Our thoughts on the market's current situation: 1. Inflation data is moving in the right direction, but is this "good" for the stock market? 2. Both CPI and PPI inflation data, headline and core, fell more than expect in February 2025 3. This was the first major piece of economic data under President Trump's trade war 4. Immediately after this, President Trump posted "egg prices are down, oil is down, interest rates are down," effectively applauding his policy moves 5. As we have seen, the market has had a very MUTED reaction to inflation data that would've previously sent the S&P 500 SHARPLY higher 6. Why is this the case? This data provides President Trump a reason to keep doing what he is currently doing 7. Had inflation rebounded, Trump would face backlash as attention would have shifted to the inflationary nature of tariffs 8. Now, the trade war can carry on while President Trump will claim that he is reducing inflation, rates, and the trade deficit 9. This is exactly why markets are not recovering losses following some of the best inflation data in months 10. Lastly, it's clear that President Trump knows economic weakness, or even a recession, is the fastest "solution" to inflation It has become increasingly clear that President Trump's trade war is not going to be solved overnight. Buckle up for more volatility in BOTH directions.