The Fed Went Hawkish Because It's WAY Behind the Curve

The Fed  revealed how badly behind the curve it is on inflation yesterday.

Sure, everyone believes the Fed was hawkish because it wants to hike rates two more times this year with an additional three es in 2019… but lost amidst that is the fact the Fed upgraded its inflation forecast while emphasizing that policy remains accommodative.”

Put another way, if SEVEN rate hikes over a two year period are “accommodative,” REAL inflation is WELL above where rates are now.

Remember, Jerome Powell is not a clueless academic like Janet Yellen or Ben Bernanke. Powell has ample experience in the private sector and is well aware that the Fed’s official inflation measures are garbage.

If you don’t believe me, consider how the actual markets reacted to the Fed statement. The $USD which SHOULD rally hard based on the Fed being hawkish gave up all its gains in just a few minutes.

Meanwhile, Gold and other inflation hedges EXPLODED higher, finishing the day at the highs.

Let me ask you... is a collapsing $USD and a strong Gold rally inflationary or deflationary?

Remember the Fed has ready admitted its open to an "inflationary overshoot." Given how guarded the Fed typically is concerning real risks to the financial system (remember the "subprime is contained" gaffe in 2007?) this suggests the Fed is well aware inflation is going to be a REAL problem.

On that note, we recently published a special investment report on how to profit from inflation. The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.

We are making just 100 copies available to the public.

To pick up yours, swing by:

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research


dizzyfingers Thu, 06/14/2018 - 09:54 Permalink

A hair-care product I've been buying for years went from 4 oz. for about $2.50 to less than 2 oz. for about $4.50. Same for many food products, much smaller containers for many more dollars. This continues into all other products from cars to vacuum cleaners.

Just like Johnson's butter-and-guns era Vietnam, wars take immense bites out of everyday life. US has a much older population now, so health care even for healthier older people with few maladies (and in good shape) is unaffordable.

Quantify dizzyfingers Thu, 06/14/2018 - 10:46 Permalink

Might be time to shave your hair off. This isn't about wars, its about social programs and importing millions of illegals and putting them on social programs and printing money to pay for bad bank deals, and printing money for bad government investment in solar and wind, and printing money for backing housing bubbles, and just printing money for government to piss away on anything they want.

In reply to by dizzyfingers

Kidbuck dizzyfingers Thu, 06/14/2018 - 12:38 Permalink

Products like cars.

You are prescient indeed. Cars have indeed shrunk to make them cheaper to manufacture while the prices continue to rise. I couldn't figure out why adults would want to go from car seats and interiors that were like luxury recliners in a living room to primary school kid's size seats shoved in a tightfitting closet. Small car buyers are truly getting fucked coming and going.

In reply to by dizzyfingers

QQQBall Thu, 06/14/2018 - 11:53 Permalink

Let me ask you... is a collapsing $USD and a strong Gold rally inflationary or deflationary?


Dude, put down the crack pipe. those are hourly charts and the USD move is not collapsing... its why no one takes gold commentators seriously.

surf@jm Thu, 06/14/2018 - 13:56 Permalink

Was thinking of buying a hotdog the other day, until the guy wanted to charge me $1.25, to slop some chili on it......

Well, he didn`t sell his chili, or his hotdog......