Posted on 03/12/2025 9:11:34 AM PDT by Signalman
Fresh off a victory lap on declining egg prices, the Trump administration is touting the release of a cooling inflation rate that officials say signals the economy is weathering a storm of tariffs and turbulent stock markets.
Core inflation subsided last month as consumer prices rose 2.8%, below the 3% benchmark set in January, according to the U.S. Department of Labor. The rise was also slightly less than economists who spoke with the Wall Street Journal expected.
The actual cost to consumers is just 0.2% month over month, indicating a “step in the right direction,” according to one CNN analyst.
“This is definitely very encouraging to see,” he said on Wednesday, “because I think it’s going to relieve some fears that inflation will perhaps reaccelerate.”
Inflation rates have fluctuated between 2.2 and 3.9% since August of 2023, a low since they approached a modern high of approximately 9% at the beginning of 2022.
Prices excluding food and energy—the sectors deemed “core” by economists—rose 3.1%, the lowest year-over-year reading since 2021, according to the Journal.
The uncertainty surrounding President Donald Trump’s tariff war with Canada and Mexico continues to weigh on investor sentiment. Stocks jumped at the opening bell but quickly pulled back, a sign that the hour-by-hour trade negotiations are still at the forefront of Wall Street’s mind.
Some of the salvos have netted quick wins for the president. On Tuesday, Ontario announced it had agreed to lift a surcharge on electricity exports to Michigan, New York, and Minnesota after 24 hours. The decision followed high-level talks between Trump Commerce Secretary Howard Lutnick and Ontario Premier Doug Ford.
One day earlier, President Trump announced he was imposing an additional 25% tariff on Canadian steel and aluminum, bringing the total to 50%, in direct retaliation to Ontario’s electricity surcharge. He had promised to declare a “national emergency on electricity” if the Ontario surcharge took effect.
Trump administration officials will be back at the bargaining table on Thursday to discuss revisions to the United States-Mexico-Canada Agreement (USMCA) before the April 2 tariff deadline.
To be sure, Wall Street prognosticators are not yet convinced that tariffs are the key to making America great again. Last week, Goldman Sachs economists predicted a fourth-quarter core inflation rate of 2.9%, up from 2.4% the year prior.
Investors are also doubtful that the February figures will buoy the Federal Reserve’s chances of considering rate cuts at its meeting next week. Interest-rate futures on Wednesday were slightly lower than before the inflation data came out.
Still, President Trump has plenty to crow about as a result of his bargaining. The specter of tariffs cajoled major corporations like Apple and OpenAI to invest heavily in American skill-building and artificial intelligence development, and last month, Honda announced that it would be relocating production of its 2025 Civic models to Indiana after abandoning plans to use a plant in Guadalajara, Mexico
Dems will still complain.
Democrats in January: “Trump has been president for 24 hours! How come eggs aren’t cheaper???”
Democrats in March: “See? Inflation is cooling! Biden should get the credit! We told you that Biden’s policies were working!!!”
Wait. What?!
Yeah, that was a very nice number to see. I blame the affordable gas prices, heh.
I saw yesterday on some MSM blurb….. “Why lower gas prices could be a beacon of bad times to come”
Liberals are the worst.
I saw many items at the grocery store come down a bit.
Democrats will thank Biden’s “excellent stewardship” of the economy.
From BRAVE AI:
M1 money supply is the sum of currency and checkable deposits in the United States. It’s also known as narrow money.
What’s included in M1?
Currency: Coins and bills in circulation that aren’t held by the Federal Reserve, Treasury, or banks
Checkable deposits: Funds in checking accounts, which are also called demand deposits
Other liquid deposits: Savings deposits and money market deposit accounts
Why is M1 important?
M1 is a measure of the most liquid parts of the money supply, meaning it contains assets that can be quickly converted to cash. This makes M1 the money that people use to buy goods and services, pay debts, and settle transactions.
How is M1 measured?
The Federal Reserve System measures M1 daily.
How has M1 changed over time?
The definition of M1 changed in May 2020 to include more checkable deposits, such as money market accounts and savings accounts. This was done to increase the liquidity of the money supply and prevent a severe recession during the pandemic.
M2 is a measure of the money supply that includes cash, checking and savings accounts, and money market mutual funds. It’s a broad definition that’s used in the United States and the eurozone.
What’s included in M2?
Currency outside of banks
Demand deposits, like checking accounts
Time deposits, like certificates of deposit under $100,000
Savings accounts
Money market mutual funds
Why is M2 important?
M2 is a key indicator of the economy’s health and is used to help guide monetary policy. Changes in the money supply can impact currency prices, which is important for forex traders.
How does M2 change?
The growth rate of M2 has been unusual since the COVID-19 pandemic. It grew rapidly from 2020 to 2022, but has declined since late 2022.
Other money supply measures:
M1: Includes cash outside of banks and checking accounts
M0: Includes all physical currency, like coins and notes
MB: Includes all physical currency and Federal Reserve deposits
MZM: Includes M2 minus time deposits and money market funds
M3 is a broad measure of the money supply that includes cash, checking and savings deposits, and other liquid assets. It’s also known as “broad money”.
What’s included in M3?
Currency in circulation
Deposits with a maturity of up to two years
Deposits that can be redeemed at up to three months’ notice
Repurchase agreements
Money market fund shares
Debt securities with a maturity of up to two years
Why’s M3 important?
M3 is a key indicator of economic health and inflation. An
increase in M3 can lead to higher prices, which may indicate future interest rate increases.
How does M3 compare to other money supply measures?
M3 is broader than M2, which includes M1 plus savings deposits and money market mutual funds. M1 is the most narrow measure of money supply, and includes currency and checkable deposits.
Related concepts
The Federal Reserve uses different definitions of money, including M1, M2, and M3.
Condolences to Democrats on the loss of one of their talking points.
They'll demand more millions of chickens be slaughtered over sniffles.
Yes, it is better that prices are increasing less fast than they were, according to the government numbers. However, I don’t believe the government numbers are a meaningful proxy for what prices are actually doing so CPI to me is a typical government exercise. It accomplishes what the government wants it to accomplish and not what it is suppose to accomplish which is a true measure of price levels in the economy. Instead it has become a corrupt process designed to report much lower price inflation than in reality. This benefits the government, accurately measuring real inflation hurts the government.
No kidding. Democrats were taking to their blogs by the end of Trump’s first week and complaining that he promised to bring egg prices down on his first day in office!
Now we can see why corrupt and evil Democrats continue to be elected to office. Their voters are clueless dolts who are easily manipulated and controlled.
“It accomplishes what the government wants it to accomplish and not what it is suppose to accomplish which is a true measure of price levels in the economy.”
Mistakes like this are why most people don’t build wealth.
“I saw many items at the grocery store come down a bit.”
That’s nice but has nothing to do with inflation and for very good reason food isn’t included in the calculation.
I bought a box of microwave popcorn the other day,previously they had 3oz bags the new one 2.75 oz bags but the price was the same.😠
I do not believe the numbers. They will be adjusted a month later like Biden did.
Trump has not been in office long enough and Biden has never had a single quarter where the numbers were as reported.
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