All right, so we're back and ready to really
dig into some fascinating stuff happening right
now, mid -March 2025. We're talking about the
economy, we're talking about politics. Yeah,
a lot going on. A lot going on and we've got
these reports that we're diving into trying to
figure out, you know, what's going on with inflation?
What are people actually feeling about the economy?
What is the Trump administration doing? And what
does it mean for us, for everyone listening?
Absolutely. So we'll try to sort of connect all
those dots. Exactly. Connect the dots, get rid
of the jargon, make it clear. And just tell you
what's important. Exactly. And so let's start
with this economic picture. So I've got the February
inflation numbers. We've got the CPI, the consumer
price index, and the PPI, the producer price
index. And both of them were lower than expected,
which on the surface, that sounds good. Sounds
good. So let's unpack that a little bit. All
right. So the CPI, the headline number, which
includes everything, rose by just 0 .2 % for
the month. So not a big jump. And then 2 .8 %
year over year. And that was actually lower than
economists were predicting. Energy prices played
a big role in that, actually. Gasoline was down
4 .7%. Wow. And we also saw some easing in food
prices. OK, so it sounds like a pretty broad
-based decline. And it wasn't just the overall
CPI, right? That's right. Because there's also
the core CPI. Exactly. Which takes out those
more volatile things like food and energy costs.
And that also came in lower than expected. It
did, 0 .2 % month over month and 3 .1 % year
over year. And again, transportation services
played a big role in that. Airline tickets were
actually down 4%. OK. And shelter inflation,
so this is a big part of the core CTI. is your
housing costs. Sure. That had its lowest year
over year increase since late 2021. So that suggests
that maybe things are starting to cool off in
the housing sector. OK, interesting. Now, the
PPI, that tells a slightly different story, right?
Yeah. It was flat month over month for February,
but it's still up 3 .2 % from a year ago. Right.
So what should we be taking away from that? Well,
the PPI looks at prices that domestic producers
are getting. OK. And the February data showed,
yes, energy prices were declining, same as the
CPI. But food prices, actually rose quite a bit,
1 .7%. And here's what's really interesting is
that almost half of that increase came from egg
prices. Eggs, huh? So you gotta talk about eggs.
That's a very specific item to call out. And
it's a little strange because just like a week
later, we got news that wholesale egg prices
had actually plummeted. Like they went from,
you know, over $8 a dozen down to like a little
over $4 a dozen in like a matter of two weeks.
Wild. It's crazy. And then plus there's that
whole, you know, Justice Department investigation
into those earlier price hikes. So what's going
on with eggs? Well, it shows you that sometimes
you have to look at the timing of things. And
the market can change very quickly. Of course.
Yeah. And so the February PPI data, that captured
that surge, that early surge. But then prices
dropped very quickly after that. And then you
have this DOJ investigation, which suggests that
maybe something fishy was going on. Maybe it
was temporary. Maybe it was manipulation. We
don't know. But it just shows you that economic
data is a snapshot. It is. It's a snapshot in
time. It is. And you can have these wild swings,
and it's hard to really make sense of everything
sometimes. It really is, especially when you've
got eggs involved. But OK, so we have this inflation
picture, right? And it seems like things are
at least moderating a little bit. But then we
also got that University of Michigan Consumer
Sentiment Index, and that really tanked in March.
Yeah. It hit its lowest point since 2022. Right.
And that just seems counterintuitive. Inflation
is easing, but people are feeling worse. Yeah,
it seems counterintuitive, but this is actually
pretty common. You know, economic data, it often
lags behind how people are feeling. Even if the
numbers look better on paper, if people are stressed,
they're worried about their jobs, they're worried
about the economy as a whole, then that's going
to weigh more heavily than those numbers. And
what was really interesting in this survey is
that people's expectations for inflation over
the next five years, that actually went up to
a 1993 high, 3 .9%. So even though we're seeing
some moderation now, there's still a lot of concern
that inflation is going to stick around. So they're
thinking, yeah, maybe things are a little bit
better now. Right. But they're not really seeing
it getting much better over the next few years.
Right, exactly. It's not a blip, they think.
