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Something about the inflation story just does not add up…
We got some economic data recently that’s supposed to reassure us that everything is under control. Retail sales ticked up a bit, which caught some people by surprise.
PPI showed an energy increase, though I have to say — how is that a surprise when we’re watching oil and electricity prices climb?
But here is what really gets me…
The official numbers tell one story while your wallet tells another. The current methodology shows inflation running at almost 3% annually, which sounds manageable until you dig deeper into what that actually means.
The way they’ve been doing it lately makes everything look like it has chilled out, but we’re still looking at almost 3% increases per year. Things that cost $100 now will cost $103 by next January.
The Methodology That Makes Inflation Disappear
I just don’t know if I believe these numbers. Here’s why that matters to you as a trader.
If you recalculate inflation using the methodology from the 1980s, we would still be sitting at crazy high inflation — closer to 7-8% instead of the official 3%.
And that’s not really under control.
It feels like we’re running a little rich, with prices still going higher at quite a clip. Maybe not exactly 7-8%, but if you do it the old way we might be closer to that than anyone wants to admit.
The Fed makes policy decisions based on these official numbers. They’re looking at 3% and thinking they have inflation handled. Meanwhile, actual price pressure remains much stronger than the data suggests.
The $100 Rule and What It Means for Your Trading
Let me give you the real-world test that tells the true inflation story.
It used to be that you could go to the store and buy what you needed for dinner for 20 bucks. Now? Everything is $100. Go to the store — $100. Go out to dinner — $100. Going to the movies — $100. Go to the grocery store — $100.
That is the inflation story that matters for markets.
This disconnect creates real trading implications. If the Fed’s making decisions based on understated inflation metrics while consumers are getting hammered by actual price increases, we have a mismatch between policy and reality.
That affects consumer spending patterns, corporate earnings expectations and the sustainability of current valuations.
The gap between official inflation measures and lived experience is not just frustrating for consumers — it creates opportunities and risks for traders who understand what’s really happening beneath the surface of the data.
Where does all this stop? I don’t know. But I do know that understanding the difference between what the numbers say and what’s actually happening gives you an edge in positioning for what comes next.
Jeffry Turnmire
Jeffry Turnmire Trading
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I’m just a regular dude in Knoxville, Tennessee: a husband, father, civil engineer, urban farmer, maker and trader.
I’ve been at this trading thing with real money for 20-plus years, and started paper trading over 35 years ago. I have a knack for making some epic predictions that just may very well come true. Why share them? Because I like helping other people — it’s the Eagle Scout in me.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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We develop strategies to the best of our ability, but we cannot guarantee a future return. There is always a risk of loss when trading. Past performance is not indicative of future results. The results shown are from a 237-trade backtest from 1/1/20 – 1/1/26. The result was a 70% win rate, 40% average return (winners and losers), with a 7-day hold time.
