federal reserve will be hiking those rates, trying to bring prices down at the consumer level. we have been dealing with 40-year high inflation in this country, and it has been tough on all. we are going to speak to larry kudlow about all of that when he joins us live coming up. we'll ask him, john, if the federal reserve might be going too far. a lot of times you don't see the actual impact of the interest rate moves for months down the road. so, are they going too far with this? that's a question we will put to larry kudlow. welcome, everybody. i'm sandra smith. "america reports" as we roll into hour two. >> john: keep an eye on the fed and the markets, one of the fast-moving stories this hour. also border crisis, one week until the biden administration lifts title 42 and the border patrol warns things are going to get a whole lot worse. a democratic lawmaker from the border pleading with president biden to stop this from happening. congressman henry cuellar is here later this hour. >> sandra: a chinese tech company from doing business in the united states, senator tom cotton says it's a national security no brainer. why hasn't it already happened? senator tom cotton, how big a threat chinese-owned tech companies are to all of us. >> john: russian spies right under our nose, and a story straight from hollywood. >> what the hell? >> it's a couple. >> get in. >> go. >> take them, take them! >> sandra: that was hollywood's take on russian spies in the hit tv show "the americans," a husband and wife seem like the perfect american couple next door. >> john: so deep into their cover stories, even fooling their neighbor, an fbi agent. we know that that plot was not outlandish at all. >> sandra: new hampshire, 25,000 people in a town. >> john: the braymans, a typical suburban home, blue shutters and a big yard, they sell night lights through etsy. >> it's a cover-up, a one stop shop for funneling information to russia. they say they fabricated shipping documents and invoices, repackaging and reshipping items to destinations around the world before arriving in russia. >> john: delivery driver described the pair as the nicest family, according to the boston globe. molly line is live with this, and john lecari could not have written it any better. >> fascinating tale. the federal investigators say they have busted a smuggling network that worked to send millions of dollars in sensitive technology to russia to fund that countries war machine with some of the goods shipping through this quiet neighborhood. we are in merimac new hampshire, alexei lived a suburban life with his wife, but a frequent "trans shipment point," military grade, and to europe and then on to russia. some of the electronic components can be used in the development of nuclear and hypersonic weapons. >> i would see a bunch of boxes sort of stacked up in the garage and i remember telling my wife, oh, they must be moving, all packed up to go and i walk back again, and is it ill there, and that's just what they had, i did not know it was an online business, who knows this day and age. >> brayman appeared in court wearing red, white and blue, facing conspiracy and fraud charges, released on $150,000 bond, and ordered to wear a monitoring bracelet. court documents say a u.s. citizen often shipped packages to brayman, opening many bank accounts for shell companies, and another suspect arrested in estonia, a man self-described as a colonel in the fsb, russia's security and counter intelligence agency. he allegedly attempted to smuggle u.s.-made ammunition, including bullets for a sniper rifle into russia, and several additional russian suspects remain at large. >> john: a tale of intrigue. and we know what the fed is doing and what it may do in the future. >> sandra: hiked for the seventh time here, 50 basis point, a half a point. this was unanimous, it appears, the increase of 50 basis points. the market has been reacting as you can see, it was up all day, john. up a couple hundred points before the announcement and while it's not negative in a big way, the drop from where it was is pretty significant to know, the note is saying that it has seen modest growth in spending production but does say, the fed, there will be ongoing rate increases in 2023. so the federal reserve is basically saying in order to continue to tame inflation in this country, it's going to have to continue to raise interest rates, and that affects all of us. >> john: not done yet. see how high they go and how low the dow goes. >> sandra: and the fed is saying it remains committed to 2% inflation. we are still dealing with, you know -- 7, 8% is where we have been, 40-year high, to get to 2%, john, that is that really tough balancing act that the fed is going to have to manage because as you raise interest rates, you don't really know the impact of that for months, sometimes years down the road, and so the fed has to try to tackle inflation without driving us into a recession. of course, that is the fear. >> john: you have to land the plane without killing everybody on board. >> sandra: we'll watch that and the market reaction and news from there as we see it. 11 days to go to christmas, 11, holy moley. parents are not just worried about the cost of everything under the tree but also critical antibiotics and fever reducing medications that are needed for so many children that are getting sick right now. fox business lydia hu is live at a pharmacy outside of new york city for us. how are the pharmacies handling the shortages? >> hi there, sandra. it's really difficult, this pharmacy here, it's running very low on amoxicillin, a common drug used to treat many children during this time of year. they say 2 to 3 weeks on back order right now, so this particular cvs are in touch with other locations in the area trying to get parents what they need. but the problem is this is an issue that is affecting all corners of the country because the ingredients needed to make many of our medications are foreign. according to the u.s. non-profit, 83% of the companies that are manufacturing critical ingredients that make drugs like amoxicillin are foreign, like china and india, disruption in the supply chain there means a disruption to our supply here. take a look at this, you can see how china and india have grown their supplies, india, the part shaded green, associated with 20% of drug ingredients back in 2000. by the end of last year, that has grown to 62% for the year. china, the portion in blue, 4% to 23%. the red part shrank from 15% to just 4. we talk with the ceo of u.s. antibiotics, only licensed u.s. manufacturer