Fox TRASHES Trump's Inflation As Prices Keep Soaring

[00:00:00] Speaker 1: Hello everybody, David Shuster here. The US government just released its latest inflation report and the numbers are bad. So bad that the usual Trump cheerleaders on Fox Business let out audible groans as the demoralizing numbers came in. [00:00:15] Speaker 2: Four tenths of 1% on headline month over month, three tenths of 1% on core month over month. [00:00:22] Speaker 1: Translation, consumer prices rose 0.4% in October, more than expected complicating feds inflation fight. [00:00:30] Speaker 2: It is hotter than expected, similar with the core flat in line with where we were before. But again, hotter than expected. We were looking at maybe a deceleration here because we thought a big jump in gas prices would start to come down. And I would say that we are nowhere near good enough. [00:00:48] Speaker 1: While the overall inflation rate went up 0.4%, some parts of the US economy, including energy, gasoline and food prices went up even more. [00:00:57] Speaker 2: "Food prices five-tenths of 1%, housing three-tenths of 1%, owner's equivalent rent three-tenths of 1%, gasoline 1%, which means real earnings for all private workers are flat now. And again, until this starts to show significant change, real earnings flat does not get consumers out of the hole that they feel like they have been in." [00:01:25] Speaker 3: "Look at your NASDAQ futures right now, by the way. That's the massive deterioration." [00:01:31] Speaker 1: We will get to rates and the market expectations in a moment. First, you heard the Fox Business News anchor talk about wages. Wages in the United States are rising, but all the data shows the wages are not rising fast enough to keep up with inflation. So for most American families, a larger and larger portion of our income is being spent on necessities, including food, gas, housing and healthcare. And that leaves less money for everything else, leaving most of us even more financially squeezed than we were feeling six months ago or even a year ago. The rising inflation and flat wages prompted a dive in the US stock markets. Headline stock market today, major indexes fall, treasury yields jump, as inflation data boosts Fed rate hike expectations. To try and tamp down inflation, the Fed is expected to raise borrowing rates. And earlier on this day before the inflation report, a member of the Fed [00:02:27] Speaker 2: offered some guidance. Harris Waller, four and a half hours ago, the federal governor there, saying that if headliner core, I should say, came in at 0.3 or higher, which is where we are, he wants a 50 basis point hike and not a 25 basis point hike. This is the last CPI number that we get before the Fed meets December 8 through 9. [00:02:49] Speaker 1: A 50 basis point hike would be half a percentage point. A 25 basis point hike would be a quarter percent. The last time the Fed raised borrowing rates by a half percentage point was four years ago in December 2022, when the US inflation rate was at a 40 year high. But again, the monthly inflation jump in the latest data was twice as high as the Federal Reserve's inflation goal. [00:03:13] Speaker 4: We're 0.4. Yeah, you're really looking for 0.2. 0.2 on a consistent basis would be in line with the Fed's 2% target. So you're moving further away from that when you get to 0.4 instead of the 0.3. I want to pull up the bond market as well. [00:03:30] Speaker 2: Yields are jumping 10 basis points across the curve. The December rate hike is now 100% odds [00:03:37] Speaker 1: that the Fed moves in December. And with that 100% chance of a Fed rate hike, the bond market yields are soaring. The Treasury yields act as the baseline benchmark for fixed income loans. So when Treasury yields rise, lenders increase rates on mortgages, auto loans and credit cards. The bond yields on this day soared. [00:03:59] Speaker 2: The two-year jumps 14 basis points. We came in at a 463. We're at a 469. 14 basis points higher. The 10 was at a 494. Now we're up about seven basis, you know, 13 basis points, seven basis points on the day or so further out on the curve. So I think this really changes the conversation. This is not what [00:04:20] Speaker 3: Kevin. Well, I think I think Waller framed the conversation and the numbers just said the way he framed it is now going to be the conversation. I'll be talking about a half point here and a half point [00:04:31] Speaker 1: raise in the Federal Reserve interest rate would mean sharp raises and consumer borrowing costs. So anybody who's looking to get a mortgage, car loan or new credit card is going to experience sticker shock soon. And all of this comes at a time when most Americans are already feeling financially pinched. The news is so gloomy that even Trump economic advisor Kevin Hassett, who always seems to put on a happy face and spin the US economy as great, [00:04:57] Kevin Hassett: appeared on Fox Business and was morose. It's a disappointing report that we had this period in the summer, you and I talked about it back then, where core got all the way down over a three month average to about one and a half annual rate. But then things have accelerated over the last three months. And, you know, my friend EJ that you just quoted, I think characterized it pretty well what we're seeing in the data, which is really energy prices of the CPI are up 20 percent year over year and gasoline prices are up 37 percent year over year. And we had so much good news throughout the year, like lower drug prices and everything that it kept things from, you know, heading in the wrong direction on the wrong trajectory. But right now the trickle down from the higher energy prices is definitely [00:05:42] Speaker 1: very palpable in the data. Higher prices were part of why Donald Trump's Republican Party got annihilated in the midterm elections. Another part involves corruption. When Fox News asked voters how important was government corruption in your vote for Congress, 55% said crucial, 36% said major. In other words, nine out of 10 Americans said corruption was a factor. [00:06:05] Speaker 6: When times are tough and we're going through an economic transformation of an extraordinary degree and prices are high, even though jobs are plentiful, people are hurting. And that was a big issue in the election. And they look at Washington and they see the president, apparently a rich man to begin with and never afraid to talk about how rich he was and is. Suddenly several billion dollars richer according to Forbes magazine and they see his sons involved in the cryptocurrency businesses that are netting them a large amount of money and they don't like the looks [00:06:43] Speaker 1: of that. And it fuels the Democratic plans not just to pass legislation to try and address the affordability crisis, but also to conduct investigations into Trump corruption and self-dealing. The economy and corruption have merged. So Democrats plan to tackle both. In the meantime, the news for Donald Trump keeps getting worse. Not only will Donald Trump be a lame duck with Democrats controlling Congress for the final two years of his term, the affordability crisis dumped on consumers is getting heavier. Borrowing costs are going to rise and public anger at Trump even after the midterms may intensify. By the way, Texas Republican Senator Ted Cruz is now saying it's over for embattled Trump Defense Secretary Pete Hegseth. [00:07:29] Speaker 7: And one of two things is going to happen. Either Hegseth is gonna step down, either he will resign voluntarily or Trump will fire him. Or if that does not happen, I think it is extremely likely if not certain that the House will impeach him. [00:07:45] Speaker 1: Check out that video at the link below. It generated a lot of comments on YouTube. One of the most pop was from Dave Arope. By the way, Ted Cruz, it's over for you too. You just don't know it yet. You're what we call on borrowed time. Thank you for your attention to this matter. I hear you. I look forward to reading your comments about the latest government inflation report triggering doom and gloom on Fox business. I'm David Schuster. Thanks for joining us.