Inflation May Be Much Lower Than You Think...

To investors,

It is hard to remember a world before the recent hysteria driven by the market sell-off. Do your best to ignore the recent noise and remember back to a few weeks ago when everyone was worried about inflation.

The latest CPI report came in at 3% year-over-year change. Economists were issuing warnings that Trump and his administration were going to make inflation skyrocket because of their tariff policies. And mainstream media was doing their best to spin the 3% inflation report as a positive development that wouldn’t hurt President Biden’s legacy.

But it turns out these warnings were misplaced.

The government’s CPI data uses backwards-looking data to make an educated guess about where inflation is right now. That makes no sense. The more logical approach would be to use real-time data to understand where inflation stands at any given moment in time.

This is exactly what Truflation does. They describe their work as “providing real-time, unbiased data to empower decisions and build a transparent economy.”

So what is Truflation showing inflation at right now? A measly 1.39%!

That means Truflation is showing an inflation reading that is more than 50% lower than the government’s latest report.

It would be easy for critiques to claim Truflation doesn’t know what they are doing. They probably constantly under-report inflation compared to the government, right?

Wrong.

As you can see in the chart above, Truflation actually had inflation reported in real-time at 3.1% back in December 2024. This means they beat the US government to the 3% or higher inflation reading by nearly two months.

Now that Truflation’s metrics are falling aggressively, it is likely we will see the government’s stats come down in the coming months as well.

The government runs on outdated data. Truflation runs on real-time metrics.

So why is it important to pay attention to Truflation? It gives the most accurate measurement of the true damage the American consumer has experienced in the last few years.

For example, Truflation shows the aggregate inflation since January 2020 is now over 26%.

This means that $1 in 2020 can only buy $0.74 of goods today. It is unsustainable for a currency to lose 26% of its purchasing power every 5 years. But that is what we have lived through for the last half-decade.

This brings me to the most important point — if the government’s data is correct, then the Federal Reserve should not cut interest rates. Cutting interest rates with inflation at 3% would be a recipe for disaster.

If Truflation is right however, the Fed better start cutting interest rates quickly. We can’t have high interest rates with inflation crashing 50% in a matter of weeks. That would also be a recipe for disaster.

So ultimately the Fed’s decision hangs in the balance of which data set you believe — the antiquated methodology using backwards looking data? Or the real-time data calculated by the technologists?

I think we all know the answer to which data set and methodology is more accurate, but our opinion doesn’t matter. Only the Fed’s opinion counts right now. And so far we have no reason to believe that Powell and his crew see disinflation as the issue that it probably has become.

Hopefully markets don’t punish us later for today’s sins. I wish all of you a great start to your day and I’ll talk to everyone tomorrow.

- Anthony Pompliano

Founder & CEO, Professional Capital Management

Cathie Wood on Bitcoin, The Economy, DOGE, and More

Cathie Wood is the Founder & CEO of Ark Invest. This conversation was recorded at Bitcoin Investor Week in New York.

In this conversation we talk about what the environment was like buying bitcoin in 2015, why bitcoin is so innovative, institutional interest in bitcoin, global macro world, market uncertainty, DOGE, bitcoin strategic reserve, and the future outlook on the market and bitcoin.

Enjoy!

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