March CPI jumped 0.9% in a single month, the biggest gain since June 2022, pushing year-over-year inflation to 3.3%. Empty supertankers are flooding toward the US Gulf Coast, but they're reshuffling barrels, not creating new ones. SaaS stocks have collapsed 40% while the S&P 500 is essentially flat. Gas hit $4.12 a gallon, and consumers were already dipping into savings before that happened.
March CPI rose 0.9% month-over-month, the largest single-month jump since June 2022, pushing the year-over-year rate to 3.3%, the highest since May 2024.
But this is reshuffling existing barrels, not creating new supply.
Ian Bremmer assessed that Trump doesn't have a plan to reopen the Strait, and extended negotiations without a breakthrough serve both the US and Iran. If the Strait isn't fully reopened, European airports face jet fuel shortages within three weeks, and some Asian countries have already begun rationing fuel.
Palantir stock continued to slide even after Trump praised the company's "great war-fighting capabilities" on Truth Social.
February personal income was negative in real terms while spending was the strongest since August. Consumers were dipping into savings or turning to credit cards even before gas prices jumped.
A 0.9% monthly CPI print gets your attention. It should. That's the kind of number that makes you check the date to make sure you're not reading a 2022 report. Year-over-year inflation at 3.3% is the highest since May 2024.
But Jason Furman makes a case worth hearing. He argues this is fundamentally different from the 2021-22 transitory debate: there are two easily identifiable one-time shocks, the labor market is much looser, wage growth is broadly slowing, and the price data itself tells a messy story. The Fed doesn't have tools that should be used for this type of inflation, because the unemployment rate is already too high, not too low. The best solution is to drop tariffs and solve the Strait of Hormuz problem.
Here's the part that should worry you more than the headline. The Fed targets PCE, not CPI, and Furman notes PCE inflation is running much higher than CPI inflation. The policy-relevant gauge is worse than what you saw in the headline. Fed researchers estimate tariff pass-through already added 0.8 percentage points to core PCE through February, and that this pass-through is effectively complete.
So the tariff damage is already baked in. The Hormuz damage is ongoing. And the Fed's best move is patience. That's a polite way of saying: you're on your own for a while.
WTI crude closed at $96.57, down 6.1% on the week. That looks like relief. It isn't, exactly.
The oil market is simultaneously saying "immediate danger reduced" and "summer spike risk is more probable than ever". Those two things can be true at the same time when the near-term physical crunch eases slightly while the structural problem (a closed strait, no plan to reopen it) gets worse.
Bremmer characterizes the regime-change war as one of the most irresponsible foreign policy decisions, noting Iran's nuclear and missile programs were a real threat but did not warrant all-out war. And he doesn't see a path to reopening the Strait anytime soon.
The tanker traffic tells you everything. Empty supertankers heading to the Gulf Coast looks like a solution on a map. It's actually the market trying to reshuffle around the barrels that remain. If the Strait isn't fully reopened, European airports face jet fuel shortages within three weeks. Some Asian countries have already begun rationing fuel.
That's the weekend risk nobody's pricing correctly.
Regular gas prices rose to $4.12 per gallon as of April 6, up 3.3% from the prior week. That's the biggest weekly move among household-relevant prices, and it landed before the full March CPI data even hit. Multiply that by a few weeks and it starts to feel real.
The 30-year fixed mortgage rate fell to 6.37% as of April 9, down from 6.46% the prior week. A modest improvement if you're shopping for a home loan, though "modest" is doing a lot of work in a sentence about a rate that was under 3% not that long ago.
Initial jobless claims rose to 219,000 as of April 4, up 16,000 from the prior week, though continuing claims fell to 1.794 million. The labor market is bending but not breaking. That gap between initial and continuing claims suggests people who lose jobs are still finding new ones, just maybe not as quickly.
Average hourly earnings stood at $37.38 as of March, up 0.24% from February. With CPI running at 3.3% year-over-year, your paycheck is growing slower than prices. That's the definition of a real purchasing power squeeze.
The S&P 500 closed the week at 6,816.89, up 7.0% from the prior week. A $100,000 portfolio indexed to the S&P 500 at the start of the week would now be worth roughly $107,030. Whether it keeps that gain depends on what happens in the Strait this weekend.
Signal:
The S&P 500 posted back-to-back 3%+ weekly gains, which historically produces above-average returns and is higher a year later 86.7% of the time. History is on the bulls' side, though history didn't have a closed strait to deal with.
February personal income was negative in real terms while spending was the strongest since August. Consumers were already stretching before gas spiked. That's a crack in the foundation.
The Bloomberg Commodity Spot Index hit new highs with 83% of components in uptrends, driven largely but not exclusively by energy. When nearly everything in the commodity complex is rising, that's a broad inflation signal.
Gold rallied 5.2% on the week alongside equities. That's unusual. When both risk assets and the ultimate safe haven rally together, markets are saying the equity bounce isn't an all-clear.
In the first six months of FY2026, the US government took in $2.5 trillion and spent $3.7 trillion. Don't try this at home.
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, with incentives like minimum prices to advantage non-Chinese suppliers. Supply chain diversification is becoming actual policy, not just a talking point.
Noise:
Palantir stock continued to slide even after Trump praised the company on Truth Social. A presidential endorsement that can't stop a stock from falling tells you something about where the real power is.
The broad market being essentially flat while SaaS collapses 40% suggests sector-specific forces, AI displacement fear, duration repricing, positioning unwinds, rather than macro-driven selling. If this were systemic, everything would be falling.
The positive stocks-bonds correlation highlights the need to think beyond the 60/40 model to find uncorrelated returns like commodities and alternatives. But over the very long term, commodities have tended to produce only the inflation rate, roughly 3%, while being as volatile as emerging market equities. They work cyclically. They're a poor long-term strategic allocation.
Xi held rare talks with Taiwanese opposition leader Cheng Li-wun, aiming to cast doubt on the Lai administration's self-defense focus by showing benefits of a more conciliatory stance toward China. This is political theater with a very long fuse.
Any headline about military escalation or failed talks could send crude gapping higher on Monday.
Watch timespreads, not just the flat price.
Consumer credit data. Consumers were already spending more than they earned in February. The next credit card delinquency and revolving credit reports will tell you whether that gap is widening.
The March PCE report will be the number that actually moves Fed expectations.
This piece believes inflation is driven by two identifiable one-time shocks, not a broad demand overheating, and that the Fed should stay patient. What flips that: if core services inflation (stripping out energy and tariff-affected goods) accelerates for two consecutive months, or if wage growth re-accelerates. That would mean the shocks are bleeding into expectations, and patience becomes complacency.
On oil, I believe the physical market is tighter than the weekly price drop suggests. What flips that: a credible diplomatic framework for reopening the Strait, or Saudi Arabia announcing a meaningful production increase. Either would break the "summer spike" thesis.