Extraordinary Becomes Ordinary

For the week ended 4/12/2025.

In a sign of just how upside-down things have gotten, last week’s inflation data got bumped to page three while the nation fixated on Washington’s latest reality show episode, starring—you guessed it—Donald J. Trump. Amid the chaos, the Labor Department quietly dropped a surprise: consumer prices in March actually fell by 0.1% (seasonally adjusted). Even more impressive, year-over-year inflation cooled to 2.4%, well below the 2.6% consensus forecast.

Helping this downward move? A steep drop in gas prices—finally, something we can thank our local pump for. This was the first month-over-month CPI decline in nearly five years, a rare bit of good news for the inflation-fatigued consumer. But let’s not get carried away: the victory lap may be short-lived. Trump’s “Liberation Day” tariffs didn’t kick in until April 2, so their price-tag punch won’t show up until the next CPI report. Tick-tock.

Market Whiplash

Now, if you had asked this author how the markets took the inflation news on Thursday, the answer would've been “celebratory.” But Monday morning tells a more complicated tale. Domestic equities did pop, finishing the week up a strong 5.6%—but that rebound was paired with a 2.5% drop in bonds, signaling rising anxiety under the surface.

And here’s the rub: the bond market has had enough of executive-branch improvisation. Foreign governments and major institutional players are beginning to hit the sell button on U.S. Treasury debt. Should that trend pick up steam, we’re not talking about a garden-variety correction—we're talking full-blown fireworks. The kind that would make 2011 look like a dress rehearsal. But hey, let’s not ruin a perfectly good Monday visualizing that trainwreck.

Coming Up: Retail Therapy?

This week’s marquee economic data will be March retail sales and core retail sales. And with consumer confidence recently taking a swan dive off the high board, this will be a telling gauge of whether shoppers are still showing up—or just shutting down.

With that, may your coffee be strong, your news consumption discerning, and your portfolio diversified. Stay frosty out there.