Deal Overview

CoreWeave (NASDAQ: CRWV) announced on April 9 an expanded long-term agreement with Meta Platforms (NASDAQ: META) to provide approximately $21 billion in AI cloud capacity through December 2032. This builds on a prior $14.2 billion deal signed in late 2025, bringing Meta's total committed spend with CoreWeave to roughly $35 billion. The infrastructure will span multiple data center locations and include some of the earliest deployments of Nvidia's Vera Rubin platform. CoreWeave also announced plans to raise $3 billion in fresh debt.

Unlike earlier contracts focused on training large language models, this agreement is specifically optimized for inference: running AI models in real-time at scale. Meta shares rose roughly 3% on the news; CoreWeave gained about 5%. CoreWeave CEO Mike Intrator framed the deal simply: hyperscalers can build their own data centers, but they still need external capacity. "For some reason, all these people who can buy compute also feel the need to buy it from us."

Why It Matters

The inference pivot: The AI infrastructure market is shifting from training (building models) to inference (running them). Meta's $21 billion commitment is the clearest signal yet that inference compute will dwarf training spend over the next decade. As Meta deploys AI agents across Facebook, Instagram, and WhatsApp for tasks like real-time translation, content moderation, and autonomous shopping, the demand for low-latency, always-on compute is effectively unbounded.

CoreWeave's concentration risk: Meta now represents roughly 40% of CoreWeave's projected capacity through the end of the decade. That is extraordinary customer concentration for a company that IPO'd only weeks ago. If Meta's AI strategy stumbles, or if it decides to bring more compute in-house, CoreWeave's revenue base compresses dramatically. The flip side: $35 billion in contracted revenue provides a level of visibility that almost no infrastructure company has ever had at this stage.

The GPU landlord model works: CoreWeave's entire thesis is that hyperscalers will always need more compute than they can build themselves. This deal, plus similar arrangements with Google, Microsoft, and OpenAI, proves the model. CoreWeave shares are up 28% in 2026.

What Happened

The Carlyle Tactical Private Credit Fund (CTAC), a $7 billion interval fund that represents 41% of Carlyle's private credit portfolio, disclosed in a shareholder letter on April 9 that it received repurchase requests totaling roughly 15.7% of its outstanding shares in Q1 2026. The fund's structure limits redemptions to 5% per quarter. That means investors who asked to pull an estimated $750 million received approximately $240 million, less than a third of their requested amount.

Carlyle is not alone. Blue Owl's OCIC fund reported redemption requests of 29.1% and gated at 5% on April 2. Morgan Stanley, BlackRock, and Apollo Global Management have all imposed similar limits in recent weeks. The shareholder letter attributed the wave to "recent market volatility" across private credit funds broadly.

Why It Matters

The semi-liquid illusion cracks: Private credit's selling point to retail and wealth management clients was simple: higher yields than public bonds with the ability to redeem periodically. The "semi-liquid" label implied you could get your money back when you needed it. What investors are now discovering is that "semi-liquid" means "liquid until everyone wants out at the same time." When redemption requests exceed the gate, investors are trapped, and the fund managers decide who gets paid first.

Iran war fallout: The timing is not coincidental. The U.S.-Iran conflict that began February 28 sent oil above $110, crushed equities, widened credit spreads, and triggered asset markdowns across private credit portfolios. Investors who entered these funds expecting bond-like stability got equity-like volatility with bond-like illiquidity. The ceasefire may calm markets, but the structural problem remains: too many investors in vehicles they cannot exit.

Contagion risk is real: When one major fund gates, investors in similar funds rush to redeem preemptively, creating a self-fulfilling liquidity crisis. The progression from Blue Owl (29.1% requests) to Carlyle (15.7%) to the broader industry suggests the wave is still building. The question is whether the ceasefire rally provides enough breathing room for asset values to recover before the next redemption window opens.

