First off, on the views of the economy, as we heard from janet yellen at that time at the meeting in june, members thought that the economy would bounce back from the harsh winter in the tough First Quarter. Thermation received since Committee Meeting in april again, the Economic Activities rebounding from the decline in the First Quarter of the year. There was no great debate around the table, according to the minutes, about whether the fed might be behind the curve with regard to tightening Monetary Policy. Thatinutes go on to say participants generally supported the committees current guidance about the likely path of asset purchases and its approach to determining the timing of the first increase in the federal funds rate and the path of the policy rate thereafter. There was debate among members specifically over whether the Forward Guidance would suggest that the greater likelihood the economy would be slowing or that it would be speeding up and they might have to respond accordingly. There was a debate over that. Specifically with regard to the taper, they discussed that the economy was growing at a Strong Enough case that bond buying would finish off by the end of the year, is expected. The evening up to the point where participants generally agreed, according to the minutes, that the final tapering would be 15 billion, combining 10 billion and 5 billion, increments10 billion. The final move, they suggested, would be 15 alien dollars. The discussion of 15 billion. The discussion of policy, they discussed the tools at their disposal and most agreed that the rate of excess reserves should play a central role during the normalization process. It was generally agreed that overnight repurchase agreement facilities within interestrate set below the interest on excess reserve rate could play a useful supporting role in helping to firm the floor under money market interest rates. They discussed what the spread should be. They are getting into real details with the staff about how they would execute this exit strategy. The part about whether or not there would still be a need for discussing a federal funds target in the communications. Participants suggested some of them at least suggested that would be necessary. They also discussed the possibility of other communication tools for example, in addition, participants examine possibilities for changing the population calculation to obtain a more best measure of funding rates and apply lessons from International Efforts to develop improved standards for benchmark interest rates. Mark, a lot of discussion here about those tools at their disposal, how they are going to move forward. One thing they did make clear in the mets, they want to communicate this to the markets earlier rather than later. Expect more later this year. Thanks. Cook, lets quickly get a check of the markets. Julie hyman is standing by. Julie, some reaction today. Some but not huge reaction. Few look at the s p 500 on an intraday basis, it came off by a point or 2 after these comments from the fed. Worst the gains is the you could say of what we had from these minutes. It looks like the readers that, yes, people need to be aware of the raleigh that rates are eventually going to get people need to be aware of the eventuality that rates are eventually going to go out. Stocks are not seeing a Huge Movement by the snapback from the 2data kinds we have seen from the s p and the dow, and we are not making of the 2 days of the clients we have seen, but it seems like it is holding relatively steady after these minutes came out. Julie hyman, thank you so much. Bloomberg economics editor Michael Mckee joins me now on the phone from jackson hole, wyoming. What is your take . I think the reason, mark, we do not see any Real Movement in the markets is this is all about process rather than timing, and what investors want to know now is when is the fed going to move. They do not give any clues to that am other than to let us know that they will probably wrap this up in october and not do an extra taper of a billion dollars in the month of december. The real question coming up is how they are going to exit, when they do, and we did not get details but as peter noted, they confirmed what most people already suspected, that their primary tool is going to be interest on excess reserves. The fed will lend out treasury well taketo treasury securities from people in the markets and the markets and lend them cash and get money off their Balance Sheets for the time being. Struck in thewas minutes that fed officials did express concern about low volatility in equity currency and fixed income markets, something that we have been discussing on bloomberg tv. A lot of people on the street say theyre concerned about low levels of volatility. It is interesting because that is something that janet yellen talked about in her last speech could there has been an issue in the fed of how much attention they paid to market stability am a financial risks, when they make a Monetary Policy decisions. They are leading the markets know that they are concerned, and that may be part of the strategy. They do not want to raise adjust rates to head off market bubbles because it is such a blunt tool. This may be part of that. Conversationhe again always goes back to when, again, is the fed going to raise interest rates. Mps sayingme ca probably next year, some saying they could be out farther than that. What is the consensus . What are you hearing in a jackson hole . A lot of people here that what the fed has told us is that sometime in late 2015 will be too late. They will probably have to move it up, and we have seen some members of the wall Street Community moving their forecasts ahead. But you have to remember, these are the minutes of the last meeting, at which we got the last