stuart: which year did mcdonald's lawn of the happy neil? give you the answer right now, 1979. back then a happy meal cost $1.10. today 2.50 and $4. 1979. the markets are way way down. neil cavuto will cover it for you. neil: you hit on a key point. i don't know how much competition bonds are in the environment. as you said, stuart, two year note fetching 3.75%. maybe in this environment adequate enough competition for stocks. that is what i felt. they disconnect us after a while. has nothing to do with him. back up on interest rates on heels of august retail innation

report, never mind it was down 8.5% in the prior month. august, running at year-over-year clip at 8.3%. expecting something in the vicinity of 8.1%. we can get into details here. suffice it to say right now that the bond market is already pricing in big hike in rates and in two weeks. maybe, i should say in a week, i apologize. our charlie grady, stocks editor, senor editor 20% chance some people say that rate hike might be a full percentage point at the very least baked into the cake now is 3 -- 3/4 hike in a row. a little skittishness in the markets that is probably an understatement. go to the white house, edward lawrence is going through all the data and reaction behind it. reporter: you talked about, neil. it's a little bit less than last

month, 8.8 year-over-year. that is huge number. federal reserve would like to see that number 2% going. what is the other number, core inflation. inflation without food and energy prices t rose for the first time in five months and rose substantially to 6.3%. that will spook the federal reserve. the biden administration is saying in a statement, the data shows progress the policies need more time. look what happened to inflation since president biden took office. >> democrats have no plan for inflation, other than to make it worse, to spend trillions more and drive inflation up even more. gas prices they have no plan to reduce gas prices other than to make it worse by hammering american oil and gas production. reporter: within this number in the cpi report, expense we use every day. meat and eggs, eggs up almost 40%. milk up 17% year-over-year. fruits and veggies are up.

coffee is up 17.6%. overall the number will likely mean the federal reserve will raise rates 3/4 of a percentage point, even more, possibly 1% as the market has been starting to crumble about. these interest rate hikes have not happened since the federal reserve model went to the model they're using now. talking about the 75 basis points. 75 basis points. now looking at another 75 basis points or more at this meeting next week. here is the federal reserve chairman last week. >> longer that inflation remains well above target, greater the concern the public will start to naturally incorporate higher inflation into its economic decision making and our job is to make sure that doesn't happen and we're committed to doing that job. reporter: last jobs report was very strong. cpi inflation report coming in a little bit hot. this gives the federal reserve a green light. neil? neil: we don't know a green light into what. maybe more aggressive that we

thought. moody's john lonski, jackie deangelis looking at gas price situation. the gas prices have come down from their highs but that might be a short-lived event. jackie what do you have for us? reporter: neil that is right. the administration touting a decrease in gas prices as victory doing it in such a way leaving room for price to bounce again because that could very well happen in the future. we're at 3 .70 dollars. prices are lower the administration says it tapped the spr to help the american people but that spr stands at 442 million barrels. it is at the lowest point it has ever been since october 1984. since president biden tapped the spr it is down 30%. to give you context. many debating if this situation qualifies as a type of emergency that the spr was designed for but that is a separate

conversation. a million barrels a day isn't nothing. also not enough oil to account for the 26% drop we saw in gas prices when we consume roughly 20 million barrels a day as a country. it is about 5% of our daily needs. the real reason crude oil prices are trading lower because speculators see the fed raising interest rates to slow the economy. those speculators are worried about a recession and they think demand is going to drop. what is it that could take us higher. why are people worried about that? eu embargo on russian oil and gas goes into effect at the end of the year that will tighten supplies again. experts warn gasoline and home heating costs will rise this winter, supplies tighten further prices could rise even if demand is even lower. people like to reach out on social media, that u.s. oil producers are pumping that i have the story all wrong. they are pumping, neil to answer that question, 12.1 until barrels a day, but that is still

a million short where we were in february of 2020 right before the pandemic. had big oil been investing, building out the infrastructure last 19 months we could be pumping 13 million barrels a day and we wouldn't need to tap the spr at all. we are short on refineries. we always have been. they are certainly not going to build the refineries when the administration is pushing electric cars so hard. part of higher gas prices is the increase in demand all summer. the other part is supply is not rising the way it could if politicians were approaching oil and gas a little differently. neil? neil: jackie, thank you very much for that. jackie deangelis. dow jones industrials had been skidding 900 points, well over 900 points a couple minutes ago, around 31,000 on the dow. nasdaq is swooning. interest rates are higher. here are some making bets what the federal reserve does next week. increasingly they're betting on a big rate hike. not just 3/4 of a percent hike

seemed to be baked into proverbial cake but maybe a full percentage point. 20% are before thing on that. go to john lonski getting the read, first cycle founder. john what are you looking for yourself what kind of a hike? >> 3/4 percentage point. up to 3.%, higher since -- neil: talking about the fed funds rate. >> 10-year treasury yield approaching 3.45%. there is pretty good chance it will rise above the 2022 ohio. ohio. -- high. that was back in june, inflation running at 9.1% annually. neil: wondering too, you're getting almost as much for your money overnight from next week at this time as you are committing it for 10 years. you've got a two-year note over 3.75%. how high is high here?

