. America is coming back bigger and better and stronger than ever before, okay . They will see it and they will see the result. America isnt content just by getting by. America is about getting ahead, about finding the best in ourselves and in each other. Were reclaiming our destiny as americans, a nation that thinks big, dreams bigger and always reaches for the stars. We didnt become great through massive taxation and washington regulation and by the way, we are cutting regulation at a rate never seen before in the history of our country. We became great because our people, our families and because of our freedom. We became great because of our drive to find the next horizon, to unlock the next mystery and to begin the next adventure. You know what im talking about, and thats who we are, a nation of drivers and builders and dreamers and doers sh, people who treasure their independence and dont know how to quit. Never ever give up. I say that also to our great cabinet, and theyve done a great job. A lot of things have happened. Nobody has done the job that weve done. When government loosens its grip , there is no summit we cannot reach. Our tax cuts will break down and they will break it down fast, all forms of government and all forms of government barriers and breathe new life into the american economy. They will unleash the american worker. They will tear down the restraints on discovery, innovation and creation and they will restore the hopes and dream s of the american family. Millions of middle class families will win under our plan and today, we are honored to hear from a few of those wonderful and truly great families. Bryant and ashley blick, right . Are from lancaster county, pennsylvania. I know it well. They have two beautiful children with a third on the way. Bryant manages a Farm Equipment store. Ashley works in healthcare. This year, they were in the 15 tax bracket. Under our plan they will drop to the 12 bracket. Its a big drop, instead of itemizing their deductions they will be able to file their taxes on a single little beautiful sheet of paper. Thats good. [applause] President Trump and instead of paying 2600 in income tax, they will get it down to 2000, they will save at least 600 and probably more than that. Bryant, ashley, how about saying a few words. Do you want to . Come on. Well thank you, mr. President its an honor to be here. On be half of the good people of lancaster county, my family, and specifically my grandmother linda martin, well done. Many of your predecessors promised that this reform was coming but you did it. That we are greatly excited about. With the tax savings that we are going to see, we are going to put that money into Home Renovations and i am excited that you were the one that got it over the finish line. Thank you, mr. President. [applause] President Trump thank you, bryant. The covax family also joins us today from ohio. Thats a great state. A lot of success in ohio. Adam is a veteran who works in telecommunications. Lindsay works in administration, admissions at a university and they have two beautiful children this year, theyre currently in the 25 bracket and pay nearly 14,000 in taxes. Our plan gives them their time back because they wont have to itemize and it gives them nearly onethird of their money back more than 3500 for one year. Id like to invite the covax to explain what our tax cutting will mean for them. Theyve studied it very closely and these are very smart sharp people and they know exactly what were doing here and they like it. Come on up, thank you. [applause] thank you, mr. President. It is truly an honor that you invited the covax family to the white house today. This is going to be great for our family. We have Home Renovations that we want to take care of and hopefully save for our two children to go to college. Thank you so much, mr. President. [applause] President Trump the gianpolo family is from polk county, iowa. Anthony is a Police Officer and autumn is a 911 emergency dispatcher. When theyre not at work protecting and serving their fellow citizens, their hands are full with four wonderful children. This year, they were in the 25 bracket. Their itemized deductions and theyve done everything they can they paid more than 19,000 in taxes. Thank you very much by the way. Thats a lot of money. [laughter] President Trump but i like it. Under our plan, they will file on a single page and save 2700. Anthony, maybe youd like to say a few words. Come on in. [applause] just want to thank President Trump. Education is very important to our family. Under this bill, our family will be able to save a lot of money. We have a lot of people going to school. My wife and ir both in graduate school finishing up and we still got three other, four other kids to get through college, so it will help out a lot. [laughter] [applause] President Trump leon and Maria Benjamin are pastors of new lifes Harvest Church and its a Beautiful Church in richmond, virginia and they have three wonderful children under our plan they will get a larger tax refund to help them pay their bills. They will receive a tax refund this year of 3000. Leon and maria, i would love you to discuss your middle class tax cut a little bit with the millions of people watching right now on television. [laughter] President