forecast. We already know essentially what they think in terms of timing. These minutes dont give us anything new in that regard, what we will want to see is when janet yellen testifies next week in the Humphrey Hawkins testimony, whether she gives any indication that the fed is thinking the timing might be behind the curve and we will have to wait until september to get the next forecast to see what they think that. In the meantime you have got to Pay Attention to job state. Michael, thank you. We have a lot more on the fed minutes coming up. We will get a take on when the whenay make a ruling and they had to the next fomc meeting on july 30. Antonio percent c, Portfolio Manager at pimco, will join me from california. That is at the bottom of the hour on bottom line. President obama arrives in texas in a few hours. He is facing a growing crisis facing tens of thousands of undocumented children arriving in the united states. Phil mattingly joins me now. An emergency funding request has been made. Is congress willing to give the president nearly 4 billion . Like most things that are sent to capitol hill from the white house, this is not tech weakening a warm embrace from either party. Theres is one thing there is agreement on, both democrats and republicans. This is a major problem and congress is going to have to do something. Senate democrats pledged they would move quickly on the 3. 7 billion emergency funding request from the administration. It is House Republicans that, as always, are the big question. House speaker john weiner held a press conference john boehner held a press conference and said that they need to do something before july. But the large amount of money the not call concerns in conference, something the speaker alluded to. If we dont secure the border, nothing is going to change. Aboutesidents request is continuing to do with the problem. We have got to do something about sealing the border and ending this problem so that we begin to move on with the bigger question of Immigration Reform. Republicans want actual solutions, not just money thrown at the problem. Phil, there has been growing pressure on the president to visit the border. Why isnt he making that stop . It is a great question, one that democrats have been asking publicly. He is going to be so close, why not make a trip down there . The white house says that the president is more than knowing of what is going on at the border and will meet with faith leaders on this issue today. But there was a major optics issue they are dealing with today. We have 4 republican senators including ted cruz and john mccain questioning why the president is making fundraising stops in colorado and texas and wont make a short trip down to the border. On some level the white house feels that they made dispositions include because people are calling on them to change their minds doesnt force them to do that. I dont think you will see any type of secret visit, at least not at this point. Are there any substantive policy changes the administration is seeking along with the emergency funding . This is where the administration is running into problems with people and their own party. There is a 2008 law that right excerpt protection to children coming through central america. Those added Legal Protections are causing problems for an administration that would like to figure out a way to send many of these kids home in a quick fashion. The idea are wary of of putting tens of thousands of children on planes and sending them home. They want fixes now and if those come is a big question. Phil mattingly, thank you. When bottom line continues in a moment, more on the fed minutes. The u. S. Federal reserve saw the economy rebounding but offered no guidance about when it will raise rates. The chief economist at sterne agee joins me from las vegas. Welcome back to bottom line. Good to see you again. Thank for having me. What was your take away . Wasntrtunately, there much to learn from the minutes and it is more about what we didnt see than what we did is he. About theo hear more longerterm fed funds rate. While Committee Members increase their expectation for rates in 2015, we did see a decline in their expectation for the longerterm level, taking us from 4 to 3. 25. I was hoping to see more conversation about that, but not much detail there. I was hoping to see more in terms of the reasoning behind the feds decision to lower their forecast for nearterm growth. Also in the june expectation excuse me, Economic Projections they lowered their forecast for 2014 growth, taking us from the upward round of 3 to just 2. 3 percent. We were hoping to see what the indicators suggested that they needed to do that, but also, why they didnt lower the forecast even further. Remember, against the backdrop of the decline of 3 in the First Quarter, were still going to have to see 3. 5 to 4 growth in the remaining three quarters, meaning it is going to be very difficult to get to that expectation even though the fed has lower this twice. Feds exit strategy, i was discussing this with Michael Mckee, who was on the phone with us. How much concern is there that the strategy will be completed . I think there is a lot of concern and the market was looking or more specifics in terms of timing. We continue to see a discussion that suggests maybe the fed doesnt have a clear idea of how they are going to unwind all of these unprecedented policies that have been in place for years. Essentially, the fed growing their Balance Sheet over 4 trillion, that remain to very big bird in area that the fed is going to have to deal with that remains a very big burden an area that the fed is going to have to deal with. While we hear this discussion where they are suggesting to the market that they are going to have a strategy, it is clear at