Hey There Income Hunter,

 

The Fed and US government are up to their old tricks of changing rules and calculations to ensure they are able to meet policy goals. 

 

Here is the posted change directly from the US Bureau of Labor Statistics website … 

 

 

The impact of recent CPI calculation changes will mechanically increase their inflation target from 2% to 4%! 

 

By shifting to a 1-year ago comparison, reported CPI should fall dramatically in 2023, giving the Fed the cover it needs to pause rate hikes and even cut rates late in 2023!

 

Today, I’ll share past data that shows similar changes in the past and their impact on the markets and what to expect in the coming months. 

 

The “New Look” CPI

The BLS change is purely an illusion created by disregarding the standard rule of combining the past two year-over-year changes in CPI and only using the previous year-over-over percentage change as the comp for the current year. 

 

Notice the chart below illustrating the March 2023 March CPI expectations using the one-year year-over-year CPI inflation comp (red line) versus what the y/y CPI inflation comp would be under the old methodology.

 

 

As you can see, this is a massively important rule change achieved by creating tougher comparisons to future data. The proof is right there on the government’s own BLS website. 

 

What the Change Means for CPI

By netting out the old and new BLS standard calculation, reported y/y CPI inflation will fall by 2-3%! See below …

 

 

This will give the appearance of Fed policy working miracles in terms of getting inflation down …

 

However, in reality, it will significantly boost inflation longer-term because it will allow the Fed to cut rates without needing the cover of something breaking in the financial system. 

 

Bring It Home

The performance of gold, gold miners and, more recently, home builders and even Bitcoin, shows that there are traders that may be positioning for this upcoming change.

 

The Proshares Bitcoin Strategy ETF (Ticker: BITO) looks to be good low risk/high reward bullish trade for participating in a Fed pivot based on the BLS change … 

 

 

A bullish option strategy with a stop loss on a close below $12.90 is one way to make money on the Fed’s new policy initiative of manipulating expected reported inflation to create the illusion that it met its inflation target and can now fire up the printing press. 

 

I see major opportunities ahead.

 

If you want exclusive access to Power Income Trades designed to profit from policy changes and macro forces driving markets, simply dial 1-888-872-3301 and speak to our Customer Care Team for full details.

 

Live and Trade With Passion My Friend,

 

Griff