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close video US economy faces very dire situation if Fed cant keep rates high: Mike Lee

A ‘Word on Wall Street’ panel with Michael Lee Strategy’s Mike Lee, Strategic Wealth Partners’ Mark Tepper, Bulltick Capital’s Kathryn Rooney Vera discuss market trends amid banking collapse volatility.

While some of America’s top banking CEOs discuss a new rescue plan and the Federal Reserve kicks off its two-day meeting, one market expert has warned of a "very dire situation" dependent on fiscal policy. 

"If the Fed can't keep rates high, if they can't keep raising as they need be, and we have persistently high inflation, we are in a very, very, very, very dire situation," Michael Lee Strategy founder Mike Lee said on "Mornings with Maria" Tuesday.

"So I think the Fed goes 25 basis points. I think how the market reacts depends 100% on what Powell says and reacts to the questions and how the market absorbs that," he continued. "But what I see is not so much as a contagion from banks or some sort of massive solvency crisis, it's what do we do if the Fed can't raise any more, can't keep tightening? It has to ease, so there's no systemic shocks from the banking system."

With a strong market rally underway Tuesday morning, the Fed began discussing its latest interest rate decision. Sixty-two percent of investors expect the policymakers to continue hiking rates, which would mark the ninth straight increase, while 38% expect no change, according to CME's FedWatch.

BANK TURMOIL COULD BRING ‘VICIOUS’ END TO BEAR MARKET, MORGAN STANLEY SAYS

While the Fed under Chairman Jerome Powell has embarked on its most aggressive rate hike path since the 1980s to combat stubbornly high inflation, a recent report written by U.S. economists indicates if history is destined to repeat itself, then the Fed will "find it hard" to avoid a recession later this year.

The Federal Reserve could bring the U.S. economy into a “very dire situation,” Michael Lee Strategy founder Mike Lee said on “Mornings with Maria” Tuesday. (Fox News)

The central bank is also navigating bank-run contagion fears this week, after the recent insolvencies of Silicon Valley Bank and Signature Bank, and potentially First Republic Bank.

Lee signaled the banking and rate hike dilemmas are ones of "confidence," as opposed to structural issues. Image 1 of 4

Markets often react when Federal Reserve Chairman Jerome Powell speaks or announces a rate hike decision. | AP Newsroom

"No matter how good the banking laws are, no matter how good the oversight is, no matter how strong your balance sheet is, nobody can withstand a 20 to 25% deposit base withdrawal in a single day, as happened with Silicon Valley Bank," Lee explained. close video The Fed to meet this week to decide possible rate hike

Mercatus Center distinguished fellow Thomas Hoenig discusses how the Fed’s plan for inflation, argues it has been running poorly for years on The Bottom Line.

"So I think the upshot of what just happened is lending standards are most likely going to increase, further slowing the economy," he added.

Also joining the "Word on Wall Street" panel, Bulltick Capital’s chief market strategist Kathryn Rooney Vera agreed with Lee that the Fed will likely raise rates by 25 basis points Wednesday.

"It has to hike 25 basis points. It has a dual mandate, 2% inflation and full employment, it has to comply with that. If they do not hike this week, tomorrow, this is going to be a huge additional shock to credibility and they're very focused on that," Rooney Vera said. "So they have to recoup credibility. If they do not hike 25, I think it will be poorly received by the markets."

GET FOX BUSINESS ON THE GO BY CLICKING HERE close video US will see 25 basis point hike from the Federal Reserve: Michael Kantrowitz

Piper Sandler chief investment strategist Michael Kantrowitz provides insight on the Federal Reserve’s response to record-high inflation on ‘Making Money.’

Michael Wilson, the chief U.S. equity strategist at Morgan Stanley and a longtime Wall Street bear, said in an analyst note on Monday that the stock market is in the early and painful stages of exiting the bear market than began in the summer.

"The last part of the bear can be vicious and highly correlated," he said. "Prices fall sharply via an equity risk premium spike that is very hard to prevent or defend in one’s portfolio."

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FOX Business’ Megan Henney contributed to this report.

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Springer out after 3rd base hop, ending Jays’ rally

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Springer out after 3rd base hop, ending Jays' rally

TORONTO — Blue Jays outfielder George Springer skipped into third base on a key RBI hit by teammate Alejandro Kirk, and hopped right into an inning-ending out in the fifth on Sunday against the Athletics.

Springer was called out following a replay review after Athletics third baseman Max Schuemann alertly kept his glove on the Blue Jays right fielder while Springer hopped up and down on third base.

Springer, who had reached on an RBI single that opened the scoring for Toronto, was celebrating Kirk’s double that cut the deficit to 3-2.

The out call meant Toronto slugger Addison Barger didn’t get to bat with runners at second and third.

Schuemann had just entered the game as a defensive replacement, taking over for Miguel Andujar.

The Athletics had lost five straight and 16 of 17 entering Sunday.