of amoxicillin brand products, he says other countries allow medications at very low costs, squeezed out american companies in the race to the bottom for prices. >> just in the area of amoxicillin, china, the chinese government made a very conscious decision to invest heavily in developing very large production facilities in china. so they drove a lot of companies that were in the united states producing amoxicillin and those companies went out of business. for a number of reasons, but i think primarily it was just the price dropping so low. >> u.s. antibiotics says it is in touch with the fda about boosting the supply of amoxicillin specifically, but the real conversation is bringing the supply chain and manufacturing back to domestic soil. until that happens, pharmacies like this one will experience shortages moving into the future. sandra. >> sandra: so frustrating for so many parents and their children, and lydia, a few months ago you were covering every day the baby formula shortage, and now to have this happening, where people cannot get much needed medicine, not even on the store shelves, this is -- this is tough stuff. lydia, thank you. good to see you. john. >> john: destructive winter storm from the mexican border up to canada bringing everything from deadly twisters in the south to blinding blizzards and minus 12 temperatures up north. authorities say a young boy and his mother were killed when a tornado struck near shreveport, louisiana, the same system dumping heavy snow and bringing whiteout conditions to the northern plains as it treks towards the northeast over the next couple of days. we have live fox team coverage. max gordon is in denver, colorado, the snowy conditions there. begin with robert ray, he's live in four forks, louisiana, got hit pretty hard. >> john, a terrible situation here today, just less than two weeks from christmas in this rural area just southwest of shreveport, louisiana. two people lost their lives yesterday as an et2 confirmed tornado by the national weather service popped down and took the lives of an 8-year-old boy and his mother, the 8-year-old boy found under a pile of debris yesterday evening, his mother found at 2:30 a.m. about a block away, she was taken out of her home by this tornado. multiple injuries here in the area. more than 25 structures destroyed, trees down. there are electrical poles down in the area, police and officials keeping it really to a very limited space, not allowing media in. we went in earlier today and got a first look at the video as you are taking a look at right now, and unfortunately there is a lot of clean-up and a lot of mourning here in the area. meanwhile, john, there is another massive severe weather outbreak with tornadoes and straight line winds happening right now across the south in states like mississippi and onward into alabama. it is not over yet by any means, and as you stated, this all started on the west coast with snow and is going to tick up into the northeast with freezing rain and snow in the coming days. but again, an 8-year-old boy and his mother passed by the tornado that came in yesterday here in northwest louisiana. john. >> john: such a tragedy. robert, thank you. sandra. >> sandra: so heartbreaking. head west where max gordon is tracking the blizzard portion of the storm, the plains slapped with snow. you are in colorado, how much snow did you get there? >> here in the rockies, a healthy amount of snow, over two feet in some areas. but really, the area of concern is to the east of us on the plains. blowing snow is a threat in eastern colorado today. they are under a winter weather advisory until 6:00 p.m. local time. blizzard conditions continue from eastern wyoming and montana into the northern plains with gusts from 40 to 60 miles per hour in western nebraska, many roads have been considered impassable, in north dakota, no travel advisories for most of the state after roads were unsafe and for a while, a large swath of 94 from dickinson to fargo was shut down. significant icing is also developed in the eastern dakotas and northwest iowa, up to a half inch of ice reported. numerous downed tree branches and slippery slopes. and the rockies, cold temperatures in the wake of the snow. temps in the teens, excellent skiing conditions if you can bear it. back to you. >> sandra: max gordon on that for us, this is some whether, john. moving across the country. >> john: it is. but in the mountains where you are supposed to get the snow, it's a paradise, i was just looking at vail mountain cams, 11 inches of snow in 24 hours, the back bowls are filled with snow and with skiers. but with lake powell 173 feet below full pool, you could get that much snow every day all winter and would not be enough to fill the reservoirs back up. >> sandra: incredible. a couple weeks before christmas. >> john: guess who is on his way. larry kudlow will walk through the fed hike. we will watch wall street react. >> sandra: glad he's coming. what happened? all green all day, and then the federal reserve interest rate decision came in and lost all the gains and more. migrants are flooding the southern border ahead of title 42 expiration one week from today, sparking a rise in kidnappings, the sight of dangerous criminals preying on desperate people. one mother's journey and the message for her family back home. >> john: we are digging into that with texas democratic congressman henry cuellar and the flow of deadly fentanyl across the border. nearly took the life of a florida police officer who was exposed to the drug during a traffic stop. >> breathe, come on, breathe. hit her again. she's not breathing, hit her again. >> out again? >> yes. orking hard to build a better future. so we're hard at work, helping them achieve financial freedom. we're providing greater access to investing, with low-cost options to help maximize savings. from the plains to the coasts, we help americans invest for their future. and help communities thrive. millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile that means millions are saving hundreds a year with the fastest mobile service. and now, introducing, the best price for two lines of unlimited. just $30 per line there are millions of happy campers out there. and this is the perfect time to join them... save hundreds a year over t-mobile, verizon, and at&t with xfinity mobile, and for a limited time get $400 off a new eligible 5g phone. switch today. >> sandra: fox news alert, the markets are reacting to the latest move from the federal reserve to tame 40-year high inflation. as expected, it was a rate hike