When core pce inflation was above 2.5% year over year for 27 straight years, we had 10Y yields well above 5 and 30-year mortgages well above 7.5 to go with it

 1967-1993, inclusive.

 

 

Eleven foods which made new all-time high average prices in April 2025

 Round roast $7.616/lb

All roasts 7.995

Round steak 8.627

All steaks 11.12

Sirloin steak 12.326

Ground chuck 5.996

100% ground beef 5.801

All ground beef 6.142 

Coffee 7.536

Sugar 1.021

 

Beer 1.827/pint

The slavish respect for the consensus estimates for inflation and everything else vs. the actual levels viewed historically is as nutty as anything promoted in partisan politics

Consumer sentiment slides to second-lowest on record as inflation expectations jump after tariffs

... Recent inflation data has not shown a tariff bump, as both the consumer price index and producer price index for April came in below consensus estimates. ...

Who gives a damn about whether the consensus estimates got it right or not? What matters is what the damn rates are! 

And the rates are much higher when compared with the immediate pre-pandemic rates.

Would those have come down in recent months without the spectre of a Trump tariff regime looming in the wings?

Well we'll never know, now will we?

It's all so infuriatingly stupid.

Meanwhile consumer sentiment and surveys of same don't hold much water with me.

I conclude only one thing from them: that our tolerance for inflation has weakened dramatically. We were a much hardier people in the past, and now we are soft and melt like snowflakes at the slightest hint of bad news.

In November 1974 cpi inflation peaked at 12.2% year over year. The then Michigan survey of consumer sentiment plunged to 57.6 by February 1975.

But in April 2025 cpi inflation is only 2.3% year over year, and the Michigan survey has dropped to 50.8 from 52.2 in April.

It's comic.

March core wholesale prices year over year were revised up in today's release for April, from 3.3% to 4%, and with April we now have eight consecutive months with increases above 3%

 The average increase to date has been 3.58% year over year for eight months, 121% higher than the pre-pandemic average of 1.62%. 

The rate of core cpi inflation is still running 55% ahead of the 2010-2020 average and liberal VOX wonders where is the inflation

Meanwhile you start turning on, and turning off, tariffs in February and expect to see massive, economy-turning evidence already in the April data?

Save it for the drive-thru.

 

The Tariffs Are Here. Inflation Isn’t. What Gives?

Eric Levitz, Vox

Core cpi inflation, which excludes food and energy, came in at 2.8% year over year in April 2025, and so did food inflation

 Core cpi inflation at 2.8% year over year is 55% higher than the average rate of 1.8% which prevailed 2010-2020.

 

core

food

Energy inflation year over year in April 2025 is negative, but prices for electricity have never been higher, natural gas is climbing in record territory, and gasoline prices under Trump are still Biden-like

 

The March 2025 core pce inflation rate of 2.64% year over year is still 72% higher than the 1.53% average 2008-2020

 

Core pce inflation numbers were finally updated in this chart by the BEA at 147pm EDT showing revisions but the same old story: No core inflation progress in a year

Core inflation in Mar 2025 year over year is 2.64%, still ahead of the lowest reading in the last year at 2.63% in Jun 2024.

Core inflation has been sideways for a year and more, and nowhere near 2% or below as in the pre-pandemic era.

The revised 2.96% for Feb 2025 is equivalent to the 2.97% reading in Mar 2024.

That Feb spike helps explain why the 1Q2025 reading was up 3.5% from 4Q2024.

It's nearly noon and this chart of core personal consumption expenditures still isn't updated with the data due out today because the Department of Commerce which oversees the BEA is now run by the incompetent Howard Lutnick

 CNBC usually runs a big story on core personal consumption expenditures before 9:00 AM every month when this report comes out, but not now under Howard Lutnick.

 

Tomorrow is a big day for economic reports: Core pce inflation and 1Q2025 real GDP

 The consensus estimate for tomorrow's core pce inflation number is 2.6% year over year in March, and 0.1% month over month. In February the actual numbers were 2.8% year over year and 0.4% month over month.

The consensus estimate for tomorrow's real GDP estimate is 0.4% vs. 2.4% actual the previous quarter. Yes, you read that right, 0.4%. GDPNow's final read on 1Q2025 out this morning is  . . .  -2.7%.

Yikes.

The ADP employment change will also be reported. Consensus is for +108,000 vs. +155,000 actual the previous month.

Nonfarm payrolls comes out on Friday. Consensus is for +130,000 for April vs. +228,000 actual in March.

