Japan's Core Inflation Hits Four-Year Low of 1.4% in April
Core inflation, excluding fresh food but including energy, rose 1.4% year-on-year, down from 1.8% in March and below the 1.7% forecast, driven by government subsidies on fuel and school tuition. This marks the third straight month below the BOJ's 2% target—the slowest since March 2022—and follows the bank's April rate hike to 0.75%, its highest since 1995. Free school lunches played a role, but a slowing was widespread. Full impact of War yet to be felt but the deceleration in inflation should keep BoJ gradual in hiking. Markets saw a milder yen and bond support, though analysts predict a rebound as subsidies fade and Middle East tensions lift fuel costs. Source: Bloomberg
What is happening in China?
Car retail sales plunged -15% YoY in April, the steepest decline since mid-2022, according to China's National Bureau of Statistics. Home appliance and furniture purchases fell at a double-digit pace, while gold, silver, and jewelry sales collapsed -21% YoY. Overall retail sales rose just +0.2% YoY in April, the weakest reading since December 2022, while fixed-asset investment fell -1.6% in the first 4 months of 2026, returning to contraction. The April data suggest GDP could expand as little as +4.1% YoY in Q2 2026, which would represent a significant miss of Beijing's official growth target of 4.5% to 5% China's economy is struggling. Source: Global Markets Investor
Here's why soaring yields do matter. Annual US interest expense is currently $1.3 trillion.
For context, the largest US government outlay is Social Security. It is $1.6 trillion. Source: zerohedge
According to BofA fund manager survey, the biggest risk to stocks is a "second wave" of inflation.
Source: BofA
Why is the Fed expanding its balance sheet again (QE)?
The stock market is at an all-time high. Credit spreads are near all-time lows. And inflation has been above the Fed's target level for 62 consecutive months, averaging over 4% per year since 2019. So why is the Fed expanding its balance sheet again (QE)? Source: Charlie Bilello
Interesting statistic: If you spent $10 million every day since Jesus was born, you would’ve spent $7.4 trillion. The US debt is $39 trillion.
Of course. it does not account for inflation. The $7.4 trillion figure is in nominal dollars, as if someone spent today’s $10 million every day for ~2,026 years. If you adjust for inflation, the comparison becomes messy because: - Dollars did not exist for most of that period. - Inflation data only exists meaningfully for recent centuries. “$10 million per day” could mean either: -> $10 million in today’s purchasing power each day, or -> $10 million nominal dollars each day, which is unrealistic historically. It still shows that today’s U.S. debt is over five times larger than that total. Source: Bull Theory
Japan Producer Prices Jump by Most Since 2014, Backing BOJ Hike
Source: Bloomberg
Inflation is now outpacing wages in America for the first time in 3 years.
Before the US-Iran war started in late February, inflation was sitting at 2.4%. It has risen to 3.8% in just two months, driven almost entirely by the energy price shock from the war. Real average hourly wages fell 0.5% in April alone and are now down 0.3% annually. Americans are earning more dollars but buying less with them. Source: Bull Theory
