Welcome to the Stay Wealthy podcast. I'm your host, Taylor Schulte, and today I'm addressing the May

CPI inflation report. And in addition to providing a short summary, I'm also sharing what shadow

inflation is and why you should probably ignore it, why inflation is so high and what investors can do in

response. For all the links and resources mentioned today, just head over to you staywealthy.com

forward slash 155.

Okay, before we dive into the May CPI report, which I know everyone is really excited to talk about,

I want to clarify and expand on something important from last week's episode on tips that I may have not made very clear.

I'd shared that tips, and let's actually be a little more specific here and say intermediate term tips.

I had shared that intermediate term tips were losing money because the current economic

environment has been in line with market expectations. I also, and possibly too quickly,

stated that tips are impacted by changes in interest rates and action taken by the Federal

Reserve. To avoid any confusion here and expand on these comments a little bit, let's just

keep it simple. And let's say that there are two ways that you can evaluate the performance of

tips. One is to compare the performance of tips to nominal bonds, your plain vanilla U.S.

Treasuries. While I had advocated for not trying to predict the future and shared that if you're going to add tips to your portfolio, you might consider Swenson's philosophy of maybe splitting your tips and your nominal bond allocations just right down the middle at 50-50.

While I advocated for that type of approach, some investors, including myself, are still interested in understanding when it was better to own

tips versus nominal bonds. So that's one lens in which we can evaluate performance. Are tips

outperforming or underperforming compared to nominal U.S. Treasury bonds? In other words,

has inflation been above or below future market expectations?

Most students of the market would likely find that data interesting or, in some cases, even

helpful to their investing decisions. The second way that you might evaluate their performance

of tips are just on their own in isolation, just like you might evaluate the

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