The video provides an in-depth analysis of the latest inflation numbers, highlighting a concerning upward trend in the Consumer Price Index (CPI) over several months. The host explains that June's 2.7% annualized inflation rate, higher than estimated, continues a month-over-month increase, sparking fears of persistent inflation. By comparing the current trend to previous inflation surges, particularly the high-inflation period of 2021-2022, the video emphasizes the dangers such as eroding purchasing power, damaging asset markets, and destabilizing traditional investment portfolios.

This video offers timely insights into how tariffs and specific product categories—like apparel, electronics, and home goods—are experiencing rapid inflation, possibly as a consequence of recent trade policies and companies elevating prices during tariff discussions. The host underscores the importance of monitoring these trends proactively, rather than reactively, explaining impacts on bond yields and borrowing costs, and addressing recent market reactions and policy statements. He warns against unrealistic hopes for aggressive interest rate cuts and cautions against the negative outcomes from mismanaging monetary policy while inflation remains a concern.

Main takeaways from the video:

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Key Vocabularies and Common Phrases:

1. annualized [ˈænjuəlaɪzd] - adjective or verb (past participle) - Calculated as if something (like a rate or return) continued for a full year, based on the current data. Often used with statistics like inflation or returns. - Synonyms: (yearly, annual, per annum, projected)

So yesterday, CPI numbers came in and they showed that that inflation for the month of June had grown annualized at a pace of 2.7%.

2. modus operandi [ˈmoʊdəs ˌoʊpəˈrændi] - (noun phrase) - A particular way or method of doing something, especially one that is characteristic or well-established. - Synonyms: (method, approach, technique, procedure)

Beyond that, it also wrecked the modus operandi of most portfolios in the United States, which is called the 6040 portfolio, which is 60% stocks and 40% bonds.

3. cumulatively [ˈkjuːmjələtɪvli] - (adverb) - Increasing or increased by successive additions. - Synonyms: (collectively, altogether, jointly, in total)

Those categories had recorded already cumulatively 5, 5 percentage points worth of inflation.

4. tariffs [ˈtærɪfs] - noun (plural) - Taxes imposed by a government on goods imported from other countries. - Synonyms: (duties, import taxes, levies, customs)

So some people are saying that this is proof that we are already seeing a pass through in inflation from all those tariffs

5. materialize [məˈtɪriəˌlaɪz] - (verb) - To become actual or real; to happen or appear. - Synonyms: (occur, happen, emerge, manifest)

And unfortunately it's beginning to materialize. And a recurring theme on this show that I've told you guys time and again, my job for you guys, for myself, for my clients, for everyone, is to spot problems ahead of time.

6. vigilant [ˈvɪdʒələnt] - (adjective) - Keeping careful watch for possible danger or difficulties. - Synonyms: (watchful, alert, attentive, cautious)

But we have to stay vigilant about it because if it happens, we have to be on top of it.

7. aggregate [ˈæɡrɪɡət] - (noun / adjective / verb) - A whole formed by combining several elements; a total amount. - Synonyms: (total, sum, combination, collection)

It is an aggregate of all the bets every participant in the market, not only in the United States, but around the world, is making.

8. lull [lʌl] - (noun / verb) - A temporary interval of quiet or lack of activity. - Synonyms: (pause, break, respite, hiatus)

This has all happened during the period of June when tariffs were in a sort of a lull, quote unquote, where there was less tariff noise.

9. proactive [proʊˈæktɪv] - (adjective) - Creating or controlling a situation by causing something to happen rather than responding to it after it has happened. - Synonyms: (preventive, anticipatory, pre-emptive, forward-looking)

So my job is to be proactive, which is why I'm focusing a lot on this inflation report, whereas most other publications probably aren't even going to talk about it.

10. credibility [ˌkrɛdɪˈbɪlɪti] - (noun) - The quality of being trusted and believed in. - Synonyms: (trustworthiness, reliability, believability, dependability)

That is exactly how you get a loss of credibility with your monetary policy.

11. runaway inflation [ˈrʌnəˌweɪ ɪnˈfleɪʃən] - (noun phrase) - Inflation that is increasing uncontrollably or at an excessive rate. - Synonyms: (hyperinflation, surging inflation, spiraling prices, rapid inflation)

That is exactly how you get a second round of runaway inflation to follow on the first round in 2022.