Trump you do very well and were very proud of you and it is indeed a Beautiful Church. I got to see a very very nice picture. Well have to get there some day soon, thank you. Come on in. [applause] to god be the glory. [applause] thank you, President Trump for inviting us here on be half of the benjamin family and of course richmond, virginia. We represent a cadre of many families across the nation, african American Families, urban communities and families all across need this now and its time for a change and its time that we recognize that our president is making good on his promises. [applause] thank you, mr. President. God bless you and well continue to keep praying for you and your team as you move forward and forge ahead with this new future in america. God bless you. [applause] President Trump he can be my minister any time. [laughter] President Trump the Howard Family lives in tenino, washington, izaac owns an espresso Machine Service company and emily takes care of their four beautiful children and theyre currently in the 15 bracket and pay 2500 in taxes. Our plan will totally wipe out their tax bill and they might even get a refund of substantially more than 700. Id like to intro introduce them come on up. [applause] im going to speak for us today. We are absolutely blessed to be here, so thank you, mr. President. Its our joy to stand before you guys, and what this means to us as a family is that we will be able to pour out into our community whatever that looks like giving away to families that are in need or setting them up for success indiana any way that whatever god has planned for our family. I think that that is our goal and we are blessed to have such an amazing president and what a good stuart he is of our country so thank you, mr. President. [applause] President Trump well thank you all. Its critically important for congress to quickly pass these historic tax cuts and thats going to take place i think even before the media. I used the word media, did you notice . As opposed to fake news media. I dont say. [laughter] President Trump because today is a very important day. We want everybody to be covered very accurately so im excited to announce that if Congress Sends me a bill before christmas , the irs, this is just out, this is breaking news, has just confirmed that americans will see lower taxes and bigger paychecks beginning in february. Just two short months from now. [applause] President Trump we just got that. 55 years ago this week, president john f. Kennedy, a democrat launched a historic effort to pass sweeping top to bottom tax cuts. A half a century later, were reminded that lowering taxes is neither republican or democrat idea but an american principle and an american idea. The goal of my administration is for every american to know the dignity of work, the pride of a paycheck, and the satisfaction of a job well done. We want people to love waking up in the morning and going to work , just with that incredible enthusiasm that we have in this country and thats what were going to be doing and thats whats going to be happening. Today we stand on the verge of a new economic miracle. Our economy has already surged to 3 growth far ahead of schedule by the way, far far ahead in each of the last two quarters and if we didnt have the hurricanes we could have hit four last quarter, four. A number that was unthinkable two years ago when i started the campaign, and even my first month in office, that was an unthinkable number and ill tell you what. Its going to go higher than that. Weve created 2. 2 million jobs since the election. Unemployment is at a 17year low , the Unemployment Rate in the Manufacturing Business is the lowest in recorded history, Consumer Confidence is a 17. High, mentions and retirement accounts are soaring as the stock market hits 85 new record highs since the election. How are we doing are we doing okay . [applause] President Trump not bad, right . [applause] President Trump if Congress Sends me a tax reform, this is only a small beginning to the incredible things that our people will achieve over a very short period of time, and the tremendous heights that we will reach economically and so many other ways in our country, every day, as this victory draws closer. We are so close right now, so close. In fact almost i dont want to talk about it. Maybe we shouldnt talk about it [laughter] President Trump the voices that opposed tax cuts grow smaller and weaker and the American People grow stronger. I heard one of our opponents stand up the other day and say this is for the rich. They had no idea. They didnt even see the final bill. I didnt see the final bill. This is for the people of middle income. This is for companies that are going to create jobs. This is for very very special people, the great people of america. Every day hard working americans know that the future of this nation will never belong to those who say you cant. It will always belong to the American People who will say we will. It belongs to people like the gl icks, the covax, the benjamins , the howards and millions of americans just like them across our nation who pour out their hearts and souls every single day to take care of their families and the country they love and that we love. We are going