Preliminary data today:
Inflation Expectations Explode, Sentiment Collapses (U. Michigan)
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Instantaneous CPI Inflation
Rates are down, but not as far down as in mid-2024.
Expect Drops in Interest Rates
The yield curve looks like this as of today’s close:
“Recession” Odds
Two observations: (1) market odds of a downturn have rebounded today, and (2) the odds are very similar across two platforms (Kalshi, Polymarket), despite the fact the definitions of recession are different in the two markets.
Grocery Prices Continue to Rise, as Forecast Path Steepens
From CPI release today:
Did Trump Blink?
I see repeated references to this assertion. As Jason Furman points out, relative to “Liberation Day” announcement, he didn’t, insofar as the increase in tariffs on Chinese goods rose from 54% to 125% even as reciprocal tariffs were delayed 90 days, thus pushing up the effective tariff rate (with no quantity response) to essentially where it was going to.
Ten Days that Shook the Financial World … But for What?
A recap:
Alternative Business Cycle Indicators: Coincident Index, VMT, Early Benchmark NFP
Coincident index growth slows from 4.1% m/m AR to 1.7% in February.
The Recession Start Predicted (Post-Pause)
While the odds on a recession in 2025 have dropped from 69% to 54% in the wake of Trump’s 90 day pause, the predicted start of the recession has not changed much.
A Real-Time US Effective Tariff Rate Measure
From Paweł Skrzypczyński, “Average effective tariff rate in the U.S.”: