This will move the market certainly. And in a crash test, it determines which cars are safe for you and your family. T tys out today so simon is my partner. Hi, simon. This is a historic day for the fed and we have key coverage up on every aspect. Diane olick on mortgage rates. Kate rogers on what it means for Small Business lending, Kayla Tausche and Steve Liesman on whether it really marks the end of fed bond buying. Lets start with our senior economics editor, Steve Liesman. Two years later, the fed set to end the bond purchases or quantitative easing that launched in the wake of the financial crisis. Now it stands at 4. 4 trillion. That compares to under a trillion before the crisis began and the plan is to keep it there for at least quite some time and the result is that just because qe3 is ending doesnt mean the effects are going away. The fed has said its going to hold onto the Balance Sheet until they start raszing Interest Rates. Thats not expected until the summer and then it could hold on even longer than that. The new fed Stimulus Program is a big Balance Sheet. Guidance and Interest Rate guidance. When and how much it will hike. Now, all those five, ten, 20, 30year bonds and mortgagebacked securities the fed bought, theyre going to remain on the books and off the market. This should continue to depress long rates and interest investors who want to buy riskfree investments. So the fed at least for now not really going cold turkey. As bonds mature, the fed goes back into the mark and replaces those bonds to keep the Balance Sheet level, at least until it decides it wants to wind down. To be sure, some have argued the 4 ppt 4 trill upstock in assets has an effect but the monthly buying has the real effect. The flow plus the stock. Former fed chairman ben bernanke has said, quote, qe works in practice, not in theory. Which is another way of saying we know it worked but not exactly how. Simon . For the moment, thank you very much. As new federal resolve money pouring into bronlds broadly dries up, the banks will be left filling some of that gap. Kayla tausche has some of that. Kayla. Banks both here and abroad, simon, arent backing down from the market. Theyll actually ramp up their sovereign bond buying in the fis of new regulations. Heres why. This year regulators will put in place what theyre ruling safe assets that they can fund in a crisis scenario instead of getting bailed out. No surprise u. S. Treasuries are included in those safe assets so banks here are buying them en masse and those overseas will have to, too, once those are implea menled. So far its been unmistakable. The u. S. Commercial banks seeing their stockpiles growing to 605 billion. Thats a 23 increase just since december when the tarp actually started. Bank Balance Sheets showing similar growth on an individual basis. Citys treasury up since last year. Bang of americas, theres is increasing by 20. Bna treasuries. If you worry there will be fewer buyers of these bonds, prices will go down and yields will rise, some of that might be overstated. There will be many banks that need to buy bonds that will with in the market. Thank you very much. In the meantime breaking news. Fiveyear notes were up. Rick santelli has the details. Rick. Well, simon, it certainly was not a pretty auction. The grade, dminus. They now hit the streets. The yield much higher than where the market was trading. 1. 5, 6, 7. I saw a lot of 155s trades in the one issue market right up to the very end. Average bid over 10 auctions. 274. This one 2. 36. 2. 36 chasing every dollars worth of securities available is the weakest bid to cover since july of 0. Now they were about 748. Dealers took 41. 7 of the auction. But between the pricing and theed by to cover the grade for demand fits, but then again theres issues. Its called the fed statement. Back to you, sue. Okay, rick. That eric you very much. Of course, were on watch for that at 2 00 p. M. Eastern time. Loan rates were supposed to give Small Businesses a big boost. It would seem to be a positive for Small Businesses allowing them to access cash for cheap. Small business lending is steady but not robust. According to the Small Business legislation, lending for 2014 is at 19 billion. Now that is up from the 17 bill in 2014, dow slightly from 2011. Small companies are turning to alternative lenders. They have higher Interest Rates, easier credit standards and shorter terms. They say post lending standards are still too tight. They find that only about 2 citing financing as a top business problem and ham of these Small Business owners flat out saying they do not want a loan right now because loan rates are are not triggering the growth in spending that would promise a good cash flow on business investments. Separately, a pepperdine Capital Index survey finds about 42 of the Small Businesses say the current environmental is holding them back from growing. While Interest Rates may be a small factor, they dont mean that much to main street. They are what factor more into decisions to hire, raise wages and actually invest. So while all eyes are going to be on janet yellen, any clue as to when shes going to change Interest Rates, many are not going to care. Thank you very much. Thank you. Housing now. Part of the feds plan to keep Interest Rates low was to help revive the housing market. Is that plan really helping home openers and the programs ending. Diana olick is next. Hi, diana. There was one fascinating insight in this weeks report from the Mortgage Bankers relating to the fed. Ill get to to na a second. Fir first lets look at refis. They soord two weeks ago when the 30year fix fell below 4 . Applications to purchase a home down yet again. 