Editor's note: Our friend and colleague Marc Chaikin – the founder of our corporate affiliate Chaikin Analytics – has issued a critical warning about a major shift that's coming to the U.S. financial system... So over the past few weeks here at Empire Financial Daily, we've been sharing insights from Marc and his team about […]

Not rendering correctly? View this e-mail as a web page here. Editor's note: Our friend and colleague Marc Chaikin – the founder of our corporate affiliate Chaikin Analytics – has issued a critical warning about a major shift that's coming to the U.S. financial system... So over the past few weeks here at Empire Financial Daily, we've been sharing insights from Marc and his team about other developments in the markets. Today, we're continuing that series with an essay from Karina Kovalcik – a senior quantitative analyst at Chaikin Analytics – about what the most recent inflation data means for U.S. Federal Reserve's strategy... This Is Likely the Fed's Next Move By Karina Kovalcik Wall Street Legend Pounds the Table on $12 EV Stock A 25-year Wall Street vet – who shot to fame by growing his first hedge fund by 130,000% – just made what could be the biggest call of his career. He says that ONE $12 EV stock is screaming, "Buy me!" Get the details. Don't let the market's gut reaction fool you... As Chaikin Analytics founder Marc Chaikin recently told his subscribers, the Consumer Price Index ("CPI") update for October was better than expected. And stocks ripped higher on the news. Sure, the latest inflation numbers beat expectations. But they still weren't good. That's a big problem... You see, the Federal Reserve's target inflation rate is 2%. However, even after the recent good first step, inflation still sits at 7.7% year over year. So now, the real question is... what does all of this mean going forward? Let's take a closer look... First, we need to know what actually happened with inflation in the most recent report... The media makes the story about a single number – the overall CPI. That number represents the average increase in price of all items bought since last year (or last month). But you can also look at all the items individually... For example, the cost of fuel oil jumped about 20% over the past month alone. It's up almost 70% in the past year. The cost of food was up about 11% in the past year. And shelter costs were up around 7% in that same period. These numbers are all part of the overall CPI. And you can see that it gets complicated quickly. That's why the media tries to focus on a single takeaway. With that in mind, here are the basics we need to know... These numbers show that we've taken a step in the right direction. However, investors are running on "hopium" right now. They're tired of bad news. So they're latching onto every little piece of good news. It's great that inflation rose less than expected in October. That's why investors got excited. Recommended Link: Legendary financial researcher goes on record Legendary financial researcher Herb Greenberg just went on record with something that few people understand is available to them. It's a unique "savings account" that can pay you up to 50% on your money, starting today. It could be the best money move you'll make this year. Check out everything right here. But now, we need to pay attention to what happens next... If the CPI rises next month, watch out. That would likely cause the market to crash in a similar amount to its roughly 6% jump over the final two trading days in the wake of the recent report. Consumer sentiment is a critical indicator to watch, too. If it crashes and demand for goods also drops, that could signal that we're headed into a deeper recession. A third factor is worth watching as well... Until a sustained drop in inflation occurs, the Fed can't afford to stop hiking interest rates. The next CPI release is scheduled for December 13. And importantly, the Fed's regularly scheduled meeting about interest rates will happen the next day. With where inflation is right now, the Fed can't afford to not raise the federal funds rate again. As we said earlier, it's about five percentage points higher than the Fed's target. Now, let's say the inflation numbers come in higher for November... It would indicate that October's reading was just a fluke. And you can guess what would happen in that case... The Fed would raise interest rates. So short of massive disinflation next month, the Fed's next step is pretty clear. And it looks a lot like all the recent steps... The Fed is going to raise rates again in December. By now, you know that's not good news for stocks. And it means volatility will continue. Regards, Karina Kovalcik November 21, 2022 Editor's note: As we approach the year's end, Marc is stepping forward with what he's calling the culmination of all of his predictions dating back to 2020, when he accurately warned about the COVID-19 crash: A simple action he warns you must take before January 2, 2023. He predicts we're about to see a historic reset of the U.S. financial system... and says you have to move your money into a vehicle 50 years in the making that could make you a huge potential gain as the whole thing unfolds. Get the full story here. 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