the DON JONES INDEX…
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GAINS POSTED in GREEN LOSSES
POSTED in RED 5/22/26…
15,593.94 5/15/26… 15,584.58 6/27/13... 15,000.00 |
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(THE DOW JONES INDEX: 5/22... 50,295.66; 5/15...
50,009.97; 6/27/13… 15,000.00) |
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LESSON for FRIDAY, MAY
22, 2026 – “INFLATION DESTINATION!”
The
Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent on a
seasonally adjusted basis in April, after rising 0.9 percent in March, the U.S.
Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.8 percent before seasonal
adjustment.
The
index for energy rose 3.8 percent in April, accounting for over forty percent
of the monthly all items increase. The shelter index also increased in April,
rising 0.6 percent. The index for food increased 0.5 percent over the month as
the index for food at home rose 0.7 percent and the index for food away from
home increased 0.2 percent.
The
index for all items less food and energy rose 0.4 percent in April. Indexes
that increased over the month include household furnishings and operations,
airline fares, personal care, apparel, and education. Conversely, the indexes
for new vehicles, communication, and medical care were among the major indexes
that decreased in April.
The all items index rose 3.8 percent for the 12 months ending
April, after rising 3.3 percent for the 12 months ending March. The all items
less food and energy index rose 2.8 percent over the year, following a 2.6
percent increase over the 12 months ending March. The energy index increased
17.9 percent for the 12 months ending April. The food index increased 3.2
percent over the last year.
(See our Outgo Indices below. See the complete list, plus further data as
ATTACHMENT “A”)
“Economic policymaking is hard, and it has a tendency to make
even the smartest decision-makers look out of their depth when predictions
don’t pan out,” deduced Tangle Senior Editor Will Kaback.
(ATTACHMENT
ONE)
The
war in Iran has disrupted global energy markets, driven up prices, and led to
rising inflation here in the United States. Unlike, say, the debate over Bidenomics or the tax policy put forward in
the One Big Beautiful Bill, this interpretation doesn’t seem to be
a source of disagreement. Opinions vary on whether the potential benefits of
attacking Iran justify this disruption, but there’s no longer much debate that
this war is directly responsible for heightened economic pain.
“The
question now is how bad it will get — and for how long.
“To state the obvious, the longer the war lasts — and the Strait
of Hormuz remains effectively closed — the longer inflation will remain a
problem. Unfortunately, that may not be on the immediate horizon.”
Kaback raised the prospect that the Xi/Trump meetings, then on the
table, could end the war and the Hormuz blockade, but the President went home
with no deal, just a lot of promises.
So, Tangle concluded, the last, best hope may be in incoming Fed Chair Warsh – but will he buck the president if inflation
continues to spiral? “Or will he turn around and push for rate cuts?” (See more below)
The BLS report (1440, ATTACHMENT TWO) also
noted that inflation outpaced wage growth in April for the first time in
three years. Economists blamed the inflation on... surprise... the Iran War,
“bolstered expert predictions that the central bank will not lower
interest rates until mid-next year” and expressed disorientation regarding the
price of tomatoes.
NBC (ATTACHMENT THREE) also cited Bureau of
Labor Statistics statistics to report inflation
hitting 3.8%, “outpacing wage growth for the first time since 2023” and broke
down the upswing by categories.
Food inflation moved up 0.7% last month compared
with March, when the metric eased slightly on
a month-to-month basis.
Tomato prices increased nearly 40% in April compared with the same period in 2025 — the highest rate of inflation among the food-at-home categories the BLS tracks.
(Grocery Dive ATTACHMENT FOUR) reported that “Inflation remained in somewhat
of a holding pattern during the final two months of 2025 and the first quarter
of this year, bouncing between a yearly pace of 1.9% and 2.4%, but that pattern
abruptly ended in April.”
GD cited beef, vegetables and coffee as inflationary. “On the other hand, prices for poultry were
up less than 1%, with prices for fresh whole chickens declining nearly 2%. Egg
prices, which were a symbol of high
grocery prices last year, fell more than 39%.”
Dr. James E. Thorne, posting on “X” asserted
that “shelter, not oil, is driving
inflation and the fed still doesn’t get it!”
(ATTACHMENT FIVE)
Tenants should be happy,
and landlords sad, that the shelter spike is not
a reacceleration in rents, “it is a measurement error coming home to roost.
Because the October 2025 housing panel was skipped during the government
shutdown, the Bureau of Labor Statistics effectively assumed zero rent growth
for that month, depressing the level of the index for half a year. April is
simply when those missing observations finally re-entered the sample, producing
a mechanical jump in primary rents and owners’ equivalent rent, 0.55% and
0.53%, roughly double their usual pace. Strip out that one-time adjustment and core
CPI for April would have printed around 0.26%, a far more subdued reading
consistent with a cooling economy rather than an overheating one.”
Barrons’ Megan Leonhardt (ATTACHMENT SIX) warned that the cost
of shelter, now Covid corrected, would start soaring – even as the bottom half
of Americans were struggling, despite the false statistics.
“Core inflation—which excludes food and energy prices—has been
running behind headline inflation in
recent months, even before gasoline prices started their meteoric rise in the
wake of the Iran war. Because core inflation is considered a better gauge of
price growth trends, this has provided some optimism that the U.S. is trending
closer to the Federal Reserve’s 2% target than the headline figures would
suggest.
“Those cooler readings, however, are largely the result of softer
housing inflation, which is made up of rents and the owners’ equivalent of rent
(OER)—a measure of what homeowners would hypothetically pay if they rented
their homes. In fact, housing accounts for roughly 40% of the core CPI basket
excluding used car prices.”
“Omair Sharif, founder of Inflation
Insights, estimates housing will probably add more like a 0.25 percentage point
increase month over month. “So it’s a pretty big
jump–more than double what it’s been doing the last couple of months,” Sharif
says.
Insurance Business Magazine (May 11,
ATTACHMENT SEVEN) reported that “financial stress
and medical inflation deepen strain on US workforce.”
A
Prudential Financial Benefits & Beyond study drawn from the
first of three installments in the study, “The Future of Work: Building
financial resilience in an era of rising costs,” come as employer health
costs and employee out-of-pocket expenses are both expected to climb faster
than general inflation through 2026, according to benefits consultants and
healthcare analysts.
“At
the same time, Prudential highlighted a clear perception gap: while 75% of
employers believe they are doing enough to help employees manage medical costs,
only 46% of employees agree. 68% of
employees experienced at least some financial stress in the past 12 months, and
28% said it was a significant or overwhelming concern. “For many, that pressure is feeding directly
into mental and emotional strain: 45% of employees report experiencing more
mental stress over the past year due to financial concerns, rising to 50% among
Gen Z.”
ON WALL STREET...
“Why does the stock market keep going up,”
asked the Guardian U.K., amidst “war, inflation and Trump’s tariffs”? Wall Street still has its down days. But the tech-heavy Nasdaq
index has continued to surge amid continued investment in AI and investors ask:
“how long can this bull market last?”
(May 14, ATTACHMENT EIGHT)
The answer, GUK postulated, is an old, old friend.
EVERY DAY IS TACO DAY
“Some economists point to a mindset that investors have embraced –
that the president will back off of his most extreme policies: Trump Always
Chickens Out, or Taco.
Backtracking threats has been a hallmark of Trump 2.0,
particularly when it comes to tariffs and Iran. When Trump announced his slate
of “liberation day” tariffs, he delayed implementing them hours after they were
announced. He similarly threatened a 25% tariff on eight EU countries when he
was angry about annexing Greenland. Those tariffs were also called off.
Now, even as Trump says the Iran ceasefire is on “life support”,
markets still keep going up.
THE K-SHAPED ECONOMY
The lefty GUKsters
determined that inequality... whether in the U.S., the U.K. or the entire
West... is to blame. Wealthier Americans continue to
spend while lower-income Americans try to manage their budgets.
The most recent evidence of this came through a report from the
New York Federal Reserve, which showed that while low-income Americans
have cut down on
their gas usage amid the Iran war, high-income Americans haven’t changed their
gas consumption at all.
Economists have started to refer to this phenomenon as the “K-shaped” economy to
represent the bifurcated experience of Americans whose wealth is tied to the
stock market, and have thus been doing really well over the last few years, and
those who are not.
The vast majority of the stock market is owned by just a small
chunk of Americans: the top 10% income percentile in the US owns 87.2% of the
market. The bottom 50% own just 1.1% of all stocks.
“Our consumers, which sit at the top of the ‘K’, are continuing to
invest in travel, it’s their priority, and they want to have that experience,”
Ed Bastian, the Delta Air Lines CEO, told CNBC last
month when the company announced its quarterly earnings, noting that revenue
from Delta’s premium offerings doubled over the last year.
“Though the rising stock market has kept a handful of Americans
happy and spending, recent polls show that a majority of Americans
currently disapprove of
Trump’s handling of the economy, and 63% said they specifically blame Trump for
recent high gas prices.
GUKsters Lauren Aratani and Andrew Witherspoon report that the
answer might well lie in tech companies are spending hundreds of billions on
AI investments, with no end in sight. Thousands of datacenters are being built around
the country. This colossal investment in AI has been immune to the geopolitical
events seen over the last few years.
Now, just seven companies out of the S&P 500 carry 30% of the
index’s weight. All of them are tech behemoths who have heavily invested in AI
in recent years: Alphabet (Google’s parent company), Amazon, Apple, Meta,
Microsoft, Nvidia and Tesla.
Three AI startups, OpenAI, Anthropic and
SpaceX, the parent company’s for Elon Musk’s xAI, are all planning trillion-dollar IPOs for this year.
“Just three IPOs would be larger than the whole dotcom bubble,” Kedrosky said. “That money has to come from somewhere. So what’s going to happen is you’re going to see massive
selling in a host of equities because institutions want to be able to buy these
things.”
Perhaps the limeys are hoping to make
lemonade from a strange, strange situation... but it also may just be that not
only will the tech boom crash the economy, it will also implement a replacement
of those dirty proles with machines which will put the 99 percent in their
places... be they prisons or graves.
WRAL News (Releigh,
NC), conjoined with the Associated Press, also differentiated between the
working classes (increasingly strained) and the investors (increasingly
enriched... albeit on perilous roller coasters).
The Labor Department’s April findings showed
that, while inflation continued targeting oil by the barrel and gas by the
gallon at the pump, the rate of rising slacked off. In March, gasoline price rose 21.2%, setting
off a wave of worries that increased exponentially as one thumbed down the
wealth indices of Joneses; April’s uptick (5.2%) was still hefty, but only
about a quarter of the March spike occasioned by the closing of the Straits of
Hormuz.
Other indices are starting to react to Hormuz
– the higher oil and gas prices mean higher transport costs... thus higher
prices for food, clothing and myriad commodities (some already impacted by
tariffs) as well as petroleum derived fertilizers impacting spring planting and
guaranteeing higher grocery costs for at least the rest of 2026. (May 15, ATTACHMENT NINE)
The
number of Americans filing for jobless aid rose last week but remains
historically low despite the economic uncertainty caused by the war in Iran.
Despite
relatively few layoffs, the labor market appears to be stuck in what economists
call a “low-hire, low-fire” state. That has kept the unemployment rate low at
4.3%, but left many of those out of work struggling to find new employment.
Retail sales were down and housing prices
flat as the trend towards mortgage rates edged lower while the stock markets
began falling from
its records Friday and joining a worldwide stock market drop as higher oil
prices sent a shiver through the bond market. Stocks that had been caught up in
the euphoria around artificial-intelligence technology that rose sharply for
most of the week, led the decline Friday.
“Bond markets convulsed on Tuesday, pushing the rates on U.S.
Treasuries to levels not seen since the global financial crisis nearly 20 years
ago, as investors grew increasingly anxious about rising inflation because of
the war in Iran.
“The yield on the 30-year Treasury note rose to 5.18 percent on
Tuesday, its highest level since 2007. Bond yields move inversely to prices.”
The New York Times (Wednesday, ATTACHMENT TEN) reported that the
rising rates, which are pushing up borrowing costs for governments, homeowners
and businesses, “could be a critical pressure point for the Trump
administration as it continues to pursue its campaign against Iran, which has
pushed up oil prices worldwide.
“The last time President Trump faced such turmoil in the Treasury
market was after he announced in April last year that he would raise tariffs on
nearly every U.S. trading partner. The steepening rates were cited as a primary
reason that Mr. Trump later backed down from many of his most draconian proposals.”
CNBC compiled this and other data into charts
which indicated more trouble ahead, the longer the war drags on.
“American
households are going to continue to struggle trying to manage through this, and
that’s going to be the case for the foreseeable future,” said Mark Zandi, chief economist at Moody’s. (ATTACHMENT ELEVEN)
The
sudden and steep rise is an example of how the cost of jet fuel is being passed
directly to travelers, said certified financial planner Stephen Kates, a
financial analyst at Bankrate.
“Consumers
are currently trapped in a ‘double squeeze,’ wrestling with both the acute pain
of the gasoline price spike and the slow rise in other core budget items,”
Kates said. “Households will find it harder to shift budget dollars from one
category to another when most major categories are becoming more expensive at
the same time.”
Even
if more oil tankers get through the Strait of Hormuz, it may be a while before
the whole supply chain starts working again, said certified financial planner
Stephen Kates, a financial analyst at Bankrate.
(See
the charts, graphs and tables here.)
“If we get some resolution, optimistically,
within the next few weeks, it then might be two months for things to start to
normalize,” said Brian Bethune, an economics professor at Boston College.
“The
pessimistic scenario is at least double that or even longer — that could be six
to nine months to get back to where we were in January or February,” he
predicted as the increasing price of diesel increased trucking costs of food to
the groceries.
“Fertilizer is another key
export through the Strait of Hormuz, threatening to raise prices for
farmers.
“You can see the pass-through gaining momentum,” Zandi said.
As to the incoming Fed Reserve Chair, “(t)he latest inflation reading reinforces
expectations that the Federal
Reserve will keep interest rates unchanged for a while — doing
little to ease consumers’ current affordability
challenges.
“The
trajectory of inflation will not immediately reverse, even if geopolitical tensions
ease, making it highly unlikely that we will see any interest rate cuts this
year,” said Bankrate’s Kates.
NBC,
looking forward to next week’s quarterly earnings reports from Home
Depot, Lowe’s, Walmart and Target are expected to offer “one of the clearest
snapshots yet of how U.S. households are navigating an economy increasingly
under strain from soaring gas prices, stubborn inflation and elevated borrowing costs.” (NBC, Wednesday, ATTACHMENT TWELVE)
Economists, investors and journalists will
parse the financial results and the accompanying commentary from corporate
leaders looking for explicit signs of strain: “Are shoppers trading down to
cheaper products? Delaying home improvement projects? Or pulling back on
discretionary purchases to prioritize essentials?”
And, resorting to the “K-shaped economy”, a
report by the Bank of America Institute, cited by the Peacock, found debt and
debit spending rising sharply found lower- and middle-income consumers “were
increasingly pulling back on discretionary spending categories like dining and
entertainment, while wealthier households — boosted by strong stock market
gains and rising home equity values — continue to spend at a healthy pace.”
Worst afflicted by the downward push on inflation some seniors
and retirees are resorting to “survival mode” as Social Security and pensions
(for those who have them) fail to keep up with the costs of food, power and
shelter – even if their home mortgages have been paid off.
WWBT
in Richmond, Va. interviewed retirees, indlucing one
who asked: “how many people there are out there that are truly in panic
mode?” (ATTACHMENT THIRTEEN)
“I
consider myself to be very fortunate, because I know that there are, Lord knows
how many people there are out there that are truly in panic mode,” said retired
insurance worker Becky Minton.
Minton
says she’s learning to cope with this expensive reality but hopes the younger
generations aren’t in the same situation when they’re her age.
Market Watch (Wednesday, ATTACHMENT FOURTEEN) called inflation a “triple threat”; Jay Sharifi, CEO of Legacy Wealth Management, citing “increased withdrawals, taxes and how those parlay into depleting savings” as the factors.
“The
first thing we need to consider is the weight of all three of these on the
middle class and understanding the burden of taking care of the next two to
three decades in retirement, which can potentially be the most expensive phase
of retirement,” says Sharifi.
He
recommends hiring financial advisers, opening Roth accounts, “qualified
longevity annuity” and choosing S&P500 plans to protect your nest egg. “(S)omeone who
invests too conservatively might not keep pace with inflation, says certified
financial planner Mark Humphries at Sentinel Financial Planning.”
Those
who cannot hire financial planners, lack nest eggs or pensions and bank plans
are just shit out of luck.
Inflation
and its consequences are also variable geographically, as they are
demographically.
An AI
overview from “X” says that the United States national inflation rate sits at
3.8% annually, but regional and local variations exist. The Northeast and
Pacific regions generally experience higher inflation due to housing and energy
costs, while the Midwest, South, and Mountain regions tend to hover closer to
or below the national average.
(ATTACHMENT FIFTEEN) Various
links to fiscal analyses of regional inflation can be found at links: 1, 2, 3, 4, and 5.
Broad treands
include the following...
·
Northeast:
Tends to see the highest inflation rates in the country (averaging over 3.5%
annually). Steep price increases are largely driven by older housing markets
and a heavy reliance on imported energy.
·
The West (Pacific & Mountain): Shows wide divergence,
with Pacific coastal states (like California) experiencing the highest living
costs nationwide, while Mountain states show slightly lower and more moderate
year-over-year gains.
·
The South: Experiences moderate to lower-than-average
inflation rates. While certain large metro areas have seen higher growth,
states in the South benefit from generally lower regional price parities and
cheaper building costs for housing.
·
The Midwest: Generally tracks at or
slightly below the national average. Midwestern cities and rural areas usually
see more stable housing and utility costs compared to the coasts. [1, 2]
Inflation by commodities from Visual
Capitalist (Jan 26, 2026, ATTACHMENT SIXTEEN) report that, at the end of 2025, motor vehicle insurance has seen the largest
price increase since 2019, rising more than 56%.
Gas heating was next (electricity fifth),
followed by vehicle maintenance and coffee.
Inflation for milk and alcohol was relatively low, but the VCs chose not
to mention eggs.
The numbers have gone sideways in 2026, due
to Hormuz, and may well get even stranger.
Gouging
the poor through higher rents have risen 30.8% since 2019, outpacing both “all items” inflation and
the CPI excluding food and energy.
INTERNATIONAL
The Council on Foreign Relations (April 15th
ATTACHMENT SEVENTEEN) published a Tax Day “Global Inflation Tracker” for those
who might be considering emigration for reasons of inflation surpassing
income... perhaps a cheap tropical paradise where $10/day is a living wage, or
pension... or for other reasons.
Their interactive maps (see here)
tracks inflation from the 2020 Covid pandemic, through the wars in Iran and
Ukraine to the present inflationary days.
PARTISAN POSSESSIVE POLITICS
And as inflation makes some richer, more poorer, the countdown to November’s midterm elections
is drawing a landslide of partisan political advertising – mainly from the
haves, but also a fillip of foundation-sponsored progressive partisans and
candidates... not to mention the watchful and wary media, either making an
effort to promote a “united” states, or just make arguments for its side, color
(geographic or human) and constituency
Thus MS
NOW published a manifesto from Rep. Ro Khanna (D-Ca), deriding President
Trump’s contention that inflation was a price that need be paid for preventing
Iran from having nuclear weapons.
(Tuesday, ATTACHMENT EIGHTEEN)
Trump’s now-famous quote that he “doesn’t think
about Americans’ financial situation” has gone viral, bacterial and positively Ebolic in the week since it was posted.
“The reality is that Trump has no vision to improve Americans’
lives,” Khanna accused.
As of
Tuesday, the President’s worst crime... liberals contended... has been his
Putinesque toadying to President Xi since his Beijing holiday - accompanied by
Wall Street oligarchs who
have “shown their willingness to sell out American industry so long as the
profit margin is big enough. 2026 / 11
“Rather
than investing in America, our president is trying to sell out our industries
by forming a
board of investment with China. We need a leader who has a
vision and will build up American industry, not ask China for investment that
will devastate American workers.”
He
added farmers, migrants, schools and sick people to his roster of victims,
calling for a new New Deal “to help American workers
deal with the threat posed by AI.”
On the right, the stout and studly New York
Post doubled down on the contention that inflation was “bad news, but not grim: The
main cause is obvious, and it won’t last.”
(May 14, ATTACHMENT NINETEEN)
The
solution is to win the war with Iran
the way we did in Venezuela, and are itching to do in Cuba – whether that means
duplicitous diplomacy engineered by son-in-law Jared, or just an outright
invasion and conquest.
Spreading
the snark, “Speaker-emerita Nancy Pelosi hypes that inflation is “skyrocketing,”
yet she said no such thing at the same point in the Biden years (15 months in),
when it was 8.3%.
“That was the
result of the Biden-Pelosi federal-spending binge, “stimulating” an economy
already soaring post-pandemic; getting the rate down,” the Post said, would
take long months of harsh Federal Reserve interest-rate hikes.
“Inflation’s
been reasonably tame so far under President Donald Trump,” the Post boasted,
“and far better than under the last guy.”
Fox (May
12, ATTACHMENT TWENTY) also blamed Pelosi, and some asses (as well as RINO
traitor MTG) for “dogpiling” Trump on inflation.
"From the pump to the grocery store, the
President’s reckless war of choice in Iran is hurting the American people. With
inflation skyrocketing, working families are being forced to pay the price for
Trump’s chaos — while he focuses on his billion-dollar ballroom," Pelosi
declared in a post on X.
Fellow Californ
Rep. Ro Khanna asserted in a post that: "Trump promised to bring prices down. Prices
under his policies are up. Inflation is 3.8 now. It was 3.0 when he started.
His betrayal of his base in launching a war in Iran has been an absolute
disaster."
And former baser Greene joined Rep. Pramila
Jayapal, D-Wa who declared in a post on X that “(i)nflation is accelerating because of Trump’s illegal war
that is skyrocketing gas prices. We need to stop this war NOW,"and
Fox nemesis Hakeem Jeffries who told Pubs not to “politicize pump pain under
Biden.”
White House spokesman Kush Desai said, "President
Trump has always been clear about temporary disruptions as a result of
Operation Epic Fury... President Trump’s long-term economic agenda continues to
deliver despite these disruptions: drug and hospital services prices are
declining thanks to the President’s Most-Favored-Nation and price transparency
initiatives, while trillions in investments continue to drive robust real wage
growth for manufacturing and construction workers.
“The Trump administration remains
laser-focused on delivering growth and affordability on the home front while
working to eliminate the Iranian nuclear threat,” but
even Fox Business host Larry
Kudlow on Tuesday told National Economic Council (NEC) Director Kevin Hassett that the rising annual inflation
rate was “lousy”. (The Hill, ATTACHMENT TWENTY ONE)
What does an NEC director say on
a day like today “when the CPI is coming out so poorly?” asked Kudlow.
Lisa Kudrow, meanwhile, told Pedestrian TV
(21.A) that the residuals the cast of “Friends” earns every year is “a f**k tonne.”
And a summary of the BLS Consumer Price
Indices for April included opinions from the right (most of whom are still
faulting Bidenomics but increasingly worried about
Trump’s perceived indifference to the voters) while Jonathan Chait of the
leftist Atlantic grasped on to Trump’s remarks when POTUS, “probably by mistake, said
something honest the other day.”
Appearing on the White House lawn Tuesday afternoon, Trump was
asked by a reporter to what extent Americans’ financial situation was
motivating him to make a deal with Iran. “Not even a little bit,” Trump replied,
before elaborating: “I don’t think about Americans’ financial situation. I
don’t think about anybody.” (May 14,
ATTACHMENT TWENTY TWO)
The
statement has been drawing heat... if not very much light... on print,
televised and social media ever since.
AXIOS, also a week ago yesterday, reiterated the remark
(ATTACHMENT TWENTY THREE) with commentary that the
President “currently has no clear way to square his
desire to end the war on his terms with the need to rein in inflation and keep
the stock market humming in an election year.”
Well, one for three as of today would get a
baseball player into the All Star Game even if, as Axios predicts, the nuances are “certain to be lost in the
campaign ads Democrats cut highlighting the quote.”
CNN (ATTACHMENT TWENTY FOUR)
compared Trump’s inflation problem to Ol’ Goneaway Joe’s – except that, absent Covid (if present
Hormuz) opinionator Allison Morrow contends that it’s “self-inflicted”.
“Then
came the war with Iran — an unpopular conflict from the start,” (although even
rabid Democrats stood up and cheered when American military power deep-sixed Tehranian nuclear capacity... whether for good, or just for
a while... and terminated the wicked Ayatollah Khameini). Only after we realized that his replecements (a damaged son and heir fronting for a gang of
fanatic jihadists eager to massacre their own people to preserve their “Death
to America” cult) were even worse, could Morrow’s premises that the war was
“only deepening Americans’ economic frustrations” be validated.
