Economic News Today

A supposedly mild inflation report.  I say supposedly because the alleged decline was not in items that actually matter to people.  And I would like to note that while the CPI is weighted, I am not sure it accurately reflects the amount of spending on various items by the average household.  In any event, gasoline price, which are quite volatile, went down, and airline fares declined substantially, as airlines are reporting weaker demand. Meanwhile shelter costs are up.  Medical costs are up.  Those are have-to-haves.  (BLS Report)

In the worst news of the day, the federal government spent twice as much in February as it collected in revenue.  You read that right, half as much revenue as spending.  All the DOGE stuff isn’t meaningful, won’t really make a dent in spending.  I keep saying that you have to reform entitlements and the Trump bobos keep saying there is all this fraud and abuse, and I will just again point out that it is a drop in the bucket.  We are running a bigger deficit that last year so far.  And guess what, more tax cuts and the same level of spending in 2025 means a larger deficit.

We had a decent ten-year US note, a hefty $39 billion worth, auction, with a slightly lower than expected interest rate and pretty good demand.  Notwithstanding the decent ten year auction. rates in the aftermarket rose.  Why–see the paragraphs above about inflation and the deficit.  The market is very skittish.  Tariffs and other trade nonsense, no real evidence of substantial reductions in the deficit, weakening consumer demand being reported by many companies–all lead to concerns about stock valuations and the return needed on bonds to justify the inflation risk.  Lot of work to do.