One of the key questions of the day is if the inflation that so many have been anticipating this year is starting to percolate. Or, as the bulls are quick to point out, based on the recent data, maybe it’s just not coming.One of the bear camp’s key arguments for why we should not trust the current joyride to the upside is that inflation from tariffs will most definitely show up soon. After all, everyone agrees that tariffs represent increased costs that "someone" has to pay - and economists of all shapes and sizes agree that those cost will indeed increase inflation. And with the U.S. expected to take in hundreds of billions in tariffs this year, it follows that inflation is on its way - it’s just a question of when.This assessment has kept the Federal Reserve "on hold" lately. After cutting rates last year based on inflation trending in the right direction, Jay Powell’s crew has decided to "wait and see" if the inflation everyone is calling for actually shows up before cutting rates any further.However, for anyone keeping score on the subject, said inflation is nowhere to be found at the moment. In short, the most recent data - the June U.S. inflation reports (CPI, PPI, and import prices) - continued to show that price pressures remain broadly under control. For example, CPI and core CPI advanced at an annual rate of 2.7% and 2.9% respectively and have risen only modestly since April. And then PPI for final demand and PPI ex-food and energy actually fell to rates of 2.4% and 2.6% respectively. Oh, and import prices fell 0.2%. Not exactly the stuff of the runaway inflation being many are anticipating.The bears counter with something along the lines of "just you wait!" Our furry friends point to the fact that Core consumer goods prices (which exclude food and energy), rose 0.7% over the past year, which is the most in nearly two years. And for the record, this is the CPI grouping that most directly reflects tariffs.Although I can concur that there "may" be some inflation percolating under the surface and our inflation models have indeed moved out of the disinflation zone, I’m not sure it’s a great idea to be investing based on the anticipation of what may or may not happen in the future.You see, in the business of managing money, thinking you know what will happen next is problematic as I can confirm that NO ONE has been able to consistently forecast what the future holds in Ms. Market’s game for any length of time. As such, I learned a long time ago to put away any designs on predicting the future and focus instead on what IS happening now.And what is happening now is many of the world’s central bankers are cutting rates. You know, to help keep their economies from falling into a state of disrepair.But here at home, Powell & Co. remind us that inflation has not yet moved back down to their target zone. The country’s merry band of central bankers add that until they have "confidence" (most often accompanied by a healthy dose of hindsight) that inflation will reach the purported target, they are in no hurry to cut rates.On the surface, this sounds logical, and the stance makes a lot of sense. Why try make a prediction? Why not just wait until inflation is where you want it to be?However, it is worth remembering that the Fed has a miserable record in getting inflation either up to or back down to their target. Oh, and lest we forget, the 2% target is relatively new. Implemented in 2012, the cold reality is the Fed (a) failed to get inflation up to their 2% target for more than a decade and (b) have never attempted to get inflation back down to 2% before. Super.So, as investors, I think we have to pick sides here. Is inflation percolating and ready to pick up in earnest? Or will the tariffs that actually are implemented be absorbed and become a nothing-burger?So far at least, the stock market, which is once again flirting with all-time highs this morning, seems to be siding with the bulls. Our heroes in horns appear to believe that inflation fears are overblown and that lower rates are coming - and soon. Remember, lower rates aid economic growth, which, in turn leads to higher earnings. Which for stock investors, is a good thing.For me, the bottom line is to remember the old joke that economists were invented to make weathermen look good. And unless/until inflation actually starts to show up, we should probably focus on corporate earnings, which at least for the time being, look pretty darn encouraging."Whenever you find yourself on the side of the majority, it’s time to pause and reflect." - Mark TwainWishing you green screens and all the best for a great day.