>> we would like to think we're not going much higher but unfortunately if bond yields are close to peaking, that tells me that some hard times await the u.s. economy. neil: yeah. >> it is only if the economy shows signs of reaccelerating, spending picks up again, despite high inflation, that we might have the 10-year yield break well above 4%. so be braced for hard times, forget about that recent rally we had in equities. that was very, very misleading regarding the likely direction of the u.s. economy. neil: what broke the camel's back here today? we have another four hours to go here thereabouts. was it, it wasn't the fact that inflation and in the aggregate year-over-year was little higher than estimated. still down from the annual pace, from the prior month but it was all the components, right? >> strength and core inflation that -- neil: without food and energy. >> without food and energy. you had big jumps in

transportation services prices that were not expected. you had a jump in what you call shelter costs. renters rent owners equivalent rent, so on. that is what is sending the market lower, sending bond yields higher. as a result increasing the perceived risk of a recession. all the while, let's not forget, that in the month of august we had for a 17th consecutive month the yearly increase by the cpi, 8.3%. with three percentage points greater than yearly increase for the average wage. longer you have prices out running wages the likely you will have a sharp downturn by real consumer spending. neil: just up to speed, the fed's goal is to get the inflation rate back down to something like 2%, right? >> that's right. neil: so we're north of 8%. so you hope you don't have to go

up to 8% to mimic that typically what you would do to try to adjust things. you hope the rates you have or continue to make are going to bring that down but that could be a weight? >> could be quite a weight getting a 2% inflation. getting consensus forecast, they have inflation running at 2 1/2% annually by the end of 2023. so it may not be until 2024 that we get inflation under 2%. now one way of speeding this goal of attaining 2% inflation is via a recession that hits hard, that brings about a build-up of unwanted inventories, price discounting and also brings about a less of a need for labor that would need to a jump in layoffs. the consensus forecasts seemed to be telling me that recession risks are going to be running very high by the second half of 2023. neil: you're not in the camp of

jpmorgan saying we will still have a good shot at a soft landing rather than something worse, right? did this number today change that? >> it definitely worsens business. it lessens the likelihood of jpmorgan's talk of a soft landing. i don't think that is going to happen. i think the fed will continue to tighten. we could have fed funds above 4%, above 4% by the end of this year. neil: really? >> we could have even higher treasury bond yields. let's not forget housing already is in a recession f we get further increases by the 10-year yield, that is going to deepen the housing downturn. that is also going to increase the danger of pockets of home price deflation. i say pockets from now but i hope it doesn't become widespread but we did have very rapid home price inflation up until the recently and that increases the danger that we could see home prices falling again for the first time since

late 2007, 2008 earnings but consumer is still strong, expensive new iphone 14s are out, selling like proverbial hotcakes. getting strong holiday sales, five to 7% depending what data you use, so is there a disconnect? >> i don't think there is a disconnect. if there is perhaps explained this way. if we look at the cash holdings of households, that is deposits, currency, money market funds, that is still running 2 1/2 trillion dollars above what might be considered normal. why is it. that is because of all of the stimulus that was supplied to the economy during covid. 2020, 2021. there is still a big cash overhang consumers are leaning on. i can't help but think at some.it will dawn upon them these prices have been rising

rapid i for sometime income growth. high time to cut back on spending. neil: to make your choice. >> i don't buy the argument holiday sales will be all that great. i think they will be much softer than you were talking about a four to 5% year to year increase. that is nominally, but in real terms -- neil: actually down. >> they would be down. neil: yeah. all right, john, great series of good news items, thank you, very, very much. john lonski, he knows of what he speaks. meantime here you have added complication of a potential rail strike affecting the delivery of goods, toys, you name it, all over the country right now. they used to think that this was not even remotely possible. well they have elevated it to possible and now probable. the impact for you after this. ♪

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♪. neil: you know there was always this threat of a rail strike grounding the transport of anything at leastpy rails across this country but looks

increasingly likely and the impact could be pretty severe if you're looking to get certain items, certainly get your items now for christmas and beyond. kelly owe kelly o'grady from california where this could be going. reporter: good to see you, neil, if the strike happens, more supply chain snarls. 60,000 workers of remaining union holdouts. 100,000 if the rest strike in solidarity. railroad executives confirm they're following protocol and beginning to halt the transport of has does materials like fertilizer chemicals left unsustained. nationwide strike according to estimates would cost 2 billion a day and a 467 long haul trucks on the road. that is crazy number. a number of industries could be paralyzed that depend on rail. 75% of new cars are moved that way.

we could see empty shelves, manufacturing shutdowns and disruptions to hundreds of thousands of amtrak customers. more trucks as theoretical solution poses challenges. the industry is short 80,000 drivers, the trucks to support the shift don't even exist. railroad execs warn it could wreak havoc. if the first half 2022, more than 75,000 rail shipments began the journey each day. in the event of a shutdown she is shipments would sit idle. the cabinet is monitoring this closely and the proposal on the table stems from the president's emergency task force that convened in jewel. the white house will continue senior level engagement in hopes of averting a complete shut down. if no strike happens it underscores the deep tension between the president's top priorities. he has been very vocal in labor unions but doesn't want a utter melt down of the nation's transportation infrastructure. neil: it would be a little awkward, especially right now.

kelly o'grady. thank you very much. we're getting on the wire of all of this. what are implications for the economy and even our safety because sometimes as our next guest tells you these things can get violent. christine mcdaniel joins us, former deputy assistant socker secretary of treasury, form i senior counsel under president george w. bush. mr. secretary, if the worst happens a strike starts it cogo on a while. i know that is an understatement but it could get dicey? >> right. as we just saw freight is, rail is about 30% of the u.s. freight. so you know, shipping that down is a lot different than just your favorite coffee shop shutting down for a couple weeks. literally shutting down 30% of u.s. freight. there are ripple effects. bulk commodities like agriculture. we're seeing some fertilizers taken off the track. so you know, you're looking at a

situation where grain could just be sitting and rotting in silos. it is harvest season. so from farmers perspective, very difficult time for this to be happening. and bulk commodities really rely on rail. so you have, you know, you've got a lot of ripple effect the from upstream to further downstream. that means shortages and shortages mean higher prices and that is going to mean every american household will be even facing even higher prices from rail strike. neil: i'm just wondering if sort of stepping back from this if it behooves a lot of americans to start their holiday shopping earlier just in case? >> sort of deja vu, right? weren't we having the same discussion last year and year before? neil: you're exactly right. >> yeah, start your shopping early, you know, and, don't rely on, on long distance shipping

like we just, i just remember saying this last year, and hearing people say this last year. if you don't see it on the shelf don't assume you can necessarily get it. neil: so the threat to inflation, in fact that it could make things worse, we've already got retail inflation report today that reminded us we're a long way from resolving this situation, how long is this a drag? >> so, so we, a lot of it is timing. now looking back at u.s. history on these railroad workers strikes, it is interesting, the first one was in the late 1800's. the most recent one was i i 1992 or so they often go down to the wire. it is set to shut down on friday if they can't come up with a agreement. workers said they will keep talking.

