This is CBS, I Am The World. I'm John Batchler. I welcome Elizabeth Peek, a columnist at

the Hill, a columnist at Fox News. The subject is the American economy. Midwinter, end of

winter, spring and sight. And yet, Liz, a very good evening to you. The markets are unreliable.

I look away from them because they're up, they're down, they're here, they're there.

But there was a number last week that the markets did not like. It was an inflation number.

What was different about that number that scared the rally of January as compared to what

we've had for months now, which is inflation is unacceptably high. We're going to work

on it. Good evening to you, Liz. Good evening, John. Well, what we saw last week was

a personal consumption expenditure price index with a long, wordy title, which is what

everyone describes as the Federal Reserve's preferred method of or measure of inflation.

And unfortunately for investors, the PCE and price index went up more than expected. It

was up more than it had been in December, both on the core and top line number. And after

many months of seeing inflation gradually, trend lower, I think investors were beginning

to assume that that was sort of an inexorable trend. And so this backing up of the number

was sort of a jolt and really changed expectations about number one, whether it was going to

continue to raise rates several more times this year, whether by the year end we would be

looking at rate cuts. Remember that was sort of the narrative behind the January rally

was that by the end of this year, inflation was going to be so under control that the Federal

Reserve would go back to cutting rates in order to stimulate the economy. And I think also people

really did kind of come back to the idea that later this year we probably would be in recession.

On top of that PCE number, which was not good, it was worse than expected and again worse

than in December. We also have had a lot of earnings reports come in and company CEOs talking

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