to have a country that celebrates you again, hard working, great people. Youre being celebrated again. Remember that, because you were a little bit forgotten. We have caught the forgotten people. Somebody else called me and everybody else the deplorables. Have you ever heard that term . Were proud to be the deplorable s and were doing well were going to make our tax system work for you again. Were going to make our economy work for you again, and we are going to make the American Dream and thats the real dream. That will be the dream that you want for your children and your grandchildren once again but we need your help to get congress across that finish line. Well have very little democrat support probably none and thats purely for political reasons. They like it a lot and they cant say it. They dont like whats happening , but they cant say it some day, we have to come together and do bipartisan and hopefully it can happen soon. [applause] President Trump if you make your voices heard, this moment will be forever remembered as a great new beginning, the dawn of a brilliant american future shining with patriotism, prosperity and pride. With your help, we will bring back our jobs, we will bring back our wealth as a country and for every citizen across this beautiful land, we will bring back our great American Dreams. Thank you, and god bless you all thank you very much. [applause] President Trump thank you. With a parade of middle class families by his side giving testament to what they anticipate will be tax cuts, breaks and bigger refunds President Trump delivering his final push for tax reform this on a day that house and Senate Republicans say theyve agreed in principle on a tax deal. Let us go back to k street a few blocks away to the Federal Reserve and janet yellen finishing up her final press conference of her term. Janet and said has been an important objective, whats on my undone list you ask . We have the 2 symmetric inflation objective and for a number of years now, inflation has been running under 2 and i consider it an important priority to make sure that inflation doesnt chronically undershoot our 2 objective and i want to see it move up to 2 , so most of my colleagues and i do believe that its being held down by transitory factors but theres work undone there in the sense we need to see it move up in line with our objective. Going to greg and then jen. Reporter thank you, what do you think will be the drivers of inflation over the next couple of years and how long will the committee go with low unemployment, low inflation, before you rethink Monetary Policy this gradual rate hikes . Thank you. Janet so, you know, i think for a number of years, weve had an undershoot of inflation for a number of years. We absolutely recognize that. I think until this year, the undershoot was understandable. First, we had a good deal of slack in the labor market and then we had plummeting oil prices and beginning in mid 2014 , there was the marked depreciation in the dollar, and those three factors held down inflation for a number of years. Now, in 2016, core inflation came very close to 2 . We seem to be on a path of inflation moving up and this year, beginning in march, there seemed to be a sequence of negative surprises. Some reflect one time factors that were easily identifiable like a marked decline in qualita justed cell phone plans. There may be other factors not so easy to name but inflation doesnt always follow exactly and many factors affected beyond the key influences of labor market slack, Exchange Rates and import prices and oil prices. Those are three big ones but there are other factors that affect inflation too in our judgment at this point is that transitory factors that are unrelated to the broader macroeconomic outlook are holding inflation down, but i have tried to be straightforward in saying that this could end up being something that is more in grained and turns out to be permanent. Its very important to watch it and if necessary, rethink whats determining inflation, a possibility is that longer run sustainable rate of unemployment is, its been coming down, estimates in the committee have come down. Its conceivable that they need to come down even more. Its not my judgment that Inflation Expectations have slipped but that also remains a possibility that needs to be monitored, so there are, there could be a rethink of inflation. I think its important to watch inflation outcomes carefully and if we dont see inflation moving in the manor that the committee anticipates to alter policies so that we do achieve our 2 objective, but at the moment most of my colleagues and i believe we are on track to achieve it. Reporter hi, Los Angeles Times im wondering you mentioned this is your last News Conference. What are your plans when you stepped down from the fed are you going to remain in washington . Will you go back to berkeley and also im curious if you have any disappointment that youre not going to be continuing in this job as some of your predecessors have done . Janet so on my plans i dont have anything definite for you. I guess i have home in berkeley and expect to maintain it but i would say my spouse is on the faculty hes a professor at georgetown and we would like to stay in his job and we expect to maintain