Where the Fed is Failing

[Power Profit Trades] Thursday, August 25, 2022 [Billions of Dollars Are Up for Grabs Every Day]( $970 billion, to be exact... that comes out to $11 million just waiting to change hands every second of every day. All this extra volume comes courtesy of the waves of speculative cash thrown into the markets by amateur traders with practically zero strategy. While these newbies are basically just throwing darts in the dark, pattern trading expert Tom Gentile is taking advantage of the incredible rise in trade volume and stock prices with the help of his new brute-force algorithm. [Click here to see the astonishing results so far, and how you can claim your share of the next round](. Where the Fed is Failing! By Tom Gentile Daily Watchlist Today's Schedule 8:30 a.m. ET - Catch the [Money Morning LIVE show]( before the bell 1 p.m. ET - Premium subscribers only (private room) Don't miss any Tom Gentile cameos! [Follow the Money Morning LIVE streaming schedule here.]( The Fed's original denial of the seriousness of inflation, followed by the belief that rising prices was transitory, will continue to have an adverse impact on our economy and your investment portfolios! You remember the headlines: The Fed may be able to control U.S. interest rates, but there are some things that it cannot control - international supply-chain issues! While some inflationary measures are working, others are not, and that creates great cause for concern to investment portfolios - potentially for the long run! Since the market's low on June 17, it has risen nearly 18%, which can create false hope if the short-term rally is a bull trap (a temporary rise in a bearish market trend) - resulting in investors turning a blind eye to the reality of our economic situation. Listen - the Fed has been downplaying the risk of inflation and the very real potential for a deep recession from the start; and the rhetoric continues to this day. The consequences for downplaying inflation, along with the late response from the Fed, can easily have long-term repercussions to investments. Is the Fed Still in Denial? Julian di Giovanni is head of Climate Risk Studies in the Federal Reserve Bank of New York's Research and Statistics group. Giovanni has been working at determining what the U.S. inflation rate "would" have been without supply bottlenecks. I'm not sure investors are comforted by the thought that the very high 9 percent inflation rate "should" be a 6 percent high, instead. Giovanni also exclaims that "fiscal stimulus and other aggregate demand factors would not have driven inflation this high without the pandemic-related supply constraints." As the Fed mulls over the data and analysis showing that 60 percent of U.S. inflation over the 2019-2021 period was due to the jump in demand for goods, and 40 percent was owed to supply-side issue, the rest of us can look at the grim reality and get prepared for what's coming. The Reality of our Economic Situation Matters to Investment Portfolios! The majority of U.S. pandemic-era inflation may have come from the surge in demand, and supply-chain constraints may have exasperated it. For this reason, suggests Greg McBride, chief financial analyst at Bankrate.com, "to really feel like we've hit a peak, we need to see a sustained pullback in a broad range of categories - and we're not seeing that." There are two serious concerns with the latest Consumer Price Index reading that deserve attention. First, the decline in the CPI was mainly due to a 7.7% decline in gas prices. Second, there was yet another month-over-month increase in food prices! Both of these items are a huge household expense. (Gif Linked Despite the fact that gas declined slightly, the rise in food, electricity and other costly items are going to continue to take a toll on household spending. I mentioned above that there has been a jump in the stock market since June, which occurred on lighter trading volumes than those found when the market was sharply declining. This can give investors a false sense of a hopeful recovery to their portfolios. Inflation is still exorbitantly high from a historical perspective. As we look at the graphic below, the global supply chain, which has been responsible for 40% of our inflation, is still in crisis. (BLS - Global Supply Chain Pressure Index moved more than 4 Standard Deviations from the mean) What the Fed can't Control Unfortunately, the Fed may be hosing down the fire of inflation with interest rate hikes, but what the Fed cannot control is supply chain issues from other countries, like China. China's supply-chain