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Fed Set To Hike Interest Rates This Week - YouTube
Channel: MSNBC
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37 past the hours and the market just
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opened with the dow ticking up slightly
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after the massive
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drop that we saw on friday it tumbled
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900 points to close out april with the s
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p posting its first ma worst month since
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the pandemic began and the nasdaq
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posting its worst month since the 2008
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financial crisis
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but it's not just in the united states
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global economic growth is slowing to a
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crawl as covid and the war in ukraine
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rattles the world's biggest economies
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and as fears grow about a recession here
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at home
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fed chair jerome powell is set to
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announce a big rate hike
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later this week so many questions so
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many questions i know mika on your
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birthday you want clarity so i have
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brought in columnist
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and editor for the new york times deal
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book and co-anchor of cnbc squawk box
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andrew ross andrew it's
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you know andrew uh as we went through
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coven we've never gone through anything
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like that before in our lifetime we
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haven't gone through people holding the
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two trillion on the side and then
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dumping it into the economy a lot of
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things going on that led to a lot of
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questions but when you look and see that
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the eu's economy is basically slowed
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down to a stop when you look at what's
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happened in the u.s when you look at
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what's happening in china when you look
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at interest rates going up suddenly
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it becomes more clear
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and what the what wall street's saying
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isn't all that positive uh does the
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recession begin now
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well maybe it is it's already begun in
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some ways i think that the the moment of
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clarity oddly came actually last
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thursday night when amazon reported its
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earnings
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less revenue than people had expected
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but also a sense that costs are going to
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continue to rise wages are going to go
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up
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a good thing for those people working at
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amazon of course uh less of a good thing
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when it comes to their profits and the
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potential for earnings and that is a
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sort of a microcosm for the economy and
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how businesses across this country i
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think are starting to think about what
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happens then you start to think about
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the strength of the consumer the
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consumer has held up but we've also
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talked about the fact that interest
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rates and this is the week we're going
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to find out what happens at least with
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this first next step for the federal
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reserve and you're going to start to see
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credit card interest rates go up
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so you're going to see mortgage rates go
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up and then the question is does that
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tip the balance for the consumer and
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what do they do you go to the you know
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you go to get your
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your car uh some gas these days and you
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know
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the running joke is you got to get a
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second mortgage and i think that's
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that's the other big issue right now and
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so you put all those things together
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plus europe plus the rest of the world
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and people are starting to get pretty
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concerned
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i'm so glad you brought up netflix
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because you know when facebook drops by
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25 in a day or two you're like okay it's
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facebook is it real is it not real
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what's going on right i mean when when
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when you see netflix lose close to 50
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that's still streaming you see amazon go
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down 14 15 today
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they actually they deal in real goods
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all of us almost all of us have amazon
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we order things day in and day out if
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they're getting hit by 14 15
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suddenly you're talking about i know
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this is a stupid i i you know i read
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sports illustrated during econ 101 in
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the back row so i'll just say it seems
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like the real economy uh when you have
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amazon uh take that much of a hit you
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start going oh my god this may be more
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than just you know pets.com going under
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i think there's a broad sort of
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realization that especially by the way
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the big tech stocks the facebooks of the
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world the amazons of the world uh the
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netflix's of the world all of them have
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come down and the question is what is
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the the growth story for the future and
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then you layer on top by the way i just
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got back from omaha uh this weekend was
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what they call woodstock for capitalists
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berkshire hathaway warren buffett has an
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annual meeting and he was talking really
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just about how much speculation and
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gambling there's been in the market how
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much money's been thrown against the
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wall and also a sense that maybe where
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stocks were over the past year and a
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half that there was a bit of an alice in
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wonderland uh element to this and we
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used to talk about that all the time
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actually right i mean that was that was
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the big issue um in terms of we look
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around and go we're in the middle of a
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pandemic how is it possible that stocks
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are this high and so everything is
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relative and so you're looking at these
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prices come down but maybe the truth is
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you should be looking at where prices
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were
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pre-pandemic right and certainly the
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stocks yeah the price of the stocks not
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necessarily commensurate to the health
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of the economy and that's a lesson that
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donald trump never wanted anyone to
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learn because he'd brag about it all the
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time but certainly that is where we are
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now so talk a little bit about the what
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we should expect here from the federal
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reserve you know which i think you're
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going to see uh 50 what they call 50
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point basis rise some people are talking
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about 75 points um and
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you know how how fast do you go
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interestingly there's a wealth effect
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issue which is to say that if stocks
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continue to come down
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you could argue that that actually does
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a little bit of work for jay powell in
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terms of j what j pal and the fed are
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trying to do is reduce demand right and
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so if you're trying to reduce demand if
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in fact the market comes down ahead of
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that that on to itself may reduce demand
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people feel less wealthy they go out and
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they spend less money they don't go
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maybe on as many trips so when you start
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to think about inflation that that you
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know in a strange way could help i don't
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think it's going to change the dynamic
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this week in terms of what the fed does
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but it could change the dynamic in terms
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of what they do next month and the month
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after and the month after
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and by the way here we are less than an
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hour in oh boy amazon already down uh
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over three percent uh it just keeps
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going
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it just just keeps going
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some people may think it's on sale too i
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just want to say there's another side to
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all of this i i don't know the answer
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but uh we'll see
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okay andrew sir thank you very very much
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thank you
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very much
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oh i just got a kiss i know that was a
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virtual kiss
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that's nice all right coming up
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actor schreiber has close ties to
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ukraine and is working hard
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to help dozens of aid groups there amid
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the war and he joins us ahead plus a
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look at
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[Music]
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you
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