Do. Whether it will continue raising Interest Rates throughout the year. We have a lot to digest. Yale economic professor, robert schiller, he is the guy. He is going to break it all down for us. Nancy pelosi is at it again. She cant help herself. She is weighing in on border security. This is her proposal. That the federal government mow the grass. You know, mow the lawn along the southern border to keep Illegal Immigrants from sneaking in. No need for a wall. No need for tighter border security. Just mow the grass. Were on that. And her increasingly troublesome or the increasing amount of trouble she is bringing for the Democratic Party. Before we get to her, were going right down to the new york stock exchange. Gerri willis is there. Nice to seat market resurrecting itself shall we say after what we saw in the last hour of trading yesterday. This this is so nice. Yesterday we were making a turn going down right this moment. Were up 222 points on the dow. S p up half a percent there. Nasdaq doing very well indeed as well. Get you to the dow winners here, just an interesting list of stocks. United technologies, this is industrials. This is about the economy. The company is talking about it. Seeing stories of a possible break up of parts of that Aircraft Parts maker. The stock is up handily. General electric, the stock is up off the floor. Set an alltime low, theyre up about 3 i believe. Lets see, yes. 2 , that is. And finally caterpillar, that is last years big dow winner, the strongest stock on the dow last year, up additional 2 , 4 now as well. But the big story all day, that is because we see crude up about 2 at 62. 77 a barrel, energy doing really well. Look at chesapeake here, 20 gain in the stock. Why, they had a great earnings report. The important thing they said here, the production isnt continuing to rise without additional spending. That is key for investors. They love that others playing into the trend. Southwestern energy and baker hughes, general electric, announcing they will not spin two thirds of that company they dont own. That will help both of stocks. Treasurys, coming in at 2. 928 yield, call it 2. 93. That is good news for investors down here. Theyre keeping an incredible watch on that. 2 45, talking for two minutes, trish, back to you. Trish it will be interesting hour. Gerri, keep checking in. Joining meed tore and publisher of the gartman letter, dennis gartman. Youve been optimistic about this market. Are you changing your tune with the rally like today . Not really, trish. I think the market saw the high back a month ago or so. Look at markets, major does industrialized nations the what bothers me the rallies come in on very light volume. Breaks are coming in on much greater volume. That is very disturbing to me. Im bullish about the economy. I think recession is a long way into the future. The fed will be tightening Monetary Policy all year long but at this point in the cycle it is not atypical to move money out of Capital Markets into plant and labor and i think that is what is happening. Trish what does that mean for the market . Were at 25,000 now. Have a better economy. People making different decisions. You could see i imagine a rotation from equities to fixed income as Interest Rates get more attractive. Yes. Trish where does that leave the dow and s p come yearend in your view . I think it will be very difficult for the dow or s p rally more than two or 3 from the current levels. On balance they will probably be lower than where they are right now. Will they be dramatically lower . I think they to down five or 7 from here. I think the highs have been seen, a month ago in the u. S. Market. Almost two months ago in the international markets. So i think the proper places to have cash on hand. Not terribly heavily invested. If youre going to be invested. Plenty of places yield etfs own 8, 10 , i look at opening those things aggressively at this point. Trish the fed said theyre committed to raising rates. Simultaneously, in yesterdays report, a lot of data i report were kind of old. Yes. Trish their concern whether or not tax cuts, Corporate Tax cuts are actually going to be meaningful in terms of the fundamentals in this economy and they question whether or not well get an increase in wages. By questioning those two things theyre basically leaving themselves some room, dennis, to say, maybe scale back on some of those rate cuts. I dont know as they will though because recent data and again they have sort of backwardslooking data, recent data suggests we are in a better economic environment. So where do you think they ultimately come out on this . I think that the fed chairman, the fed governors and Federal Reserve regional president s should spend time wandering about the country to see what is going on. No question about it, everywhere you go, helpwanted signs are up everywhere. Even here in southeast virginia, where we had been very slow for past several years because of declining spending on military, which is now beginning to turn the other direction. The demand for labor is intense every place. Wages are in fact going higher. They will continue to move higher over course of next year. Trish good. Im of the very firm belief fed will tighten at least four times this year. Im really of the belief, instead of the fed moving by 25 basis points it wouldnt surprise me later in the year they move one of those times by 50. Trish wow, oh, my goodness that is much. 50 basis points . No, not really. Not at all. I have been around for a long time. I can remember when the fed moved Interest Rates from one meeting to the next by 200 basis points. I can remember three months period of time when the fed funds moved by 8 hupp basis points. Trish youre going bab to the 70s. Pardon . Trish i mean 800 basis points, was that in the 70s . That was in 80s, very early 80s. It happened twice in the early 1980s and moved into back out of back into recession. We had several periods of time Interest Rates moved by 8 hupp points. Trish dennis i like talking to you especially when you make me feel young. I make a lot of people feel young these days. Trish all right. Turning to politics, President Trump making good on his Campaign Promise to build a wall along the mexican border. The federal government begun process replacing a border wall along california. Nancy pelosi says a wall is terrible idea. Here is what she thinks will secure our borders. You have got to watch this. Lets talk about where a more serious structure might be necessary. Were mowing the grass so that people cant be smuggled through the grass. Trish right. Whatever it takes. Just mow the lawn. Mow the grass. Well, anyway, i think her thinking here is, and there could be something to this, right . You have very tall grass people can hide in it. It if you just mow it make maybe you can stop some of illegal crossings. Joining me with the future of the Democratic Party as long as nancy pelosi is there, and donald trump in the white house, bullseye brief publisher adam johnson. You have been very bullish on this market. You have been very bullish on this economy and you made the point over and over again, adam, because of the policies coming from this administration, the economic policies. With that in mind, where does that leave nancy pelosi and the dems . You know, nancy pelosi called the tax cuts armageddon, good reason, because they are for the democrats. If you are voting with your pocketbook youre certainly not putting a democrat in office come november. This is incredibly powerful trend happening. Think about it, trish, average american makes 55,000, getting a 2,000 raise because of tax cuts. All the socalled crumbs she is talking about, 1000dollar onetime bonuses to people that adds another thousand bucks, that is 3,000, that is a 6 raise this year. People will spend the money. They will feel great. I think they also will vote gop. Trish isnt that remarkable . Youre looking at a president having these listening sessions right now with the victims of gun violence. Right. Trish talking about putting in an age limit on guns. Talking about reforming our immigration system and perhaps providing citizenship to some people that are here illegally. Right. Trish he ising doing some interesting things. He is talking about he is crossing the lines. Trish exactly. America great again. Appealing, yesterday meeting with the likes of Richard Trumka and other union heads. Sure. Trish to show them American Workers do matter in this economy and they do need to come first. I guess it face fascinating, i dont know what will be left for nancy pelosi and her colleagues. Right. Trish because he is increasingly encroaching on their traditional territory, adam. Im waiting for him, he already sort of opened the door to put together a deal, says to pelosi, or schumer, give me funding for your walls i which of gill your daca kids and dreamers pathway to citizenship. He already hinted at that. That is kind of crossing aisle we used to see certainly under ronald reagan. I hate to give him credit but even bill clinton. Trish welfare reform, Newt Gingrich had a big hand in that fayes. Trish welfare reform happened under bill clinton. Right. Usually you dont think of coming from a democrat. Here you have a republican, donald trump, actually talking about gun control, getting rid of bump stocks. Striking a deal, perhaps he as i said with democrats on border wall versus daca. This is what president s do. They lead and get people to come in the middle. Donald trump author of, the art of the deal, i think well start seeing donald trump embrace that. I think he is growing into the office. Look, he was kind of belligerent early on, everybody was. It was great moment. Came storming in, will drain the swamp. He is realizing you have to work with everybody. I think were seeing a new side of donald trump. I will not call him a diplomat. He is attempting diplomatic gestures. Trish americans dont want a diplomat. They want somebody to go in and be a change agent. To go in and shake the place up. The more he can get done in this kind of environment the more people will be excited. He is bringing the base along. He sure is. Trish he is going to nancy, i will take some of your business from you because youre not there for them. Im literal 50 yards from trump tower. Every time i come on the show to join you i walk past trump tower, every day there are not just dozens, there are hundreds of people out there in front of trump tower. Theyre not protesting. Theyre having their pictures taken. Theyre smiling out there to be in front of trump tower. Such a different narrative you see it in person versus what you read in the New York Times or Washington Post or cnbc or cnn. Such a different reality. As donald trump grows into the office reaches out to democrats you will see a lot of progress. Youre absolutely right. That is armageddon for nancy pelosi. The last thing she wants to see is success. Trish or higher stock market. 25 on the dow, up 227 points. As always our thanks to mr. Adam johnson. Thank you, trish. Trish give the newsletter a plug. Dennis got one. Bullseye brief. I have three new ideas coming out on sunday morning, bullseye brief. Com. I never usually do this, digging into one theme, 5g. It is so powerful. Im excited about it. Trish you made your readers a lot of money thus far. Making them some money past few years. Trish sounds good. Thanks, trish. Trish senator Bernie Sanders is blaming Hillary Clinton for not doing enough to stop the russians from meddling in our election. Wait a second, wasnt the whole thing about the democrats blaming, blame game wasnt that getting old with voters . Well debate that next. Were seeing again this big rally right now, off the highs of the session but still up 231 points. Im being told were going to the white house briefing. Lets do it right now. That is what we endeavor to do at council of Economic Advisors. What we endeavor to do with the report. Briefed the president on it 11 30 at oval office. I encourage you to read it. It is scintillating read. The economic report has eight chapters. The first chapters is economic outlook, where we project our policies create 3 growth rate next 10 years. Real gdp will be 2 there will dollars higher in in 2028 because of President Trumps policies. We go into labor regulation, infrastructure policies, enhancing global trade and innovative policies or americas health. They all basically go into big literature that goes into how policies affect our Economic Growth. We go from 2. 