Inflation Pain for Stocks, Musk Defends DOGE, Exclusive With BofA CEO Moynihan 2/12/25

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Elliott Kalin (0:59)

Market insight and analysis.

SPEAKER_1 (1:00)

You're listening to the opening bell of CNBC Squawk on the Street.

Carl Quintanilla (1:10)

Good Wednesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Sara Eisen and Mike Santoli at Post 9 of the New York Stock Exchange. Cramer and Faber have the morning off. Futures do fall out of bed here as January CPI comes in hotter than expected, up 5 tenths, biggest monthly jump since 22 Year on year core ticks up to 3.3, and the 10 year yield is now 4.62. That's almost a one month high. A roadmap begins with Elon Musk defending DOGE in the Oval yesterday, making the case for the group's aggressive actions in this new administration.

Sara Eisen (1:40)

Speaking of Musk, shares of Tesla trying to avoid their sixth straight day of losses, stock already down 15% in February on growing concerns over Musk's focus on the company and rising competition. And we will take you down to Miami for a CNBC exclusive with Bank of America Chairman and CEO Brian Moynihan. His reaction to this morning's CPI print, the Trump administration, and Powell on the Hill again this morning.

Carl Quintanilla (2:04)

Let's begin with Margaret's reaction to CPI, ahead of the chair's second day of testimony on the House side today. A lot of discussion about whether this number was front-loading tariffs or whether there were some wildfire effects. But year-on-year headline, Mike, since August, 2-4, 2-6, 2-7, 2-9, and now 3-0.

Michael Santoli (2:23)

Yes. And the market also was leaning in the direction of this being a little bit of an unfriendly, sticky, hot print. But then it actually was even hotter than that, probably, as the bond market is suggesting right now. There's also kind of the immediate search for the one-offs, as you mentioned. So whether it is wildfire effects, obviously bird flu, but the other, and tariff pull forward, but also just this annual tradition now of hot January numbers, seasonal effect. So all that being said, you can't explain it away fully. We basically said, you know, we've been sideways at best on inflation for a while. Well, above the Fed's target, it does sort of reinforce the idea that they should just be in wait and see mode. Stock and bond markets, interestingly, are kind of just testing recent ranges. So it's not as if it's sort of, OK, the entire game has changed, but it's going to be a lot more suspense around every data point and around every interaction with with Jay Powell from here.

Sara Eisen (3:21)

I mean, there were a lot of ugly, hotter numbers in this report, for instance. I mean, pickups even at food for food, food away from home and food at home in the grocery store and in the restaurant.

Both perked up on the month. We're talking about a 0.5 percent increase for food away from home. It was 0.3 in the monthly number before. So you don't want to see those kind of numbers going in in different directions. Auto insurance continues to be a problem. Some of these insurance numbers, which have been hot, airfares, hotels, they all contributed. Airfares gained 1.2 percent on the month. Hotels increased 1.7 percent. I mean, this was a number that suggests that the Fed is not making as much progress as it is hoped or it is thinking on inflation. Does it mean that last year's 100 basis point cuts were a mistake? I mean, that debate is going to be out there. We've been having that for a long time. But it also means that they are not going to be able to do much in terms of cutting from here. So now the market yesterday was pricing in the first cut in September. We've gone out to December of this year for the first cut. So complete rethink of when the Fed is going to be able to cut if the Fed is going to be able to cut. And remember yesterday I said day two Powell testimony should be more interesting because of this. Hopefully, he'll address it. And that's why we could get some news this time because he didn't say anything new yesterday.