And, folks, a key part of the estate tax, controversial tax to begin with, being almost totally ignored. Is the irs about to strike back . Well tell you about that one. We certainly will. We start with fed chair janet yellen getting grilled on capitol hill on regulating the banks and also her comments on the economy. Steve liesman, take it away with the highlights. Shes just finishing up testimony now, mandy, on the last question of the hearing that gab at 10 00 a. M. This morning that was supposed to be aboutbac banks but ended up mak news on monetary policy. Chair janet yellen told markets to wake up and get ready because december is a live possibility. What the committee has been expecting is that the economy will continue to grow at a pace thats sufficient to generate further improvements in the labor market and to return inflation to our 2 target over the medium term, and if the incoming information supports that expectation, then our statement indicates that december would be a live possibility, but importantly that weve made no decision about it. So she said no promises, but the market heard rate hike. Twoyear popped, the stocks fell, and the dollar strengthened. I want to play you one more piece of sound from the hearing in which she characterizes the u. S. Economy in a stronger way than i believe she has in the past and talked about the impact of Global Economic developments on the u. S. We take Global Performance into account, and at the moment what we see is a domestic economy that is pretty strong and growing at a solid pace offset by some weakening spilling over to us from the Global Economy. On balance, as we said, we still see the risks to Economic Growth and the labor market is balanced, but the Global Economy has been a drag. And all of that had the effect of hiking yields on the twoyear note. It was up north of 80. Settled back down just a bit. Stocks fell. They were positive on the day, now theyre down about 52 points or so on the dow and the dollar strengthened quite a bit. What you saw is the euro fall through that 109 area into 108 and thats going to be a problem, tyler and mandy, for the Federal Reserve to consider as it talks about raising rates, the dollar strengthens, which ends up having a deflationary or disinflationary impact and moving it further away from the goal. Its a catch22 here, tyler. Currency markets have been moving on that yellen testimony. Hawkish tone. The dollar rallying as you see right there, and there you see it against the yen, the pound, and the euro, where the euro is down more than 1 against the dollar. Still a lot of uncertainty out there. Europe, brazil, biotech, china, some of the bricks in the wall of worry as we like to describe it. What are the new bricks . Dominic chu taking a look. Tyler, again, its interesting here because fed chair janet yellen gave us a whole bunch of new bricks. Theyre not new, weve known they were worries for a while but look at the ones that have been brought to the forefront yet again. First of all, you have what will be u. S. Troops, albeit in a small amount, in syria, heightening the idea of geopolitical risk. The syria equation playing part of the market story as well. You heard janet yellen talking about the u. S. Economy. She says it may be strong, others tend to disagree. Still, the u. S. Economy will be a huge focus and the relative strength. Then the ipo market. A lot of larger ipos are now trading at or below their initial offering price. Perhaps signs of weakness there. And then transportation stocks as well. People are moving stuff around but maybe not as much and not as robust as some would like. Transports a leading indicator, and, of course, mandy, we just talked about the u. S. Dollar and whats happening with currencies. If the dollar strengthens appreciably from here you could see more headwinds for the large multinational u. S. Companies, mandy. Back over to you. Thank you very much for the new bricks there. Do you buy this market or sell it . Joining us are ben willis of Princeton Securities Group and matt tuttle. Thank you for joining us. Ben, were in spitting distance of those record highs. Do you think were looking a little overstretched, at least near term. For near term, yes, its possible we are slightly overbought but it doesnt change my bullish tone. The corrections that will come from an overbought situation are buying opportunities without a doubt. I think the market will, the dow jones, the s p, the nasdaq where we are today will be higher on december 31st. Between here and there will there be a better opportunity to buy . Absolutely. But today was one of those days. Youre seeing the broad markets come off, yet some of the higher beta stocks like the f. A. N. G. Stocks from jim cramers world are putting on a great performance and i think thats whats going to happen in the broad market as well. It will be the broad market, unfortunately, will be driven by a select few stocks. Thats why this is a stock pickers market. Its hard to be bullish on the broad market in that sense but for those people like josh brown looking to beat their portfolio numbers, its going to happen by buying individual stocks that have been sold for the wrong reasons. And a year end rally but maybe narrower leadership. Matt, youre a little more bearish on the market. Is the rate hike on the table feeding into that . The rate hike is definitely feeding into that. It sounds like the fed is trying to get us ready for a december hike, but the way theyve been throwing curve balls this year, who knows. You know, both of our etfs right now are sitting on a decent amount of cash because we do think that near term the market is extremely overbought. We also dont like the fact that Investor Sentiment is at nose bleed levels. So we are looking for an opportunity to get back in here, but we do think that theres going to be a selloff that will present that opportunity for us. Yeah, absolutely. The latest readings showing bullish sentiment increasing, bearish sentiment decreasing. Thank you very much to both of you for your pulse on the market. Lets take a look at whats happening with bonds. We have a news alert in the bond market with twoyear notes up for auction. As we saw the yield hitting its highest since april 2100. Demand isnt very good. I gave it a d. Its a oneoff auction because the debt ceiling issues, jack lew was pretty quick on the trigger to cancel it. Yield at the dutch auction, 0. 