2 baseline growth and get to 3 Economic Growth doing what the academic literature says about economic policies. Were come up with measures of our nations problems that help set priorities and quantify how bad our problems are. We have two attempts at economic report to do that. One we have chapter on cybersecurity where we did a lot of original research, cyber theft is costing us 100 billion a year right now in the u. S. In 2016. The second thing we did was look at the opioid crisis. That is costing us 500 billion a year to help set priorities. That is what the economic report says. I have a few minutes for questions. Anyone who wants to reach out to us, come over to the cea office and ask me questions there. I will start with you in the back. Thank you, kevin. Two questions for you. One on the dollar. One on the stock market. Were seeing tremendous amount of stock volatility over month ago. Do you think that volatility has impact on the real economy beyond wall street . Stock market volatility is something to be expected. Its a regular thing in the stock market. It tend to go up when the market goes up as it has in response to our policies. I dont think it is anything unusual or people to think about. Question up here. Reporter followup on the dollar, sir . Secretary mnuchin spoken a lot about the dollar. The dollar policy has not changed. Reporter whether the United States has a strong dollar policy. There are comments that the United States want secretary mnuchin is in charge about communications of the dollar policy. Reporter economic policies of this president may lead to greater inflation . Thats right. That is something people are concerned about. Inflation data caused some pause or concern for markets. Our views, most of our policies will create growth for the economy on supply side. When the supply side growth comes, that is good for inflation, increased supply, puts downward pressure on prices. We think we can get Economic Growth forecast without pickup in inflation. At cea when we model this we get forward Interest Rates about what the fed Forward Guidance is right now. Reporter cut taxes to stoke, and that is the concern, that that will stoke higher core inflation. Thanks for the question. If you cut the marginal tax rate on investment, what happens you get more Capital Spending that increases supply. If we had a big cash for Clunkers Program that would increase demand and cause inflation. Question up front. Reporter question on stock market as an indicator. The president has often pointed to rising stock market as evidence of success of his economic policies and strength of the economy. If the stock market goes down should we conclude the reverse . Should we conclude the president s economic policies are failing and economy is not healthy . The stock market is great forwardlooking indicator because value of the curve is the market present assessments of future earnings after tax or free cash flow. So smoothing through the ups and downs the market is great indicator. There will big up days and down days. Aye short term random walker, there is literature, the best guess what the market will do tomorrow, flip a cain, that will tell you answer. Economic policy matters. At this point the stock market is up 35 since the president was elected. I could run the latest numbers. That is pretty consistent what you expect with ault positive policy changes we made. Cutting the statutory tax rate from 35 to 21 . In the present value of firm earnings, one minus tax rate. Goes from. 65, to. 79, that means you should expect equity markets go up. Equity markets go up and down. That is the nature of a business. Reporter if we see a bear market come about, we should conclude there are fundamental problems with the economy . Sure if there is a bear market sustains that would likely happen because there is a lot of bad news about Earnings Growth and state of the economy. So the stock market is reasonable indicator of the current state of the economy. It has been going up a lot because of optimism about the president s policies. I go to the middle. Come back to the front row. I am sorry dont still know everybodys names. Reporter that is all right. Forecast for the u. S. Economy, net positive, net negative, if the u. S. Is to pull out of the north american freetrade agreement . At cea we done a heck of lot of analysis to guide the president s thinking on trade. A lot of decisions are coming up. Our job is to project the pluses an minuses of each the moves considered. That analysis is confidential. Shared with the president. It could be foiad in fullness of time but i cant comment. Reporter would it be a good thing for the u. S. Economy, if us said for example, nafta . I would point you to the trade chapter of the economic report of president. We have extensive discussion on trade. What surprised me as economy as i dug into the details how right the president is about trade in the following sense our trade deals are asymetric. We charge pretty much no tariff at all on imports into the u. S. But a lot of our trading partners have high tariffs and high nontariff barriers. Look at u. S. Sales of ought yes, sir into korea, there are a lot of nontariff barriers make it so u. S. Firms cant sell there. If economists were to sit down write a trade deal, it would be two or three lines. Lets have free trade. Our trade deals are thousands of pages long. Those thousands of pages are negotiated by feckless negotiators