The latest CPI data was released for November 2025.  Investors celebrated and drove U.S. markets higher because price inflation was tamer than expected.

The year-over-year CPI now stands at 2.7%.  The expectation was 3.1%.  But the October data was never released because of the government shutdown.

I have a confession to make.  I thought that when the release came this month that it would include the full October data, since there was never a report issued in November.  But we don’t even get official CPI numbers for October.  I guess they couldn’t even retroactively track the data.

It is beyond ridiculous that this data wasn’t tracked in October when the government was “shut down”.  This was a time when the government went another $600 billion or so in debt.  The funding for foreign wars continued.  A lot of things continued.

Yet, somehow, they couldn’t spend the tiny little fraction of money that it would take to track inflation data that impacts how the Federal Reserve controls interest rates and the money supply.

Sure, I wish there was no central bank and we had a free market in money.  I wish there were no government statistics and that any tracking were left to the market.  But given our current system, it is a bit ridiculous that the government wouldn’t spend this miniscule amount of money (relatively speaking) to track inflation data. The Fed’s decision on whether to lower its target rate and whether to return to quantitative easing (which it did) is dependent on data to a certain degree.

What if the CPI numbers came out really high, right after the Fed just announced another rate cut and return to buying government debt?  These Fed decisions have such a big impact on the economy, yet the government couldn’t operate this one little thing (tracking statistics), while continuing to send money to Ukraine.

Is Price Inflation Normal Again?

My guess is that Trump saw the data that was going to be released.  I can’t imagine he delivered a speech the night before talking about how prices were coming down if he didn’t know the data.  It wouldn’t have been a good look if the CPI numbers had come in higher than expected.

Just as Biden lied about inflation, so is Trump.  Trump is repeating the same lie that prices are coming down.  This is perhaps true for a select number of products.  But prices are not coming down overall.  They are still increasing.  They are just increasing at a slower rate than before.

Even with these new numbers, we still aren’t at the Fed’s supposed target of 2%.  We haven’t been there in about 4 years.

As I have been asking, why is the Fed lowering rates and returning to QE (digital money printing) when the price inflation rate hasn’t even gotten back to 2% yet?

Of course, how can we even trust these numbers?  The numbers are very sketchy, especially given the limited data.  Plus, Trump will just fire someone if they report numbers that he isn’t happy with.  It throws into question all government statistics at this point (even more than before).

If it is true that the rate of price inflation is coming down, it still doesn’t mean we are in good shape economically.  This may just be a reflection of people spending less money because of the economic conditions.  When a recession is on the horizon, people tend to sense the trouble and spend less.  It could be because of job losses or the threats of job losses.  It could be because some people are in too much debt and have to cut back.

While disinflation (for lack of a better word) is not necessarily associated with a recession, it could be that in this case.  Given the previously inverted yield curve and the major asset bubble we have seen, the new inflation numbers may just be a sign of consumers running out of money to spend.

The risks for a recession are high.  With inflation data being tamer than expected, it might give the green light to the Fed to be even looser with its monetary policy.  On that, we’ll have to see.  But these cuts of 25 basis points to the Fed’s target rate isn’t going to stop a recession from happening.

The Federal Open Market Committee (FOMC) released its last monetary policy statement for 2025.  It wasn’t a certainty, but it was widely expected that the Fed would cut the federal funds rate by 25 basis points, and that’s exactly what it did.

There were three dissenting votes.  Two Fed members wanted to hold the target rate steady, while one member wanted a half-point (50 basis points) cut.

Opinions still vary on what the Fed will do in 2026.  Of course, this is based on the current data, which isn’t all that current with some government statistics being delayed.  And things can change very quickly.

But the small cut in the federal funds rate isn’t the big story.  The Fed announced that, beginning in two days, it will begin buying $40 billion in short-term bills.  They are calling this “maintenance”.  Maybe by maintenance they mean maintaining the illusion of our bubble economy.

Federal Funds Rate Problem?

One of the reasons for the buying of short-term Treasury bills is to keep the federal funds rate in the new range of 3.5 to 3.75 percent.

The actual FOMC statement is more subtle.  It states: “The Committee judges that reserve balances have declined to ample levels and will initiate purchases of shorter-term Treasury securities as needed to maintain an ample supply of reserves on an ongoing basis.”

Since the fall of 2008, the Fed has been able to manipulate the federal funds rate by paying banks interest on their reserves.  It’s been a good deal for the big banks, and it’s been a good deal for the Federal Reserve. That sounds about right.

