ClearValue Tax (Uncut) 01-15-2025
CPI Inflation Report: The Great Melt-Up Continues in 2025!
so the CPI inflation report was released this morning and the stock market shot up interest rates fell and I want to update you on what’s going on so the Bureau of Labor Statistics the BLS they released their monthly inflation reports CPI headline inflation is now at 2.9% so this is actually bad because the rate of headline inflation the prior month was at 2.7% so ultimately headline inflation went up but core inflation did improve to 3.2% this month it was at 3.3% the prior month now here’s a chart showing
the rates of headline inflation and core inflation headline is at 2.9% core is at 3.2% but the federal reserve’s goal is to get these down to 2.0% but as you can see progress has stalled so listen the stock market has shot up after the CPI inflation report but if you’re thinking why did this happen happen because you know honestly this report it didn’t seem that great if that’s what you’re thinking then I’ll tell you that you’re absolutely right this inflation report was honestly not so good but here’s the thing last Friday
we had the jobs report and that blew away expectations it was a solid report 256,000 jobs added the market expected that the same thing would happen today for this inflation report the market was they were expecting that inflation would coming hotter than expected just like the jobs report but that did not happen today yes the rate of headline inflation went up but it did not rise more than expected so was this report bad well I mean I’ll say that it wasn’t good but it could have been worse and that’s good
enough for the markets and on top of that the banks are reporting their earnings this morning the results their results are coming in strong and that’s contributing to the rally as well but now I want to show you this so the next Federal Reserve meeting is on January 29th before this inflation report there was a 97.3% chance that the Federal Reserve would not cut interest rates at that meeting now after this inflation report it remained unchange like it literally did not budge it’s still at a 97.3%
chance that the Federal Reserve does not cut interest rates this month so this is according to the CME fed watch tool okay so the next meeting after January is on March 19 before this inflation report the odds that the Federal Reserve does not cut rates at that March meeting was at 76.9% after this inflation report the odds that the Federal Reserve does not cut decrease to 74% so honestly this report it came in as expected and the odds of interest rate Cuts have not changed by much now I want to talk to you more about the
inflation report but before we do that I want to answer this question because I keep seeing this in the comments a lot a lot of people are asking is the great melt up over because they see that the stock market is facing resistance it’s not just going straight up okay my answer my it’s a short answer the answer is no the great melt up is not over we’re still in the great melt up we’re actually in the beginning stages so I’m explain it to you like this what is the root cause of the Great melt up the root cause is the federal
government’s debt crisis so I’ll ask you you know if you’re asking this question is the great melt up over I’ll ask you is the government’s debt crisis over and if it’s not over then that means that the great melt up is not over either it’s as simple as that so listen I’ll tell you this all this short-term volatility that you see in the stock market this is expected this is part of the Great melt up so I want to tell you this I said this before in the long run stocks only go up but here’s the thing I
know a lot of people have difficulty just grasp being that concept A lot of people are against that concept that in the long run stocks just go up but let me explain it to you better if you’re against that so listen when I say that stocks only go up in the long run it’s not because stocks are like a godsend to mankind no stocks go up in the long run because simply the federal government continues to devalue the dollar with inflation that’s all that’s going on it’s very straightforward and honestly I mean you
could look up the stats for yourself in real terms stocks only slightly outpace inflation in nominal terms yeah stocks go up by a lot but if you don’t have stocks or Investments then you lose out in real terms and in nominal terms but to answer answer the question the great melt up no it’s it’s not over it’s definitely not over we’re just only in the beginning phases now going back to inflation I want to walk you through the highlights of the CPI inflation reports so we have CPI headline inflation at
2.9% % CPI core inflation at 3.2% and these are the main categories so shelter inflation is at 4.6% Services inflation is at 4.4% Food inflation 2.5% and energy inflation came in at negative half a percent now here’s what the report shows for food inflation so these are rates year-over-year changes fish is down slightly 7% bread is up by. 3% fruits and veggies up 1% mil milk is up by 1.9% butter is up 2 1/2% meats are up 2.7% coffee is up 3.8% and eggs 36.8% so let me know if you’re seeing certain prices and certain Goods
skyrocketing recently and I want to show you this so this is coming from the Federal Reserve two days ago here are the inflation expectations over the next 12 months home prices are expected to go up by 3.1% over the next year food food by 4% rent 5.5% college education 5.7% cost of medical care 5.8% so honestly I mean because I reported on this earlier the thing that bothers me is that you have these elevated expectations like you see it for yourself 3% 4% 5% and even the CPI inflation report says you know headline
2.9 core 3.2 but then cost of living the cost of living adjustment for Social Security recipients and other beneficiaries are at 2.5% for this year so how is that not unfair and the last thing I want to show you is this is this stat and it’s coming from the Federal Reserve I’m just going to read it off to you so the median household expects that their expenses will grow by 4.8% this year so expenses go up by 4.8% that is a lot that’s actually much higher than pre-pandemic averages the median household expects
that their income will grow by 2.8% % this year so that I mean that’s terrible that’s a bad setup imagine your income goes up by 2.8% your expenses go up by 4.8% it’s just simply your expenses are going up faster than your income so that’s obviously a bad situation so just I’m be careful with your finances be careful with your budgets the scary thing is that right now I mean you saw you see GDP this is considered like good Economic Times just imagine when things go bad for the economy if we ever get into well if they
ever declare you know a recession imagine anyways that’s what happened today I just wanted to keep you updated with the CPI inflation reports and the last thing I do want to say is that my book is now available on Amazon so I released that yesterday and I just want to say thank you so much for all the support and the feedback it’s just been tremendous like overwhelming and I appreciate it so much I’m very very grateful so thank you again it’s a book about how to fast track your wealth and if you enjoy my content I’m sure you’re
going to love the book or it’ll also make a you know great gift for friends or families thank you so much and wish you a very nice day take care