CPI Inflation Report: The Great Melt-Up Continues in 2025!

So the CPI inflation report was released this morning, and the stock market shot up, interest rates fell, and I want to update you on what's going on. So the Bureau of Labor Statistics, the BLS, they released their monthly inflation reports. CPI headline inflation is now at 2.9%. So this is actually bad, because the rate of headline inflation the prior month was at 2.7%. So ultimately, headline inflation went up. But core inflation did improve to 3.2% this month. It was at 3.3% the prior month. Now here's a chart showing the rates of headline inflation and core inflation. Headline is at 2.9%. Core is at 3.2%. But the Federal Reserve's goal is to get these down to 2.0%. But as you can see, progress has stalled. So listen, the stock market has shot up after the CPI inflation report. But if you're thinking, why did this happen? Because honestly, this report, it didn't seem that great. If that's what you're thinking, then I'll tell you that you're absolutely right. This inflation report was honestly not so good. But here's the thing. Last Friday, we had the jobs report, and that blew away expectations. It was a solid report. 256,000 jobs added. The market expected that the same thing would happen today for this inflation report. They were expecting that inflation would come in hotter than expected, just like the jobs report. But that did not happen today. Yes, the rate of headline inflation went up. But it did not rise more than expected. So was this report bad? Well, I mean, I'll say that it wasn't good. But it could have been worse. And that's good enough for the markets. And on top of that, the banks are reporting their earnings this morning. Their results are coming in strong, and that's contributing to the rally as well. But now I want to show you this. So the next Federal Reserve meeting is on January 29th. Before this inflation report, there was a 97.3% chance that the Federal Reserve would not cut interest rates at that meeting. Now, after this inflation report, it remained unchanged. It literally did not budge. It's still at a 97.3% chance that the Federal Reserve does not cut interest rates this month. So this is according to the CME FedWatch tool. Okay, so the next meeting after January is on March 19th. Before this inflation report, the odds that the Federal Reserve does not cut rates at that March meeting was at 76.9%. After this inflation report, the odds that the Federal Reserve does not cut decreased to 74%. So honestly, this report came in as expected, and the odds of interest rate cuts have not changed by much. Now, I want to talk to you more about the inflation report. But before we do that, I want to answer this question because I keep seeing this in the comments. A lot of people are asking, is the Great Meltup over? Because they see that the stock market is facing resistance. It's not just going straight up. Okay, my answer, it's a short answer. The answer is no. The Great Meltup is not over. We're still in the Great Meltup. We're actually in the beginning stages. So I want to explain to you like this. What is the root cause of the Great Meltup? The root cause is the Federal Government's debt crisis. So I'll ask you, if you're asking this question, is the Great Meltup over? I'll ask you, is the government's debt crisis over? And if it's not over, then that means that the Great Meltup is not over either. It's as simple as that. So listen, I'll tell you this. All this short-term volatility that you see in the stock market, this is expected. This is part of the Great Meltup. So I want to tell you this. I've said this before. In the long run, stocks only go up. But here's the thing. I know a lot of people have difficulty just grasping that concept. A lot of people are against that concept that in the long run, stocks just go up. But let me explain it to you better if you're against that. So listen, when I say that stocks only go up in the long run, it's not because stocks are like a godsend to mankind. No. Stocks go up in the long run because simply the federal government continues to devalue the dollar with inflation. That's all that's going on. It's very straightforward. And honestly, I mean, you could look up the stats for yourself. In real terms, stocks only slightly outpace inflation. In nominal terms, yeah, stocks go up by a lot. But if you don't have stocks or investments, then you lose out in real terms and in nominal terms. But to answer the question, the Great Meltup, no, it's not over. It's definitely not over. We're just only in the beginning phases. Now, going back to inflation, I want to walk you through the highlights of the CPI Inflation Reports. So we have CPI Headline Inflation at 2.9%. CPI Core Inflation at 3.2%. And these are the main categories. So Shelter Inflation at 4.6%. Services Inflation at 4.4%. Food Inflation 2.5%. And Energy Inflation came in at negative half a percent. Now, here's what the report shows for food inflation. So these are rates, year over year changes. Fish is down slightly, 0.7%. Bread is up by 0.3%. Fruits and veggies up 1%. Milk is up by 1.9%. Butter is up 2.5%. Meats are up 2.7%. Coffee is up 3.8%. And eggs, 36.8%. So let me know if you're seeing certain prices and certain goods skyrocketing recently. And I want to show you this. So this is coming from the Federal Reserve two days ago. Here are the inflation expectations over the next 12 months. Home prices are expected to go up by 3.1% over the next year. Food by 4%. Rent 5.5%. College education 5.7%. Cost of medical care 5.8%. So honestly, I mean, because I reported on this earlier, the thing that bothers me is that you have these elevated expectations. Like you see it for yourself, 3%, 4%, 5%. And even the CPI Inflation Report says, you know, headline 2.9, core 3.2. But then cost of living, the cost of living adjustment for Social Security recipients and other beneficiaries are 2.5% for this year. So how is that not unfair? And the last thing I want to show you is this, is this stats. And it's coming from the Federal Reserve. I'm just going to read it off to you. So the median household expects that their expenses will grow by 4.8% this year. So expenses go up by 4.8%. That is a lot. That's actually much higher than pre-pandemic averages. The median household expects that their income will grow by 2.8% this year. So that, I mean, that's terrible. That's a bad setup. Imagine your income goes up by 2.8%, your expenses go up by 4.8%. It's just simply your expenses are going up faster than your income. So that's obviously a bad situation. So just be careful with your finances. Be careful with your budgets. The scary thing is that right now, I mean, you see GDP. This is considered like good economic times. Just imagine when things go bad for the economy, if we ever get into, well, if they ever declare a recession, imagine. Anyways, that's what happened today. I just want to keep you updated with the CPI inflation reports. And the last thing I do want to say is that my book is now available on Amazon. So I released that yesterday. And I just want to say thank you so much for all the support and the feedback. It's just been tremendous, like overwhelming. And I appreciate it so much. I'm very, very grateful. So thank you again. It's a book about how to fast track your wealth. And if you enjoy my content, I'm sure you're going to love the book. Or it'll also make a great gift for friends or families. Thank you so much. I wish you a very nice day. Take care.