美CPI超预期油价飙升，市场押注年内加息两次

Good noon everyone. Bloomberg's money are showing personal finance, retirement and wealth management. I'm Scarlet Fu Tom Keene is off today. Coming up on the show today, Richard Haass, center of new partners, senior counselor and president emeritus of the Council on Foreign Relations. He makes the case that a strong foreign policy begins with meeting domestic challenges, like a swelling national debt or a lopsided economy.

Plus, we've got Ellen Zentner, Morgan Stanley wealth management chief economic strategist and global head of thematic and macro investing. She's done a ton of work on longevity and the new long term opportunities that that creates. But first, let's get a snapshot of where things stand in the markets. Stocks are rising on a combination of falling oil prices and in pretty much as expected, CPI report for the Dow, the S&P and the Nasdaq the first gain in five days.

Notable that the S&P is still about 1.6% shy of a record high set. Back on August 13th, the VIX currently down right now to about 15. But it did get above 18 yesterday. Let's look at the asset board because yields are backing off from multi-year highs. The ten year yield now at 4.94%. It almost touched 5% overnight but has much to back away from that level. Dollar index little change at this hour. And oil prices retreating after yesterday topping 104 a barrel.

That is the U.S. benchmark WTI. It was a four standard deviation move, I'm told Tom Keene actually texted me and told me that. And diesel prices of course up. You know, a product of oil rising cost $6 a gallon. We're going to get into all of that shortly. So let's get into the conversation right now, because joining us at the Money Desk this afternoon is Bloomberg Money managing editor Nicky Waller, Bloomberg Intelligence ETF senior analyst Eric Balchunas, our Washington correspondent Tyler Kendall in New York today, and Bloomberg opinion columnist Allison Schrager, who's also author of the upcoming book Worth the Risk The Seven Myths That Keep Us From Taking the Chances We Need to Take.

So we got to start with a big data point today, which was inflation. And Allison, those numbers came out today up at consumer prices. Wholesale prices came out previously. They pretty much met or rose slightly more than expected. So a rate hike feels inevitable at this point. Well, it was warm but not hot. And so the markets are now pricing in maybe two rate hikes later this year. I think the question is though is that really going to be enough?

I think what we're starting to see is maybe sort of what we don't want to realize, which is inflation might just sort of be settling around two and a half, 3% and sort of this nice deflationary pressure that we had is played out. And if we really want to get inflation back to two, it's going to really take no more than tough talk and a couple of rate hikes. And, you know, are we really willing to do what it takes to decrease demand.

Because what we do is a lot of this inflation pressures from supply, things like energy. So you could have a really bring down demand basis from where it is now to get your hands around inflation. And it's not clear we really have the appetite for that. Right. That would require a series of rate hikes, not just a 125 basis potentially a recession or a recession. Nicky, you've been looking into the data points of the inflation report.

What did you pick up? So one thing to look at is not just what happened last month, but what is going to happen in the future. We saw the other big number that you mentioned earlier, that diesel went up to $6 a gallon. That that shows up in the CPI. Fuel costs obviously a huge part of that number. But the other thing that we're going to see with, with all of those costs is that diesel is the price of getting your groceries to the grocery store.

So even more price hikes are in store for things like the bananas and beans that you're going to be buying at the grocery store right now. You know, when it comes to this oil spike and the Iran situation, there's been this like back and forth with the president, you know, wanting to have peace talks when oil goes too high because he's well aware he does not want to have rates go up. It's horrible for the economy. I think the stock market is kind of a governing force over the whole apparatus.

And so the idea that oil goes up, stocks go down. There's always reversal. So I think that's going to keep inflation in check. And I'm going to take the under on the rate hikes and go with zero or even a cut. You've been sticking to this point for a long time because it all goes back to the president does not want rate hikes. He wants rate cuts. And it's pretty straightforward. Yeah I mean he sat there and interviewed this guy and I'm sure it came up and I just think that's it.

People overthink it. People overthink it. So, Tyler, you're here in New York, but of course, there's a lot of action in Dallas, and you helped cover what was going on at the first ever midterm convention held by the Republicans. Did they bring up gas prices? Did they bring up affordability concerns? It's interesting because how we did see it brought up was through what is considered to be a rather unusual proposal, with this potential for a $5,000 check to be sent to Americans if Republicans end up winning both chambers of Congress.

We have to say that we did have the NSC director, Kevin Hassett, on Bloomberg Television earlier today, who said that maybe this could be done through a reconciliation package, which we should put context behind. That would mean that Congress would have to get involved, even if the president has previously floated that maybe he could do it without their authority. Also point out, we hear a lot from the president about tariff revenues.

Yeah, our own analysts have crunched the numbers. This could be trillion proposal. When we talk about all the concerns with the deficit, how difficult it is to politically cut spending in Washington. But after those tariff rebates, uh, refunds from the Supreme Court case, I think this year we're on track for somewhere close to 15 billion. We are much farther away from that trillion dollar. And so, Allison, I want to come to you, because that's an interesting point.

The tariff revenue that came in, I mean, that does help at least slowed the growth of our national debt, doesn't it? It does. I mean, that was one of the benefits, supposedly. I mean, I don't think it's going to take care of our debt problem. Um, and when I try to be generous about tariffs as an economist, I hate them. But, you know, it is a consumption tax, and I like those. But, um, the problem is, is, I mean, I don't know how realistic this $5,000 check is, but I think we saw during the pandemic that sending everyone a check is then inflationary.

Yeah. And that increases the debt. So, you know, you're sort of then in a bit of a pickle that, you know, you know, tariff revenue, even if we're tariff 20% is going to get you out of, especially because that's another hit to prices. You know, we had the consumer sentiment report coming out of University of Michigan and it shows, uh, sentiment, people feeling lousy about the economy because of the rising gas prices, the rising diesel prices, Nike, that you mentioned.

But it always splits along, whether you're a Democrat or a Republican, doesn't it? It does. And I think we see much more positive views of the economy on the red side of the House. At the same time, I think it is deteriorating broadly, um, as people are experiencing the economy and and not feeling good about it. Tyler, have the Democrats come up with any kind of counterprogramming to what the Republicans said at the mid-term convention to get their base fired up?

I love that you ask this, because this is actually every, uh, question that we asked every Democrat that joined us this week on Bloomberg Television. It's difficult at this moment because, um, one regard, Democrats have the abilit