Can the Fed Really Beat Inflation Without Wrecking the Economy? – Part II

[Inside Wall Street with Nomi Prins]( Welcome to Inside Wall Street with Nomi Prins! It’s the only daily newsletter featuring the insights of renowned author and former Wall Street insider, Nomi Prins. Every day, Nomi shines a light on a massive wealth transfer she calls The Great Distortion. That’s the true cause of the permanent disconnect she sees between the markets and the real economy. And she shares ways you can come out ahead, if you know where the money is flowing. You’ll find all Nomi’s Inside Wall Street issues [here](. If you have questions or comments, send Nomi a note anytime [here]( or at feedback@rogueeconomics.com. Can the Fed Really Beat Inflation Without Wrecking the Economy? – Part II By Nomi Prins, Editor, Inside Wall Street with Nomi Prins Yesterday, we looked under the hood of the latest inflation figures. And it wasn’t a pretty sight. Costs continue to rise in nearly all categories reported in the latest Consumer Price Index (CPI) figures. Some categories, including food, gasoline, and rent, are seeing their highest annual increases since the 1980s. [If you missed that dispatch, you can [catch up here]( Meanwhile, the Fed continues to wield its interest rate baton to fight what, so far, has been a losing battle against rising inflation. In three rate hikes this year, it has raised the Federal Funds Rate by 1.5%. It now stands at 1.75%. The Fed’s actions are still working through the system… And President Biden has reassured the Fed that he will give it room to fight inflation. But Americans are wondering when the inflation peak will come – or if we are even close to the peak. So today, I’ll show you the choices open to the Fed right now… and which course of action I believe it is most likely to take… And I’m sure you’d like to make up for some of the higher prices you’re paying at the gas station and the supermarket… So I’ll also show you some ways you can play the current market volatility that’s caused by all the uncertainty around the Fed’s next steps to your advantage… Recommended Link [America’s “Permanent Recession” Is Here]( [image]( Life in America is not as it seems… And thanks to recent unprecedented decisions by a strange force of unelected officials… Americans may now experience a level of financial insecurity and suffocation of freedoms bigger than the crisis of 2000…2008… and 2020 - COMBINED. Months from now we may look back to – this moment – as the end of the middle class. Stephen Roach, a former chairman at Morgan Stanley, says: [“U.S. living standards are about to be squeezed as never before.”]( Newsweek says: [“[This] Will Be The End of American Freedom.”]( And HuffPost says: [“[This] Is Making The Rich Richer, and Leaving You Behind”]( But a new “boots on the ground” investigation reveals Americans will be forced to make a drastic decision… Become one of the ‘new poor’ in America… Or the ‘new rich’. While everyone else could end up in “Permanent Recession.” [Click Here To Get The Details.]( -- Positive Signs on the Horizon So, what’s the Fed going to do next? Well, the biggest risk to our economy right now is that it will overreact and overtighten. It might want to prove some sort of political point about its competence to fight inflation. But the Fed can’t control inflation on the supply and demand side. It can’t produce oil or food. It also can’t reduce the cost of rent or of a used car. That’s why, with respect to the Fed’s role in fighting inflation, I believe that one of two things will have to happen. Either the Fed will have to raise its inflation target from its current 2% base… Or it will have to come to a point where there’s enough give in certain prices for it to declare victory over inflation. That could happen, of course. Inflation is broad-based and there are many parts to it. And there are some positive signs on the horizon… [Featured: Goldman Sachs Alum Sounds Alarm on “Next US Crisis”]( Oil prices fell for almost four weeks straight from mid-June to mid-July. And gas prices have declined for the past 28 days in a row. Commodity prices have been falling since the previous CPI figures came out a month ago. In addition, wage growth has been slowing down over the past few months. Indeed, inflation-adjusted average hourly earnings fell by 3.6% this month. That’s the most in the history of the CPI index. So we could see a lower total inflation number in the months to come. That might be enough for the Fed to take its foot off the gas… Also, don’t forget, the Fed has a dual mandate. It needs to maintain full employment as well as price stability. We currently have 3.6% unemployment. The Fed might slow down or stop raising rates – or send out signals to that effect – if unemployment hits 4%. Recommended Link [Best play for the 2022 crypto disaster?]( [image]( When it comes to making money during extreme market conditions... [Millionaire trader, Jeff Clark, is the man you should listen to.]( During the 2000 dot-com collapse, he doubled his net worth - with a single trade. In 2008, during the worst financial crisis of our lifetime… Jeff’s trades delivered gains as high as 490%. And he even predicted the crash of 2020 - and the historic 2020 spring rally. But today, Jeff is ready to reveal his most controversial investment method yet... [An unusual 3-second financial maneuver]( that lets you lock in gains as high as 660%... 810%... even 1,925% - in a matter of days. If you have any kind of money in the markets, you must hear what Jeff has to say. [Click here. LIVE demonstration reveals all the details.]