The Trifecta of Inflation: Metals, Fiat, and Fuel

October 1, 2025

Mish's Daily

By Mish Schneider

The trifecta of inflation” usually refers to the three core drivers that push inflation higher at the same time, creating a stronger and often stickier inflationary environment

According to Economists, the trifecta they refer to are

Demand-Pull Inflation – Prices rise because demand outpaces supply (booming economy, stimulus, strong consumer spending).
Cost-Push Inflation – Prices rise as production costs increase (energy, commodities, wages, tariffs, supply shocks).
Built-In / Wage-Price Inflation – A self-reinforcing cycle where higher wages → higher prices → more wage demands.

Then, there is the trifecta of inflation that I use, which stems from the price direction of hard assets.

This is a trader’s perspective. Keep these in your mind!

Weakening U.S. dollar
Silver outperforming gold (i.e. silver gaining vs. gold, which implies rising inflation pressure)
Sugar “busting out” (sharp rise in sugar futures / prices as a food-staple inflation signal)

The U.S. dollar has declined ~10% in 2025. This tends to fuel import inflation and asset-price inflation (commodities, precious metals) in dollar terms.

Both the gold chart (now on new highs) and the decline in the dollar well supports my trifecta.

In 2025 so far, silver has outpaced gold in returns.

The strength of this ratio indicator, as part of the trifecta, supports inflation expectations, especially when paired with dollar weakness.

As for fuel, lets look at sugar and oil…

Instead of rising, sugar prices are down: as of September 2025.

Sugar has fallen ~16.99% year-over-year.

The sugar leg does not confirm my inflation signal.

However, because sugar is more volatile and sensitive to weather, a future reversal could still flip that leg later.

I am adding oil as a fuel, which can also be said about sugar, both as a biofuel and as a food additive.

In my “trifecta of inflation,” oil isn’t one of the three signature tells (dollar, silver/gold, sugar), but it acts as a shadow driver:

Strengthens the cost-push inflation leg.
Reinforces the weak dollar + commodity surge loop.
Influences consumer inflation psychology.

Oil prices have been volatile, swinging with OPEC+ supply decisions, U.S. shale output, and Middle East risks.

Even when not spiking, the threat of oil shocks adds to the inflation premium in markets.

If oil sustains above ~$90–100/barrel, it would re-ignite broad inflation fears

The takeaway:

With two of my three indicators signaling and oil acting as a reinforcing fourth, inflation risks remain elevated even without sugar’s confirmation.

If sugar joins the rally alongside oil, the market should brace for a stickier, multi-sourced inflation cycle that echoes past inflationary eras — and challenges the Fed’s easing narrative.

Educational purposes only, not official trading advice. 

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