US stocks sink after inflation surges

By CNN Business

Updated 5:18 p.m. ET, November 10, 2021
6 Posts
Sort byDropdown arrow
12:52 p.m. ET, November 10, 2021

Inflation is ‘concerning’ and the Fed must make a course correction, former Bush economist says

From CNN Business' Matt Egan

Glenn Hubbard, the former top economic adviser to President George W. Bush, is worried the Federal Reserve is getting caught flat-footed by red-hot inflation.

“The Fed is clearly being too accommodative,” Hubbard, now a professor at Columbia Business School, told CNN on Wednesday.

Consumer prices surged by 6.2% in October from a year before, a significant acceleration from prior months and the biggest jump since November 1990.

Hubbard said headline inflation is “very high” and “even more concerning” is that core inflation, which strips out food and energy, is high as well. That metric rose in October by the most since 1991.

“The question is: When does that get into the public’s consciousness? I think it has already,” said Hubbard, who chaired the Bush administration’s Council of Economic Advisers.

And yet the Fed has only just begun to slow its stimulus program of asset purchases and has continued to keep interest rates at rock-bottom levels.

“It doesn’t add up,” Hubbard said of Fed policy. “You don’t have to pour gasoline on a fire.”

The criticism of the Fed, from a Republican economist no less, comes as President Joe Biden debates whether to reappoint Fed Chairman Jerome Powell, a Republican nominated by former President Donald Trump.

“I don’t think the house is on fire. There is time to make a course correction,” Hubbard said of the inflation situation. “But I’m not sure the Fed is going to make it.”

9:57 a.m. ET, November 10, 2021

Stocks open lower

From CNN Business' Anneken Tappe

Wall Street opened in the red on Wednesday, adding onto the losses that major stock indexes incurred in the previous session.

The big economic report of the morning did nothing to lift spirits: A key measure of inflation rose to its highest in more than 30 years, a result far worse than economists' expectations and a sign that the pandemic price hikes are not yet behind us.

9:57 a.m. ET, November 10, 2021

America's prices are surging more than they have in 30 years

From CNN Business' Anneken Tappe

There's no end in sight for higher prices. US consumer price inflation surged higher again in October, the Bureau of Labor Statistics reported Wednesday.

Over the past 12 months, prices climbed 6.2% -- the biggest increase since November 1990.

Stripping out food and energy prices, which tend to be more volatile, the index rose 4.6% over the same period, the biggest jump since August 1991.

The overall price index rose 0.9% in October alone, adjusted for seasonal swings, significantly more than the 0.6% economists had predicted, and overshadowing the somewhat more tepid 0.4% increase from September.

Last month's price jumps came on the back of increases in multiple categories, including energy, shelter, food and cars.

Read the full story here.

6:27 a.m. ET, November 10, 2021

US stocks point to slightly lower open

On Tuesday, US stocks fell and snapped an eight-day win streak.

Stock prices have gotten particularly high during earnings season: The market has risen in 17 of the past 20 sessions, as companies consistently beat third-quarter earnings estimates.

Investors did what they do when stocks get pricey: sell, take a breather, and come back hunting for bargains the next day. That appears to be the case.

Here's where things stand as of 6:25 am ET:

  • Dow futures fell 65 points or 0.18%
  • S&P 500 futures slid 0.24%.
  • Nasdaq futures were 0.39% lower.

6:20 a.m. ET, November 10, 2021

Americans have never been in so much debt

From CNN Business' Anneken Tappe

American households are carrying record amounts of debt as home and auto prices surge, Covid infections continue to fall and people get out their credit cards again.

Between July and September, US household debt climbed to a new record of $15.24 trillion, the Federal Reserve Bank of New York said Tuesday.

It was an increase of 1.9%, or $286 billion, from the second quarter of the year.

As pandemic relief efforts wind down, we are beginning to see the reversal of some of the credit card balance trends seen during the pandemic," such as lower spending in favor of paying down debt balances, said Donghoon Lee, research officer at the New York Fed.

Read more here.

6:21 a.m. ET, November 10, 2021

There is no fear on Wall Street. Only greed

From CNN Business' Paul R. La Monica

The current mood on Wall Street can only be described in one way: euphoric.

All the major stock market indexes are at record highs on Monday. The Nasdaq is on an eleven-day winning streak. Bond yields remain relatively low. And cryptocurrencies like bitcoin and ethereum are at all-time highs too.

It's no wonder then that the CNN Business Fear & Greed Index, which looks at seven gauges of market sentiment, is still showing levels of Extreme Greed in the market.

Four of the seven indicators, including stock market momentum and demand for risky junk bonds, are in Extreme Greed territory. Two other measures are in Greed territory.

Read more here.