that is what everyone else happens if they don't take the deal president's arbitration board suggested, that he will at least keep talking if they don't take the deal by friday. so to avoid a strike but, yee, you have, you know, these things often come down to the wire but they usually do come up with some type of an agreement. if you just look at what the advisory board suggested, they pretty much cut down in the middle from what the labor unions wanted and what the rail carriers had offered but they're still working out sounds like some detail on sick leave, attendance, holidays and, so some of that nitty-gritty stuff that could take a little bit of time. neil: it tends to pace other labor agreements and negotiations in a score of industries, not only private but public as well. it could be trendsetter. christine mcdaniel, we're going to watch it.

like last year we appreciate a head's up. christine mcdaniel. meantime it might be a an odd day to brag about the inflation reduction act as if, that wit be the approach the administration is taking that there is good news you're not seeing. what that might be, and why alabama senator tommy tuberville isn't buying it but he is here to tell you why. ♪. at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect.

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items. almost everything that isn't gas to say, bad timing, mr. president. probably one of those is senator tommy tuberville of alabama kind enough to join us now. senator you were not keen on this from the beginning yet the president today will be touting its successes. what do you make of it? >> well they're having a big party neil. they're all celebrating and we've told them all along this is coming. you keep spending money. since i've been here 19 months, neil, we spent $4.2 trillion over our budget. we've thrown money out of helicopters or airplanes and it's everywhere. too much money, not enough goods, inflation is going to go up. in my state of alabama, telling us 8.3. it is not below 20%. it is bad and getting worse. all you have to do go to a restaurant or grocery store. it is out of control and it will guess worse. somebody asked me you said they don't know how to do it. they know how to fix this. they don't want to fix it.

is another tax on progressive on the left. 15, 20% of the people in the democratic party which are progressives are running the show this making all the calls in white house and congress and running us right into the ground. neil: you say one quick way to sort of reverse this trend, expand energy production, that sort of thing that doesn't seem to be in the cards so, then what? >> well, cut taxes, neil. cut regulations. cut spending and drill. you can't run an economy like we have without fossil fuels. it's impossible. they're trying to force something down the american peoples throat. it is not going to last. once we take over the house and the senate to get back the white house we'll change all this, meantime the american people are going to suffer. we'll suffer mightily. it will get worse, it is not only hurting us but hurt the europeans this winter, they are going to freeze. they don't have any oil or gas. that is the reason biden is doing this iranian new deal over

there. he is trying to get them to sign a deal where he can get them to sell oil and gas to the europeans. but that is not the way this works. we don't need to be working with our enemies. we need to be working with our allies. neil: senator, were you troubled -- i haven't had a chance to talk to you since mitch mcconnell made these remarks, he is concerned about republicans taking oaf the senate. that they have a good shot in the house. he was worried about the quality of some of the candidates, whether that will hurt republicans doing the same in the senate, what are your thoughts on that? >> well, you don't need to look at the quality of our candidate. look at quality of their candidate. we put some of these people up here it will be a disaster. i think the american people are looking at that they are going to vote with their pocketbook. they're going to vote because this inflation, they will go out to look to see how the progressives and the democrats have tried to run us into socialism and we're going to win. i think we'll win handily to be

honest with you. we we have 56 days to the election. this is not about republican or democrat though. this is capitalism or socialism. if you want socialism vote for democrats and the progressives. if you want to save this country, get back to growth, give the kids opportunity to have the same country we grew up in, vote for republicans. only way to save this country again. it is not about republicans and democrats, people really understand that people want to go from the constitution. we want to cut back on taxes, american people to enjoy a life, work to get it, not giving something. neil: while we have you, senator, people know you as not only the a united states senator, head coach at all burn. i always admired you. made son goes to clemson. don't take it personally sir. it is much ado about nothing. all kidding aside, what did you make of nebraska firing its head coach scott frost after only

three games? >> it is ridiculous. you got somebody to a contract. let them run out the contract. give them the opportunity, he could have turned this thing around. you know a lot of people have gone 0-2 or 1-3 begin to the season. run the table. look at miami dolphins won seven, eight, nine in a row. give them a chance. they have no chance now. run the head coach off. speculation who will take over the head coaching decision. you have the same staff there been running the show anyway. i hate something like this happens. people get impatient. and it is all because of you know, the media and the twitter and all those things going on. plus you got presidents and athletic directors, to me most of them don't have a clue about athletics. they have just been given a opportunity to run a multi, multibillion-dollar business. they listen too much to the people outside of the program. listen to the people that work for you, try to help them. neil: think about your emphasis

senator, if we did this with others who have a bad start in politics as well we wouldn't see a lot -- i did want to step back to get your take how college football has changed since you were coaching. it was about money. big money. i get that sir. i wonder if it is out of control, especially new conference shakeups, that added to the pressure that ultimately made nebraska head coach about money. >> it is all about money. talking about athletic programs that spend 250 to million dollars a year. olympic sports programs, basketball, baseball all those. it is hard, it is very, very hard. you have to make sure you understand you have good leadership at the top. sam thing in politics. you have to have good leadership in the top. if you don't you have to struggle. we're struggling in government. simply from the fact people want

to transition to someone else, same thing in sports. people that are running the show, believe something different than what your coaches do. everybody has to be on the same page. work for the people you need to work for, try to save what you can save knowing you will have problems you have to work through the problems. everything is not perfect in life. neil: you're right about that you're probably encouraged that your old school is 2-0. clemson is 2-0. you must be impressed with what clemson is doing, right? >> clemson is coming back. dabo is a good friend of mine. they're coming back. i will be at the game this week. we playpen state in auburn. a good game. there are a lot of good games every week. nick saying bonn last week almost lost on the road. anybody can lose at anytime. you have to be prepared. this nil worries me neil, how we're playing players. i'm not against playing players i'm against not having rules for all 50 states. it is wild, wild west sports.

