If you’ve been paying attention, yesterday’s inflation print seems like kind of a “duh” moment.
Headline CPI rose more than half a percent in April from March — about an 8% annualized pace — on top of the surge the month before.
Strip out the seasonal adjustments, and the increase runs closer to 10% annualized.
Gasoline did its part for the second straight month. But it wasn’t alone.
Electricity prices moved higher. Food prices climbed again. Core services—the category that makes up more than 60% of CPI—accelerated at the same time.
That combination leaves the Federal Reserve with fewer places to look away.
If and when Kevin Warsh is confirmed, he will have a tougher time persuading the Federal Reserve’s board that rate cuts are justified by AI productivity gains.
In fact, even if policymakers treat the gasoline spike as temporary, they still have to deal with rising costs across services, food and power.
Electricity is where the shift becomes harder to ignore:
Electricity continues to surge as energy-hungry data centers serving the AI boom are getting built and going online. (Source: Federal Reserve Economic Data)
Utilities are adding load as data centers come online to support AI systems that run continuously.
Those facilities draw power at an industrial scale, and the contracts behind them lock in demand over long periods.
In several regions, electricity prices are roughly 50% higher than they were five years ago.
The grid itself still looks familiar—a mix of nuclear, natural gas, coal, wind and solar managed by local utilities.
What has changed is the demand profile. Households use more devices. Businesses rely on more computing. Data centers whir without interruption.
Electricity – a line item most people treat as a monthly expense – is starting to reflect the knock-on costs of all that capital spending at the high end of the S&P 500 Index.
With utilities, you can get the best of the AI boom – steady growth, reasonable income, and it doesn’t matter which AI company is leading or lagging right now to worry about.
To get our top play for surging electricity prices, become a member of Grey Swan Pro — details here.
~ Addison
P.S. Quick program note: on Friday, May 15, at 2 p.m. EST/11 a.m. PST, we’ll be hosting a live webinar on taxes and trading. Are you making the most of your tax status to save and invest money? Find out on Friday…
P.P.S. Also, this week’s Grey Swan Live! features Jennifer Stevens, publisher and executive editor for one of our favorite publications, International Living. We’ll be chatting it up with Jennifer at 2 p.m. EST/11 a.m. PST tomorrow – Thursday, May 14 – about making those tax savings go farther overseas:
We bumped into and had dinner with Jennifer in Panama City a few weeks back at the beginning of March.
Over some fresh fish and an Argentine Malbec, we started a conversation about what she calls the “value proposition” that those who choose to retire overseas seek. Here’s a snippet of the email conversation that followed our meetup:
What most people don’t realize is that you can have a lifestyle that’s a lot more interesting and affluent than most people realize. The key is to explore your options abroad.
Because outside the US—in the right spots—good living costs quite a bit less than it does in the States.
A couple can live well on as little as $1,700 a month in some places. The trick is to know where to go. And that’s what we show people at IL.
And to be clear: You don’t have to upend your life to take advantage of this “arbitrage.”
- You could buy a place – outside the US, outside the dollar, protect some of that hard-earned money from whatever may be coming down the pike in the US – rent it out for income, watch it appreciate, and you could enjoy it, too.
- You could spend part of the year abroad…
- You could, in fact, up sticks and move…
We invited Jennifer to join us this Thursday, May 14, 2026 at2 p.m. EST. If you’re looking for a way to make your pile stretch further, beat inflation, avoid politics and give you a life with some adventure in it… you’ll want to join us and hear what Jennifer has to say.
As always, if you have any questions for us, send them to Feedback@GreySwanFraternity.com.