and a half a basis point, 50 basis point, yet another effort from the federal reserve to bring down prices and the federal reserve basically said prices are coming down slower than they anticipated, jackie deangelis from the fox business network is here ahead of your big show in january, and we are watching this breaking news and the markets are certainly reacting negatively. what is the reaction that you are hearing? >> dow was up 200, it's now down 100 and the reaction i'm hearing is there are head winds ahead of us, sandra in 2023, and the market might have been a little by aggressive. got 50 basis points it was expecting, modest growth next year, unemployment expectation, 4.6%, we are at 3.7% right now. inflation is declining at a slower rate than projected. we are talking about a target of 2023, the fed funds rate between 5 and 5.25%. that means more rate hikes, yes, maybe not as aggressive as this year, but we are not through the woods yet. the market wants to see the fed engineer what they call a soft landing, that is very difficult to do. >> sandra: especially when your target inflation rate is 2% and we are at 7.1%. so the really sensitive difficult challenging balance the fed has is to somehow achieve that target interest rate goal, sorry, inflation goal of 2%, but you have to look at the moves the fed is making now and predict where things will be a few months from now, a couple years from now, because we don't truly see the impact of these rate hikes, you know, tomorrow. >> for a while. and if the fed does not act aggressively, people will say jerome powell is not doing enough, because people are suffering. even at 7.1% year over year inflation, people are feeling the pinch and saying we need to be moving faster in the reverse backward direction. food, gas, all these things are costing a lot more, and the fed also mentioned the russia and ukraine war is adding some pressure to inflation as well, people are looking at how long the conflict could be a factor here that jerome powell has to indicate. and the labor market has not cracked yet, and part of what the plan is, he told us, powell back in jackson hole, he said we are going to have to see some unemployment. 4.6%. >> sandra: ongoing rate increases in 2023, jay powell saying a few minutes ago we have not seen clear progress on slowing inflation. that is a big warning flag to these markets that continue to move lower, and the fed is now projecting raising rates as high as 5.1% before ending this inflation battle. jackie, could you kind of just tell our viewers what that means for them at home? we have already seen the affordability on housing really getting hit hard by this. people can't afford to get into new homes right now, the housing market is affected. mortgage rates are going up, car payments are going up, all of these things are costing us more so we are in effect paying for all these policy mistakes, big government spending that led to this inflation, we are now paying for that trying to get these prices down. >> when the fed does when it tries to raise rates in this way, slow the growth and the overall economy. consumers are spending. when the cost of borrowing goes up, you are 100% right, and mortgage rates go up, less people are buying new homes. auto loans, less people are buying new cars. that's fueling the inflation and stimulating the economy, it's all projected to pull back a bit, but that makes it harder for the average person to live and exist. by the way, if you have depleted your savings and now you have turned to plastic and starting to rack up some credit card debt, expect those interest rates to go up as well. so, while we will see inflation come down, there is definitely a direct economic cost here and that's to the american people. >> sandra: the wall street journal, they ran a headline, how did the housing market get so unaffordable for so many. while prices are coming down, the cost to own that home, the mortgage costs are going sky high and it's harder and harder for the average american family to get into a home. a lot of predictions we will see a big dump of houses go on the market in the new year. >> that happened quickly and people in the market or had been dragging their feet but were looking, told me the home we could have afforded six months ago or end of last year, we can't afford it now because the rates make the payment expand in that way. >> sandra: fed raising rates by a half a point to try to tame inflation, markets are reacting, dow is down about 94 points, not a huge selloff, about you down after being up all day waiting for that announcement. thanks for jumping in, jackie. >> john: murder case in idaho, investigators there are hopeful a new tip from a gas station clerk could help them crack the case. the tip comes more than a month after four students were found gruesomely murdered in an off campus home. matt is live in idaho with the latest, and i think this almost speaks to how little the police really have this one tip may be their best attempt to crack this case. >> john, we are standing in front of the police station right now. they insist the case is not cold, they are getting hundreds and hundreds of tips, but you know, the viewers on the ground know a lot of frustration and skepticism where the case stands. and the latest piece of video, the tip, police have asked the public to be on the lookout for the 2011 through 2013 hyundai elantra, and a gas station employee decided to scroll through the surveillance video and she found a white car speeding by around the time of the murders on november 13th, and police have since taken hours and hours of video from that surveillance camera. you can't really definitively make out the white car in the video, so not sure what police will do. they say it is important and police have not defined what role the car plays in their investigation, just that they want to speak to the occupants, and another development, a possible piece of evidence there was video from police officers' body camera, he was stopping to talk to some students for apparent underage drinking and look in the background of the video, looks like 3, 4 people walk by, all you can see is silhouette, and an investigation on the ground and the 3 or 4 people in the background appear to be walking from the vicinity of the crime scene, of that murdered house. so, police say obviously that's very important, these four people in the background spotted about 3:12:00 a.m., we know the homicides happened between 3 and 4:00, could they have seen something, related to the case, they are looking into it, john. >> john: