If your head was stuck in the clouds yesterday, inflation just gave us all some breathing room as it dropped to 2.3% in April. Which is a BFD, especially considering that’s the lowest it’s been since February 2021, back when SPACs were still pretending to matter and people made Peloton their entire personality. 

(Source: Giphy) 

And yet, Core CPI came in at 2.8% with monthly gains being 0.2% across the board. Cooler than expected, boring enough to not freak anyone out, but not low enough to put a golden bust of J-Powws head in the front hall of the Fed. Especially since Shelter was still doing its thing… up 0.3% and responsible for over half the total monthly increase. So yeah, housing continues to drag inflation around like a dead body in the trunk. Used car prices fell 0.5%, new vehicles went nowhere, and apparel prices dipped. Medical care services were up 0.5%, because, you know, healthcare inflation is the one tradition America refuses to let go of.

The great news though, is that egg prices fell 12.7% in one month, thank Gawd. Although, prices are still up 49.3% from a year ago… but we’ll take the win. . Food overall dropped 0.1%. Energy bounced back 0.7% after falling in March. Real wages were flat. Not down. Not up. Just perfectly mediocre. But, but, but… here’s where things get a bit interesting: 

(Source: CNBC) 

April’s numbers don’t include the full impact of Trump’s new tariffs, which were rolled out during his “Liberation Day” speech… a name that sounds like it should come with fireworks and a ceasefire agreement. The tariffs slapped 10% duties on all U.S. imports across the board, with extra “reciprocal” tariffs for specific trading partners. China’s in the spotlight, obviously, but the full range hits everything from electronics to raw materials. Some of the more aggressive China tariffs got a 90-day delay, but most of the new costs are already trickling into the supply chain.

Importers are still absorbing some of the costs, but that’s a temporary arrangement. Eventually, the price increases will get passed downstream. Economists are saying May or June CPI could show the first signs of this. It depends on how fast the supply chain digests the new math. Inventory drawdowns and weaker demand might mute some of the impact, but no one’s betting on that being a long-term fix.

(Source: Bloomberg) 

So yeah, April looks clean. But it’s clean because the mess hasn’t shown up yet. The tariffs are a delayed variable, and everyone knows it. Oh, and keep in mind, the Fed’s preferred inflation gauge isn’t the CPI anyway… it’s the PCE, which drops later and carries more weight for actual policy decisions. But CPI still shapes the market mood, and right now, the mood is “quietly waiting for the explosion.”

On the rate cut front, expectations have already shifted. Markets were betting on three cuts in 2025… while some zesty analysts are still expecting four… but now, maybe two is the most we’ll get. June’s off the table. September is still in play, but only if inflation doesn’t reverse course and kneecap everyone’s mood. Plus, the Fed doesn’t want to cut into rising prices… especially not with tariffs throwing gasoline on the numbers. 

(Source: Giphy) 

In the end, if you didn’t already know… April’s CPI looks good on paper. But it’s the last clean print before the policy whiplash kicks in. Meaning, keep your head on a swivel, and place your bets accordingly, friends. Until next time… 

P.S. Oh, I’m sorry, I didn’t know you liked getting rekt. Let’s face it, retail investors get the short end of the stick all day everyday. It’s the smart money’s world, and we are just living in it–only useful when it comes to liquidity purposes in the market. Meaning, if you’re as pissed off as I was when I found out Milli Vanilli was lip syncing the whole time, then it’s time to go from investing blind, to investing smart. Luckily for you, the key is right here as a Stocks.News premium member. Click here to see exactly how our premium members are printing while others quake in the face of today’s market chaos. 

Stocks.News does not hold positions in companies mentioned in the article.