5 week to week. Theyve been down for three straight weeks and are now at the Second Lowest level since 1995. For buyers, rate is no longer the issue. Its higher home prices and still tight credit. Now to that fascinating factoid i was talking about. The Mortgage Bankers note thad the big jump in refis we saw two weeks ago was largely for jumbo loans of 130 for the week. Thats loans over 729,000. They dropped back last week when rates went up again. So clearly these rate moves are really moving wealthier buyers in a much bigger way than everywhere else. They may be reluctant to go through the expense of a refi. It recreated the boom in 20112 through 2013. That effect is largely over and everyone is waiting to see what happens to rates tomorrow. Very volatile after the fomc. Thank you very much. Our question today is did the feds Bond Buying Program work. We want you to weigh in. As you vote, ron insana will talk about whether or not he thinks it worked. What do you think, ron . Without a doubt. In each case the feds qe program 1, 2, 3, the economy continued to stabilize and grow. Things were more affordable. Banks, businesses were able to deleverage their value sheets. Except for what both kate and diana talked about. The lending standards are offsetting the impact of the low rates. What about the fact that they kept rates for too long a period of time, that perhaps the core part of the economy is healthy enough or was to withdraw some of that stimulus . Sfwhoo we had the taper tan item last year. I think if you look globally. Deflation and this is the view of Larry Summers and a variety of other economists who are following this quite closely, theres a global risk and it could be important here again. Its not current in the United States but the fed has to watch this. They cant make a 137style mistake where they raise rates and have to try to do something if the economy weakens down the road. What are you expecting from miss yellen from this afternoon. What would you like to see . They have to wind down qe. I think at this juncture its not that big of a deal. There are other things that could stimulate monetary velocity, but they will leave the considerable time language in. I dont think theyll suggest well get rates higher, sooner rather than later. I think theyre lower for longer. And was reported in the journal yesterday, if qe is kept in as a tool, even though the market responded to that yesterday, i think they may start to talk about how the fed would use it in the future. Stay with us while we lock in the vote right now. I would like to get your reaction because im surprised by the results. Did the feds Bond Buying Program help the economy . 60 said no. 40 said yes. Its making really wild claims about what the feds mollty policies will do. Spikes in Interest Rates, stock market crashes. None of which, by the way, weve gotten over the last five years. People who have been bashing the fed have been dead wrong this entire period of time and yet it still resonates with people because its perceived its helped out bankers and businesses more than individuals. So its a psychological disconnect here but theres no doubt in my mind the fed did the right thing and continues to do so. Ron, good to see you as always. You too. Lets go to don. This is following a dow jones report that theyre preparing bids possibly for the company. Bids include names like apollo, heldman and freeman and kkr with the first round of bids due today. Remember back on august 19th, petsmart had looked at strategic options. Its worth noting that the activist is the top shareholder. Back over to you. Thank you. Lets change gears. For decades crash test dummies have made tests. Big news for the dummies. Will it make it, phil . Thats the hope. America has changed but the crash test dummies have not until now. Wait till you see what the new crash test dummies look like and what it might mean for saving your life whelp power lunch returns. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. [ female announcer ] we love our smartphones. And now telcos using hp Big Data Solutions are feeling the love, too. By offering things like onthespot data upgrades an idea that reduced overcharge complaints by 98 . No matter how fast your Business Needs to adapt, if hp Big Data Solutions can keep wireless customers smiling, imagine what they can do for yours. Make it matter. Alibaba. Its trading low with a 118 price target. Facebook stock continues to fall after it projected a slowdown in Revenue Growth this quarter and announced a dramatic increase in spending for next year. And ups predicting record holiday deliveries. As many as 14 million packages will be shipping on monday before christmas. And i will be one of those shipping, simon. Thank you very much. Were not counts just down to the fed. We have 56 days until christmas. Theyre having me read this story because it panics me con pleatsly. Courtney reagan is with me and she has the entire story with us. You think youre panicked. Ive got a lot to do. But in truth, the holiday forecast and surveys are kind of split down the middle to whether americans will want to spend more or less this season over last year. Alex partners forecast a holiday sales increase but below the tenyear average and consumers told twc and amex they plan to spend less than last year. However others point to a stronger season than last year. But consumers also tell deloitte theyre not all that optimistic about the economy. Gas prices have been lower year over year for 107 straight days. The Unemployment Rate is it. And while consumers say theyll spend a decent amount more this holiday season, at least