we have to get control of it. if we don't we'll lose what we enjoyed for the last 100, 150 years. neil: that is good point. we have different rules no matter with where you go, conference states, it's a mess. cope, always good having you, be well. >> you bet. neil: we were at session lows in the middle of the conversation here. we're off of them. big concern prices running up, stocks are running down. right now they're not stopping or pausing to think about what they're doing. we'll have more after this. as an independent financial advisor, i stand by these promises: i promise to be a careful steward of the things that matter to you most. i promise to bring you advice that fits your values. i promise our relationship will be one of trust and transparency. as a fiduciary, i promise to put your interests first, always. charles schwab is proud to support the independent financial advisors who are passionately

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a whistle-blower fueling the argument of the world's richest man. chad has more. hey, chad. reporter: neil, twitter's former head of quart told senators the firm tracks practically everything. pieter zatko says twitter has not been up with the government about what info it has. >> what's the phone number, what latest ip dress they have connected from? are there other ip addresses they have connected from? is this the current email? how long have they been using that email with the account? what are the prior emails for it from the i.p. address? where do we think they live? where do we think they're connected to right now. reporter: twitter fired zatko. federal trade commission is over its head when it is regulating twitter. the firm doesn't care about user safety, just making money. >> to put it bluntly twitter leadership ignored its engineers because key parts of leadership lacked the competency to

understand the scope of the problem but more importantly, their executive incentives led them to prioritize profits over security. >> in his opening remarks gop iowa senator chuck grassley said at least one chinese agent works for twitter. zatko says it would be easy for foreign intelligence firms to install agents inside of twitter to track everyone. sat cosays twitter is unwilling to root out potential spice to could compromise national security. >> i'm reminded of one conversation with a executive when i said i am confident that we have a foreign agent. their response was since we already have one what does it matter if we have more. let's keep growing the office. reporter: twitter declined to comment on the hearing and testimony from zatko. later twitter announces results after shareholder vote on efforts from elon musk to buy

twitter. congress has not acted on reforming section 230. that is the legal shield that protects big tech firms despite controversial content. neil: chad pergram on capitol hill. susan li is following all the headlines and developments, getting details when we're following this. i think there is an edge that muck elon musk has in the argument. people are going back and forth when everything is truthful, if you're elon musk you're liking this. reporter: i should note there was one twitter employee who was convicted on behalf of spying for saudi arabia last month, right? so that was a conviction there. if you're elon musk and by the way you also try to use this whistle-blower complaint in his severence package to get out of twitter buyout yesterday. twitter says no, we're still going to court. the five-day trial starting in october and delaware, if you look how tesla is trading. really how twitter is trading

we're still in the 40-dollar range, this whistleblower complaint plays into the courts of elon musk -- neil: certainly nowhere near the 54-dollar. >> 54.20. twitter stock price trades close to $40 or so. neil: a long way. >> plus the stock, tesla stock would actually rally if somehow elon musk gets out of this twitter agreement even with a small penalty that he has to pay because at the end of the day it is just cash. he doesn't need to sell more stock. neil: his currency is that stock. reporter: that's right. neil: what else do you have? reporter: i want to talk about what is happening with peloton. we were talking aboutth during the break. neil: you and i are fitness buffs. reporter: exactly. we have the ultrawatch on your minds. peloton, we have two founders, cofounders leaving the company. is it that big after surprise? john foley who handed over the ceo baton to barry mccarthy last year. mccarthy was former netflix spotify executive brought in. you asked me a question i had to

scramble to look for information during the break. you asked if john foley has a significant stake in peloton itself? a lot of people say he sold off most of it, $100 million in the last few years since november of 2020. i would also say founders are not usually great ceos. that to me that isn't that big of a surprise. very rare to find zuckerberg to stay place in long time at the company they founded, right? you usually bring in a custodian is specially with peloton down 90% from last year. trying to find $800 million cost savings, laying off staff, closing stores or plants. his departure i don't think that is big of a surprise. neil: you could have seen some of this coming. after covid, people were returning to the offices. the demand for these is not what it was. >> yeah. neil: they seem to be caught off-guard. reporter: gym memberships is up as well. that is helping foot traffic in malls and the like and commercial real estate. i found it interesting i want to

talk about rent the runway, since we're talking about troubled companies during the pandemic. if you look at stock down 30%. restructuring cutting their workforce by 24%. apparently people are not renewing the fashion subscriptions neil. neil: yeah i stopped. i said no. reporter: discretionary spend, economy. neil: that goes. food goes first obviously. fashion has to take quite a back seat. reporter: okay. neil: thank you very much, susan. you're the best. she is a walking encyclopedia on all of this. stuff. corner of wall and broad, we're down almost 900 points. tech stocks taking it on the chin. prices going up but that we knew but apparently after the inflation report will keep doing so quite a while, maybe a long, long time after this.