But it seems that the rigged game has to be altered now.  It is possible that the Fed is having trouble maintaining the federal funds rate without actually creating new money out of thin air.  This is one of the reasons they will be buying new debt, which means that the money supply will once again increase.

The 12 Days of Stable Money

The Fed didn’t give us the 12 days of Christmas this December, but it did give us the 12 days of stable money. Or maybe it will just be 11 days.

From the late October meeting, the Fed announced it would be winding down its quantitative tightening.  Starting December 1, all Fed holdings would be rolled over as they matured.

With the latest Fed meeting, they will begin buying Treasury securities on December 12.  This is a return to quantitative easing (QE), also known as digital money printing.  They can call it reserve management purchases or whatever they want, but it appears to be more money printing.

So, we got a stable money policy of no monetary inflation or deflation from December 1 to December 12.  They couldn’t even wait a full 2 weeks from quantitative tightening to quantitative easing.

Problems?

Why is the Fed already returning to QE?  Is it just to maintain the federal funds rate?  If that’s the case, then it is a good indication they shouldn’t be lowering rates right now if they can only maintain it through more monetary inflation.

(While the market should determine interest rates and there should be no Federal Reserve, I am writing this from the basis that we currently do have a central bank.)

The Fed’s supposed price inflation target is 2%.  Even going by government statistics, we haven’t seen 2% in several years.

If the economy is relatively strong and consumer price inflation is still above 2%, why is the Fed cutting rates?  Why is the Fed returning to QE?

It just tells you that something is going on, and they know something is going on.  There are major underlying problems in the economy.  The yield curve was inverted for about 2 years.  With the latest cut in short-term rates, it is normalizing more.  We are facing a recession ahead.  We are in a major bubble, and I think some Fed members sense this.

I don’t think these decisions are purely political.  The dissenting vote who wanted to lower the target rate by 50 basis points was probably political.  Fed officials see trouble ahead, but they don’t want to announce it to everyone.  Then they will just get blamed for panicking the market.

It has not been uncommon for the Fed to cut rates before a recession becomes evident.  If history is any guide, we are on a path to recession right now.  Maybe we are already in it.  The Everything Bubble could implode.

They can fudge the statistics all they want, but there are some numbers and prices that can’t be hidden.  Some of the Fed members sense there is trouble ahead.  It would be wise to pay attention.  Why would they be cutting rates and returning to QE if there weren’t serious problems out there?

The situation in Venezuela is extremely bad, but it is also bringing up some important moral issues.  The Trump administration has been bombing boats off the coast of Venezuela.  The excuse is drugs.

It is hard to believe that these boats are traveling hundreds of miles or thousands of miles to deliver drugs.  But even if that is the case, it doesn’t give the right to the U.S. government to blow them up.

There is absolutely no proof that these boats are carrying drugs.  There is no trial for the people on board the boats.  Some of them are probably fishermen.  And even if they were carrying drugs, since when do we issue the death penalty for carrying drugs?  Plus, it makes it even worse that the U.S. government is doing this to a sovereign country.

Imagine if Russia or China started blowing up boats off the coast of Florida because they suspected they had drugs.  How would that go down?

The big controversy is that there was at least one boat that was bombed that had survivors.  There were orders to kill the remaining survivors.  The more controversial part should be blowing up the boats in the first place, but at least it is getting attention for something.

Pete Hegseth is evil and a bumbling fool.  He is mocking and making light of these murders.  He is completely complicit in these murders.  So is Trump.  This issue alone means they are unfit for office.  They are fit for jail for outright murdering people.

Just Following Orders

Six Democratic members of Congress stated that military members should not follow illegal orders.  The Trump administration is investigating these people.  Trump suggested that this is traitorous and even that these members of Congress are subject to the death penalty.

There is no need to defend these particular members of Congress.  They will support illegal and immoral wars when it fits their agenda.  But there is a need to defend what they said and their right to say it.

They were very careful in saying that people can refuse to obey illegal orders.  If the orders are illegal, why would you follow them?  Hey Trump, just don’t give illegal orders and then it won’t be a problem.

There is certainly subjectivity as to what is illegal.  But you don’t have to be a legal scholar to figure out that it is both illegal and immoral to murder people in boats.

Illegal vs. Immoral

Just because something is illegal, it doesn’t mean it is immoral.  And just because something is legal, it doesn’t necessarily mean it is moral.  This isn’t even a strictly libertarian principle that rests on the assumption that initiative government force is immoral.

If the government passes a law stating that it is ok for the government to murder people who haven’t harmed anyone, it doesn’t make it moral.