washington as our base but i dont have any definite plans. Lets see and you asked me if im disappointed. So let me just say that i have served in senior positions in the Federal Reserve now for quite a long time. I became president in San Francisco in 2004 and ive participated in the fomc since that time as president , as vice chair, and as chair and its been an immensely rewarding experience for me. I feel very positive about what weve been able to accomplish and feel tremendous loyalty to the institution, so i did make the judgment that this is the right time for me to leave but i feel i have served in senior positions at the fed for a long time and its really been an honor and a privilege for me to have had a chance to. Adam and mike with the last question. Reporter adam shapiro with fox business. Glad to hear youre staying on the east coast. I wanted to follow up to the bitcoin questions, because youve lived through what we all experienced in 2007, 2008, and should the fed take a more active role in trying to identify who some of the counterparty and what the exposure is with bitcoin as a potential threat to Financial Stability . The best minds of the fed can misthese, your predecessor mr. Bernanke said in 2007, the contagion would not affect the Housing Market or the economy. Are we underestimating the potential threat from bitcoin as it runs up in value . Well, i certainly agree that its important for the fed to attempt to understand emerging risks to Financial Stability, and to be looking not just in the Banking System, but outside it for developments that could pose financial risks, and we are doing that, and i would say one of the changes during my tenure is we devoted, decided in the aftermath of the crisis that we needed to devote considerable resources to Financial Stability, to monitor for emerging threats, and now we have at the board, a fullblown division of Financial Stability thats involved in doing that. Now, when you ask about bitcoin, i still see the Financial Stability risks from it as limited. Often, risks threatening Financial Stability arise when theres exposure of the Banking System to fluctuating asset valuations, and i really dont see any significant exposure of our Core Financial institutions to threats from bitcoin if its value were to fluctuate, i dont see a threat to our Core Financial institutions, so undoubtedly, there are individuals who could lose a lot of money if bitcoin were to fall in price, but i really dont see that as creating a fullblown Financial Stability risk. Mike, last question. Reporter Michael Mckie from Bloomberg Radio and television. I guess i should ask a salute torrey question, let me do a couple of cleanup questions, President Trump said he thinks his tax plan will produce 4 growth. Do you think that is possible . Second, do you think that there is any fed blame or complicity in the flattens of the yield curve and worried that there might be policy mistake built into that that could slow the economy. And something everybody has wanted to ask you for four years, since this is your press conference. Can you tell us which dot is yours . [laughter] i can answer the last question first. The answer is no ive never been willing to reveal which dot is mine, im not going to change that now. So my assessment and i think most participants assessments as i said is the impact of the tax policy on growth, has been informed by work by the joint committee on taxation, and other analysts, and everyone recognizes that theres uncertainty about what the economic effects would be, and i wouldnt want to rule anything out. It is challenging, however, to achieve growth of the levels that you mentioned. Look, if the package were to stimulate growth of that magnitude, let me just say, again, the Federal Reserve would welcome that. If its a supply favorable supply side developments that would be compatible with the attainment of our employment and inflation objectives, thats something that would be very, very welcome, but it would be challenging to achieve numbers like that. Lets see, i think you also asked me about the yield curve and there is much discussion about yield curve inversions and whether or not a flattening yield curve could signal a recession, is that the brunt of your question . Reporter and whether theres a policy mistake in that . So this is something we discussed and have looked at, the yield curve has flattened some as we raised short rates, the flattening yield curve reflects higher shortterm rates. The yield curve is not currently inverted, and i would say that the current slope is well within its historical range. Now, there is a strong correlation historically between yield curve inversions and recessions, but let me emphasize the correlation is not causation. I think there are good reasons to think that the relationship between the slope of the yield curve and the Business Cycle may have changed, and one reason for that is that longterm Interest Rates generally embody two factors. One is the expected average value of short rates over, say, ten years, and the second piece of it is a socalled term premium that often reflects things like inflation, inflation risk. Typically, the term premium historically has been positive. So when the yield curve has inverted historically, it