Welcome to power lunch. Im melissa lee. Stocks right now are mixed actually all in the red right now. Amazon, though, hitting a new alltime high in todays session. Same for tesla, that stock trading above 300 a share for the first time ever. And take a look at gold hitting its highest level since february 27th. Tyler . Melissa, thanks very much. Im tyler mathisen. Glad you could join us on a rainy tuesday in new york. Here is what else is happening this hour. The u. S. Trade deficit falling in february as exports climbed to a twoyear high. Cleanup efforts under way from texas to the taerls after another stripping of severe storms ripped across the south. Five stormlegalitied deaths reported. And tony romo apparently hanging up his helmet and cleats for a microphone. Espn reports the cowboys quarterback will end his 14year nfl career and go into broadcasting. Michelle . Welcome to the business. Thanks, tyler. Im michelle carusocabrera. We have a lot to do today. We begin with a big headline coming out of the white house. The Washington Post reporting President Trumps team is exploring new tax proposals. Listen to this, could include a valueadded tax, very common in europe and latin america and or a carbon tax. Lets get more on this developing story, cnbcs eamon javers and numerous ceos spent the morning with the president and the Vice President. Reporter i just stepped into the white house here a few moments ago and talked to a white house official inside the building. They are not disputing the Washington Post reporting here that they are at least considering whats called a vat tax or value added tax, placed on products incrementally as they go through the Building Supply chain and also theyre considering a carbon tax. They caution they are considering these things, a wide range of options. They say its too early now to say that theyre ruling any one thing in or one thing out. Theyre also aware here at the white house that conservatives might be frustrated by the idea of a carbon tax, something they have said would kill jobs up on capitol hill among many conservatives in congress. Yet that is still under consideration here at the white house. Meanwhile they had a whole host of ceos here, about 50 ceos and top executives from a variety of Financial Companies and other industries around the economy here at the white house today. Gary cone, the White House National economic counsel director talked to the group before the president spoke. He talked about a couple of things he thinks they can achieve in the near term in terms of infrastructure including revamping the u. S. Airline system. Here is what he had to say. Air Traffic Control to me is probably the single most exciting thing we can do for a lot of reasons. Number one, everyone else has done is so we know its relatively easy to do, which is kind of insulting that were the to do air Traffic Control. Number two, it affects every state in the country. Multiple times. We have multiple air Traffic Control systems in multiple states all over the country. So this is a project that touches every part of the country. Number three, everyone in the country is affected. Whether you fly or not. Reporter and talking to that super wealthy group in the white house here it at the auditorium gary cohn said the only two groups who might oppose this are congressional appropriators who like to play with the money that goes out to the Airline Control System but also he said people who fly private aviation, the private jet industry might be against that. You all in this room use private jets. Well make sure you are not lobbying against us on this. Michelle, a lot going on. Gosh, there sure is, eamon, a ton going on. Carbon tax, a republican idea. It was the way democrats wanted to implement it, that it became very controversial, the way the money would get spent. Value added tax, great resistance among the right because they worry it would come in addition to an income tax rather than replacing it, so thats another big issue. And dont forget, eamon, big interview coming up on the closing bell later today. Chairman of the house ways and Means Committee live at 4 00 p. M. Eastern time. Everything youre hearing reporting runs contrary to what representative brady wants to do with ways and means. He wants a border adjustment tax. Now a potential battle going on between the two sides. Thanks, eamon. Lets get right now to caly tausche who was with one of the ceos or is now, in a meeting with the president. Congratulations to your tar tels. Heels. I hope you got a little bit of sleep. Just a little. The ceo of first data was in the meeting today. Frank, weve seen a lot of these meetings happen at the white house. What did you get out it have today and what sort of action plan do you feel the white house has put in place . First of all it was tremendously invigoratininvigor. Ive been watching whats going on here and i find it to be an incredible time. In the broadening of definition s if you think about infrastructure were not only talking about roads and bridges and tunnels but were talking about technology and Real Infrastructure to help power it. I find the leadership is completely dessicated to making this so much better. Of course when gary handed the president a process map it reminded me of my first days at first data and all the things in the way and the conversation about get rid of the clutter. So its an incredible dialogue, well led. But it is a dialogue at this point, and you have the manufacturing council, the infrastructure working group, the office of american invasion, you have the Strategic Policy forum. What are