April 13

4/13 - Friday’s CPI report may be the first hint of big trouble ahead. The consumer price index for March was 3.3% above a year ago, up from 2.4% in February. Gasoline was the big driver in March, up 18.9%. Taking out the food and fuel categories, the core CPI was up 2.6%. Regarding interest rates, the 10-year treasury yield, which finished February at 3.96%, is up to 4.32% (4/10). The Freddie Mac national average for 30-year mortgage rates, which hit a low of 5.98% in late February, has rebounded to 6.37%. In The Wall Street Journal’s (just released) quarterly survey of 68 economists, the consensus is for the CPI to peak at 3.6% by mid-year, then decline to 3.2% by year’s end – assuming some resolution of the war in Iran. The Iran war knocked roughly 0.2 of a percentage point off economists’ U.S. GDP forecasts - with 2026 growth now projected at an anemic 1.99% and 2027 not much better at 2.16%.