mohamed el-erian, diane swonk, michael caroli, jeff rosenberg.y one place to watch reaction and the drumbeat to the fed coming up later. it begins at 1:30 eastern time. leigh-ann: keeping you up to date with news from around the world, with the first word, i'm leigh-ann gerrans.. bloomberg has learned the justice department is using a grand jury to investigate efforts by former president donald trump and his aides to overturn the election. the focus is on creating fake collectors and pressuring former vice president mike pence to certify the victory. no comment from the trump camp. senate majority leader chuck schumer has told others that he doesn't think there are the votes to pass the big tech bill. still, the bill cosponsors have maintained they have enough votes for passage. in europe, natural gas prices soared again after russia tightened its grip on the energy supply. prices surged as much as 14%. it is now 10 times higher than usual prices for this time of year. gazprom says there is a maintenance issue. shares of spotify are rising. they

kriti: thank you to diane swonk. want to get to a quick headline on the italian situation, as we monitor it. italy five-star will take part in the confidence vote. we now have three coalition parties. the league, the five-star movement, and another have all said they will not take part in this confidence vote. it is inching the italian government closer and closer to collapse. we will bring all the headlines as they come to. but now, let's get global headlines from mark crumpton. mark: ukraine's first lady will appeal face-to-face with u.s. lawmakers for air defenses for her country. speaking of capitol hill, she told lawmakers stories of children killed or maimed by airstrikes, or shot to death as their families tried to flee with them. as she spoke, graphic photos were displayed for the audience. boris johnson has signed off at his final event as prime minister he had this bit of advice for the next prime minister. >> to my successor, whoever he or she may be, number one, stay close to the americans, speak up for t

kpmg chief economist diane swonk. how does making things more expensive bring prices down?ll, that is exactly unfortunately how you bring prices down is by increasing the cost of doing business. >> when does that mean i can stop paying $12 for a loaf of bread? >> reporter: stephanie caltagerone owns magpie, a restaurant in rockford, illinois. >> i'm not even breaking even. >> reporter: surging costs from everything from hand soap to staples like eggs, wheat and vegetables means inflation is eating away at her bottom line. >> things that haven't gone up, they've added a fuel charge too. when your corned beef goes up by more than double, i can't charge double for what i serve people or else i won't have any customers. >> reporter: stephanie is trying anything to cut costs. >> otherwise, i would just be sitting at my home office, trying to figure out how to make a profit in a world where i can't. >> reporter: trying to figure out how to make a profit in a world where you can't? >> yep. it's pretty depressing. >> reporter: but you keep trying? >> can we take a break for a minut

chief economist diane swonk. how does making things more expensive bring prices down?ll, that is exactly, unfortunately, how you bring prices down, is by increasing the cost of doing business. >> when does that mean i can stop paying $12 for a loaf of bread? >> reporter: stephanie caltagerone owns magpie, a restaurant in rockford, illinois. >> i'm not even breaking even. >> reporter: surging costs for everything from hand soap to staples like eggs, wheat, and vegetables, mean inflation is eating away at her bottom line.. >> things th >> things that haven't gone up, they've added a fuel charge to. when your corned beef goes up by more than double, i can't charge double for what i serve people. or, you know, i won't have any customers. >> reporter: stephanie is trying anything to cut costs. >> i mean, otherwise, i would just be sitting at my home office trying to figure out how to make a profit in a world where i can't. >> reporter: trying to figure out how to make a profit in a world where you can't. >> yup, it's pretty depressing. >> reporter: but you keep trying. >> c

diane swonk was talking about how we saw mortgage demand dropping to a 22-year low. the correction in housing, the most interest-rate sensitive sector, is leading the economy into a more significant slowdown or worse. should we be more worried about how we the housing market is cooling off? blerina: we should focus on two things in the housing market. we are seeing a deterioration because of affordability. homes became unaffordable because of the very fast home price appreciation post-pandemic and because of higher interest rates. we know the housing market is one of the most interest-rate sensitive sectors of the economy. but we should be careful to extrapolate what is happening with home sales to the broader economy. we know this is one of the most interest-rate sensitive sectors. at this point, not convinced this dramatic slowdown will spread to consumer spending, because of how healthy balance sheets are, how healthy the market is, believe to absorb inflation hits. kailey: doesn't that mean that the federal reserve's job in trying to rein in demand to get inflati

normalize very quickly sort ever on its own or as a result of what we've seen because with what diane swonk was warning about last hour, i don't know if you caught it, but she thinks the fed will not be able to cut rates next year and the report we got this morning demonstrates that >> persistently high i'm still sticking with the analog of a post-warren envirot and it may take one, two, two and a half years for disruption in demand exceed that supply over time. i do think the fed is getting slows tore stopping some time next year. i don't think that a pivot is in the cards just yet i mean, and i think that was another misinterpretation and all of a sudden the fed jumped into the notion that the fed would start cutting rates and absent a large recession or an event that causes systemic risk and there's no reason for them to lower rates and there's no further reason for them to raise. we do need supply chains to normalize for inflation to come down inflation is not going from 9% to 2%. if we can get it to three and change next year, we'll be on a path with post world war i and post world war