Inflation is leaving the range it held for two years. And the Fed changes hands.

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Inflation is leaving the range it held for two years. And the Fed changes hands.

Back in 2023 I said inflation would stay stuck in a range while everyone else waited for it to collapse. It did. Now the range is breaking, right as the Fed gets new leadership.

June 22, 2026 · 9 min read

Key takeaways

Back in October 2023 I said inflation would stay in 2.5-4%. It held for almost two and a half years.
In May 2026 it broke out to the upside, at 4.3%. The regime is changing.
The Fed gets a new chair, a high-rates man, right after a cycle of cuts.
When inflation reignites, capital moves early into assets that can outrun it. Bitcoin included.

Everyone was waiting for US inflation to collapse toward 2%. In October 2023, one chart said otherwise.

I bet on a range, not on a collapse. I was right for almost two and a half years.

Now the range breaks to the upside, and the Fed has just changed leadership. Two things that together rewrite the rules of the game.

Definition

Forward guidance

The Fed's habit of telling the market in advance what it will do with rates, so nobody gets caught by surprise. Powell leaned on it heavily. Warsh wants it gone. Fewer promises up front mean more volatility when the direction changes, because the market is no longer held by the hand.

October 2023

What I was saying while everyone waited for the collapse

US inflation was at 3.7% and almost everyone saw it collapsing back to target, the way it does after any shock.

Under the chart, someone wrote us exactly that: inflation falls from here.

I said the opposite. No collapse, no blow-off, just a range it stays stuck in.

“I think we will be ranging 2.5 to 4% a good period.” October 2023.

I was right. Inflation stayed caught between 2.5% and 4% for almost two and a half years. It never went back to 2%. It never exploded. It sat exactly where I said it would.

The logic was simple. After a wave of inflation the pressures do not disappear, they settle. Energy, wages and rents keep a floor under it, and high rates keep a lid on top.

The gold band in the chart is that range. The line stays inside it, month after month, until 2026.

2.5-4%The range I said inflation would stay in, back in October 2023. It held.

US inflation, year over year. The gold band is the range called in October 2023. The reading stayed inside it until the 2026 breakout.

That was then, when it sounded crazy. Now look at what has changed.

May 2026

It breaks to the upside

Now it breaks. The latest reading, 4.3%, above the top of the range.

And it is not one isolated jump. Four months rising in a row: 2.7% in February, then 3.3%, then 4%, then 4.3% in May.

A range that holds for two and a half years and then breaks means one thing: the regime is changing.

Expensive energy, costs coming through from tariffs, a dollar that no longer helps. The pressures piled up and pushed inflation out of the box.

What separates one hot reading from a new regime is direction. Four months up in a row, not a stray month.

For us, who bet on the range, this is no surprise. It is the next step in the same story.

4.3%US inflation in May 2026. The first reading above the top of the 2023 range.

And it does not break in a vacuum. It breaks exactly when the Fed changes the man at the controls.

The change at the Fed

New leadership at the Fed, at the worst possible moment

On May 13, 2026, the Senate confirmed the new Fed chair, Kevin Warsh.

Powell leaves after steering the bank through the pandemic and through the biggest wave of inflation in a generation, a 9% peak in 2022.

Warsh does not arrive with a soft hand. In 2011 he walked out of the Fed in protest against money printing. His line is clear: high rates, expensive money, zero slack on inflation.

A high-rates man, appointed by a president who is asking for aggressive cuts. That is the tension.

At the hearing he was blunt. He wants to drop forward guidance, the signal the Fed used to telegraph its rate moves in advance. And a new way of looking at inflation, after criticizing the easing that followed COVID.

He inherits a rate already cut toward 3.5 - 3.75% since 2024. Right as inflation turns back up.

The second chart shows it plainly. The rate comes down, inflation goes up, and inflation has now crossed back above the rate. The rate peaked at 5.3%, inflation at 9%. Now the roles flip.

3.5-3.75%Where the Fed rate landed after the cuts, exactly as inflation turns up again.

Inflation (navy) and the Fed rate (gold). Inflation peaked at 9%, the rate at 5.3%. Now the rate is coming down and inflation is climbing above it.

But the part that concerns you is not who runs the Fed. It is where you keep your money while inflation rises.

For you

The market moves before the price does

Here is the part that matters for the portfolio.

By the time inflation turns back up, plenty of investors are already positioned. Not because they guess. The market prices the future, not what you can see today.

If inflation rises, you look for something that beats its future return. That is where Bitcoin comes in.

The mechanism is simple. When inflation, 4.3%, climbs above the rate, 3.6%, the real return on cash goes negative. You lose purchasing power just standing still.

So capital leaves for assets that keep up: gold, companies that can raise their prices, and more and more Bitcoin, seen as a reserve that is hard to inflate.

That is what we watch. Not today's reading, but the fact that whoever sees inflation coming positions early. Bitcoin included.

since 2023How long we have been saying the same thing: inflation stuck in a range, then pressure again.

That is why I watch positioning, not today's headline.

Conclusions

For two and a half years inflation sat quietly inside the range. Now it leaves, exactly as the Fed changes leadership.

The new chair does not come with gloves on. And if inflation reignites, the question is no longer whether it drops to 2%. It is where the money goes when it wants to keep up.

Summary

The range call held for two and a half years. Now the break to the upside is the signal, not the noise.
A tougher Fed arrives exactly as inflation crosses above the rate. Real rates are negative.
For the portfolio, today's reading is not what counts. What counts is that money looking to keep up moves early. Bitcoin included.

Inflation is leaving the range it held for two years. And the Fed changes hands

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