While
diplomats dance and play games in Pakistan (or Qatar, or Turkey) the most
recent Consumer Price Index report showed prices rising 3.8% year-over-year —
up sharply from February’s 2.4% annual rate, before the US and Israel began
attacking Iran.
Then,
CNN reported, came “the even hotter hot mess of the Producer Price Index, which
tracks wholesale prices that businesses pay one another and tends to foreshadow
changes to consumer prices. That inflation gauge hit a 6% annual rate in April
(vs. 4% in March).”
“Not even Biden’s harshest critics can argue in good
faith that he somehow caused a global pandemic before taking office or that his
policies prompted Russia to invade Ukraine,” Allison compared, albeit with
“fair critiques of Biden’s handling of the
aftermath of those two inflationary events,” which motorvated
voters to return 45 to the White House as 47... “having campaigned on the
economic grievances of regular Americans when inflation was trending steadily
downward.
While much of the dissatisfaction, plummeting poll numbers and
rebellious Republicans can be blamed on the fact that the war took 20% of the
world’s oil supply offline virtually overnight, Morrow continued, “there’s more
to these inflation reports than a one-time shock.”
Specifically she named the cost of “services”— as in, “prices
for rent, health care, car insurance, airfare, hotels, restaurants, etc.” Rents and housing prices, in particular,
simply transferred more money from the have-nots to the haves... leading
Heather Long, chief economist at Navy Federal Credit Union, to say: “I don’t
know how you tell such a rosy story if we have another month or two of services
inflation up 0.5% a month.”
And again, howsoever random, Trump’s tariffs continue, taxing US
businesses who are increasingly passing the difference to consumers.
“In just two years, affordability — the weapon that Trump
wielded against Democratic foes President Joe Biden and Vice President Kamala
Harris in 2024 — has become an incumbent’s curse,” seconded Axios’
Stephen Collinson.
And that leaves the Fed as the last, best
hope... or fear... of slowing the inflationary landslide.
Yet another Axioyster...
Neil Irwin... heaped more praises upon the departing (from the Chairmanship, if
not the Board) Powell.
“In his eight years at the helm of America's
central bank, Jerome Hayden Powell has guided the U.S. economy through extreme
tumult and fought off unprecedented presidential efforts to undermine the
Federal Reserve's independence,” Irwin gushed – citing his dedication to “duty
and public service”, work ethic and “an underlying sensibility that seems
almost from another time.”
Extolling Feddie
Powell’s biographical highlights – his “accidental” appointments by three
Presidents, his Republican supporters like Janet Yellen and Steven Mnuchin, the
popular meme of "Money Printer Go Brrr"
(a popular meme wherein a cartoonish version of Powell shoots “endless cash out
from his press conference podium” and his discourses and
speeches – including "Monetary
Policy in a Changing Economy," known in central banking
circles, eight years later, as the "guided by the stars speech." (ATTACHMENT TWENTY FIVE)
Irwin does admit that, by late 2021, “it
was becoming evident that the Fed had misjudged how sustained and deep-seated
the inflation problem was turning out to be.”
Powell was worried that an inflationary
psychology was setting in that could have built on itself, “and was willing to
promise the possibility of pain to prevent that from happening.
He held out hope that inflation could be
brought down without a recession, but needed to signal to the world that the
Fed would tolerate pain in order to achieve price stability.”
But as it turned out, Irwin wrote, “the
aggressive rate hikes of 2022 and 2023 caused some pain, but not a recession.”
Powell also dined on TACOs... specifically
the DoJ first threatening to indict him on criminal
charges, then backing off after Republicans warned they might not confirm Warsh – calling the legal actions against him
“unprecedented in our 113-year history.”
Despite those mistakes as above, Irwin
applauded the former Feddie Chair’s deep
sense of public purpose — “seeking at every turn to make sure Americans can get
a job, rely on the value of a dollar, and count on their central bank to make
its decisions for the right reasons.”
Tanglish
takeaways amidst the Wall Street Journal, however, deemed Powell’s tenure “a notable failure,” the
board wrote – and the New York Sun, said “blame Bidenomics and big government for today’s
stubbornly high inflation,” because it’s important to remember “why
this spurt of rising prices has hit consumers right in the nose — er, wallet —
if we are going to solve the affordability crisis.”
Bidenomics was the primary villain… the Sun’s Stephen Moore promoted, but
with a warning: “(t)he solution isn’t just to get the oil flowing through the
Persian Gulf. We also have to reduce government spending right now… If
Republicans don’t start watching their Ps and Qs, as the old saying goes, we
could see another Biden-type inflation surge with voters mad as hell.”
And
the libertarians at Cato cited the Economist/YouGov May Day polls showed 25% of
Americans approve of the way Donald Trump is handling inflation/prices
while 69% disapprove — “a net of –44%, lower than any point in either Biden or
Trump’s presidencies,” proves voters didn’t just want lower inflation; “they
wanted prices to fall.”
Tangle’s
left-wing correspondents (Attachment One, above) blamed the war (naturally),
contending “the economy is worse for consumers than for large companies” and
that Warsh will prove as ineffectual as Powell in
handling inflation.
In
the centrist Bloomberg, John Authers said that
the real change in the Fed was Warsh’s replacement of the “ultra-Trumpy
Stephen Miran.”
The AI
shock (was) strong enough to help the stock market reach record heights this
morning, and withstand interest rates where they are, “while the combination of
rising inflation and stable employment should be enough to convince even the
current administration that lower interest rates are not called for just now.”
But in the genuinely progressive MS NOW, Ali Velshi argued
that “for many Americans, the recession is already here.”
Citing the “K-shaped economy” (above), Velshi called consumer
sentiment in May the worst it has ever been…So what’s going on? The simplest
way to understand it is this: There isn’t one American economy right now, there
are two.”
Adopting the liberal contention that the rich are getting richer
and the poor are getting poorer, Velshi adapted the maxim to reflect DJI board
member (and, in “Black Helicopters”, third-party Presidential candidate) Jack
Parnell’s differentiation between the profiting Wall Street parasites (now
swelling to include the AI job and energy pirates) as against a suffering and
increasingly angry working class.
The
ultrarich, whose spending has ballooned, don’t care what money costs,” wrote
Liz Hoffman in Semafor. “Neither do the tech
companies fueling the AI boom.”
Tangle Senior Editor Will Kaback (above) said
that, while “(o)pinions vary on whether the potential benefits of attacking
Iran justify this disruption... there’s no longer much debate that this war is
directly responsible for heightened economic pain.
“The
question now is how bad it will get — and for how long.” The answer may
well lie in Beijing... or, in Washington?
“Incoming Fed Chairman Kevin Warsh has made it clear he has made the
president no promises: Despite being more bullish on the outlook for the
economy, the new boss of the central bank says he hasn’t committed to rate
cuts.
“However, everyone from Washington, D.C. to
Washington state knows that President
Trump wants lower interest rates — but the argument for cutting is
only getting more difficult to sell.
“Inflation is not moving in the right way for
a cut, and, this week, shorter-term treasuries also moved in an inconvenient
direction for lowering.” (Fortune, May
15, ATTACHMENT TWENTY SIX)
The news in the past 24 hours a week ago
(repeated, in even higher detail yesterday) also hasn’t done much to alleviate
concerns that sticky inflation will cool anytime soon. “Remember that the
latest consumer price inflation (CPI) report came in at 3.8%—well above the
Fed’s 2% target, first introduced by Warsh’s mentor,
former Fed Chairman Ben Bernanke.”
Fortune’s Eleanor Pringle cites the usual
suspects: Hormuz, the failure of the China summit and the supply chain; Joseph
Brusuelas, chief economist at RSM, telling Fortune that: “In
his confirmation hearing, Warsh testified that
‘inflation is a choice.’ He may get the chance to prove he actually believes
it.”
The Associated Press profile and bio of Kevin
Warsh (May 13, ATTACHMENT TWENTY
SEVEN) depicts him as an “inflation hawk”, but one who has aligned
himself with the President as a booster of AI and other new technologies that “can
boost productivity and economic growth without igniting inflation.” Former chair Jerome Powell, much to Trump’s
displeasure, has chosen to remain on the board citing Trump's
"unprecedented'' attacks on the central bank's independence. Although
Powell's term as chair is ending, his term as a Fed governor doesn't expire
until 2028.
Powell's continued presence could make things
awkward for Warsh who “comes from central casting,”
the President said. The graduate of Stanford
and Harvard Law is married to Jane Lauder, daughter of billionaire cosmetics
heir and major Republican donor Ronald Lauder, but also worth at least $100M
through his own investments in Polymarket and
SpaceX... and was previously a runner-up to Powell for the Senate-confirmed
post of Fed Chair in 2017. Trump has since said that he was given bad advice
regarding Powell.
Warsh, who
has also been working as a visiting economics fellow at the Hoover Institution,
a conservative think tank located at Stanford University, has criticized the
Fed in interviews, calling for “regime change” and assailing Powell “for
engaging on issues like climate change and diversity, equity and inclusion,
which Warsh said are outside the Fed’s mandate.”
Phynancial
pundits at the Motley Fool (May 14, ATTACHMENT TWENTY EIGHT)
suggested that his tenure “might not be great news for the market” given
the double-barrelled pressures of surging inflation
and an unstable economy.
“Raising interest rates could help cool
rising inflation, but it can also reduce consumer spending and slow economic
growth,” the Fool maintains... “a particularly risky move when the unemployment
rate is already elevated.”
The Senate confirmation vote was 54-45 with
one Democrat, John Fetterman of Pennsylvania, joining all Republicans to place
President Trump’s nominee atop the central bank “after more than a year of
unprecedented pressure from the White House for lower interest rates.” (Yahoo, May 14, ATTACHMENT TWENTY
NINE)
“The April CPI release underlines the
challenge facing Warsh … and the distance the
inflation data needs to travel back in favor of disinflation before the FOMC
could consider reducing rates further,” Krishna Guha, head of economics and
central banking strategy for Evercore ISI, told the Yahoos. “It also gives a
little more ammo to the hawkish minority who think the next move is as likely
to be up as down.”
During his confirmation hearing, Warsh said the US economy is still dealing with ripples
from a pandemic-driven spike in inflation and that the Fed needs a different
framework for inflation.
“Warsh seems less
concerned about inflation persistence than many current Fed officials,” said
Christian Floro, market strategist at Principal Asset
Management. “His preference for trimmed mean and median inflation measures
implies he sees underlying inflation pressures as materially cooler than
headline data would suggest.”
Boston Fed president Susan Collins said in a
speech Wednesday that she thinks the Fed will need to maintain its “current,
slightly restrictive monetary policy stance for some time.”
“More than five years of above-target
inflation has reduced my patience for ‘looking through’ another supply shock,”
Collins said.
How jobs, inflation, and the
Fed are all related
Yahoo cited warnings from Collins’ Boston, as
well as the Chicago and Clevelane Feds as to whether
the present “string of shocks” (Covid, Ukraine, Iran, oil) is
really each short-lived, “or whether they are building on one another and
creating an inflation mindset for consumers and businesses.”
And, despite the President’s support, a Trump
– Warsh showdown may be in the cards.
“There
will be no majority for renewed consideration of cuts until the Fed has been
able to confirm tariff inflation is falling into the rear
view mirror, oil is passing through with only moderate and expected
one-time impacts on core inflation, core services (excluding) housing is
finally starting to cool in a persistent manner, and AI spillovers are not
changing the overall trajectory of disinflation,” said Guha — who also warned
that dynamic will threaten tension with Trump.
CNBC interviewed traders and gamblers who
assessed the probability of a rate hike by December at 51%, rising to 60% by
January, 2027 and 71% by March. (May 14,
ATTACHMENT THIRTY)
With the Fed experiencing rare rate-related
divisions, economists
participating in the Survey of Professional Forecasters predicted that second-quarter inflation will top
out at 6%, “a huge boost from the last
estimate.”
U.S. News and World Report reported that the
Fed was “on hold” during regime change – at its April meeting, the Federal Open
Market Committee (FOMC) kept the federal funds target rate at 3.5% to 3.75% for
a third consecutive meeting, extending a pause that followed three
quarter-point cuts late in 2025.
Governor Stephen Miran...
acknowledged the Trumpiest member of the Fed who was
ousted to make way for Warsh after Powell swore to
finish out his term... had wanted a quarter-point rate cut and was hauled away
still defending more cuts.
But bank presidents Beth Hammack of
Cleveland, Neel Kashkari of Minneapolis, and Lorie Logan of Dallas objected to
something more subtle: a line in the policy statement they read as an implicit
easing bias. Rather than signal the next move would be a cut, all three argued
the committee should acknowledge that the next change could go either way – up
or down – given rising energy prices tied to the war in Iran and persistent
inflation above the Fed's 2% target.”
USNWR interviewed Jay Jacobs, U.S. head of
equity ETFs at BlackRock, who said: “Despite a stable unemployment rate,
payroll growth has been effectively flat over the past year and concentrated in
a narrow set of sectors, including health care and education.”
Whereas Dr. Thorne (Attachment Five, above)
fingered the real root of inflation to be residential rents, which are driving
the bottom half of Americans to the poorhouse, the streets or the prisons,
“monetary economist” William Luther of Florida Atlantic University adds another
pibix to the mix... calling the root cause of
inflation the “huge excess spending in the overall economy.” (Fortune, May 19, ATTACHMENT THIRTY TWO)
So where is all this excess money coming from? “A major source is a ramp in government spending: the CBO forecasts that federal outlays will rise a lofty 6% in FY 2026 (ended in September),” according to Fortune’s Shawn Tully. An obvious contributor, also cited by Powell, is the “king’s ransom being lavished on AI data centers,” projected to reach almost $1 trillion this year, multiples of the number three years ago. To boot, consumers—especially the well-to-do gorged with the affluenza of money manipulation, as opposed to commodities production — continue to spend big time on everything from dining out to health and wellness. The “wealth effect” from a stock market led by an S&P that’s gained 28% in the past year also likely emboldens (at least the rich) folks to reach deeper into their wallets.
“But what about the trajectory of money available for pursuing what’s for sale in the supermarkets and auto lots? Total spending, or aggregate demand, rose at a jackrabbit 6%. That’s 3.34 points faster than output, and translates into inflation, pretty much matching the CPI numbers. And the just-released data suggests that the wave of excess money is waxing fast and unless checked, will put more upward pressure on those tabs at the checkout counter.
Luther points to a perverse result of
Powell’s view that as during post-COVID period, it’s passing disruptions that
account for the spikes. From October to December of last year, the Fed reduced
its benchmark rate by half a point, from a range of 4.00% to 4.25%, to 3.50% to
3.75%. It hasn’t changed since. But since the start of January, the CPI’s gone
from 2.6% to 3.8%, and the expected yearly inflation rate on the 5-year
Treasury looking forward has increased by 0.42%. That inflation component
explains the entire increase in what the 5-year is paying. What’s known as the
“real rate” has actually fallen. “And it’s the real rate that influences
economic decisions,” says Luther.
The Fed, Luther contends, has several options
available to tackle the overall Big Spend. “It can raise the Fed Funds rate,
making borrowing more costly and curbing the lending that fuels expenditures as
varied as auto purchases and new plant construction.” Or it could embrace quantitative tightening,
where it sells mortgages and Treasuries from its balance sheet, “soaking up
funds that would otherwise get spent.”
The good news, he says, is that incoming
chair Warsh will steer a substantially better course
than his predecessor—by in part making it a top priority (to) keep aggregate
demand on a steady course. “He’s a great pick,”
says Luther. “He has great knowledge of financial markets, and it’s hard to
imagine that inflation would have gotten as high under his leadership as it did
under Powell’s.”
The bad... according to the liberals at MS
NOW... is that the majority of Americans (who are not the big spenders coddled
by merchers) endured a consumer price index that
reached its
highest level in almost three years (as the inflation rate
climbed above wage growth), nearly
identical news on the “core personal consumption expenditures
price index” and, finally, wholesale prices also posted their highest
annual increase – also in more than three years.
MS NOW doesn’t have solutions, but it does
have plenty of blame to dish out on the President and his scandalorians.
Consequently,
consumers already stressed... and likely to be further strapped if Warsh tightens credit as much as he seems to be planning...
have no recourse except to hold on, somehow, stay alive and take their revenge and retaliation in
November’s midterms.
Multiple national polls show
that more than three-quarters of Americans believe Donald Trump’s policies have
made the cost of living worse, not better.
Republicans, Benen predicts, are “likely to
suffer a backlash at the hands of angry voters as the midterm elections draw
near,” perhaps potentiated by the Presidential primary purge of moderates like
Rep. Massie (in Kentucky) and Sen. Cassidy (in Louisiana).
Reiterating the now viral postings of disconcern about American finances, Benen
concludes that the President is “peddling a combination of ignorance and
self-defeating lies that the public recognizes as nonsense, not because of
fact-checkers but because of their own life experiences.”
|
|
||
|
Friday, May 15, 2026 Dow:
49,526.15 |
President Trump
and Dictator Xi walk through a Chinese Communist garden and POTUS says the
Chinese will “pressure” Iran to behave so “fantastic” deals will emerg. Back in the USA, SecState Marco says the
Chicoms prefer to take over Taiwan “voluntarily” – for which they will buy
200 fighter jets now, more later. Also
food. Political prisoners like Jimmy
Lai are discussed while Trump’s entourage of businessmen are called “the
cream of the crop.” Elon Musk’s six year old son charms the Chicoms. In other global affairs, Djonald
UnForgiving says he wants to indict 94 yer old Raul Castro for shooting down
planes back in the last century and offers a reward of “humanitarian aid” as
the power grid fails. Israel denies
abuse of Palestinian prisoners and sues the New York Tmes. Supremes pivot, repeal repeal of abortion
pills by 7-2 vote. DoJ says Yale
discriminates against w hite applicants.
Also Asians. Kash Patel,
presumably sober, accused of snorkeling around the sunken U>S>S>
Arizona. And a bipartisan vote calls
for pay suspension for Senators during coming gumment
shutdowns/ |
|
|
Dow: Closed |
Civil
rights marchers protesting gerrymandering that wipes out from one third to
one half of the Congressional black representation by repeating the march
across the Edmund Pettis Bridge in Alabama.
This itme, they are not attacked by the
police. California AyGee Rob Bonta says conditions
in ICE detention centers are illegal and inhumane. DHS disagrees. Fifty migrants have died since Trump took
office and the contractor for Alabama prison health goes bankrupt, ending
medical care. And down a ways in Florida, the Alligator Alcatraz is shut down. President Trump settles his 10B lawsuit
against himself for 1.7B (which will be financed by taxpayers). He will not take the money himself, but his
Truth and Justice Fund will dole out payments to persons who claim to have
been injured or had their feelings hurt by Old Goneaway Joe. These are rumored to include pardoned One
Six unsurrectionists including those who beat and even killed Capitol police. Trump returns from China and in goes
Vladimir Putin. Taiwan calls for $14B
in arms sales, but POTUS waffles – some think he wants a deal with Xi... they
end support for Iran and we give them Taiwan.
Back home, he celebrates as RINO Sen. Bill Cassidy is defeated in the
Louisiana primary by MAGAnauts... next, he promises; next, he promises, goes
renegade Republican Thomas Massie in Kentucky. |
|
|
Sunday,
May 17, 2026 Dow: Closed |
It’s time
for Sunday talkshow talk. On ABC’s “Week”, Rep. Jamie Raskin (D-Md) warns
that “utterly lawless” TaJF will finance extreme MAGA insurrectionists like
Proud Boys and Oath Keepers – says Republicans will pay at the polls in
November (or not, depending on gerrymandering). Since Trump has made $1.6B in office, it’s
time to strengthen emolument rules. The bedeviled Massie (above) blames
“outside billionaires” for his challenge and also blames the Jews – but says
Trump opposition will help his fundraising.
Round Tabler Donna Brazile calls Trump “tone deaf”, RINO Chris Christie
advises Trump to “pray” in November, but also says that Cassidy sucked up on
almost everything, so his defeat was a good ting. NYT’s Michelle Cottle says POTUS cannot
stand anybody disagreeing with him on anything while Sara Isgur says he
defeated the Reputlican Party before defeating Dems and jacked up his revente
and retaliation to Eleven. Trump supporter Jamieson Greer blames
Biden for peril to Taiwan and says He now addresses China tariffs “sp the
President doesn’t have to.” IntSec
Doug Burgum denies the Golden Ballroom is a vanity project; nor is his
Triumphal Arch, nor painting the reflecting pool blue. Historic Preservationist Carol! Quillen
replies that Trump is a tenant in the White Houe,
not its owner. Greer, on “Face the Nation” later, says
the President is “exploring different tools” on trade, “finalizing a fact
sheet and is “Focused on musutally beneficial
trade. Taiwanese Ambassador Alexander
Yui says Chinese aggression has been going on for 77 years and all we want to
do is “maintain our sovereignty.” |
|
|
Monday,
May 18, 2026 Dow: 49,526.15 |
Long Island Railroad strike strands 270,000 Manhattan workers; costs $61M/day. Talks fail over pay and health benefits but may resume. Or not. Workers enduring a 3 hour commute into Gotham will face gas prices that keep rising as the war continues; and will likely do so after Trump posts an AI video of him pressing the “red button”. A lucky few find buses. National average gas price $4.47/gal. and
rising heading into Memorial Weekend.
Triple A says drivers are increasingly running out of gas on the
highways. POTUS makes it official; his $1.7B Truth
and Justice Fund settlement (of his $10B lawsuit against Himself) will pay
out a million dollars to each of the One Six insurrectionists amidst Proud
Boys, Oath Keepers and Nazi-ers... AyGee Todd Blanche will administer the goodies as top
Treasury lawyers resign in protest.
The DoJ promises to keep fighting “those who
wrong America” while AOC calls it “outrageous corruption.” Most Republicans are silent. |
|
|
Tuesday,
May 19, 2026 Dow: 49,363.88 |
Trump postpones his alleged invasion of Iran on the counsel of our now-allies in the MidEast, even after Iranian drones blow up UAE nuclear plant. Gas prices up another nickel to $4.52 and Gas Buddy predicts another dime by Memorial Day. Record airline bookings despite fare increases and fees... influencers say to folf clothes before packing and don’t bring extra shoes. There’s good news in Gotham for travelers
as the Long Island Railroad strike is settled. Service resumes in time for the afternoon
commute home and the Knicks’ game. Teenage terrorists attack Islamic Center
near San Diego, wounding several and killin a
security guard, hailed
as a hero who saved kindergartners The
shooters escape but are hunted down by police and commit ssuicide. Parents and classmates say they were
disturbed, and probably Neo-Nazis. It’s primary election day in six states,
MAGA accuses liberals of paying homeless people to vote as the Urban League
offers free rides to the polls and marchers for voting rights cross the
Edmund Pettis bridge in Alabama.. DefSec HegSick campaigns
against RINO Thomas Massie in Kentucky.
|
|
|
Wednesday,
May 20, 2026 Dow: 50,009.35 |
Trump celebrates as Massie is defeated in
Kentucky. Defiant in defeat, he calls
Trump a King. The DoJ
drops all tax charges against his family - Democrats call it corruption, as
does John Thune (R-ND), Djonald UnSnelled calls
inflation “peanuts” and asks critics if they want to see the world explode. Bonds are
selling at highest levels in two decades as inflation jumps to 6.75%. The Dow crashes through the 50K ceiling and
a bill passes in the House that reportedly favors home sales to human beings
as opposed to institutional investors.
Google Deep Mind in $900M overhaul; CEO Dennis Haskins calls it ten
times more important than the Industrial Revolution and AI data centers will
ultimately save consumers far more than they are presently costing their
utility bills. He also sneers that the
future “is not with” working people.
META cuts 800 jobs. Holiday
travel troubles (including floods, fires, hail) have a new friend – a huge
sinkhole opening at LaGuardia, halting flights and stranding ticketholders. |
|
|
Thursday,
May 21, 2026 Dow: 49,652.14 |
CIA chief John Ratliff tells Cuba to surrender 94 year old Raul Castro to be tried for shooting down two
American planes thirty years ago. Cuba
reminds him of the Bay of Pigs. Harry Dunn
and Daniel Hodges, two DC cops, sue Trump for propsing
to pay out millions to One Six rioters.
“People who hurt cops get money all the time,” say trump allies like
Mike Caputo as more GOP senatos revolt and Trump
polls sink to 33% to 64% negative.
Some allies like Mike Lindell eager to be paid. Humanoid
robots made in China are selling out to hobbyists in the USA because they are
cheap, can walk around and spy on America.
