Summary
Anderson’s July 22 Gann email frames the current moment through three interlocking themes: (1) the integrity of CPI data under Trump — “brazen corruption calls into question the integrity of economic data” — with Trump reportedly entertaining selling early access to his Truth Social posts for $100,000/month and having made 21,000 securities trades in his first year; (2) the bond market’s verdict on inflation — the 2-year Treasury yield “barely budged” after the June CPI report and “sits well above the current level of the Fed Funds rate,” meaning “the collective wisdom of market participants isn’t buying the June CPI report’s message of moderating inflation”; market-implied odds still point to rate hikes at the September FOMC and again in March 2027; (3) the second-half construction boom channelling through AI/data-centre infrastructure — Tim Cook announced Apple price increases citing “the jump in costs [for semiconductors] unlike anything he had seen in any area in over 40 years,” echoed by Elon Musk: “the biggest price jump in anything I’ve ever seen.” Import prices ex-fuels at 4.2%, with computer/electronic components jumping 7.5%. Anderson ties this to the classic late-cycle inflation pattern: “Inflation’s rate of change tends to inflect higher during the final years of the cycle” — visible ahead of the 2008, early-1990s, and early-1970s recessions. The specific driver this cycle is AI infrastructure rather than housing: “the second half construction boom is intensifying and is boosting prices in areas we don’t immediately associate with inflation.”
Key Claims
- Trump’s corruption — selling early access to Truth Social posts for ~$100K/month, 21,000 securities trades in first year — “calls into question the integrity of economic data” including CPI. — confidence: high
- The 2-year Treasury yield leads the fed funds rate. After the June CPI report (headline +3.5% YoY, core +2.6%, monthly −0.4% — largest drop since April 2020), the 2-year “barely budged” and remains well above the current fed funds rate. The bond market is not buying the moderation narrative. — confidence: high
- Market-implied odds from fed funds futures still point to rate hikes at the September FOMC meeting and again in March 2027 — unchanged by the CPI report. — confidence: high
- Inflation’s rate of change inflects higher during the final years of the cycle — visible ahead of 2008, early-1990s, and early-1970s recessions. The specific driver this cycle is the “second-half construction boom” in data centres and AI infrastructure, not residential housing. — confidence: high
- Tim Cook (Apple): semiconductor cost increases “unlike anything he had seen in any area in over 40 years.” Elon Musk: “the biggest price jump in anything I’ve ever seen.” Electronics price increases will show up in inflation metrics in the months ahead. — confidence: high
- Import Price Index ex-fuels at 4.2% and accelerating since late 2025. Computer and electronic components jumped 7.5% in the latest report — “a long period of deflation in the cost of computers and electronic components is reversing.” — confidence: high
- Shelter costs (one-third of CPI) rose just 0.1% MoY — smallest increase since start of 2021. This is the “good news” in the CPI report but may be overridden by electronics/AI-driven inflation. — confidence: medium
- “Learning to read a chart is now more important than ever” — markets provide a more reliable signal than official data under a corrupt administration. — confidence: high
Predictions / Forecasts
- Rate hikes at September FOMC and March 2027 — market-implied odds unchanged despite softer CPI — status: pending
- Electronics/semiconductor-driven inflation will show up in CPI metrics in coming months — status: pending
- The second-half construction boom (AI/data centres) is “intensifying” — status: pending
Concepts Referenced
- Financial Conditions — 2-year Treasury vs fed funds as the key signal
- Real Estate Cycle Peak — late-cycle inflation inflection
- AI Bubble Thesis — AI infrastructure spending as the inflation driver
- Fiscal Dominance — Trump’s corruption and data integrity
- Trump Put — political pressure on rates and data
- Gann Time Counts — reading charts over headlines
Notable Quotes
- “The 2-year Treasury yield tends to lead changes in the fed funds rate. Let me repeat that: The 2-year Treasury yield tends to lead changes in the fed funds rate.”
- “The collective wisdom of market participants isn’t buying the June CPI report’s message of moderating inflation.”
- “Inflation’s rate of change tends to inflect higher during the final years of the cycle.”
- “The second half construction boom is intensifying and is boosting prices in areas we don’t immediately associate with inflation such as food and energy prices.”
- “Learning to read a chart is now more important than ever.”