The Week in Context

On April 7, President Trump announced a two-week ceasefire with Iran, brokered by Pakistan, ending 40 days of U.S.-Israeli strikes that had sent oil above $110 per barrel, disrupted global shipping through the Strait of Hormuz, and dragged the Dow into negative territory for 2026. The market response was immediate and violent. On April 8, the Dow surged 1,326 points (2.9%), its best day since April 2025. WTI crude plunged 16% to $94.41, the steepest single-day decline since April 2020. The S&P 500 broke above its 200-day moving average. By April 9, the index had notched seven consecutive gains, its longest winning streak since October.

The rotation was textbook. Semiconductor stocks led the rebound: Broadcom jumped 5%, reclaiming ground lost during the conflict. Energy names that had surged on war premiums reversed hard: Exxon fell 4.7%, Chevron dropped 4.3%. Industrials (XLI +3.8%) and materials (XLB +3.3%) rallied on expectations that global trade disruption would ease. Ten of eleven S&P sectors closed green on April 8. Energy was the lone loser.

Why It Matters

The "war premium" unwind is only half done: Oil settled near $98 on April 9 after bouncing from the $94 low, as markets realized Iran was still controlling access to the Strait of Hormuz despite the ceasefire. Ships need to "coordinate with Iran's Armed Forces" to pass through. That is not free passage. Until the strait is genuinely reopened without conditions, crude remains elevated above the pre-war ~$70 to $75 range. The rally is pricing in a ceasefire that is fragile at best.

The Fed pivot that isn't: FOMC minutes released April 9 showed policymakers are now more inclined toward rate hikes, not cuts, as they fear the war has triggered inflationary pressure that the ceasefire alone will not reverse. Oil spent 40 days above $100. That feeds into transportation, food, and manufacturing costs with a lag. Even if crude normalizes, the inflation impulse is already in the pipeline. Markets rallying on peace may be ignoring the monetary tightening that peace cannot prevent.

Amazon's $15B AI reveal: Buried in the ceasefire euphoria, CEO Andy Jassy disclosed for the first time that AWS's AI revenue run rate topped $15 billion in Q1. Amazon shares jumped 5.6% on April 9. The number confirms that the AI infrastructure buildout is accelerating through geopolitical chaos: hyperscalers are spending regardless of oil prices, wars, or rate expectations. Amazon, Meta ($21B CoreWeave deal), and Anthropic ($30B run rate) all reported milestone AI numbers in the same week.

What Happened

Anthropic disclosed on April 7 that its annualized revenue run rate has surpassed $30 billion, up from approximately $9 billion at the end of 2025, a 3.3x increase in roughly four months. The company now has more than 1,000 business customers each spending over $1 million annually, a number that doubled in under two months since its February Series G announcement. Eight of the Fortune 10 are running critical workloads on Claude.

Alongside the revenue disclosure, Anthropic announced an expanded partnership with Google and Broadcom for 3.5 gigawatts of next-generation TPU compute capacity, set to come online in 2027. The deal deepens Anthropic's existing Google Cloud relationship and extends a Broadcom supply agreement through 2031. The majority of the compute will be sited in the United States. Anthropic also raised a $30 billion Series G round in February at a $380 billion valuation, with SoftBank, Amazon, Nvidia, and a16z among the investors.

Why It Matters

Anthropic has overtaken OpenAI: OpenAI disclosed a $2 billion monthly revenue figure in late March, putting its run rate around $24 to $25 billion. Anthropic is now generating more revenue than its rival despite having a fraction of OpenAI's consumer user base (OpenAI has 900 million+ weekly ChatGPT users). The difference is enterprise mix. Roughly 80% of Anthropic's revenue comes from business customers, compared to OpenAI's more consumer-heavy composition. Enterprise revenue is stickier, higher-margin, and expands faster.

The compute arms race escalates: The 3.5 gigawatt deal is staggering in physical terms. For context, a single gigawatt powers roughly 750,000 American homes. Anthropic is securing the equivalent of a medium-sized city's power consumption in AI chip capacity alone. Broadcom CEO Hock Tan has projected close to $100 billion in AI chip revenue for 2027, with Anthropic cited as a primary driver. A Broadcom SEC filing earlier revealed that Anthropic had placed $10 billion and $11 billion custom chip orders in consecutive quarters.

