Inflation Drivers - Inflation is driven by factors such as cost increases and demand spikes [1] Beneficiaries of Inflation - Identifies who benefits from rising prices [1] Policy Impact - Fiscal and monetary policies play a role in inflation [1]

Joining me is KPMG's chief economist Diane Swank and CNBC's Steve Leeman. Steve, let me begin with you. Is this a big departure from what we had seen after the last Fed meeting.>> Um, yeah, and by the way, Contessa, unfortunately, you blinked. And, uh, it's an even bigger departure because those probabilities are now down to 41%. Um, and I get that because it's only just been in a little bit that we've had that move.As you saw, uh, the 10-year yield rise higher. uh to around 414 and now the probabilities ha ...

Monetary Policy Outlook - The FOMC is divided on future rate cuts, with some members favoring additional cuts and others believing they have done enough [4] - The differing views within the FOMC reflect disagreements on how to conduct policy given the current economic outlook [5] - Market participants anticipate further rate cuts, influenced by forecasts that consider macroeconomic fundamentals and potential political influence on the Federal Reserve board [10][12] FOMC Communication and Decision-Making - FOMC participants engage in public speaking to communicate and attempt to convince each other regarding policy decisions [6] - The market may react adversely if the case for another rate cut is not well explained by Chair Powell [9] Economic Conditions and Inflation - The FOMC's view of economic activity and inflation is expected to remain consistent with the summary of economic projections from September [2] - Inflation remains a concern, with some FOMC members arguing that it is not at the desired level and that there are upside risks [5] Future Considerations - A new chair and voting members will join the FOMC next year, potentially influencing future policy decisions [10] - Political factors, such as the White House's ability to appoint a majority to the Federal Reserve board, could significantly impact future interest rate policy [12]

Let's continue that conversation with Muhammad Ali and this morning chief economic adviser at Aliance who I'm sure has been listening in. Muhammad, happy Friday. It's good to see you.Do you think this wave of unleashed data can be definitive. >> No. Um, you have deep divisions and you heard Steve say that you're likely to get three descents if they don't cut, four to five descents if they do cut.These are deep divisions getting deeper. They're getting deeper for three good reasons and one awful reasons. The ...

Unsure about the outlook for trade and monetary policy, companies in the US and the UK slashed their currency hedges in the third quarter after boosting them to a record earlier this year https://t.co/lhteXgrjyV ...

Market Overview - Early indicators suggest Wall Street may open lower, with Dow futures down 223 points, S&P 500 futures down 53.75 points, and Nasdaq 100 futures down 316.75 points [1] - Major U.S. averages ended lower on Thursday, with the Nasdaq dropping 536.10 points (2.3%) to 22,870.36, S&P 500 down 113.43 points (1.7%) to 6,737.49, and Dow down 797.60 points (1.7%) to 47,457.22 [2] Economic Data Releases - The PPI-Final Demand for October is expected to increase by 0.3% [2] - The Commerce Department's Business Inventories for September is anticipated to rise by 0.2% [3] - The Energy Information Administration's Natural Gas Report will show a prior week increase of 33 billion cubic feet in gas stock [3] International Market Performance - Asian markets finished lower, with China's Shanghai Composite down 0.97% to 3,990.49, Hong Kong's Hang Seng down 1.85% to 26,572.46, and Japan's Nikkei down 1.77% to 50,376.53 [5] - Australian markets reached a four-month low, with the S&P/ASX 200 down 1.36% to 8,634.50 [6] - European shares are also trading lower, with France's CAC 40 down 117.75 points (1.43%), Germany's DAX down 401.20 points (1.67%), and the U.K. FTSE 100 down 170.59 points (1.74%) [6][7]

