April 21, 2025
Taxes or extension filed? Check.
Daffodils everywhere in my yard? Check.
Dairy Queen open? Check.
Other news? Well, stock markets were disappointing again last week, while Treasury and other bond prices rose slightly. That last is very good news, since it indicates that investors were buying Treasurys (pushing prices higher and yields lower). What we don’t want to see are investors abandoning Treasurys as untrustworthy. While the higher yields that come with falling bond prices are attractive to investors, they create a problem for the government, which has to pay the interest. And our debt service is now more expensive than our defense spending. So, good job by the bond market for stabilizing.
Federal Reserve Chairman Jerome Powell spoke at the Economic Club of Chicago on Wednesday and said that the Fed would have to have “greater confidence” that inflation is falling toward its 2% target before it would cut interest rates further. And that it might take more time than originally thought, because “The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effect.” Chairman Powell indicated that tariffs may cause rising inflation while at the same time dampening growth. If that happens, it could lead to the dreaded stagflation.
Stocks fell on these remarks. According to Bloomberg, “As of now, S&P 500 losses during Trump’s second term have erased gains going all the way back to August 2024.” The three major stock indices are still positive for the trailing-12 months, but have turned negative for 2025 year-to-date.
The economy remains strong for now. Weekly initial unemployment claims came in lower than expected on Thursday, with 215,000 filing for benefits. And consumer spending was higher than expected – up 1.4% in March alone. Much of that increase is attributable to auto purchases – without them, the sales figure would be up 0.5%. Consumers were apparently incentivized to buy cars before tariffs took effect. The consumer price index (CPI) showed that grocery prices were 2.41% higher last month than a year earlier, which is closing in on 2%, although egg prices remain at record highs. Perhaps, post-Easter, prices on eggs will decline. And although the White House is using 30,000 real eggs for today’s Easter-Egg Roll, egg-industry representatives said that only small and medium-sized eggs are being used, and not the large sizes that make their way to grocery stores. Inflation for all goods rose 2.4% in March, versus the 2.8% we saw in February for the 12 month period ending in that month.
Harvard resisted Trump Administration pressure to change its governance structure in response to antisemitism on campus. Threats of revoking Harvard’s tax-exempt status added to the feud between the administration and the university, before the administration announced that it had sent the threatening letter to Harvard in error.
Pharmaceutical giant Eli Lilly reported promising results for a new drug that could become the first oral pill alternative to injectable weight-loss and diabetes drugs. Not that I’m interested, but, when will it be FDA approved? and how much will it cost? and what is its name? As I said, no interest at all.
For the week ending on April 17th (the 18th was Good Friday) the Standard & Poor’s 500 finished at 5,282, the Nasdaq Composite Index at 16,286, and the Dow Jones Industrials at 39,142. The yield on the 10-year Treasury note closed at 4.333%. U.S. crude oil cost $62.97 per barrel, N.Y. gold cost $3,328.00 per ounce, and one Euro was worth $1.14.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here was gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Yahoo Finance, Barron’s, The Washington Post, Bloomberg, Vanguard, CNBC, Morning Brew, Axios, The Wall Street Journal, The Economist, CNN, Business Insider, The New York Times, The Washington Post, USA Today, Reuters, 1440 Digest, and The Associated Press.
We are very sad to hear of the death of Pope Francis early this morning. He was beloved by Catholics and those of other faiths around the world, and a shining example of humility, charity, and love. It is a small consolation that the cardinals who will vote on the next pontiff were largely appointed by Pope Francis, and may therefore look for another in his mold.