's up grandma's guys here and welp. It just got a lot worse as as of. Today the inflation rate came in at 91. Percent.

Which was the highest ever reported since 1981. And significantly higher than every other analyst expected not to mention what's even more concerning isn't the fact that home buyers are cancelling the highest rate of deals since kovid a recession is all. But confirmed and an alligator was found swimming in wisconsin. Lake but.

Instead the fact that inflation increased at a rate of 13. Month over month. Suggesting that it's about to go a lot higher. So let's talk about exactly what this means.

Why these numbers continue getting worse. How this is about to impact your investments and then most importantly. What you could do about this to make money. Although before we start as usual.

It takes a lot of research to be able to post accurate information like this shortly after it comes out so. If you appreciate that it would mean a lot to me if you inflated that like button. And subscribed. If you haven't done that already for the youtube algorithm.

Plus as a thank you for doing that here's a picture of a. Squirrel so thank you guys so much and also big thank you to publiccom for sponsoring this video. But more on that later all right so first when it comes to inflation before we go into the exact numbers we need to clear up some confusion when it comes to these readings. Because even though.

We've seen a huge increase year over year that does not give us the entire picture. And it's really important to understand precisely what this means to start the category that gets the most attention is what's known as cpi inflation. Which stands for the consumer price index this covers a weighted average of the most frequent consumer purchases and it's tracked on a year over year basis. Every single month as a simple way to visualize.

It just imagine that you have a grocery basket of 10 items and on a regular basis. They compare the current cost of the basket with the month prior if that basket costs more we've seen inflation and it's reflected in the headline that we see here however measuring these prices isn't just a one size fits all approach and in an effort to make a reasonable comparison between items some extra measures are taken like first cpi is adjusted to include for the extra features that weren't available 10 or 20 years ago. Like the fact that all new cars are required to have a backup sensor. These changes allow for the inflation.

Number to be altered as needed for the fact that sure you are paying more. But you're also getting a lot more back in return. The second cpi numbers are also adjusted to consider the fact that when prices rise consumers have the option to switch to a less expensive alternative like going from name brand to generic. Because of that this switch is calculated into the official readings artificially bringing down.

The overall number. That's shown and third housing increases are based on a metric known as owner's equivalent rent this is obtained by asking homeowners if you were to rent your home. Today. How much do you think it would rent for monthly unfurnished and without utilities of course that brings in the major concern that homeowners might not know what their home would accurately rent for and it's entirely based on opinion and not factual data.

So when one third of the entire inflation index is comprised of shelter. Anecdotal reports may not provide a truly accurate reflection of how much rents are really going up which i'll talk about shortly. Because that brings me to the next reading core inflation. This purposely excludes food and energy.

Prices. Because they tend to be a lot more volatile based on factors outside of our control. They're also considered to be staple items that are consumed on a regular basis regardless of how much they cost after all you still need to put gas in your car to drive to and from work even if it's seven dollars a gallon in california while some guy ambushes you for his tick tock video. Although in this case.

As of today gas prices are beginning to come down with the peaks. So far having occurred. A month ago on june 15th. The same could also be said about food.

Which have all soared in price over these last 12 months in fact the cost of eggs. Have gone up by 95 making one of the best investments so far this year being an egg laying chicken. Anyway jokes aside point being inflation numbers are extremely difficult to calculate. Because even though there are ways to cut back and buy cheaper alternatives while paying anecdotal rent to a hypothetical landlord.

The actual number for someone making no adjustments whatsoever is substantially higher than what's being reported today. So in terms of what's going on right now. And what this means for you your money and your investments. Here's what you need to know.

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Today and now with that said. Let's get back to the video all right so in terms of our latest inflation report yes. It is a clear glaring sign that conditions are worsening despite joan powell's best attempts at throwing water on a flame. But in terms of the exact numbers you're going to want to hear this the highest inflation category throughout the last month was almost completely isolated to energy with an overall increase of seven and a half percent month over.

Month this includes a whopping. 104 percent increase in the cost of energy. Commodities and an 112. Increase.

In the cost of gasoline on top of that food also increased by another one percent last. Month while new and used vehicles also increased by 07. And 1 respectively. I know the bubble was supposed to have popped.

But that didn't happen at least in the month of. June but finally rental costs increased by another 08. Last month. Which was the largest monthly increase since april of 1986 and medical.

Care rose by 19. In dental services. Which was the largest monthly change ever recorded. Now the good news.

Kind of is that when you exclude food and. Energy. Prices core inflation still came in high at 59. Percent.

