A friend of mine on Capitol Hill sent me a scoop on Wednesday morning: Larry Summers met with top White House economic advisors on Tuesday. It seems President Biden's team was keeping this meeting relatively quiet, though it was clearly leaked. If that means nothing to you, let me explain why it's important. Summers, once the World Bank's chief economist, went on to serve as Treasury secretary under former President Clinton. He returned to Washington, D.C., eight years later to become President Obama's top economic advisor (after a stint in the wilderness as president of Harvard University). So let's just say he's influential in Democratic circles. (Understatement alert!) But here's the important part: Summers has been extremely critical of both the Federal Reserve and the White House on economic matters in recent months. He contends that by continuing to provide much more fiscal and monetary stimulus than the economy needs, they're flirting with inflation in a very dangerous way. To date, the White House has ignored Summers' worries about the dangerous increases in prices. But his meeting this week in the West Wing - on the same day the U.S. Bureau of Labor Statistics released the consumer price index report for June that showed a 5.4% year-over-year increase, the biggest year-over-year increase since 2008 (see the below chart) - could suggest the White House is willing to start listening. Powell Disagrees Meanwhile, in his testimony on Wednesday before the U.S. House of Representatives Committee on Financial Services, Fed Chairman Jerome Powell said the labor market still has a long way to go to fully recover from the damage done by the pandemic. That suggests the Fed isn't even close to taking its foot off the gas. Markets moved higher on Wednesday on that news, as investors collectively seem to be more worried about the Fed's response to inflation than about inflation itself. At the moment, it's very hard to tell whether the inflation spikes we've seen in recent months are "transitory" - as the Fed suggests (because of the unique nature of the COVID-19-induced recession) - or inflation is back in a bad way, as it was in the 1970s. I don't know this for a fact, but I would bet a lot of money that, despite their many reassurances about the temporary nature of recent inflation increases, economists at the Fed are pretty uncertain about this too. Simply put, as is too often the case, the markets and the economy are sending mixed signals right now. But we at The Oxford Club have you covered with research to help you weather the storm. And it's not just us. The folks over at Monument Traders Alliance and Trade of the Day have their heads on straight about inflation right now too. In fact, Head Trade Tactician Bryan Bottarelli believes there's a way you can stay ahead of anything the economy throws at you. He calls it Stockflation - the inflation of stock values. And he's got some ideas on how you can take advantage of it. Just click here to learn more. Enjoy your weekend, Matt | 
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