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neil: all right. ukrainians not only fighting back as the sign says, it is taking an incredible amount of land back from russians who had it under supposedly firm control. 2,000 square miles of that land. jeff paul with the latest from kyiv. jeff? reporter: neil, 2300 square miles and counting and it was

all recaptured according to ukrainian president volodymyr zelenskyy. it comes down to the land size but also the speed. now we're starting to see russian forces responding to this liberation, up to 30 territories in the kharkiv region. you look at some of the images. some of the things being targeted could be considered military targets but a lot of images that are coming out of that region are civilian targets. you've got homes that have been hit. you have got power plants have been hit. it is leaving people without the necessary things that they need like electricity and running water. but it is, you know, not just going to be able to crush the spirit of the ukrainians there who are essentially fighting for the country, fighting for their lives and now, neil we're starting to see there are criticism coming from russia. russia state media pundits on tv there as well as bloggers who are in favor of russia and

waging this war so we'll see how this plays out. but as it stands it looks like they're responding right now with some of these long-range strikes, neil. neil: thank you, my friend. please be safe. jeff paul in kyiv. general keith kellogg, we always love having him on. i'm thinking of john bolton who is now saying he worries that russia gets desperate. vladmir putin may be even decides to go nuclear, what do you make of that? >> yeah, neil, thanks for having me. look it's about time we really start thinking about the unthinkable. that is use of tactical nuclear weapons. that is what we call them. they call them nonstrategic nuclear weapons. russians have 2,000 of them. it is in their doctrine to escalate to de-escalate. if they see losses occurring or he thinks he will lose this war we have to start thinking what happens if he decides to use that one? we're talking about nonstrategic

nuclear weapon, at low yield, 1000 kilotons to 100 kilotons to one kiloton with five mile blast raise just. if they do that we need to think what they will do. if the reports are true they lost big elements of the first guard tank army. the reason why that is important that is probably their premier unit in the russian army f that is true they have lost the battle, then they have lost that was originally designed to defend moscow. we need to think if putin gets really desperate, if he is cornered what will he do? i hope we have adults in the room in biden white house, situation room and national security council. what happens if he uses it. he wouldn't use it on tactical formation. if they use a nonstrategic weapon they would be used as demonstration. put it away the front lines but cross that nuclear threshold. we need to figure out how we respond to that crossing of the nuclear threshold t will be a real challenge to the world, to the united states as well.

neil: even to the russians themselves, at that kind of activity could blow back literally on them, couldn't it? >> it could, neil, a lot of criticism on putin isn't that they're having problems with the war. he is not aggressive enough. when you look at the military bloggers and criticisms he is getting he is not pushing the envelope, he is not pushing as hard as he should. he may decide i'm done with this i will make a big strag gibbing move, to put it back on the back of the west to see how they will respond. this is one of those where let's see how far it goes. i think the first step if he has general conscription in the russian military, that means he is really starting to escalate. if it gets pad to lose in the south and north, i don't know where he will go and we have to think about the unthinkable. neil: part of the unthinkable is not deliverable. we've seen explosions seen around these two nuclear

reactors in ukraine t doesn't take much to be a little off and do a lot of damage? >> yeah. it is true, neil, think about it, for a long time people said we'll never use weapons of mass destruction, meaning nerve gas. it is gotten to be routine usage. forms in syria, it has been used a lot. they said there was a red line. when we crossed obama didn't trump did. if we cross the small nuclear threshold what will happen? if you look at the power plants, especially zaporizhzhia largest nuclear reactor in europe. only two react tears are on line of the six. if that gets damaged you have a problem like chernobyl all again. there are a lot of unknowns, this will continue to get before it gets better next month or so. neil: general, we'll see what happens. general keith kel lowing on that, a lot -- kellogg. by the way the russian ruble is getting hit on some of these

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neil: we are not rocking and rolling, stocks are running up and expectations are going up and not a lot more than we earlier thought. following the market reaction, we have peter doocy on the white house reaction and madison allworth on how small businesses are reacting as well. markets not liking what they were seeing. ashley: the market made games for four state sessions on the hope that maybe, just maybe inflation would peak. the fed could take its foot off the gas pedal a little bit sooner perhaps. consumer price report slam the door shut on that fear you, the selloff continues, the dow off 900 points. inflation was up 0.6% month

over month honor year over year basis, 8.3%. the core year-over-year increased 6.3%. it has not peaked. it is one of the last reports the fed will see ahead of their september meeting when the central bank is expected to deliver its third consecutive 3-quarter of a point interest rate hike. the unexpectedly high august report could lead the fed to continue its impressive hikes longer than investors anticipated. we are seeing a market selloff, the unexpected jump in consumer prices for august comes amid a 5% drop in energy over the month but those declining gas and energy prices offset by increases in many areas of the economy. the home index rose. 7% in the month with all 6 indexes of the major grocery stores rising.

the cost of shelter recorded its largest month on month increase, 0. 7% since january 1991, more than 30 one years and the cost of medical care notably rose 0.7% in august after 0. 4% increase in july. we are seeing prices go up in many facets of the economy and inflation fears hitting high-growth big tech stocks as you see, the housing stocks no big surprise as higher mortgage rates continue to call off the housing market, 30 year fixed getting close to 6% and then we need to talk about treasury yields, 3.43%, the 2-year note if you look at this jumped to 3.75, the highest level in 15 years. when you see that, things are getting expensive, mortgages getting expensive.

all parts of life getting more expensive. we talked about the shelter inflation, rents going up and wages losing out against inflation, rents going up, leading to fears that we will have a recession, longer-lasting recession than we had hoped for. we are looking at the markets. neil: what ashley was saying, fear of rates going higher, pumping money on this, how much federal reserve has interest rates. not just 3 quarters of a% that we saw into the proverbial cake. even 3 quarters of 1%, the third such hike for the federal reserve, something higher than that. that would be a little bit alarming to put it mildly. the white house digesting all of this.

