Stuck Between Inflation and Real Pain

[] Inflation’s Not Down, Just Slowing [] [] [] [] On Tuesday, when PPI (Producer Price Index) numbers came out, the market rallied. Then CPI (Consumer Price Index) on Wednesday and the same thing. The interesting thing to me is that people saw the reports and said “inflation went down” Because actually it didn’t. Inflation rarely ever goes down, it usually just slows down — but it’s still growing. It’s a bit like a car that was speeding at 85 MPH tapping on the brakes and so now it’s going 60 MPH. It’s still moving forward — it’s just not getting there as fast. And so while the market rallied, the Fed is still in a tight spot. Because their only tool in the battle against inflation are rate hikes. But those high rates are causing some real pain. People can’t afford to live anymore because everyday needs like food, cars and housing are already sky high — and still going higher. So the Fed is stuck between a rock and a hard place, with inflation bearing down on them from one side and real people getting beat up on the other side. It would be easy to feel sorry for them, if not for one thing: They brought it on themselves. Do you remember back a few years ago at the height of the pandemic? I can still hear Jerome Powell, Chairman of the Federal Reserve saying “transitory inflation.” The phrase drove me crazy. Meanwhile, I still remember being on Ask The Pros where all the panelists, including me, could see clear as day that inflation was hitting in a big way — and only growing. It’s baffling how we were able to see that so clearly, but The Fed was so blind to it. So while I don’t envy the Fed Chief, I also put the blame for the record inflation we’ve been through over the past few years squarely on his shoulders. Now, if the Fed cuts rates as they’ve hinted they might before the election, they’d just be playing politics. They ought to wait out the year, keep rates steady and regroup after January 1 to see where the economy is and if a rate cut is appropriate. But they won’t do that. How do I know? Because the Fed tends to make bad decisions. The “transitory inflation” example I pointed out above wasn’t their first time and it won’t be their last one. What does it all mean for us as traders and investors? It means we need to stay sharp, keep our eyes on the data, and not get lulled into a false sense of security just because the market rallies on a headline. The Fed’s decisions in the coming months will have a huge impact on the markets, and whether they stick to their guns or start playing politics, we need to be ready to adjust our strategies accordingly. As of now, with the S&P futures firmly above this key level I called out, I’m cautiously optimistic that we could be headed for another all time high. From there? Well, let’s just keep an eye on things. — Geof Smith P.S. Gold just entered an acceleration cycle, and [this is exactly how I am playing it.]( [] [] On Tuesday, when PPI (Producer Price Index) numbers came out, the market rallied. Then CPI (Consumer Price Index) on Wednesday and the same thing. The interesting thing to me is that people saw the reports and said “inflation went down” Because actually it didn’t. Inflation rarely ever goes down, it usually just slows down — but it’s still growing. It’s a bit like a car that was speeding at 85 MPH tapping on the brakes and so now it’s going 60 MPH. It’s still moving forward — it’s just not getting there as fast. And so while the market rallied, the Fed is still in a tight spot. Because their only tool in the battle against inflation are rate hikes. But those high rates are causing some real pain. People can’t afford to live anymore because everyday needs like food, cars and housing are already sky high — and still going higher. So the Fed is stuck between a rock and a hard place, with inflation bearing down on them from one side and real people getting beat up on the other side. It would be easy to feel sorry for them, if not for one thing: They brought it on themselves. Do you remember back a few years ago at the height of the pandemic? I can still hear Jerome Powell, Chairman of the Federal Reserve saying “transitory inflation.” The phrase drove me crazy. Meanwhile, I still remember being on Ask The Pros where all the panelists, including me, could see clear as day that inflation was hitting in a big way — and only growing. It’s baffling how we were able to see that so clearly, but The Fed was so blind to it. So while I don’t envy the Fed Chief, I also put the blame for the record inflation we’ve been through over the past few years squarely on his shoulders. Now, if the Fed cuts rates as they’ve hinted they might before the election, they’d just be playing politics. They ought to wait out the year, keep rates steady and regroup after January 1 to see where the economy is and if a rate cut is appropriate. But they won’t do that. How do I know? Because the Fed tends to make bad decisions. The “transitory inflation” example I pointed out above wasn’t their first time and it won’t be their last one. What does it all mean for us as traders and investors? It means we need to stay sharp, keep our eyes on the data, and not get lulled into a false sense of security just because the market rallies on a headline. The Fed’s decisions in the coming months will have a huge impact on the markets, and whether they stick to their guns or start playing politics, we need to be ready to adjust our strategies accordingly. As of now, with the S&P futures firmly above this key level I called out, I’m cautiously optimistic that we could be headed for another all time high. From there? Well, let’s just keep an eye on things. — Geof Smith P.S. Gold just entered an acceleration cycle, and [this is exactly how I am playing it.]( [] ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Prosperity Pub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Prosperity Pub are for your informational purposes only. Neither Prosperity Pub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. Prosperity Pub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit [( for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by Prosperity Pub 101 Marketside Ave, Suite 404 PMB 318, Ponte Vedra, Florida 32081, United States [Prosperity Pub]( [] ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Prosperity Pub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Prosperity Pub are for your informational purposes only. Neither Prosperity Pub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. Prosperity Pub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit [( for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by Prosperity Pub 101 Marketside Ave, Suite 404 PMB 318, Ponte Vedra, Florida 32081, United States [Prosperity Pub](