The Fed is going to raise its inflation target.
It might be difficult to believe, but for most of its history, the Fed didn’t have a formal inflation target. The target rate of 2% that everyone quotes was first suggested by Janet Yellen behind closed doors when Alan Greenspan was Fed Chair in 1996. The Fed appears to have adopted that target at the time but didn’t publicly state it until 2012.
I bring all of this up because throughout the inflationary storm of 2021-2023, the Fed proclaimed that its policies would bring inflation back to this target of 2%. This is why the Fed raised rates from 0.25% to 5.5% in the span of 15 months, one of its most aggressive monetary tightening cycles in history.
Doing this triggered a bear market in both stocks and bonds erasing over $10 TRILLION in capital in the span of 12 months.
Historically, when stocks decline, bonds “cushion” the drop by rallying. Not in 2022. Because the Fed was raising rates so rapidly due to inflation, bonds fell alongside stocks. The result was that the bear market in 2022 was one of the worst in history, wiping out more capital than the Tech Crash or the Great Financial Crisis for most portfolios (again, bonds didn’t cushion the decline in stocks).
This is a major reason why the Fed gave up on tackling inflation completely. And it is now clear that the Fed has no intention of bringing inflation down to 2%.
The Fed’s preferred inflation measure is the Core- Personal Consumption Expenditures (Core-PCE) index. That index is clocking in at 4.1% year over year. It has been over the Fed’s target rate of 2% for 64 consecutive months.
Let me ask you, if someone claimed they had a goal and then abandoned that goal for more than FIVE YEARS, would you still believe they would achieve it?
To be clear, the Fed could achieve 2% inflation by draining excess liquidity from the financial system. But doing this would trigger a severe bear market in stocks as well as a recession (there is ample evidence that stocks are now effectively the same thing as the economy).
The Fed is obviously not willing to risk that (again, inflation has clocked in over 2% for 64 months straight). And with the U.S.’s public debt now over $39 trillion and set to hit $40 trillion within the next three or four months, it’s obvious the Fed’s new goal is inflating the debt away, NOT tackling inflation.
In terms of profiting from this, we just published a Special Investment Report covering five investments you can use to profit from the next round of inflation.
The report is titled Survive the Inflationary Storm. It explains my top precious metals plays — their names, their ticker symbols, and the resources they own. These are high-octane positions that rallied 75%, 140%, 150%, 180%, 280%, and an incredible 574% in 2025. And I wouldn’t be surprised to see them repeat this performance in 2026.
Normally I’d charge $499 for this report as a standalone item, but in light of what is unfolding today, we are making just 100 copies available to the public.
To grab one of the last remaining copies…
Best Regards,
Graham Summers, MBA
Chief Market Strategist
Phoenix Capital Research