>> reporter: what biden officials are talking about, they have been bragging for weeks about the price of gas coming down but it hasn't come down enough to offset rising cost of food or rent and president biden says in a statement today's data shows more progress bringing global inflation down in the us economy. prices have been flat in our country the last two months, that is welcome news for american families with more work still to do. there is a former obama economic advisor who writes a lot of things that we are supposed to bring down have happened to the degree energy prices, we should be seeing the reverse now. i was then skeptical of magnitude. maker force returning, good forces migrating but not working. this is erasing a talking point president biden was trying to roll out when inflation month-to-month was flat.

remember this? >> i want to say a number, 0, today, received news that our economy had 0% inflation 4 july. 0%. here is what that means, the price of some things going up, went up last month by the same amount. >> in less than two hours there is an event being held on the president's schedule, passing hr 5336, inflation reduction act, they will be celebrating inflation reduction a few is after the president said inflation flat. neil: i want to throw you are curve. that's a statement that i'm not judging one way or the other but in this context, bad timing at a minimum but it comes a

couple days after the vice president was saying the border is secure. they must realize how detached that looks. >> reporter: i don't know if they realize that. we can go by what they tell us but it is divorced from the numbers we are seeing, the inflation reduction act has not reduced inflation and even last month, the president was saying inflation is at 0% that is month-to-month but prices then and now are still 8% overall higher than last year. that's not inflation reduction. inflation is really high and staying really high. neil: like me saying on pluto i would be thin. you can share that with whomever you want. good seeing you again. we will be right back. but it is detached. madison allworth, they are very

concerned about what is happening on the inflation front. from their vantage point it is not getting better. >> it is not getting better. the feeling for operating the business, for the customers who can't spend as much, it is a sneaker and leisure shop, they have seen units per transaction go down. when they come in they are buying less items because of soaring inflation adding up to a difficult picture for businesses. 77% say that inflation increased over the last two months so even though you expect to lower inflation report, business owners were not surprised to see that inflation did increase because we have been feeling it. we talked about the increase from inflation 0. one%. for apparel it was one. 2%. what are the things still driving up your costs?

>> we are seeing it in terms of inflation to the consumer and impacting us directly, higher fuel costs, fuel surcharges and increase in wages because employees and staff are getting squeezed, so we are seeing it in terms of cost of manufacturing goods where our products are becoming more expensive because it is expensive and it is passing on to us as well. >> reporter: units per transaction, you've seen a change in the cost of transactions, how much people are spending. tell me how that is adjusted and what that tells you about your customers. >> we've seen an interesting dynamic, where we saw transactions go down in the average ticket volume goes down but the total number of actual transactions went up. what that tells me is

back-to-school shopping, maybe more budget constraint and more mindful in terms of where and how they are spending their money and we see that reflected in back-to-school shopping. neil: they have been around for decades, in the community for 40 years so they are lucky to have loyal customers which christine was talking about, the challenge is they are buying less, another challenge that has been fallout for inflation for local businesses is those regions, she doesn't compete as much for walmart, if you want nike you will come and purchase it but with wages these bigger companies can more absorb and offer better benefits and pay, small businesses struggling with that as well. overall they are feeling it in every direction and at the top they were not surprised we saw inflation to cut because 77% of businesses say it has gotten worse over the last two months and that is reflected in the data today. neil: and how widespread the

tentacles go far far out in the case of an establishment so we will keep an eye on it, the former white house budget director under donald trump, always good to have you. and you were not in the camp that said inflation would be transitory but now it appears, not even ending anytime soon development, that is baffling the markets today, the federal reserve is going to have to keep aggressively raising rates so that is higher than we earlier thought. where do you see this going? >> i don't see it changing anytime soon because one of the things i have been focused on is looking at the shelter index, the chilling index which is upwards of 18% or 20% and that is a huge portion of the cpi index, those things take a

long time to get factored in to the cpi index because of one year rental agreements, we knew this was coming in the market is awakening to it. the fed is awakening to it in the sense that their hope had been they could raise 4% inflation would come down and that would be the end of the pain and i don't think that's the case, they are going to have to raise beyond that or at least sustained that longer. the biden administration is making their life harder by adding more spending, student loan cancellations upward of 75 basis points and they are adding to this mix and making it harder and harder so this problem is not going away, the market is beginning to catch up to where the fundamentals have been all along. charles: i know the administration has details on tolerating the inflation reduction act and they will point to the new feature in the measure that allows medicare to

negotiate drug prices with major companies even making the assumption that it could lower those costs. whether it is wise to do so, but that is a small part of what we are talking about. >> there was an analysis today by the people who support the inflation reduction act that biden has put forward $5 trillion of spending since the beginning of his administration and then show somewhere in the neighborhood of $100 billion if you include the extension of obamacare subsidies beyond what cbo does, in reverse to that. i don't think it will reduce inflation. it is an actual spender, they don't have a record in the biden administration of reducing the deficit so all they can do is go out there and either pivot which they are not going to do or it is a bad place to be but one of their own choosing.

neil: you hope that growth can mitigate the damage and there are a lot of those on capitol hill from approaching the discipline on the right or left but i don't see the prospects of that in this environment, whatever growth we are seeing. that is not a great double-edged sword. >> where's the growth coming from? the inflation reduction act included a tax increase, designed to increase prices because they want people to use less energy and they have a policy of regulation as far as the eye can see that includes not just bad and efficient regulations but regulations that are designed to divide the american people and introduce woke policies into the workplace so everywhere you look there's a drag on the economy and the cavalry cannot come to the rescue to deal with the problems of the biden

administration. neil: the former omb director for donald trump. you think we have it bad with inflation and everything else and the slowdown, are we in recession or not? how would you like to be the brits these days? they just lost their queen and now the attention paid, mesmerizing attention is going to wallop the economy. some say this could lead to a recession. we will explain.

