>>CORLEY PEEL: THE CONSUMER PRICE INDEX, A KEY MEASURE OF INFLATION HIT A 40 YEAR HIGH
ON FRIDAY, SENDING MARKETS
TUMBLING THE NEWS ALSO SHOCKED
ECONOMISTS WHO HAD EXPECTED A
BREAK FROM RISING PRICES. JON
CRYER IS JOINING US THIS
MORNING VIA ZOOM TO GIVE US AN
INSIGHT INTO WHAT THIS MEANS
IN WHAT COULD BE AHEAD. GOOD
MORNING. THANK YOU SO MUCH FOR
JOINING US.
>> HEY, GOOD TO BE HERE,
CARLY. THANKS FOR HAVING IT’S
BEEN A LITTLE BIT OF A CHAOTIC
COUPLE OF WEEKS HERE TO BE
SURE. YES, THAT’S FOR SURE.
AND I MEAN, CAN YOU JUST TELL
US?
>>CORLEY PEEL: WISE IS SCARING
PEOPLE SO MUCH. I MEAN, IT’S
SCARING ME BECAUSE EVERY TIME
I GO TO THE STORE, I FILL UP
MY GAS TANK. I’M JUST DREADING
WHAT IT’S GOING TO COST.
>> YEAH, A YEAR AGO WE WERE
HAVING THIS CONVERSATION AND
THE FEDERAL RESERVE WAS
TALKING ABOUT RAISING INTEREST
RATES TO SLOW DOWN INFLATION.
THEY WERE SAYING THAT THEY
THOUGHT INFLATION WOULD BE
TRANSITORY OR TEMPORARY OF
FACT. AND WHAT’S HAPPENED OVER
THE LAST COUPLE OF THEM WEEKS
OR MONTHS HERE IS THAT THEY’VE
REALIZED THAT IT’S NOT
NECESSARILY TEMPORARY AND
DIFFERENT FACTORS THAT COME
INTO AND THEY FEAR THAT IT
MIGHT BE OUT OF THEIR CONTROL,
EVEN THAT INTEREST RATE HIKES
LIKE WE’RE GOING TO SEE THIS
WEEK MAY NOT EVEN DO THE TRICK
RIGHT AWAY. THERE’S A LOT OF
UNCERTAINTY FLOATING AROUND
THE MARKETS RIGHT NOW.
>>CORLEY PEEL: WELL, WE KEEP
HEARING THAT THE PANDEMIC AND
THE WAR IN UKRAINE HAVE BEEN
FACTORS TO DRIVING INFLATION.
BUT WHAT IS REALLY CAUSING ALL
THIS?
>> YEAH, I MEAN, ALL THOSE
FACTORS COME IN AND THEY’VE
AMPLIFIED THIS. YOU KNOW, YOU
COULD ALMOST SAY THIS WAS A
PERFECT STORM THAT’S BEEN
BREWING FOR WELL OVER 10
YEARS. THE LOW INTEREST RATES
GO BACK TO THE 2008 CRISIS AND
THE FED WAS TRYING TO GET
INFLATION COOKING AND U.S.
ECONOMY WAS GROWING MUCH
SLOWER THAN EXPECTED. SO WE
HAD THOSE LOW INTEREST RATES
AND COVID COMES ALONG AND WE A
COUPLE TRILLION DOLLARS INTO
THE ECONOMY ON THE SIDE AND
THERE’S MORE DOLLARS FLOATING
AROUND BETTING ON THE SAME
BASKET OF GOODS AND YOU’RE
AUTOMATICALLY GOING TO HAVE
INFLATION OUT OF THAT. ON TOP
OF THAT, YOU HAVE SUPPLY CHAIN
PROBLEMS FROM COVID THAT ARE
AMPLIFIED BY THE WAR IN
UKRAINE. AND AGAIN, IT’S JUST
A RESET OF A PERFECT STORM
GOING ON HERE.
>>CORLEY PEEL: AND WITH SO
MUCH UNKNOWN RIGHT NOW, SHOULD
PEOPLE BE DOING TO MAKE SURE
THEIR ACCOUNT TO SECURE THEY
GOT ENOUGH MONEY IN THEIR
ACCOUNTS AND THEY DON’T RUN
OUT.
