The market’s big macro event of the week is here. The consumer price index data for September shows that inflation is still hot.
Overall, prices increased by 0.6% month over month. That’s a big move. What’s more, on a year-over-year (YOY) basis, inflation is 3.7%, nearly double the Federal Reserve’s 2% “target” rate:
Regardless of what you think of the Fed’s target rate, or whether it’s a pipe dream during an era of reckless deficit spending by an absentee Congress…
Traders are now rethinking whether the Fed may hike interest rates this month after all. Typically, the central bank has avoided raising interest rates within weeks of an election.
We’ve lost any confidence now that Fed Chairman Kevin Warsh will adopt an aggressive rate-cutting stance as he’d written and spoken about before his confirmation to the chair’s seat.
The only thing Warsh has done, consistent with his pre-confirmation ideas, is get out of the way and let Scott Bessent and the U.S. Treasury tackle decades-high yields on their own.
With the Treasury’s latest moves to buy back bonds and prop up the Japanese yen, the real story in finance for 2026 has been the potential for dollar devaluation, the “debasement trade.”
That is the fancy Wall Street term for the Treasury and Fed colluding to inflate away the hapless debt foisted on U.S. citizens by their elected officials.
The mildly amusing way the financial press talks about debasement is “sticky inflation.”
Well, duh.
If no one is going to take responsibility for deficit spending, then of course the currency is going to be worth squat… and getting worth even less squat by the day.
There’s not a lot you can do about it.
But you can buy and own real assets priced in depreciating dollars.
We’re at a gold symposium hosted by the Financial Times in London right now, and the predominant fear is a U.S. government mistreating its own currency… and throwing its military at sticky conflicts around the world, too.
Gold is a no-brainer in this market, even if the Fed makes matters worse by hiking rates on a slowing economy.
And there are other equally interesting ways to play the resource boom driven by AI euphoria on Wall Street. Today, Andrew shares a unique asset that’s perfect for the AI buildout… and for hedging against “sticky” inflation and a tone-deaf Congress.
~ Addison
P.S. We’re traveling this week, but will return with our regularly scheduled Grey Swan Live!
Joining us this week is Andrew Zatlin of Moneyball Economics. Andrew is our man with his eye on Washington, D.C., focusing on the labor market.
Andrew will walk us through what’s happening in the labor market, as well as his forecast on the upcoming midterms – and where he’s positioning himself now.
