former chairman alan greenspan put it this way. for all practice will purposes price stability means expected , changes in the average price level are gradual enough that they do not materially enter business and household financial decisions. of course, inflation has just about everyone's attention right now, which highlights a particular risk today. the longer the current bout of high inflation continues, the greater the chance of higher inflation expectations will become entrenched. that brings me to the third lesson, which is that we must keep at it until the job is done. history shows the employment costs of bringing down inflation are likely to increase with delay as high inflation becomes more entrenched in wage and price settings. the successful voelker disinflation of the early 1980's followed multiple failed attempts to lower inflation over the previous 15 years. a lengthy period of very restrictive monetary policy was ultimately needed to stem high inflation and start the process of getting inflation down to the low and

i said let's get back tot that point that alan greenspan prints an important point in your book. if a redo i want to finish talk about purchases that's important point in yourak book. how do you square this argument you are making which bond purchases spur inflation with the reality that we have had bond purchases often at large quantities saw very low inflation. under how this things work together? >> very good very pertinent question. what happenedr after 2082 thing. one is the federal reserve while they are creating this money and affect froze the money. the fed buys the bonds, they credit the bank account the dealer has of the federal reserve. what did this was something they've never done before but they start to pay interest on those. they have never done that before. at the same time they were putting pressure banks to slow thdown lending. banks were hiring more in 2008/2009 for they are hiring compliance officers the loan officers. the value of the loans went down even though the reserves went up. and at regulatory manner it was putting pressure on banks while they though

that was alan greenspan and on cnbc you had a camera set up to watch him walk across a street with a briefcase and try to gauge the meaning of that based on how overstuffed with papers that leather briefcase was i'm not making this up you can google this. the fed has since learned that speaking is a very powerful tool or weapon in its arsenal, and so rob may be exactly right the last thing the fed needs right now is for the market to start anticipating a dovish pivot is the stew peddest thing on earth that forces them in a position to continue to fight against financial conditions that are too loose. 'stock market rallies 25% in the fed's face what, do you think that means longer tightening cycle or shorter? of course longer so it's a weird situation that we're in now the fed's like walking a tight rope they don't want to give the market the impression that they're trying to create a financial crash, but they don't want people saying you know what i don't care i'm buying now because we're about to have a pivot, and all of a sudden you see rates come down, which they have. you see mul

this is not alan greenspan fed speak where it is gobbledygook and we can try to figure it out. they are laying out what they're going to do with respect to the tenure rate, which is what i think carter was referring to. one of the natural things we would expect is if the fed does its job and manages to get inflation under control, and if it does have the necessary side effect, slowing effect on the economy, than actually what the 10 year rate debt, which is essentially nothing, is exactly what you would expect.>> carter made that point as well, for the tenure. if i think it through and push aside the numbers that i saw on the screen with the way that stocks were selling off and i think about what is really happening here, powell wants to get inflation under control. it is at four year highs. it feels like a good thing to do. we all want this to be able to be a possibility. we just don't want the trade off of depressed economic growth and higher joblessness when we have this strong economic market, but should we all get comfortable with maybe a little bit of that pain? >> i thin

i'd love to get back to that point about alan green the alan greenspan era because it's an important point in your book. but before we do, i'd like to just finish talking about bond purchases because that's also an important point in your book. i wonder how you sort of square this argument that you're making which is that fed bond purchases spur inflation with the reality that we had fed. bond purchases also been very large quantities over the sort of post-financial crisis period and we didn't see a lot of inflation. in fact, we saw very low inf over that period and so i wonder i wonder how those how those things work together. a very good a very pertinent question because what happened after 2008 was a two things one is the federal reserve while they're creating this money in effect froze the money, you know, the mention they the fed buys the bonds they credit the bank account that the dealer has at the federal reserve and what they did was something they'd never done before they started to pay interest on those reserve. they'd never done that before at the same time. they were putt

former chairman alan greenspan put it this way. for all practical purposes, priced ability means expected changes in the average price level are small enough and gradual enough that they do not materially enter business and household financial decisions. of course, inflation has everyone's attention right now, which highlights particular risk. the longer the current bout of high inflation continues, the greater the chance that expectations of higher inflation will become entrenched. that brings me to the third lesson which is that we must keep at it until the job is done. history shows that the employment cost of bringing down inflation is likely to increase as higher inflation becomes more entrenched. the successful volker disinflation of the 1980's followed multiple failed attempts to lower inflation over the previous 15 years. a lengthy period of very restrictive monetary policy was ultimately needed to stem high inflation, and to start the process of getting inflation down to low and stable levels until the spring of last year.

. >> not unlike 1990 to the 1992 period where alan greenspan, fed chair, decided to end the crisis so it didn't go further decided to raise the short rates to liquidity the bank's balance sheets this is what we have it's time to be bank of america and charlie sharp. my travel trust owns that. wells fargo. there's going to be -- remember the sanctions were put on five years ago february, so maybe if he gets the sanctions lifted he has to do a lot of different things. >> it does feel like this is all predicated on the fed pausing. >> right. >> easing. which is becoming a very big bet in the market and that's not what we're hearing from the fed. it's not. >> we want the fed to come back and put the hammer to -- we don't want them -- if you're a bull you don't want them to let up think about it, they did three quarters and said pause, but we'll do another the market has a rally so i think the market very much wants to see discipline in the fed. and how about the flajs what else did he buy? >> that's what i heard about is the flannels >> doug is granular and appreciate his information i ap

former chairman alan greenspan put it this way -- for all practical purposes, price stability means expected changes in the average price level are small enough and gradual enough that they do not materially enter business and household financial decisions. of course, inflation has been just about everyone's attention now, which highlights a particular risk today. the longer the current bout of higher inflation continues, the greatest of chance of higher inflation will become entrenched that brings me to the third lesson we must keep at it independent the job is done. history shows that the employment costs are likely to increase with delay, as high inflation becomes more entrenched in way and price setting. the successful voelker disinflation followed multiple failed attempts to lower inflation over the previous 15 years. a lengthy pertain of restrictive policy started the process of getting inflation down to the low and stable levels that were the norm until the spring of last year. our aim is to avoid that outcome by acting with resolve now so these lessons are guiding us, as we use our t

the last 40 years since alan greenspan took office we are in customs to a federal reserve it gets interest rates high and people go that hurts and i am so sorry and they bring them down quickly, we are not there, they are saying they will bring them up and keep them up. neil: the focus is bringing inflation to what it was, 2% and lower than that, interest rates, looking at the math and figuring 8.5% inflation, a long way to go. >> the fed chair has its work cut out for them. don't let the wonderful scenery in jackson hole, this is no vacation for jay powell, getting very little help from washington with continued spending and when you tell the american people on a friday in the summer ahead of midterm elections that there is more pain ahead as they it into winter heating season and back to school, not going to make friends, no surprise the financial markets blue upon his speech today but recognize there are limits to what he control. i appreciate his genuine nature making the 70s and 80s analogy, he doesn't want to be arthur burns, he wants to be paul volcker but he because two recessions,

do you suggest there is an over communication versus what we knew about alan greenspan? stephen: i think the fed, maybe are feeling a little bit regretful about the fact they went to this saying of being specific about what might happen at the next meeting. they did that a couple of times and it didn't work out quite as they had planned. they stepped back from that in july. it feels like it is a one-way ratchet. which, become more transparent and communicate more, it is hard to take that back. i think the fed is trying to be explicit about what they are doing. at the end of the day, it is a different view about the economy. the fed officials for the most part are continuing to push the soft landing story, the economy is fine, everything is going to be ok. we are going to slow down but not see a session. the markets are thinking, we are in one or about to be in one. not only is the economy weaker, the economy is going to quickly bring inflation down, which is another variable in the equation that i think the market may be too optimistic about. jonathan: i think most parti

it was harder for chris verrone in the time of alan greenspan and you had to glean what the fed was doing. christopher roan is microstrategy at strategic -- strategic's. it is about the bond market, technically you see two year yields moving higher. discuss. christopher: yeah, i think the idea that the bond market buys this idea of a fed privet, we do not see on the charts. two yields are basically back at the highs. if you look at the futures were say , they are already back to 4%. we met back and looked at every single tightening cycle back to the early 70's -- 1970's. we cannot find a tightening cycle where the fed funds rate ultimately didn't end above the rate of inflation. this idea of peak inflation, that is a math problem to us. i'm not sure it is investable. even if you get cpi lower over the next 12 months to 7, 5, 4, you need a fed funds rate above the rate of inflation, that is what history has shown us. i think that is with the two year yield is reflecting. i think that is what the shape of the yield curve is reflecting as well. it is very contradictory to the message from th

alan greenspan, what does he look like in the morning >> what does he look at in the morning? 2.56 ten-year note that was his most important thing in the morning >> now it's bitcoin. let's get to the trading dade ahead. cnbc's commentator, mike sa santoli. if you woke up and came into mon on june 30th and said i 50e78 going into the stockmarket and said, yeah, this is easy, this is good, mike, july was good. >> yep last week was good july was good. we obviously were positioned probably for further bad news. we managed to absorb the continued downgrading of estimates because, look, it's still going to to be up a little bit. probably at a record level haven't seen that real erosion just yet financial conditions loosened up a bit. take a look at the s&p 500 index fund this is year to date one thing that's been accomplished here is kind of a first step, which is you broke that kind of down trend that was in place from this early april high that's one step. i think you'd still have to say it leashes you at the top of the range since we've been in since may. still something to prove