---
title: 'CPI Inflation Report: Gasoline Prices Surging — Trouble Ahead'
source: 'https://youtube.com/watch?v=3woIZO1tixY'
video_id: '3woIZO1tixY'
date: 2026-08-01
duration_sec: 564
---

# CPI Inflation Report: Gasoline Prices Surging — Trouble Ahead

> Source: [CPI Inflation Report: Gasoline Prices Surging — Trouble Ahead](https://youtube.com/watch?v=3woIZO1tixY)

## Summary

This video breaks down the February CPI inflation report, highlighting that while headline inflation is 2.4%, most components are rising faster than the Fed's 2% target. The presenter also warns about surging gasoline and diesel prices, analyzes unchanged rate-cut odds from the CME FedWatch tool, and discusses the growing risk of stagflation.

### Key Points

- **February CPI at 2.4%** [00:02] — February CPI inflation rose 2.4% year-over-year, matching market expectations. The presenter immediately casts doubt on the reliability of the official numbers.
- **Data reliability caveat** [00:29] — The presenter calls the CPI report 'fictional literature' and argues the federal government bases decisions on narrative, not accuracy, so it's still important to know the story.
- **Progress since 2022 peak** [01:11] — Inflation has come down substantially from the 2022 peak because interest rates are no longer at 0% and the Fed has slowed money printing, but prices are still rising—just more slowly.
- **Seven of ten CPI components above 2%** [01:39] — The Fed's target is 2.0%, but seven of the ten CPI components are rising faster than that target, meaning the overall average hides broad pressure.
- **Category-level inflation rates** [02:06] — Daycare is up 3.7%, furniture 3.9%, food outside the home 3.9%, medical care 4.1%, movie admissions 5.5%, airfare 7.1%, candy 11.6%, beef 14.4%, and home health care 15%.
- **CPI suppressed by shutdown; March preview** [02:50] — The government shutdown is artificially suppressing housing inflation in the CPI. March CPI will be higher because of energy prices, and costs take time to pass through.
- **Gasoline prices surge** [03:05] — National average gasoline is $3.58 today vs $3.54 yesterday, $3.20 a week ago, $2.94 a month ago, and $3.08 a year ago—a 16% year-over-year jump.
- **Diesel prices spike 33% YoY** [03:35] — Diesel is $4.83 now vs $3.67 last month and $3.63 last year—a 33% year-over-year increase that raises costs across agriculture, transportation, and shipping.
- **Cost pass-through will hit April** [04:44] — Businesses won't pass all higher costs to consumers in March, so if the Gulf situation drags on, April could be even uglier as costs are pushed down the supply chain.
- **Rate-cut odds for March and April** [05:10] — CME FedWatch still shows a 99.4% probability of no rate cut at the March 18 meeting, and the April no-cut odds barely moved from 87.1% to 87.3%.
- **June meeting and new Fed chair shift odds** [06:22] — June is Jay Powell's last meeting as Fed chair; the new Trump-appointed chair is expected to want cuts. No-cut odds rose from 60.7% to 63.9% after the CPI report.
- **Tricky Fed situation and cut excuses** [07:01] — The new Fed chair owes his job to Trump and wants rate cuts, but rising inflation complicates a June cut. Expect 'transitory' or dual-mandate excuses to justify cutting anyway.
- **Stagflation risk emerges** [08:42] — The Fed faces a stagflationary environment—inflation plus slowing economic growth and higher unemployment—while lower rates would bail out commercial real estate, underwater banks, and a trillion-dollar federal interest bill.