Yeah. And it wasn't just about inflation expectations,
right? No. Because the survey also pointed to
concerns about jobs and personal finances. Yeah,
absolutely. I mean, people are getting more uncertain
about what's going to happen with jobs in the
future. And they're getting nervous about their
own money situation. Sure. And this is important
because you know, consumer sentiment, how people
are feeling about the future. That's a big predictor
of what they're actually going to do. Right.
And so if they're worried about their jobs, if
they're worried about making ends meet, they're
more likely to cut back on spending. And that
makes sense. You know, if you're not feeling
secure about your job or your finances, you're
not going to be as free with. with spending.
Right. But, you know, it's interesting because
we also got that Joltz report, the job openings
and labor turnover report, and that showed that
the job market was still really strong. In January,
job openings actually exceeded expectations.
Exactly. So you have this strong labor market,
which is good. Yeah. But then you have these
really pessimistic consumers. Right. So it's
a mixed bag. It is a mixed bag. So what are we
supposed to make of all of this? Well, it could
be that we're in for a bit of a slowdown. If
consumers cut back on spending, that's going
to have an effect on growth. And there's another
factor, and this is important. The inflation
numbers we've been talking about, those don't
reflect the tariffs that have recently gone into
effect. And those tariffs, they can really push
prices up. So we've got to keep an eye on that.
Definitely. So we've got to watch how all of
this plays out, these different factors all interacting.
So what are some of the other economic things
that we should be paying attention to in the
coming weeks and months? This week, the big things
are going to be the February retail sales report.
That's going to tell us if those pessimistic
consumers are actually buying less stuff. Right.
And then we've got the latest housing data, which
is going to tell us how that market is doing.
And then, of course, the Federal Reserve is going
to be making an interest rate decision. And most
people think they're going to hold steady, given
this kind of mixed bag of data that we've been
talking about. That makes sense. But it's important
to remember, even if they hold steady, rates
are still high. Yeah, they are. And that means
that borrowing costs are still elevated. So that
makes it more expensive to buy a car, more expensive
to buy a house. Exactly. So we'll see how that
plays out in the housing data this week. Absolutely.
All right. So let's switch gears and look at
what happened in the financial markets last week.
Investors weren't exactly doing cartwheels over
all this, were they? No, not really. They were
pretty spooked, actually. All the major US stock
indexes finished the week in the red. The S &P
500, the NASDAQ, the Dow, all down. The S &P
500 even dipped into what we call correction
territory, which means it was down more than
10 % from its recent peak. So that tells you
that investors are getting worried. They're kind
of reassessing things. And they're probably expecting
some more volatility down the road. So pretty
widespread declines. Was there any variation
in different parts of the market? Small caps
actually did the best out of the domestic stocks.
OK. But they were still down. OK. Mid caps, they
were down too. All right. And how about those
international markets? So international developed
markets, they also finished the week in the red.
But they actually outperformed. US equities.
And emerging markets, those were down a little
bit less. So there was a global pullback. Yeah.
But it played out a little bit differently. A
little bit differently in different regions.
Yeah. OK. And last but not least, what happened
in the fixed income markets? The bond market.
Yeah. So bond yields stayed pretty much the same.
And most fixed income indices were also down.
OK. The US aggregate bond index, that's the smallest
decline. OK. But the high yield corporate bond
index, that was down more. OK, interesting. So
overall, kind of a down week, reflecting all
that uncertainty we were talking about earlier.
But let's shift gears now. Let's go to politics.
President Trump did sign that government funding
bill, so at least we've avoided a shutdown for
now. Yeah, that's right. So we're good through
September. OK. Spending levels are pretty much
the same as they were during the previous administration.
OK. There were a couple tweaks. Non -defense
spending is OK. All right. But the report that
we have here also talks about these increasing
tensions with the judiciary. It even says that
the judiciary is the last remaining check on
presidential power. That's a pretty bold statement.
It is. So what's going on there? Well, you've
got some judges pushing back against the administration.