meant that shortterm rates were well above average expected short rates over the longer run. So with a positive term premium, thats what it means, and typically that means that Monetary Policy is restrictive, sometimes quite restrictive, and some of those recessions were situations in which the fed was consciously tightening Monetary Policy because inflation was high and trying to slow the economy. Well, right now the term premium is estimated to be quite low, close to zero, and that means that structurally and this can be true going forward, that the yield curve is likely to be flatter than its been in the past. And so it could more easily invert if the fed were to even move to a slightly restrictive policy stance, you could see an inversion with a zero term premium. So i think the fact the term premium is so low and the yield curve is generally flatter is an important factor to consider. Now i think its also important to realize that Market Participants are not expressing heightened concern about the decline of the term premium, and when asked directly about the odds of recession, they see it as low, and i could concur with that judgment. Okay, thank you. Thank you very much. Liz janet yellen, chairman of the Federal Reserve, on her last News Conference. This, on a day where weve had major breaking news on both Interest Rates and tax reform. Yellen tackled both during her last News Conference as head of the worlds most powerful and strong and important central banks, in a highly anticipated move, everybody knew it was coming, the fed did raise Interest Rates by a quarter point and expect three more such moves in 2018 as the u. S. Economy firms up. And as for tax cuts, she did say lowering the Corporate Tax rate will stimulate what has been a sluggish economy. So heres the stock market reaction. We are seeing just a bit of sell on the news but have the dow up 123 points. It had been up 161. The s p now moving higher by 4. Had climbed earlier by 7 points. But look at the intradays, you can see in a better way how the story played out. 2 00 p. M. Eastern when the news of the rate hike came out, you saw the dow spike to its high of the session, now what we see shortly thereafter was a bit of a selloff, were not quite back up to highs of the session, were getting there. Up 124 points. Same story with the s p 500. Look at the jump at 2 00 p. M. Eastern and with some selling after, any gain for the dow and the s p will mean brandnew record closes, and we should add, thats the same for the dow transports. The 21st record close for the year for the tranies. U. S. Treasury yields falling to session lows. When you see a lowering yield, that means a bit of a fear, sort of when you talk about fair trade. You jump in and say let me go back to something safer. The yield is down about five basis points. U. S. Dollar reacts from rate hike, the dollar falling to the lowest level since december 7 and pared losses, but the euro is strong at 1. 18. All currencies that we track are higher against the dollar. But theres no fear here. Look at the volatility index which tracks fears on wall street, below 10 as investors applaud yellens final move. It is a tax plan that is merely days away. As you were watching janet yellen and the president , so were former atlanta fed president dennis lockheart and bill lee, former senior economist at the new york fed and former head of citigroup. It was almost as if they were talking about the same thing at the same time, just as President Trump was outlining how the tax cuts will affect the middle class in a salubrious way, i will begin with you, dennis. Janet yellen was saying, she expected tax cuts would be stimulative as well. Do you are you in agreement with all of that, and what jumped out at you . Well, im not surprised to see interpretation that janet yellen presented. I do think clearly that tax cut will be stimulative, but i think she said modestly so, and i think at the moment thats the best way to think of it. On the margin, the tax cuts will provide a little bit of stimulus and according to the summer of Economic Projections that came out of the committee today, most of the members factored a little bit of stimulus into their projections for 2018 to 2019 growth. Liz bill, what she did say that caught our eye is even with the tax plan if it goes through, and sure looks like it will, even with that, 4 growth gdp, which the president said many times and recently i remember him saying 4, 5, maybe 6 . That kind of gdp number will be challenging to reach. You dont see getting to 4 even . 