Before we get to the Fed announcement today, we need to talk about the latest CPI numbers, which dropped yesterday.

The report showed inflation had dropped to its lowest level in more than two years. When compared to the same month last year, the Consumer Price Index (CPI) rose by 4%. That’s the smallest rise since March 2021.

_{Source: Statista}

The headline number was driven by lower food inflation (6.7% vs 7.7% in April) and energy an 11.7% drop in energy prices. Smaller price increases were also seen for new cars, clothing, housing, and transit services. (Of course pretty much everything except energy is still getting more expensive, so there’s that…)

On a monthly basis, prices increased by 0.1 percent in May, after rising by 0.4 percent in April.

This was the last piece of critical data before the Federal Reserve meeting today. And at 2 PM ET, the FOMC released its latest interest rate decision, which was to hold rates where they are. Futures markets were pricing in a 91.9% probability of this yesterday, so there wasn’t much doubt. Nevertheless, it concludes a period of 10 consecutive raises.

Bolstering their case is the fact that core inflation, which excludes volatile commodities like food and energy, has fallen to 5.3%, the lowest level since November 2021.

But if you think we’ve seen the last of rate hikes, not so fast… 5.3% is still an unacceptable number by anyone’s standards, including the Fed’s own (their stated target is 2%). And according to the so-called dot-plot (which I’ve covered before), Fed members are expecting two more rate increases this year.

We’ll have more to say about this as things develop, but I’ll leave you with this…

You may or may not have noticed, but US equities have recently performed extremely poorly on Fed days. And the good folks over at Bespoke Investment Group have the research to back this up. During the past six Fed days, the S&P has averaged a one-day fall of more than 1%. As they point out, these declines have typically occurred in the last hour of trading after Powell’s press appearances. So stay frosty out there.

_{Source: Bespoke Investment Group}

Switching gears, we’ve got two things to show you today that you’ll find interesting…

The first is an update on the crypto world from my colleague Jimmy Butts of Capital Wealth Letter. In it, he tells you what you need to know about the latest news regarding the U.S. government’s ongoing crusade against crypto.

And to wrap things up for today, we’re going to show you something we’ve never done before… Our own boss, Phil Ash, President of Investing Daily and StreetAuthority, is going to give you an inside look at how he uses one of our strategies to trade in his own real-money portfolio.

Enjoy,

Brad Briggs
StreetAuthority Insider

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Regulators Crack Down On Crypto Platforms… Should Investors Be Worried?

I wanted to do a quick update on the cryptocurrency market. There’s been some major news in the space in the last week or so.

Over the past couple of months I’ve touched on how regulators have been cracking down on major players in the crypto space like Coinbase, Kraken, Gemini, and Binance.

For example, in February cryptocurrency platform, Kraken, got sued by the SEC and was forced to shut down its staking service.

Then Coinbase received a Wells Notice from the SEC. A Wells Notice is a warning from the SEC that it has identified violations of securities laws and is often followed by legal charges.

Well, Coinbase got hit with legal charges last week. In fact, the SEC hit Binance — the world’s largest cryptocurrency exchange — with a lawsuit, and then 24 hours later they hit Coinbase with a lawsuit.

The SEC has been busy…

Now, I’m going to focus on Coinbase since that’s the platform we talk about most over at Capital Wealth Letter…

So, what exactly is the SEC accusing Coinbase of?

• One, that they haven’t registered with the SEC as a securities exchange.
• That Coinbase has been acting as an unregistered broker.
• Coinbase is an unregistered clearing agency.
• And finally, Coinbase didn’t register the offer and sale of their staking program.

That last one, is what they shut Kraken down for, so it makes sense that Coinbase would be next in line.

Here’s The Crazy Part…

So, here’s the thing… the SEC claims that Coinbase has been breaking the rules since 2019.

But the SEC is the same entity that approved Coinbase to go public in 2021. And as a reminder, when a company goes public it takes at least a year, and it must file all sorts of paperwork and financial documents with the SEC.

What’s more, the U.S. government has been using Coinbase to sell confiscated Bitcoin and will continue to do so throughout the year.

You just can’t make this stuff up.

So, what does this mean for our crypto holdings, Bitcoin and Ethereum? Well, here’s how they reacted to the news…

Both Bitcoin and Ethereum initially fell on the news, then rallied. In the last week both cryptos have slid. But here’s the thing… crypto doesn’t need the U.S government’s approval to succeed. In fact, that’s the whole point of crypto.

It was built as an alternative financial system. One where a centralized government can’t control or censor it.

And that has regulators scared. Which is why they are doing everything they can to try and regulate cryptocurrencies. Right now, they can only go after centralized exchanges that make it easy to buy and sell crypto.

Closing Thoughts

As I’ve said before, Bitcoin (and cryptocurrency in general) may be the most fascinating and controversial development in money and finance in generations. And the underlying blockchain technology has the potential to revolutionize aspects of our economy, upending many established companies, and even entire industries.

The bottom line is that crypto isn’t going anywhere. Companies, governments (even our own U.S. government), and retail investors around the world hold digital assets.

Crypto has survived and will continue to survive.

The cryptocurrency world is constantly evolving. And the next big thing is right around the corner…

Over at Capital Wealth Letter, we plan to be there when it happens. Remember, cryptocurrencies are speculative at this point. The ride will be volatile, so don’t bet the farm on these plays. But you need to learn about this corner of the market — and even consider dipping your toe in the water as long as you feel comfortable. Because the potential upside here is just too good to ignore.

That’s why I just released a bombshell briefing about how you can profit. Go here to learn more now…

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Get An Inside Look At Our Publisher’s Real-Money Portfolio…

Hello, this is Phil Ash, president of Investing Daily. I am for the most part a buy-and-hold investor, using stock recommendations from some of our services such as Personal Finance and High-Yield investing, among others, but I do like to play around with options.

In this video, I’m going to show you how I trade some of Jim Fink’s Options for Income recommendations. You’ll get a front row seat to my TastyTrade account to see how easy these trades are to make. You can also read a transcript of my comments below this video (and also find out more about how this strategy works.)

Today is not the typical options expiration date, which is the third Friday of each month, but I do have several options expiring today, June 2nd.

Let’s take a look at a few of those options in my Tastytrade account. Sorting them by days till expiration, I have two options spreads expiring today from Jim Fink’s Options for Income service. These are mostly put credit spreads, which I won’t go into detail about in this video. I will provide links in the comments section to other videos that explain put credit spreads and how to engage in what Jim Fink calls “the greatest investment strategy on planet Earth.”

I traded Jim Fink’s Options for Income portfolio successfully a few years ago, earning an annual return of 25-30%. However, I got busy with other things and stopped, but I recently reactivated my account.

Initially, I seeded it with $5,000 at the end of February 2023 and gradually added more money. It’s now at $20,000, but I’ll probably need to put in around $25,000, which is what we recommend to be able to trade one contract on each of Jim’s recommendations. You can trade with just $5,000 if you want, but you won’t be able to execute all of his trade recommendations. Of course, you can put in more money if you want to trade more than one contract per trade.

Now, let’s look at the two trades I have expiring today. I sold a $225 put option and simultaneously bought a $220 put option to create a $5 put credit spread on one contract. Each contract is worth 100 shares of stock, so I put $500 at risk. However, when I bought this Visa trade, I collected a credit of $450 and bought insurance in the form of a put option for $300. That means I collected a net of $150, which I get to keep regardless of the trade’s outcome. Since it’s a $5 spread, I put $500 at risk but collected $150, resulting in $350 actually at risk. This trade, if successful, will yield a 43% return in just a few months.

As for the other trade expiring today, TTWO, it is also a $5 spread, and I just need the stock price to finish above $119, which it has been significantly higher than for weeks. On this particular trade, I collected a $167 credit, so $500 minus $167 equals $333 that I actually had at risk. This trade will yield a 50% return in a matter of months.

That’s what’s happening in the world of Jim Fink’s Options for Income. I’ll provide links in the comments section to videos if you’d like to learn more about trading put credit spreads. Feel free to drop me a comment if you have any questions. I hope this was helpful. Have a great day.

P.S. To learn more about more about how put credit spreads and Jim Fink’s Options for Income service works, check out these short (and free) training videos. Jim Fink calls put credit spreads “the greatest investment strategy on planet earth”… and I do not disagree.

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This article originally appeared on Investing Daily.