let's get to some economic news this morning as economists predicted uh inflation ticked up slightly year-over-year in October the Consumer Price Index Rose two ten0 of a percent last month it is one of the key inflation gauges monitored by the Federal Reserve the price of Housing and food also both increase so CBS News money watch correspondent Kelly o' Grady is joining me here in Studio 55 to talk about what the numbers mean and potentially Kelly an interest rate cut what do you think so this is where it gets a little hairy right I want to
just kind of level set expectations we were expecting 2.6% it is higher it's not caused for panic it's caused for concern we don't like to see this move up but this is not like we've seen it happen month over month over month this is the first time that it's actually moved up in a while right now the market is pricing in an 82% chance of a quarter point cut come the next fed meeting in December right so it's not 100% but we're leaning that way what I want to emphasize though is this kind of is
the first piece of data that the FED is going to get we're going to get another CPI report before that meeting which could impact things another PPI report um just to kind of give you a little bit of flavor the reason why this is up is shelter okay so shelter costs have been rising they're really sticky energy costs came down that's good um but something I know you and I talk about all the time is why don't people feel the fact that inflation's coming down the good news in this report Is that real wages so
that's inflation adjusted actually increased 1.4% so what that means is it might not feel it right now for for you at home but your wages are actually growing faster than inflation that's something we like to see yeah because a part of the uh argument that Democrats made during this last election is that the economic data was good and that people just had to hold tight so that wages could catch up to inflation and even surpass it uh it is only starting to happen now and it's hard for people to understand you can show them all
sorts of data and you can put up fancy graphics on the screen but when they come home and they say look the price of milk cost way more than it did four years ago the price of eggs the price of gasoline uh the price to heat my home costs way more than it did four years ago it's a hard argument to uh go against When You're just showing economic data numbers absolutely and and that's why I always like to say like look I get it I'm not feeling it at home either and so the data
is there but it's going to take a while for that to flow through and that's why you saw voters say like look I'm just not feeling it one of the things that people always ask me as well Kelly is well how come interest rates uh for the cost of homes has not come down the 30-year fixed um and and it's hard for people to understand they say all the economic data points to good things the the FED is cutting and yet it feels like interest rates are even higher than they were six months ago okay
so this is all because of inflation so mortgage rates actually did come down before the FED cut rates because mortgage rates are tied to the 10year treasury and what that measures is where investors think inflation and the economy is going so before the FED cut rates there was all this messaging that the fed's going to cut rates so you started to see mortgage rates come down starting in July for a couple of months then that rate cut that we got the last two was already priced in and so now some of the economic data including
today's has shown that inflation it's going to be a little bit of a bump your road it's actually going up and that's why you're seeing mortgage rates go up now I think it's the past six or seven weeks we've seen them tick up so until we see that inflation data coming down again more um more over time and that the FED continues to cut rates and we think they're going to continue to cut rates mortgage rates are going to stay where they are okay uh what numbers could we potentially see tomorrow Thursday is always a
big day on the economic calendar so we're going to get the producer price index and that's really important because those are the prices producers are make and guess who they pass that on to Vlad consumers us so it's an early indication of what you could see down the line in the next inflation report economists are mixed but they're thinking we could see a little bit of an uptick which again is not what the FED wants to see but like I said we're not panicking yet we're concerned I'm going to want to talk to you uh
over the next couple of weeks especially as we get to the inauguration and to the next Trump Administration about some of the economic policies that the president-elect has talked about implementing which some economists say might not be good for the US economy even though people voted for him because they thought that he could quote unquote fix the economy so it'll be a really interesting discussion to have over the next couple of weeks uh love having you here in the studio Kelly as always uh Market likes what you're saying look it's already up uh 48 big
points means nothing folks all right thank you Kelly appreciate you as always