Congress wants to regulate them as energy agents. As prices drop from $28 to $14,000, media
calls them “really fun and really creepy.’ At the
movies, “Michael” biopic returns to the top, dethroning “Devil” as fans
anticipate the next Star Wars sequel starring “Grogu”
as Baby Yoda tomorrow. In sports,
winners are Sinner (Italian Open), Rai (PGA), NBA finalist Knicks, Cavs, OK
City and San Antonio, while NHL semifinalists include Colorado, Vegas,
Montreal and Carolina. |
|
|
Despite
the war, the inflation and consumer misery, investments like the Dow moved to
record heights. Inequality rocks!!! |
|
|
|
THE DON JONES INDEX CHART
of CATEGORIES w/VALUE ADDED to EQUAL BASELINE of 15,000 (REFLECTING…
approximately… DOW JONES INDEX of June 27, 2013) Gains in indices as improved are noted in GREEN. Negative/harmful
indices in RED as are their designation. (Note – some of the indices where the total
went up created a realm where their value went down... and vice versa.) See a
further explanation of categories HERE |
|
ECONOMIC INDICES
|
(60%) |
|
|||||||
|
CATEGORY |
VALUE |
BASE |
RESULTS by PERCENTAGE |
SCORE |
OUR SOURCES and COMMENTS |
||||
|
INCOME |
(24%) |
6/17/13 revised 1/1/22 |
LAST |
CHANGE |
NEXT |
LAST WEEK |
THIS WEEK |
THE WEEK’S CLOSING STATS... |
|
|
Wages (hrly. Per cap) |
9% |
1350 points |
5/15/26 |
+0.08% |
6/26 |
1,898.17 |
1,898.17 |
https://tradingeconomics.com/united-states/average-hourly-earnings
37.41 |
|
|
Median Inc. (yearly) |
4% |
600 |
5/15/26 |
+0.063% |
5/29/26 |
1,130.50 |
1,131.22 |
http://www.usdebtclock.org/ 52,058 091 |
|
|
Unempl. (BLS – in mi) |
4% |
600 |
5/15/26 |
-2.33% |
5/26 |
542.60 |
542.60 |
||
|
Official (DC – in mi) |
2% |
300 |
5/15/26 |
-0.03% |
5/29/26 |
216.39 |
216.45 |
http://www.usdebtclock.org/ 7,252
254 |
|
|
Unofficl. (DC – in mi) |
2% |
300 |
5/15/26 |
+0.16% |
5/29/26 |
249.68 |
249.28 |
http://www.usdebtclock.org/ 13,724 746 |
|
|
Workforce Participation Number Percent |
2% |
300 |
5/15/26 |
-0.009% -0.0005% |
5/29/26 |
295.89 |
295.89 |
http://www.usdebtclock.org/ In
162,769 754 Out 105,058
111 Total: 267,827 865 60.774 60.76 |
|
|
WP % (ycharts)* |
1% |
150 |
5/15/26 |
-0.162% |
5/26 |
149.98 |
149.98 |
https://ycharts.com/indicators/labor_force_participation_rate 61.80 |
|
|
OUTGO |
(15%) |
||||||||
|
Total Inflation |
7% |
1050 |
5/15/26 |
+0.6% |
6/26 |
906.30 |
906.30 |
http://www.bls.gov/news.release/cpi.nr0.htm +0.6 |
|
|
Food |
2% |
300 |
5/15/26 |
+0.5% |
6/26 |
257.89 |
257.89 |
http://www.bls.gov/news.release/cpi.nr0.htm +0.5 |
|
|
Gasoline |
2% |
300 |
5/15/26 |
+5.4% |
6/26 |
195.66 |
195.66 |
http://www.bls.gov/news.release/cpi.nr0.htm +5.4 |
|
|
Medical Costs |
2% |
300 |
5/15/26 |
+0.6% |
6/26 |
268.48 |
268.48 |
http://www.bls.gov/news.release/cpi.nr0.htm
+0.6 |
|
|
Shelter |
2% |
300 |
5/15/26 |
+0.0% |
6/26 |
239.10 |
239.10 |
http://www.bls.gov/news.release/cpi.nr0.htm
+0.0 |
|
|
WEALTH |
|||||||||
|
Dow Jones Index |
2% |
300 |
5/15/26 |
+0.57% |
5/29/26 |
384.90 |
387.10 |
https://www.wsj.com/market-data/quotes/index/ 50,009.97
295.66 |
|
|
Home (Sales) (Valuation) |
1% 1% |
150 150 |
5/15/26 |
+1.005% +2.18% |
5/29/26 |
129.54 267.74 |
130.84 273.58 |
https://www.nar.realtor/research-and-statistics Sales (M): 3.98 4.02 Valuations (K): 408.8 417.7 |
|
|
Millionaires (New
Category) |
1% |
150 |
5/15/26 |
+0.149% |
5/29/26 |
137.11 |
137.31 |
http://www.usdebtclock.org/ 24,218 254 |
|
|
Paupers (New Category) |
1% |
150 |
5/15/26 |
+0.038% |
5/29/26 |
135.03 |
134.98 |
http://www.usdebtclock.org/ 36,874 888 |
|
|
GOVERNMENT |
(10%) |
||||||||
|
Revenue (trilns.) |
2% |
300 |
5/15/26 |
+0.147% |
5/29/26 |
475.67 |
476.37 |
http://www.usdebtclock.org/ 5,459 467 |
|
|
Expenditures (tr.) |
2% |
300 |
5/15/26 |
-0.07% |
5/29/26 |
291.53 |
291.73 |
http://www.usdebtclock.org/
7,125 120 |
|
|
National Debt tr.) |
3% |
450 |
5/15/26 |
+0.087% |
5/29/26 |
345.97 |
345.67 |
http://www.usdebtclock.org/ 39,243 277 |
|
|
Aggregate Debt (tr.) |
3% |
450 |
5/15/26 |
+0.105% |
5/29/26 |
369.49 |
369.10 |
http://www.usdebtclock.org/ 107,862 975 |
|
|
TRADE |
(5%) |
||||||||
|
Foreign Debt (tr.) |
2% |
300 |
5/15/26 |
+0.16% |
5/29/26 |
253.08 |
252.68 |
http://www.usdebtclock.org/
9,512 527 |
|
|
Exports (in billions) |
1% |
150 |
5/15/26 |
+1.94% |
5/26 |
199.71 |
199.71 |
|
|
|
Imports (in billions)) |
1% |
150 |
5/15/26 |
-2.39% |
5/26 |
135.33 |
135.33 |
|
|
|
Trade Surplus/Deficit (blns.) |
1% |
150 |
5/15/26 |
+4.98% |
5/26 |
234.98 |
234.98 |
|
|
|
ACTS of MAN |
(12%) |
|
|||||||
|
World Affairs |
3% |
450 |
5/15/26 |
-0.1% |
5/29/26 |
469.61 |
470.08 |
Alien animals
attack!... king cobra found in Philippine toilet. Shark eats spearfisher
off Rottnest Is. in Australia. |
|
|
War and terrorism |
2% |
300 |
5/15/26 |
-0.1% |
5/29/26 |
282.88 |
283.16 |
Fat
pro-Iran Iraqi arrested for Euroterrorism. Two teens shoot up San Diego Islamic Center
– kill 3, then themselves. |
|
|
Politics |
3% |
450 |
5/15/26 |
-0.1% |
5/29/26 |
454.21 |
453.30 |
Six
primary elections Tuesday. Trump
nemeses defeated. ICE agent shoots Venezuelan
in Minnesota as Minnesota migrant hunting National Guard redeployed to fight wlldfires. |
|
|
Economics |
3% |
450 |
5/15/26 |
+0.1% |
5/29/26 |
427.91 |
427.06 |
US
mortgage rates hit 9 month high. UK
partisans riot on affordability. LIRR
strike called, then settled. Swatch
buyers riot in NYC, pepper sprayed by police.
Pabst now selling pickle flavored beer. James Murdoch buys Vox and New York
Magazine. |
|
|
Crime |
1% |
150 |
5/15/26 |
+0.1% |
5/29/26 |
203.16 |
203.36 |
Kars 4 Kids
called a Jewish scam. Migrant accused
of leaving child with violent uncle says son would still be alive if ICE
hadn’t detained and deported her. Tik
Tok influencer girl and her dad hire a hitman (from the FBI) to kill her boy
band ex. Oops! |
|
|
ACTS of GOD |
(6%) |
|
|||||||
|
Environment/Weather |
3% |
450 |
5/15/26 |
-0.1% |
5/29/26 |
278.86 |
278.58 |
Extremes
dominated with record heat in Philadelphia, Boston in 90’s, but Demver in 40’s and tornadoes active from Canada to
Mexico. Cop City (Simi Valley, CA)
burning in the Sandy Fire; nearby the Verona Fire – southeast aways it’s the Bain Fire.
(Call for Batman!) And in
Texas, it’s the Stinky Fire. (Call for Pepe le Pew!) |
|
|
Disasters |
3% |
450 |
5/15/26 |
-0.1% |
5/29/26 |
464.00 |
463.54 |
New
teenage trend of shooting cops with water guns called dangerus. Two die as plane
crashes into Akron home, firefighter killed others injured in Maine lumber
mill explosion. 8 killed, 25 injured
in Bangladesh train/bus crash. |
|
|
LIFESTYLE/JUSTICE INDEX |
(15%) |
|
|||||||
|
Science, Tech, Education |
4% |
600 |
5/15/26 |
-0.1% |
5/29/26 |
620.45 |
619.83 |
Surgeon
General calls upon kids to reduce social media time and “live real
lives.” High costs and low job
prospects causing more youth to skip college.
Disney AI surveillance facial recognition cameras threatening
visitors. CEO of Google booed at grad
ceremony. Dr. Shaq graduates from LSU. |
|
|
Equality (econ/social) |
4% |
600 |
5/15/26 |
+0.1% |
5/29/26 |
669.69 |
670.36 |
Blacks
recreate 1965 voting rights march after repeals, gerrymandering. Swalwell scandal provokes bipartisan,
all-female Congressional scheming. |
|
|
Health |
4% |
600 |
5/15/26 |
-0.1% |
5/29/26 |
413.81 |
413.40 |
TVdocs say blueberries, olive oil and sardines healthy,
alcohol and donuts – not. NM docs say American brains turning to plastic –
some compare to the lead pipes that killed the Roman Empire. MV Hondius
hantavirus kills three so far; UnHondius variant
kills Washington Stater, Ebola toll up to 600 in Africa as American Dr.
Stoddard evacuated to Germany. Straus
metallic ice cream recalled. Costco
patio swings recalled. Kroger cheese
n’ garlic croutons recalled.
Kraft/Heinz reformats Jell-O to remove toxic food coloring. |
|
|
Freedom and Justice |
3% |
450 |
5/15/26 |
nc |
5/29/26 |
479.20 |
479.20 |
California
arrests parents of kids for involuntary manslaughter on illegal e-bikes. Elon Musk’s suit against Chat GPT tossed because
he filed too late. |
|
|
CULTURAL and MISCELLANEOUS
INCIDENTS |
(6%) |
|
|
||||||
|
Cultural incidents |
3% |
450 |
5/15/26 |
+0.1% |
5/29/26 |
591.70 |
592.29 |
“Michael”
back at B.O. #1, beating “Devil” with Grogu
tonight. Rolling Stones video used AI
to evoke the past. Sports winners –
Sinner (Italian Open), Rai (PGA). NBA
final four are Knicks, Cavs, Spurs and Thunder. NHL Vegas, Colorado, Montreal and
Carolina. Aubrey Bracco wins $2M and a
car on Survivor Fifty. RIP: pioneering gay Congressman Barney
Frank, NASCAR driver Kyle Busch, singer (and killer) Claudine Longet, Mango Fashion CEO Isak Andic killed by son to
protect his interitance. Also RIP at 177: Schlitz Beer and, at age
11, the Colbert Show killed by Trump Estrangement Syndrome. |
|
|
Miscellaneous incidents |
4% |
450 |
5/15/26 |
nc |
5/29/26 |
552.85 |
552.85 |
Burger
King changes its iconic slogan to “Have it the way.” Teenage pranksters risk death by shooting water pistols at cops. Carolina child bitten by “exotic animal”. |
|
ATTACHMENT ONE – FROM TANGLE
THE
LATEST ECONOMIC NEWS
On Tuesday,
the Bureau of Labor Statistics (BLS) released its Consumer Price Index (CPI) report
for April, which showed an increase of 3.8% from a year earlier, slightly
higher than economists’ expectations. The latest inflation figures represent
the highest annual increase since May 2023, up from 3.3% in March. On a
month-to-month basis, prices rose a seasonally adjusted 0.6% after rising 0.9%
in March. Core inflation, which excludes volatile food and energy prices, rose
0.4% for the month, its highest pace since January 2025.
Reminder: The
CPI tracks price fluctuations for 80,000 items in a fixed basket of goods and
services, representing everything from gasoline to apples to the cost of a
doctor's visit. You can read our coverage of past inflation reports here.
A
3.8% surge in energy prices accounted for over 40% of the monthly increase
for all items, while food prices climbed 0.5% and the shelter index rose 0.6%.
Airline fares, household furnishings, education and apparel prices all
increased in April, while medical care, new vehicles, and communication service
prices declined. Separately, the producer price index, which measures the average change in
selling prices received by domestic producers, rose a seasonally adjusted
1.4% for the month — its largest monthly gain since March 2022 — and was up 6%
on an annual basis.
Lastly,
on Wednesday, the Senate confirmed Kevin Warsh
to be the next Federal Reserve chair by a 54–45 vote. Warsh,
56, served on the Fed’s Board of Governors from 2006–2011 as its youngest-ever
governor, acting as a key liaison to Wall Street during the 2008–09 financial
crisis.
Warsh is set to take over
from current Federal Reserve Chairman Jerome Powell, whose term ends on May 15.
President Donald Trump announced his nomination of Warsh in January, but Sen. Thom Tillis (R-NC) blocked the nomination from advancing until
after the Department of Justice dropped its probe into Powell for the cost of
the renovation to the Federal Reserve’s headquarters. During his confirmation
hearing, Warsh faced intense scrutiny from the Senate Banking Committee
over whether he would maintain the Federal Reserve’s independence from
President Trump, who has publicly pushed for aggressive interest rate cuts and
criticized Chairman Powell for opting to keep rates unchanged amid inflation
concerns. The Federal Reserve Open Market Committee will next meet to decide on interest rates on June
16.
We’ll
get into what the right and left are saying about the latest economic news
below, then Senior Editor Will Kaback gives his take.
What the right is saying.
The
Wall Street Journal editorial board wrote about “Jerome Powell’s inflation legacy for
Kevin Warsh.”
“[Warsh] may be wondering why he ever signed up for this
duty. Tuesday’s consumer inflation data for April show he is inheriting one of
the most difficult monetary tasks since Paul Volcker took over from G. William
Miller in 1979,” the board said. “Some 40% of the [consumer price] increase was
related to the Iran war’s energy shock. But that’s little consolation since
so-called core prices, sans food and energy, rose 0.4% in April, an
acceleration from 0.2% in March, and 2.8% for 12 months.”
“The
latest inflation report marks a dispiriting end to Jerome Powell’s eight-year
tenure as Fed Chair. The press focuses mainly on President Trump’s relentless attacks
on Mr. Powell and praises him as a stalwart of Fed independence. We’ve
supported him against those unfair assaults. But Fed chiefs are measured above
all by their stewardship of the economy, especially price stability. On those
grounds, Mr. Powell’s tenure has been a notable failure,” the board wrote. “The
real challenge for Mr. Warsh will be navigating the
economic reality he inherits of renewed inflation, an oil shock affecting
consumer confidence, and a President who always wants lower interest rates but
higher tariffs.”
In
The New York Sun, Stephen Moore said “blame Bidenomics
and big government for today’s stubbornly high inflation.”
“The
new consumer prices report showing a 3.8% price rise in April confirms what
Americans have been complaining about for months: Inflation is squeezing family
budgets,” Moore wrote. “Oil and fertilizer supply disruptions in the Middle
East are driving up prices here at home. Yet that’s only part of the inflation
story. Consumer prices overall are up nearly 30% since Covid-19 derailed the
American economy six years ago… It’s important to remember why this spurt of
rising prices has hit consumers right in the nose — er, wallet — if we are
going to solve the affordability crisis.”
“If
you’re angry about the high price of nearly everything, Bidenomics
is the primary villain… During Covid-19 and its aftermath, Uncle Sam spent more
than $4 trillion. Remember the Build Back Better Act, CHIPS and Science Act,
Inflation Reduction Act, and other ‘stimulus’ bills? Every penny of that
spending blitz was borrowed and essentially printed,” Moore said. “Here’s the
impending political and economic danger for Republicans. The solution isn’t
just to get the oil flowing through the Persian Gulf. We also have to reduce
government spending right now… If Republicans don’t start watching their Ps and
Qs, as the old saying goes, we could see another Biden-type inflation surge
with voters mad as hell.”
In
Cato, Ryan Bourne, Jai Kedia,
and Nathan Miller wrote “President Trump’s approval on
inflation is now worse than President Biden’s ever was.”
“The
Economist/YouGov’s May 1–4 poll shows 25% of Americans approve of the way
Donald Trump is handling inflation/prices while 69% disapprove — a net
of –44%, lower than any point in either Biden or Trump’s presidencies,” the
authors said. “That’s a remarkable development. Biden oversaw an inflation peak
of 9%, which Trump hasn’t approached, yet Trump’s disapproval has surpassed
Biden’s worst… Voters didn’t just want lower inflation, though; they wanted
prices to fall.”
“More
recently, inflation has accelerated again. The consumer price index increased
0.6% in April after rising 0.9% in March, meaning prices are up 3.8% in the
past year… Some of those price rises were to be expected. War in Iran has
driven gasoline prices 28.4% above year-ago levels, and that mostly explains
the 20.7% surge in the highly salient airline fares. But the concern with oil
shocks is that they can pass through into virtually all other prices,” the
authors wrote. “These numbers are particularly problematic for Trump given that
this is an election year where affordability will be at the forefront of
voters’ minds.”
What the left is saying.
In
Bloomberg, John Authers said “Warsh
could find inflation too hot to handle.”
“US
inflation is too hot for comfort. The numbers for April reveal that the
headline rise in consumer prices reached 3.8%, continuing an upward trend that
started before the Iran war,” Authers wrote. “The
greatest problem is, of course, the spike in energy prices driven by the
blockage of the Strait of Hormuz. Energy prices are always erratic and there is
little monetary policy can do to control them, which is why central banks tend
to look at core inflation... However, inflation excluding energy is still
rising, while an array of other statistical measures of core price increases
are also turning upward.”
“Fittingly,
the inflation data dropped just as the Senate confirmed Kevin Warsh as a governor of the Fed, to replace the ultra-Trumpy Stephen Miran,” Authers said. “He arrives just in time for two-year
Treasury yields to touch 4%, their highest since June last year, buoyed by the
strong market expectation that the fed funds rate cannot move far from where it
is now… There are worse inheritances for Warsh. The
AI shock is strong enough to help the stock market withstand interest rates
where they are, while the combination of rising inflation and stable employment
should be enough to convince even the current administration that lower
interest rates are not called for just now.”
In
MS NOW, Ali Velshi argued that “for many Americans, the recession is
already here.”
“The
old-fashioned way of thinking about a recession is that it’s two consecutive
quarters of negative growth in gross domestic product, GDP being the broadest
measure of all economic activity in the country. Not only is that view of a
recession outdated, it also may not fit an economy that, for a whole lot of
Americans, is already feeling like one that’s in a recession,” Velshi said. “In
May, consumer sentiment was the worst it has ever been…So what’s going on? The
simplest way to understand it is this: There isn’t one American economy right
now, there are two.”
“Economists
call this a K-shaped economy, because if you draw it on a chart, the line for
wealthier households invested in the stock market is going up (the top of the
K), and the line for everyone else is flat or going down (that’s the bottom),”
Velshi wrote. “Across every income group, real spending has actually turned
slightly negative in recent months. So what’s holding
the number up? Two things. The first is the government. Defense spending
crossed $1 trillion this year, roughly a 15% jump from the year before, driven
in large part by the war with Iran… The second is a major economic boom in a
single narrow sector: companies pouring money into building data centers for
artificial intelligence.”
In Semafor, Liz Hoffman wrote “the Fed’s most powerful economic
lever is losing its edge.”
“[Kevin
Warsh is] signalling a
willingness to lower interest rates — either because the president wants him
to, or because he thinks current conditions justify it. It’s not entirely up to
him, and the market is losing faith in that outcome anyway, but the bigger
question is whether it would matter,” Hoffman said. “The US economy is less
sensitive to interest rates than it used to be. The long shift from
manufacturing — which responds to higher borrowing costs (factories are
expensive) in a way that services don’t — has blunted one of the Fed’s most
powerful economic levers. The ultrarich, whose spending has ballooned, don’t
care what money costs. Neither do the tech companies fueling the AI boom.”
“Another
kink in that policy-transmission hose is that the Fed only controls overnight
interest rates, not the longer-term levels that determine what money costs in
the real economy. Expectations of inflation (if you’re a pessimist) or growth
(if you’re an optimist) have kept longer-term borrowing costs higher than you’d
expect after six rate cuts,” Hoffman wrote. “The economy is being tossed around
by supply shocks, which central bankers can’t control, rather than the demand
shocks they can. The Iran war is a shock to the supply of oil. AI is a shock to
the supply of knowledge. The Trump administration is a shock to the supply of
certainty. Put it together and central bankers are pushing on a string, and
getting less bang for their buck on interest rates.”
My take.
Reminder:
“My take” is a section where we give ourselves space to share a personal
opinion. If you have feedback, criticism or compliments, don't unsubscribe.
Write in by replying to this email, or leave a comment.
Senior
Editor Will Kaback: Economic policymaking is
hard, and it has a tendency to make even the smartest decision-makers look out
of their depth when predictions don’t pan out. Tangle has always covered
debates about the health of the economy, and I can honestly say — whether I’ve been
a reader, researcher, editor, or writer for those editions — that I typically
come away struggling to figure out which competing theories I find most
persuasive. But every so often, the data from moments like this one tell a
clear, simple story.
The
war in Iran has disrupted global energy markets, driven up prices, and led to
rising inflation here in the United States. Unlike, say, the debate over Bidenomics or the tax policy put forward in
the One Big Beautiful Bill, this interpretation doesn’t seem to be a
source of disagreement. Opinions vary on whether the potential benefits of
attacking Iran justify this disruption, but there’s no longer much debate that
this war is directly responsible for heightened economic pain.
The
question now is how bad it will get — and for how long.
To
state the obvious, the longer the war lasts — and the Strait of Hormuz remains
effectively closed — the longer inflation will remain a problem. Unfortunately,
that may not be on the immediate horizon. As Isaac documented on Tuesday, the productivity of
peace talks (and length of the conflict) is difficult to gauge, but President
Trump’s recent comments suggest the fighting could soon ramp
back up. Additionally, new reports about Iran’s regained missile
capabilities suggest they aren't ready to fold anytime soon.
Alternatively,
the U.S. and Iran could soon reach a deal that reopens the Strait of Hormuz and
restores some degree of stability to global markets. President Trump is
currently meeting with Chinese President Xi Jinping at a high-stakes summit in
China, where the two are expected to discuss the war. China is playing a
behind-the-scenes, but pivotal, role in the conflict right now. It’s
reportedly planning to provide Iran with weapons and
could benefit from selective exceptions to Iran’s shutdown of the strait. A
Chinese supertanker sailed out of the Persian Gulf yesterday —
now, it’s testing the U.S. Navy’s blockade.
The
drama on the high seas raises the stakes of a rare face-to-face standoff
between the two superpowers. Secretary of State Marco Rubio said Trump will push Xi to take a more
active role in mediating an end to the conflict, saying, “It’s in their
interest to resolve this.” Rubio is alluding to the economic pain China will
continue to experience if the Strait of Hormuz remains closed, but that’s only
one input China is weighing. The longer the U.S. remains engaged in Iran, the
more the U.S. military’s resources will be depleted. Plus, with each passing
day, Trump’s domestic political challenges become more acute. Xi and China are
ultimately balancing their own economic challenges
against the strategic benefit of a weakened United States.
Even
in the best-case scenario where the Trump–Xi summit produces a deal to pressure
Iran to reopen the strait, inflation will get worse before it gets better.
Energy markets have suffered massive shocks, the kind that don’t immediately
rebound as soon as Trump declares the war over — or even after the strait
reopens.
An
analysis from Oxford Economics published in April found that inflated oil costs caused by
conflicts persisted for two to three years. In the Ukraine war, fuel prices in
the U.S. remained elevated for roughly a year after Russia’s
full-scale invasion before moderating to pre-war levels. That’s encouraging
because it suggests energy markets can absorb the effects of upheaval over
time. But it’s also deeply discouraging because a year of rising gas prices is
a long time, and we still don’t know how bad the Hormuz crisis will get.
