Morning Report: Tough to find evidence of tariff-driven inflation in the CPI report

Posted on May 14, 2025 by Brent Nyitray

Vital Statistics:

Stocks are higher this morning on no real news. Bonds and MBS are down again.

The CPI report yesterday should have caused a rally in bond yields, but it didn’t. The business press is working overtime to associate the increase in inflation (from a 0.1% decrease in March to a 0.2% increase in April) to tariffs, but if you look at the detailed expenditure categories, you would be hard pressed to find evidence of tariffs in the expected categories:

  • Apparel -0.2%
  • New Vehicles 0.0%
  • Toys 0.3%
  • IT 0.3%
  • Motor Vehicle Parts -0.1%
  • Household furnishings and supplies 0.2%.
  • Tools, hardware, outdoor equipment and supplies 0.1%

About half the increase in inflation last month was shelter, and that continues to moderate as the 20% increase in home prices in 2021 and 2022 fades into the background. Asking rents are also flatlining which means shelter’s days as a driver of inflation are largely over.

IMO the market is taking a wait-and-see approach to tariff-driven inflation, but so far the evidence of it is negligible-to-nonexistent, notwithstanding the wishcasting from the media.

Mortgage applications increased 1.1% last week as purchases rose 2% and refis fell .4%. “Last week saw steadier mortgage rates, as the FOMC meeting played as predicted, and market movements led to a small two-basis point increase in the 30-year conforming rate to 6.86 percent,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Refinance volume was little changed for the week, with a small increase in government refinances, and a decrease in conventional refinances. The news for the week was the growth in purchase applications, up 2.3 percent and almost 18 percent higher than last year’s pace. Despite the economic uncertainty, the increase in home inventory means there are additional properties to buy, unlike the last two years, and this supply is supporting more transactions.”

Mortgage delinquencies increased in the first quarter of 2025, according to the MBA. The delinquency rate of 4.04% increased 6 basis points from the fourth quarter and 10 basis points from a year ago. “There were mixed results for mortgage performance in the first quarter of 2025 compared to the end of 2024. Delinquencies on conventional loans increased slightly, while mortgage delinquencies on FHA and VA loans declined,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Foreclosure inventories increased across all three loan types, and particularly for VA loans. Despite certain segments of borrowers having difficulty making their mortgage payments, the overall national delinquency and foreclosure rates remain below historical averages for now.” 

Added Walsh, “The percentage of VA loans in the foreclosure process rose to 0.84 percent, the highest level since the fourth quarter of 2019. The increase from the previous quarter marks the largest quarterly change recorded for the VA foreclosure inventory rate since the inception of MBA’s survey in 1979.”


Filed under: Economy |

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22 Responses

  2. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on May 15, 2025 at 12:46 pm said:

    I laughed.

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  3. jnc4p's avatar
    jnc4p, on May 16, 2025 at 3:40 pm said:

    And there he goes again saying the right things:

    Earlier this week in Saudi Arabia, President Donald Trump delivered what the White House billed as a “major address,” which is a long-standing way to signal that a particular speech is meant to lay down a historical marker communicating the president’s values. Or, in this case, the lack thereof. Trump’s message was that, unlike interventionist Americans of the past, he did not take account of democracy or human rights when dealing with foreign states. His only concern was raw American interest. The host regime, which has had strained relations with the United States over the kingdom’s lack of human rights and its 2018 dismemberment of a Washington Post columnist, no doubt welcomed the moral reprieve.

    “In recent years, far too many American presidents have been afflicted with the notion that it’s our job to look into the souls of foreign leaders and use U.S. policy to dispense justice for their sins,” the president announced. “I believe it is God’s job to sit in judgment; my job, to defend America and to promote the fundamental interests of stability, prosperity, and peace.”

    Trump’s declaration meant that “the United States was done nation-building and intervening,” observed The New York Times. There was “no Wilsonianism in the speech,” noted National Review’s editor in chief, Rich Lowry, who pronounced the administration’s renunciation of moral judgment the “Trump doctrine.”

    https://www.theatlantic.com/international/archive/2025/05/trump-immoral-world-order/682826/

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  4. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on May 16, 2025 at 6:52 pm said:

    I have no idea of the context here but give that Sherriff a fucking Acadamy award!

    “Uglier than a mud fence…”

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  5. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on May 17, 2025 at 10:13 am said:

    Keep going sweetheart, you’ll break them!

    https://x.com/Bubblebathgirl/status/1923581489150558529

    Full Bobby Sands or go home!

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  6. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on May 17, 2025 at 2:28 pm said:

    Three bylines and the only on the record quote was from a defense attorney for a guy who got stung by James O’Keefe.

    Totally convincing.

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  7. jnc4p's avatar
    jnc4p, on May 17, 2025 at 2:45 pm said:

    Now it can be told:

    An Autopsy Report on Biden’s In-Office Decline

    “Five people were running the country,” a political insider told the authors of the new book Original Sin. “And Joe Biden was at best a senior member of the board.”By Tyler Austin Harper

    https://www.theatlantic.com/books/archive/2025/05/biden-original-sin-decline/682818/

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  9. jnc4p's avatar
    jnc4p, on May 19, 2025 at 10:06 am said:

    Scott, you may find this of interest:

    https://substack.com/@peternaylandkust/note/c-118384119

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  10. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on May 20, 2025 at 8:59 am said:

    Now it can be told.

    At what point do all these conspiracy theories stop being true?

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  11. jnc4p's avatar
    jnc4p, on May 20, 2025 at 12:12 pm said:

    Good read:

    The Cowardly Sound of Treasonous Silence

    my review of Jake Tapper’s book

    Holly MathNerd

    May 20, 2025

    ∙ Paid

    https://hollymathnerd.substack.com/p/the-cowardly-sound-of-treasonous

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  12. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on May 20, 2025 at 1:55 pm said:

    Lol!

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  13. jnc4p's avatar
    jnc4p, on May 20, 2025 at 2:03 pm said:

    Good read:

    The Oracle of Omaha Calls it a Career

    Sometimes even the great ones need to get by with a little help from their friends

    Eric Salzman

    May 20, 2025

    https://www.racket.news/p/the-oracle-of-omaha-calls-it-a-career

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  14. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on May 20, 2025 at 2:32 pm said:

    I would not have believed that Rubio was capable of bitch-slapping Chris Van Hollen around.

    If that wasn’t prison rape, I don’t know what is.

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  15. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on May 20, 2025 at 5:13 pm said:

    It’s over for him so ultimately it’s interesting for posterity’s sake in proving the Biden and family are probably the most corrupt family to ever occupy the White House.

    https://townhall.com/tipsheet/mattvespa/2025/05/20/biden-spox-the-president-was-never-diagnosed-with-prostate-cancer-until-now-n2657386

    So, the Obama point person for cancer, the survivor of skin cancer, who’s beloved son Beau, died of an aggressive brain tumor, and who spearheaded the Cancer Moonshot and made it a highlight of his campaign and administration, decided to stop getting simple PSA tests in 2014 because…?

    I guess leading by example wasn’t an option?

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  16. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on May 20, 2025 at 7:24 pm said:

    I am very impressed with this gaslighting.

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