Howdy folks,
The market got a reality check this week.
When the CPI report came out Wednesday morning, economists, traders and a whole bunch of smart folks learned what Main Street people like you and I have known all along: Inflation is heating up again.
Now markets traders are scrambling to make sense of what it means for interest rates, the economy, and the Fed’s next move.
If you’ve been following along, you know I’ve been saying for months that the Fed cut rates too soon.
Back in September, when the Fed made its first cut, I warned that inflation hadn’t cooled enough and that Powell might be making a mistake.
But unfortunately, I couldn’t get Powell on the line…
So then in December, when they cut rates again, I pointed out how the bond market wasn’t buying it — and that inflation wasn’t going away anytime soon.
So cut to this week… and clearly the CPI report (as well as today’s PPI report) just confirmed what I’ve been saying all along:
Inflation is still in play.
And the market’s reacting just like I expected: first dumping stocks, then rallying them right back up, but not really going anywhere.
Take a step back, and you’ll notice something interesting:
The S&P 500 hasn’t really gone anywhere for the last few months!
It’s been chopping around, waiting for direction.
So, where do we go from here? Will the Fed be forced to pause or even hike rates again? (gasp!)
Or will they hold steady and hope inflation takes care of itself?
That’s exactly what I broke down in today’s FREE Market Radar educational session, along with:
- Gold’s reaction to inflation — what’s driving it, and how high it could go
- Why traders shrugged off the hot CPI print and what it really means for rate cuts
- Copper’s breakout and what it signals for the broader commodities market
If you missed it, catch the full replay right here.
Stay sharp,
—Geof Smith
P.S. No matter what the market’s doing, energy is heating up to be the investment I’m focusing on. See how I’m playing the uranium boom here.