Housing Market & Affordability - The home affordability crisis is impacting monetary policy, financial markets, and American politics [1] - High interest rates contribute to an erosion of home affordability, as higher mortgage rates reduce the number of people who can afford to own a home [1] - Solving the housing crisis presents an economic opportunity for companies in the real estate market [1] - Building more housing, regardless of type, is presented as a solution to drive down housing costs [2][4] - Increased housing supply leads to lower prices, following basic economic principles [2] Investment & Financial Markets - Open Door's stock price increased from around $0.50 per share to $9.37 per share [1] - Lenar's year-to-date performance is down 2%, Dr Horton's is up 6%, and NVR is down nearly 9%, while Pyroup is up nearly 13% this year [1] Economic Policy & Principles - Milton Friedman's recipe for economic success includes cutting government spending, restrained monetary policy, and eliminating regulations [16] - Cutting taxes and regulations, maintaining near-zero money supply growth, and stable monetary policy are advocated [17] - Free markets are considered better for the economy than government intervention [18] Warren Buffett's Investing Principles - Warren Buffett's average annual return is 20% since 1965, nearly double the S&P's average [6] - An $18 investment with Buffett would have grown to $750,000 by 2025, a return of over 5.5 million percent [6] - Timeless investing principles, as demonstrated by Warren Buffett, can lead to wealth [10]

Labor Relations and Corporate Performance - Kroger successfully averted a potential strike as Teamsters ratified a new three-year contract for over 140 Smith's warehouse workers, which includes a significant 20% wage hike [2] Company Performance and Outlook - Siemens Energy AG announced that its FY25 results and FY26 outlook align with expectations, while setting ambitious new mid-term targets for FY28, aiming for a profit margin of 14%–16% before special items and low-teens revenue growth [3] Central Bank Actions and Economic Outlook - The Bank of Canada confirmed it will restart Government of Canada Treasury Bill purchases effective December 16, 2025, aimed at normal balance sheet management and restoring a more balanced mix of assets [4] - Federal Reserve's Neel Kashkari expressed no strong view on a December rate cut, noting a resilient overall economy despite identifying some labor weak spots, with firms reportedly very optimistic about 2026 [5] Economic Data and Media Developments - The U.S. Bureau of Labor Statistics indicated that it will require time to assess and finalize new release dates for economic data, with a new publication schedule to be announced later, following disruptions from a government shutdown [6]

We're joined by Mike Wilson, chief U.S. equity strategist at Morgan Stanley. Really great to have you with us on this first day after the government shut down. Mike, now that it's over, now what.Good morning. Good morning, Nathan. Yeah.Well, I think most people probably won't feel the effects. I'm sure the government employees are happy to get back to work. And look, I think from our standpoint, from a market standpoint, I mean, this is the longer that this kind of, you know, lagged into the holidays, it de ...

Core Insights - The research from Harvard Business School's Pricing Lab suggests that inflation may be lower than reported if the effects of tariffs are excluded, indicating potential for the Federal Reserve to lower interest rates further [2][5] - The average pass-through of tariffs to consumers is currently about 20%, which is expected to rise to 100% in the coming years [2] - The Consumer Price Index (CPI) inflation rate would have been approximately 2.2% instead of 2.9% without tariffs, highlighting the significant impact of tariffs on inflation metrics [3][4] Tariff Impact on Inflation - The Federal Reserve's target for inflation, based on the Personal Consumption Expenditures Price Index, translates to about 2.4% CPI inflation, with current estimates suggesting a rate of roughly 2.3% if tariffs were excluded [4] - The Fed has analyzed the implications of tariff-induced price increases and concluded that these should be considered in inflation calculations but excluded from monetary policy decisions [6][8] Monetary Policy Considerations - Tighter monetary policy can reduce non-tariff inflation but cannot prevent price increases due to tariffs, which may lead to a trade-off between inflation control and employment [7] - The Fed is likely to adopt a "see-through" policy approach, focusing on underlying inflation estimates while considering the long-term effects of tariffs on price levels [8][17] Inflation Expectations - The effectiveness of the see-through policy hinges on the public's perception of inflation; if higher inflation is viewed as permanent, tighter monetary policy may be necessary despite potential recession risks [9][16] Gradual Price Adjustments - The impact of tariffs on prices may be gradual, leading to a perception of permanently higher inflation rates, which could influence monetary policy decisions [10][16] - Economic analysis suggests that the pass-through of tariffs into American prices may occur over several years, affecting consumer and business expectations [16]