recession but i believe saying a severe recession may be needed to tame inflation. we ll talk to larry kudlow about that, he joins us on set now. larry, great to see you. just take us through that. larry: i don t want a recession. i mean, here is one thing. this is a disastrous report and it s not about energy, ok. if you look under the hood of this report, food and energy, that thing rose 7/10%, highest in month. three-month change, listen, 7.9%. the 12-month change is 5.9. when am i saying? i m saying excluding energy and gasoline, even excluding groceries, which we shouldn t do, but excluding sandra: that s what the fed looks at, core inflation rate. larry: and getting worse.
destroyed because of the adjustment on the asset side, and it hasn t even started to play out as it s going to over the next two years in terms of so many things. and guys, i mean, the fed and chairman powell have been very clear that they are looking for monthly core inflation. i m sure they would like to see all of the numbers come down, but surely monthly inflation come down. we saw prices increase 7/10 of a percent. this is problematic for the fed because it now means the fed will have to do more rather than less to try to tame inflation and a more aggressive fed means the likelihood of overdoing it, of triggering a recession goes up. that s the concern. let s pull up food prices that everybody can relate to. in the past year, food is up 12.2%, but if you break it down, cereal and bread, egg 13.8,
services, the biggest component, take out energy, the three-month change is 8.5%, that s way above the 12-month change, what you ve got here the last three months, 7/10, 6/10, 7/10, getting worse. cleveland federal reserve has this trimmed mean, they take out the top 8% prices and the low 8% prices, all the outliers, and it is soaring up. 2% beginning of last year. sandra: what do you think of the white house saying this is old news. larry: this stuff is hinting towards the future. you are deepening and broadening and increasing the inflation rate right now. it s not about energy, it s about all the other prices, like 5,000 prices, everything is going up. 68% of the c.p.i. is now running
we ll do infrastructure. didn t we pass a bill on that last year? we ll build one million homes over the next five years. we have 142 million homes in america today. why is adding 7/10 of 1% of homes over the next five years paid for with taxpayer dollars going to reduce the cost of housing. price control on drugs and child and elder care. we have build back better. we have the $5 trillion spending bill. that s what he is talking about. finally he says we re involved in deficit reduction. he suddenly admits that most of these so-called deficit reduction. we didn t repeat the covid stimulus bills that we had in march of 2020 and december of 2020 and by not repeating those we re reducing the size of the annual federal deficit. the national debt continues to go up. what is his answer to that? raise taxes. we ll raise taxes on american companies to match the levels
servant staff member martin reynolds. a person nobody had really heard of before outside westminster. it also means it will be much more difficult for the government to move on from this because some conservative advisers had thought that the attention and the anger was dissipating and with the threat from 0micron looking less bad, the government could start talking about other things. that is clearly not the case. labour are now moving off of the territory as well of saying that the rule makers are rule breakers, are now focusing on the personal integrity of the prime minister. they are calling him a liar and this morning they have sent out a list of 11 times where they say borisjohnson misled parliament or misled the public. fiifi say boris johnson misled parliament or misled the public. say boris johnson misled parliament or misled the public. 0k, thank you, adam. we ll be speaking to the labour party at 7.10 and health minister, edward argar at 7.30. a us man has become the firs