Unliberated Week in Review

Inflation, tariffs, & more tariffs

In a nearby parallel universe, this week resulted in an economic victory lap. Inflation came in cooler than expected and is back to early 2021 levels. Unemployment remains low. Mortgage applications are picking up. Correspondingly, consumers are looking to spend, the Fed is ready to cut rates, and both the economy and equity markets are ready to blast off.

The only difference between our universe and that one? Their version of America didn’t ratchet tariffs up to their highest effective level in nearly a century.

So instead of imminent rate cuts and a soft landing, we get stock market sell offs, resurgent inflation fears, the worse consumer expectations in 45 years, rising rates as the world sours on U.S. treasuries, and a business environment frozen solid by nearly unprecedented uncertainty.

Of course, unlike previous economic crises, this one has a simple off switch.

Monday

TSA Checkpoint Travel Numbers

Air travel has fallen below 2024 levels over the past two weeks, according to TSA data. This is a bad sign for both business spending and tourism, and airlines appear pretty glum about the outlook for the remainder of 2025. It has been the services side of the economy that has held up best in the face of high interest rates, but now this segment is also starting to slump.

Gas Prices & Diesel Prices

Gas prices increased to $3.37/gallon this week. Gas prices typically rise throughout spring, but oil prices cratered over the past week, so we’ll see if normal seasonal patterns hold (they won’t – gasoline prices will be much lower by the time of our next report).

Diesel prices rose again but, at $3.64/gallon, are still $0.36/gallon cheaper than one year ago.

Tuesday

NFIB Small Business Optimism Index