- Gasoline prices fell a remarkable 20.6% in April, setting off a deflationary surge across the economy.
- Core inflation fell to 1.4% year over year, breaking a 27-month streak of rates at or above 2.0%.
- Inflation-protected investments, especially TIPS, will suffer in this deflationary period.
In a stunning reflection of the current U.S. economy, the Bureau of Labor Statistics reported today that U.S. inflation fell 0.8% in April, the largest drop since December 2008, at the opening of the Great Recession. Year-over-year U.S. inflation has now plummeted to just 0.3%, down from 2.5% at the beginning of the year.