( -- The Fed’s Dilemma But even if the Fed fights tough, reducing inflation isn’t about one government’s policies in isolation. Central banks around the world are battling inflation that they can’t control. It’s like a geopolitical bravado game of “Who’s the most serious inflation-fighter?” As Bank of Canada Governor Tiff Macklem said after raising rates by 1% last week, “We had indicated we were prepared to be more forceful. Today was more forceful.” That was the Bank of Canada’s biggest move in 24 years. The markets were expecting a 0.75% hike. Canada is the first G7 country to enact such an extreme hike during this Distortion period. The central bank of South Korea recently raised rates by 0.5% (the most in one go since 1999). The European Central Bank (ECB) is expected to announce its first interest-rate hike since 2011 this week. Markets are expecting a 0.25%-0.5% increase. The question now is: Does the Fed want to win the rate-hiking competition? Or would it rather maintain stability in the markets and the economy? [Featured: Caught on Camera - Florida man leaves crypto crowd speechless…]( The Fed’s Next Move So what is the Fed’s likely course of action? [As I told you yesterday]( some are expecting a 1% interest rate hike. I believe 1% would be too much of a shock to the markets and the real economy right now – even for the currently hawkish Fed. But I also believe the latest CPI data ensures that a mere half-percentage-point hike is now firmly off the table. So the most likely outcome is that the Fed will raise rates by 0.75% at its meeting next week . Regardless which comes to pass, one thing is certain: Volatility will be around until the Fed steps back from these chunky rate hikes. And economic uncertainty will rise as consumer confidence falls. Recommended Link [Millionaire trader: How to make money in any market]( [image]( What if you could ignore 99% of the entire stock market… and still have the chance to make money in bullish AND bearish conditions? Sadly, most folks don’t even see triple-digit returns in a single year – or even in 10-years… But today, millionaire trader and former professional money manager Jeff Clark, is revealing his newest trading breakthrough… He’s used this secret to help 170,000 regular folks have the chance to see triple-digit gains over 48 times and double-digit gains over 81 different times. The key: Don’t over-complicate things. [Watch Jeff Demonstrate His ONE Stock Trade Now.]( -- What This Means for Your Money Now, I promised to give you my playbook for how to play this current period of volatility to your advantage. Firstly, hold onto your positions until the Fed takes its foot off the rate-hiking gas. And yes, this includes through the losses you’re seeing in your portfolio, as difficult as that may be. Selling into market volatility is never a good idea. Second, you could use this period of volatility in the markets to buy the dips in your core holdings in small increments. Third, consider purchasing an exchange-traded fund (ETF) of companies that are dedicated to paying high dividends to their shareholders. My recommendation for this is the SPDR Portfolio S&P 500 High Dividend ETF (SPYD). It pays the average dividend of the top 80 highest dividend-paying companies in the S&P 500 Index. Alternatively, I recommend buying companies with high dividends that fit one of my five [Distortion Themes](. These are New Energy, Infrastructure, Transformative Technology, Meta-Reality, and New Money. I believe money will eventually flow into these areas once the Fed pivots back to a neutral position on rates and monetary policy. Until tomorrow, [signature] Nomi Prins Editor, Inside Wall Street with Nomi Prins P.S. Regardless of which course of action the Fed takes next, there’s a $40 trillion transfer of wealth about to happen... one that could forever split the entire nation into two groups – the “new rich” and “the new poor.” Experts estimate we could see 263 million people fall into poverty in the coming months ahead. And some Americans could find themselves living in a “Permanent Recession.” I want to do everything in my power to help you end up on the right side of this new moment in history. That’s why I just released a new video presentation. I’m even giving away the name and ticker symbol of an investment folks have used to join the “new rich.” [Click here for all the details](. --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=Inside Wall Street Feedback). --------------------------------------------------------------- MAILBAG The conversation about green energy and electric vehicles continues in the mailbag… If the United States wants to have energy independence, Biden should not have canceled the Keystone XL Pipeline, which was intended to export a lot of cheap oïl from Canada to the U.S. South. Here in Quebec, our government has passed a new law that canceled all exploration of oïl and gas. It cut all activities of a good company, especially a project of gasified natural gas in the east of the province (I think it was for $9 billion). This project would have easily replaced Russian gas for Europe. The government also closed the sites in production and no other energy except the Hydro. Our politicians do not know what will happen in the next few years. – Paul A. On the subject of electric vehicles (EVs), can you please address the overall market share that EVs can potentially occupy given the limited supply of materials needed to produce an EV and the rapidly increasing price for those materials? The stupid state of California believes the combustion engine will be obsolete in 10 years. Impossible if you don't have enough materials to make EVs. In 10 years, maybe the state of California will be promoting biking and walking when they don't have enough EVs and have made the combustion engine illegal and California doesn't have gas stations. – Richard M. What do you think of Biden’s decision to halt permits on the Keystone XL pipeline? Are our politicians in the dark on the future of oil and gas, as Paul points out? Write us at [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Can the Fed Really Beat Inflation Without Wrecking the Economy? – Part II). IN CASE YOU MISSED IT… [The #1 Stock Set to Benefit from High Gas Prices]( It’s not a Big Oil stock… in fact, it’s beating Big Oil at their own game. Get the full story on a tiny, under-the-radar company selling for less than $20. [CLICK HERE.]( [image]( Get Instant Access Click to read these free reports and automatically sign up for daily research. [The Trader’s Guide to Technical Analysis]( [The Gold Investor’s Guide]( [The Ultimate Guide to Taking Back Your Privacy]( [Rogue Economincs]( Rogue Economics 55 NE 5th Avenue, Delray Beach, FL 33483 [www.rogueeconomics.com]( [Tweet]( [TWITTER]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. 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