Today is Friday the 13th, a day that’s been considered an “unlucky” day for centuries in Western culture.
Now, a lot of folks may get a little jumpy on Friday the 13th. And the reality is, whether we’re talking about broken mirrors or black cats, it’s easy to see the folly in our own superstitions.
Because the truth is, they’re mostly harmless.
But I’ll tell you one thing. There’s a far more dangerous superstition haunting Wall Street. And it’s emanating from inside the halls of the Federal Reserve.
I like to call it the Inflation Bogeyman.
See, a bogeyman is a mythical creature meant to frighten someone, usually children. Different versions of it have been around in various cultures, but they usually appear when a kid has misbehaved. The idea is to target a specific unwanted act or behavior and then scare the kid into acting right.
I bring this up because, for months, the Fed has been fighting this mythical creature. Warning of its return. Blaming tariffs. Forecasting surges in prices. Hesitating to act while growth slows and markets grow restless.
But here’s the truth nobody inside the Fed seems willing to admit.
This Inflation Bogeyman isn’t real, folks. And those who have been waiting for it to materialize are unfortunately mistaken.
We saw more evidence of that this week in the form of two key inflation reports: the Consumer Price Index (CPI) and the Producer Price Index (PPI).
So, in today’s Market 360, I’ll review the details of these reports and explain what’s really going on. I’ll also give my take on why the Fed has a lot of explaining to do at its meeting next week.
But while most folks are paying attention to the Fed, there’s something else taking place behind the scenes. In fact, this could be one of the most transformative policies in U.S. history.
If my research is correct, this new government fund stands to make a lot of wealth for early investors… and I’ll share how with you today.
The Real Inflation Data Tells a Very Different Story
This week, two critical inflation reports struck another blow to the Fed’s narrative.
The CPI showed headline inflation rose just 2.4% year over year, barely above April’s 2.3%. Month over month, prices increased 0.1%. Core CPI, which strips out food and energy costs, climbed only 2.8% annually – again, below expectations.
This latest CPI reading was below economists’ expectations for the fourth straight month. In other words, these guys can’t hit the broad side of a barn.
Rather than anticipating inflation from the tariffs, the folks at the Fed would be better off by simply looking at the chart below, which shows the reality of the situation…
Digging further into the data:
- Food costs rose 0.3%,
- Energy costs dipped 1%,
- Gasoline plunged 2.6%,
- Vehicle prices dropped 0.3% for new cars and 0.5% for used,
- Apparel fell 0.4%,
- Services rose 0.2%,
- And shelter costs (owners’ equivalent rent) ticked up 0.3%. This continues to be the primary inflation catalyst.
Turning to the PPI report, it showed a modest rise, but it was still below expectations.
After two straight months of decline, the PPI rose 0.1% in May, down from the 0.2% increase in April and below expectations for a 0.2% rise. Year over year, the PPI went up 2.6%.
Core PPI, which excludes food, energy and trade margins, also increased 0.1% last month and is up 2.7% in the past year. Economists expected core PPI to rise 0.2%.
If we look further into the report, wholesale service costs rose only 0.1%, and wholesale goods prices were up 0.2%.
What Has to Happen Next
The bottom line is that the data is clear. Inflation continues to fall and defy the expectations of the so-called “experts”. That’s great news, folks.
And this Inflation Bogeyman that they’re so afraid of still hasn’t shown up.
The fact is, they’re anticipating Trump’s tariffs will drive prices higher, but most of those tariffs are still at the 10% baseline. On top of that, a strong U.S. dollar is offsetting much of the impact.
The Fed needs to stop watching for phantom inflation and start looking at the actual data.
The Beige Book says it all. Nine out of twelve Fed districts reported either no growth or outright contraction. And nearly every district is reporting elevated uncertainty that’s already putting the brakes on business and consumer activity.
To be honest, the fact that they’re ignoring the economic data is shocking. The right move would be to cut rates at the next meeting. Even if they don’t cut, any guidance hinting at cuts could spark a relief rally.
My Main Focus Right Now
Now, here’s where things get really interesting for investors like us…
While the Fed keeps debating inflation, another force is already reshaping America’s economy. And it’s happening quietly – outside the headlines most investors are watching.
Specifically, I’m talking about Executive Order 14196.
This little-known order, straight from the desk of the President of the United States, promises to unlock the hidden wealth inside of America – and channel that directly into a select group of companies.
Investors who position themselves early could ride the next wave of growth in this little-watched corner of the market.
That’s why I put together a special briefing explaining how this fund works, where the biggest opportunities are, and how investors can profit as the capital starts flowing into these sectors.
I’ll also tell you how you can gain access to my top three picks that are being fast-tracked to success, thanks to this Executive Order.
Click here to get the details and watch my full briefing now.
Sincerely,
Louis Navellier
Editor, Market 360
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