The Economy & Stock Market Will Look Different Very Soon

We got the final report on inflation during the Biden Administration. Here is the breakdown, and what could occur next with Trump.

Inflation data hit on Wednesday. The numbers were mostly flat for the month, but on an annualized basis, inflation is heating up still. As I have said countless times, the economy is robust with solid job growth and low unemployment. Notwithstanding the Federal Reserve reducing its balance sheet in an effort to remove extreme policy accommodation in reaction to COVID and the subsequent shutdowns worldwide, commercial banks are lending out at a rate that is creating money within the system that is systematically outpacing what the Fed is removing. Keep in mind: The framework of our economy is fractional banking. Eventually, this will push inflation upward.

But, we also have another variable that needs to be brought into the equation: Trump with tariffs & tax cuts.

Given where the economy is currently, and the potential effects of Trump’s policies, I am buying the dips on TMF ETF—a 2x ETF, then dropping more and more into my TLT position. I will continue to do so over the course of the next couple of years. There are risks to this trade: Namely, too much debt will keep long term rates elevated. However, even that has a bit of containment.

Long term, I expect to make profits, of course. But, from this point forward, I am playing a long game… a very, very long game.