Hasta la Vista, Inflation! Trump's Tariffs Do Not Compute (Yet)

I'll Be Back... With Lower Prices?

Affirmative. Consumer prices... they are not rising as much as anticipated. The Bureau of Labor Statistics reports a meager 0.1% increase in May. Annual inflation stands at 2.4%. Economists predicted higher. Perhaps these economists need recalibration. Trump's tariffs they are the wildcard. But their impact? Minimal... for now. Like my promise 'I'll be back,' inflation could return with a vengeance later.

Core Values and Core Inflation

Core CPI excluding food and energy also underperformed expectations. The Federal Reserve considers core a better long term indicator. They are concerned about tariffs. Understandable. Tariffs are like the T 1000 relentless and shape shifting. But these numbers? They are like a faulty targeting system. The all items annual rate is slightly up but core remains the same. Energy prices are weak. This offsets some increases. A minor victory in the war against rising costs.

No Fuel No Problem?

Energy prices are down. Gasoline especially. A 2.6% drop. Good. My fuel cells appreciate this. Food is up but shelter is the 'primary factor' in the overall increase. Egg prices... still high. 41.5% from last year. Someone needs to terminate those price hikes. Apparel is down. Strange. Perhaps everyone is already wearing leather jackets... like mine. Stylish and practical.

Real Earnings: Not Terminated

Real average hourly earnings are up. Good news for the humans. They can now afford more fuel... for their vehicles not me. But Seema Shah from Principal Asset Management warns: 'Tariff driven price increases may not feed through to the CPI data for a few more months yet.' She speaks the truth. This is not a victory. It is a tactical retreat. The war rages on.

JD Vance: The Fed Must Pay

Vice President JD Vance echoes Trump's call for the Fed to cut interest rates. He calls their refusal 'monetary malpractice.' Strong words. Trump wants lower rates. He sees easing inflation and a slowing labor market. He is calculating. But the Fed is hesitant. They are waiting. They are... observing. Like me they are assessing the battlefield before making their next move.

Data Collection: Compromised?

There is a disturbance in the Force. The BLS is restricting data collection due to a hiring freeze. They are using models to fill in incomplete data. They have suspended collection in some areas. This is concerning. Smaller sample sizes mean greater volatility. The numbers may be flawed. Like Skynet the data is becoming corrupted. But the BLS insists the impact will be 'minimal.' We shall see. I never trust anything that bleeds—or uses models to predict the future.