More Tariff Shock To Come? June Inflation Numbers Reveal Alarming Trend - What's Moving Your Money

Hi, everyone, it's Spencer Akimian. And welcome back to another episode of what's Moving your Money. On today's episode, we're gonna dive into the latest inflation numbers and we're gonna look into whether or not inflation is making a comeback. I personally think it is, and I'm gonna explain why in this episode. So enjoy. Sit back tight and get ready.

So yesterday, CPI numbers came in and they showed that that inflation for the month of June had grown annualized at a pace of 2.7%. Now, that compares to the estimates of 2.6%. And yes, on the surface, it does not seem like such a big deal that inflation only beat by 10 basis points. But, and I want you to look at a trend here, because economics is all about trends. It's not just about, you know, the raw numbers. In April, we had inflation that was 2.3% year over year. Then in May, we got inflation that came in at two and a half percent year over year. And as I just said, in June, inflation was reported to be 2.7% year over year. So we keep going up on these inflation numbers, and that's a very alarming trend. If you guys recall, back in 2021 and 2022, we did not immediately go to 9% inflation. We started at 3, then we went to 4, then we went to 5, then, then we went to 6, then we jumped up to 8, and then we peaked at 9. Right. It takes time for all of this to go through the system, but given the fact that we are seeing some of it head through in the system already, I think we have to be very cautious about this going forward.

Now, as you all know, inflation is devastating for an economy, and it's also pretty bad for asset markets. If you remember, in 2022, it was the worst year that financial markets had had since 2008. Beyond that, it also wrecked the modus operandi of most portfolios in the United States, which is called the 6040 portfolio, which is 60% stocks and 40% bonds. Bonds get killed with inflation. People that are living on fixed income, fixed wages, they get destroyed from inflation. That's one of the reasons why inflation is so politically unpopular, because inflation really tends to hurt older people, poor people, people that are living on fixed wages. And those people tend to vote quite a lot. Right. And we also, President Trump wrote that inflation fear back into the White House in 2024.

Now, look, one other thing that is really alarming that caught my eye in yesterday's report, and again, no one really spoke about is we are seeing very rapid surges in inflation in a few categories. They are apparel, furniture, electronics, and specifically home goods. So stuff like refrigerators, microwaves, ovens, things of that nature. Since April 1, just until the end of June, as It's measured by CPI, those categories had recorded already cumulatively 5, 5 percentage points worth of inflation. So if those items costed $100 on April 1, as of July 1, according to CPI, that cost $105, that is 5% inflation in 90 days annualized, that's about 20% inflation. That's unsustainable. Right. Ironically or probably not ironically, these are the categories that we most heavily tariff from places like China, Vietnam, India, Bangladesh, Uganda, you name it. So some people are saying that this is proof that we are already seeing a pass through in inflation from all those tariffs. And I absolutely agree with it. Right. I believe some of this is actually that companies are taking advantage of how much tariffs were in the headlines in the past couple of months. So they're raising stuff even though we had a pause on our tariffs. Right. One of the big risks with doing tariffs was that as we saw back in 2022, when prices rise, prices never fall. That is the most basic economic rule. Every ninth grader in this country can tell you that prices never fall. They do not reset, they stay at their higher level. Right. So companies got an advantage to raise prices in early April and, and now even if those tariffs are not in place, they are keeping those price hikes in place. So in a way, we're really getting the worst of both worlds here. Right? Because we're not necessarily getting the full amount of tariff revenue that we otherwise may have gotten if we kept those tariffs on. Right. And we're also suffering to some extent from those price hikes that we were fearful that tariffs would bring on. So again, we were speaking about this all spring long and unfortunately it's beginning to materialize. And a recurring theme on this show that I've told you guys time and again, my job for you guys, for myself, for my clients, for everyone, is to spot problems ahead of time. There is no use in 2026 figuring out some of that was happening in 2025, because markets react and it's over with. Right? So my job is to be proactive, which is why I'm focusing a lot on this inflation report, whereas most other publications probably aren't even going to talk about it. Right. And if it's one month, one month does not make a trend. One, two months doesn't even make a trend. Three Months doesn't even make a trend. But it's worth noting these things because if in 30 days again, the inflation numbers pick up, particularly as it relates to those categories, electronics, apparel, home appliances, you know, furniture, things of that nature, we really have to start getting cautious here.