bottlenecks have been a real issue for supplying the great demand - contributing to world-wide inflation. It becomes clear that with all of the factors involved with high inflation, that one single contribution, such as raising interest rates, does not give the green light for a full-throttle stock market rebound. Get Prepared Over this past week, the 1-week Relative Performance of market sectors has been upheld only by Energy - leading with a positive 5.63% return. All other sectors from Utilities to Industrials and even Consumer Cyclicals have fallen to the red. The Fed may have downplayed the risk of inflation early on, and supply-chain issues may have played a significant role in inflation, but these are things we simply cannot control. Instead, it's important to be aware of potential threats to the market and economy. Then, plan ahead in an attempt to reduce the adverse impact these things may have on your personal investing. Find out how you can become aware of some of the snares lurking about - the kind that can impact your investing. Listen daily to the professionals on [Money Morning Live]( as they discuss hot topics. [Join me each Monday through Wednesday at 12:00 p.m. ET]( to find out how we're winning this battle. Watch the Money Morning Live gurus just by [Clicking here to join]( You won't miss out if you miss the live shows. Just click the button below to watch my replay - save it to your favorites! See you soon, Tom Gentile America's #1 Pattern Trader [Tom's Toolbox]( Today's Watchlist is based on the Morning Report's Expensive IV tool. This data is updated after the closing bell each session, and compares current implied volatility (IV) against a set of near-the-money options over the last year. Expensive IV means the current IV is at the high end of this 52-week range, meaning option premiums are running hotter than normal - a ripe atmosphere for selling to open options. The Morning Report tools from the Tom Gentile Suite app are free to Power Profit Traders - [click here for instructions on how to use and download](. [Download the APP]( [Subscribe to Tom's YouTube]( [Follow Tom on Spotify]( [How much will Friday's "Gravity" trade make?]( 536% --> [Vote]( 819% --> [Vote]( 980% --> [Vote]( Deadline on Friday at 3pm - [Click here to see more.]( Join the conversation at [powerprofittrades.com]( Or follow me on [Facebook]( and [Twitter]( [Facebook]( [Twitter]( [More...]( mailto:customerservice@cs.powerprofittradesinfo.com?subject=Tom%20Gentile's%20Power%20Profit%20Trades&body=Check%20out%20https%3A%2F%2Fpowerprofittrades.com%2F mailto:customerservice@cs.powerprofittradesinfo.com?subject=Tom%20Gentile's%20Power%20Profit%20Trades&body=Check%20out%20https%3A%2F%2Fpowerprofittrades.com%2F [Money Morning Red Alert] The best way to receive the most timely, actionable opportunities from Money Morning is by joining our text messaging service, Red Alert - free of charge. [Text INCOME to 21852]( By texting INCOME to 21852, you are expressly consenting to be texted about investing news, trade alerts and marketing communications from Money Map Press, LLC about Money Morning's Red Alert text messaging service at the phone number you use, even if the phone number is on a corporate, state or national do not call list. You also consent and unconditionally agree to our [Privacy Policy]( and [Terms of Use]( including the arbitration provision and class action waiver contained therein. Your consent is not required to make a purchase. Msgs may be sent using automated technology. Message frequency varies. Msg&data rates may apply. Text HELP for HELP and Text STOP to STOP. You are receiving this e-mail at {EMAIL}, as part of your subscription to Power Profit Trades. To remove your email from this list: [unsubscribe here]( or [Manage Your Email Preferences](. To cancel, or for any other questions or requests, please contact our Customer Service team: [Online]( Phone: 888-384-8339 (North America) 443-353-4519 (International) Mail: Power Profit Trades | Attn: Member Services | 1125 N Charles Street | Baltimore, MD 21201 Fax: 410-622-3050 Our Customer Service team is available Monday ‑ Friday between 9:00 AM and 5:00 PM ET. © 2022 Money Map Press. All Rights Reserved. Nothing in this email should be considered personalized financial advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Protected by copyright laws of the United States and international treaties. This Newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of: Money Map Press. 1125 N Charles Street, Baltimore, MD 21201. [Website]( | [Privacy Policy]( | [Terms & Conditions]( [sg_hidden_unsub]