April 11, 2025

Permission to republish original opeds and cartoons granted.

As Producer And Consumer Prices Fall, Is Inflation Finally In The Rear-View Mirror?

By Robert Romano

Producer prices dropped 0.4 percent in March, following consumer prices dropping 0.1 percent, according to the latest data from the Bureau of Labor Statistics, amid continued drops in food and energy prices, particularly on the producer side, which saw 2.1 percent and 4 percent drops, respectively.

These price drops came prior to President Donald Trump’s April announcements of reciprocal tariffs (now paused) and 10 percent tariffs globally except for China, which is currently seeing a 145 percent tariff. Since then, there have been further drops in commodities prices including oil that factor into producer prices. Light sweet crude oil has dropped from $72 a barrel down to $60 a barrel, a 16.6 percent drop. 

All of which means inflation is falling — and appears poised to continue falling — in spite of repeated predictions by opponents of President Donald Trump’s tariffs of both parties that prices would rise in response to his tariffs on Canada, Mexico, China and the rest of the world. 

It simply has not happened, with consumer inflation the past 12 months now at 2.4 percent and producer inflation at 2.7 percent. That’s coming off peak consumer inflation of 9.1 percent in June 2022 and producer inflation of 11.3 percent in June 2022. The trend is down and has been.

And it’s really not that surprising. The money supply has not increased since 2022, and energy production including oil has been rising following the Covid-led production lockdowns as the global supply crisis has eased.

Demand has also cooled as American households maxed out their credit, total consumer credit owned and securitized having declined by 1 percent the past 12 months, according to data compiled by the Federal Reserve. 

Additionally, unemployment had already risen by more than 1 million before President Trump was even sworn into office. Arguably, unemployment has not moved too much because of the ongoing labor shortages with the ongoing Baby Boomer retirement wave, with more than 900,000 Americans over the age of 65 leaving the labor force every year and accelerating.

And, short-term market movements notwithstanding, the dollar has nominally strengthened 3.9 percent in the past 12 months. And so, the strong dollar usually accompanies commodities prices in producer prices taking a hit, which they have.

Interest rates overall are down since January, with 10-year treasuries moving from 4.8 percent down to about 4.5 percent now. 2-year treasuries are down from 4.4 percent at the beginning of the year to 3.9 percent now as of this writing. That shows inflation expectations are largely dropping. 

Gold, after initially dropping after the April 2 announcement, has been rising, showing signs of being a safe haven as it did in 2009 and also in 2020 and 2021. During the heart of the financial crisis and the Covid economic lockdowns, inflation was not a going concern, but gold kept and increased value.  

These are if anything recession signals historically — years in the making — that tend to happen at the end of economic cycles following peak inflation. 

As it is, the effective federal funds rate set by the Federal Reserve, currently at 4.3 percent, has been above the consumer inflation rate now at 2.4 percent for about two years now. If inflation continues falling and unemployment continues rising, one should expect the Fed to begin ratcheting down interest rates like they do every time those two things happen at the end of the economic cycle.

It could be we already had the recession or are in one, but it hasn’t been booked yet or that there is still one on the horizon. Generally, rising unemployment, along with collapsing consumer credit, is what usually happens as inflation slows down along with demand after the economy overheats as it did in 2022.

Politically, inflation has been slowing, it just didn’t slow down fast enough to help Joe Biden and Kamala Harris in 2024, who had to run on a record of inflation outpacing incomes.

As for the short-term gyrations in U.S. bonds with rates rising the same time stocks were selling — a worrisome sign — are interest rates on U.S. bonds rising and the dollar weakening short term because of inflation? Let’s look overseas.

For example, since April 2, the Japanese yen to the dollar has appreciated by 6 percent as Japanese 10-year treasuries have dropped following President Trump’s announcement of tariffs. Similarly, the euro to the dollar has appreciated by 5.3 percent, with German 10-year treasuries dropping as well. These could indicate domestic flights to safety as the Japanese and European economies are set to take hits from the increased U.S. tariffs.

But generally, lower interest rates abroad indicate lower inflation expectations overseas, not higher. It also indicates lower growth expectations.

Domestically, as of April 9, the Atlanta Federal Reserve is projecting the U.S. Gross Domestic Product to decline in the first quarter by an annualized 2.4 percent. This is completely consistent with the lower inflation readings. This does not happen overnight. The Atlanta Fed has been projecting a negative first quarter since the end of February. 

