The Producer Price Index
The Producer Price Index came in this morning with a month-over-month increase of 0.9%, much hotter than expected. Economists have been looking for signs of inflation tied to tariffs, and this report is the first indication that higher prices are coming on purchases. I can attest to this, as I recently ordered some gifts from overseas and was hit with an 8% tariff on an order under $4,000.
The administration can replace the Bureau of Labor Statistics chief and shuffle Federal Reserve members, but prices are still rising, which is why I believe rate cuts are unlikely to occur anytime soon. The Fed is not going to cut in the face of rising inflation, and they remain in tightening mode as their balance sheet continues to decrease, which lowers the supply of dollars in circulation.
Get accustomed to these rates and prepare accordingly. That’s the investment policy we are following here at Warcap.
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