this point that they dont have a specific strategy in place. Economist at sterne agee is joining us from las vegas. Is it now question of keeping the markets away from speculation on rate hikes or is it, as Michael Mckee told us, about process . It is going to be difficult because on the one hand, as we saw from the june economic projection, the fed is lowering expectations for growth. On the other hand, Committee Members are increasing their expectation for the brevity and timing of the first said rate hike. It will be difficult to clarify the conversation between market between what we are seeing, the lackluster reality, and the hike in next rotation of growth and rates going forward. You put out a note that although job creation has been impressive, it is not leading to wage gains. Our business is looking for lowcost, parts and labor . They certainly are temporary, parttime, lowwage ofor is the vast majority the employment gains that we have been seeing. While topline headlines excuse me, headline job creation has been quite impressive we have seen five consecutive plus 200,000 reports, so i do not want to take away from the gains we have seen, but that hasnt been enough to lead to wage pressures. It has not translated into income growth, which is the precipice to add to the consumers ability to spend in the market place. This is what janet yellen is talking about when she says we cant look at headline job creation, we cant just look at the on employment rate. We have to look at those in the context of a broader measure of labor market conditions, which continue to show very stagnant average hourly earningsl, decades low of the Participation Rate, longterm unemployment levels. We are still not seeing a healthy labor market, certainly not indicative of a nearterm rate hike. It is clearrote, that the feds focus is first and foremost u. S. Labor market, not inflation nor received Financial Market imbalances. If the labor market appears to be healing, why is inflation taking a backseat . When it comes to inflation, the feds concerned about prices comes from the wageprice spiral. When we start to see the labor market improved, employers grow their business and they take on money and they put that work and they take on additional employees and they drawdown that pool of available labor and that begins to translate into wage pressures. That is deflationary spiral that they are concerned about. Right now with 13 million americans actively seeking employment, we are not seeing that translate into wage pressures. While we do see these temporary or transitory price pressures as a result of whether or geopolitical issues, that is not enough to drive Monetary Policy. Well wegoing so are going to take a commercial break could would you mind sticking around for a couple more minutes . I would be happy to. Thank you so much. She will rejoin us when bottom line continues. We are back, talking about the fed with Lindsey Piegza, chief economist at sterne agee. She joins me from las vegas. Thanks so much for staying with me through the commercial break. Signs of increased risktaking reviewed by some the dissidents as an indication some participants as indication that Market Participants were not factoring in sufficient uncertainty about the economy and Monetary Policy. Are investors at this point too complacent about the direction of the economy . Of the certainly is one concerns of the fed and several Committee Members have talked about Financial Market stability. An unofficial third mandate of the fed could but regardless of how complacent the market is, the feds focus will remain on the labor market. That is their concern first and foremost, getting the labor market to a healthier condition, getting americans back to work, making those high wage jobs translate into the income pressure that is needed to get the economy back on track via the consumer. Despite market volatility excuse me, the lack of market volatility, the feds concerned about Financial Market stability, that will take a backseat to labor market conditions. Lindsey, i have to circle back to labor market conditions. Goal of fulls length limit approaching faster than perhaps they anticipated, what are they to do . Again, when we talk about full employment, we are talking about the civilian Unemployment Rate could but we have to take that in the context of the Participation Rate that is still at a 3decade low. It goes back to yellens comments about looking at the labor market through a much broader lens. She is looking at the civilian on limit rate at the backup of a youth Unemployment Rate that is over 12 . But we also looked at the Participation Rate, the share of working people who are actually in the labor force. Last month it was at 62. 8, matching the low of any. 78 there is a matching the low of 1978. There are a lot of people who have left the labor force for one reason or another. That is exactly right, and we are getting a lot of misinformation about the visitation rate, pointing to the fact that we have an aging calculation. The vast majority of the decline in the Participation Rate has been in the age range of 25 to 45, individuals with a significant number of potential income earning years left. Lindsey piegza, chief economist of sterne agee, always good to have you on the broadcast. Thank you so much for having me. Bloomberg is on the markets. Julie hyman joins me now. How are the markets doing . They have pretty much stabilized after the minutes. The read, as mike mckee talked about, is that we are still sort of datadependent and waiting to see what happens next. The s p and dow are remaining steady actually, they have gained a little bit versus earlier. If you look at what individual stocks we are watching, American Airlines is on the list. Those shares are on the rise and are pulling