“Powell finally did the right thing.”
That’s what I told you last week, right after the Federal Reserve Chair stepped on stage at Jackson Hole.
Because while he didn’t say it outright, the message was clear.
A shift in policy is coming.
It couldn’t have come at a more critical time. After two years of rate hikes, the economy is showing signs of weakness. Job growth has slowed to a crawl. People aren’t buying homes.
And while the Fed has been waiting for a tariff-fueled inflation bogeyman to appear, real Americans are feeling the strain.
It’s no wonder, then, that President Trump has criticized Fed Chair Jerome Powell for months on end. He’s even taken the unprecedented step of firing a Fed governor – although not Powell himself.
I don’t want to get into the drama surrounding this move – which looks like it will ultimately be decided in court.
The point is, whether you agree with these moves or not, one thing is clear: President Trump is feeling the pressure. He wants to deliver on his promises of an economic boom as soon as possible.
And in just a moment, I’ll tell you why that is, and why I think it’s all going to come to a head by September 30. But before we get to that, the first real test of Powell’s pivot came this morning in the form of the latest Personal Consumption Expenditures (PCE) report.
Remember, this is the Fed’s preferred inflation gauge, so Wall Street was watching this one like a hawk. Because today’s data could either lock in a September rate cut… or slam the door shut.
So, let’s look at the numbers and examine what they really mean. I’ll also share how to position yourself for what’s next… because if the door to lower rates remains open and Trump delivers the economic boom he’s promised, we could be looking at the most explosive stock surge of our lifetimes.
The Fed’s Favorite Inflation Report
The Commerce Department reported that the PCE index rose 0.2% in July, in line with forecasts. On a year-over-year basis, headline PCE rose 2.6%, in line with last month’s rise.
Core PCE, which strips out food and energy, rose 0.3% in July and 2.9% annually, compared to last month’s 2.8%.
This is important because Core PCE is the Fed’s preferred inflation gauge. It has previously stated a desire to see this number at 2%, so an uptick in this report shows there’s still some progress to be made before we get there.
Diving deeper into the numbers, consumer spending was up 0.5% in July, which some found surprising – a clear sign of underlying strength.
Additionally, food was down by 0.1% on a monthly basis. Energy fell by 1.1%.
Overall, the prices of goods fell by 0.1% – but that was more than offset by the 0.3% rise in services.
Bottom line? This report supports the notion that the Fed can afford to ease up.
Prices may not be where the Fed wants them to be, but the reality is that we just haven’t seen the wild price hikes that many predicted back when President Trump first introduced the tariffs back in April. Sure, there might be some tariff-related noise in the numbers, but the so-called experts’ predictions have not materialized.
We’re not completely out of the woods, though. The focus will now be on the August jobs report and the Consumer Price Index (CPI) report in early September. Along with the PCE numbers, those will be the last two key reports the Fed will look to before deciding on whether to cut key interest rates at its next meeting.
The Next Move Starts Here
Today’s PCE report gave us a clear signal that rate cuts are on deck. But the bigger story is what comes next…
President Trump has promised a boom “like the world has never seen.” And with his legacy on the line, he’s determined to deliver it – as soon as possible.
Why? If the Democrats take back the House in 2026, the second half of Trump’s term could be consumed by investigations and gridlock. He knows it – which is why he’s pulling out every stop now. From record tariff revenues, to trillions in onshoring deals, to historic energy and infrastructure programs, the stage is being set for an historic boom.
That’s why I’ve been telling investors to prepare for a market shockwave by September 30.
I call it the Trump Shock – that’s when a $7 trillion flood of sidelined money could hit a handful of select stocks like a firehose.
But let me be crystal clear: This will not be a rising tide lifts all boats moment.
Just as with any major economic transformation, there will be clear winners and losers.
So, the next move is obvious: Position yourself now, before Wall Street does.
That’s why I’ve identified five buy-rated companies already flashing strong signals in my system. These are the stocks best positioned to soar as Trump’s boom collides with the Fed’s pivot.
Go here now to watch my urgent briefing now.
In it, I’ll give you the name and ticker of one stock absolutely free – and show you how to claim my full list of five before the Trump Shock sends them soaring.
Sincerely,
Louis Navellier
Editor, Market 360