Trump, his lawyers, and his spokespeople can spout all they want about “narco-terrorists” or “democracy” or “fighting drugs”.  It doesn’t make bombing boaters legal.  And even if they amended the U.S. Constitution to allow for such a thing, it wouldn’t make it moral.

After World War 2, there were the Nuremberg trials.  German officials were convicted for war crimes and killing people even though some of them were just following orders.  Maybe the victors in the war were just trying further embarrass and degrade the Germans, but the principle is still correct.  Following orders is not an excuse when harming innocent people, regardless of the law and regardless of who is barking the orders.

Right now, Trump is saying that he is the dictator and the military has to follow his orders, no matter what they are.  If he believes they must murder boaters off the coast of Venezuela, then that pretty much means that anything goes.

What if Trump orders the murder of his political opponents?  Will he arrest the military members who refuse his orders?  What if he orders that all judges be given the death penalty if they rule against one of his edicts, such as his tariffs?  Should the military and police follow his orders because it is the president issuing the orders?

Maybe this sounds absurd, but that is only because Trump is being absurd.  It is the duty of people to not carry forward illegal and immoral orders.  This is not being a traitor.  It is not seditious, as the evil and foolish Hegseth said.  It is Trump and Hegseth who are being the traitors by issuing illegal and immoral orders.

There is no defense for ordering the intentional murder of innocent people.

The yield curve was mostly inverted during 2023 and most of 2024.  It has been slowly normalizing over 2025.  This means that short-term yields are lower than long-term yields once again, which is the “normal” state of nature.

An inverted yield curve doesn’t make much sense.  Why would someone lend money for 30 years with a lower interest rate than what they would get for lending it out for just 3 months?  Why lock up your money for 30 years when you can get a higher average annual return and get your money back after 3 months?  After all, you can reinvest the money after 3 months.

The only reason to do such a thing is on the belief that rates will be even lower in the future.  You might lock in a rate for 30 years if you thought rates were going lower in the future.

This is not normal.  In a world without fiat money and central banking, it is unlikely we would see this drastic inversion.

Yields in December 2025

As I write this, the yield on a 3-month treasury is lower than both the 10-year yield and 30-year yield.  It isn’t by a lot.  It is about a 34 basis point difference between the 3-month and 10-year yield.  It is about 100 basis points (1%) between the 3-month yield and 30-year yield.

If the Fed cuts its target rate by another 25 basis points in December, then the spread on the yields should widen.  The short-term yields should continue to fall.

This is significant, even though hardly anyone is talking about it.  The yield curve was inverted for about 2 years.  At times, it was quite heavily inverted.  It has been somewhat flat for the last year.  It is finally normalizing, especially with the Fed rate cuts.

The yield curve has historically been a good predictor of recessions.  But the recession doesn’t come when the yield curve is inverted.  It comes after the yield curve was inverted and then normalizes.

If history is any guide, we should be in for a hard recession any time now.

The Fed’s Actions

The big variable is the actions of the Federal Reserve.  There should have been a recession in 2020 with or without COVID lockdowns.  But the government lockdowns provided an excuse for Congress to spend trillions of dollars extra and for the Fed to more than double the money supply in 2 years.  Most of that doubling happened in March to May 2020.

When you inject such a ridiculous amount of money, both through government spending and monetary inflation, it is understandable how the recession barely happened at that time.

It’s always possible the same could happen again here.  It doesn’t necessarily have to be a virus and lockdowns as the excuse.

Still, with consumer price inflation still above 2%, it is hard to imagine the Fed going crazy again with monetary inflation.  The Fed will likely return to monetary inflation when there is some kind of banking crisis, trouble in the bond market, or a massive stock market crash.  But at that point, the recession is already here.  Some of the damage will already have been done, and the Fed’s interventions will likely only make things worse in the long run.

I don’t think the Fed is going to go crazy like 2020 just because stocks take a dive or because Bitcoin is crashing.  If there is a banking crisis, then maybe we will see something like that.

The point is that you shouldn’t count on the Fed to bail out your portfolio.  Remember the tech crash of 2000 to 2002.  Remember the financial crisis of 2008.  There were dramatic drops in the market.  The Fed’s interventions took a while to save the day.

The Fed’s actions will, unfortunately, continue to play a big role in the economy.  This doesn’t mean that your investments are safe in the stock market or Bitcoin or anything else.  The Fed will do whatever it takes to save the big banks.  It won’t do whatever it takes to save your retirement portfolio.