Hey guys, it's Sasha US Inflation is now officially over and the U.S stock market is about to go. Bonkers CPI Inflation data for June just came in and it's at 3.0 This is a one percent drop from the four percent that it was back in May and the month before it was at 4.9 As was extremely obvious from the data for months now, inflation is now officially gone. It was so obvious from the data that I've been making this point repeatedly for something like 10 months already. If you've been watching the channel, you will know and I got endless comments saying that I am a complete idiot I Don't understand the data.

Inflation is sticky and bloody bloody bloody blind. Here we are and inflation is at 3.0 Who could possibly have seen this one coming? And the best bit is going to fall more because there are two major parts of the Consumer Price Index that haven't even started properly falling yet. But we have already seen the data. We already have the data that says that they will collapse in the coming months.

The first of these is energy. and specifically Energy Services because Energy Services are only minus 0.9 percent year on year. This is because the energy companies are squeezing every last drop out of their greedy profiteering and not passing on the drops in commodity prices to Consumers. But eventually they will have no choice and we are now starting to see this number plummet.

Last month, this number was at 1.6 so it fell 2.5 percent in just one month. The month before it was up at 5.9 So it's Fallen 6.8 percent in the last two months. But look at the commodity prices: natural gas is currently about 60 to 70 percent lower than it was at this point last year. Coal is also 70 lower than it was at this point last year, and gas and coal account for about 60 percent of the U.S energy production total.

So the raw materials for 60 of the energy production are down 70 percent in price. But the retail prices, the prices that the consumers are paying. Ah, let me check down 0.9 In fact, electricity is still up 5.4 and piped gas is down only 18.6 So this number is like in the real world, drops by a long way and so over the coming months it has to catch up and it's heading a lot lower, which will help bring inflation down even more. The second part that is high is shelter.

It's up at 7.8 And it's funny because even six months ago I was saying that exactly this was going to happen. The risk there is that while the rest of the index things like energy, food Etc are all gradually on the way down, Shelter will be pulling the average up because of its big weight. Shelter is at 7.8 Because it is a lagging indicator. It is lagging the increase in house prices that we saw in the last two years, and the increases in rents.

But the latest Zampa report data is showing that rent prices have come down from 12 to 15 percent that they sat at to under six percent now. and the only reason that they are not falling even further at the moment is because of the uncertainty because the interest rates are affecting mortgages and this is pushing the entire market up. Artificially talking about mortgages: after an explosion in price during Covid, prices are now already starting to fall sharply. we had the biggest four ever in Q1, and the high interest rates will suppress them further in Q2 because monthly repayments on new mortgages are now so much higher and you can see that everybody is really surprised by the fact that Shelter is pushing the entire index up.

The Bureau of Labor Statistics themselves wrote CPI for all items arises 0.2 percent in June Shelter up in the title. For this inflation release, they couldn't possibly see it coming, and inside the actual release they wrote, the index for Shelter was the largest contributor to the monthly all items increase, accounting for over 70 percent of the ink degrees. I Know who could possibly have seen this one coming? Absolutely impossible to predict. So Shelter is now sitting at 7.8 percent while rent increases are now down below six percent at the moment and house prices have begun dropping very sharply.

So the good news is that Shelter is also going down. The bad news is it's going to take a long time because Shelter lags real price changes by some time. This line comes from people only experiencing the increase in the prices of rent or the prices of mortgages when they happen to move or when they get their annual rent review and remember that shelter now makes up 35 of the total index. So of course this lag effect is going to push the whole index up.

It's the biggest Single part of the index by far, and here is an interesting stat. If you take the shelter number the lagging indicator out of the index, the rest of the index put together is at 0.45 You heard that right. except the inflation on shelter, the average CPI on everything else. the average inflation level in the United States is at 0.45 and is heading lower.

Food Inflation that was over 10 percent of the time of the year was looking pretty bad is down at 5.7 This is extremely good news. Look at the last four months in the data. These are seasonally adjusted month-to-month movements: 0.0 another 0.0 0.2 percent, 0.1 percent. So food inflation is dropping very fast and is looking very likely to continue to do so.

We already talked about energy falling. new vehicles are at four point one percent, and look at the recent months minus 0.2 percent, minus zero point one percent and zero point zero percent. And the last Bastion of stubborn inflation data. Transportation Services is beginning to follow the energy sector and starting dropping quite fast.

Just as we were saying was a 10.2 last month now down at 8.2 at two percent drop in just one month now. When I explained that all of this is going to happen, a lot of people out there in my comments on social media told me that I don't understand what I'm talking about. And of course the FED really does know because they're the Smart Ones right? They really know what they are talking about because just a few days ago, just a few days ago, Jerome Powell said that the FED will have to keep increasing rates, including at their next meeting in two weeks in July and I said that this is absurd. You know why I said it because it was completely absurd because I was looking at the data I know crazy and I have no idea what Jiro and Power and the rest of his cronies were looking at and in recent speeches, Jerome Powell said that the FED will have to keep increasing rates.

They have no choice in the projection materials. From the first last meeting, which was just four weeks ago, 16 out of the 18 idiots in that room said that the interest rate will have to go up this year starting with the rate hike in July The other two didn't have much of an opinion, said it's just going to stay flat. Not a single one, not one of them said that the rates will reduce. They were unanimous and I said that the data will come and whack them right in this Mark faces.