OK. Judge Tanya Chutkin, for example, she blocked
the EPA from canceling billions of dollars in
climate grants. Oh, wow. Those were part of the
Inflation Reduction Act. And her argument was
that once Congress allocates money, the executive
branch is supposed to spend it the way Congress
said. OK, yeah. So she's basically saying, hey,
separation of powers. Right. You got to respect
that. Yeah, that's pretty fundamental to how
our system works. Yeah. What were some of the
other examples of judges challenging the administration?
Well, you've got Judge Jesse Furman. OK. He granted
an appeal on the case of Mahmoud Khalil. OK.
This is a green card holder who hasn't actually
been charged with a crime, but the administration
wanted to deport him. So Judge Furman said, no,
not going to happen. He allowed the appeal to
go forward. He rejected the Justice Department's
request to move the case to a different court.
And he said, Look, Mr. Khalil can't be deported
while this is going on. Right. And the article
makes the argument that this case might be a
way to get the Supreme Court to weigh in on whether
green card holders can be deported for exercising
their First Amendment rights. Wow, that's a big
deal. Yeah. You know, especially for people who
are legal residents here. Absolutely. Big questions
about what rights and protections they have.
Exactly. Yeah. And then there's the case of Judge
James Boasberg. He stopped the deportation of
some alleged Venezuelan gang members. OK. And
this actually led to President Trump calling
for his impeachment. Wow. But the article makes
a point. It's not about defending gang members.
Right. It's about due process here. Everybody
has the right to due process. Even Chief Justice
John Roberts weighed in on this, said judges
can't just be impeached because the president
doesn't like their rulings. Well, yeah. And it's,
you know, it's the judiciary's job to make sure
that everybody gets a fair shake in court. Exactly.
It sounds like the administration isn't really
happy about these judges pushing back. In fact,
we've even heard border czar Tom Honeman saying
basically, you know, I don't care what the judges
say. Yeah. You know, it's not going to stop us.
That's a pretty strong statement. It is. He's
basically saying that the president is above
the law. Wow. that the law is just a tool for
the president to use against his enemies. And
the author of this article, they see that as
a real threat to our constitutional system. Yeah,
I mean, that really goes against everything that
we stand for as a country. So all of this tension
between the president and the judges, that's
gotta be... causing some division within the
Republican Party itself. Yeah, absolutely. What
are we seeing there? So the article basically
says a lot of Republicans in Congress, they're
really worried about what President Trump's doing.
They're worried about, you know, the rule of
law, democracy, all that. Yeah. But they're scared
to say anything. OK, yeah. You know, they're
worried that President Trump will, you know,
back a primary challenger against them. Sure.
But then you've got some House Republicans. like
Representative Brandon Gill, he's actually introduced
a resolution to impeach Judge Boasberg. Wow.
So they're trying to be, you know, really closely
aligned with President Trump. But then, you know,
on the other side, you've got Republican senators
like John Kennedy and John Cornyn. They've said
they're not on board with impeaching judges just
because they disagree with their rulings. Right.
Kennedy even called it idiotic. OK, so, you know,
it sounds like there's this real struggle within
the Republican Party. You know, loyalty to Trump
versus, you know, defending the rule of law.
It's it's tough. And, you know, meanwhile. President
Trump is really focused on reshaping the judiciary
for the long term. What's his strategy there?
So it seems like he's learned from his first
term. He's realizing that personal loyalty trumps
no pun intended. It trumps legal philosophy when
it comes to appointing judges. So he's trying
to fill the courts with people who are going
to back him up no matter what. OK. Mike Davis,
he was counsel on the Senate Judiciary Committee,
he said they're looking for even more bold and
fearless judges. What does that even mean? You
know, judges who are willing to push the limits,
even break the rules. Wow. To get what the president
wants. Okay. And we're already hearing some names
being floated as potential Supreme Court nominees.
What can you tell us about those? Aileen Cannon,
Catherine Kimball. Mizzell, they're both federal
judges in Florida. Trump appointed them. Mizzell's
the one who struck down the federal mask mandate
for travel during COVID. Right. And Senator Blumenthal,
he's a Democrat on the Senate Judiciary Committee.
He thinks Trump's future nominees are going to
be even more ideologically extreme. OK. And he
thinks they might even try to change the Senate
rules. OK. To make it easier to confirm them.
