Rebel Capitalist News New Inflation Data Rocks The Market
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Mar 20, 2026 Rapid inflation surprises and a shock to producer prices take center stage. Tariffs and import pricing are unpacked, showing who actually absorbs the costs. Energy and food spikes tied to Middle East tensions get attention. Historical oil shocks and links to recessions are compared. Labor, unemployment trends, and margin squeeze implications for policy are explored.
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Tariffs Hit U.S. Firms Not Foreign Producers
- Gammon explains tariffs are largely paid by U.S. importers, not foreign producers, because import prices aren't falling despite tariffs.
- Importers absorb margins or try to pass costs to consumers, but weak demand forces margin compression instead.
Monitor Margins And Core PCE Before Betting On Cuts
- Expect hotter than forecast core PCE and a lower probability of Fed cuts as input prices rise faster than output prices, squeezing corporate margins.
- Monitor margin pressure in Q1/Q2 reports and energy-linked input lines like diesel and jet fuel.
Oil Spikes Often Precede Disinflationary Ends
- Gammon frames current dynamics like 2007–09: an oil shock can lift CPI temporarily but often precipitates disinflation or deflation once demand collapses.
- He cites 2007 oil rising to $140 then CPI jumping to 5.6% before the 2008 collapse and disinflation.