Founder’s Note: You’re about to read one of the best lessons about how markets process complex information in real time you’ll ever get.
That’s what Jason Perz does… he takes on hard challenges and makes them seem a lot easier.
Here he is with everything you need to know about “price stability” right now. – JC
By Jason Perz
I don’t think Jerome Powell is confused.
I don’t think he’s panicking.
And I definitely don’t think the Fed chair’s flying blind.
I think Powell sees exactly what the market is showing anyone willing to look past CPI headlines: Inflation is bubbling under the surface.
It hasn’t re-accelerated in the statistics yet, but it never announces itself there first. Inflation shows up in prices before it shows up in prints.
And prices are already talking.
We’re coming off the 2020-22 inflation shock, and here’s the part most people conveniently forget: We never went back to pre-COVID levels.
We stabilized on top of them. That matters. When price levels reset higher and stay there, inflation doesn’t disappear — it becomes sticky.
It embeds itself into wages, supply chains, capital spending, and expectations.
That’s the environment we’re in now.
Sticky Inflation Isn’t Loud, It’s Persistent
If you stare at CPI alone, you can convince yourself inflation is “contained.”
That’s because CPI is backward-looking, politically sensitive, and poorly weighted toward the things that actually drive future costs.
But when you zoom out and look at the underlying inputs — the raw materials that sit at the base of the global economy — a different story emerges.
Aluminum is breaking higher.
Copper is pushing to new cycle highs.
Palladium has come alive after years of dormancy.
Nickel, zinc, tin — all moving.
These are not speculative meme trades.
These are industrial metals, and they don’t move because of vibes. They move when capital spending rises, when infrastructure demand accelerates, and when supply is tighter than people realize.
Markets don’t wait for CPI confirmation.
They front-run it.
The Metals Message: This Isn’t Random
Look at the first chart:
Aluminum futures are in a sustained uptrend, grinding higher after digesting gains.
Copper has resumed leadership after its consolidation, behaving exactly like a metal that knows it’s structurally scarce.
Palladium — written off, hated, ignored — is waking up in the way beaten-down commodities do right before they matter again.
This isn’t just futures markets, either. The metals and mining sectors in equities are confirming the move.
Leadership is expanding. Breadth is improving. Capital is rotating toward real assets.
That doesn’t happen in a disinflationary regime.
It happens when money is leaking out of the currency and into things you can’t print.
The Rates Chart Is the Tell
The second chart is the one most people don’t want to talk about:
The effective federal funds rate keeps getting pushed lower, while the 30-year Treasury yield keeps moving higher.
That divergence matters. Short rates are policy. Long rates are markets.
When long-term yields rise despite easing policy pressure, the bond market is telling you something uncomfortable: inflation risk isn’t gone.
Growth expectations, term premiums, and supply dynamics are pushing yields up even as the Fed is under pressure to cut.
That’s not a victory lap for disinflation.
That’s a warning sign.
Historically, when the Fed eases into rising long rates, you don’t get a clean, painless outcome.
You get financial repression, currency pressure, and higher real-asset prices.
Powell knows this.
Why Powell Spoke, and Why It Matters
That’s what makes Powell’s recent weekend statement so important — not because of the politics, but because of the timing.
He framed the Justice Department’s criminal probe as an attempt to intimidate the Fed into cutting rates more aggressively. He called it a threat to central bank independence.
And he was explicit about one thing: Policy will be set by evidence and economic conditions, not political pressure.
I’m not here to glaze Powell. I’m not here to defend him. But I am here to recognize competence when I see it.
Powell understands that cutting rates aggressively into rising long-end yields and firming commodity prices is how you lose credibility. It’s how inflation re-ignites, not how it dies.
He also understands that CPI is a lagging indicator — and that by the time it re-accelerates, it’s already too late to pretend you didn’t see it coming.
Inflation Doesn’t Explode… It Accumulates
The dangerous inflationary periods aren’t the obvious ones.
They’re the quiet ones where prices rise steadily, wages adjust upward, commodities grind higher, and policymakers convince themselves it’s “transitory enough.”
That’s what 2021 looked like before it wasn’t.
Today feels different, but the structure rhymes.
We have:
Elevated price levels that never reset… rising industrial commodity prices… long-term yields refusing to fall… political pressure to ease policy anyway.
That combination doesn’t lead to immediate CPI panic. It leads to asset inflation first, then goods inflation later.
Powell sees that path. That’s why he’s drawing a line.
The Market Is Voting — With Capital
If inflation were truly dead, metals wouldn’t be leading.
If growth were collapsing, copper wouldn’t be acting like this.
If policy were truly restrictive, long bonds wouldn’t be selling off.
Markets are voting with capital, not commentary.
And capital is moving into:
Industrial metals… hard assets… commodity-linked equities.
That’s not a coincidence. That’s positioning.
The Bottom Line
Inflation doesn’t start at the grocery store. It starts in currencies, rates, and commodities.
Powell knows it. The bond market knows it. The metals market knows it.
CPI just hasn’t caught up yet.
And, by the time it does, it will already be too late.
Save the bees,
Jason Perz
Senior Analyst, TrendLabs