Many
Americans cannot, or will not, tolerate $4.50 gas (or worse) for an extended period,
which creates an obvious political problem for the president and his party as
we approach the midterms. Trump recently commented that he doesn’t “think about
Americans’ financial situation” in relation to the Iran war. That makes for
easy fodder for attack ads, but I’m also not sure how true it is behind the
scenes. More likely, the White House hasn’t figured out how to reconcile the
president’s insistence on continuing the war with a coherent strategy for our
mounting economic challenges. But if inflation runs hot for another month (or
two, or three), there will be no hiding from political reality in November.
In
fact, that reality is already here. As Zachary Basu wrote in Axios
this week, Trump is facing a “five-alarm economy” — surging prices, shrinking
paychecks, mounting debt, cratering consumer confidence, and increasing
pessimism among small businesses. Despite their redistricting gains,
Republicans will probably lose the House, and you can draw a
straight line from rising prices to that forecast. What’s more, the president
seems to have learned little from his predecessor, whose administration
suffered politically for downplaying inflation and casting it as “transitory.” Again, the
connection between the Iran war and inflation is obvious (to say nothing of
the impact of Trump’s tariffs), and publicly, the president seems
deeply indifferent to the pain the conflict is causing. Forget the politics of
it all; that posture is just plain aggravating to me as a citizen.
Personally,
the most unnerving aspect of our economic outlook is how clearly it
demonstrates the fragility of the systems that make life “normal” — an
understanding that was laid bare during Covid and now feels like a wound being
reopened. Consider these stories from the past week: A massive Japanese snack
company is switching to black-and-white packaging because
the Iran war has disrupted supplies of an ingredient used in its typical
packaging ink. The cost of food staples like tomatoes has risen up to 30% from pre-war levels, largely because
of diesel prices. Healthcare supply chains have been similarly impacted. Auto industry insiders are warning that we’re weeks away from mass
shortages of motor oil. Virtually all forms of transport — not just cars —
are getting significantly more expensive. And a U.S. airline just shut down, unable to weather rising jet-fuel
costs.
My
three years at Tangle have instilled a kind of reflex to check myself when I
start to default to worst-case scenario thinking. But when I try to find
optimistic outlooks here, I’m not seeing many compelling arguments. In our
research for today’s edition, the most pointed defenses of the economy boiled
down to blaming President Biden and arguing that Trump can bring
down inflation by going after grocery price gouging. One is an admission of the situation,
while the other is a potential solution to only one element of the problem, one
that’s pretty far down the priority list at the moment.
Wherever
we’re headed, the big new variable in the mix is Kevin Warsh.
When we covered his nomination back in February, I wrote that his singular focus on
containing inflation as a Fed governor made him an intriguing candidate to lead
the central bank at a time when the president was pushing aggressively for
interest rate cuts. That was before we attacked Iran, and before the March and
April inflation reports. Warsh’s inflation-curbing
instincts could be well suited for this moment, but they could quickly bring
him into conflict with President Trump. Will he buck the president if inflation
continues to spiral? Or will he turn around and push for rate cuts?
It
feels odd to ask these questions about someone assuming a position that’s
supposed to be fully independent of the president, but after the way Jerome Powell’s term ended, it’s necessary to consider his
replacement’s fealty to the White House. Ultimately, President Trump’s
anti-inflation strategy hasn’t arrived yet, and the new Fed chair will have an
important role to play in whether Trump can execute it.
ATTACHMENT TWO – FROM
1440
|
PRICES UP,
WAGES DOWN |
|
Inflation outpaced wage growth in April for the first time in three
years, according to a Labor Department report released yesterday.
Inflation-adjusted hourly wages fell 0.3% year-over-year, as inflation
climbed 3.8%—its fastest increase in three years. Economists
largely attribute rising inflation to the energy chokehold caused by the Iran
war's effective closure of the Strait of Hormuz, a critical shipping route for
about one-fifth of the world’s oil and natural gas. Energy costs climbed
roughly 18% from a year earlier, with gasoline up 28% and airfare up 21%. Meanwhile,
core inflation, which excludes food and energy prices, rose 2.8%
year-over-year. The Federal Reserve closely watches this less volatile number
when weighing interest rate cuts. Yesterday's report bolstered expert predictions that the central bank will not lower interest
rates until mid-next year. (Explore the connection between interest rates and
inflation here.) Energy isn't
the only culprit: Tomatoes are almost 40% more expensive than last
year. How is this possible? |
ATTACHMENT THREE – FROM NBC
INFLATION HITS 3.8%, OUTPACING WAGE GROWTH
FOR THE FIRST TIME SINCE 2023
Increased energy costs are “accounting for
over forty percent of the monthly all items increase,” said the Bureau of Labor
Statistics.
By Steve Kopack May 12, 2026, 5:00 AM
EDT / Updated May 12, 2026, 9:17 AM EDT
Inflation surged to 3.8%
in April, its highest level in nearly three years, according to data released
Tuesday, as the war in Iran causes a ripple effect across the economy and
energy prices surge.
April inflation rate surges to 3.8% amid uncertainty
in the Middle East
As inflation continues
to accelerate, it’s eating into Americans’
wages at a rapid clip. April’s inflation
rate means prices are now rising faster than wages for the first time since
2023, which could aggravate the affordability crisis that has already been
gripping consumers.
The pace of wage gains
has been slowing over the past two years. In November, wage growth continued to
rise at a pace of almost 4%. April’s jobs report, which was released Friday,
showed that wage growth had slowed to 3.6%.
“Inflation is a
regressive tax, which hits the ranks of those who can afford it least,” KPMG
chief economist Diane Swonk said.
The overall rise in
inflation was in line with what economists expected. Month over month,
inflation rose 0.6%.
Core inflation, which
excludes food and energy costs, also rose 0.4% from the previous month, the
Bureau of Labor Statistics said. That was higher than what economists had
expected.
Business News: Trump ethics filing reveals thousands of trades tied to
U.S. stocks
Tuesday morning, the
price of oil had risen more than 70% since the start of the year, and the
average price of a gallon of gas was $4.50.
“The index for energy
rose 3.8 percent in April, accounting for over forty percent of the monthly all
items increase,” BLS said in a statement.
Still, energy prices may
not have yet fully hit prices.
“Energy costs likely
would not start to feed through to core goods prices for at least a few more
months,” Citigroup said in a note to clients Monday.
The BLS also noted
that other energy market-linked prices rose in the month, including airfares
and apparel. Airfares alone rose 20% from a year ago.
The price of jet fuel has
surged 60% since the war with Iran started, according to data from Argus. In
response, a number of airlines, including Delta, United and Southwest, have
increased bag fees. Some international airlines have also implemented
surcharges on ticket prices.
The U.S. Postal
Service introduced a “limited time price change” last month to offset rising
fuel costs.
Tuesday’s report also
showed that other categories, such as “food at home,” or grocery prices, jumped
0.7% in April, while services, which includes transportation, rose 0.5% from
the month before.
The jump in grocery
prices was the highest in nearly four years.
“The rise in diesel
fuel, which touches just about everything, shows up rapidly on grocers’
shelves,” Swonk said. “The jump in diesel costs happened
even faster [than gas prices], ahead of the spillover effects that shortages
can have across supply chains, including fertilizer and the food supply.”
It wasn’t universally
bad news for consumers though. Prices fell slightly in the new vehicles, medical
care, health insurance and communications categories. Price of used vehicles
were flat in the month, and prices for vehicle maintenance also ticked down.
Swonk said the inflation problem is likely to get “worse before it
gets better.”
“The closure of the
Strait of Hormuz is more than an energy shock; it is roiling supply chains
around the world in ways that echo the disruptions we saw during the pandemic,”
she wrote Tuesday.
Before the Iran war,
more than 20% of the world’s energy supply traveled on oil and gas vessels
through the Strait of Hormuz, off southern Iran. Since the war started, ship
traffic has plunged to a trickle.
Swonk said Tuesday’s report and the Hormuz issue suggest that
consumers could continue to feel the ripple of effects of the energy and supply
chain disruptions “well into 2027, even if the strait were to reopen tomorrow.”
ATTACHMENT FOUR – FROM GROCERY DIVE
GROCERY
INFLATION HITS HIGHEST LEVEL SINCE MID-2023
By Sam Silverstein Published
May 14, 2026
Dive Brief:
• Food-at-home prices rose in April at a
2.9% annual clip — their fastest pace of increase in almost three years —
according to Consumer Price Index data released Tuesday by the U.S. Bureau of
Labor Statistics.
• Grocery inflation moved up 0.7% last
month compared with March, when the metric eased slightly on a month-to-month
basis.
• Tomato prices increased nearly 40% in
April compared with the same period in 2025 — the highest rate of inflation
among the food-at-home categories the BLS tracks.
Dive Insight:
Grocery inflation remained
in somewhat of a holding pattern during the final two months of 2025 and the
first quarter of this year, bouncing between a yearly pace of 1.9% and 2.4%,
but that pattern abruptly ended in April.
The annual pace of
food-at-home inflation moved up by a full percentage point last month compared
with March — the largest month-to-month increase for the metric since May 2022,
when prices were skyrocketing and inflation was in double digits. Grocery
inflation came in at 1.9% in March.
Overall inflation hit
3.8% in April, the highest rate since May 2023. The BLS did not release
inflation figures for most categories for October 2025 because of the federal
government shutdown.
Meat prices continued
to play a central role in pushing prices up in April, with beef price inflation
remaining in double digits. Prices for uncooked beef roasts were up almost 18%
last month compared with their level a year ago, while prices for uncooked beef
steaks surged just over 16% and uncooked ground beef prices were up 14.5%.
Shoppers also paid
significantly more for produce in April, as prices for fruits and vegetables
moved up approximately 6%. Fresh vegetable prices were up at an especially fast
clip, rising 11.5% as tomato prices skyrocketed.
Coffee was another
source of pain for grocery shoppers, as the beverage cost almost 20% more last
month than it did a year ago.
On the other hand,
prices for poultry were up less than 1%, with prices for fresh whole chickens
declining nearly 2%. Egg prices, which were a symbol of high grocery prices
last year, fell more than 39%.
ATTACHMENT FIVE – FROM “X”
FOR
THE RECORD: SHELTER, NOT OIL, IS DRIVING INFLATION AND THE FED STILL DOESN’T
GET IT!
By Dr. James E. Thorne... poster
Washington’s
long-running suspicion has now been confirmed: its shelter doing the heavy
lifting in CPI, even as the narrative remains fixated on geopolitics and
gasoline. Roughly 70% of the increase in core services came from shelter alone,
driven by a statistical catch-up rather than real-time housing pressure. Warsh is so badly needed. With a Fed and Wall St still
unable to distinguish embedded domestic demand from index quirks and supply
shocks. Once supply is taken seriously, the absurdity of the consensus becomes
obvious. Rate hikes do not “fix” a supply shock; they deepen it by worsening
bottlenecks, raising financing costs for capacity expansion, and deterring
investment where it is most needed.
The
shelter spike is not a reacceleration in rents, it is a measurement error
coming home to roost. Because the October 2025 housing panel was skipped during
the government shutdown, the Bureau of Labor Statistics effectively assumed
zero rent growth for that month, depressing the level of the index for half a
year. April is simply when those missing observations finally re-entered the
sample, producing a mechanical jump in primary rents and owners’ equivalent
rent, 0.55% and 0.53%, roughly double their usual pace. Strip out that one-time
adjustment and core CPI for April would have printed around 0.26%, a far more
subdued reading consistent with a cooling economy rather than an overheating
one.
Everywhere
outside the war- and AI-affected categories, the data tell the same story. Core
goods are flat to falling, including tariff-exposed imports and housing-related
items sagging under higher mortgage rates. Discretionary services such as car
rentals are in outright deflation.
Consumers are trimming nonessential spending
to cover costlier gasoline and utilities, and businesses lack the pricing power
to push through broad-based increases. This is not a boom in need of restraint;
it is a demand squeeze playing out under the cover of an energy shock and a
shelter misprint.
Meanwhile,
the gold standard of inflation expectations, the 5‑year, 5‑year
forward, is sitting at roughly 2.27%, exactly where a “price-stability” regime
would want it. Inflation expectations are telling policymakers to relax; the
structure of CPI is telling them where the noise is; and yet Wall Street is
still cheering for more tightening to “prove” the central bank’s resolve. The
same Keynesian reflex dominates both the Fed and its loudest market
commentators: treat every relative price move as a demand problem and prescribe
the same cure, higher rates.
That
thinking belongs to the last century. In an economy defined by supply, side
shocks, from wars to AI-driven bottlenecks, the old models reliably misfire.
They encourage central banks to jack up borrowing costs into supply squeezes,
choking off the very investment that could relieve them. The result is slower
growth, weaker productivity, and no meaningful progress on the prices
politicians claim to care about. A new era of supply-side monetary analysis is
not a luxury. It cannot come fast enough.
ATTACHMENT SIX – FROM BARRON’S
GASOLINE PRICES
AREN’T THE ONLY INFLATION THREAT. WATCH HOUSING COSTS.
By Megan Leonhardt
Updated May 11, 2026, 6:03 am EDT / Original May
11, 2026, 3:00 am EDT
Economists say distortions tied to the 2025 government
shutdown could cause shelter inflation to accelerate in April, complicating the
Federal Reserve’s fight against rising prices.
Key Points
All eyes will be on how much further higher gasoline
prices will drive up inflation again in April when the consumer price index is
released Tuesday morning, but it’s the housing component of the report that
investors need to watch.
Core inflation—which excludes food and energy
prices—has been running behind headline inflation in recent months, even before
gasoline prices started their meteoric rise in the wake of the Iran war.
Because core inflation is considered a better gauge of price growth trends,
this has provided some optimism that the U.S. is trending closer to the Federal
Reserve’s 2% target than the headline figures would suggest.
Those cooler readings, however, are largely the result
of softer housing inflation, which is made up of rents and the owners’
equivalent of rent (OER)—a measure of what homeowners would hypothetically pay
if they rented their homes. In fact, housing accounts for roughly 40% of the
core CPI basket excluding used car prices.
Yet those crucial softer readings are likely to
dissipate in April due to data distortions carried over from the 43-day
government shutdown in 2025. During that funding lapse, there was no CPI data
collected in October, which meant that BLS staff penciled in a zero for that
month’s housing inflation. And unlike many prices collected in the CPI, rent
and OER are based on survey panels that are conducted every six months. So that
distorted data has been hanging around until April, when the data from the
latest housing panel survey will be added in.
Economists expect that this distortion could lead to
shelter costs accelerating in April. Over the last three months, shelter has
added on average about a tenth to core inflation. In the April data, Omair Sharif, founder of Inflation Insights, estimates
housing will probably add more like a 0.25 percentage point increase month over
month. “So it’s a pretty big jump–more than double
what it’s been doing the last couple of months,” Sharif says.
Digging into the details, Zillow’s Treh Manhertz estimates that OER will be running at 0.44% in
April, translating into a 3.2% gain annually. He expects rents will rise 0.39%
month over month, adding up to a 2.6% annual advance.
Overall, economists surveyed by FactSet currently
estimate that core CPI rose 0.4% month over month in April and increased 2.7%
year over year. That would be an advance from March’s 2.6% annual gain.
Many economists like Manhertz
expect that once the April correction is in place, housing inflation will
continue to cool as the year progresses. Zillow estimates that the CPI’s index
of rent of primary residence will rise 2.39% over 2026, a substantial slowdown
from the 2.92% gain logged last year.
In fact, the path back to the Fed’s 2% target is
heavily reliant on cooling housing inflation. But that may not be enough. James
Egelhof, BNP Paribas’ chief U.S. economist, says that
while he expects continued gradual cooling in rents and in OER to put some continued
downward pressure on overall core inflation, it likely won’t be enough to
address the sources of heat that are coming in from other sources, such as
tariffs.
“There is an offset coming from rents, but we expect
that to just not be quite enough to get inflation back down to target—even far
out in the future,” Egelhof says. The economy has
been through several large, successive shocks to inflation that have produced a
lot of economic and price volatility. That’s causing prices to simply have more
momentum than they’ve had in the past, he adds.
And housing inflation may not cooperate. Alternate
rent indicators do show that rents are softening. But most focus on growth in
the price of new leases. That’s a bit different from the CPI’s calculation of
rent prices, which heavily skews toward continuing rents, Sharif says. And
there is some evidence that continuing rents are not going to cool much more.
In fact, real estate investment trusts (REITS) like UDR and Mid-America Apartment Communities (MAA) have reported solid new lease gains on
continuing tenant rents in late 2025, and that momentum has continued into
2026.
“We’re getting into a much tougher stretch where the
marginal reduction inflation that was coming from shelter is slowing,” Sharif
says. “We have seen big, big reductions in shelter inflation in the last couple
of years, but the magnitude of that change is slowing, and it’s going to keep
slowing.”
That could pose problems for Fed policymakers, many of
whom have already raised concerns about the potential for
stickier-than-expected inflation in the coming months. If housing inflation
doesn’t cooperate, it leaves officials without much hope that inflationary
pressures can be tamed in the near-term.
ATTACHMENT SEVEN – FROM INSURANCE BUSINESS
FINANCIAL STRESS AND MEDICAL
INFLATION DEEPEN STRAIN ON US WORKFORCE - REPORT
Report points to integrated financial, health and
mental well-being support as the new battleground for group insurers and
brokers
By Josh
Recamara May 11, 2026
Economic
uncertainty and escalating medical expenses are deepening financial stress for
US employees and taking a toll on their mental health, according to Prudential Financial's latest Benefits & Beyond study.
The
research suggested financial pressure is no longer just a budgeting issue.
It is increasingly tied to mental strain and health decisions in ways that can
undermine engagement and productivity.
At
the same time, Prudential highlighted a clear perception gap: while 75% of
employers believe they are doing enough to help employees manage medical costs,
only 46% of employees agree.
The
findings, drawn from the first of three installments in Prudential’s 2026
Benefits & Beyond study, “The Future of Work: Building
financial resilience in an era of rising costs,” come as employer health
costs and employee out-of-pocket expenses are both expected to climb faster
than general inflation through 2026, according to benefits consultants and
healthcare analysts.
Financial stress is widespread - and linked to
mental strain
According
to Prudential, 68% of employees experienced at least some financial stress in
the past 12 months, and 28% said it was a significant or overwhelming
concern. For many, that pressure is feeding directly into mental and emotional
strain: 45% of employees report experiencing more mental stress over the past
year due to financial concerns, rising to 50% among Gen Z.
The
study reinforced a pattent seen across other
workplace surveys - workers who are struggling financially are more likely
to report poorer mental health, changes in health behaviors and difficulty
focusing at work. This raises concerns around
absenteeism and retention at a time when labor markets remain tight in many
sectors and voluntary benefits have become a key tool for attracting and
keeping talent.
“Rising
medical costs are putting pressure on employers and employees alike,
intensifying financial stress across the workforce,” said Jon Trevisan, vice president and head of distribution at Prudential
Group Insurance. “The most successful organizations will likely take a holistic
approach that balances managing costs with delivering meaningful benefits that
support overall employee financial health.”
Medical inflation hits wallets, health decisions and
well-being
Prudential’s
data showed that seven in 10 employees saw at least a 5% increase in their
medical costs over the past year, and nearly one in five experienced hikes of
15% or more. Those increases are not only squeezing household budgets; they are
also influencing how people use care.
Employees
said rising medical expenses significantly affect their financial stress, mental
health and physical health. Other industry research suggested that cost
concerns are leading a growing share of Americans to delay or skip care,
including doctor visits, prescriptions and recommended tests, which can
increase long-term health risks and future claim costs for employers and
insurers.
Against
that backdrop, the disconnect between employer intentions and employee
perceptions is notable. While most employers in the study believe they are
doing enough to help manage medical costs, fewer than half of employees agree,
raising questions about whether plan design, cost-sharing structures or
communication – or a combination of all three – are failing to meet workers’
needs.
Low take-up of employer resources points to engagement
gap
The
report also pointed to limited use of existing support. Only 13% of
employees said they turn to employer resources for help with financial,
medical or mental health challenges, despite employers’ efforts in recent years
to expand benefits and well-being offerings.
“This
research points to a critical opportunity for employers,” said Michael Estep,
president of Prudential Group Insurance. “Connecting financial, medical and
mental health support through clear, ongoing communication and education helps
employees better understand their benefits and feel supported when they need it
most.”
ATTACHMENT EIGHT – FROM GUK
WAR,
INFLATION AND TRUMP’S TARIFFS HAVE SHAKEN THE US. WHY DOES THE STOCK MARKET
KEEP GOING UP?
Wall Street has proved
incredibly resilient to instability, and while consumer confidence has dipped,
shares have soared
By Lauren
Aratani and Andrew Witherspoon Thu 14 May 2026 06.00 EDT
It was a dark Friday for Wall Street on 27
March. Oil prices were climbing and the war with Iran raged on. Markets
responded accordingly, with the Dow and Nasdaq entering correction territory,
falling more than 10% below their peak, after a month of selloffs.
Fast forward seven weeks later to 13
May, and the situation in Iran only looked marginally better. Oil prices were
high, and the strait of Hormuz was still closed. Peace talks with Iran seemed
tenuous, even with the pressures of high gas prices. Donald Trump on
Wednesday said he was “not even a little bit” motivated by Americans’ financial
situation to end the war.
And yet, stock markets have not only
recovered from their losses – they are thriving.
Even before the start of the war, the US
stock market proved incredibly resilient to political and economic instability.
The market has shrugged off the Covid-19 recession and generational-high
inflation, absorbed Russia’s invasion of Ukraine and increasingly turned a
blind eye to Trump’s tariff spats. Everyday Americans continue to struggle with
an affordability crisis and consumer confidence has crashed, but the markets
just keep going up and up.
Yes, Wall Street still has its down
days. But the tech-heavy Nasdaq index has continued to surge amid continued
investment in AI. The index has gone up 11% since the start of the year –
nearly half of the gains that it saw last year. The Dow and S&P 500
continue to bump close to record highs.
Each time investors shake off the latest
shock and reach new highs, questions arise: what is driving this phenomenon,
and how long can this bull market last?
The S&P 500 fell nearly 20% in March
2020, the beginning of the Covid-19 pandemic in the US.
But the stock market started to recover
quickly, especially after the federal government passed three stimulus packages
that totaled nearly $5tn.
Markets started reacting to inflation,
which reached a 40-year high in 2022, and the rising interest rates that soon
came with it. Oil prices were also peaking during this time after Russia
invaded Ukraine.
OpenAI
debuted ChatGPT in November 2022, opening the
floodgates for AI investment and bolstering markets over the next few years.
Donald Trump promised to enact widespread
tariffs as soon as he started his second term. Markets dipped over concerns of
supply disruptions and rising inflation.
Markets enter their current “Taco” (Trump
Always Chickens Out) era, showing resilience amid a whirl of tariff
announcements. Investors, unfazed by the instability, keep spending.
“Taco” briefly appeared to run its course
when the US and Israel conducted strikes against Iran. But once Trump announced
a two-week ceasefire, markets jumped again.
EVERY DAY IS TACO DAY
Some economists point to a mindset that
investors have embraced – that the president will back off of his most extreme
policies: Trump Always Chickens Out, or Taco.
Backtracking threats has been a hallmark
of Trump 2.0, particularly when it comes to tariffs and Iran. When Trump
announced his slate of “liberation day” tariffs, he delayed implementing them
hours after they were announced. He similarly threatened a 25% tariff on eight
EU countries when he was angry about annexing Greenland. Those tariffs were
also called off.
Now, even as Trump says the Iran
ceasefire is on “life support”, markets still keep going up.
But as Eswar
Prasad, a former IMF official and an economist at Cornell, points out, investor
confidence in the midst of the crisis predates Trump and Taco.
“Investors now have a pretty clear view
that if there is significant trouble in the financial system, the [US Federal
Reserve] and the US government will step in and not let things get too deep
into the hole,” Prasad said.
But federal intervention in a crisis,
say the collapse of regional banks such as Silicon Valley Bank, whose depositors were bailed out by the government, can hide risks,
said Prasad, especially when supervision and regulation of financial markets
are weakening.
“This is a concern we already saw with
how ineffective supervision led to problems with Silicon Valley Bank and First Republic” in 2023, Prasad said. “The question is, where is the risk being hidden
right now?”
THE K-SHAPED ECONOMY
Though inflation has come down since its
40-year high in 2022, Americans are still feeling the pain of increased prices.
Amid the war on Iran, inflation has started to go up once again. In April,
annual inflation surged to 3.8%, up from 2.4% in February.
Higher prices would typically mean less
spending among all Americans. But instead, wealthier Americans continue to
spend while lower-income Americans try to manage their budgets.