4 is going to be tough but its not impossible. You know why . Because you need a total change in the attitude of businesses. Theyre going to have to accept the supply side benefits of the tax cut and really produce more productive investments, and one way to do that is to invest in technology and essentially boost what economists call multifactorial productivity. The fomc says even though we get half percent boost in growth, we dont get change in inflation. Even though its stimulative, it does not provoke the fed to aggressively tighten because the rates of progression dont change. Liz were not going to see Much Movement when it comes to higher prices, maybe you see it, if we dont have wage growth. She was very clear. Were not really seeing, that and this has stretched out more in this transitory word. It means temporary. This has not been temporary. Wages have not ballooned higher like many people expected or would like to see them do. Whats going to stimulate that . Well, she did point out that in previous years, what economists might call the output gap was big enough that it was understandable that wages werent responding. Now were at an advanced point in the recovery and you would expect with the tightness of the labor market and anecdotally we hear that from so many business people, its hard to find good candidates, you expect to find good wage growth. If we dont see accelerating wage growth, then there is something going on that i believe economists dont fully understand. In 2018, is going to be a key year to evaluate whether we understand the way the economy is working in terms of wages and inflation or not. Liz bill, we got one more question here, and i really was interested to hear what one person, during the janet yellen News Conference, asked of her they would be so interested to hear, im sure President Trump would disagree, but this person asked, do you foresee this is not exactly the right time to be cutting taxes when the economy is actually doing better . I think the right answer to that question was this is exactly the right time to cut taxes if we need to boost the income of those people who have been left behind. Thats what President Trump is trying to say. A lot of the job growth is low wage sectors and paying extraordinarily high taxes under the old tax key and the change to the tax plan, the low wage income earners are able to keep more wages. Its exactly the right time and the proof of the putting is the fed has not raised inflation forecast, and if we can boost productivity, well get real wage increases. Thats the generic idea behind the tax reform as opposed to tax stimulus. Liz were calling you lockheart and lee, thank you so much for translating this for all of the viewers, and we want to let people know right now on capitol hill, the house members of the committee that are deciding this tax plan and what it will look like, there is an agreement along with the senate group there, the senate committee, are meeting right now. Lets go back to the Federal Reserve where janet yellen just wrapped that big press conference, her last one ever, fox business adam shapiro in there for the whole thing. We put it to the side when President Trump was speaking. What did janet yellen say during that time that caught your eyes and ears. Reporter one of the questions was a followup, you asked it, which caught your attention on was it the right time to cut taxes . She said thats up to the administration as well as congress. She was asked a question on the things that keep her awake at night, this is the exact quote, im personally concerned about the u. S. Debt situation and the addition to the debt is a concern for me. That was in reference to what she expects to happen with the tax reform bill going through, that it will add to the national debt, and that is of concern to her. The other questions that were being asked. Several questions about the cryptocurrencies and digital currencies, and she said now is not the time. Theres no need for the Federal Reserve to have a digital currency, but were questions about the remarkable rise in the price of bitcoin and the u. S. Economy and Financial System have any exposure to bitcoin, what people call the bitcoin bubble. Heres how she responded. I still see the Financial Stability risks from it as limited. Often, risks threatening Financial Stability arise when theres exposure of the Banking System to fluctuating asset valuations, and i really dont see any significant exposure of our Core Financial institutions to threats from bitcoin. Reporter liz, the reason i asked her about bitcoin, potential underestimating by the fed of Counterparty Exposure to whatever is going on with the cryptocurrency, grew out of what happened what we remember from 20072008. Ben bernanke in 2007 actually said that the contagion from subprime mortgages and the meltdown taking place would not impact the Housing Market and would not impact negatively the u. S. Economy. Oops the question we were asking about bitcoin, does the fed need to be more aggressive, and the chair talked about the fact they have a committee since the crisis that looks for those kind of exposure issues and whether the banks are exposed. Shes trying to reassure everybody that no, it doesnt pose a threat to Financial Stability. Liz and she also said this, which was reassuring, she does not see the chances of a recession as very high at all. We have had enough of a recession since 2009. Certainly very happy for that. Adam, thank you very much. And by the way, we want to take you right now to the senate. This is tom bartel, the chief of staff of the joint committee on taxation right now speaking in a public forum where they are allowed to debate tax reform. Of course, hoping to get it done this week and hold the final vote next week. President trump just saying minutes ago right here it will be a huge Christmas Present to the American People, and he is certainly hoping to pull up one of the biggest feats on election history. Im sorry, this