these groups actually getting done, and what sort of deliverables is the white house asking you for . I think today was about the partnership coming to the white house. I mean, theres been lots of ceos in here, great leaders before. I think its a very, very open to business mentality. But for the betterment of the country. I mean, its all about the betterment of the country, creating jobs. If you listen to the Workforce Development programs and i think every ceo in there took notes and thought about things we could do in our Companies Better and how we can partner with the administration better. Two of the biggest items on the agenda that businesses are focused on are tax reform and deregulation. First on tax reform, when you look at a potential border adjustment tax, a valueadded tax, now a carbon tax, when you think about running a business, what is actually advantageous for you understanding that they need to find revenue from somewhere . Well, i think that this administration has a ton of thought leaders that know the number one objective is to stimulate the economy and to create jobs and all of this is designed for that. If youre running a company youre thinking about how you, in fact, can get more done, how you can bring more to the market. And i think thats what theyre creating, keeping jobs in america, being able to develop more product, innovate. The idea of innovating and even bringing innovation to government. So i think tax reform, the way its being thought about has tremendous benefits. The devils in the details always. And, of course, there will be a lot of to and froing. I find it very stimulating. Well see which of these e ideas stick. Frank, great to talk to you. Thanks for giving us your perspective on todays meeting. Frank bisignano of first data. Jamie dimon releasing his annual letter to investors. Lets get to which will fred frost. Reporter it is understandable why so Many Americans are angry at the leaders of americas institutions. His overall tone was optimistic. He said he strongly disagrees with the view we are in slow growth and outlined boost iing labor participation, better education, lower Corporate Tax and deregulation. His comments on deregulation likely to attract attention. In particular he said america should eliminate its gold plating of international standards. By this he means the way in which u. S. Regulators topped up various stages of the basel rules and if they could use the standards of other International Banks it would free up a material amount of capital. On the point of capital he said, quote, we currently have excess capital while we prefer buying our stock at tangible book value we think it makes sense to do so at around two times tangible book value as well. This suggests they could be set for significant stepup in buybacks or dividends given the valuation somewhere between those two levels at the moment. Guys . Thank you very much, wilfred. Jamie dimon optimistic about the future. Should you be, too . Dia dia diane, mr. Dimon says we can grow a lot faster. Do you agree . I think so, too. The odds of a recession have been pushed out several years. The yield curve is telling us that and the banks are overcapitalized. You think its telling you a recession has been pushed out because everybody is wringing their hands suggesting were not going to get nearly as much growth as the stock market things . The first two years are baked in the cake. Its turned in terms of earnings reversal, turning positive. So far whatever happens in this administration really cant impact anything except two years and out. The yield curve investors are saying, hmm, well wait and see on that. The first two years look pretty good to us. Two questions closely related. One, do you agree that the u. S. Economy can grow at a faster rate than it has been and, number two, do you think that the stock market can continue to move up though maybe not at the rate it has been doing . I think the economy can that was for bob actually. Im sorry. I definitely agree with jamie dimon the market or the economy can grow a lot faster than it has. Ive never been i was a believer in this limits to growth theory. I believe that if you put in the right reforms in terms of better tax policies, better regulatory policies, better monetary policy, the economy could grow a lot at a lot quicker pace than it has in recent years. That said, if we get some positive reforms out of washington in terms of continued regulatory roll backs, we get some tax reform or tax cuts, i do believe we can see the economy grow faster. I think that would be good. And stocks, have they gotten ahead of themselves . Are they counting on too much good news . U. S. Stocks have been expensive for some time. I think with a rebound in corporate profits and if you do get some positive policy developments out of washington i think stocks can continue to grind their way higher. I wouldnt expect the returns that weve seen in recent years to continue. I still think we could end the year higher than we are today. Tax reform is great, sounds great, but the devils in the details. If the rumored or reported possibility of a valueadded tax is out there and that happens, is that a concern for you in terms of squelching consumer demand . I think they have to consider that carefully before they enable that and i think that just lower taxes would be better. Clearly the United States is one of the highest in the world. Id like them to focus on Corporate Taxes first and then, of course, the individuals. No one wants to be double taxed. Diane, bob, thank you. All right. Elon musk taking a dig at tesla shorts. Got us thinking, who are the other big losers in shortsville this year . We have those names coming up. First, though, airlines adding more routes to the summer schedule. Good move or could it backfire . We could see too much capacity. You always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you 24 7. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance welcome back to power lunch. Breaking news from the Federal Reserve. Richmond fed president jeff lacker resigning from the Federal Reserve. He is acknowledging that he was the source of information about an investigation that came from a story from Medley Global Advisers in september 2012. The story has been out there for five years. We have not known the source of the leak. Jeff lacker now saying he was a person who confirmed information in possession of the analysts during the call. Jeff lacker saying, quote, my conduct was inconsistent with Federal Reserve policies. Hes disclosing he says he did disclose that the analysts had the information in talks with the u. S. Attorneys office in the Southern District in 2 5 2015, but he did not disclose it in 2012 when he was interviewed by the Federal Reserves general counsel. He says, quote, i crossed the line. A 13 year veteran scheduled to retire in october. He is retiring immediately. Jeff lacker standing down and resigning after admitting he was the source of the confirmation of information in that medley global adviser story that caused such a controversy back in 2012. Confirming there was a quantitative easing. Should we tell us about how the fed works. I know theyre appointed. Should we assume lacker is stepping down because he knows he would have been removed . Hes not an employee like a ceo where you can get fired by a board. Reporter he actually is. So the Federal Reserve could have or would have reporter right. Conducted some sort of ex parte hearing and booted him out . Reporter he serves, as my understanding, brian, at the pleasure of the board of directors of the richmond Federal Reserve bank. Those are the people who appoint and vote for the next president. Its important here he did not tell accurately to the general counsel of the fed about this contact with this analyst. He doesnt even seem to be admitting that he told it in a wider investigation. This was the subject of an investigation by the u. S. Attorneys office. Which leads me to a question, steve, could he be prosecuted . Reporter look, thats outside my area of knowledge. What i wanted to talk to you about right here is this notion what it says here is, i did disclose in the interview around the broader investigation in 2015 that the analyst was in possession of confidential information, but he doesnt say that he admitted to talking to the analyst about that. Thats unclear to me whether or not he actual ly told the full truth in an investigation that involved the fbi and the Inspector General of the fed right there. So certainly in the 2012 interview with the general counsel he says he did not provide the information. There should be two stories here. To michelles point, if he broke fed rules he will not be prosecuted. He will be canned, in which case he stepped down immediately because you step down immediately when you think youre going to be booted anyway. If, however, that information was utilized in some capacity for trading by medley which is an adviser of macro policy my question is even more simple. The fbi is involved, the doj is involved, the minute youre involved michelle is asking an excellent question. The obvious which is in order to be prosecuted you have to have broken a law not a federal rule. Reporter this is a novel Insider Trading case, and thats something that had been pursued, and i dont know the status of it right now. Its been in the background for almost five years now and things crop up on it every now and then. We have not known the source of the confirmation of the information. The way president lacker describes it is the analyst already had the information and it appears from reading it that he confirmed that information that the fed was about to do a stimulus package of 45 billion of bonds. I know we have to go. Its a big, developing story. Our producer, i apologize, what does this mean for the fed in terms of interest Interest Rate policy . Lacker a Voting Member . Reporter he is not right now, i dont believe. Let me say this is not strictly directly at Interest Rate policy. I believe this is a black eye on the reputation of the fed. I was wondering if we would be short a Voting Member or will be short . Reporter no. When do we get somebody new . Reporter somebody will take his place, a Research Director or Vice President at the richmond fed would take his play on the board would be typical fashion. Theres not it would never be short a member. If a president who is a Voting Member couldnt vote theres an alternate for each member. Got it. Like a jury. I dont think weve been doing this about 20, 25 years never seen a story like that before. Jeffrey lack earp was scheduled to retire october 1st so hes moving up his retirement. Resigning immediately says a lot and not saying anything. Were back. More on this developing story. More on your markets and how airlines are adding more routes to the summer schedule so you dont have to be quite as packed in as sardines. Just a different type of slightly larger fish. See things your way. You have access to the right information at the right moment. And when you filter out the noise, its easy to turn your vision into action. Its your trade. E trade. 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