The most recent evidence of this came
through a report from the New York Federal Reserve, which showed that while
low-income Americans have cut down on their gas usage amid the Iran war, high-income Americans
haven’t changed their gas consumption at all.
Economists have started to refer to this
phenomenon as the “K-shaped” economy to represent the bifurcated experience of Americans whose wealth
is tied to the stock market, and have thus been doing really well over the last
few years, and those who are not.
The vast majority of the stock market is
owned by just a small chunk of Americans: the top 10% income percentile in the
US owns 87.2% of the market. The bottom 50% own just 1.1% of all stocks.
Continued spending from the top has kept
many companies afloat as other consumers cut spending.
“Our consumers, which sit at the top of
the ‘K’, are continuing to invest in travel, it’s their priority, and they want
to have that experience,” Ed Bastian, the Delta Air Lines CEO, told CNBC last month when the company announced its quarterly earnings,
noting that revenue from Delta’s premium offerings doubled over the last year.
Though the rising stock market has kept
a handful of Americans happy and spending, recent polls show that a majority of
Americans currently disapprove of Trump’s handling of the economy, and 63% said they specifically
blame Trump for recent high gas prices.
RISING TIDES LIFT (or drown)
ALL
The release of ChatGPT
in 2022 kicked off a race to build up AI systems and the infrastructure needed
to support them. Tech companies are spending hundreds of billions on AI investments, with no end in sight. Thousands of datacenters
are being built around the country. This colossal investment in AI has been immune
to the geopolitical events seen over the last few years.
Now, just seven companies out of the
S&P 500 carry 30% of the index’s weight. All of them are tech behemoths who
have heavily invested in AI in recent years: Alphabet (Google’s parent
company), Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.
Nvidia, which produces and sells the
microchips needed to power AI, currently tops the S&P 500 and was the first
company to reach a $5tn valuation last fall. Its stock has gone up 1,450% over
the last five years.
The huge amounts of spending in AI in
such a short space of time have raised concerns among those who believe that
there is an AI bubble holding up the stock market. AI spending outpaced consumer spending as a percentage of US economic growth in the first half
of 2025.
“In a weird way, we have the largest
private sector stimulus program in US history,” said Paul Kedrosky,
an investor and research fellow at the MIT’s Institute for the Digital Economy.
“The private sector is spending so aggressively on this one thing.”
The White House is also all in on the AI
boom. Kevin Warsh, Trump’s Federal Reserve chair
pick, has argued that AI is “the most productivity-enhancing wave of our lifetimes
– past, present and future”. Warsh is likely to
advocate for interest rate cuts once he assumes his role as chair, using the
growth of AI to bolster his argument, even as inflation rises.
WHAT GOES UP…
Alan Greenspan, who served as Fed chair
for 18 years, delivered a now-famous speech in 1996 where he warned of
“irrational exuberance” from investors driving markets to unsustainable highs –
what would eventually be known as the dotcom bubble.
Despite Greenspan’s warning, the S&P
500 would go on to double in value after 1996. Then in April 2000, a massive
sell-off began when the profitability of many of the new tech companies came
into question. By 2002, the S&P 500 was at half the level it was just two
years earlier.
Kedrosky believes that the current AI boom could experience a similar bust.
Three AI startups, OpenAI,
Anthropic and SpaceX, the parent company’s for Elon
Musk’s xAI, are all planning trillion-dollar IPOs for
this year.
“Just three IPOs would be larger than
the whole dotcom bubble,” Kedrosky said. “That money
has to come from somewhere. So what’s going to happen
is you’re going to see massive selling in a host of equities because
institutions want to be able to buy these things.”
In other words, investors are placing
all their bets on AI. For Kedrosky, the risk that
comes with this has made him a firm believer that it’s not a matter of whether
the AI bubble will ever pop, but when exactly it will.
“I would cheerfully be wrong. It would
just be the first time in history that we’ve had this kind of a [capital
expenditure] wave and not had it go bad,” Kedrosky
said. “So history’s on my side.”
ATTACHMENT NINE – FROM WRAL
NEWS, RALEIGH, NC
AMERICA IN FOCUS: HOTTER
INFLATION DOESN'T STOP CONSUMERS, INVESTORS
In
the past week, many Americans remained focused on the economy, inflation and
how those forces could impact their lives. Trips to the grocery store or gas
station are more painful than they were last year, and that is impacting the
decisions of both households and businesses.
By
MICHELLE CHAPMAN — AP Business Writer Posted 5/15
In
the past week, many Americans remained focused on the economy, inflation and
how those forces could impact their lives. Trips to the grocery store or gas
station are more painful than they were last year, and that is impacting the
decisions of both households and businesses.
Here’s
a snapshot of prominent economic data and news that occurred over the past week
and what it potentially means for you.
GAS PRICES FUEL INFLATION SURGE OF 3.8% IN US
U.S.
consumer prices climbed sharply again last month as the 10-week war with Iran
pushed energy prices higher.
The
Labor Department’s consumer price index rose 3.8% from April 2025, according to
data released Tuesday. On a month-to-month basis, April prices rose 0.6% from
March as gasoline prices rose 5.4% during the month; the month-over-month gain
was down from a 0.9% increase from February to March.
Labor
Department figures showed that gasoline prices are up more than 28% compared to
a year ago. AAA says the average gallon of gasoline costs motorists more than
$4.50 a gallon, about 44% more than it cost last year at this time.
WHOLESALE INFLATION CAME IN HOT DURING APRIL
U.S.
wholesale inflation came in hot last month. Producer prices rose 6% from a year
earlier, the most since December 2022, as the 10-week Iran war pushed up energy
prices and put pressure on companies to pass along higher costs to consumers.
The
Labor Department reported Wednesday that its producer price index — which
tracks inflation before it hits consumers — shot up 1.4% in April, the biggest
monthly gain since March 2022.
Energy
prices climbed 7.8% from March to April and 22.7% from a year earlier. Gasoline
soared 15.6% from March and diesel, the dominant fuel used in shopping, jumped 12.6%.
Excluding
volatile food and energy costs, so-called core producer prices were up 1% from
March and 5.2% from April 2025.
All
the numbers were much higher than economists had forecast.
APPLICATIONS FOR UNEMPLOYMENT BENEFITS RISE AS IRAN
WAR DRAGS ON
The
number of Americans filing for jobless aid rose last week but remains
historically low despite the economic uncertainty caused by the war in Iran.
U.S.
applications for unemployment benefits for the the
week ending May 9 rose by 12,000 to 211,000, the Labor Department reported
Thursday. That’s slightly more than the 207,000 new applications analysts
surveyed by the data firm FactSet had forecast.
Weekly
filings for unemployment benefits are considered a proxy for U.S. layoffs and
are close to a real-time indicator of the health of the job market.
Despite
relatively few layoffs, the labor market appears to be stuck in what economists
call a “low-hire, low-fire” state. That has kept the unemployment rate low at
4.3%, but left many of those out of work struggling to find new employment.
RETAIL SALES GROWTH SLOWS IN APRIL
Shoppers
pulled back on spending in April as higher gas prices fueled by the Iran war meant
less money left over for some nonessentials like clothing and furniture.
Retail
sales rose a respectable 0.5% in April, but that was slower than the 1.6%
growth seen in March, according to Commerce Department data released Thursday.
March marked the largest one-month increase in retail spending in more than
three years, largely because gas prices rose so rapidly.
Excluding
gasoline, retail sales in April were up 0.3%. That’s less than half the 0.7%
pace from the previous month, excluding gas station sales.
US HOME SALES FLAT LAST MONTH
Sales
of previously occupied U.S. homes were essentially flat in April, another
lackluster showing for the housing market during what’s traditionally its
busiest time of the year.
Existing
home sales edged up 0.2% last month from March to a seasonally adjusted annual
rate of 4.02 million units, the National Association of Realtors said Monday.
Sales were unchanged compared to April last year.
The
latest sales figure fell short of the roughly 4.12 million pace economists were
expecting, according to FactSet.
Sales
have been hovering close to a 4 million annual pace now going back to 2023, far
short of the historic norm that is closer to 5.2 million.
AVERAGE US LONG-TERM MORTGAGE RATE MOVES LOWER
The
average long-term U.S. mortgage rate edged lower this week, its first drop
after rising the previous two weeks.
The
benchmark 30-year fixed rate mortgage rate fell to 6.36% from 6.37% last week,
mortgage buyer Freddie Mac said Thursday. One year ago, the rate averaged
6.81%.
Borrowing
costs on 15-year fixed-rate mortgages, popular with homeowners refinancing
their home loans, also eased this week. That average rate fell to 5.71% from
5.72% last week. A year ago, it was at 5.92%, Freddie Mac said.
STOCKS SLIDE WORLDWIDE ON INFLATION WORRIES
The
U.S. stock market was falling from its records Friday and joining a worldwide
stock market drop as higher oil prices sent a shiver through the bond market.
Stocks that had been caught up in the euphoria around artificial-intelligence
technology that rose sharply for most of the week, led the decline Friday.
ATTACHMENT TEN – FROM
THE NEW YORK TIMES
BOND YIELDS HIT
HIGHEST LEVEL SINCE 2007 AS INFLATION FEARS SET IN
The 30-year U.S. Treasury yield hasn’t been this high
since the lead-up to the global financial crisis. Across Europe and Asia,
yields are also elevated.
By Joe Rennison May
19, 2026 Updated 5:17 p.m. ET
Bond markets convulsed on Tuesday, pushing the rates
on U.S. Treasuries to levels not seen since the global financial crisis nearly
20 years ago, as investors grew increasingly anxious about rising inflation
because of the war in Iran.
The yield on the 30-year Treasury note rose to 5.18
percent on Tuesday, its highest level since 2007. Bond yields move inversely to
prices.
The rising rates, which are pushing up borrowing costs
for governments, homeowners and businesses, could be a critical pressure point
for the Trump administration as it continues to pursue its campaign against
Iran, which has pushed up oil prices worldwide.
The last time President Trump faced such turmoil in
the Treasury market was after he announced in April last year that he would
raise tariffs on nearly every U.S. trading partner. The steepening rates were
cited as a primary reason that Mr. Trump later backed down from many of his
most draconian proposals.
This time, investors across the world are becoming increasingly
concerned about the fallout from the monthslong conflict in the Middle East,
where, despite a cease-fire between the United States and Iran, efforts to find
a lasting peace deal have stalled.
The yields on 30-year bonds in Canada, Germany, France,
Spain, Portugal, the Netherlands and Switzerland all traded at their 12-month
high on Tuesday. Across the rest of Europe and Asia, the long yield was also
elevated
In Britain, the tumult in the government bond market
is even more extreme. A leadership crisis facing Prime Minister Keir Starmer has helped push the country’s 30-year bond to its
highest level since 1998.
Japan’s 30-year bond yield sits at 4.13 percent, the
highest it has ever been, as rising energy prices strain the country’s already
struggling economy.
Bond investors around the world are focused on the
continued blockade of the Strait of Hormuz, the vital shipping lane that before
the war had funneled roughly a fifth of the world’s oil supply, predominantly
to Asia and some parts of Europe.
In the United States, the impact of higher oil prices
was reflected in a series of inflation reports last week showing consumer and
producer prices both rising at their fastest pace in several years.
Another factor weighing on the Treasury market is last
weekend’s summit between Mr. Trump and China’s leader, Xi Jinping. Investors’
hopes that the much anticipated meeting would result
in China’s help with ending the war in Iran were dashed.
In Europe, world leaders met on Tuesday to discuss
ways to tamper inflation, though many in the group were upset about a U.S.
decision this week to further ease sanctions on Russian seaborne oil in an
attempt to bring down global fuel costs. Some European officials said the move
rewarded Russia while its aggression in Ukraine continued.
“I think there is just a lot of fear out there right
now and a collective hesitancy to step in front of the sell-off,” said Vail
Hartman, a U.S. rates strategist at BMO Capital Markets, noting concerns that
yields could continue to move higher.
Unlike during last year’s tariff turmoil, Mr. Trump
appears less willing to back down over Iran, analysts say. The economy is
otherwise in good shape, underpinned by the growth of artificial intelligence
and blockbuster corporate profits. The stock market has risen for seven
consecutive weeks, hitting record highs along the way.
But the rising rates are also starting to add pressure
on stocks. On Tuesday, the S&P 500 fell about 0.7 percent, its third
consecutive daily drop, as investors awaited developments in the tenuous
cease-fire in the Iran war. When asked on Tuesday how long Iran had to return
to the negotiating table, Mr. Trump said: “Two or three days. Maybe Friday,
Saturday, Sunday. Maybe early next week. A limited period of time.”
The climbing Treasury yields could complicate Mr.
Trump’s other economic priorities, like jump-starting the stalled housing
market.
The 10-year Treasury yield, which underpins borrowing
costs for mortgages, has also surged higher since the start of the war with
Iran.
That yield has risen roughly three-quarters of a
percentage point since the war began, to 4.67 percent, its highest level since
the start of 2025. The average 30-year mortgage rate has risen to 6.36 percent
from below 6 percent before the war, according to data from the housing agency
Freddie Mac.
Some of the increasing Treasury yields are driven by
anticipation that the Fed will potentially need to raise the short-dated
interest rates it controls to try to slow inflation. These
expectation are increasing even with the appointment of the new Fed
chair, Kevin Warsh, whom Mr. Trump picked with hopes
of lowering rates.
Before the war began, investors had expected the Fed
to cut rates at least half a percentage point by January. Now, they have
lowered those expectations to a quarter-point rise, based on prices in interest
rate futures markets.
“There is a feeling that this is going to get worse
before it gets better,” said Joseph Purtell, a
portfolio manager at Neuberger Berman, adding that the market is “pricing in
some kind of premium for that uncertainty.”
Emmett Lindner contributed reporting.
Joe Rennison writes
about financial markets, a beat that ranges from chronicling the vagaries of
the stock market to explaining the often-inscrutable trading decisions of Wall
Street insiders.
ATTACHMENT ELEVEN – FROM
CNBC
HERE’S
THE INFLATION BREAKDOWN FOR APRIL 2026 — IN ONE CHART
By Jessica Dickler Published Tue, May 12 2026 9:44 Am Edt Updated Tue, May 12 2026 11:11 Am Edt
Key Points
·
The consumer price index rose 3.8% year over year in April 2026, up
from 3.3% in March, according to the Bureau of Labor Statistics.
·
The Iran war caused oil prices to spike, which then caused prices to
rise for gasoline, airfare and groceries.
·
It may take a while for conditions to normalize due to the monthslong
conflict, economists say.
Inflation jumped in April to the highest level in nearly three years as surging gas
prices due to the Iran war pushed up the cost of many consumer goods.
The consumer price index, a key inflation measure, rose 3.8% in April
from a year earlier, the U.S. Bureau of Labor Statistics reported Tuesday.
That’s up from 3.3% in March.
The April data paints a clearer picture of the financial fallout for
consumers after what was then more than a month of conflict in the Middle East.
“American households are going to continue to struggle trying to manage
through this, and that’s going to be the case for the foreseeable future,” said
Mark Zandi, chief economist at Moody’s.
HIGH OIL PRICES CREATE A ‘DOUBLE
SQUEEZE’
Earlier this week, President Donald Trump rejected Iran’s latest
proposal to end the war, sending oil futures higher.
Iran has continued to restrict energy supplies through the Strait of
Hormuz, a waterway used to transport about a fifth of the world’s oil. “It’s like the aorta artery
in your body,” said Brian Bethune, an economics professor at Boston College.
“When that is choked down, it is the whole global economy that is affected.”
Oil prices — as measured by Brent crude oil, a global price benchmark —
spiked to $118 per barrel by the end of April from roughly $70 per barrel
before the conflict began. Prices remain above $107 a barrel as of early Tuesday.
Products refined from oil, such as gasoline and jet fuel, have risen
sharply, too.
Gas prices soared about 50% since the war with Iran began on Feb.
28 and are up 28.4% over the year, according to the CPI data.
Consumers paid a national average of $4.50 per gallon as of Tuesday,
according to AAA — up from about $3.14 a
year ago.
Airline fares rose 20.7% over the past 12 months, according to the CPI
data.
Read more CNBC personal
finance coverage
The sudden and steep rise is an example of how the cost of jet fuel is
being passed directly to travelers, said certified financial planner Stephen
Kates, a financial analyst at Bankrate.
“Consumers are currently trapped in a ‘double squeeze,’ wrestling with
both the acute pain of the gasoline price spike and the slow rise in other core
budget items,” Kates said. “Households will find it harder to shift budget
dollars from one category to another when most major categories are becoming
more expensive at the same time.”
THE IRAN WAR’S EFFECT ON FOOD PRICES
As the conflict persists, the oil shock has put upward pressure on food
prices as well, economists said.
For example, an increase in diesel prices affects the transportation
costs of trucking food to grocery stores, Boston College’s Bethune said.
“It takes some time for the fuel surcharges that are built into these
contracts to work their way through the system,” Bethune said.
Fertilizer is another key export through the Strait of Hormuz, threatening to raise prices
for farmers.
“You can see the pass-through gaining momentum,” Zandi
said.
Food prices increased 3.2% over the last year, according to the CPI
data.
“For most families, what matters most is the cost of a gallon of
unleaded gas and a pound of beef, and both are up quite a lot,” Zandi said. Beef prices rose 14.8% year over year, according to the CPI data.
Economists say that the inflationary effects of the war could take weeks
or months to unwind.
Even if more oil tankers get through the Strait of Hormuz, it may be a
while before the whole supply chain starts working again, Bethune said.
“If we get some resolution,
optimistically, within the next few weeks, it then might be two months for
things to start to normalize,” Bethune said.
“The pessimistic scenario is at least double that or even longer — that
could be six to nine months to get back to where we were in January or
February,” he said.
THE FED UNDER PRESSURE
The latest inflation reading reinforces expectations that the Federal Reserve will keep interest rates
unchanged for a while — doing little to ease consumers’ current affordability challenges.
“The Federal Reserve, soon to be led by Kevin Warsh,
is in a very difficult position because it cannot ignore an annual inflation
rate climbing back toward 4%,” said Bankrate’s Kates.
“The trajectory of inflation will not immediately reverse, even if
geopolitical tensions ease, making it highly unlikely that we will see any
interest rate cuts this year,” he said.
ATTACHMENT TWELVE – FROM NBC
ARE CONSUMERS CRACKING UNDER THE WEIGHT OF HIGH PRICES? WE’RE ABOUT TO FIND OUT
Quarterly earnings from Home Depot,
Lowe’s, Walmart and Target this week will offer one of the clearest reads yet
on how U.S. consumers are holding up.
By Allie Canal May 19, 2026, 12:05 AM
EDT / Updated May 19, 2026, 10:42 AM EDT
Four of America’s largest retailers will
report their quarterly earnings this week, and the most pressing question the
reports will answer is whether Americans are finally starting to buckle under
the weight of rising prices.
The results from Home Depot, Lowe’s,
Walmart and Target are expected to offer one of the clearest snapshots yet of
how U.S. households are navigating an economy increasingly under strain from
soaring gas prices, stubborn
inflation and
elevated borrowing costs.
The stakes are especially high as rising
energy prices continue to ripple through the broader economy, driving up
transportation, grocery and household costs when many consumers are already stretched thin.
Economists, investors and journalists will
parse the financial results and the accompanying commentary from corporate
leaders looking for explicit signs of strain: Are shoppers trading down to
cheaper products? Delaying home improvement projects? Or pulling back on
discretionary purchases to prioritize essentials?
Home Depot kicked off the closely watched
earnings parade Tuesday morning, reporting a 5% increase in sales from a year
earlier.
But executives also said the consumer is
still spending selectively.
“The main thing is just this uncertainty
that’s holding them back for taking on large projects,” Home Depot CEO Ted
Decker told analysts during the company’s earning call, adding that “larger
discretionary projects remain under pressure.”
Still, he said customers remain engaged in
smaller seasonal purchases and outdoor projects, with strength in categories
like grills, patio furniture and outdoor power equipment.
Meanwhile, the company’s chief
financial officer told CNBC that
homeowners are “more protected financially” than other customers, but noted
that they’re also holding off on more expensive projects. Affordability is a
big challenge in the housing market, where average mortgage rates nationwide
Monday hit 6.68% for a 30-year fixed loan, according
to Mortgage News Daily.
“If it’s higher for longer on rates in a
slow housing market,” Decker added on the call, “we’re just going to have to
keep working our way through this period of moderation.”
The Home Depot results echo early spring
spending data that suggests consumers are still holding up all right — but not
evenly.
According to a recent report from the Bank
of America Institute, total credit and debit card spending per household rose
4.8% in April from a year ago, the strongest single-month increase in three
years.
But beneath the headline resilience,
economists say, an even sharper divide is emerging.
The so-called K-shaped economy — in which
spending by wealthier households accounts for an
outsized share of overall consumer spending while lower-income families
struggle — has widened in recent months, according to economists.
The report found lower- and middle-income
consumers were increasingly pulling back on discretionary spending categories
like dining and entertainment, while wealthier households — boosted by strong
stock market gains and rising home equity values — continue to spend at a
healthy pace.
And with inflation running at 3.8% in
April, above the wage growth rate of 3.6% that month, economists warn that
financial pressure on lower-income households could intensify.
And if the gap continues to widen, it
could complicate the Federal Reserve’s path under the incoming chair, Kevin Warsh, who is expected to be sworn
in as the central bank’s next chief Friday.
Warsh, who already said he was open to “regime
change” at the Fed, will assume the top job when
persistent inflation could force the central bank to keep interest rates higher
for longer than anyone could have imagined just a few months ago — to prevent
the economy from overheating.
Higher benchmark interest rates from the
Fed have a direct impact on consumer lending costs, which means the same
elevated borrowing costs would continue to keep the pressure on businesses and
consumers who are already struggling to keep up with rising costs.
“While households still have some near‑term
buffers — including tax refunds and savings — these too are unevenly
distributed, underscoring the growing gap between headline resilience and
stress experienced by some households,” Bank of America economists said.
ATTACHMENT THIRTEEN – FROM WWBT RICHMOND,
VA
‘SURVIVAL MODE’:
RECORD HIGH INFLATION IMPACTS SENIOR CITIZENS
By Joel Vazquez-Juarbe Published: May 14, 2026 at 5:00 PM
EDT Updated: 1 hour ago
MIDLOTHIAN, Va.
(WWBT) - Before Becky Minton retired in 2019, she worked for a major insurance
company.
It allowed her and
her late husband Pete to build a life for themselves in Brandermill, raising
two children in their four-bedroom house.
“I found it to be
quite affordable,” Minton said.
Since her husband’s
passing seven years ago, Minton lives alone in that home with her dog.
Between Social
Security and her pension, Minton has about $2,400 to live off of a month.
While she admits
that’s modest compared to other people, in this economy, it’s not getting her
as far as she’d like.
“It is stressful with
the prices seemingly no end to them going up. Like I said before, I am in a
survival mode,” Minton said.
While she is grateful
her home is paid off, her bills include car and long-term care insurance, gas,
utilities and food.
Gas has gone up
nearly 30 cents in Virginia in just one month, according to AAA.
She just paid a
$1,000 utility bill from the winter.
The average grocery
bill has gone up nearly 3% from this time last year.
“That’s a shock to
the system. When you’re a senior, on a fixed income, you know, I can’t go out
get a job. I don’t have the energy level to do that anymore to do that,” Minton
said.
Inflation surged to
3.8 percent in April, the highest it’s been in three years.
Minton not only
worries for working families but other seniors who may be living on less.
“I consider myself to
be very fortunate, because I know that there are, Lord knows how many people
there are out there that are truly in panic mode,” Minton said.
Minton says she’s
learning to cope with this expensive reality but hopes the younger generations
aren’t in the same situation when they’re her age.
“I wonder if they’ll
have to spend their entire life worrying about once
they get to their own senior hood and will they be prepared for it,” Minton
said.
ATTACHMENT FOURTEEN – FROM MARKET WATCH
INFLATION IS AT A
3-YEAR HIGH. THIS IS THE ‘TRIPLE THREAT’ THAT RETIREES NOW FACE BECAUSE OF IT
Plus, here’s how retirees can smartly deal
with the secondary impacts of inflation
By Alisa Wolfson Updated: May
19, 2026 at 4:32 p.m. ET
For retirees, inflation can hit especially hard thanks
to three factors that interact with these rising costs: increased withdrawals,
taxes and how those parlay into depleting savings,
says Jay Sharifi, CEO of Legacy Wealth Management. Indeed, inflation can
trigger a chain reaction, as it can necessitate larger withdrawals so retirees
can afford their life. Those withdrawals then inadvertently create larger tax
bills — and that may in turn require additional withdrawals, leading to a
vicious cycle that can deplete one’s savings more quickly, he explains.