824. Looked to me like 82 basis points was trading when the market turned into a oneissue market. Consider this, highest yield in an auction for a twoyear since, lets see, what was it, april of 2010, 3. 01 bid to cover. 10 auction average is 3. 37. Thats the weakest since may, since may of 2010. So april, may, you see what im getting at . Theres a lot in common with the last time we saw yield this high. In indirects at 40 was the weakest since 40 since april of this year and 11 on directs wasnt great but we have seen not great directs on 2year. So a d for the oneoff auction. Maybe many investors apprehensive to be owning something that is unable to be handicapped, meaning the fed. Thank you very much. A lot of people have oks to the estate tax and now there may be a new problem with it. Eamon javers is in washington. This is a story that came to me from a tip from a high ranking swiss banker who asked not to be named but this swiss banker sees this area as the next potential explosion point in the global tax wars between the United States and europe and countries around the world. Its the foreign estate tax. What he said was foreigners generally are just ignoring this law that not many people know actually exists. Take a look at this form i have got here. This is form 706 na. If you were a foreigner and you own u. S. Assets, including shares in american stocks like apple or a condo in miami, real estate throughout the country, if you die, your estate has to paes state taxes on that, but we ran the numbers and looked at it and it turns out not very many people around the world are paying that tax. Just 849 people filed a 2014 nonresident alien Estate Tax Return and they paid a total of 60 million. Now, contrast that to just the amount that foreigners own in u. S. Equities, about 6. 7 trillion in u. S. Equities alone let alone all the real estate and other real assets that foreigners own in the United States. We showed all of those numbers to an expert, and she said substantial amounts of tax are not being paid, and guys, we have alots more detail about this on cnbc. Com. But it raises the question of why this estate foreign estate tax is on the books and if it is on the books why it would appear the United States is not doing much to collect that massive amount of tax. Thank you for joining us. Next up today, new polls on where the Republican Party stands. Clearly theres a lot going on. Many have called it dysfunction, but is it really just democracy at work. Larry kudlow will be joining us. Mandy, im bringing on former Republican NationalCommittee Chairman and mississippi Governor Haley barbour and senator ron johnson from the great state of wisconsin. Weve got a lot to talk about next up on the kudlow report oh, no, no, power lunch. Two minutes away. Please stay with us. Proud of you, son. Ge a manufacturer. Well thats why i dug this out for you. Its your grandpappys hammer and he would have wanted you to have it. It meant a lot to him. Yes, ge makes powerful machines. But ill be writing the code that will allow those machines to share information with each other. Ill be changing the way the world works. interrupting you cant pick it up, can you . Go ahead. He cant lift the hammer. Its okay though youre going to change the world. Awe believe active management can protect capital long term. Active management can tap global insights. Active management can seek to outperform. Thats the power of active management. Welcome back to power lunch. Shares of bojangles are surging today near the highest levels of the day up around 4 at this point. This is all ahead of its Third QuarterEarnings Release after todays closing bell. Analysts are looking for 18 cents a share on sales of 122 million. The stock is down 5 since its may debut. It will be a stock to watch as we head into the close, guys. Back over to you. Thank you very much. And welcome back to power lunch, everybody. Im tyler mathisen. New Quinnipiac University poll out today shows that donald trump leads the Republican Party race for president at 24 . Dr. Ben carson one point behind. Senator rubio scored 14 . 13 for senator cruz. Former Florida Governor jeb bush came in at just 4 . Cnbc contributor larry kudlow is with us today. You know, larry, i got to thinking over the weekend that we in the media, not just mainstream media, we throw around the world dysfunction a lot these days. Washington is dysfunction. The political process is dysfunctional. The Republican Caucus in the house is dysfunctional. The 14 candidates on stage last week or however many there were, thats dysfunctional, but it began to occur to me that maybe what were seeing is less dysfunctional than the glorious untidiness of democracy. Yeah. Wasnt it churchill who said democracy is the worst system ever known except any other one weve ever discovered. Its messy by definition. Its what the founders wanted. I guess. The last time i talked to jefferson no, but youre quite right. You have a lot of people running for president and its a management problem. It doesnt mean its dysfunctional. I want to ask Haley Barbour about that who is a former rnc chairman. Regarding the house and senate, we have senator johnson coming on, a leader in the senate from wisconsin, theyre not getting stuff done the way id like to see gem ththem get it done but again thats the rules. You vote, you elect, you have legislation and it may not be what i want, what you