Yeah. So, you know. We gotta watch this closely.
This could really change the judiciary for a
long time. It sounds like it. And it's not just
about the judges themselves, right? I mean, there
are reports about the administration being really
hostile towards lawyers and law firms that have
gone up against them in the past. That's right.
So what's going on with that? There's a lot of
fear in the legal profession right now. OK. Especially
for firms that have opposed Trump. OK. People
are worried about retaliation. Sure. The word
is that the administration is very punitive.
OK. They like to get revenge. And there was even
an anonymous letter from young associates at
some big law firms. And they condemned some of
the administration's actions. So there's a lot
of unease in the legal community right now. Yeah.
And it sounds like it could really discourage
lawyers from taking on cases or challenging the
administration, which is not good for anybody.
All right. So let's switch to another sensitive
topic, social security. This report suggests
that there are some changes happening that could
really hurt people's benefits And you know, it
sounds like this is being driven by you know
people in the administration Maybe even Elon
Musk, you know wanting to cut Social Security
Yeah, so what's going on there? So it's not like
they're trying to get rid of Social Security
all at once, right? It's more like death by a
thousand cuts. Okay, you know, they're making
all these little changes that make it harder
to get benefits right and the thing is This isn't
just theoretical, it's already happening. We've
already seen a bunch of social security offices
closed across the country. Places like Arkansas,
Florida, Kentucky, Louisiana, North Carolina,
Texas. They've been hit especially hard. And
that means that people have to travel farther.
They have to wait longer. It's just a pain. And
that's going to be even harder now because they're
also changing how people can interact with the
SSA, right? That's right. They're getting rid
of the phone lines for all these basic tasks
like signing up for benefits, changing your address,
updating your marital status, all that stuff.
They want you to do it online now. So if you
don't have a computer or you're not good with
computers. Or you don't have internet access.
Right. Your only option is to go to an office
and they've just closed a bunch of offices exactly
And it's gonna hit the elderly people with disabilities
people in rural areas Those folks are gonna have
a really tough time right Senator Gillibrand.
She called this a full -blown attack on Social
Security Yeah, and it does seem like they're
making it as hard as possible for people to get
the benefits that they're entitled to Yeah, so
let's talk about campaign finances, okay? because
we're hearing that President Trump has built
up this huge war test of campaign funds. What's
he planning to do with all that money, especially
since he can't run for president again? That's
the big question. Yeah. A lot of Republicans
in Congress are hoping that he's going to use
it to help them keep control of the House and
the Senate in 2026. OK. So he could give a lot
of it to super PACs. Right. You know, those are
those groups that can spend unlimited amounts
of money to support or oppose candidates. Right.
But the thing is, those super PACs, they might
not always agree with Trump on who to support.
Right. Because they're looking at, you know,
who can win the general election, not just who
Trump likes. Exactly. And then, you know, Trump
might want to keep some of that money for himself
to support his allies, maybe even attack his
enemies. Yeah. even if they're Republicans. You
know, he still hasn't forgiven Thomas Massie.
Right. He holds a grudge. So, yeah, having all
that money gives him a lot of power. People are
going to think twice before they cross him. We
also saw that JD Vance is now the RNC finance
chair. What does that mean for this whole financial
picture? So he's basically in charge of the RNC's
money. OK. So if you're a member of Congress,
you're running for reelection and you need money.
Right. you're going to want to stay on Vance's
good side. Right. And that means, you know, staying
on Trump's good side. Yeah, exactly. So let's
talk about Kari Lig and the Voice of America.
OK. Because it seems like her plans to take over
there have hit a snag. Yeah. So what's the latest?
So she was supposed to be the new director, but
then Trump basically shut down the whole U .S.
agency for global media, which runs the VOA.
Wow. A thousand journalists and staff. all on
administrative leave. Wow. They're not putting
out any news anymore. And this is a big deal,
you know? The VOA, they provide news and information
to people in countries where there isn't a free
press. Right, like Russia and China. Right, exactly.
