Good Thursday AM from your Hometown Lender,

I was hoping for a little relief this morning from the PPI report to give the Fed a reason to cut more and sooner but alas, it was not to be. PPI came in hot at both the headline number and also the core level. Retail sales did drop which is showing people are buying less but that was not enough to counteract the strong inflation report. Unemployment claims came in about as anticipated. The data points are below. I think this takes a May Fed cut off the table. We will hear what the Fed has to say next week but I would think June is as good as it is going to get right now. The silver lining is that markets aren’t going to wait for the Fed, they are going to move well ahead of it. Rates are already substantially better than where they were and will be declining again soon.

• Retail Sales 0.6 vs 0.8
• Ex Auto 0.3 vs 0.5
• PPI MOM 0.6 vs 0.3
• Core PPI MOM 0.3 vs 0.2
• Weekly Claims 209K vs 218K

The WSJ shared an interesting piece on inflation, we will see.

February’s CPI came in hot for a second straight month. Consumer prices rose 3.2% from a year earlier, a tick higher than consensus forecasts. The 10-year Treasury yield responded with the largest one-day increase in several weeks.

Inflation is still well off the highs of recent years. And there is reason to believe this report isn’t a game-changer for the Federal Reserve when officials meet next week. A key focus will be whether most officials continue to expect three cuts this year or whether more central bankers will want just one or two. But the inflation of the past several years is taking its toll on consumers, who continue to experience sticker shock when buying daily essentials (more on that down below). Deodorant that costs twice as much as a few years ago is just one example. Elsewhere, discount retailer Dollar Tree said it plans to close about 1,000 locations.

Please remain safe and healthy, make today great!