Sticky Inflation Is Back
The April CPI print landed like a punch nobody wanted. Headline jumped to 3.8% — hotter than consensus. The tariff reality is finally showing up in the data.
May 2025Why Inflation Feels Structural Now
Tariffs are the obvious trigger, but they're layering on top of trends already in place:
- Goods inflation flipping positive as import costs rise 8–15%
- Shelter costs still lagging but sticky at elevated levels
- Wage growth holding above 4% in a tight labor market
- Fiscal impulse from extended tax cuts keeping demand hot
Bond vigilantes are awake. Real yields are pushing positive again.
Metals Leading the Charge
Gold cleared $3,000 decisively — central banks still buying hand over fist, now joined by retail and institutional flows chasing real-asset protection.
Silver is playing catch-up with a 20% move on industrial demand plus monetary hedge.
Copper — Doctor Copper — is screaming reindustrialization, breaking multi-year highs on domestic manufacturing buildout and global supply constraints.
AI Leaders Shrugging It Off
NVIDIA and Alphabet are hitting new all-time highs even as the broader Nasdaq chops. Why? Insatiable AI demand doesn't care about higher rates or tariff noise.
Hyperscaler CapEx guides are going up, not down. NVIDIA's Blackwell ramp is sold out for quarters ahead.
In an inflationary regime, companies that drive productivity gains are kings. These names have pricing power, secular growth, and balance sheets that laugh at higher funding costs.
Bottom Line
Sticky inflation is the new reality, courtesy of tariffs and a resilient economy. The Fed's on hold, yields are higher, and rotation is favoring real assets and true structural winners.
The reflation trade is on. Metals offer the best hedge and upside, while NVIDIA and Alphabet remain the highest-conviction ways to stay invested in growth without fighting the tape.
Vector Ridge is long gold, silver, copper miners, NVIDIA, and Alphabet. Core conviction remains in AI infrastructure leaders and industrial metals.