This morning’s Consumer Price Index report confirmed what many of us have been watching in slow motion: inflation is back, and it’s wearing a MAGA hat.
The Bureau of Labor Statistics reported Tuesday that consumer prices rose 3.8% annually in April — the highest reading since May of 2023, and a full half-percentage point jump from March. Month over month, prices climbed 0.6%. Even core inflation, which strips out food and energy, came in above expectations at 2.8% — well above the Federal Reserve’s 2% target. To put this in stark contrast: when Biden left office, we were sitting at 2.4%. The steady climb since then isn’t a coincidence — it’s a consequence.
Two culprits are doing most of the damage. First, Trump’s tariff regime, which is hitting apparel, household goods, and import-dependent sectors hard. Second, the Iran war, which has sent energy prices into the stratosphere — gasoline is up nearly 30% year over year, and oil is now trading above $100 a barrel. Together, they’ve erased the wage gains that American workers were finally starting to see, with real hourly wages now falling 0.3% annually.
But here’s what deserves more attention: Treasury yields. The 10-year note climbed to 4.43% Tuesday — a benchmark that directly shapes your mortgage rate, your car loan, and your credit card debt. When yields rise, it’s a signal that buyers of U.S. debt are demanding more compensation for the risk of holding it. The administration nearly triggered a full-on bond market crisis earlier this year when foreign governments started dumping U.S. Treasuries. That pressure hasn’t gone away — it’s building.
We are one unexpected economic shock away from a very dark place. Watch this space.
