Happy 250th America…Let’s Celebrate all year long!!
Initial jobless claims for the week ending March 14 decreased by 8,000 to 205,000…The consensus was 215,000.
What does it mean – Continuing claims were little changed, indicating stable labor market. This will probably keep the Fed preoccupied for now with the inflation side of its mandate. Future reports like this may make it tough for the Fed to cut rates in the future.
Producer Price Index was up 3.9%, versus 3.6% in January…The uptick is from the survey prior to the war in Iran.
What does it mean – After the survey came out oil prices have spiked to over $100 per barrel. This will surely hit consumer pocketbooks.
The Philadelphia Fed’s manufacturing index edged up…Coming in above the consensus forecast.
What does it mean – This report marked the fourth straight monthly increase in industrial production.
Deregulation…An LLM-based deregulation index for the US has reached the highest level in decades.
What does it mean – From the Chart below you can see that deregulation often coincides with economic expansion.
According to the opening statement from the most recently released report from the White House Economic Council.
“Excess regulation harms economic activity by increasing compliance costs and misallocating resources away from more profitable activities, thus discouraging innovation, investment, and economic growth. Regulatory complexity coupled with high compliance costs can also act as a barrier to entry, sheltering incumbent producers and stifling competition, thereby reducing startup activity and job formation. Moreover, onerous regulations can lead to higher prices, reduced opportunities, an increase in the poverty rate, and disproportionate impacts on small businesses”.
This letter has been consistently pointing out exactly what The White House Council Of Economic Advisors reported in their 2025 report. Below is a graph of previous periods where we saw deregulation.
Inflation is baffling experts…Powell is providing daily proof he is in over his head as he keeps rates steady, pushing mortgage rates higher and home ownership more difficult.
What does it mean – According to First Trust’s Brian Wesbury, “recent figures have been downright bizarre”. The producer prices index rose 0.7% in February and was up 3.4% from a year ago. Yet the increase has been led by the services sector, not the goods sector. The Fed and many economists expected the complete opposite. Prices for goods in the PPI are up 2.5% in the past year, while services prices are up 3.8%. We see a similar pattern for consumer prices where services prices are up 3.1% in the past year while commodity prices are up 1.3%. The good new is that this trend and the effect of tariffs have been much more muted than many feared. Yes, inflation is still above the Fed’s 2.0% target.
Affordability and Powell’s politics over principal. It is no secret that Powel and this administration see the role of government and economic policy much differently. While he favored a very loose money supply during the previous administration and in fact even lowering rates prior to the election, he has reversed course and has tightened the money supply vs historical averages. According to First Trusty, “in the ten years prior to COVID, the M2 measure of money grew about 6.0% per year with inflation averaging at or below 2.0%. In the past year, M2 is up just 4.3%”.
The Fed is anything but lose now while it puts more pressure on the administration to solve housing and the affordability factor. The Fed is actively working against the very people it is supposed to serve. You – The taxpayer. The Fed continues to tighten through higher rates and steals money from the taxpayer by continuing forced redistribution of your hard-earned taxes while it pays banks interest on their reserves. As you know from previous letters, this theft has been going on for the last 15 years and has got to stop!!! It stifles lending, increasing the cost of capital, and creating massive profits for banks as they bring in hundreds of billions in profits by doing nothing to grow their business. It is killing small banks and entrepreneurs. Government Created this theft about the same time as the States figured out that the Affordable Care Act (ACA) would allow for massive fraud through massive expansion of government programs with little to no oversight. Probably not a coincidence. The ACA was thousands of pages long and Nacy Pelosi famously said. “We have to pass the bill so that you can find out what is in it”. Now we know. Health care fraud and waste are at record highs as government grows its stranglehold on nearly 20% of our economy.
Oil prices spike…Highest prices since 2022/23. While Iran and its backed proxies attacked US interests and bases over 180 times during that period according to the White House briefing and reports from the defense department.
What does it mean – Different cause but same results. In 2022/23 and through much of 2024, America was actually under attack by Iran and its proxies throughout the Middle East and Africa. With over 180 attacks by the largest terrorist organization in the world accompanied by a self-destructive energy policy and massive regulation that closed refineries, pipelines, and allowed the federal government to increase regulations and ultimately slow play the release of federal land for the purpose of drilling and developing petrol energy while they invested billions in unreliable wind energy that killed countless mammals off the coasts. All leading to the highest gas prices we have ever seen as a nation.
Drill Baby Drill…While California suffers from the highest gas prices it also suffers under the highest gas taxes in the country. It is forcing the closure of refineries run by Philips, Valero and Chevron to name a few. CA is literally pushing thousands of high paying jobs out of the state as these companies shut down and relocate their headquarters and operations out of CA to states like Texas.
What does it mean – While the rest of the country continues to see fuel prices rise, California continues to double down on stupid and sees its prices rise much faster and higher than the national average. Here is what it cost me to fill my truck with Diesel on 3/23/26. The worst part about it is the pump shut off at $200.00 and I could not even fill my tank.
According to Andy Walz and his interview at The New York Times, “California has had, I think, very poor energy policy. They’ve put a climate agenda ahead of reliable and affordable energy, and the consequences of that are that energy in California — any form of it — is unaffordable.”California you have agency. You have the power to choose. Seek the facts and choose wisely. Policy matters!!
Let’s roll America!!
Doug De Groote, CFP®, MBA, CTC
Managing Director
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