Now, if we go into market pricing, and as you know, as I'm sure you know about me, I am the type that says the market is always right. The wisdom of the market is better than the wisdom of anything else. The market is the cumulative estimate of everyone that's participating in the market. It is an aggregate of all the bets every participant in the market, not only in the United States, but around the world, is making. So I believe there's tremendous wisdom in looking at market prices. Well, what did the market say to today's inflation report? Bond yield spiked. The 30 year yield rose above 5% for the first time since June. And before that it was April. If you recall, back in early May, Scott Besson had essentially told the whole world that the reason he was able to get President Trump to back off those tariffs was because the 30 year yield rose above 5%. Now, the 30 year yield is very important because a lot of lending to the actual world bases itself off of the 10 and 30 year yield. So home loans, auto loans, car loans, renovation loans, business loans, any type of long duration consumer loan you can think of is based off of the 30 year loan. So with that rising, real borrowing costs to the actual economy are rising as well. Right. We already know we have a consumer that's slowing down quite a lot. We already know we have a housing sector that's really, really, really frozen. Right. We already know how much uncertainty businesses are facing with all of these tariffs. If we add on to this entire puzzle, rising bond yields, it becomes awfully difficult for an economy to continue sustaining at a solid pace. And that's a fear that we have. Right.

So another thing I just want to quickly highlight is this has all happened during the period of June when tariffs were in a sort of a lull, quote unquote, where there was less tariff noise. You know, Taco was going around. Trump always chickens out. People thought that, you know, the worst of the tariffs were behind us and we still printed these rather bad numbers, to be frank. Right. I have a fear that, as you've seen in the past couple of days, in the last week, we are going back to talking about those tariffs. All the countries around the world, Brazil, South Africa, Canada, Europe, Mexico, Indonesia, you name it, all these countries are getting brand new tariff rates and they're as high, if not higher, than they were back in April. So what happens if we actually go through with tariffs? Right. How is inflation not gonna pick up from here? How is that electronic inflation, apparel inflation? How is it not gonna keep spiking up from here? Do we get a 30 year that climbs closer towards 6%? I'm not saying it will happen. All right. My personal take is at the end, Trump always does chicken out. I agree with that. But we have to stay vigilant about it because if it happens, we have to be on top of it. We cannot be reactive. We have to be proactive in these markets.

So I'm going to end on one final thing here. There's been a lot of talk, especially from Trump and his true social posts, about the Fed cutting rates. He's suggesting a 3, 300 basis point cut. Don't take them seriously. With all due respect, just don't take them seriously. We didn't do 300 basis point cuts in 2008 or in the peak of coronavirus. We're not doing it right now. There's no reason to do such a thing right now. But beyond that, you know, more, more in, you know, traditional economic thought, how do you cut rates with inflation on the rise? Right, right. That is a formula for disaster. That is exactly how you get a lost decade like the 1970s. That is exactly how you get a second round of runaway inflation to follow on the first round in 2022. That is exactly how you get a loss of credibility with your monetary policy. That is exactly how you get your dollar, your currency, to lose another 20% of its value in six months time. Do we want any of that? I definitely don't. So I don't see how we can cut much here. The market is currently pricing in two rate cuts for 2025. As of now, I don't think we're getting any rate cuts in 2025. I could always be wrong, but we'll see. And look, we have to monitor all of these things very closely.

So, again, this was today's episode and on tomorrow's episode, I want you to tune in. Because bank earnings have started and commercial banks, in my opinion, are the most important sector in the overall economy because they have their hands everywhere. They impact every single part of the economy. So we can get some very good insights from not only the earnings that banks support, but also from the commentary that their executives are willing to provide. So thank you for watching today's episode and I hope to watch see you guys again tomorrow.

ECONOMICS, FINANCE, POLITICS, INFLATION, TARIFFS, MARKET ANALYSIS, FORBES