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english day at buckingham palace. a steady rain falling from clouds hanging low over the palace but none of that dampened the eagerness of thousands who gathered here to await the arrival of the queen's coffin on her last visit, her last night in buckingham palace. the coffin was loaded onto a royal air force c-17 plane at edinboro airport earlier today after the queen had lain in stadion saint giles cathedral for some 24 hours. the plane carrying the coffin is due to touchdown at royal air force base norfolk which is in west london. any moment now, took off by my calculations 30 minutes ago, a 40 minute flight so fairly

soon, the coffin will be brought, the royal air force base to buckingham palace. a short time ago we saw king charles and queen consort camilla who spent the earlier part of the day, in belfast where the king shook the hand of the leader of sinn fein, the nationalist party the believes northern ireland should not be so-called, should not be part of the uk, that is a symbolic moment. the solemn duties of welcoming the queen's coffin to buckingham palace. king charles and the queen consort, by the prince and princess of wales, william and kate.

the princess royal will be there. she has as i have been saying, accompanying this coffin every step of the way from ballmoral. the princess is never leaving her mother's side throughout this journey. neil: your mom is a big royal water watching your report. how does she feel about what is going on here and this goes on another six days. your thoughts? >> thanks for asking. she's desperately sad and i think for her, the moment we first saw the coffin lead the gates, brought home the reality, she like a lot of people in britain had been

comforted to some extent by king charles's first address to the nation on friday night but we moved to this long goodbye we are in the middle of and my 84-year-old mother in the english countryside and everybody in britain or the vast majority of britain, desperately sad time they are trying to get through this, she is spending a lot of time in tears as she watches the images on screen. i asked her because i know you're interested in her thoughts, if she would do something with us on tv, she doesn't have the emotional bandwidth to do that. same for a lot of people. this is a very sad time watching the queen lie in state, in the palace of westminster, the oldest part of the palace will be a very different time but it will also be an opportunity for probably

hundreds of thousands of people to pay their last respects and say a final goodbye to queen elizabeth ii. neil: you have a great sense of humor, the passion for the stories shining through. now the former foreign policy, and you get a lot of business numbers, the fixation on all things, the queen, and now the king people are mesmerized, they are not working, the productivity is way down. i don't mean to this merge or find people but it could take london into a recession. that might be a bit extreme but they are lumping it together next monday, but what do you

make of that? >> a truly momentous time for the united kingdom, this is a nation in morning at this moment and monday was declared a bank holiday on the day of the state funeral. the united kingdom faces an energy crisis, soaring inflation, major economic challenges ahead for the british government headed by liz truss but this is a moment the british people are united together as one remembering the life of a truly great queen. an incredibly important time. economically they will bounce back because you have a prime minister who is determined to have free market policies to

cut taxes and rollback the frontiers of state. i'm optimistic about the outlook for the united kingdom in the next couple years. i don't underestimate the challenges ahead but with the white leadership and government that believes in the free market, that believes in economic liberty, britain is on the right track and i think the uk can be tremendous economic success story the coming years, free of the shackles of the european union. the eu has seen decline, great opportunity ahead for great britain as a free sovereign nation. neil: you have become so much in the past, you will do so again. they really had to endure a lot of change we have never seen before. a new prime minister. the queen passes away. the king comes in, record high inflation, people frantic it

will lead to recession. the breaths -- the brits are living up to the stiff upper lip reputation. >> the british are a robust people and they survive challenges for many decades. the british are believers in freedom. the queen represented that, and a second era of thatcher with liz trust as the prime minister. britain again will be leading on the world stage, brexit, a great blessing for the united kingdom. i'm confident they will do well. what we see is uniting of all corners of the united kingdom,

and scott's warning the loss of the queen and this is what we've not seen for many years and that bodes well for the future of the united kingdom and we won't see scotland spitting off from the uk in the coming years. scott's of demonstrated tremendous support for the monarchy, overall strong shape, the united kingdom is strong so i'm confident about the future for the united kingdom. britain must britton must be a leader on the world stage leading the free world as such. neil: folks who consistently through the centuries, thank you very much. key advisor to margaret thatcher. i want to pass along some news in this country, twitter

shareholders have backed the elon musk take over bid. he was duped, it won't happen, shareholders not surprisingly say we like this and think he should deliver on it. elon musk has not changed his mind but the message from twitter shareholders, please rethink that. of the things that matter to you most. i promise to bring you advice that fits your values. i promise our relationship will be one of trust and transparency. as a fiduciary, i promise to put your interests first, always. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com

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neil: goldman sachs, s&p 500 sectors taking it on the chin. goldman will be laying off people next week. i won't say charlie gasparino didn't warn you, they are

working to get their workers back in offices, the sooner the better. charles: every year, the bottom 10%, this was kind of a -- neil: covid interrupted that. why are they going back to this? business conditions, they are not what they were, got to put up a charge on a number of ipos going on this year, that is the -- neil: that was their life. . charles: they have fallen through the roof, the mergers and acquisitions and all of that. what does that mean, a lot of that is factoring so what does that mean?

this goldman thing has been baked into the pie. what you do is you see not just goldman but jamie, goldman sachs as they go through this and the deal, it is likely to get worse, it is not good for ipos and financing, sometimes, banks put money on other things than interest rates, like jpmorgan but it will get hammered here. charles: what do you make of the timing? the push to get them back in the office. charles: what we have been reporting and you and i, don't we have a millennial? charles: listen.

they were pampered. on wall street, they were pampered and bonuses, perks, free coffee, how to take away the coffee card. they gave them anything and everything. charles: you are lucky about that. charles: the layoffs at goldman seems like a dry run. they are coming later on in the year. neil: they do these performance reviews. they weed out the weaker -- charles: one reason they stopped did you see the numbers on the deal? those numbers were through the roof so they had to stop and they don't have that. you bring it back at this time but as i keep hearing, they see

a long grind and the goldman thing is foreshadowing bigger cuts ahead and the market is down 800 points. neil: thank you very much. charles: get some millennials. charles: i think they like being called names. like when somebody mentions you. what a goofball that guy is. neil: let's go to jared leavy, the strategy president. on the layoffs charlie was talking about. this was delayed by covid.

