Morning Report: Wholesale inflation comes in better than expected

Posted on March 13, 2025 by Brent Nyitray

Vital Statistics:

Stocks are lower this morning on the escalating trade war. Bonds and MBS are down.

We had another benign inflation report, with the Producer Price Index flat on a month-over-month basis. The Street was looking for a 0.3% increase in the index, so this was a sizeable pleasant surprise. On a year-over-year basis, the PPI rose 3.2%.

If you strip out food and energy, the index fell 0.1% MOM and rose 3.4% on a YOY basis. In theory, this should be good for the bond market, however trade issues are overshadowing the good report.

It is getting hard to keep track of where we are on tariffs – what has been threatened, what has been implemented, what has been revoked, etc. Tariff threats are sucking up all of the oxygen right now, and that is pushing stocks lower. Theoretically that should be good for bonds, but tariffs reduce demand for Treasuries. This is because most countries run trade surpluses with the US, so instead of buying US goods and services countries buy Treasuries instead.

Initial Jobless Claims came in at 220k, which has been the typical level for years. If there is this army of recently-terminated government workers out there, the initial jobless claims aren’t reflecting it.

Donald Trump looks set to nominate Michelle Bowman as the country’s top banking regulator. She is going to replace Michael Barr, and will probably pursue a more deregulatory approach to banking regulation.

Filed under: Economy |

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17 Responses

  1. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on March 13, 2025 at 4:34 pm said:

    The problem the KosKidz are having is that Trump’s victory over everything thrown at him, and Biden’s disastrous economy, foreign policy and open border have “normalized” him in the eyes of the electorate, those D’s up for election in 2026 know this.

    https://www.dailykos.com/stories/2025/3/13/2309882/-Why-this-government-shutdown-could-be-different-if-it-happens?pm_campaign=front_page&pm_source=top_news_slot_1&pm_medium=web#comment_90903501

    My prediction is that the D’s are allowed to offer 30 day CR amendment so will vote for cloture. That’s about as complete a capitulation as you can get. Trump could literally keep the government open during a shutdown by declaring everybody an essential worker, thereby hurting only Democratic constituents because they wouldn’t be receiving checks (and paying union dues). I do not see how this isn’t win/win for Trump.

    Am I wrong?

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  2. jnc4p's avatar
    jnc4p, on March 13, 2025 at 7:15 pm said:

    This is an interesting piece relevant to the Democrats caving:

    I have been thinking a ton about the rise of the Tea Party, and how starting in 2010, this hyper-conservative faction of the right knocked off a bunch of moderate Republicans and decided to start voting—over and over again—to defund Planned Parenthood. This tactic was absolutely batshit according to most political metrics: first, Planned Parenthood was massively popular; more popular than either party or any presidential candidate. If you had polled Americans and taken your milque-toast cues from the results—as Democrats have been doing since the Clinton administration—you would never have launched an attack against one of the most beloved entities in the country and expected to gain from that. Second, and this was of course part of the strategy, these votes were destined to fail. Obama was in the White House, Democrats controlled the Senate (at least in theory). Yes, that meant that there was no chance that the constant agitating to defund Planned Parenthood was going to work and that Republicans would have to pay the electoral price. But through a Just Win Baby lens, the insistence on continuing to vote on a losing measure, over and over and over again, should have been a sign of weakness. It definitely wasn’t.

    In being willing to fight and get beaten on something—even a massively unpopular thing that no one really wanted—the Tea Party was using muscles that Democrats have allowed to atrophy: right wing lawmakers were showing their base, and their opponents, an eagerness to bare their teeth, sustain injury, risk humiliating defeat, and in doing so, present themselves as warriors on behalf of some principle, idea, piece of policy that (to them) was worth losing for.

    https://substack.com/home/post/p-158985345

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  3. jnc4p's avatar
    jnc4p, on March 14, 2025 at 7:38 pm said:

    Scott, you may find this another amusing anecdote in the “your identity gives you special wisdom” files:

    Consider, for example, Nancy Pelosi’s statement blasting Schumer’s decision. She says the idea that Democrats must choose between a shutdown and letting the Republican CR pass is a “false choice.” She says Democrats “must have a better choice: a four-week funding extension to keep government open and negotiate a bipartisan agreement.” But Democrats do not have that choice! If Democrats block the CR, Republicans won’t agree to pass Democrats’ four-week stopgap.1 They will allow the government to shut down, and so the choice is not false at all. She then adds a gratuitous appeal to gender, saying Democrats must “listen to the women”: Patty Murray and Rosa DeLauro, the top Democrats on the Senate and House Appropriations Committees, respectively, share Pelosi’s position, and I guess their gender is supposed to be important in deciding who is right. Democratic politicians make these arguments ad demographicum when they don’t have a good substantive argument. And besides, Sen. Kirsten Gillibrand is a woman, too. Why shouldn’t Democrats instead listen to her when she literally shouts about why allowing a shutdown this time would be an especially bad idea?

    https://www.joshbarro.com/p/it-is-not-chuck-schumers-job-to-satisfy

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  4. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on March 16, 2025 at 11:01 am said:

    I guess those planes didn’t turn around.

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  5. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on March 17, 2025 at 5:34 pm said:

    This Julie Kelly thread on the Aliens and Sedition Act deportation is a scream.

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    • Brent Nyitray's avatar
      Brent Nyitray, on March 18, 2025 at 1:40 pm said:

      I find it funny how it is always a Scooby Doo mystery to these people why the polls usually overestimate D support.

      It probably isn’t “respondents are weird.” It probably is that you are telling your subscribers what they want to hear.

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