Sharifi calls this the “triple threat” that is
reshaping retirement planning. “The first thing we need to consider is the
weight of all three of these on the middle class and understanding the burden
of taking care of the next two to three decades in retirement, which can
potentially be the most expensive phase of retirement,” says Sharifi. For many,
this might mean consulting a financial adviser. To find one, you can use this free tool that can match you to a fiduciary adviser, from our ad partner SmartAsset,
as well as resources like NAPFA and the CFP Board.
Other pros also explain just how much inflation is
impacting their clients. “Many middle-income Americans feel increasingly
unprepared for a future shaped by persistent inflation, ongoing economic
volatility and growing doubts about the long-term stability of key federal
safety nets,” says Scott Goldberg, president of the consumer division of
financial services company CNO Financial Group. “These concerns are practical,
emotional and increasingly central to how people are thinking about their
financial lives. Even in a cautious economy, it’s shaping how people plan, save
and make decisions about their future,” he says.
While you probably can’t avoid inflation, we asked
pros some strategies that retirees can do to help mitigate its impact.
LOWERING YOUR TAXES AS YOU FIGHT INFLATION
Increased withdrawals may be necessary in times of
inflation — so what do you do to try to avoid a heftier tax bill because of it?
Since future Roth withdrawals are tax-free, converting traditional IRAs or
401(k)s to a Roth account can help lower your tax burden, in addition to
reducing required minimum distributions. Doing Roth conversions before RMDs
kick in helps create future withdrawals that are tax-free.
Considering which accounts to withdraw from and in
what order will also play an impactful role in how you’re taxed. One strategy
is to pull money from taxable accounts, like brokerage accounts first, followed
by traditional IRAs and 401(k)s, before doing so from Roth accounts to preserve
the tax-free funds for as long as possible.
Since brokerage accounts are saddled by capital gains
and dividends, spending them down first helps minimize taxes later on. Saving
the Roth means it compounds tax-free. What’s more, Roth accounts don’t have
RMDs and beneficiaries can inherit them tax-free, making them an efficient way
to transfer wealth. Working with a financial planner to go over tax-loss
harvesting and qualified charitable distributions can also alleviate some of
the tax burden in retirement.
Furthermore, qualified longevity annuity contracts can
reduce the need for withdrawals by providing a guaranteed deferred income
stream later in life. Opting for something like this means you may not need to
pluck as many funds from your portfolio since you know you’ll be collecting
consistent funds from the QLAC.
HOW TO AVOID OUTLIVING YOUR SAVINGS
You need a retirement plan, stat, as this is essential
to avoiding running out of money, says certified financial planner Ryan Haiss at Flynn Zito Capital Management. “The earlier you
have that conversation, the more options you typically have. Sit down with a
CFP and build a retirement plan that can help you answer key questions like
what your ideal retirement budget looks like, if you’re on pace for that target
and if not, what steps you can take to get closer,” says Haiss.
To find a CFP, you can use this free tool that can match
you to a fiduciary adviser,
from our ad partner SmartAsset, as well as resources
like NAPFA and the CFP Board.
Don’t invest too conservatively either, says certified
financial planner Andrea Clark at The Table Financial Planning. “It’s tempting
to invest conservatively when you are worried about not having enough and
potentially losing money in the market,” she says. “But if you take no risk,
you are handicapping your future self by limiting the growth of your nest egg.
Choosing just two to three broadly diversified index funds such as the S&P
500, a U.S. extended market index and an international index to make up 75-80%
of your nest egg is always wholly appropriate throughout your 50s, if you do
not anticipate retiring until your 60s,” says Clark.
Quite simply, someone who invests too conservatively
might not keep pace with inflation, says certified financial planner Mark
Humphries at Sentinel Financial Planning. “This is a double-edged sword. Some
people over 50 take more risk than necessary when managing their assets and
some people do not take adequate risk. Both scenarios can result in the same
outcome, not enough money for retirement,” says Humphries.
ATTACHMENT FIFTEEN – FROM AI OVERVIEW
AI
Overview
The
United States national inflation rate sits at 3.8% annually, but regional and
local variations exist. The Northeast and Pacific regions generally experience
higher inflation due to housing and energy costs, while the Midwest, South, and
Mountain regions tend to hover closer to or below the national average. [See
links: 1, 2, 3, 4, 5]
REGIONAL
CONSUMER PRICE INDEX (CPI)
Regional
differences largely reflect housing market conditions, local supply chain
constraints, and varying energy dependencies. While specific city-level data is
published on staggered (monthly or bimonthly) schedules, recent broad regional
trends across the four primary U.S. Census Bureau regions include: [1, 2]
ATTACHMENT SIXTEEN – FROM VISUAL CAPITALIST
WHERE INFLATION HAS RISEN THE MOST IN THE U.S.
(2019–2025)
By Bruno Venditti, January 26, 2026
·
Motor
vehicle insurance has seen the largest price increase since 2019, rising more
than 56%.
·
Household
essentials like utilities, food, and rent have risen faster than overall
inflation.
Inflation has reshaped household budgets
across the United States since 2019, but price increases have not been evenly
distributed. While the overall consumer price index (CPI) is up roughly 26%
over the period, some everyday expenses have climbed far faster.
This graphic
highlights where inflation has risen the most across
major consumer categories between November 2019 and 2025. The data for this
visualization comes from reporting by CNBC (via Gabriel Cortes), the U.S.
Bureau of Labor Statistics,
and POLITICO.
Transportation Costs Lead the Inflation
Surge
Motor vehicle insurance tops the ranking,
with prices rising 56.1% since late 2019. Higher repair costs, more expensive
vehicles, and increased claims severity have all pushed premiums upward.
Vehicle maintenance and repair costs are
close behind, up nearly 49%, reflecting higher labor rates and parts prices.
|
Rank |
Consumer
Category |
% Change
(2019-2025) |
|
1 |
Motor
vehicle insurance |
56.1% |
|
2 |
Utility
(piped) gas service |
48.8% |
|
3 |
Vehicle
maintenance |
48.8% |
|
4 |
Coffee |
46.1% |
|
5 |
Electricity |
40.4% |
|
6 |
Meats,
poultry + fish |
38.1% |
|
7 |
Food away
from home |
34.8% |
|
8 |
Used cars +
trucks |
33.6% |
|
9 |
Rent of
primary residence |
30.8% |
|
10 |
Bread |
29.4% |
|
11 |
Housekeeping
supplies |
26.2% |
|
12 |
Alcoholic
beverages |
25.9% |
|
13 |
Personal
care products |
24.9% |
|
14 |
Milk |
24.1% |
|
15 |
New cars +
trucks |
22.6% |
|
— |
All items
less food + energy |
24.7% |
|
— |
All items |
26.0% |
ENERGY AND FOOD PRICES CONTINUE TO
PRESSURE HOUSEHOLDS
Utility costs have also surged, with piped
gas services rising 48.8% and electricity up more than 40%.
Food prices remain another major strain,
particularly for items consumed outside the home. “Food away from home,” which
includes restaurant meals, is up nearly 35%, while coffee, meats, and bread have
all seen increases well above the overall inflation rate.
HOUSING AND EVERYDAY ESSENTIALS OUTPACE
HEADLINE INFLATION
Housing-related costs continue to rise
faster than the CPI average.
Rent for primary residences is up 30.8%
since 2019, outpacing both “all items” inflation and the CPI excluding food and
energy.
Other everyday categories—such as
housekeeping supplies and personal care products—have also experienced steady
increases, reinforcing the sense that inflation is most visible in daily
spending rather than discretionary purchases.
ATTACHMENT SEVENTEEN – FROM THE COUNCIL ON FOREIGN RELATIONS
By Benn Steil, Senior
Fellow and Director of International Economics and Yuma Schuster, Analyst,
Greenberg Center for Geoeconomics April 15, 2026 1:35p.m.
SEE MAPS HERE AND VIA URLS ON
NOTES
INFLATION DATA BY COUNTRY
The map below aids in gauging inflation
trends in almost two hundred countries around the world—mainly those that
report data to the International Monetary Fund (IMF). The inflation rate is
defined as the rate of change in the consumer price level over the prior twelve
months. Each country is shaded according to its year-over-year rate of
inflation, with darker colors indicating higher inflation. Hover over a
particular country to see its latest data, and, to view changes over time, use
the slider above the map to adjust the date. Use the drop-down menu to select
which item to view. [1]
The map highlights, for example, how inflation
reacted to COVID-19 disruptions beginning in early 2020. As businesses
shuttered, consumers spent less and saved more. Median global inflation fell
from 2.2 percent to 1.9 percent that year. In 2021 and 2022, consumer demand
recovered far more rapidly than supply, which was limited by labor shortages,
supply-chain interruptions, and the Russian invasion of Ukraine. Between the
third quarters of 2020 and 2022, median global inflation soared from 1.9
percent to 8.7 percent. This contrasts with the experience of the Great
Recession, when median global inflation fell from 9.9 percent in the third
quarter of 2008 to 1.7 percent in the third quarter of 2009. Median global
inflation declined steadily following the pandemic, dropping to 2.6% in the second
quarter of 2025. Since then, inflation has risen slightly, driven by persistent
services inflation in advanced economies, and central banks are one by one
signaling an end to the global easing cycle.
INFLATION DATA BY QUARTER
The charts below compile data on inflation
trends in almost two hundred economies going back to 1990. Each chart shows the
year-over-year inflation rates for fourteen different items.[2]
Use the rightmost drop-down menu above the
chart to toggle among those items. The leftmost menu lets you select groups of
countries for display. You can create a custom list of countries or filter them
by region. Hover over the charts to see a country’s inflation rate within
particular years.
Together, the charts reveal significant
trends in global inflation. Food prices, for example, are notoriously volatile,
owing in particular to shocks caused by extreme weather. Over the last three
decades, median food inflation has ranged from 1 percent to more than 13
percent.
COMPONENTS OF TOTAL INFLATION
The final large chart below allows you to
view, for each country, the historical percentage-point contributions of five
categories of inflation (food, energy, housing, services, and other) to total
inflation.[3] The
sum of the percentage-point contributions of each category equals a given
country’s total inflation rate. Use the leftmost drop-down menu to choose which
country to view.
The charts highlight how a category’s
contribution to total inflation can change considerably over time. In 2022, for
example, energy inflation, driven by energy spikes from the war in Ukraine,
constituted roughly a third of the total inflation rate on average across
tracked countries. This contrasts with 2015, when falling energy prices made a
substantial negative contribution to the total inflation rate by an average of
0.6 percentage points.
ATTACHMENT EIGHTEEN – FROM THE LEFT: MS
NOW
BY Rep. Ro Khanna (D-Ca) May. 18, 2026, 6:00 AM EDT
The
split screen in our politics this past week was particularly stunning. Inflation rose to 3.8% as
President Donald Trump’s illegal war against Iran drove gas prices to $4.53 a gallon.
Under Trump, gas is up 28.4%,
airfares are up 20.7%, energy costs are up 17.9% and beef and veal are up
14.8%. Yet when questioned this week about Iran, the president said, “I don’t
think about Americans’ financial situation. I don’t think about anybody. I think
about one thing: We cannot let Iran have a nuclear weapon. That’s all.”
Americans
are hurting in this economy. From farmers to manufacturers to working-class
families, people are struggling to get by.
The
reality is that Trump has no vision to improve Americans’ lives.
Trump
promised to lower costs, bring back American manufacturing and end overseas
wars. But the reality is that Trump has no vision to improve Americans’ lives.
Americans
are tired of his chaotic economic policies. Recent polling found that 77% of Americans,
including a majority of Republicans, say Trump’s policies have made the
affordability crisis worse in their communities.
Rather
than investing in America, our president is trying to sell out our industries
by forming a board of investment with China. We need a leader who has
a vision and will build up American industry, not ask China for investment that
will devastate American workers.
I
just spent three days talking to people in western Pennsylvania, Ohio and
Michigan. I went to learn what struggles manufacturers, farmers and workers are
experiencing — I got that and so much more. I heard from American manufacturers
such as Vitro Glass and Ultium Cells that
have faced unfair competition from China and have even been forced to lay off
workers because of Trump’s evisceration of critical support for U.S. industry, such as the
elimination of the electric vehicle tax credit.
I
heard from Ohio farmers being hammered by rising input costs on urea and ammonia
due to Trump’s tariffs on U.S. allies, such as Canada, and his disastrous war
against Iran.
And
I heard from union workers, such as those in UAW Local 1112, which organizes Ultium Cells’ plant in Warren, Ohio. Jobs there are being
threatened by the Trump administration’s termination of tax credits for clean
energy manufacturing, as well as by Chinese competitors that dump their
products in the U.S. market and violate American labor laws.
Meanwhile,
Trump went to Beijing accompanied by Wall Street oligarchs who have shown their willingness to
sell out American industry so long as the profit margin is big enough.
2026 / 11:57
When
I called him out on Fox News last weekend, Trump melted down.
After
I talked about the importance of protecting America’s steel, shipbuilding and
auto industries, the president suggested on social media that I am a “wolf in sheep’s
clothing.”
In another post the
same day, he said it was a “fake narrative” for me to criticize China for
setting up factories in the United States under his watch that abuse their workers,
circumvent U.S. trade law and reportedly receive Chinese state subsidies.
Americans’
economic woes are not a fake narrative.
At
the Port of Cleveland, I saw warehouses full of Chinese steel — at a time
when U.S. steelmakers are laying off thousands of workers because they have been forced
to idle production.
As part of Bible reading event, Trump expected to
recite Scripture read at Jan. 6 riot
Missouri’s failed DEI suit vs. Starbucks offers
lessons to Big Business
The
Chinese steel was produced by the Shougang Group,
which the U.S. government has determined dumps its products into
the U.S. at a fraction of true market value and engages in forced labor practices,
including participating in the “mass incarceration” of Xinjiang’s Uyghur
population.
Trump
gutted the Department of Homeland Security’s trade unit responsible for
investigating illegal Chinese economic practices when he redirected thousands of federal agents to immigration enforcement. As a
result, cases investigating allegations of abuse by Chinese companies
have ground to a halt.
While Trump slashes enforcement, Chinese companies such as Fuyao Glass are
undercutting rival manufacturers that have been forced to shutter plants and lay off workers across the industrial Midwest.
Trump
said he and Xi did not discuss tariffs
during his China trip./ 11:57
The
president’s chaotic policies have also seriously harmed America’s farmers. In
Ohio, I heard from farmers who are paying more for fertilizer and farm
equipment due to tariffs and the supply-chain shortages resulting
from Trump’s war of choice against Iran. Farmers have paid more than $4
billion in higher input costs during
Trump’s second term. This hurts not just farmers but also Americans who are
paying higher prices at the grocery store.
We
have to face the fact that the president is not addressing these challenges and
we’re going to have to do it ourselves. America needs to embrace a new economic
patriotism.
Rather
than prioritizing the interests of Wall Street, we need to focus on Main
Street. A New Gilded Age is not inevitable.
All
this means setting up a new industrial bank to fund much-needed investments in
America’s steel, battery, auto and other industrial sectors. As I heard in
Ohio, Pennsylvania and Michigan, tariffs alone are simply not sufficient for
revitalizing American manufacturing.
A
new economic patriotism means establishing a thousand new trade schools and
technical institutes to train American workers for the jobs of the future,
including in artificial intelligence, and particularly in areas that have been
harmed by unfair competition from abroad. We need to lay the foundation for a
future where all Americans prosper, thanks to help from such essential programs
as free public college, Medicare for All and affordable childcare.
And
it means promoting the boldest federal jobs agenda since the New Deal to help American
workers deal with the threat posed by AI.
We
urgently need to rebuild the American heartland. That must start with
rebalancing our economic relationship with China. We need an economy that works
for hardworking Americans, led by a president who not only thinks about
Americans’ finances and cost of living but is working hard to make those things
better.
Rep. Ro Khanna
represents California's 17th congressional district.
ATTACHMENT NINETEEN – FROM THE RIGHT: NEW YORK POST
By Post Editorial Board May 14, 2026, 7:30 a.m. ET
April’s inflation spike is no cause for panic — but
only to finish off Iran fast
Word
that inflation hit 3.8% last month is bad news, but not grim: The main cause is obvious, and it won’t
last.
It’s
the halt on oil
shipments through
the Strait of Hormuz, which plainly won’t last much
longer.
So our
cautious optimism is entirely different from all that Biden-years talk about
inflation being “transitory.”
Notice:
Speaker-emerita Nancy Pelosi hypes that inflation is “skyrocketing,” yet she
said no such thing at the same point in the Biden years (15 months in), when it
was 8.3%.
That was the result of the Biden-Pelosi
federal-spending binge, “stimulating” an economy already soaring post-pandemic;
getting the rate down would take long months of harsh Federal Reserve
interest-rate hikes.
Today’s uptick is a move in
the wrong direction — climbing from March’s 3.3%, and marking
the highest rate in three years.
But
it’s also a reminder that inflation’s been reasonably tame so far under
President Donald Trump — and far better than under the last guy.
Rising
oil prices accounted for a full 40% of the April jump; strip out energy and
food, and “core inflation” stood at just 2.8%; once the Strait reopens, the
trend should reverse — albeit not as fast as we’d like.
See charts and graphs by Unleash Prosperity
ATTACHMENT TWENTY – FROM FOX
PELOSI, OTHER DEMS, AND FORMER REP MTG DOGPILE ON
TRUMP OVER INFLATION, IRAN WAR
'Not at
all what America voted for,' Marjorie Taylor Greene declared in a post on X.
By Alex Nitzberg
Published May 12, 2026 1:45pm EDT
.
Rep. Nancy Pelosi, D-Calif.,
other Democratic lawmakers and former Republican Rep. Marjorie Taylor Greene
targeted President Donald Trump while speaking out about inflation and the Iran war on
Tuesday after the U.S. released new Consumer Price Index data.
"From the pump to the
grocery store, the President’s reckless war of choice in Iran is hurting the
American people. With inflation skyrocketing, working families are being forced
to pay the price for Trump’s chaos — while he focuses on his billion-dollar
ballroom," Pelosi declared in a post on X.
Rep. Ro Khanna, D-Calif.,
asserted in a post, "Trump promised to
bring prices down. Prices under his policies are up. Inflation is 3.8 now. It
was 3.0 when he started. His betrayal of his base in launching a war in Iran
has been an absolute disaster."
INFLATION CONTINUED TO
RISE IN APRIL AS IRAN WAR IMPACTED ENGERY PRICES
Greene, a vociferous Trump
critic who had previously been a staunch Trump ally, wrote, "Inflation is rising and
gas is over $4.50 per gallon all because Trump went to war with Iran. Not at
all what America voted for."
The former House Republican
departed from office in the middle of her two-year term earlier this year after
a falling-out with the president.
The AAA national average price for regular gas
is currently $4.504, which is below the record of $5.016 set in June of 2022
during President Joe Biden's White House tenure.
"Inflation is
accelerating because of Trump’s illegal war that is skyrocketing gas prices. We
need to stop this war NOW," Rep. Pramila Jayapal, D-Wash., declared in
a post on X.
In a statement obtained by
Fox News Digital, White House spokesman Kush Desai
said, "President Trump has always been clear about temporary disruptions
as a result of Operation Epic Fury. The April CPI report reinforces, however,
that President Trump’s long-term economic agenda continues to deliver despite
these disruptions: drug and hospital services prices are declining thanks to
the President’s Most-Favored-Nation and price transparency initiatives, while
trillions in investments continue to drive robust real wage growth for
manufacturing and construction workers. The Trump administration remains
laser-focused on delivering growth and affordability on the home front while
working to eliminate the Iranian nuclear threat."
The U.S. Bureau of Labor
Statistics (BLS) on Tuesday said that the consumer
price index (CPI) – a broad measure of how much everyday goods like gasoline,
groceries and rent cost – rose 0.6% "on a seasonally adjusted basis in
April" and 3.8% "before seasonal adjustment" during a 12-month
period. The all-items index increased 3.8% "for the 12 months ending
April," the report noted. That's the highest level since May 2023.
GOP SENATOR INTRODUCES
BILL TO SUSPEND GAS TAX AFTER TRUMP ENDORSES PLAN
The June 2022 CPI report, which was released in July
of that year during Biden's presidency, stated, "The Consumer Price Index
for All Urban Consumers (CPI-U) increased 1.3 percent in June on a seasonally
adjusted basis after rising 1.0 percent in May," noting, "Over the
last 12 months, the all items index increased 9.1 percent before seasonal
adjustment."
Fox
News Digital's Eric Revell contributed to this report
ATTACHMENT TWENTY ONE – FROM THE HILL AND PEDESTRIAN.TV
THE HILL
Kudlow tells Hassett
inflation number was ‘lousy’
Fox Business
host Larry Kudlow on Tuesday told National Economic Council (NEC)
Director Kevin Hassett that the rising annual inflation rate is
“lousy” as the Trump administration seeks to defend its economic agenda.
The consumer price
index (CPI) rose 3.8 percent over the past 12 months and 0.6
percent in April alone, having previously hit 3.3 percent in March, according
to the Labor Department’s data.
“So, Kevin,” Kudlow
told Hassett on his eponymous show. “Certainly on the surface, you’ve got to admit today’s CPI
was a lousy number. Sixth-tenths of a percent, core –– excluding energy ––
still up four-tenths of a percent.”
He asked Hassett what “does an NEC director say on a day like today
when the CPI is coming out so poorly?” Both men laughed.
“Well first of all,
this is a temporary energy shock, and that’s very clear in the data,” Hassett said. “And so, the history of this is that people
at the Federal Reserve and elsewhere tend to peer through energy shocks and use
core CPI to forecast the future, not the energy shock data.”
Lisa Kudrow Just
Divulged The Truly Obscene Money The Friends Cast
Still Earn Every Single Year
ATTACHMENT TWENTY TWO – FROM
THE ATLANTIC
TRUMP DOESN’T WANT
TO FIGHT INFLATION
He was elected to tackle one problem. Instead, he’s made it worse.
By Jonathan Chait
May
14, 2026, 1:34 PM ET
Donald Trump, probably by mistake, said something honest the other day.
Appearing on the White House lawn Tuesday afternoon, Trump was asked by
a reporter to what extent Americans’ financial situation was motivating him to
make a deal with Iran. “Not even a little bit,” Trump replied, before
elaborating: “I don’t think about Americans’ financial situation. I don’t think
about anybody.”
Trump was probably trying to lie here—he likely wanted to
reject the premise that the economic pain caused by his war of choice is putting pressure on him to end it. The premise is obvious, but he has fervently
denied it, in part to retain some leverage over Iran.
But his denial revealed a deeper truth: Trump has treated
the public’s economic well-being as an afterthought. The thing he admitted so
casually is the primary reason his popularity has cratered. Trump was elected
to tackle inflation, and instead has made it worse.
(REMAINDER UNDER PAYWALL)
ATTACHMENT TWENTY THREE – FROM AXIOS (5/14)
President Trump's remark
this week that "I don't think about Americans' financial situation"
as he weighs his next moves in Iran may
have inadvertently captured the fundamental bind he's in: how to pressure Iran
without spooking markets and sending oil prices soaring.
Why it matters: Trump currently has
no clear way to square his desire to end the war on his terms with the need to rein
in inflation and keep the stock market humming in an election year.
Between the lines: What Trump
appeared to mean in Tuesday's remark is that domestic economic concerns won't
deter him from whatever steps he feels are necessary to stop Iran from obtaining
a nuclear weapon.
ATTACHMENT TWENTY FOUR – FROM CNN
LIKE
BIDEN, TRUMP HAS AN INFLATION PROBLEM. UNLIKE BIDEN, TRUMP’S IS SELF-INFLICTED
By Allison Morrow
The evidence, both anecdotal and quantitative, is piling up: Inflation
is back with a vengeance.
Two back-to-back reports this week showed painful price increases across
the economy, and they’re not going away soon. Consumers are flagging, pummeled
by years of high prices and the sense that no one in power really cares.
“I don’t think about Americans’ financial situation,” President
Donald Trump told reporters when asked whether the strain on Americans was
a consideration in his negotiations with Iran. “I don’t think about anybody. I
think about one thing: We cannot let Iran have a nuclear weapon, that’s all.”
AMERICA IS IN FOR YET ANOTHER LONG SPELL OF PRICE PAIN
Much like his predecessor, Joe Biden, Trump has an inflation problem.
The difference is that the price surges happening on Trump’s watch are
indisputably, directly linked to his policy decisions: namely, tariffs and the
Iran war. Not even Biden’s harshest critics can argue in good faith that he
somehow caused a global pandemic before taking office or that his policies
prompted Russia to invade Ukraine.
Of course, there are plenty of fair critiques of Biden’s handling of
the aftermath of those two inflationary events. His administration injected
nearly $2 trillion into the Covid economy, which propped up consumer demand and
likely made inflation worse. Its signature Inflation Reduction Act of 2022 was
arguably too little, too late to have a meaningful impact on voters, who,
obviously, didn’t give him a second chance.