>> YEAH, YOU KNOW, THIS IS
THIS IS A GOOD TIME TO
ACTUALLY HAVE SOME CASH
SOMETHING ALWAYS SAY ON AIR
HERE IS DON’T PANIC. THIS
CHART BEHIND ME SHOWS ABOUT
100 YEARS OF HISTORY AND AN
AWFUL LOT OF CRISES SEEMED
ACTUALLY A FEW OF THEM QUITE A
BIT BIGGER THAN THIS. SO, YOU
KNOW, THE WORLD GETS IT
TOGETHER AND A LOT OF TIMES
OUT OF A CRISIS LIKE THIS
INNOVATION IS THE WAY THAT
COMES OUT OF IT. AND WHEN IT
COMES TO INNOVATION, THE U.S.
SEEMS TO BE THE LEADER THAT
ALWAYS MAKES THE GAME CHANGER
THERE. SO I DO THINK THAT, YOU
KNOW, THERE’S THERE’S SOME
PEOPLE COUNTING ON THAT AND
THE ELECTRIC VEHICLE SPACE AND
OTHER PLACES THE WORLD DOESN’T
GO OUT OF BUSINESS. IT JUST
RESETS ITSELF EVERY FEW YEARS.
AND AS LONG AS WE ACCEPT THAT
AND KNOW THAT THERE’S GOING TO
BE DOWN THEN IT’S A LITTLE BIT
EASIER TO DIGEST.
>>CORLEY PEEL: AND HOW DO YOU
THINK THIS WILL IMPACT US IN
THE LONG RUN?
>> YEAH, LONG RUN. THIS IS
GOING TO FOR SOME CHANGE. I
MEAN, COVID WAS A GAME
CHANGER. IT DEFINITELY CHANGED
THE WORLD AND, YOU KNOW, THE
FACT THAT IT OCCURRED IN AN
ELECTION YEAR MAY OR MAY NOT
HAVE CHANGED HOW IT PLAYED OUT
ON EITHER SIDE. WE HAVE
ANOTHER ELECTION YEAR THIS
YEAR. SO THERE’S THERE’S A LOT
OF FINGER POINTING GOING ON
AND, YOU KNOW, PERHAPS WE CAN
GET REPUBLICANS AND DEMOCRATS
WORKING TOGETHER, MAYBE AND 6
MONTHS OR A YEAR AND AND START
SOLVING SOME IN THE LONG RUN,
THE WAR IN UKRAINE AS AN
EXAMPLE SHOULD ADVANCE
ELECTRIC VEHICLE AND RENEWABLE
ENERGY. BUT THERE’S GOING TO
BE PAIN AND SUFFERING ALONG
THE WAY THE FEDS ARE GOING TO
RAISE INTEREST RATES HERE.
THAT’S GOING INDUCE PAIN AND
SUFFERING. BUT IT’S A POSITIVE
ALONG THE WAY BECAUSE IT WILL
GET PEOPLE TO CHANGE THEIR
BEHAVIORS WITH RESPECT TO
BUYING HOUSES IN GAS AND FOOD
AND THINGS LIKE THAT. SO THERE
ARE SILVER LININGS HERE.
POSITIVES WILL COME OUT OF
THIS.
>>CORLEY PEEL: THAT’S GOOD.
AND ONE MORE QUESTION REAL
QUICK BEFORE WE LEAVE. WHEN DO
WE EXPECT THINGS CAN TURN
AROUND? IS THERE A TIMELINE
DUE FOR SEEING ANY OF THIS
GETTING BETTER IN THE FUTURE?
>> YEAH, THAT’S THE $64,000
QUESTION. AND THAT WAS WHY
THURSDAY’S NUMBER WAS SO WAS
BECAUSE INFLATION DROPPED A
LITTLE BIT IN APRIL AND THEN
IT PICKED UP AGAIN HERE. BUT I
DO FEEL LIKE THIS COULD HAVE
BEEN THE PEAK BECAUSE HOUSING
IS SLOWING DOWN, MAYBE NOT IN
NORTH FLORIDA, BUT IN THE REST
OF THE COUNTRY USED CAR PRICES
ARE COMING DOWN. SO WE ARE
SEEING ADJUSTMENT IN CONSUMER
BEHAVIOR AND RELIEF MIGHT BE A
LITTLE SOONER THAN THINK. AND
THE MARKETS ARE PRICING IN THE
WORST CASE SCENARIO RIGHT NOW.
HANG ON AND TAKE A DEEP BREATH
AND AND WE’LL GET THROUGH