Holy cow, I paid $15.92 for this ground turkey on March 31, now it's $18.88, up 18.6% in less than a month

 

18 things which set new price records on an average basis in 1Q2025: beef, beef, and more beef, ice cream, sugar, coffee, OJ, chicken, American cheese, beer, wine, eggs, electricity

 

sirloin

chuck roast

beef roasts

beef steaks

ground beef

ice cream

sugar

coffee

orange juice

chicken

ground chuck

round steak

round roast

American cheese

beer

wine

electricity

eggs

High unemployment, high inflation, and high interest rates 6% or higher all at the same time plagued the country for six years 1975-1982, but we survived

 There were six years when all three, the unemployment rate, headline inflation, and 10-year US Treasury yield, were at 6% or higher on an average basis at the same time:

1975: 8.5%  9.14%  7.99%

1977: 7.1%  6.46%  7.42%

1978: 6.1%  7.62%  8.41%

1980: 7.2%  13.5%  11.43%

1981: 7.6%  10.37%  13.92%

1982: 9.7%  6.15%  13.01%.

 

In March 2025 unemployment was 4.2%, headline inflation was 2.4%, and the 10Y yielded 4.28%.

The current data set is no compelling case for reducing interest rates.  If Trump had confidence in his tariff regime, he wouldn't be clamoring for further reductions.

 

Ten foods making new all time high average prices in March 2025 per FRED Economic Data

Round roast $7.557 per pound

Round steak $8.554

Ground chuck $5.854

Ground beef 100% $5.79

Ground beef all $6.137

Beef steaks all $10.98

Eggs $6.227 per dozen

Coffee $7.385 per pound

White sugar $1.014

Beer $1.821 per pint

 

They're calling the 10Y at 4.5% the moron premium because everyone hates Trump and his tariffs, but I don't remember it being called the 5% dotard premium under Joe Biden

People need to get a grip.

Blaming hapless Liz Truss' two-months as PM in September and October 2022 for the UK's high interest rates pretends that the Bank of England didn't raise interest rates in response to inflation same as the US Federal Reserve Bank.

This trashy headline belongs in The Daily Star, not the UK Telegraph. No wonder they're trying to sell you a 1-year subscription for only 29 pounds.

 

 

Week over week US Treasury yields in the aggregate popped 5.8% on net to an average 4.335% after declining for months from 4.5 to 4.0 and everybody's freaking out like this hasn't happened, what, six times now in the current era

Most of the pissing and moaning is from investors who pulled the bond trigger too soon, plowed into fixed income, and got burned badly because interest rates reasserted themselves.

The press this weekend is instead full of apocalyptic language about the Treasury market and the implications for America on a grand scale. It's complete rot and I'm ignoring it. It's all designed to pressure the Fed to lower their rate again.

The last time the Fed embarked on rate cuts is instructive. It was late September 2024. The average of the aggregate of the curve had fallen to just north of 4. Inflation rates seemed to be trending down. So the Fed cut, and voila! Treasury rates hilariously shot upward!

The burn was real.  

$TLT investors, who were down 4.76% in 2021, 31.41% in 2022, up 2.96% in 2023, went down again, 7.84% in 2024 as a result. Ouch.

They are back, itching again for a policy reversal like they have a flea infestation, so bad they are bleeding.

As things stand year to date, long term investment grade investors in VWESX, for example, are down 1.43%. It wasn't supposed to be this way, not again.

So everyone hates the bond vigilantes with the heat of 1,000 suns, and urges more imprudence.

Meanwhile in "cash" you go on making 4.3% or so, and in gold you have made a killing, while stocks reel under Trump's stupid tariff shotgun blasts which are wounding everyone in the field, including himself.

If the Fed had done a proper job against inflation by jacking up the Fed Funds Rate to meaningfully combat the core pce inflation rate of its average 5.35% in 2022 instead of going only where it did, which was 1.69% on an average basis, maybe we wouldn't still have this lingering inflation for the bond vigilantes to demand payment against. Core pce inflation hasn't moved materially off 2.8% in a year now, still much too high.

The bond market is "she who must be obeyed". She doesn't tell you everything you need to know, but she does tell you the most important thing.

But what the hell do I know. I'm just some punk keyboard warrior blogging in his underwear in the basement to the money men. So yippee-ki-yay, you earned it. Especially you Donald Trump, you complete ignoramus.

 

Liars all over Elon Musk's X kept saying Trump brought egg prices down, but in March 2025 they were more expensive than ever on an average basis: $6.227 per dozen

Sam's Club, when it has eggs in stock, is charging in the mid to high 4s per dozen.

 

The average price of gasoline in the United States remains Obama-like in March 2025

 

The average price of piped utility gas in the United States is again knocking on the door of nosebleed levels in March 2025