🚀 Consumer Sentiment near record low

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Market Overview
Read time 1.4 minutes

Year To Date Performances:

1. Consumer sentiment plummeted in April, hitting 50.8—its second-lowest reading since 1952—according to the University of Michigan's mid-month survey, with inflation expectations surging to levels not seen since the early '80s. One-year inflation fears soared to 6.7%, the highest since 1981, while five-year expectations ticked up to 4.4%. The decline was broad-based, spanning all demographics, and driven by mounting concerns over inflation, personal finances, and the labor market. With President Trump’s tariff policy looming large, fears of a recession are intensifying, despite recent data showing cooling price pressures.

2. Wholesale prices dropped 0.4% in March—defying expectations and offering a surprising sign of easing inflation—just as President Trump ramped up tariff threats. The decline, driven largely by a sharp 11.1% drop in gasoline prices and a 0.9% fall in goods overall, marks the first dip in the producer price index (PPI) since October 2023. Core PPI also slipped, reinforcing hopes that inflation pressures are cooling. Still, year-over-year inflation remains above the Fed’s 2% target, and looming tariffs could reignite price pressures, making March’s data feel outdated before it’s fully digested.

3. President Trump’s latest tariff hike effectively severs most U.S.-China trade, with cumulative duties now reaching a staggering 145%, according to economist Erica York. The triple-digit rate—boosted by a new 125% tariff and an earlier 20% fentanyl-related duty—means most goods will be too costly to import unless no substitute exists. The Tax Foundation projects the tariffs will generate over $170 billion in new tax revenue this year, making them the largest tax increase since 1993. Despite a 90-day tariff pause on non-China imports, the U.S. remains in its most protectionist stance in decades, while China has already retaliated with an 84% tariff on U.S. goods.

4. Headlines

   1. UK GDP expanded by 0.5% in February, beating expectations of a 0.1% increase.

   2. BlackRock’s Larry Fink believes that the US will soon enter a recession.

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