want, but thats the way it works out and its a pretty darn good system. And at points of high tumult and change where there are philosophical struggles within the Republican Party as there are within the democratic party, fighting for the soul of the party, you would expect to see some of this let me call it untidiness. Look, this whole or dysfunction. If you buy the polls, polls are the polls, theres great anger, angst, and crankiness and unhappiness by the voters, particularly the base of the Republican Party, at whats going on, and youre seeing that. That is being reflected and there are divisions, and the primaries ultimately let me ask you, i believe it was karl rove who said americans dont elect angry president s. Do you agree with that . I think he was talking about john dean. Perhaps. I dont know. Perhaps. But the electorate is angry. The lectelectorate is cranky angry. I want to bring on my guests to shed more light on this. We have former mississippi Governor Haley barbour who was a Republican NationalCommittee Chairman himself many years and my great friend senator ron johnson from the state of wisconsin. Mr. Johnson is in a tough reelection race. Gentlemen, thank you very much. Governor barbour, let me begin with what tyler has been saying. You have that somewhat unwieldy process, 15someodd candidates, a revolt by the candidates against the rnc. So whats the solution or do we need a solution at all . Whats your take on this . Its a very large field, but, look, the first thing is all these debates are about polls, about process, about tactics. What the American People want to know is our country is going in the wrong direction at warp speed. About 65 of americans think america is going in the wrong direction. Thats more than there are republicans. That means a lot of democrats, a lot of independents think were going in the wrong direction and how can that not be only 48. 5 of adults have a fulltime job in our country. Last quarter the economy only grew 1. 5 . Manufacturing is going backwards. Half of americans think were in a recession, and yet you have a debate and everybody wants to talk about polling, wants to talk about how somebody looks. The American People want to know whats your plan for getting our country back in the right direction . How are you going to grow the economy . How are you going to create more jobs in our country . What are you going to do to get us going back where we were just a few years ago . You dont hear that in these debates. Thats an indictment. Thats a very interesting point. Senator johnson, i want to ask you the same point. With these debates and were basically polling mostly on the basis of the debates right now, not a single vote has yet been cast agree cast, as you know. So is what haley saying right . Is the gop not getting out a message of Economic Growth because the polls show the economy is issue number one, its been issue number one, its going to be issue number one for the duration of the lest periel period. Are republicans having trouble getting the message out . It could be because its somewhat messy. One message getting through is we want to see america great. Thats a message thats getting out. Kind of going back to the founders, the founders designed this process to make it difficult for government to grow because they knew as government grew, our freedoms receded and you send up with this mess here in the federal government which is creating all this frustration, all this angst, so theres no doubt about it. Our message should be about opportunity, about Economic Growth. We need to be concerned about, you know, those that have it and those that dont and how do you bring up those people that are disadvantaged, how can we create those kind of opportunities and the way you do it is you have pro growth tax reform. Lets keep Energy Prices low making sure we have a clean environment. We know how to do these things. Thats the good news. Weve been doing it for a couple hundred years. We have to return to those principles of Economic Growth. Governor, why not look at the new polls, okay . This is all being polldriven, these debates. Maybe the cutoff is too low. Look at the quinnipiac poll, you have basically four frontrunners. You have trump, carson, you have cruz, and you have rubio. Suppose they become the top tier. Just let them go at it and we talk a lot more about growth and regulations and taxation, things senator johnson just mentioned. Maybe thats the best way to solve this. What do you think . Well, again, larry, youre trying to make this more about polls. I think we ought to make it less about polls. I think we ought to make it about substantial. I think, you know, in America Today were very evenly divided. Yesterday your network, nbc with the wall street journal, published a poll. Said 45 of americans want a democrat president next time. 45 want a republican president. We are very divided evenly, but were more polarized than i can remember any time in my life. Senator johnson what we need is so solve problems. Let me stay there with haleys point. Senator johnson, a lot of the Republican Base is very angry over the house and the senate, all right . Maybe not you particularly, but they think you have broken your promises. They thought when they gave you a majority in the 2014 elections, youd create a lot of sweeping bills, roll back obamacare, broad based tax reform, energy reform, sweeping bills, house, senate, put them on the president s desk. If he wants to veto it, fine, lets go to the elections. That didnt happen and i think a lot of the gop base is very unhappy about that. Well, there are an awful lot of people overpromising what we cant deliver. Here is one thing a majority of republicans have done, we stopped president obamas legislative agenda. What we havent been able to stop because you cant defeat a president legislatively unless you have twothirds of both bodies which obviously we dont have. N