Inflation Is Coming Down & Fed Needs To Act
Today’s letter is brought to you by Consensus!
Consensus is Crypto’s Most Influential Event
20,000 of the world’s most ambitious builders and boldest investors are coming to Consensus to make connections and shape the future of the digital economy in Toronto this May 14-16, 2025.
Here’s a glimpse at what’s ahead:
New! Bitcoin & Mining Summit: Discover Bitcoin’s potential with insights on energy, hardware, L2s, ETFs, and more
World-Class Content: Gain and grow with firsthand advice from 400 expert speakers on Web3, Crypto, and AI
Business & Dealmaking: Shake hands and set meetings onsite with high-caliber VCs, institutions, startups, and enterprises
With over ten years of seeing tens of thousands of attendees, Consensus remains your best bet for market-moving intel, meaningful connections, and career-defining deals. You can’t afford to miss it.
To investors,
The March CPI report was published this morning. As I have been predicting, inflation is crashing. The headline inflation number dropped from 2.8% in February to 2.4% in March.
Core CPI inflation fell below 3.0% for the first time since March 2021. And even the weird “supercore CPI”—a specific measure of inflation that zooms in on the prices of services, excluding food, energy, and housing costs—dropped -0.24% month-over-month. That is the lowest number we have seen for the metric since May 2020.
According to EndGame Macro, “Supercore CPI MoM (circled) is collapsing that’s a clean signal of demand-side weakness across sticky services, especially discretionary buckets like travel, recreation, and healthcare. That supports the “disinflation is real” narrative.”
The prediction that inflation was dropping aggressively was easy. You could see it clearly in Truflation’s measurement, which is a real-time alternative inflation metric. Today the Truflation reading is at 1.3%, which is more than 50% lower than it was in December 2024.
Maybe the most important part of this slowdown in inflation is the structural change that seems to be underway. Heritage’s EJ Antoni writes the “average annual inflation rate from '09 until '21 was 1.8%, then Biden drove it up to 8.6% for a year and a half, then it rose steadily at 3.1% for the rest of his term; but now Trump is averaging a mere 1.0%.”
The current administration has only been in office for a few months, and there is still a long way to go in their term, but this material change to inflation is a welcomed development.
Remember, the last 5 years has been brutal for the average American. Charlie Bilello lays out the numbers for various goods or services:
CPI Medical Care: +12.4%
CPI New Cars: +20.9%
CPI Shelter: +26.8%
CPI Food at home: +27.5%
CPI Food away from home: +30.4%
CPI Used Cars: +33.5%
CPI Electricity: +34.2%
CPI Gasoline: +35.1%
CPI Transportation: +36.7%
CPI Gas Utilities: +49.2%
CPI Fuel Oil: +50.8%
US Home Prices: +52.3%
CPI Auto Insurance: +53.7%
CPI Dozen Eggs: +308%
And those are just the official government metrics. The true damage is probably even worse. So the good news is inflation is falling. The risk is that the Fed refuses to act in a timely manner, which leaves the economy exposed to a potential economic slowdown.
We should all hope an interest rate cut is on the way. Have a great day. I’ll talk to everyone tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
Darius Dale Explains Tariff Impact On US Economy
Darius Dale is the founder & CEO of 42Macro.
In this conversation, we discuss tariffs, risk assets, blue collar vs. Wall Street, and what could happen next.
Enjoy!
Podcast Sponsors
Figure Markets let’s you access cash without selling your crypto offers Bitcoin and Ethereum backed loans. Learn more at FigureMarkets.com
Core - Earn trustless Bitcoin yield. No bridging. No lending. Just HODLing. Begin Staking Your Bitcoin.
Simple Mining offers a premium white-glove Bitcoin mining service. Want to grow your Bitcoin stack? Visit https://www.simplemining.io/
Reed Smith - Smart legal solutions for complex disputes, transactions, and regulations. Learn more at www.reedsmith.com.
Bitwise - America’s largest crypto index fund manager and the only Bitcoin ETF issuer that publishes its wallet address plus donates 10% of profits to open source developers. Learn more at BitwisePomp.com
BitcoinIRA - Buy, sell, and swap 75+ cryptocurrencies in your retirement account. Pay less taxes. Earn up to $1,000 in rewards.
BitcoinOS - The operating system for bitcoin applications powered by zero-knowledge technology. Check out @BTC_OS on twitter to learn more.
Gemini - The future is being built today. Go Where Dollar’s Won’t. With Gemini.
Xapo - Xapo Bank is the only way to bank with Bitcoin.
Polkadot is a scalable, secure, and decentralized blockchain technology aimed at creating Web3. Innovation leader, making it a preferred choice for big names.
You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren't finding this valuable. Nothing in this email is intended to serve as financial advice. Do your own research.
Longer term interest rates are rising because countries are dumping US bonds. The fed sets short term rates. Inflation will rise because tariffs are a tax that businesses and consumers pay. Your posts are so Trump biased.
Almost every economic signal is showing 'future expectations' are now for slower growth than prior to the introduction of tariffs. Oil prices dropping, Copper prices down sharply (copper being the proverbial 'Dr Copper' as a predictive signal), bond prices ..... the list goes on.
IF IF IF IF IF trump would just say the tariff pause is permanent, the Fed would almost certainly act to lower rates. Their mandate is to temper inflation but also preserve full employment. Since future expectations for growth are now lower than they were, that lowers inflation expectations. Check.
If the uncertainty of inflationary pressure from the broad, worldwide tariff application was removed then the only remaining Fed mandate would be employment which would be spurred by a rate reduction for sure.