## Transcript

this morning and I want you to keep in mind that this report covers February. energy prices that we're seeing today in March. February, CPI inflation rose at a pace of 2.4%
and this was in line with market expectations. Core inflation was at Now, I want to show you the trend, but before we proceed to that, I want to give you this quick disclaimer and I'm just speaking honestly here.
So I just want to say that I don't have much faith in the reliability or accuracy of these numbers. However, it's still important to know what the narrative is because that's what the the federal government
base their decisions on, the story, the narrative. So I'm just saying that the CPI inflation report should be treated as fictional literature. That's just my opinion, no different than a sci-fi
short story or a romance novel. Okay, with that being said, yes, we have made a lot of progress since the rate of inflation peaked back in 2022. rate of inflation has come down substantially. I mean, it's noticeable.
So yes, we have made progress because interest rates are no longer 0% and the Federal Reserve has slowed down the rates of money printing. And here we are today at an inflation rate of 2.4%.
But I just want to say like please make note of this that this does not mean that prices have been coming down. No, it means that prices are still going up. They're just going up at a slower rate than compared to before. Another thing
that I want you to keep in mind is that although overall inflation increased at a rate of 2.4%, that's just the overall average based on their calculations. So the goal of the Federal Reserve is to
get the rate of inflation down to 2.0%. So 2%, that's the target. That's the target rate. However, seven out of the 10 components However, seven out of the 10 components in the CPI were rising faster than 2%.
your individual categories that are going up way faster. For example, going up way faster. For example, daycare is up 3.7%. That's the rate of inflation. Furniture is up 3.9%. Food outside the home is up 3.9%.
Food outside the home is up 3.9%. Medical care is up by 4.1%. Admissions to movies, so movie tickets up by 5.5%. Airfare has been going up by 7.1%. Candy is up by 11.6%.
Beef is up 14.4% and home health care is up by 15%. additionally, the overall CPI number is artificially being suppressed right now
government shutdown, which portrays housing inflation lower than it really is. And on top of that, we all know what's going to happen to the inflation for March that's going to be due next month because of the higher energy
So, I just want to give you a preview of what's to come. what's to come. And here the stats as of today. In the US, the national average for a gallon of gasoline is at $3.58.
Yesterday, it was at $3.54. A week ago, it was at $3.20. A month ago in February, it was at $2.94. was at $3.08. That's 16% higher compared to last year.
for March, it's going to be ugly, but that's the expectation. But you know what? I would say more importantly, just take a look at the price of diesel fuel. I mean you're going to need diesel to run machinery, large vehicles. I mean
you're talking about from agriculture to transportation to shipping. And if this input price goes up, then what's going to happen? going to pass down the cost, the rising cost to consumers. You know, that's
going to be on anything that's farmed, transported, or shipped, which is inflation. So, diesel is at $4.83 a gallon right So, diesel is at $4.83 a gallon right now. Last month, it was at $3.67.
now. Last month, it was at $3.67. Last year, it was at $3.63. So, when you compare February of this year to last year, it was basically flat, no inflation there. But if you compare today compared to
last year, that is a 33% increase year-over-year. So, listen, I'm just warning you that March is going to be ugly. to know, that the costs from the businesses
will not be fully passed down to the consumers in March because it's going to take some time. So, if this thing drags on in the Gulf, then April's going to be even uglier as the costs get fully or more pushed down
from the businesses to the consumers. And as the rate of inflation is expected to rise in March and going forward, that's going to make it more difficult rates because if they cut interest rates,
then that's going to be inflationary. Anyways, I want to show you the odds, rate cuts, and this is according to the CME FedWatch tool. going to be on March 18th. So, that's going to be next week on Wednesday.
Before the CPI inflation report, it was already a given that they can't cut interest rates at this upcoming meeting. There was a 99.4% chance that they would not cut rates in March. And after the CPI inflation report, here
are the new odds. And if you notice, it didn't change. So, that's not an error. They didn't move. The market expectation is clearly no rate cut in March and I I completely agree with the the March expectation. The next Federal Reserve
meeting is going to be on April 29th and here were the odds of a rate cut before here were the odds of a rate cut before the CPI inflation reports. An 87.1% chance that they're not going to cut interest rates in April, either.
And here are the odds after the CPI inflation reports. So, barely moved. The odds that they will not cut at that meeting changed from 87.1% to 87.3%. And you have to keep in mind that this
is going to be Jay Powell's last meeting as the chair of the Federal Reserve. It's going to be the June meeting that's more anticipated because that's when Trump's new Fed chair is going to be at the helm. So, let's take a look at that
one. Before the CPI inflation report, there was a 60.7% chance that the Federal Reserve would not cut interest rates in June. After the report, here are the results. The odds that there will not be a rate
The odds that there will not be a rate cut in June went up from 60.7% to 63.9%. >> this situation is very tricky. That's just my opinion.
Because the new Fed chair basically got the job from Trump with Federal Reserve would cut interest And if this special military operation does not de-escalate or terminate soon,
then you're going to have rising inflation in March, in April, in May. And then how are they going to justify cutting interest rates in June? But, I'll tell you that this is my honest assessment that I wouldn't rule out an
interest rate cut off the table in June. And here's why. straightforward. They could always come up with lame excuses to cut interest up with lame excuses to cut interest rates in the face of rising inflation.
always use the good old "Oh, this rise in inflation is just transitory." Now, of course, nobody's going to buy that, and we've heard that one before, mean that it's going to stop them. Like, they could still use that excuse.
They could also use the excuse that the balance of risks is more towards the And because the Federal Reserve has a dual mandate, they can justify rate cuts because of a weakening labor markets. I mean, all I know is that President
Trump wants rate cuts, and he's going to go ballistic if he doesn't get them. And sadly, I just want to say that lower interest rates are needed to bail out just a variety of sectors. We're talking about commercial real estate, the banks
have bond portfolios underwater, to lower the interest expense paid by the federal government, which is going to be a trillion dollars this year. And also, a trillion dollars this year. And also, yes, the labor market is weakening.
we're in a tough spot. It's a tricky situation. There was the ongoing problem of inflation, but now we're facing the danger of a stagflationary environment, which is just a combination of inflation
plus slowing economic growth and higher unemployment. All right, so that's the situation. On a side note, I just want to say that the average price of to say that the average price of gasoline in the US is currently at $3.58
a gallon. But, I'm not in California. I'm curious I mean, of course, California's known They're notorious for having the highest Thank you for the support. Please subscribe, and I wish you a very nice
subscribe, and I wish you a very nice day. Take care.