(Click on image to enlarge)

CPI Month-Over-Month Data from the BLS, chart by Mish

Bloomberg Consensus vs BLS Actual

• CPI Consensus M/M +0.1 Percent, Actual -0.1 Percent
• CPI Core Consensus M/M +0.3 Percent, Actual +0.1 Percent
• CPI Consensus Y/Y +2.6 Percent, Actual +2.4 Percent
• CPI Core Consensus Y/Y +3.0 Percent, Actual +2.8 Percent

M/M is month-over-month and Y/Y is year-over-year. Core CPI excludes food and energy.

The BLS CPI from was better by 0.2 percentage points across the board vs the Bloomberg Econoday consensus estimates.

CPI Month-Over-Month Details

• The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.1 percent on a seasonally adjusted basis in March, after rising 0.2 percent in February
• The index for shelter rose 0.2 percent in February, but rent was up 0.3 percent and Owner’s Equivalent Rent (OER) was up 0.4 percent.
• The index for energy fell 2.4 percent in March, as a 6.3-percent decline in the index for gasoline more than offset increases in the indexes for electricity and natural gas.
• The food index, rose 0.4 percent in March as the food at home index increased 0.5 percent and the food away from home index rose 0.4 percent over the month.
• The index for all items less food and energy rose 0.1 percent.
• Indexes that increased over the month include personal care, medical care, education, apparel, and new vehicles. The indexes for airline fares, motor vehicle insurance, used cars and trucks, and recreation were among the major indexes that decreased in March.

Primary rent and food are two of the biggest aggravations. They were up 0.3 percent and 0.4 percent respectively. Food at home was up 0.5 percent.

The details suggest much of the improvement is a drop in the price of gasoline.

Spotlight Shelter, Energy, Medical

Shelter was only up 0.2 percent with OER up 0.4 percent and rent of primary residence up 0.3 percent.

I did some calculations on shelter rounded to two decimal places. Unadjusted shelter was up 0.34 percent. Seasonally-adjusted shelter was up 0.22 percent.

Shelter is 35.389 percent of the CPI. Energy, down 2.4 percent is 6.329 of the CPI.

Energy services (electricity and natural gas) rose 1.6 percent.

Medical Services which play a bigger role in the PCE price index than the CPI rose 0.5 percent.

The more one digs the less great this report looks even though it was much better than expected.

I am not saying this was a bad report, just that it is not as good as it looks at first glance.

CPI Year-Over-Year Percent Change

(Click on image to enlarge)

CPI Month-Over-Month Data from the BLS, chart by Mish

CPI Year-Over-Year Numbers

• CPI: 2.4 Percent
• Core CPI: 2.8 Percent
• Food and Beverage: 2.9 Percent
• Rent: 4.0 Percent
• OER: 4.4 Percent

Next month we have a neutral number to beat for year-over-year comparisons. Then we have 3 consecutive very difficult months to beat.

Don’t be surprised by rising year-over-year numbers in June, July, and August.

30-Year Bond Market Reaction

(Click on image to enlarge)

5-day 30-year long bond yield

10-Year Bond Market Reaction

(Click on image to enlarge)

5-day 10-year treasury yield

What Is the Bond Market Worry?

I explained that yesterday in Three Things that Spooked the Bond Market and Why Trump Blinked

Three Reasons Bond Yields Took Off

• The bond market thought Trump’s massive tariffs would be highly inflationary, more like stagflationary actually.
• The Senate passed a budget bill with no cuts. Budget cuts to be announced later. Yeah right.
• In February, the Trump administration announced an 8 percent cut in defense spending. Trump just reversed that to a 12 percent increase. Massive budget deficits are coming.

On top of those fundamentals Hedge funds were blowing up with their bond market bets.

Q: So what’s been fixed?
A: Nothing.

But that’s OK because Trump says the current bond market is “beautiful”.

Competing Theories

1. Trump concocts ridiculous definition of “reciprocal” to goad China into retaliating. Socks and bonds crashed in response. This is a 5D chess planned idea.
2. Trump capitulated with a 90-day pause reacting to the plunge in stock and bond markets.

Fact check: Trump “I was watching the bond market. The bond market is very tricky. I was watching it. But if you look at it now, it’s… it’s beautiful. But, yeah, I saw last night where people were getting a little queasy.”

Now, who are you going to believe, the bond market reaction or Trump’s description of the bond market?

Ackman a True Believer Again

(Click on image to enlarge)

Here’s a Link to the Ackman Exchange.

A Third of Yesterday’s Massive Rally Vanishes, Who Knew What When?

Earlier today, I noted A Third of Yesterday’s Massive Rally Vanishes, Who Knew What When?

The selloff escalated to over half of the rally on the Dow, then fell to a quarter, and as I type it’s back to about a third.

I have no idea where the equity markets close. But If bonds continue to react weakly, any stock market rally is headed nowhere.

What’s Gold Saying?

Also consider my January 31, 2025 post Gold Hits New Record High, Dear Jerome Powell, Is Everything Under Control?

At the time I wrote that post, gold was $2796. Gold is now $3,190.

Gold does not believe the Fed has things under control, the bond market does not believe the Fed has things under control, and neither do I.

More By This Author:

A Third Of Yesterday’s Massive Rally Vanishes, Who Knew What When?
Three Things That Spooked The Bond Market And Why Trump Blinked
Trump Capitulates With A 90-Day Pause On Tariffs, Dow Jumps 2,200 Points