is doug jones, doug jones, okay. Are we going to listen here . All right. Lets go to charlie gasparino. Im so sorry for a little bit of confusion, a very busy day. Charlie political views are never ruffled. You are always on target. You always look great, you are always smiling, your hair is perfect, and then you got me. Liz i got you. I want first your opinion what the president said about tax reform, and he had this parade of middleclass families, all of whom were giving testament to the fact they anticipate things will be much better after the tax bill. I will say this, middleclass people are going to get a small tax cut under this bill because they dont pay a lot in federal income taxes. Middleclass people in new york who are not middle class in some parts of the country because they make 200,000 a year with a family of four, new york, california, highcost areas, are going to get hosed by this plan, and their hosing is going to pay for a Corporate Tax cut that is going to take it to 24 . Liz no, 21. 21. I am in favor of Corporate Tax reform. Theres a tax increase thats paying for that, thats i dont think very good for the country. One other thing we should point out before i get to whats going on with doug jones, if you are donald trump and worried about impeachment. You get impeached by the house, theres a good chance the republicans can lose the house next year, and in the places where they will lose it is in these blue states where republicans do get nominated like peter king from long island. Darrell issa from california, those seats are in jeopardy and could cause the republicans to lose the house. If they lose the house, donald trump is likely to get impeached. A little gamesmanship here. The other issue is doug jones winning the hotly contested alabama seat over roy moore. Republicans try to look on the good side of this. Roy moore was a very bad candidate aside from the sex issues that came up. This is the guy that defied court orders for years as the alabama head of the Alabama Court system, but i think people are underestimating how much damage this could do to the president s agenda going forward. We should point out that he takes office in january, theyre looking to complete tax reform now. You dont want him voting on tax reform now, the leverage is narrow. 50 50. Republicans have two more seats than the democrats with this, and heres where you see it could really impact on legislation, including trumps legislative agenda. Possibly a bigger infrastructure plan, which trump might like but a lot of republicans dont like. Probably immigration is going to be an issue, border enforcement. Will there be a wall now that you have another democrat in the senate . You know, the numbers given how many republicans dont like the notion of building a wall dont really add up that much. And also, completely off the table now, if it was ever going to be back on the table is health care reform. You definitely have another democrat in there voting against any sort of repeal and replace of obamacare. So this is going to have some impact. It better rush to get the tax cuts done, you know, even if it is a lousy plan because theyre not you know, if he gets in there, its going to be difficult. Liz we gotta go soon, but there were multiple middleclass families who got up there. You had a minister and his wife and children, you had another couple, and every single one of them was saying that they will see some real help here, and even the top rate is going to come down to 37 . Liz, its simple numbers, i dont know what theyre thinking, maybe theyll get Child Tax Credits and some of the stuff, but when you dont pay a lot of federal income tax and you get a tax cut, its marginal. Its not a lot of money. Its just the bottom line. Average middle class, working class people which i come from do not pay bigtime federal income taxes. They pay where they where they pay is in the payroll tax, thats not touched here. The reason theyre lowering the top rate marginally is because people like peter king are saying listen, you are screwing the middle class families in new york because youre eliminating the salt deduction, and also other crazy stuff as you know, carried interest liz wasnt even mentioned for billionaires, wasnt even mentioned. And the private equity business. This is a mess and maybe better than nothing. The markets like the lower Corporate Tax rate for a lot of reasons. There will be stock buybacks. Liz we got to get to nicole. Something happening with the markets. You think there is a lot of plant equipments with the plan . They have a fiduciary responsibility to shareholders not employees. Liz charlie, thank you very much. Weve lost about 60 points, 70 points of earlier gains on the dow industrials. You could call that sell on the news. S p just turned negative, straddling the flat line at the moment. Right to nicole petallides, you had janet yellen hiking rates. Congress making progress on tax reform. All of this affecting stocks in a rather interesting way . Reporter interesting, we moved to the highs of the day at 160 point. Selling off. You get the tax plan, theyve come to an agreement. You get the news you get the quarterpoint rate hike that was expected. Coming off the earlier highs, but still records here for the dow and the s p 500 intraday and the gains at the close will be more record closes. Were taking a look at the Broader Market overall doing better. We have the quarterpoint rate hike. Take a look at some of the dow leaders and seen the industrials doing well such as caterpillar and boeing have done well today, Goldman Sachs is a winner. Cocacola, Procter Gamble and 3m, caterpillar, 3. 