The inflation numbers were a disaster. Here’s the silver lining…

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When inflation numbers fell this week, I used two words to describe them in a market podcast I sent to my followers.

disaster.

And Kevin Warsh walks right in the middle of it. Warsh was confirmed as the new Chairman of the Federal Reserve in a 54-45 Senate vote earlier this week, and I hope he has packed a lunch – because he has a lot on his plate.

But there is something in these stories that most people miss now…

In this article, I want to explain in detail what the latest inflation reports tell us and what the Warsh confirmation actually means for markets.

I’ll also explain why – despite all the hype – I believe we are entering one of the rarest and perhaps most profitable market windows I have seen in decades. I explain all the details in my country 10X Fed shock Event – so be sure and get it if you haven’t already.

Let’s dig deeper.

Inflationary pressures are still increasing

Let’s start with the Consumer Price Index (CPI).

The headline figure for April came in at 3.8% year-on-year – the highest level in nearly three years.

The big driver was energy. Energy prices jumped by 17.9% compared to last year, while gasoline prices rose by 28.4%. Electricity prices increased by 6.1%.

Here are the details worth paying attention to. Core prices – which do not include food and energy – rose 0.4% in April. This is nearly double the 0.2% pace reported in February and March.

We need energy for everything. When core prices start accelerating like this, it means that energy price inflation is no longer containable. It extends to the broader economy.

Then came the Producer Price Index (PPI) – which is what I was talking about when I said it was a “disaster”.

The Producer Price Index is now up 6% over the past 12 months. Six percent!

Remember, the PPI tells us what the “producers” pay. Do you think they will eat those costs?

Not on your life. They’ll pass it along to you, me and your cousin in Albuquerque.

For this reason, the Producer Price Index is considered a leading indicator of consumer inflation.

Looking deeper, wholesale inflation jumped 1.4% in April. Wholesale commodity costs rose 2%. Wholesale service costs increased by 1.2%.

This tells me that inflation is becoming increasingly entrenched at the wholesale level – meaning it is likely to persist for a while.

Bottom line: Treasury yields are moving higher. The yield curve is flattening. All hopes of lowering interest rates in the near term are off the table.

But hey, there’s still a glimmer of hope, people.

Warsh does not work alone

Here’s the key: Kevin Warsh doesn’t work alone. And this is where the story gets really interesting.

Many investors treat Warsh as a traditional inflation hawk, but they miss the bigger picture.

This is the guy who served on the Fed’s Board of Governors during the 2008 financial crisis. He worked directly alongside Ben Bernanke during one of the most chaotic periods in modern financial history.

He knows what the system looks like when it’s under stress. And he knows how to respond.

More importantly, Warsh seems to recognize that AI-led productivity gains help grow the economy without creating the same inflationary pressures seen in past cycles.

This gives the Fed more flexibility.

It’s also worth noting that Wershe has an ally in Treasury Secretary Scott Besent.

These two men know each other privately. Besant has built his career on identifying big market shifts before Wall Street detects them. He helped George Soros make a billion dollars by breaking the Bank of England.

Warsh later partnered with Stanley Druckenmiller, the man who executed that trade. The point is that these are not professional bureaucrats or academics living in an ivory tower. These are experienced, market-tested professionals who will try to direct policy in the same direction.

This trend?

• Stabilize the treasury market without stifling growth.
• Fixing a broken housing market – homes are too expensive, borrowing rates are too high, and young people can’t afford them.
• Harness the AI ​​revolution to unleash a new era of American prosperity.
• Get a handle on America’s growing debt burden.

Now, Becent has publicly called for a 150 basis point cut in interest rates. Of course, Warsh still has to build consensus within the Fed, and higher energy prices linked to tensions in the Middle East could slow the timeline.

Now, I still believe that interest rate cuts later this year are still in place very maybe.

But even if you’re wrong, here’s what you need to understand…

What most people miss

Yes, inflation was worse than investors had hoped. I don’t reject that.

But let’s take a step back for a moment.

The S&P 500 is on track for nearly 20% earnings growth this quarter. Earnings are expected to remain strong during the remainder of the year.

Here’s something else worth remembering: Stocks are a great hedge against inflation. The same forces that worry investors at the mainstream level manifest themselves as pricing power and earnings growth within the companies we own.

The truth is that we are in a very good environment. In fact, one of the best I’ve seen in nearly five decades in the business.

Despite the hype, the underlying fundamentals are strong.

When there is a cut in interest rates – and I believe there will be – it will be like pouring gasoline on a fire.

The companies that will benefit the most are not the huge names that everyone already owns. They are a type of smaller company, focused on the domestic market, more sensitive to borrowing costs and more likely to benefit from economic growth in the United States.

The beanie is already starting to wake up. The Russell 2000, which tracks small companies, is up 38% over the past year.

The other thing about penny stocks? When they move, they move big — and fast.

Last week, I told my readers how we found a 1100% profit with… Bloom Energy Company (He is) in stock breakout, My distinguished consulting for small businesses.

Now, if you take a look at our buy list, you will see gains:

• 640% in 21 months.
• 557% in 10 months.
• 508% within 13 months.
• 407% in 11 months.

And more…

And again, I think this is just the beginning.

One of the rarest windows I’ve seen in decades

Here’s what I want you to understand about this moment.

The Fed has already begun cutting interest rates under Jerome Powell.

If I’m right and the Fed cuts interest rates later this year, that is We are entering into one of the rarest and most profitable market setups I have seen in nearly 50 years.

I’m talking about a window of consistent and sustained cuts to key interest rates.

I’ve only seen this a handful of times in my career: 1995, 2001, 2008, and 2020. Each time, a specific group of penny stocks went on to make extraordinary gains — before the public found out what was happening.

I think we’re at the beginning of window number five.

I’ve already got my eyes on 53 stocks Stock grader The system is flagged at the moment. Each one shows the same early signals I’ve tracked before every major bull run in my career: strong fundamentals and institutional money quietly starting to move before the headlines.

And on Wednesday 10X Fed shock Event, I gave one of them away for free.

If you haven’t watched the replay yet, I highly encourage you to do so today. Because opportunities like this don’t stay hidden forever. Investors who are positioned before the public finds out what is happening are the ones who get the biggest gains.

Watch the replay here.

sincerely,

Louis Navellier

editor, Market 360

The Editor hereby discloses that as of the date of this email, the Editor owns, directly or indirectly, the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations contained in the article described below, or otherwise mentioned:

Bloom Energy Company (He is)