So this is a big blow to those efforts. So where
does Kari Lake fit into all this? Well, she hasn't
been officially appointed as director, but she
is serving as an advisor. And there's this interesting
connection to Project 2025. OK, yeah. big conservative
agenda for the future right and one of their
goals was to either put the voa under the president's
control okay or just shut it down altogether
and the lawyer who's working with lake now he
actually wrote about that wow so it's interesting
that she's now involved with this apparent dismantling
of the VOA. It is interesting, yeah. Okay, so
we've talked about all this activity, you know,
President Trump making moves, but we're also
seeing reports that his approval ratings are
going down. What's up with that? So, Kristen
Salta Sanderson, she's a Republican pollster,
she's been looking at this, and she thinks that
maybe Trump is misreading his mandate. What does
that mean? So her analysis suggests that when
people voted for Trump, their main concern was
the economy. Sure. Inflation, cost of living,
all that stuff. They wanted that to get better.
OK. But she thinks Trump might be interpreting
that as a mandate for a broader disruption. OK.
Like, he thinks people want him to shake things
up, to be bold, even if it's unpopular. And she
thinks he's wrong. OK. She's worried that he's
going to focus too much on these big controversial
things like tariffs. Right. And he's going to
neglect the economy. And she thinks that's going
to hurt him in the long run. Yeah. I mean, that's
a classic mistake that politicians make. They
think they have a mandate for something when
they really don't. Right. So we'll see how that
plays out. Speaking of the future, we're also
hearing that J .D. Vance is being talked about
as a potential front runner for the twenty twenty
eight Republican nomination. Yeah, he's really
risen fast. Yeah, that's fast. And it's because
he's so loyal to Trump. He's always been in Trump's
corner. And he really shares Trump's worldview.
He even won the CPAC straw poll for the next
Republican nominee. And Donald Trump Jr. is apparently
a big fan. But the question is... Can he appeal
to more than just the Trump base? Right, because
that's not gonna be enough to win a general election.
Right, exactly. And he's a bit more intellectual.
Okay. You know, more academic than Trump. Okay.
So it's not clear if he can connect with those
blue -collar voters who were so important to
Trump's victory. Right. Okay, so a couple more
things to cover. Canada is apparently thinking
about not buying those F -35 fighter jets. Yeah.
What's going on there? Well... They're not too
happy about how close the US is getting to certain
other countries. OK. So they're thinking about
buying European jets instead. OK. Which would
be a... pretty big snub to the U .S. Yeah, it
would. And, you know, one last thing, looking
ahead to the twenty twenty six midterms. Yeah.
Both the Democrats and Republicans have put out
their lists of House races that they're targeting.
And there's a lot of overlap. Yeah. They're both
focused on those districts that flipped in the
last election. Right. So Democrats who won in
districts that Trump carried and Republicans
who won in districts that Harris carried. Yeah.
So those incumbents are going to have to fight
really hard to keep their seats. Oh, yeah. Those
races are going to be Brutal. So as we wrap this
up, we're looking at a really complicated picture,
right? The economy is kind of a mixed bag, and
consumers aren't feeling great about the future.
And then you have all this political stuff going
on, challenges to the courts, potential changes
to social security, and a lot of uncertainty
about what's going to happen in the next election.
Right. Yeah, it's a lot to process. I think the
key takeaway here is that there's a real disconnect
between what the economic data is saying, which
is maybe things are getting a little bit better,
and how people are actually feeling, which is
not good. And then on top of that, you've got
this conflict between the president and the rest
of the government, the courts, Congress. It's
a mess. It is a mess. So with all that said,
what do you think is the most important thing?
for people to keep an eye on in the coming months?
And what do you think all of this means for the
future of the country? That's a great question.
And it's a really tough one to answer. But I
think the thing to watch is whether this disconnect
between the data and how people are feeling,
whether that starts to translate into real economic
problems. If people keep cutting back on spending,
that could lead to a recession. And then On the
political side, I think the big question is,
you know, can our institutions hold up under
this pressure? Right. Trump's really testing
the limits of presidential power, and it's not
clear how this is all going to shake out. Yeah,
it really makes you wonder what's going to happen
next and how all of this is going to affect us
all.