>> you had all this pent-up deal, merger and acquisition activity, a market screaming and now it is off the table and this is my world, we are seeing it the mid and small level, not just big banks like jpmorgan and jpmorgan, a lot of institutions get leaner, and folks were like they are still existing, got a lot but interest rates take higher and as that happens the longer we keep rates in an elevated state, the higher the percentage chance of a deeper recession. jamie dimon knows that, they've got to get ahead of the curve so if i were a betting man i would be on the side of what charlie was saying.

neil: looks like the events, i apologize for the truncated time but following another development, with twitter shareholders approving this merger, elon musk is not keen on this happening anymore and then you have this focus on what is real, all of that after this. finding my way forward with node-positive breast cancer felt overwhelming at times. but i never just found my way, i made it. so when i finished active therapy, i kept moving forward and did everything i could to protect myself from recurrence. verzenio is the first treatment in over 15 years to reduce the risk of recurrence for adults with hr-positive,

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>> welcome back to cavuto coast-to-coast reporting from capitol hill, timing is everything and we saw that play out. twitter shareholders approved a $44 billion takeover by elon musk is trying to get out of.

the shareholder happened moments after a twitter whistleblower wrapped up his testimony on capitol hill. everybody calls him merged. he came to capitol hill today and told lawmakers, before he was fired earlier this year, over and over prioritizing profits over security. senator chuck grassley said there was one chinese agent working inside of twitter, he was concerned they could collect user data because chinese companies continue to advertise on the platform but here is how he tried to say something about that concern. >> we are already in bed and it would be problematic if we lost the revenue stream so figure out how to make people comfortable with it. >> reporter: elon musk was

closely following, that presumption, when musk tweeted a popcorn emoji just as. was starting his testimony. the twitter handle elon musk, changed to noddyusmaximus. this is what he might have turned up the volume to hear. >> would you buy twitter given what you know? >> it depends on the price. >> fair enough. >> the twitter stock price started day moving lower but turned around during the hearing leading up to the shareholder, one of the few stocks on a down day, still below the $54 plus musk offered in april to buy the company and elon musk and twitter have a

court date to fight things over this acquisition set for october and that is where the saga will turn. there is more cavuto coast-to-coast coming up after a quick break. there's a differ hiv. it's every-other-month, injectable cabenuva. for adults who are undetectable, cabenuva is the only complete hiv treatment you can get every other month. cabenuva helps keep me undetectable. it's two injections, given by a healthcare provider every other month. it's one less thing to think about while traveling. hiv pills aren't on my mind. a quick change in my plans is no big deal.

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neil: nothing like the threat of a rail strike including amtrak, gerri willis has the latest on that. >> the ninth railroad union secured a tentative deal, 60,000 workers, 12 unions in all are still out but there is good news coming possibly by friday. amtrak is pulling trains on 3 of its long-distance roots. this, because of the strike we have been talking about, is disrupting travel for americans across the country. amtrak giving the statement to fox business, amtrak has begun

phased adjustments in preparation for a possible rail service interruption later this week, such an interruption could impact intercity passenger rail service. for the most part in the northeast amtrak passengers will not be impacted, you see we are in front of the amtrak offices here because amtrak actually owns the rails the trains travel over. for 21,000 miles amtrak trains travel along, they are owned by free train systems. as we look at this it is not just the long halls, the empire builder, california, long-haul trains the travel chicago to the west coast, there is also implications for commuters as well, in places like la and maryland to those commuter trains are being cut back already.

as i send it back to you, one of the biggest implications is amtrak, suffering lower ridership, budget problems and during the covid pandemic, ridership was up 64%. i have to keep an eye on amtrak as this impasse goes away by friday. neil: we will see you and in the meantime, a lot is at stake, for the nation's energy situation. couldn't have come at a worse time but what are you preparing for? >> the nation is blessed with tremendous natural resources and the way they get to market is the nation's railway system. 50% of the traffic is based on call and metal materials, we are terribly concerned between

now and friday, the rails stop moving and other sectors such as chemicals and fertilizer, and call is 21%, domestic electricity supply, persistent inflation on the markets, bottlenecks still across the rail system and i am concerned about that. and the need and the drive of additional energy experts for the phase of spiking natural gas prices, hydroelectricity and a lot of nations including germany turning back to call. also seeing that in the united states as prices go up, the statistic today was electricity inflation was up 16% year to date. no reason why does not higher, the option alley of the electricity grid in this country.

we remain incredibly concerned. neil: trucking is not an option in this environment especially for you guys, only so much a truck can get around on. >> we loaded 4.4 million call cars last year alone. 70% of deliveries for utilities in the export market through railways? trucking is not an option, you saw an announcement for the association there are concerns, the drivers are close to the ability to make that about the news. neil: even if this is resolved a lot of actions are taken to prepare for that and the supply chain disruption that remains pretty disruptive. this will make it worse.

>> much worse, you are seeing notifications how they will stop loading in certain sectors and some of our companies are being given some assurances. not to worry, it is okay but we have to wait and see, secretary walsh, this falls into the hands of the u.s. congress to work it out and not much time left. neil: amtrak is expanding long-haul routes for potential freight rail strike. just wondering, a lot of average folks looking beyond the mining association you are in charge of, start buying christmas presents early, with a whole host of things. >> this will hit the pocket books, electricity bills,

manufacturers domestically, those that rely on materials like copper, the automobile, and the christmas gifts we are waiting to see, a lot of inventory, will fly off the shelves quickly. neil: it is vital to our economy, there's been a green energy push, they dispensed with that because rocketing bills. do you see that going here? >> you see a little bit of that here. to be asked to stay on throughout the midwest and those announcements continue to come forward, going through the roof, call intends to serve

long-term contracts, to protect against rate shocks, the natural gas burn and slow down another sources. neil: thanks, the national mining association ceo, to update you, hope they resolve the impasse over overtime pay, seems to be the crux right now. they hope to die the is, crossed the seas, so many making precautions for this. stay with us, the dow down 175 points. ♪

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neil: i know charles payne will blame this on me, i left him with the dow down almost 900 points, as if, to you, my friend. >> read me so well, like a book. thanks, neil. good afternoon, everyone, i'm charles payne. this is making money. inflation combing in much hotter than expected. not that is was up 8.3% from a year ago but all the signs it was supposed to abbey nine report. it is shocking the street. all the major indices are getting hammered. should you be panicking. i have major guests i know