But it's also the same as the month prior suggesting that maybe inflation is beginning to peak after all so far in the month of july oil prices have fallen below a hundred dollars a barrel car repo's are beginning to add slightly more inventory under the market and commodities are dropping on fears of a recession. That in turn should cause core cpi numbers to begin falling as long as there's not another black swan event that we can't predict and at the end of the day energy prices are being skewed by the russia ukraine war which the federal reserve honestly has very little of an effect on the truth is inflation numbers like these are a slightly lagging indicator and even though we could certainly see the prices are going up july's data is going to be a lot more telling now that people are beginning to cut back and some sectors are beginning to soften. Although the biggest concern for the market isn't so much rising costs. But instead the increased likelihood of a larger rate hike.

When the fed meets on july 25th september november. And december and this is seen as a negative for stock values as the cost of borrowing gets more expensive. See now that it's come to light that inflation still remains high the market has begun to price in a strong chance of another 75 basis point rate hike in july. Which would be the most aggressive increase since 1994.

In fact. The market is pricing in a 93 chance that we'll see a 50 to 75 basis point rate hike in the next two weeks. Along with the 66 chance that they may begin to slow down in september. Assuming inflation begins to come back down the goal is that by the end of.

2022 we should expect a base federal funds rate of around 325 to 3 and a half percent. Which just for reference is a rate that we've not seen since january of 2008. And really at the end of the day. All of this boils down to what's being called the soft landing.

This refers to a gradual slowdown in the economy. Following a period of rapid growth kind of like landing a plane on a tarmac versus dropping a bowling ball from 45 meters in the air and as of now that's the federal reserve's goal. The plane not the bowling ball in case you were confused anyway in a perfect world the federal reserve could slowly raise interest rates inflation gradually begins to decline and the economy moves on like nothing has happened but so far the federal reserve doesn't exactly have the best track record as you can see out of the last 13 previous rate hike cycles 10 of them have preceded a recession and as fannie mae concludes we're more likely to see what they call a hard landing right as the fed signals that they're about to be much more aggressive than they have been in the past in fact. A new york fed model recently put the chance of a recession at 80 percent.

While inflation lasts. Harder better faster stronger than anticipated hey that was a daft punk reference for anyone who didn't get the joke. Anyway. The risk at this point.

Is that with the economy. Slowing down price is increasing and asset values. Falling. Americans have begun to spend more of their rainy day fund with the personal savings rate having just recently fallen to 54.

Percent the lowest. It's been in almost 10 years. This general economic worry is the same reason why. 15 of home deals are now being canceled.

While americans cut back on spending and face the repercussions of higher interest rates with real estate for example. Many builders pre approve their buyers based on the interest rates at the time that they start construction. However. Now that mortgage rates have increased many of those buyers can no longer afford the payments and they have no other choice other than to back out as a result builders are beginning to do the unthinkable.

That's right they're starting to negotiate and offer incentives to keep buyers in the deal. A barclays analyst. Even said that a read of agent responses. Suggests that demand may no longer be exceeding supply giving buyers.

The upper hand to potentially get a property at a discount. You hear that millennials in the bigger picture. Though. The good news is that according to the new york fed.

Most americans believe that inflation will soon begin to come down with the three year. Expectations returning to just 36. Percent beyond that though in terms of what we end up actually seeing in the short term. It's the equivalent of a coin toss no one knows the full scale of what's to come how soon inflation will decline.

If we see a stagflationary debt crisis or if we get better than expected news. The truth is these inflation ratings are constantly evolving and the federal reserve is going to do anything they can to protect the employment rate while also doing their best to bring down inflation without hurting the economy. No that doesn't mean they're going to be looking over your spy call options to make sure they print attendees. But it does mean that there is a chance of collateral damage.

And that needs to be considered especially when the unemployment rate is near historic lows. However let's be real if you own stocks and you intend to hold them for at least another few decades. Then who cares if they drop in price. You should see this as it's a black friday deal now is a chance to continue buying normally at cheaper prices and save some money if prices then drop even further then just continue buying as normal.

And don't change your strategy. If anything the higher the market goes. The fewer stocks your money buys you so by reframing. The way you view market fluctuations.

You'll be able to come out ahead a much more profitable investor long term. This is the only not financial advice. I will ever say and it's what i personally follow not to mention based on every piece of factual research. That we have available to us this is the most profitable way that almost everyone can invest over the next 20 years.

Everything else is a shot in the dark. Oh and also don't forget the most important thing through this entire video is just this costco's not going to be raising the price of their hotdogs. So at least that's good news. So with that city guys thank you so much for watching also feel free to add me on instagram you can also get all the way up to a hundred dollars in free crypto.

When you sign up for ftx us also down below in the description with the code graham you may as well do it. It's pretty much like free money enjoy thank you so much for watching and until next time.