Economics/Class Relations

Inflation report was bad news for everyone

Insider Today

Emily Cohn October 14, 2022

 

Hello, readers! This is Emily Cohn, Insider’s deputy editor in chief, filling in for Nicholas Carlson. It’s been an exciting and busy week for our team. We launched this newsletter with a story about how the pandemic turned us all into jerks, and featured other fascinating stories, including an essay by an obesity expert who’s fine with a patient being 300 pounds. Insider’s Linette Lopez also made the bold call that it’s probably time for Mark Zuckerberg to step down. So how are we doing? Let us know at newsletter@insider.com. And now, let’s get started.
The latest
  • The UK finance minister has been fired, as the government does a U-turn on the tax-slashing plans that caused the pound to plummet. More on that here.
  • Equifax said it fired employees for working as many as three jobs at once, in an internal operation known as Project Home Alone. What we know.
  • Meta has burned $15 billion trying to build the metaverse. Nobody’s saying where the money went. Read the full story.
The big story
Credit: Malte Mueller/Getty Images
The September inflation report was the worst-case scenario for Biden, the Federal Reserve, and the stock market. They’ve all been hampered by stubbornly high consumer prices, and the new data only made things worse.

 

The Consumer Price Index rose 0.4% in September and showed a year-over-year pace of 8.2% — both higher than economist forecasts. Meanwhile, core inflation rose at its fastest pace year-on-year since 1982.

 

For the Fed, the new data makes the massive rate hikes they’ve used to fight inflation look futile. They now find themselves in the unenviable position of being forced to continue raising rates, which will increase the odds of an economic hard landing.

And while stocks have rallied since the report, their longer-term trajectory is murky. Rate hikes have been the main culprit in sending US indexes down more than 20% this year. Now traders who were hoping the Fed would already have a handle on inflation are facing the prospect of even more pressure.

 

Then we have the Democrats, who just missed their last opportunity to win a surprise inflation cooldown they could campaign on through Election Day. Republicans now have a new talking point that resonates with all Americans, which could threaten Democrats’ control of the Senate.

Here’s the full rundown.

Top reads
Credit: Mike Blake/Reuters; Savanna Durr/Alyssa Powell/Insider
  • Amazon is doubling down on “frugality.” Amid a looming recession, leaked slides reviewed by Insider show Amazon’s leadership team is urging employees to “accomplish more with less.” Here’s what else the slides show.
  • Here’s a shocking reminder to take out your contacts: A doctor says the wildest thing she’s had to do in her 20 years of practicing medicine was removing 23 contact lenses from a patient’s eye. Read the story —and yes, there’s a pic.
  • A 55-year-old who never earned more than $52,000 built a 25-unit real estate portfolio — in just four years. Now, the former cop is financially independent and told us, “If I can do it as a basic blue-collar worker raising a family, anyone can.” Read how he did it.
  • The pioneer of CRISPR is building a secretive new startup. Feng Zhang is launching yet another ambitious gene-editing company, backed by approximately $200 million from some of biotech’s biggest investors. It’s still in stealth mode, but here’s what we know so far.
Today’s sound bite
“The best way to get rid of it would be just an outright ban.”
Writer James Murphy on the “rigged game” that is early college admissions.
Watch this
From our series So Expensive Food: A batch of 4,000 pitayas (Mexican dragon fruit) can sell for over $7,400 — and getting your hands on some in the US can cost up to $22 a bucket for five fruits. So why are they so pricey? Watch to find out.
Today’s team
Emily Cohn (@emily_cohn), Hallam Bullock (@hallam_bullock), Lisa Ryan (@lisarya), and Jordan Parker Erb (@jordanparkererb).
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