Treasury Secretary Scott Bessent rebuffed Margaret Brennan’s inevitable gloom and doomism about the inflation yesterday, pointing out that the numbers do not support all the hand-wringing from Trump critics. I was delighted to see this, as I’m sick and tired of the financial reporting being so lopsided.
Good News the Media Won’t Report: Inflation Down, Markets Up, Economy Strong 👇https://t.co/3ozyP3hvLs pic.twitter.com/gouZ9ZZ9jL
— Liz Peek (@lizpeek) June 2, 2025
When Moody’s downgraded U.S. Treasuries recently, it invited wild projections of the end of the U.S. dollar, a default on U.S. debt and, of course, high interest rates forever. You would think that in 100 days, the Trump White House had completely torched our fiscal outlook. It was a remarkably dishonest response, given that Bloomberg, CNBC et al sat mostly mute while Joe Biden blew up our debts and deficits.
Bessent called out Brennan’s alarmism and noted, accurately, that inflation has been dropping, saying, “Actually, the inflation numbers are the best in 4 years.” He also cited a report yesterday in the South China Post saying that 65% of the tariffs will be eaten by Chinese exporters.
Here’s some good news the liberal media will not highlight: the past month was the best May for the S&P 500 since 1990. The S&P 500 bounced up by more than 6%, while the Nasdaq jumped almost 10%. The Dow also moved higher by approximately 4%. Why were markets in celebration mode? Because the economic news is good, consumer sentiment has bounced slightly higher that prior estimates, Trump’s tariff war moderated and earnings for the last quarter came in ahead of expectations.
That’s not what you have been hearing from Bloomberg or CNBC, to be sure. Last week, as Bessent related, we got more good news on the inflation from. The PCE – ALWAYS described as “the Fed’s favorite inflation indicator – showed prices in April rose 2.1% from the year before, decelerating from the past few months. (March was up 2.3%, April’s increase was 2.6%.) From the prior month, prices were only 0.1% higher.
Also, personal income jumped 0.8%; the expectation was for a 0.3% increase. This is excellent news, as growth in personal income bolsters consumer spending, which is obviously critical for the economy. Personal spending rose at a more moderate 0.2% rate, allowing for a healthy increase in the savings rate.
The inflation news did not please the talking heads on Bloomberg, who are committed to the notion that President Trump’s tariffs will boost inflation. They chalked the moderation up to timing, noting that imposition of the increased taxes on imports would undoubtedly lead to higher prices, but that it simply hadn’t happened…yet. The South China Post report undercuts that narrative.
Based on the recent releases, and other inputs, the Atlanta Fed GDP Now number rose to an estimate of 3.8% for second-quarter growth, up from 2.2% just days earlier. Some of that comes from declining net imports; projections of second-quarter real personal spending growth and real gross private domestic investment growth declined from 3.7 percent and -0.2 percent, respectively, to 3.3 percent and -1.4 percent. Bottom line: pretty good numbers, and way better than we’ve been hearing from the “experts” these many months.
One note: the biggest jump in spending was for housing and utilities (up 24.7%). Fed Chair Jay Powell is not helping renters or people trying to buy a house by keeping interest rates high; Trump is right about this. Powell says he’s “data driven”, but the data says inflation in declining (mainly because of lower energy prices) and growth is slower.
Time for a rate cut.