Trump returned to the White House having campaigned on the economic
grievances of regular Americans when inflation was trending steadily downward.
The Consumer Price Index was around 3% in early 2025 — higher than the Fed’s 2%
target, but much lower than the Covid-era peak above 9% in 2022 — and it stayed
mostly below that threshold for the year.
Then came the war with Iran — an unpopular conflict from the start, and
one that is only deepening Americans’ economic frustrations.
INFLATION ROARS BACK
ICMYI: The Consumer Price Index report released Tuesday showed
prices rising 3.8% year-over-year — up sharply from February’s 2.4% annual
rate, before the US and Israel began attacking Iran.
Then
came the even hotter hot mess of the Producer Price Index, which tracks
wholesale prices that businesses pay one another and tends to foreshadow
changes to consumer prices. That inflation gauge hit a 6% annual rate in April
(vs. 4% in March).
On a monthly basis, the wholesale index increased 1.4% — double what
economists had expected and the second-biggest monthly jump on record. (The
largest monthly jump happened in March 2022, three months before consumer
inflation peaked.)
“Our inflation is just short-term,” Trump said Tuesday, sounding a bit
like Biden in 2021 when he said “most of
the price increases we’ve seen are expected to be temporary.”
IF ONLY WISHING MADE IT SO.
While it’s true that energy prices are volatile, and much of the April
shock can be blamed on the fact that the war took 20% of the world’s oil supply
offline virtually overnight, there’s more to these inflation reports than a
one-time shock.
If you want to nerd out with the economists, you have to look at “core”
inflation — the stats that strip out volatile factors like energy.
The big surprise in the April CPI came from “services”— as in, prices
for rent, health care, car insurance, airfare, hotels, restaurants, etc.
As expected, Tuesday’s report showed an unusually high spike in housing
prices that was effectively a methodology hangover from the most recent federal
government shutdown. But even when you remove that quirk from the equation,
services inflation looks “sticky,” as economists are fond
of saying.
Core services, excluding energy and housing, rose 3.3% year over year,
and 0.5% from March to April.
That’s a lot harder to ignore than a big jump in goods prices due to
higher gas prices, said Heather Long, chief economist at Navy Federal Credit
Union. “I don’t know how you tell such a rosy story if we have another month or
two of services inflation up 0.5% a month.”
Trump’s gilded indifference ignores America’s growing economic pain
The pressure pushing up services is a sign of an economy that’s
“overheating,” said Austan Goolsbee,
Federal Reserve Bank of Chicago president, in an interview with NPR on Tuesday.
“The Fed has got to be thinking about how do we break the chain of escalating
inflation.”
Indeed, Wall Street’s expectations for a Fed rate cut this year have
gone out the window. Bond traders bid up US Treasury yields on Wednesday,
factoring in longer-term inflation worries that may force the central bank to
raise rates. Investors now see a more than 30% chance of a rate hike by
the end of the year.
TARIFFS AND WAR COLLIDE
The economic cost of the war is colliding head-on with the cost of
Trump’s other signature policy move: tariffs, which act as a tax on US
businesses.
A CNN/SSRS poll released Tuesday found that 77% of Americans, including a majority
of Republicans, say Trump’s policies have increased the cost of living in their
community. And 75% of Americans say the Iran war has hurt their finances.
The president has a career-low 30% approval rating on the economy,
according to the poll.
“The fact that dissatisfaction on economic matters is reaching the 70%
range suggests that some Republicans, as well as Democrats and independents,
are angry at Trump,” my colleague Stephen Collinson writes. “In just two years,
affordability — the weapon that Trump wielded against Democratic foes President
Joe Biden and Vice President Kamala Harris in 2024 — has become an incumbent’s
curse. Many voters turned to Trump to alleviate their economic pressures.
Latest data and polling suggests he has failed to
deliver.”
Bottom line: Biden got dealt a crummy hand, then he and the Democratic
Party failed to get the messaging right around an economy that was, in fact,
healing. Trump got dealt a much better hand. But rather than focus on selling
his Iran plan to the American people while expressing sympathy for the hard
times, he’s spinning out on social media, asking Congress for $1
billion for security upgrades to his White House ballroom renovation project,
and awaiting delivery of a luxury new Air Force One — gifted by Qatar but
adapted with taxpayer cash — among other extravagances.
ATTACHMENT TWENTY FIVE – FROM
AXIOS
HOW JEROME POWELL NAVIGATED PANDEMIC,
INFLATION AND TRUMP
By Neil Irwin May 15, 2026
In his eight years at the helm of America's
central bank, Jerome Hayden Powell has guided the U.S. economy through extreme
tumult and fought off unprecedented presidential efforts to undermine the
Federal Reserve's independence.
The big picture: It is Powell's
approach to duty and public service that is his ultimate legacy as a leader and
that will shape his place in history.
Zoom out: For the better part of the
last decade, I've either watched on a screen or been physically present for
pretty much everything Powell has said in public. Two sentences stick most in
my memory.
THE ACCIDENTAL FED CHAIR
Just weeks before President Trump
nominated him to the chair in 2017, I surveyed a group of astute Fed
watchers on who would get the nod — and their consensus
put Powell at a whopping 5%.
Zoom in: Powell, a career Wall Street
lawyer and dealmaker, was semi-retired when President Obama named him a
governor in 2011.
In Powell, Treasury Secretary Steven
Mnuchin found a Fed chair candidate who knew how the Fed worked, would largely
continue the stimulative monetary policies of the Yellen era, and fit Trump's
desire for appointments out of "central casting."
GUIDED BY THE STARS
At the Kansas City Fed's annual
symposium in Jackson Hole, Wyoming, in August 2018, Powell laid out a shift in
how Fed leadership thought about America's economic potential.
The upshot of this was that the Fed
should take care to allow the economy of the late 2010s to keep growing and the
labor market to keep improving until there was clear evidence in the data that
inflation or other downsides were materializing.
Flashback: It's easy to forget just
how spectacular the 2019 economy was. The unemployment rate averaged 3.7%.
Inflation was 1.8%. Wages rose 3.3%. And mortgage rates were under 4%.
Yes, but: Did the "guided by the
stars" mindset and success of 2018-2019 make the Powell Fed too slow to
intervene when inflation emerged as the predominant economic problem in 2021?
Let's put a pin in that.
Data: Federal Reserve; Chart: Neil Irwin/Axios
MONEY PRINTER GOES BRRR
When the COVID-19 pandemic brought
the global economy into a shutdown early in 2020, Powell and the Fed stood up.
State of play: The unemployment rate
at that time reached a new post-Great Depression high,
and prices for many goods collapsed so severely that oil futures briefly
traded in negative numbers.
A popular meme at the time had a cartoonish
version of Powell shooting endless cash out from his press conference podium;
"Money Printer Go Brrr."
The framework essentially promised
the world that the Fed would not act pre-emptively to slow the economy out of
fear of inflation — that it viewed "maximum employment is a broad-based
and inclusive goal" and that "a robust job market can be sustained
without causing an outbreak of inflation."
Data: Bureau of Labor Statistics; Chart:
Neil Irwin/Axios
NOT-SO-TRANSITORY
By 2021, the economy was resurgent,
and with it the frictions that come from jump-starting an economy that had
partially shut down.
The intrigue: Powell and the Fed
initially viewed it as a transitory phenomenon — a one-time adjustment that
reflected "base effects," the rebound from depressed pandemic
pricing, and a one-time result of supply disruptions.
There's also a more subtle way the
Fed's policies in this era may have fueled the outburst of inflation — one that
Powell's successor, Kevin Warsh, has articulated.
By late 2021, right as Biden decided
to reappoint Powell to a second four-year term, it was becoming evident that
the Fed had misjudged how sustained and deep-seated the inflation problem was
turning out to be.
The Powell Fed was late to its policy
pivot — it wouldn't raise interest rates until March 2022 — but was unrelenting
in its focus to do whatever it might take to get inflation back under control.
Between the lines: Monetary policy
works not just through the mechanics of adjusting interest rates, but through
setting expectations, which can be self-fulfilling.
The ultimate manifestation of
that came at the Jackson Hole conference in August 2022.
What they're saying: "Today, my
remarks will be shorter, my focus narrower, and my message more direct,"
Powell said that Friday morning.
As it turned out, the aggressive rate
hikes of 2022 and 2023 caused some pain, but not a recession.
That has all changed in the
second Trump term. The president isn't merely attacking Powell and the Fed
with tough talk, but rather through active legal maneuvers.
So far, it has worked. The Justice
Department has backed off on its investigation in order to clear a blockade to Warsh's confirmation. Powell is remaining at the Fed as a
governor, contrary to recent precedent, seeking greater assurance that the
threat to independence has ended.
What they're saying: "I want to note
here that this has nothing whatever to do with verbal criticism by elected
officials," he said at a press conference two weeks ago.
The bottom line: Powell's stewardship
of the Federal Reserve and the U.S. economy is hardly above criticism. His
mistakes contributed to the painful inflation of the early 2020s.
ATTACHMENT TWENTY SIX – FROM FORTUNE
DOMINOES ARE STEADILY FALLING IN THE PATH
OF THE RATE CUTS TRUMP WANTS TO SEE FROM KEVIN WARSH
By Eleanor Pringle May 15, 2026, 12:12 PM ET
Incoming Fed
Chairman Kevin Warsh has
made it clear he has made the president no promises: Despite being more bullish
on the outlook for the economy, the new boss of the central bank says he hasn’t
committed to rate cuts.
However, everyone from Washington, D.C. to
Washington state knows that President Trump wants
lower interest rates — but the argument for cutting is only getting
more difficult to sell.
Inflation is not moving in the right way
for a cut, and, this week, shorter-term treasuries also moved in an
inconvenient direction for lowering.
FED CHAIR NOMINEE KEVIN WARSH IS WORTH
MORE THAN $100 MILLION
Beginning with 2-year Treasuries, the
notes spiked overnight Thursday to more than 4%, their highest for the
year-to-date. 2-year Treasuries are generally seen as the temperature check for
the market’s rate expectations over the next couple of years, and tend to be
relatively in sync as a result. If the two became untethered, it could be
inferred that the bond market is signaling the Fed isn’t doing enough to cool
the economy, and will need to pump the brakes.
While Warsh, a
former Fed governor, might be betting big on AI and its promised productivity
gains as a reason for cutting down the line, it seems investors are only
expecting the trajectory to be upward in the first few years of his tenure.
The news in the past 24 hours also hasn’t
done much to alleviate concerns that sticky inflation will cool anytime soon.
Remember that the latest consumer price inflation (CPI) report came in at
3.8%—well above the Fed’s 2% target, first introduced by Warsh’s
mentor, former Fed Chairman Ben Bernanke.
Much of the strain on consumers’ wallets
at the moment stems from tensions in the Middle East. The Strait of Hormuz is
choking the global oil supply, as Deutsche Bank’s Jim Reid noted to clients
this morning: “President Trump said the U.S. doesn’t need the Strait
of Hormuz open
“at all”. So that’s added to fears that the
Strait will remain blocked for some time, leading to a more protracted energy
shock for the global economy.”
And while some had hoped that Trump’s
visit to China would help “flip” President Xi into action on Iran, little
action has materialised bar
the fact Beijing has agreed the Strait must reopen at some
point.
The Strait is actually more of an issue
for China than it is for the U.S., which is a net energy exporter. China, on
the other hand, is the single largest buyer of Iranian oil.
A LONGER-TERM ARGUMENT
With data, and now the markets, both
seemingly moving to bet against the rate cut that President Trump has been
angling so persistently for since returning to the Oval Office, Warsh’s dovish inclination will be tested.
Of note is the fact that Treasury yields
across many time frames have spiked in realtion to
fears about inflation: 30-year Treasuries are up over 5%, as are 20-year
yields.
For both to jump is an effective tightening
of conditions in the longer term, far outweighing any pinch to the base rate
the Federal Open Market Committee (FOMC) might agree on. This may be a
justification Warsh—or indeed any other dovishly inclined voters—leans on: If longer-term rates are
tightening due to macroeconomic conditions, then they could be offset by some
easing in the short term.
“The recent rise in market-based breakeven
inflation rates strongly implies that Warsh and the
FOMC will have to prepare for the chance that inflation will continue to rise
and that the Fed will have to shift its policy,” noted Joseph Brusuelas, chief
economist at RSM, in a release shared with Fortune last night.
“In his confirmation hearing, Warsh testified that
‘inflation is a choice.’ He may get the chance to prove he actually believes
it.”
ATTACHMENT TWENTY SEVEN – FROM
THE ASSOCIATED PRESS
WHO IS INCOMING FED CHAIR KEVIN WARSH?
By Josh Boak and
Christopher Rugaber Wed, May 13, 2026 at
4:54 PM EDT
WASHINGTON (AP) — The U.S. Senate on
Wednesday confirmed Kevin Warsh to
lead the Federal Reserve. President Donald Trump had picked the former Fed
governor to replace Jerome Powell, believing that Warsh
can deliver the booming economy the president had promised voters.
Warsh takes over a divided central bank
wrestling with the economic fallout from the war started by the U.S. and Israel
with Iran on Feb. 28. The conflict has driven up energy prices and made it even
more difficult for the Fed to bring inflation down to its 2% target.
But Trump has demanded lower interest
rates, not the higher ones that might be needed to keep inflation in check. Warsh, who had positioned himself as an inflation hawk
earlier in his career, has more recently aligned himself with Trump's views,
arguing that artificial
intelligence and other technologies can boost
productivity and economic growth without igniting inflation.
Trump had consistently attacked Powell for
refusing the deep rate cuts the president believes will boost the economy. And
his Justice Department had launched an investigation into the Fed that was
widely seen as an attempt to oust Powell. The legal drama delayed Warsh's confirmation. Sen. Thom Tillis, a North Carolina
Republican, said he would oppose Warsh until the
Justice Department dropped the investigation, which it finally did last month.
In an unusual move, Powell said he
would remain on the Fed's governing board indefinitely after
Warsh came on as chair, citing Trump's
"unprecedented'' attacks on the central bank's independence. Although
Powell's term as chair is ending, his term as a Fed governor doesn't expire
until 2028.
Powell's continued presence could make
things awkward for Warsh, especially if he tries to convince other Fed officials
to go along with rate cuts.
Trump has said that Warsh
comes from “central casting,” revealing a lot about the president's own views
of the 56 year-old's looks and conventional pedigree. Warsh has many of the trappings of a traditional pick to
lead the world's most important central bank,
yet he's doing so at a decidedly unconventional moment for the Fed as Trump has
said the new chair needs to cut its benchmark rates to the White House's
liking.
Rate cuts of the degree sought by Trump
could temporarily boost growth, but they also pose the risk of overheating the
economy at a time when inflation is already elevated and affordability is a top
concern for much of the American public.
Warsh was previously a runner-up for the
Senate-confirmed post of Fed Chair in 2017, when Trump selected Powell to
lead the central bank. Trump has since said that he was given bad advice
regarding Powell.
Warsh is credentialed with degrees from
Stanford University and Harvard University Law School. He is also married to
Jane Lauder, the daughter of billionaire cosmetics heir Ronald Lauder, a major
Republican donor.
Senate Democrats have condemned Warsh for
not fully divulging the details of his own wealth, which amounts to at least
$100 million. His investments include stakes in Polymarket
and SpaceX, but he hasn’t revealed the size of those holdings. He promised to
sell all such assets within 90 days of being sworn in.
At 35, Warsh
became the youngest governor on the Fed's seven member
board, serving in that post from 2006 to 2011. He was previously an economic aide in George W. Bush’s Republican administration and was
an investment banker at Morgan Stanley.
Warsh worked closely with then-Chair Ben
Bernanke in 2008-09 during the central bank’s efforts to combat the financial
crisis and the Great Recession. Bernanke later wrote in his memoirs that Warsh was “one of my closest advisers and confidants” and
added that his “political and markets savvy and many contacts on Wall Street
would prove invaluable.”
Still, Warsh
appeared in key moments to be misguided about the depth of the challenges
confronting the U.S. economy as mortgage defaults and layoffs mounted in the
Great Recession. He wanted the Fed to keep its benchmark rates higher when the
economy was at risk of deflation and possibly collapsing.
Warsh raised
concerns in 2008 that further interest rate
cuts by the Fed could spur inflation. Yet even after the Fed cut its rate to
nearly zero, inflation stayed low.
And he objected in meetings in 2011 to the
Fed’s decision to purchase $600 billion of Treasury bonds, an effort to lower
long-term interest rates, though he ultimately voted in favor of the decision
at Bernanke’s behest.
Warsh also behaved at times like a pre-Trump
Republican, calling in a 2010 speech for ending “the creep of trade
protectionism” that he declared to be the opposite of “pro-growth policies.”
Trump has since largely overhauled GOP dogma by pushing for massive hikes in
import taxes, having unilaterally imposed them last year by declaring an
economic emergency.
Warsh has been working as a visiting economics
fellow at the Hoover Institution, a conservative think tank located at Stanford
University. He is also a lecturer at the Stanford Graduate School of Business
and a partner at the Duquesne Family Office, which manages the wealth of
billionaire investor Stanley Druckenmiller.
In what appeared to be an active campaign
for the Fed post, Warsh criticized the Fed in
interviews, calling for “regime change” and assailing Powell for engaging on
issues like climate change and diversity, equity and inclusion, which Warsh said are outside the Fed’s mandate.
In a
interview last year on CNBC, Warsh said Fed policy
“has been broken for quite a long time.”
“The central bank that sits there today is
radically different than the central bank I joined in 2006,” he added. By
allowing inflation to surge in 2021-22, the Fed “brought about the greatest
mistake in macroeconomic policy in 45 years, that divided the country.”
ATTACHMENT TWENTY EIGHT – FROM THE MOTLEY FOOL
BIG CHANGES ARE COMING TO THE FEDERAL
RESERVE TOMORROW, AND IT COULD SPELL TROUBLE FOR WALL STREET
Katie Brockman, The Motley Fool Thu, May 14,
2026 at 7:20 AM EDT
Friday, May 15, marks Jerome Powell's last
day as Federal Reserve chair, with his presumed successor, Kevin Warsh, taking over. Powell will remain on the Fed's Board
of Governors until early 2028, but with Warsh at the
helm, the central bank could be poised for sweeping changes.
Warsh is taking over at a particularly tricky
time, as the Fed faces pressure from both surging inflation and an unstable
economy. While we'll have to wait and see exactly how the new chair plans to
tackle these issues, Warsh's history suggests it
might not be great news for the market.
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WARSH COULD CHANGE THE GAME ON INFLATION
The Federal Open Market Committee (FOMC),
the 12-person board that determines monetary policy, has set a long-term
inflation target of 2%.
However, during his testimony before the
Senate Banking Committee in April, Warsh explained
that he plans to shift the narrative on inflation, saying, "Price stability
should be a change in prices such that no one's talking about it."
While this statement is somewhat vague, it
suggests that Warsh plans to shift the Fed's
long-standing inflation policy. While the 2% inflation target provides an
objective benchmark to measure the Fed's actions, Warsh's
stance could lead to more subjective policies and greater uncertainty about
inflation.
To be clear, this isn't to say that Warsh's inflation plans are right or wrong. But generally
speaking, uncertainty of any kind often doesn't sit well with Wall Street.
A HAWKISH PAST COULD CHALLENGE THE ECONOMY
Since the beginning of the Iran war in
February, which has driven up gas prices and disrupted supply chains worldwide,
investors have been watching the Fed closely to see how it manages interest
rates.
In late March, Jerome Powell noted in a
talk at Harvard University that the central bank is in a tough place. Raising
interest rates could help cool rising inflation, but it can also reduce
consumer spending and slow economic growth -- a particularly risky move when
the unemployment rate is already elevated. For now, according to Powell, the
Fed is taking a "wait and see" approach while holding interest rates
steady.
Warsh, however, could change that. While
serving on the Board of Governors from 2006 to 2011, he was known for being
hawkish on inflation, often supporting aggressive measures to stabilize prices
despite surging unemployment amid the Great Recession. Whether he'll bring that
same mentality to his role as Fed chair, though, remains to be seen.
Analysts at TD Securities noted
that Warsh's ideology on interest rates is "hard
to pin down," expanding that although he will likely propose rate cuts in
2026, "the main question is whether his former hawkish persona makes a
comeback down the road."
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Big Changes Are Coming to the Federal Reserve
Tomorrow, and It Could Spell Trouble for Wall Street was
originally published by The Motley Fool
View Comments (9)
ATTACHMENT TWENTY NINE – FROM YAHOO
KEVIN WARSH CONFIRMED NEW FED CHAIR AS
INFLATION KICKS HIGHER, COMPLICATING THE CENTRAL BANK'S PATH
By Jennifer Schonberger · Senior
Reporter Updated Thu,
May 14, 2026 at 8:27 AM EDT
The US Senate on Wednesday confirmed Kevin
Warsh as the new chairman of the Federal Reserve.
The vote was 54-45, with one Democrat,
John Fetterman of Pennsylvania, joining all Republicans to place President
Trump’s nominee atop the central bank after more than a year of unprecedented
pressure from the White House for lower interest rates.
How
do tariffs and oil prices impact Fed policy?
What
challenges does Warsh face with current inflation
levels?
Why
are Fed officials questioning future rate cuts?
What
is Warsh's approach to measuring inflation
differently?
Warsh also takes over at a time when inflation
has remained above the Fed’s 2% target for over five years and is being further
pressured by tariffs and a surge in oil prices from the conflict in the Middle
East.
Read more: How
jobs, inflation, and the Fed are all related
New inflation data out Wednesday provides
fresh evidence of the task facing Warsh: Wholesale
prices soared 6% in April, pushed up largely by higher energy
prices.
That comes after the latest
report on consumer prices showed that inflation appears to be
broadening as higher input costs from oil are being passed through to
consumers.
“The April CPI release underlines the
challenge facing Warsh … and the distance the
inflation data needs to travel back in favor of disinflation before the FOMC
could consider reducing rates further,” said Krishna Guha, head of economics
and central banking strategy for Evercore ISI. “It also gives a little more
ammo to the hawkish minority who think the next move is as likely to be up as
down.”
Warsh will serve as chair for four years. He
was confirmed earlier this week to a 14-year
term as a governor. Jerome Powell, whose term as chair ends
Friday, has elected to remain on the Board of Governors.
INFLATION AND THE FED’S TASK GET STICKIER
Last year, before his nomination to lead
the Fed, Warsh argued that advances in artificial
intelligence would boost productivity, pushing down inflation and allowing the
Fed to cut interest rates. He viewed tariffs as one-time drivers of price
increases.
That was all before the Iran war.
During his confirmation hearing, Warsh said the US economy is still dealing with ripples
from a pandemic-driven spike in inflation and that the Fed needs a different
framework for inflation.
The Fed’s preferred gauge — the Personal
Consumption Expenditures index — offers only a rough take, Warsh
said, even when volatile food and energy prices are excluded. He favors
“trimmed averages” of inflation that remove outlier data. Based on those
measures, Warsh said at the time that the underlying
trend of inflation is “somewhat improving” and looks “quite favorable.”
“Warsh seems
less concerned about inflation persistence than many current Fed officials,”
said Christian Floro, market strategist at Principal
Asset Management. “His preference for trimmed mean and median inflation
measures implies he sees underlying inflation pressures as materially cooler
than headline data would suggest.”
That could be a tough argument to sell to
the rest of the Fed committee right now.
Wallet
check: Yes, high gas prices hurt. So do a lot of other costs.
Middle-class
living standards are in decline as inflation outpaces wage gains
How to protect your
money from rising inflation
The Consumer Price Index rose 3.8% in
April, up from 3.3% in March. Energy prices accounted for 40% of the increase,
while shelter and food also surged. Stripping out energy and food prices,
inflation on a “core” basis clocked in at 2.8%, up from 2.6%. Services
inflation excluding energy was up 3.3%, while goods prices, which have been
pushed higher by tariffs, rose 1.1%.
Some Fed officials, including Chicago Fed
president Austan Goolsbee,
are concerned that prices for services — things like haircuts and lawnmowing —
have remained sticky, and those prices typically aren’t influenced by higher
oil prices or tariffs.
Boston Fed president Susan Collins said in
a speech Wednesday that she thinks the Fed will need to maintain its “current,
slightly restrictive monetary policy stance for some time.”
“More than five years of above-target
inflation has reduced my patience for ‘looking through’ another supply shock,”
Collins said.
The Personal Consumption Expenditures
index for April is expected to nudge up to 3.3%, although the three-month
annualized rate would drop back to 3.9%, from 4.4%. The Fed’s inflation target
is 2%.
