Are We Too Focused on the Fed?

Good to be back and stocks going into the week on a high note coming off of a real big rally this past Friday because of a hotter than expected inflation report.

causing some investors to think maybe the Fed's going to have to raise rates when it meets later this week.

We'll see about that and we'll talk about that throughout the show.

But the Fed can't control inflation and inflation is the narrative right now.

I'm pretty much seeing it everywhere we look from the top to the bottom of the aisles in the grocery store, in and out of the supermarkets and the Home Depots of the world, but also in commodity prices.

We'll get to all that in a minute.

But this high inflation, 3.4% year over year, kind of where Folks thought it might be maybe a tick higher.

That's all caused by higher gas prices and higher oil prices.

And we do have oil hitting $100 a barrel on Friday and Brent crude prices even higher than that.

And that is putting the spike into gasoline prices now well over $4 per gallon across the country on average.

And diesel prices much higher than that.

We're going to get into that and what it means for commodity prices in general, but also some stock opportunities, stocks that are reacting well.

real well to this.

But this is all the narrative that the Fed is facing when it meets on interest rates this week.

And going into the week before that inflation report at the middle of last week, about a 50 to 60 percent chance the Fed was going to have to hike rates because of higher prices.

But after that inflation report popped, we're now looking at a much higher rate at a much higher opportunity, potentially 85 to 90 percent chance the Fed hikes rates.

But the inflation story is something the Fed cannot control, even if it hikes rates.

And we're talking, what, about a quarter point, maybe a half a point.

That's going to infuriate the president.

It's not going to do much to change prices and change the trend.

Look at this chart from our buddy, Charlie Galello, over at Creative Planning.

Inflation narrative has been with us really since the pandemic, and we're averaging around 4% a year.

When you look at that five-year change, it's really around 4%.

Remember, the Fed wants 2%.

but the five-year average is right around 4% and not much the Federal Reserve can do to control it, especially when it's foreign policy driven and driven by the Treasury Department and the Treasury Department getting in everybody's way here.

Good to be back and stocks going into the week on a high note coming off of a real big rally this past Friday because of a hotter than expected inflation report.

causing some investors to think maybe the Fed's going to have to raise rates when it meets later this week.

We'll see about that and we'll talk about that throughout the show.

But the Fed can't control inflation and inflation is the narrative right now.

I'm pretty much seeing it everywhere we look from the top to the bottom of the aisles in the grocery store, in and out of the supermarkets and the Home Depots of the world, but also in commodity prices.

We'll get to all that in a minute.

But this high inflation, 3.4% year over year, kind of where Folks thought it might be maybe a tick higher.

That's all caused by higher gas prices and higher oil prices.

And we do have oil hitting $100 a barrel on Friday and Brent crude prices even higher than that.

And that is putting the spike into gasoline prices now well over $4 per gallon across the country on average.

And diesel prices much higher than that.

We're going to get into that and what it means for commodity prices in general, but also some stock opportunities, stocks that are reacting well.

real well to this.

But this is all the narrative that the Fed is facing when it meets on interest rates this week.

And going into the week before that inflation report at the middle of last week, about a 50 to 60 percent chance the Fed was going to have to hike rates because of higher prices.

But after that inflation report popped, we're now looking at a much higher rate at a much higher opportunity, potentially 85 to 90 percent chance the Fed hikes rates.

But the inflation story is something the Fed cannot control, even if it hikes rates.

And we're talking, what, about a quarter point, maybe a half a point.

That's going to infuriate the president.

It's not going to do much to change prices and change the trend.

Look at this chart from our buddy, Charlie Galello, over at Creative Planning.

Inflation narrative has been with us really since the pandemic, and we're averaging around 4% a year.

When you look at that five-year change, it's really around 4%.

Remember, the Fed wants 2%.

but the five-year average is right around 4% and not much the Federal Reserve can do to control it, especially when it's foreign policy driven and driven by the Treasury Department and the Treasury Department getting in everybody's way here.