5 , new high there. Then we continue to follow the story of twentyfirst century fox and disney and leaving folks somewhat confused. Fox has been to the down side, there have been reports that the deal could be done the enterprise value of 60 billion which is short of what some others thought in the 75 billion range. Twentyfirst century fox down 4. 4 , that is the parent of fox business network. Disney higher a quarter of a percent as i toss it back to you. It would not be fox business, fox news and fox sports, it would be others. Liz i believe we were hearing about the Regional Sports networks, in l. A. They do the hockey. They do los angeles kings. Of course, i would know that. Thank you, nicole. Thank you very much. Shes a ranger fan anyways. Were manoamano here. As we watch the markets and your money, this is all about your money, the Federal Reserve, okay, everybody knew this will happen. Raised Interest Rates a quarter of a percent, now at 1. 25 to 1. 5 , thats the rate. But more on the horizon next year yesterday. Phil flynn, our good buddy who sometimes a little crazy, thats not phil, there you go. Threw out this number, should i say what it was . Lets show viewers what he said the other day. Princess got excited here. Heres the news. I think we could do 4 maybe 5 next year. I think the era of liz 5 . The economy all right, im getting excited here. Well go with 4. Bottom line you look at the jobs report, look at whats happening around the world right now. There is something going on in the global economy. No major recessions anywhere in the world right now, and i think the feds falling behind the curve. Liz janet yellen said 3. 3 in 2018. You want to adjust your anticipation and brian nick is sitting here too, hes with nuveen and forget about me. Projections make me feel confident. Three Interest Rate hikes, thats what the fed is saying. They have to play catchup. How many Interest Rate increases did they say we were going to get that we didnt get . I think we get them in the new year. They say 3, i say more. Remember, liz, when they said theres going to be three Interest Rate increases, they didnt take into account the potential for the tax cut deal getting done, so theyre going to raise their growth forecast on that by a couple percentage points. I think that the growth number is going to force them to act more aggressively. Liz brian, what do you think, and whatever your position is, what do you invest in at that point . What do you invest around if we get tax reform and things are starting to look good . I agree with phil, there is a chance we get four rate hikes. Hike in march and the fed could be off to the raises once a quarter assuming nothing knocks them off their path. Its interesting, the fed did revise up the 2018 growth forecast. And janet yellen said that was based partially on assumptions about the impact of tax reform. Lowered unemployment target for 2018 and 19, but didnt revise up inflation and havent revised up the long range of growth. I dont think that is incongruent with liz okay, okay, i get, it phils right, fine. The liz if we get the tax reform, plan, brian, people have more money their pockets, two out of five families say i will do Home Renovations. Why are they showing lowes and home depot, theyre moving higher, anticipation. Their anticipates. What what is missed there alt all comes in in the first two years. Well get stimulus and that will enure to the benefit cover supers. Consumers. Liz phil, what about you. What do you think really source here . I think inflation is coming back next year. I think we will see Commodity Prices start to roll a little bit. I think well see higher oil prices. That is not necessarily a bad thing. Even if we raise Interest Rates four times, were still not back to a normal Interest Rates. They will still be historically low. Well have a booming economy next year. Just enjoy. Liz enjoy the fireworks, force. This is the 85th record since election day for the dow jones industrials. A gain of 90 points. [closing bell rings] you can not deny when you look at numbers, since election day, record after record, it is trump effect in play. That will do it for the claman countdown. I will see you tomorrow. Please be there. Melissa four in a row, the dow smashing records for the fourth straight day though it had been up 160 points at high. S p 500 printing negative. All major averages in positive territory for the month. Well take it. Im melissa francis. David we will. Well take tax cuts if we can get them too. Im david asman. Were glad youre here with us. This is after the bell. We have a very busy hour. A lot going on. First stocks getting boost on high hopes for tax reform, now entering final stretch on capitol hill. Congressional leaders agree to key details on the plan. We heard from the president speaking at white house giving his closing
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