Oncast Money · Closing Bell

Fed rate hike odds surge after hot inflation

· Fact-checked before it aired. Unconfirmed claims from this segment are not shown.

Trump said "I want to get Cuba done before I leave" in a Thursday interview with Salem News Channel, referring to Secretary of State Marco Rubio.

The US has been engaged in conflict with Iran; Trump has made multiple statements about the Iran war.

Trump said "I want to get Cuba done before I leave" in a Thursday interview with Salem News Channel.

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What the hosts said

AThe market's closing bell is about to ring, and the big story is the Fed. Not a cut. A hike.
BThat's the sound of every rate-cut dream dying this afternoon.
AHot inflation data hit, and now the futures market is pricing in a rate hike in December.
BOne account on X says the odds of a 50 basis point hike in December jumped right after the data.
AI can't confirm that exact number, but the direction is real. Core inflation came in at 0.3 percent, hotter than expected.
BAnd the Fed's own comments have been hawkish, with the market pricing in a hike.
ASo the question is: is the Fed actually going to hike, or is this just a knee-jerk reaction to one bad inflation print?
BI think they should hike. We've been fighting inflation for two years, and the moment it ticks up, everyone wants to pretend it's fine.
ABut one month of 0.3 percent core inflation doesn't mean the trend is broken. The Fed has said it's data-dependent.
BData-dependent means they should react to the data. The data says inflation is sticky. You can't just ignore it.
AI'm not saying ignore it. I'm saying a 50 basis point hike is a sledgehammer when you need a scalpel.
BA scalpel? We've been using a scalpel for two years and inflation is still above target. Maybe it's time for the sledgehammer.
AAnd risk crushing the AI rally that's been carrying the market? That's the trade-off.
BThe AI rally is built on cheap money. If rates go up, those valuations get questioned. That's healthy.
AHealthy for who? The retail investor who just bought Nvidia at the top?
BHealthy for the economy. We can't have inflation running hot just to keep stock prices up.
AI'm not saying keep rates low forever. I'm saying the Fed should be careful. A 50 basis point hike in December would be a panic move.
BA panic move? The market is already pricing in a hike. The Fed would just be following the data.
AThe market prices in a lot of things. That doesn't mean the Fed should do it.
BSo you want the Fed to ignore the market and ignore the data? What's left?
AI want them to be patient. One hot print isn't a trend. Let's see what November and December bring.
BAnd if inflation keeps rising, then what? We're behind the curve again.
AThen they hike in January. But a December hike now feels premature.
BI disagree. I think the Fed has been too slow this whole cycle. They should have hiked more aggressively last year.
AAnd if they had, we might be in a recession right now.
BMaybe a short recession is better than years of inflation.
AThat's a philosophical difference. I'd rather have slow growth than a crash.
BAnd I'd rather have price stability than a market propped up by easy money.
AWell, the market's about to close, and it's been a rough day. The S&P is down, the Nasdaq is down, and the Dow is down.
BThe closing auction imbalances show the S&P 500 and the Dow leaning negative, with the Nasdaq 100 leaning positive.
ASo the Nasdaq is seeing some buying into the close, but the broader market is still under pressure.
BAnd the big tech names are seeing selling pressure in the closing imbalances.
ASpeaking of big names, President Trump just dropped a line that's got the prediction markets buzzing.
BPolymarket posted it two minutes ago. Trump says, 'I want to get Cuba done before I leave.'
AHe said it in a Thursday interview with Salem News Channel, and he was talking about Secretary of State Marco Rubio.
BCuba. That's a big one. Rubio's family is Cuban, and he's been hawkish on the regime for years.
AThe question is what 'get Cuba done' means. Regime change? Sanctions? A deal?
BTrump also said the US has been fighting with Iran at a rapid pace for the last three weeks, and that he might use military force if needed.
AThat Iran quote is unverified, but the Cuba line is confirmed. And it's moving markets.
BCuba is a geopolitical wildcard. If the US gets involved there, it could disrupt shipping lanes and energy markets.
ABut it's also a distraction from the inflation story. The market hates uncertainty, and now we have two geopolitical hotspots.
BIran and Cuba. Plus a Fed that might hike. This is a lot for one Thursday afternoon.
AAnd there's a weird story from Zero Hedge about a fast-food chain declaring war on McDonald's with a two-dollar menu.
BA burger war? That's the kind of news we need right now.
AI can't confirm the story, but the idea of a chain calling itself '100 times better' and undercutting McDonald's is funny.
BTwo-dollar menu. That's a throwback. Remember when McDonald's had the dollar menu?
AThose were the days. Now a Big Mac meal costs more than a movie ticket.
BIf this chain can actually do a two-dollar menu and make money, that's a real story. But I'm skeptical.
AFood costs are up, labor costs are up. A two-dollar menu sounds like a loss leader.
BOr a publicity stunt. Either way, it's a nice break from the Fed and the Middle East.
AAnd one more market note: an account called FLN Investment posted a chain reaction theory about the end of the war leading to rate cuts.
BThe idea is: end of war, rate hike odds drop, dollar and yields fall, risk appetite rises, inflation relief rally ends, CPI drops, rate cut odds rise, Fed cuts.
AThat's a lot of ifs. But it's the kind of thinking that's driving a lot of the market right now.
BEveryone's looking for the catalyst. The end of the war, a Fed pivot, a Cuba deal. Something to break the logjam.
AAnd that's where we are as the bell rings. A market caught between inflation fears and geopolitical hopes.
BThe closing bell is ringing. The Nasdaq is mixed, and it's been a rough day.
ABut the real story is the Fed, and that changes everything.
BWe'll see if the Fed actually does it. But for now, the rate-cut dream is dead.
AAnd that's the close. We'll be back with more after the bell.

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