Tariffs, Data, and the Art of Standing Still

For the week ended 6/14/25.

Where’s the Inflation? (No, Seriously.)

Okay, where is the inflation? While we’re not quite ready to pop champagne, the latest inflation report offers a rare moment of cheer. May’s year-over-year CPI ticked up slightly to 2.4%, exactly what economists expected, following April’s four-year low. Core CPI (that’s prices excluding food and energy, a.k.a. the “no fun” index) rose just 2.8%, a notch below the anticipated 2.9%.

For those who like their economic data with a side of specifics, here’s the juicy bit: prices actually declined last month in several sectors – smartphones, new cars, gas, vegetables, and airfare all took a dip. Sure, we saw some price hikes in bananas, peanut butter, and roasted coffee (a tragedy, frankly), but overall, inflation continues to defy predictions of a post-tariff spike in prices. Score one for the American consumer.

Of course, this report does raise questions: if tariffs and wage pressures haven’t yet ignited inflation, when will they? And what does the Fed do with this Goldilocks data? For now, the FOMC is expected to hold rates steady. Translation: no sudden moves on the monetary front just yet.

Speaking of sudden moves, Friday’s modest selloff closed out what had been a fairly upbeat week. Investors had cheered progress on the U.S. vs. China trade front and some surprisingly strong economic data, until they didn’t. Domestic stocks slipped about 44 basis points, while bonds rallied, rising 67 bps as risk-off sentiment nudged investors toward safety.

Foreign stocks and bonds didn’t fare as well over the week, but zooming out, international equities are the undisputed 2025 frontrunners, up nearly 18% year-to-date. Every other major public asset class? Stuck in first gear, dragging along with returns in the 1%–2% range.

Looking ahead, retail sales and core retail sales hit the tape Tuesday, followed by the Fed’s next rate decision on Wednesday. The smart money says no change, but as always, traders will hang on every word of Powell’s press conference like it’s a season finale.

Until then, may your week be productive, your coffee strong, and your newsfeed bearable. Enjoy the brew – both economic and caffeinated – and here’s to making it through another Monday.

Interesting data point of the week.

Source: Visual Capitalist

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