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Ukraine’s drone attack in Russia shows Kyiv felt it had nothing to lose

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Ukraine's drone attack in Russia shows Kyiv felt it had nothing to lose

An audacious Ukrainian drone attack against multiple airbases across Russia is a humiliating security breach for Vladimir Putin that will doubtless trigger a furious response.

Pro-Kremlin bloggers have described the drone assault – which Ukrainian security sources said hit more than 40 Russian warplanes – as “Russia’s Pearl Harbor” in reference to the Japanese attack against the US in 1941 that prompted Washington to enter the Second World War.

Ukraine war latest: Russia accuses Kyiv of ‘terrorist attack’

The Ukrainian operation – which used small drones smuggled into Russia, hidden in mobile sheds and launched off the back of trucks – also demonstrated how technology and imagination have transformed the battlefield, enabling Ukraine to seriously hurt its far more powerful opponent.

Moscow will have to retaliate, with speculation already appearing online about whether President Putin will again threaten the use of nuclear weapons.

“We hope that the response will be the same as the US response to the attack on their Pearl Harbor or even harsher,” military blogger Roman Alekhin wrote on his Telegram channel.

Codenamed ‘Spider’s Web’, the mission on Sunday was the culmination of one and a half years of planning, according to a security source.

More on Russia

In that time, Ukraine’s secret service smuggled first-person view (FPV) drones into Russia, sources with knowledge of the operation said.

Flat-pack, garden-office style sheds were also secretly transported into the country.

The drones were hidden in truck containers and the tops remotely lifted for the drones to be flown out to attack. Pic: SBU Security Service
Image:
The drones were hidden in truck containers. Pic: SBU Security Service

The oblong sheds were then built and drones were hidden inside, before the containers were put on the back of trucks and driven to within range of their respective targets.

At a chosen time, doors on the roofs of the huts were opened remotely and the drones were flown out. Each was armed with a bomb that was flown into the airfields, with videos released by the security service that purportedly showed them blasting into Russian aircraft.

These drones were used to destroy Russian bomber aircraft. Pic: SBU Security Service
Image:
These drones were used to destroy Russian bomber aircraft. Pic: SBU Security Service

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Among the targets were Tu-95 and Tu-22 bomber aircraft that can launch cruise missiles, according to the Ukrainian side. An A-50 airborne early warning aircraft was also allegedly hit. This is a valuable platform that is used to command and control operations.

The use of such simple technology to destroy multi-million-pound aircraft will be watched with concern by governments around the world.

Suddenly, every single military base, airfield and warship will appear that little bit more vulnerable if any truck nearby could be loaded with killer drones.

Read more:
Russia investigates bridge collapses
What new Stalin statue says about Putin’s regime

The most immediate focus, though, will be on how Mr Putin responds.

Previous attacks by Ukraine inside Russia have triggered retaliatory strikes and increasingly threatening rhetoric from the Kremlin.

But this latest operation is one of the biggest and most significant, and comes on the eve of a new round of peace talks between Moscow and Kyiv that are meant to take place in Turkey. It is not clear if that will still happen.

US President Donald Trump has been pushing for the two sides to make peace but Russia has only escalated its war.

Ukraine clearly felt it had nothing to lose but to also go on the attack.

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Phils moving Walker to relief in bullpen shakeup

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Phils moving Walker to relief in bullpen shakeup

PHILADELPHIA — The Phillies made moves to restructure their bullpen Sunday, removing Taijuan Walker from the rotation and recalling right-handed reliever Seth Johnson before their series finale against the Milwaukee Brewers.

Mick Abel will take Walker’s place in the starting rotation Thursday in Toronto. Reliever Jose Ruiz was designated for assignment to clear a roster spot for Johnson.

“I think Tai’s got a chance to make us a lot better coming out of the ‘pen,” manager Rob Thomson said.

Walker has made 10 appearances, including eight starts and two long relief appearances, with a 2-4 record and 3.53 ERA in 43⅓ innings. Thomson will use Walker in one-inning roles.

The 32-year-old Walker has been primarily a starter throughout his 13-year career. He is in the third year of a $72 million, four-year contract.

Abel made his major league debut on May 18, throwing six scoreless innings. The 23-year-old was the No. 15 pick in the 2020 amateur draft.

Johnson, 26, is 2-2 with a 4.91 ERA and 42 strikeouts in 33 innings with Triple-A Lehigh Valley, transitioning from the starting rotation to a relief role. He made one appearance for the Phillies last year, allowing nine earned runs in 2⅓ innings on Sept. 8 against Miami.

Johnson was acquired by the Phillies from Baltimore on July 30, 2024, in a trade for Gregory Soto.

Ruiz had an 8.16 ERA in 14⅓ innings this season, including allowing five runs in one inning of Saturday’s 17-7 loss to the Brewers. The 30-year-old right-hander had a 5-1 record and 3.71 ERA in 52 appearances in 2024.

The Associated Press contributed to this report.

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