Today's 'Good' Inflation News

The latest on inflation... The Fed's plans haven't changed... Suspending the monthly jobs report... Cryptos in 401(k)s... This could be the 'biggest trade in history'...

The latest on inflation...

This morning, the Bureau of Labor Statistics ("BLS") released its Consumer Price Index ("CPI") for July. On the surface, the data was exactly what investors wanted to hear...

The benchmark measure of prices rose 0.2% last month and increased 2.7% year over year. The one-month change matched Wall Street's estimate, while the year-over-year number came in slightly below the expected 2.8% increase.

A 9.5% year-over-year drop in gasoline prices helped offset a 5.5% jump in electricity costs. Aside from gasoline and oil, apparel was the only sector to record a year-over-year decline.

While the headline CPI was "good" news, "core" inflation – which strips out energy and food prices – rose 3.1% year over year, more than Wall Street's estimate of 3%. It hit its highest level since February.

More than two-thirds of the CPI's components are now rising faster than 2% – the Federal Reserve's inflation "target." So higher inflation is sticking around for now.

Still, markets loved the report. All three major U.S. indexes rose more than 1%, with the Nasdaq 100 and S&P 500 both reaching new highs today.

What this means for the Federal Reserve's next move...

In a Truth Social post this morning, President Donald Trump (again) demanded that Federal Reserve Chair Jerome Powell cut interest rates "now."

The market is betting on Trump getting his wish – even with higher inflation data.

Prior to the CPI report, fed-funds futures traders had 88% odds on a rate cut at the central bank's next meeting on September 17. After the report, those odds increased to 94%.

In a speech in Colorado on Saturday, Fed Governor Michelle Bowman said she's in favor of three interest-rate cuts by the end of 2025 to avoid a "deterioration" in the job market.

Bowman was one of two Fed voters who called for a rate cut at the July meeting. So it's not a surprise that she's calling for cuts in 2025 – even though she was against the large cut in September 2024 for fears of reigniting inflation.

But she sees the labor market as a bigger risk than inflation. As we wrote in the August 4 Digest...

[T]he report showed that the U.S. economy added just 73,000 jobs in July... the unemployment rate ticked higher to 4.2%... and most notably, hiring totals for May and June were revised down dramatically – with a combined 258,000 fewer jobs than initially reported. The new numbers said just 19,000 jobs were added in May and only 14,000 in June, compared to the 125,000 and 147,000 previously stated, respectively.

There are still two more inflation reports to come before the Fed has its next meeting. So today's report could be out of the Fed's mind by the time it makes a decision on rates. But if either (or both) of those reports show another uptick in inflation, that could put the Fed in a tough spot.

In its June "Summary of Economic Projections," the Fed predicted higher inflation and unemployment for 2025. Those factors require different responses – rate cuts to help the labor market or rate hikes to tame inflation.

Right now, it looks like the Fed is more concerned about the job market. And it may be willing to tolerate higher inflation (for a time) to try and boost hiring in the labor market. As we explained last week, the Fed may even consider cutting rates before its next meeting. But a weakening jobs market doesn't exactly portend continued strength for the economy. And a mid-meeting rate cut could raise fears that the economy needs emergency help.

About that jobs report...

After last week's jobs report, Trump described the revised May and June jobs numbers as "rigged" and fired the Bureau of Labor Statistics Commissioner Erika McEntarfer.

Now, Trump's new nominee for head of the BLS, E.J. Antoni, has made some interesting comments in an interview with Fox Business...

How on earth are businesses supposed to plan – or how is the Fed supposed to conduct monetary policy – when they don't know how many jobs are being added or lost in our economy? It's a serious problem that needs to be fixed immediately.

Antoni has proposed suspending the release of the monthly jobs report until the data gets "fixed." He suggests that the BLS only publish the "more accurate" quarterly jobs reports.

That comes with its own problems, though...

Antoni didn't specify how long it would take to rework the process of gauging the monthly jobs numbers. That could leave policymakers – and investors – in the dark for months at a time when there are concerns about the labor market's strength.

The market may not like seeing revisions. But uncertainty from not knowing the health of the economy could be just as bad. Antoni still has to be confirmed by the Senate, so his suggestion isn't a done deal.

Pivoting to the crypto space...

On Friday, Trump signed his latest executive order on cryptocurrencies.

The "Democratizing Access to Alternative Assets for 401(k) Investors" order allows retirement accounts to hold investments like real estate, private equity, commodities, and digital assets.

Our colleague and Crypto Capital editor Eric Wade explained what this means for cryptocurrencies in his weekly Friday update...

That means billions of dollars could soon move into the crypto space, creating a steady influx of new money into the industry.

According to the Investment Company Institute, Americans have more than $43 trillion in retirement assets. So even a small fraction of those funds moving into cryptocurrencies could be a huge boon for the space.

Still, 401(k) investments in crypto don't come without strings attached. More from Eric...

It also could mean that there's people getting themselves in over their heads as far as risk and reward goes.

But Eric says the top five or 10 cryptos by market cap, the "blue chips" as he calls them, will be the first to be investable in 401(k)s.

What's next for Washington's crypto goals...

Trump has called himself the most procrypto president, so we're betting this won't be the last crypto executive order to come from the White House.

And Congress is making moves, too – like passing the GENIUS Act for stablecoins as part of three bills focused on providing a clear regulatory framework for cryptocurrencies.

Eric believes the next move could come as soon as next week...

You see, in May, Eric attended a financial conclave with billionaires and White House insiders like the Trump family and JD Vance. That's where he first learned about what could become "the biggest trade in history."

Eric says it's a radical plan to reboot America's financial system. And it has plenty of big names behind it...

Market legends like Paul Tudor Jones, Ray Dalio, Larry Fink, and Stanley Druckenmiller are already in position.

President Trump's family and the son of Secretary of Commerce Howard Lutnick have also put billions of dollars into this project.

Eric just went public with a special video presentation to unveil the financial maneuver that he says could stun the market... while offering a rare chance to potentially make 10 times your money, or more. But you must act soon.

If you didn't catch this morning's presentation, you can watch a replay of the event and get all the details right here.

New 52-week highs (as of 8/11/25): Altius Minerals (ALS.TO), CBOE Global Markets (CBOE), DXP Enterprises (DXPE), Electronic Arts (EA), iShares Ethereum Trust Fund (ETHA), Gilead Sciences (GILD), Kinross Gold (KGC), Lynas Rare Earths (LYSDY), Altria (MO), OR Royalties (OR), Construction Partners (ROAD), Sandstorm Gold (SAND), SSR Mining (SSRM), Telefônica Brasil (VIV), and Vanguard Short-Term Inflation-Protected Securities (VTIP).

In today's mailbag, more feedback on Dan Ferris' Friday essay, "Ugly Clothes and Bad Advice"... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"Dan, Loved your article. Witty and funny, but filled with truth... " – Subscriber Larry N.

Good investing,

Nick Koziol
Baltimore, Maryland
August 12, 2025