And here is the data: Inflation is at 3.0 and dropping. Literally every single part of the index is dropping. They're all on the way down. They're all looking good.

They're all looking healthy. And this is not a surprise. Even though everybody is somehow so massively surprised, the interest rate is currently at 5.25 which is now substantially higher than inflation. What exactly is the Fed going to do at their meeting in two weeks? Are they going to increase rates? Because, uh, they said so.

There is absolutely no data substantiating this. There is no grounds to increase the interest rate. I Know that the FED have politicians in their ear wanting them to keep increasing rates because you know the money. Printers and record borrowing during covet to do stupid can be fixed by keeping interest rates artificially High by keeping them higher than necessary.

It's a bit like deleting your own debt, but the FED has no mandate to do whatever the White House wants them to do. In fact, the FED is meant to be an independent institution even though the chair gets appointed by the president. But let's pretend it doesn't happen. The Federal Open Market Committee is meant to manage two things and two things only Inflation and employment.

Now, increasing interest rates will not help employment. it will do the exact opposite. And inflation that we can now see in the data is already gone. Without the lagging shelter indicator, it is at 0.45 0.45 But I guess the FED is Too Proud to admit that they've up once again even though we all knew that the last two increases were complete unnecessary.

So at the meeting in two weeks time, they will have to do a U-turn and oh my. God Meltdown is going to be such a big surprise. Wow, Nobody could have predicted this. The FED will not reduce rates because if they were to reduce rates, that would be time to mount to admitting that they are completely full of and have no idea what they're doing.

Now the truth is they do have absolutely no idea what they're doing. We we already knew that because last week Jordan Powell said that they will be increasing rates in July last week. But here is what I think is now likely to happen. The FED will pause again.

Pause: There will not be a raid hike because they cannot possibly justify a rate hike. but last time they paused while continuing to say the same. Spiel That they will have to keep increasing rate. they're going to go a lot higher and please prepare for the race to go to six percent.

Now things have changed. We knew that they were gonna change, but now that they're on paper, they're printed. They're official because the dimwits in the Fomc looking in the rear view mirror now can actually see that inflation is gone. What was obvious for months already to anyone who actually looks at data looks at Trends tries to do analysis is now obvious to the people who don't understand data analysis.

So now the language of the FED statement is going to change sharply and boy is Mr stock Market going to like that because the language will now not say that more increases are 100 coming because they are not coming unless something really, really bizarre begins stirring. and they keep increasing without absolutely any corroborating reason to do so. And the FED now has a two-month Gap from that meeting at the end of July until the meeting in September. That's the next meeting because you know who works in the summer, right? Gotta take a couple of months off, Go and play some golf on my right.

So by the time that they have that meeting in September we will have the July and the August inflation data which will continue printing the trends that we are already seeing and that we've already seen in the past in the data and remember how the Fed was absolutely certain that there is no way in hell no way at all no way possible. They were in the Senate at the Committee hearing telling them there is no way that the race can go down this year. It's impossible. Remember that literally four weeks ago, not a single member of that committee said that the rates will fall this year according to their best estimate.

Not a single one. But what are they going to do now? What are they going to do when inflation is down at two percent? What are they going to do when shelter starts falling later this year? Are they going to keep interest rated 5.25 If inflation drops below their two percent? Target Are they going to increase the rate Further, Is that what they're going to do? Well I will tell you what they will have to do. They will have to start dropping rates and they're going to have to start doing it way sooner than those Muppets expected and it might actually have to happen at that September meeting which is actually not long away and this will be yet another bit of Absolute Concrete Proof that these idiots actually do not know what they are doing. And I am not saying this slightly because it is so painfully evident.

They are once again months late to seeing the data and I'm sorry. It is incredibly infuriating. The language is absolutely warranted because a random guy on YouTube can see all this and make videos explaining it. He can do the analysis.

He can look at the dates and say look, this is what's happening and this is where this is headache and why it's heading there. But a bunch of old farts with their armies of analysts, infinite resources who don't understand anything about the numbers that they are looking at or anything about analysis sit there around and giving speeches on topics they fundamentally do not understand. Why is this happening? Why is this Okay, but as the summer progresses, we will get more data on this inflation reduction. We will see two more months of inflation data and the stock market is also going to see it.

They're going to look at it and see that the inflation spike is now over and back in 2021 when inflation started picking up all the gray stocks and the pre-profit companies saw the share price absolutely destroyed. It doesn't matter whether the company was good or whether it was bad. there was a lot of bad companies too, but every company in that situation saw their share price absolutely collapse. some Investments that I hold got whacked really hard.

Not for any reason to do with the company. In fact, the companies are executing really well, but just because of the macroeconomic alpha inflation and of the interest rate fears. Then in 2022, the rest of the stock market joined and the S P 500 fell 25 in 10 months and now we're about to see a massive U-turn from the FED Inflation has officially gone, Covet is long gone. It's a bad memory.

I Can see an extremely exciting time ahead for investors. You thought that the first half of this year looked good? Well, I am looking forward to the second half.