thats what they told deloitte. At the same time theyre not feeling so good about the economy. So according to the dloit survey of 5,000 consumers, by the way, 29 think the economy is still in a recession. That is a slight downtick from the answer last year. But whats more, 11 thinks the economy is back into a recession. Thats a slight uptick from last year. And though they did double, really its a small group. Only 8 say the economy is healthy. Thats not a perspective they want to hear about. It does not. I bet we see the discounting starting very, very early the not already. Simon, back to you. Big news to the auto industry. Chrysler talking of spinning off ferrari. Phil lebeau is behind the wheel with a stallion on it. This someone of the moves that chrysler is hoping to make about 4 billion. Heres what were going to see. 10 of the ipo will be auctioned off to the public. That goes to the public. Another 90 will go to Fiat Chrysler shareholders. Its estimated the value will come in somewhere between 6 billion and 7 billion dollars. On a Conference Call heres with Sergio Marchionne said. We need to get off our butts and do it quickly because tim path on earnings is substantial. Simon, look for the road show probably to start next month. Thats how quickly hes talking. What about the crash test dummies, phil . Well, if youre somebody whos a little largerer like me, this is going to be something you take note of. If you look at the way they have changed, they havent changed since 1980. The old one, the standard, 172 pounds, 59 inches. The heavier prototype which has been developed by a company in southeastern miz, 271 pounds, 62. Thats more realistic. Obese passengers are more likely to die in a car crash. The statistics show that. 35 of the adults are considering obese. Bottom line, well see these kind of crash test dummies in the future. An extra 100 pounds is a lot of momentum. Thank you. The antares rocket lifted off at 3 22 p. M. Eastern time from virginia but it exploded seconds later. Orbital sciences, the maker of that product, their shares dropped sharply. Last check, down 15 . This launch was part of a 1. 9 billion contract that orbital has with nasa to supply cargo to the International Space station. Plus, happening now, another rocket launch. This time its happened in cape canaveral, florida. Theyre launching a fwhun with a gps sight. An at lack 5 rocket. Jane wells is here as well. 50 seconds to go. This is a boeing gps satellite thats going to be launching just hours after this explosion. We dont know what caused it up in georgia, proof that it does go on. This at lack 5 rocket is different than the antares rocket that Orbital Sciences used. It is its own rocket. And its unmanned as was the other one. Yes. This is not related to the space station but the interesting thing about this atlas 5 rocket you see here is this will be the rocket boeing would use if it wins the eventual contract to shuttle astronauts on a manned mission. Here we go. Its about to take off. Five, four, three we have igniti ignition, two, and liftoff of the launch of the 50 rocket. At a certain point last night it was 15 seconds after that particular launch when everything went wrong with Orbital Sciences. Stocks of Orbital Sciences and its merger partner atk were halted earlier. I was listening to a Conference Call with the ceo. He said with that merger, he doesnt see any reason that its not going to continue to go through. It may be delayed. They were hoping to close that 5 million merger. It could be into next year. What he said as were watching the successful launch right now of a boeing rocket on a satellite 50. They say its too early to tell. Theyre beginning the investigation. Fortunately there was not major damage to the launchpad. Most of what happened was covered by insurance. He did make this interesting comment. The investigation may or may not lead to problems with Orbital Sciences aj26 main engine, main propulsion system. It may be some other proponent . Early clues suggested it may be that. He said they had other challenges. Thats an old Russian Rocket engine that has been refurbished. They dont know if thats the problem. They have been looking into a potential replacement for it. If the investigation leads to the aj26, they me lead up to that. We checked orbitals shares, theyre down 15 . Im sure theyre watching this particular and so far successful launch very, very closely. How many times does boeing intend to use this particular rocket to take transport into space or satellites into space, do we know yet . Theyve been using the atlas 5 rocket for years. Elon musk at spacex would like to get a piece of the military launch they do there. Hates been used many times. It, too, has a russian engine which is part of the controversy. When we started having sanctions against the russian situation in ukraine, they were threatened perhaps to make no more of these engines and theyve been looking for an alternative for it. But at the moment theyre still using it. Bowing is down a quarter of a percent on the trading session. Lockheed martin is up on the trading day by a third. You mentioned elon musk. Has he commented or made any comment on what happened last night or whats going on right now . You know, elon musk spacex and Orbital Sciences are the only two contractors currently given billions of dollars to shuttle cargo. Two years ago he gave an interview with wired magazine where he called this rocket not this rocket, the antares rocket, quote, a joke. He said it was like a punch line from a joke because they were using russian technology. Here it is. It uses Russian Rocket engines that were made in the 60s. I dont mea