Allianz Chief Economic Advisor Mohamed El-Erian joins Stuart Varney to analyze the October consumer price index rise of 0.4 percent, the likelihood of a Federal Reserve rate hike and the market performance of chipmaker Nvidia.
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The market won't like it because the market is also starting to price a higher probability of a subsequent rate hike. And the reason why, Stuart, is the disappointing inflation numbers we just heard. On a three-month basis, annual inflation is now running at 3.75%, that's the highest in two and a half years. And then when you look at internals, like service inflation, that's running at 5% annualized. So people are worried that the last few months, as Kevin Hassett just said, we've seen a turnaround in inflation developments.
That's the way it is, so we're not looking at very bright prospects in the future. You mentioned the possibility of further rate hikes. One Fed governor is talking about a 50 basis point hike at some point. Is that on the table?
So it's now being debated. So we've gone in the last few days from 'they'll probably hike' — if they don't hike by 25 basis points, there's no change — but now that they will hike, and the possibility of a 50 basis point change. And the result of that is a significant move up in yields. Last I looked, the 10-year yield was almost back at 5%, it was at 4.97, an enormous jump just today.
Let's change the subject and look at Nvidia's CEO Jensen Huang. He has ties to suspected Chinese spy Alice Huang, reportedly helped move $7 billion worth of high-end Nvidia chips to Chinese firms. Do Jensen's problems undermine the whole A.I. industry?
So they are an issue, and it's national security, it's geopolitics, it's all of this, Stuart. So it is an issue, and the board with an investigation, key person risk is so high in such an important company that it's called to the whole A.I. Having said that, also look at what Anthropic said today and the A.I. trade, that's why people are genuinely torn. 1,200% increase in the first months, and October alone, monthly run rate gone up by 10 billion to 81 billion. So people are looking at Anthropic and saying, 'Look at what's happening, and this is real.' And then there's a big cloud above them, which is what's coming from Nvidia.
Cloud over the whole industry. I want to pull up your piece about what markets want from Democrats. Forgive me, I'm going to paraphrase you and do it fast. You want the Democrats to stop attacking the Fed, keep growth going, enhance A.I. safety, and do something about the budget deficit. That's a lot to ask for, Mohamed.
8 more exchanges in this transcript
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El-Erian, M. (2026, November 10). Even California voters don’t think this is a good idea: Economist [Interview transcript]. Fox Business Clips. CEOInterviews.AI. https://ceointerviews.ai/interview/3239494/
MLA
Mohamed El-Erian. "Even California voters don’t think this is a good idea: Economist." Fox Business Clips, 10 Nov. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/3239494/.
BibTeX
@misc{elerian2026_3239494,
author = {Mohamed El-Erian},
title = {Even California voters don’t think this is a good idea: Economist},
howpublished = {Interview transcript, Fox Business Clips. CEOInterviews.AI},
year = {2026},
month = {nov},
url = {https://ceointerviews.ai/interview/3239494/},
note = {Speaker-attributed transcript with timestamps}
}
