April inflation comes in lower than expected — now at 2.3%, the LOWEST since COVID.

Great news on its face. Markets love it.

Wonder why bond yields rose though....

 

A treasury surplus? In April?

 

perhaps people paying their taxes?

 

Yep, happens every year. Budget deficit for FY 2025 still running much higher than budget deficit for FY 2024, despite the increase in taxes on consumers.

 

Hmmm..good work, I guess. I can see how explicity going after people was a much softer tone than a factual thread title.

 

Uh. Yeah. That was the post..

 

I don’t believe this inflation # would include tariffs, as technically the high tariffs never went into effect - or at least not a whole lot of products on shelves are subjected to tariffs. That’s why shipping numbers were so strong in previous months (also known as “channel stuffing”). Those “last boats” were inventories coming to get ahead of tariffs.

Port activity in May was being compared to COVID, that’s what it was going to look like w/145% tariffs. This administration basically had no choice but to get more realistic. I’d slow my roll on spiking the football, as the 30% (10% reciprocal + 20% “Fentanyl tariff”) are still going to be inflationary and disruptive going forward. The 145% was a total cessation of trade, 30% is still going to hurt a lot of businesses. Might not cause inflation *if* we get deals with other Asian countries at much lower than 30%. But that’s just because big companies are already set to go in Vietnam or Cambodia. Small business may have a harder time if they were working with a Chinese factory.

 

Good news. Hope the drop continues

 

Huh?

 

If inflation falls over a sustained period wouldn’t that make it more likely to cut rates??? Or at least give them the flexibility to cut if necessary.

The worry the fed has/had, was tariffs triggering severe stagflation. Where the economy spiraled, but high govt trade barriers simultaneously triggered high inflation. Obviously increased risk and uncertainty forces rates higher as well, some of the crazy-talk (like when GOP pols just casually threaten default) calls into question the idea of U.S. treasuries as a “risk free” asset.

 

With Trump backing down from the 145% tariffs, it's unlikely we'll get the mass stagflation. But I wouldn't spike the football in triumph just yet with the current inflation report. One, full tariff effects won't hit until June or July. And two, some of the biggest price drops were in the travel and hospitality fields, who are dropping prices because demand has bottomed out due to a giant decrease in international travel to the US.

A good look at what tariffs will do is with new car prices. They were flat in March, with a small jump in April. That's because we're dealing with previous inventory that was finished and delivered before the tariffs hit. But as this article states, prices are expected to rise between 5% and 25% depending on where the parts for each car is manufactured.

 

I say go ahead and spike the football, like Leon Lett

 

So why am I paying more now than a year ago for nearly everything ???

Exclude eggs and gas from the conversation, prices are HIGH

 

Go Trump Go

 

Because you failed Econ 101.

 

The noticeable drops in inflation and illegal immigration are very telling. I guess that's why he swept 7 of 7 contested states. I'm still in awe.

 

It's still early but it's looking like America made the right choice.