The Inflation Numbers Nobody Wants to Talk About

Import prices just spiked 1.1% in a single month. Export prices jumped 2.2%. Annualize those figures and you are looking at 8.1% import inflation and 11.6% export inflation right now. If you only looked at the monthly snapshots, you could even annualize those individual monthly moves to 14% and 30%. I know those sound like alarming numbers, and they should, because they are.

Here is what makes these figures particularly important. Unlike CPI or PPI, import and export price data is much harder for government statisticians to massage. There is no complex hedonic adjustment hiding the real cost of goods flowing in and out of this country. This is as close to raw inflation data as we get, and it is running hot. As a certain Buster Poindexter song goes, hot, hot, hot.

I told you this was coming. This is not a surprise to anyone who has been paying attention to the actual economic terrain rather than the narrative being sold on financial television.

What Is Happening to Bond Yields and Why It Matters

One of the more fascinating developments this week has been the reaction in longer-dated Treasury yields, specifically the 10-year and 30-year. There seems to be a natural cap forming, and to understand why, you have to look beyond our borders.

France is currently dealing with a leading left-wing presidential candidate whose platform includes one remarkable plank: simply refusing to pay the country’s sovereign debt. Full stop. Cancel it. Walk away. Now, this candidate is polling around 30%, which means roughly one in three French voters finds this appealing. That is alarming on its own.

But here is the investment reality that flows from global political chaos like this. When investors want safety in sovereign debt, they buy American Treasuries. Period. There is nowhere else to go. That dynamic is creating a ceiling on just how high our yields can climb, even with inflation running this hot.

When the 10-year Treasury hit that 5% to 5.3% range, something interesting happened. Investors started paying attention. And rightfully so. If you are managing a significant portfolio or estate, locking in yields around 6.5% on quality fixed income, including tax-advantaged municipal bonds where you avoid federal taxes entirely, starts to look like a genuinely attractive option. That is real money working for you without equity risk.

The AI Rotation Is Here and the Math Is Not Mathing

This week we watched money rotate out of technology and AI stocks, and I want to be clear: this is not a surprise. I have been laying out this scenario on this show for quite some time.

The stories coming out of Wall Street this week all shared a common theme. The financial projections underpinning many AI company valuations simply do not hold up under scrutiny. The math, as they are now saying, is not mathing. Massive capital expenditures on AI infrastructure are not yet translating into the revenue growth needed to justify the sky-high valuations assigned to these companies.

Why is money leaving these positions now? Because there is now a genuine alternative sitting right there on the menu.

• 5% plus yields on Treasuries are competing directly with speculative equity returns
• Investors no longer need to take on AI stock risk to generate meaningful income
• Capital is rotating toward safety as inflation data confirms the higher-for-longer rate environment
• Certain AI companies are far better positioned than others, and that separation is beginning to show in price action

What Investors Should Actually Be Thinking About

The terrain right now rewards a clear-eyed, unsentimental approach to where your money is working. Here is what I am watching and what I think matters most:

• Not all AI companies are equal. Some have genuine revenue, real moats, and defensible business models. Others are momentum plays dressed up in a compelling story.
• Fixed income at current yields deserves serious consideration, especially for investors who need safe, reliable income from their portfolios.
• Inflation data you cannot manipulate, like import and export prices, is telling you the real story about purchasing power and the cost of goods.
• Global political instability continues to create a flight-to-safety bid for U.S. Treasuries, which is one reason yields have not spiraled completely out of control.

The investors who do well in this environment are the ones who ignore the noise, read the actual data, and position themselves based on reality rather than wishful thinking from the financial media.