All of which could mean that the U.S. economy if anything should be getting on a recession footing. If U.S. bonds are having trouble, the Fed might have to step up its buyer of last resort status — it has been shedding treasuries to soak up inflation since 2022 by more than $1.5 trillion and mortgage-backed securities by more than $500 billion. If the Fed resumes bond buying, that will tell everyone a lot about the direction of prices. As usual, keep an eye on jobs and also rising energy and food production, but this could mean mission accomplished in terms of killing inflation. That’s good news.

Robert Romano is the Executive Director of Americans for Limited Government Foundation. 

To view online: https://dailytorch.com/2025/04/as-producer-and-consumer-prices-fall-is-inflation-finally-in-the-rear-view-mirror/

Supreme Court Throws Out Restraining Order Blocking President Trump From Deporting Gang Members To El Salvador, Except One

By Manzanita Miller

In one of the largest legal victories for President Donald Trump on immigration so far, the Supreme Court tossed out a restraining order from a federal judge blocking the president’s ability to deport criminals under the 1798 Alien Enemies Act.    

The court’s ruling, handed down April 7, comes after U.S. District Judge James Boasberg attempted to stop President Trump from sending planes full of enemy aliens and members of foreign gangs to an El Salvador prison on March 15. It was followed by another ruling on April 10 that could change where Kilmar Abrego Garcia is held, currently in El Salvador, even if he still ends up being deported.

Judge Boasberg’s order was in direct opposition to President Trump’s classification of  Venezuelan drug-cartels as enemy aliens, which would allow the president to expel them from the United States under the Alien Enemies Act. 

The Trump administration appealed the order blocking the president’s ability to continue deportations of gang members under the Alien Enemies Act, and the Supreme Court weighed in Monday, allowing the president to continue deportations.  

The court’s removal of the order blocking President Trump from deporting criminals is a victory for the majority of the public, who are solidly behind Trump’s efforts to secure the border and deport criminals. 

Deporting illegals remains extremely popular among the American people, with the latest YouGov survey from April 7-10 showing securing the border and deporting millions of illegal immigrants are the third and fourth most important priorities to Americans, with protecting social security and ending inflation coming in first and second. 

On deportation, Americans support Trump’s deportation efforts by fifteen points, 54 percent to 39 percent, according to YouGov, and a full 36 percent of Americans strongly support President Trump’s approach to deporting millions of illegal immigrants. 

There is bipartisan support for deportation as well, with Republicans supporting deportation by 84 points, 90 percent to six percent, and independents supporting deportation by fourteen points, 51 percent to 37 percent. Although Democrats oppose deportation by 67 points, fourteen percent of Democrats also support deportation.  

When it comes to deporting violent criminals, which is the intention behind President Trump’s use of the Alien Enemies Act, the public is solidly behind the president. A survey from the Associated Press and NORC at the University of Chicago from this spring found that the vast majority of Americans support removing criminals from the country. 

The poll found 83 percent of Americans support deporting violent criminals from the United States back to their home countries, and 65 percent strongly support the move. This includes 89 percent of Republicans, 79 percent of Democrats and 77 percent independents.   

While President Trump’s deportation initiative of illegal criminals is popular among the public, his deportation efforts are likely to be challenged by left-wing activists despite the supreme court allowing deportations to continue for now. 

In Monday’s ruling the Supreme Court did not directly rule on Trump’s use of the Alien Enemies Act but ruled that the deportees behind the lawsuit should have brought their legal challenges through a different type of lawsuit based on where they were detained in Texas. 

The court also said in its ruling that illegals being deported under the Alien Enemies Act “are entitled to notice and an opportunity to challenge their removal”, a fact that activist groups like the American Civil Liberties Union (ACLU) are seizing on. 

On Wednesday, the ACLU and ACLU of Texas filed an emergency lawsuit in Texas federal court, attempting to once more stop the removal of suspected gang members under the Alien Enemies Act. 

Activist groups are gearing up to continue fighting for illegal aliens to remain in the country through federal courts in Texas and ultimately may force the Supreme Court to rule directly on the use of the Alien Enemies Act. That said, the Supreme Court tossing out the restraining order allows President Trump to continue deporting migrants to El Salvador for the time being. 

Manzanita Miller is the senior political analyst at Americans for Limited Government Foundation.

To view online: https://dailytorch.com/2025/04/supreme-court-throws-out-restraining-order-blocking-president-trump-from-deporting-gang-members-to-el-salvador-except-one/