GTX Commodities Index Monthly Chart; Runaway Goods Inflation (Trumpflation) Occurs Due to Donnie's Middle East War with Fed Rate Decision on 10/28/26 and US Mid-Term Elections on 11/3/26

The Fed and Chairman Warsh have one heck of a rate decision to make in 11 days on Wednesday, 10/28/26. Will it be a trick or treat? It is the time of year for the Halloween anthem the Monster Mash everyone's fave. As the bridge says, everyone is having fun, the party has just begun. A kid asked Keystone the other day to take his mask off because it was too scary and ugly but he was not wearing one.

The chart illustrates how tough the decision will be. Everyone and his bro, including the Uber driver, shoeshine boy and doorman, say the Fed will stay on hold for the meeting next week and then hike at the December meeting. There is only a 20% to 30% chance of a hike on 10/28/26.

Think about that with the backdrop of runaway inflation, or Trumpflation, in the chart above. High oil prices are destroying the economy and people's lives as King Donnie now lets his Iran War fester into a Middle East War. If he does not get his act together, he will be looking at WW III.

The GTX and CRB are commodity charts that represent oil, wheat, beef, many items are a gauge of goods inflation. The goods inflation will ripple into services inflation. Also, the impact of ongoing tariffs and the Middle East War will be felt harder going forward

But therein lies the rub. The Federal Reserve does not want to hike, say, next week and then in December, only to see the US economy go off a cliff because they will need to then lower rates to stimulate the economy and any hikes will be looked at as errors. That is what they are paid the big bucks for. They will roll the dice or throw a dart and sometimes they are right and sometimes not.

The chart shows how all the easy money during the pandemic (Fed money printing and Congressional largess handing out checks telling people to stay home and watch television) caused runaway inflation. The mess started to settle down but Trump's tariffs created more inflation and people saw it as everyday goods went up a few pennies or more on each item they buy.

Then Trumpski decides to start a war in Iran and the Middle East perhaps encouraged by his best buddy Dictator Putin. What a mess. Now the orange head blames Zelensky and Ukraine for the terrible Trumpflation occurring going so far as to screw them militarily to give Russia an advantage; and Musk is tied up in this nefarious activity with Trump since it is centered around the satellites. Musk is an unelected bureaucrat impacting world wars. It is enough to make you vomit. 

Do not look for relief with prices anytime soon. It looks like things may get a lot worse going forward. Again, it makes the Fed rate decision difficult. Trump will go ballistic with a hike next week in front of the 11/3/26 mid-term elections only 6 days later. Warsh does not want the Federal Reserve to be viewed as political but is it political to hike or is it political to not hike? Will Warsh follow his instincts from 20 years ago when he was a hawk, and perhaps go ahead with the rate hike and face the wrath of Donnie, or, hold off next week, selling his soul, proving he is in the back pocket of the president, only to see inflation sky rocket in the days and weeks ahead?

If Warsh hikes to tame inflation, what happens if the goods inflation takes a sudden serious downturn? Perhaps the Middle East War resolves. Warsh also does not want to push the economy into recession by raising rates. He is balancing on a tight rope while all these factors are throwing eggs. If Warsh does not hike, that means the Fed is seeing some real ugly stuff coming down the pike fast (economic recession).

It is probably best to hike next week and Warsh can take his lumps with Trump. That way, you can sit back and study the data into the end of the year to prepare for the December meeting. The options appear better going forward instead of holding next week and creating a mess with potential out of control inflation.

The stock market, however, is not ready for a hike next week. Equities would likely tank on the news. Warsh will have both Donnie and the stock market cursing him, but at least Kevin would keep his soul. It is good to be a Soul Man. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.