Read
more: How
jobs, inflation, and the Fed are all related
‘NO MAJORITY FOR RENEWED CONSIDERATION OF
CUTS’
Even before the latest hot inflation
reports, some Fed officials were becoming uneasy about inflation and
questioning whether they should look through the oil price shock, expecting
prices would come back down.
Fed governor Chris Waller, who had been
touting rate cuts, cautioned last month about looking through a sequence of
shocks, saying Fed officials need to be “more vigilant.”
“If the shocks hit one after another, they
will keep inflation elevated for quite some time,” Waller said. “The standard
‘look-through’ can become problematic if businesses and households start to
believe inflation is persistently high and it affects their price- and
wage-setting behavior.”
Read more: How
the Fed rate decision affects your bank accounts, loans, credit cards, and investments
Cleveland Fed president Beth Hammack has
also questioned whether the string of “shocks” — the pandemic’s disruption of
global supply chains, the Russia-Ukraine invasion, tariffs, and now an oil
shock — is really each short-lived, or whether they are building on one another
and creating an inflation mindset for consumers and businesses.
Three members of the Fed dissented at the
interest rate-setting meeting last month over including language in their
policy statement that signaled the next rate move would likely be a cut. A
chorus is growing for changing the language to signal that the Fed’s next move
could be a rate hike or cut, depending on how the economy evolves.
Outgoing Fed Chair Powell said in his last
press conference on April 29 that the center of the Fed’s rate-setting
committee is moving toward “a more neutral place” — that is, holding steady and
away from eventually cutting rates.
Traders largely expect the Fed to hold
rates steady for the rest of the year, though the odds for a rate hike have
risen to 20% for October and are pegged at 30% for December.
Warsh said during his confirmation hearing that
he wants “messier” interest rate-setting meetings, where a “good family fight”
can lead to better economic decisions.
He’s likely to get it. And if he can’t
convince the rest of the committee to cut rates, Warsh
could also take heat from Trump, who favored Warsh
for his views on lower rates.
“There will be no majority for renewed
consideration of cuts until the Fed has been able to confirm tariff inflation
is falling into the rear view mirror, oil is passing
through with only moderate and expected one-time impacts on core inflation,
core services (excluding) housing is finally starting to cool in a persistent
manner, and AI spillovers are not changing the overall trajectory of
disinflation,” said Guha — who also warned that dynamic will threaten tension
with Trump.
“The perception challenge for Warsh may prove just as important as the policy challenge,”
Floro said. “Because the administration has been
vocal about wanting lower rates, any dovish pivot risks intensifying scrutiny
around Fed independence.”
Jennifer Schonberger is a veteran
financial journalist covering markets, the economy, and investing. At Yahoo
Finance she covers the Federal Reserve, Congress, the White House, the
Treasury, the SEC, the economy, cryptocurrencies, and the intersection of
Washington policy with finance
ATTACHMENT THIRTY – FROM CNBC
TRADERS NOW SEE NEXT FED INTEREST RATE MOVE AS A HIKE
FOLLOWING INFLATION SURGE
By Jeff Cox
Published Fri, May 15 2026 1:40 Pm Edt updated
Fri, May 15 2026 2:55 Pm Edt
KEY POINTS
• Following
a week of surprisingly high inflation readings, traders in the fed funds
futures market are pricing in an interest rate increase as soon as December,
with a much higher certainty into the early part of 2027.
• A
December hike has a nearly 51% probability, while a move higher by January
carries about a 60% probability with March coming in at better than 71%.Markets for the first time in the current cycle now think
the Federal Reserve’s next move will be an interest rate hike.
Following a week of surprisingly high inflation
readings, traders in the fed funds futures market are pricing in an increase as
soon as December, with a much higher certainty into the early part of 2027,
according to the CME Group’s FedWatch tool.
A December hike has a nearly 51% probability, while a
move higher by January carries about a 60% probability with March coming in at
better than 71%, according to the measure, which uses prices on 30-day federal
funds futures contracts to gauge probabilities.
The move comes near the close of a week where both
consumer and wholesale inflation posted multiyear highs. Import and export
prices also were at levels not seen since the last inflation spike, a period
that prompted aggressive Fed rate hikes that started with four consecutive
moves in three-quarter percentage point increments in 2022.
Former Fed Governor Kevin Warsh
takes over the helm of the Fed as of Friday and has indicated he thinks the
central bank actually can lower rates in the current environment. At the last
Federal Open Market Committee meeting, three members dissented from a vote to
hold benchmark rates steady as they objected to language hinting that the next
move would be a cut.
Economists participating in the Survey of Professional
Forecasters think second-quarter inflation will top out at 6%, a huge boost
from the last estimate, according to a release on Friday.
ATTACHMENT THIRTY ONE – FROM US News and World Report
After Powell: How a New Fed Chair Affects Stocks
By Scott Ward
A portrait... "Washington Crossing the
Delaware," by Emanuel Leutze... can convey more than just one story. (See it here)
Take, for example, Emanuel Leutze's 1851 painting
"Washington Crossing the Delaware." It vividly frames one of the most
iconic moments of the American Revolution, depicting the voyage at dawn,
beneath the silhouette of a rising sun – yet historians believe the actual crossing
occurred at night during a violent winter storm. The boat carries 13 men of
varying backgrounds and national origins, alongside an American flag not
adopted until 1777. Some scholars speculate Leutze, a German-American painter,
intended the work to extol the value of freedom and democracy to audiences back
in Europe.
The Federal Reserve is entering a similarly layered
moment. With Kevin Warsh confirmed as Fed chair and
Jerome Powell’s term finished as of May 15, the transition may appear
straightforward on the surface: The Fed is on hold. At its April meeting, the
Federal Open Market Committee (FOMC) kept the federal funds target rate at 3.5%
to 3.75% for a third consecutive meeting, extending a pause that followed three
quarter-point cuts late in 2025.
Beneath the surface, however, the picture is a bit
more nuanced. Four members of the committee emerged from the April meeting with
dissenting votes, the most in a single FOMC meeting since 1992, when Warsh was 22 years old. Governor Stephen Miran wanted a quarter-point rate cut. But bank presidents
Beth Hammack of Cleveland, Neel Kashkari of Minneapolis, and Lorie Logan of
Dallas objected to something more subtle: a line in the policy statement they
read as an implicit easing bias. Rather than signal the next move would be a
cut, all three argued the committee should acknowledge that the next change
could go either way – up or down – given rising energy prices tied to the war
in Iran and persistent inflation above the Fed's 2% target.
Powell has also decided to stay on as a Fed governor,
perhaps until January 2028. That hasn't been done since 1948, and it could make
Warsh's attempts at achieving consensus on monetary
policy a more difficult task. The Senate confirmed Warsh
on May 13 by the slimmest margin in history, which some commentators have taken
as a harbinger of challenges to come.
For investors, these variances matter. The bigger
question is not simply whether the Fed cuts rates, but how new leadership may
define "tight" monetary policy in the coming years. That distinction
could influence stocks in at least three important ways:
HIGHER-FOR-LONGER RATES COULD PRESSURE STOCK
VALUATIONS
If the Fed prioritizes inflation credibility over
rapid easing, Treasury yields may remain elevated, putting pressure on richly
valued growth stocks and increasing the importance of earnings quality and free
cash flow. A 2026 National Bureau of Economic Research paper found that changes
in "pure discount rates" explain roughly 80% of cross-country
valuation changes since 1990, reinforcing the idea that higher rates can
pressure equity valuations even when economic growth remains solid.
More bond traders are leaving the door open for a rate
hike in the coming 12 months. As of early May 18, the CME FedWatch
tool shows traders have priced in about a 74% probability of at least one rate
hike within the next year.
"While the Fed remains on hold for now, we
believe the bar for further rate hikes is significantly higher than for cuts,
given underlying softness in the labor market," says Jay Jacobs, U.S. head
of equity ETFs at BlackRock. “Despite a stable unemployment rate, payroll
growth has been effectively flat over the past year and concentrated in a
narrow set of sectors, including health care and education.”
BALANCE-SHEET REDUCTION MAY MATTER AS MUCH AS RATE
CUTS
Many investors tend to focus on Fed rate cuts, but a
more aggressive reduction in the Fed's balance sheet could quietly tighten
liquidity even if rates stay unchanged.
ATTACHMENT THIRTY TWO – FROM FORTUNE
Forget tariffs and the Iran oil shock—a top economist
says the Fed is blind to the real inflation threat
By Shawn Tully
May 19, 2026, 3:00 AM ET
The distressing inflation data just released raises
the crucial question on whether all the good things we’re seeing in the
economy—from a confident, big spending consumer to the roaring stock market to
an explosion in capex for AI—can keep driving ahead. Is the surge in prices,
and big rise in bond yields it’s triggered, really a temporary trend caused
chiefly by the Iran war oil shock and the lingering pressure from the Trump
tariffs?
That’s the relatively optimistic stance just-exiting
Fed Chairman Jerome Powell’s been taking. But a top monetary economist believes
that Powell totally misread the signals, and that if the Central Bank doesn’t
act fast, we could see a near-repeat of the inflationary scourge of 2021 and
2022. “Powell’s been saying the same thing he said then,” says William Luther,
an associate professor at Florida Atlantic University. “He’s blaming everything
on ‘transitory’ forces again, without using that word, just like he blamed
inflation back then on supply chain disruptions. They weren’t the main problem
then, and the tariffs and higher oil prices aren’t the chief culprit now. Even
if those problems recede and nothing else changes, we won’t solve the inflation
issue. The Fed needs to address the root cause. And that’s huge excess spending
in the overall economy.”
Indeed, the recent numbers show a sharp shift from
modest progress to a relapse towards the danger zone. Unveiled on May 12, the
Labor Department’s Consumer Price Index report showed inflation rising a huge
0.6% in April, continuing a major uptrend that started with March’s reading of
0.9%. Those numbers are double to triple the average rise of 2.7% from December
to February. Over the past 12 months, the index has leapt 3.8%, at almost twice
the Federal Reserve’s 2.0% target. The following day, the Producer Price Index
release suggested worse to come: The numbers companies are paying for raw materials
and inputs surged 1.4% in April, three times the forecast and seven fold the reading from December.
For Luther, the real dynamic behind the recent spike
couldn’t be more basic: The overall dollars America’s paying for goods and
services is rising a lot faster than the quantities of cars, appliances, or
hotel rooms we’re producing and supplying. “There’s a grain of truth in the
tariffs and oil price argument,” he says. “But those price increases mainly
take money away from what’s spent on other things, and don’t have a major
impact on overall inflation. The fundamental problem is that more money is
chasing the same number of goods. We have an aggregate demand issue, not a
supply disruption issue.”
Luther explains that “aggregate demand” or “total spending”
comprises all domestic expenditures by consumers, government, and businesses
for everything from plants to inventories. So where is all this excess money
coming from? A major source is a ramp in government spending: the CBO forecasts
that federal outlays will rise a lofty 6% in FY 2026 (ended in September). An
obvious contributor, also cited by Powell, is the king’s ransom being lavished
on AI data centers, projected to reach almost $1 trillion this year, multiples
of the number three years ago. To boot, consumers—especially the
well-to-do—continue to spend big time on everything from dining out to health
and wellness. The “wealth effect” from a stock market led by an S&P that’s
gained 28% in the past year also likely emboldens folks to reach deeper into
their wallets.
The data confirms Luther’s position. In the four
quarters ended in March, GDP rose 2.66% on an annualized basis. As a reminder,
that metric for national income measures the physical volumes of goods and
services produced. But what about the trajectory of money available for
pursuing what’s for sale in the supermarkets and auto lots? Total spending, or
aggregate demand, rose at a jackrabbit 6%. That’s 3.34 points faster than
output, and translates into inflation, pretty much matching the CPI numbers.
And the just-released data suggests that the wave of excess money is waxing
fast and unless checked, will put more upward pressure on those tabs at the
checkout counter.
LUTHER CHARGES THAT THE FED IS PASSIVELY LOOSENING
MONETARY POLICY, AND NEEDS TO FASHION A STRATEGY THAT TAMES TOTAL SPENDING
Luther points to a perverse result of Powell’s view
that as during post-COVID period, it’s passing disruptions that account for the
spikes. From October to December of last year, the Fed reduced its benchmark
rate by half a point, from a range of 4.00% to 4.25%, to 3.50% to 3.75%. It
hasn’t changed since. But since the start of January, the CPI’s gone from 2.6%
to 3.8%, and the expected yearly inflation rate on the 5-year Treasury looking
forward has increased by 0.42%. That inflation component explains the entire
increase in what the 5-year is paying. What’s known as the “real rate” has
actually fallen. “And it’s the real rate that influences economic decisions,”
says Luther. Lower real rates encourage consumers and businesses to spend more,
driving up prices, says Luther. The upshot “is that the Fed is actually
loosening policy in the face of higher inflation. Just via math, when the Fed
Funds rate stays the same, and inflation expectations rise by nearly 50 basis
points, the real rate falls by 50 basis points, effectively creating an
easier-money regime.”
“This a monetary policy failure going back to 2021,”
declares Luther. “In the last couple of meetings, Powell kept saying that these
transitory supply shocks will work themselves out. He didn’t comment on the
actual principal source, the surge in overall spending.” The Fed’s primary
responsibility, says Luther, is to keep that “aggregate demand” side steady,
and instead, the Central Bank’s allowed it to run rampant. The things the Fed
claims are causing inflation wouldn’t be sending the CPI higher had the Fed
used its power over aggregate demand to combat them, Luther argues. “The Fed
can see the increases in Federal spending from a mile away,” he says. “It’s the
same with the trends in consumers spending. The Fed should project what
Congress and households are going to do, and conduct policy accordingly,
focusing on the necessary adjustments in overall spending needed offset places
where it can see that spending’s going to rise.”
Luther’s not advocating a sudden increase in the Fed
Funds rate. He believes the shift to sound strategy starts with communications,
specifically, explaining the potential threats ahead, and that if they persist,
what the Fed will do to overcome them. “Powell should have said that we’re
seeing a big uptick in total spending, and we’re watching it and will respond
to it,” Luther avows. “The communication has to be the opposite of the ‘no view
on spending’ position we’ve seen.” He argues that suggesting inflation will
abate when the war ends and oil starts flowing freely again fuels expectations
that monetary policy will remain loose, and fails to address the spending
problem.
Hence, in Luther’s toolkit, the first step is
correctly identifying and explaining the real problem. “The Fed’s hung up on
supply shocks,” he says. “The Fed first need to acknowledge what’s wrong in
order to craft a good response. Once you recognize you have a spending problem,
you have work to do.” What actions should the central bank take? The Fed should
shift from passively loosening to effectively tightening via its statements
about its future course. “The Fed should change its stated outlook towards a
path to tightening,” says Luther. In his view, the Fed must explain that even
if the war ends soon or tariffs aren’t ratcheted up any further, if it sees that factors such as the capex explosion and excess consumer
spending persist, it won’t hesitate to tighten.
As always, Luther explains, the Fed has several
options available to tackle the overall Big Spend. It can raise the Fed Funds
rate, making borrowing more costly and curbing the lending that fuels
expenditures as varied as auto purchases and new plant construction. Lifting
the interest rates paid for deposits that banks park at the Fed would entice
lenders to divert dollars from checking and savings accounts to the Central
Bank, curbing the loan portfolios that fuel expenditures across the economy.
Or, the Fed could embrace quantitative tightening, where it sells mortgages and
Treasuries from its balance sheet, soaking up funds that would otherwise get
spent.
On the plus side, Luther is cautiously optimistic that
Kevin Warsh, who replaced Powell as Fed Chair on May
15, will steer a substantially better course than his predecessor—by in part
making it a top priority (to) keep aggregate demand on a steady course. “He’s a
great pick,” says Luther. “He has great knowledge of financial markets, and
it’s hard to imagine that inflation would have gotten as high under his
leadership as it did under Powell’s.” Luther notes that Warsh
has advocated shrinking the Fed’s oversized balance sheet, a move that would
move money in the right direction, from consumption to investment––though he
adds that the new Chair hasn’t specified how big the purchases would be, or how
fast they’d come.
A potential spoiler, he adds, is Powell’s continued
service on the Fed’s Board of Governors. “He says he’ll keep a low profile,”
Luther warns, “but the deference to Powell won’t disappear. It’s reasonable to
think he’ll have a bigger than average voice in setting policy on the Open
Market Committee.”
It should worry all consumers and investors that so
far, the return of Big Inflation’s gotten the same response from the Fed as did
during the early in 2021. As Luther argues, the Central Bank needs a radically
different strategy this time. Kevin Warsh has all the
right credentials to prove just the change agent whose time has come.
The CEO-in-Chief speaks. Fortune sits down with
President Trump on tariffs, the Intel stake, Boeing's record orders, and what
the markets should expect next. Read the interview
By Shawn Tully Senior Editor-at-Large
Shawn Tully is a senior editor-at-large at Fortune,
covering the biggest trends in business, aviation, politics, and leadership.
ATTACHMENT THIRTY THREE – FROM MS NOW
AS INFLATION GETS WORSE, TRUMP HAS NOTHING TO OFFER
BUT IGNORANCE AND INCOHERENCE
The president boasted that he’s successfully lowered
prices “incredibly.” That was nonsense, but it reflected the degree to which
he’s hopelessly lost.
By Steve Benen May. 15, 2026, 9:02
AM EDT
Americans have confronted plenty of data over the past
week on inflation, and all of it is deeply discouraging. Earlier this week, we
learned the consumer price index reached its highest level in almost three
years, as the inflation rate climbed above wage growth. That came on the heels
of nearly identical news on the core personal consumption expenditures price
index. Soon after, wholesale prices also posted their highest annual increase
in more than three years.
Not surprisingly, this has led to multiple national
polls showing that more than three-quarters of Americans believe that Donald
Trump’s policies have made the cost of living worse, not better.
The result is an obvious and multifaceted problem for
a president who’s directly responsible for having
created the economic conditions that are fueling the affordability crisis he
was elected to address.
Part of the broader challenge relates to policy, since
the White House doesn’t have a plan to address the rising cost of living, other
than to hope things get better after the war in Iran eventually ends. Another
part is political, with Republicans likely to suffer a backlash at the hands of
angry voters as the midterm elections draw near.
Then there’s the rhetorical angle, punctuated by a
president who apparently no longer knows what to say about the problem he made
worse.
A few weeks ago, for example, Trump misstated basic
details about recent history on the inflation rate. That continued earlier this
week, when the Republican insisted the inflation rate was 1.7% “just before the
war,” which wasn’t even close to being true.
U.S. inflation surged in March, pushed higher by the
effects of the war in Iran
U.S. inflation surged in April, pushed higher by the
effects of the Iran war
In Trump’s latest interview with Fox News’ Sean Hannity,
which aired Thursday night, he kept this going, boasting that he has
successfully lowered prices “incredibly.”
This comes a week after the president also bragged
about a “very substantial” drop in gas prices that did not happen in reality.
What Trump continues to make clear is that he just
doesn’t have anything coherent left in the tank. The president is peddling a
combination of ignorance and self-defeating lies that the public recognizes as
nonsense, not because of fact-checkers but because of their own life
experiences.
This underscores the potency of Trump expressing
public indifference to the economic effects of the unnecessary war he launched
in the Middle East. “I don’t think about Americans’ financial situation,” he
declared this week when asked about negotiations with Iran. “I don’t think
about anybody.”
Yeah, concluded Benen,
“we’ve noticed.”
ATTACHMENT “A” – CONSUMER PRICE INDEX - APRIL 2026
The Consumer Price Index for All Urban Consumers
(CPI-U) increased 0.6 percent on a seasonally adjusted basis in April, after
rising 0.9 percent in March, the U.S. Bureau of Labor Statistics reported
today. Over the last 12 months, the all items index
increased 3.8 percent before seasonal adjustment.
The index for energy rose 3.8 percent in April, accounting
for over forty percent of the monthly all items increase. The shelter index
also increased in April, rising 0.6 percent. The index for food increased 0.5
percent over the month as the index for food at home rose 0.7 percent and the
index for food away from home increased 0.2 percent.
The index for all items less food and energy rose 0.4
percent in April. Indexes that increased over the month include household
furnishings and operations, airline fares, personal care, apparel, and
education. Conversely, the indexes for new vehicles, communication, and medical
care were among the major indexes that decreased in April.
The all items index rose 3.8
percent for the 12 months ending April, after rising 3.3 percent for the 12
months ending March. The all items less food and energy index rose 2.8 percent
over the year, following a 2.6 percent increase over the 12 months ending
March. The energy index increased 17.9 percent for the 12 months ending April.
The food index increased 3.2 percent over the last year.
FOOD
The index for food rose 0.5 percent in April after
being unchanged in March. The food at home index increased 0.7 percent over the
month. Five of the six major grocery store food group indexes increased in
April. The index for meats, poultry, fish, and eggs increased 1.3 percent over
the month as the index for beef rose 2.7 percent. The fruits and vegetables
index increased 1.8 percent in April and the nonalcoholic beverages index rose
1.1 percent. The index for dairy and related products increased 0.8 percent
over the month and the index for cereals and bakery products rose 0.1 percent
in April.
In contrast, the index for other food at home fell 0.4
percent in April after being unchanged in March.
The food away from home index rose 0.2 percent in April.
The index for limited service meals rose 0.4 percent
over the month and the index for full service meals rose 0.1 percent.
The index for food at home rose 2.9 percent over the
12 months ending in April. The fruits and vegetables index rose 6.1 percent
over the last 12 months. The index for other food at home increased 2.5 percent
over the same period and the index for nonalcoholic beverages rose 5.1 percent.
The cereals and bakery products index increased 2.6 percent over the 12 months
ending in April and the meats, poultry, fish, and eggs index rose 1.5 percent
over the same period. In contrast, the index for dairy and related products
fell 0.6 percent over the year.
The food away from home index rose 3.6 percent over
the last year. The index for full service meals rose
3.8 percent and the index for limited service meals rose 3.2 percent over the
same period.
ENERGY
The index for energy increased 3.8 percent in April,
after rising 10.9 percent in March. The gasoline index increased 5.4 percent
over the month. (Before seasonal adjustment, gasoline prices increased 11.1
percent in April.) The index for electricity rose 2.1 percent in April. The
fuel oil index increased 5.8 percent over the month. Conversely, the index for
natural gas decreased 0.1 percent over the same period.
The index for energy increased 17.9 percent over the
past 12 months and the index for gasoline rose 28.4 percent. The electricity
index increased 6.1 percent over the last 12 months ending in April and the
natural gas index rose 3.0 percent.
ALL ITEMS LESS FOOD AND ENERGY
The index for all items less food and energy rose 0.4
percent in April, after rising 0.2 percent in each of the 2 preceding months.
The shelter index increased 0.6 percent over the month. The index for owners'
equivalent rent and the index for rent both increased 0.5 percent in April. The
lodging away from home index rose 2.4 percent over the month.
The index for household furnishings and operations
increased 0.7 percent over the month, after rising 0.2 percent in March. The
airline fares index rose 2.8 percent in April and the personal care index rose
0.7 percent. The index for apparel rose 0.6 percent over the month and the
index for education rose 0.2 percent in April. The recreation index and the
motor vehicle insurance index each increased 0.1 percent in April.
The new vehicles index and the communication index
each declined 0.2 percent in April. The index for used cars and trucks was
unchanged over the month.
The medical care index decreased 0.1 percent in April,
after falling 0.2 percent in March. The index for hospital services decreased
0.3 percent over the month. Conversely, the physicians' services index
increased 0.6 percent over the month while the prescription drugs index was
unchanged in April.
The index for all items less food and energy rose 2.8
percent over the past 12 months. The shelter index increased 3.3 percent over
the last year. Other indexes with notable increases over the last year include
medical care (+2.5 percent), airline fares (+20.7 percent), household
furnishings and operations (+3.9 percent), and recreation (+2.3 percent).
NOT SEASONALLY ADJUSTED CPI MEASURES
The Consumer Price Index for All Urban Consumers
(CPI-U) increased 3.8 percent over the last 12 months to an index level
of 333.020 (1982-84=100). For the month, the index
increased 0.9 percent prior to seasonal adjustment.
The Consumer Price Index for Urban Wage Earners and
Clerical Workers (CPI-W) increased 3.9 percent over the last 12 months to an
index level of 326.541 (1982-84=100). For the month, the index increased 0.9
percent prior to seasonal adjustment.
The Chained Consumer Price Index for All Urban
Consumers (C-CPI-U) increased 3.6 percent over the last 12 months. For the
month, the index increased 0.8 percent on a not seasonally adjusted basis.
Please note that the indexes for the past 10 to 12 months are subject to
revision.
_______________
The Consumer Price Index for May 2026 is scheduled to
be released on Wednesday, June 10, 2026, at 8:30 a.m. (ET).