Inflation is Steady and FOMC Losses Accelerate
Subscriber Update Jan22 2026
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Ok so today, we had Core PCE come in as expected +0.2% MoM and YoY steady at 2.8% and as Zhedge aptly noted and demonstrated on this chart here, sorry TARIFFS do not = INFLATION as PCE has been range bound for over 2 years:
So many economists and main stream types get this “inflation” call wrong because they do not understand our modern monetary mechanics. Much like many still believe higher rates cures inflation, in today’s debt ridden world, higher rates INCREASE inflation because of trillions in net new money that needs to be created to pay all the new interest costs. Furthermore asset prices tend to benefit from that risk free interest transfer as it moves from the govt sector to the private sector, where of course wealthy investors simply hoard it and plow money into equities and real estate.
Anyway the equity markets fared pretty well today with the SP500 and the Nasdaq futures higher +35.00 points and 187.25 points respectively. As far as the SP500 March futures, let’s look at the 15 min chart
We like the bust out higher off of our 6875 weekly support late in the day yesterday with follow through buyers today. 6930 is key to watch, it will most likely see support there first time down but if it fails to bounce back and reassert back above 6950 the risk will be to rotate back down to test 6875. We can see the weekly formation is setting up as a technical bounce higher for the week and only a close tomorrow below 6875 would put the sellers back into control, for now the buyers have the edge above 6930.
When we look at the Nasdaq futures they are merely back at the long term trend slope line on the weekly:
On a shorter term scale the 25550 level needs to hold for the bulls here, a move back below there and sellers will want to push things lower to test resolve:
Another chart we want to share is the Russell2k future, ever since the back test to 2300 area in November, its pretty much been straight up. This indicates to us that diversification is ongoing and value players are picking up some bargains vs the the larger more dominant equities, a bit of diversification if you will.
One more chart for today, its the Suisse Franc and we continue to see consolidation up here which could be constructive for the next wave up. The bull/bear pivot is way below at 121-19. It seems the US dollar will either reassert stability or the FX pairs will start to put in a pretty decent assault to which we could see the Suisse and Euro make substantial moves higher in the coming year:
With the U.S. debt pile and interest costs eroding things, we figure we would also look at the Federal Reserves increasing deferred asset or what is other wise known as their mark to market loss, which it a record today of -$244.6Bn:
Ohh we almost forget this chart, pretty epic run for equities, historically, not exactly the best time to increase allocations:
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