The Pentagon dispute doesn't matter (yet): The U.S. Department of Defense labeled Anthropic a supply-chain risk following a disagreement over AI safety measures. Anthropic has warned the designation could result in billions in lost revenue. But the numbers tell a different story: enterprise demand is accelerating despite the label. The question is whether the Pentagon dispute is a solvable contract disagreement or a structural rift between Anthropic's safety commitments and government expectations for AI deployment.

Deal Overview

Neurocrine Biosciences (NASDAQ: NBIX) announced on April 6 that it will acquire Soleno Therapeutics (NASDAQ: SLNO) for $53 per share in an all-cash tender offer, valuing Soleno at approximately $2.9 billion. The offer represents a 34% premium to Soleno's closing price on April 2 and a 51% premium to its 30-day volume-weighted average price. Neurocrine will fund the deal with its $2.54 billion cash pile supplemented by modest pre-payable debt. The transaction is expected to close within 90 days.

Soleno's Vykat XR (diazoxide choline) was approved by the FDA in March 2025 as the first and only treatment for hyperphagia in Prader-Willi syndrome. In its first nine months on market, the drug generated $190.4 million in net revenue, priced at $466,000 per patient per year. By year-end 2025, 859 patients were actively on drug, representing just 12.5% of the estimated U.S. addressable market.

Why It Matters

The commercial proof point: Neurocrine is buying a proven asset with enormous room to run. Vykat XR has 630 active prescribers and only 12.5% market penetration. Layering it onto Neurocrine's existing rare disease sales force from its Ingrezza franchise is the kind of deal that pays for itself through distribution leverage alone.

The "surprising" price: Stifel analysts flagged the deal as unexpectedly cheap for Soleno shareholders given the drug's trajectory. At roughly 15x trailing revenue for a product with 87.5% of its market still untapped, Soleno's board may face questions about whether it left money on the table.

Deal Overview

Goldman Sachs (NYSE: GS) closed its acquisition of Innovator Capital Management on April 2, 2026, in a transaction valued at approximately $2 billion in cash and equity. Innovator, based in Wheaton, Illinois, is the pioneer of defined-outcome ETFs. The acquisition adds 171 ETFs and roughly $31 billion in assets under supervision to Goldman Sachs Asset Management, which now manages approximately 240 ETFs globally with $90 billion in total ETF AUS.

Why It Matters

Buy vs. build in asset management: Active ETFs pulled nearly a third of all U.S. ETF inflows in 2025, and defined-outcome strategies were among the hottest subsegments. Rather than spend five years building a competitive options-overlay platform, Goldman wrote a check. The $2 billion price tag is steep by asset management standards but buys immediate scale in a category with structural tailwinds.

The distribution arbitrage: Innovator built great products but distributed them through a 70-person team. Goldman distributes through one of the largest wealth management and institutional sales networks on the planet. If Goldman can grow Innovator's assets to $50B within two years, the acquisition pays for itself on fee revenue alone.

Deal Overview

Unilever (LON: ULVR) and McCormick & Company (NYSE: MKC) announced on March 31 that they have agreed to combine Unilever's global Foods business (excluding India) with McCormick in a Reverse Morris Trust transaction. The deal values Unilever Foods at $44.8 billion, corresponding to 13.8x 2025 EBITDA. The combined entity will be worth approximately $65 billion with $20 billion in annual revenue. Unilever and its shareholders will receive 65% of the combined company plus $15.7 billion in cash. McCormick shareholders will own approximately 35%.

Why It Matters

Unilever's strategic exit: CEO Fernando Fernandez has spent a year dismantling Unilever's conglomerate structure. The ice cream business was spun off in December. Now the food division follows. What remains is a focused household and personal care company with a faster growth profile.

McCormick's transformation: McCormick goes from a $7 billion spice company to a $20 billion global food platform overnight. Adding Hellmann's and Knorr to Frank's RedHot, Cholula, and French's creates a genuine flavor conglomerate with pricing power across retail and foodservice globally.

The market's skepticism: McCormick fell 9% and Unilever dropped 3%. RBC analyst James Edward Jones captured the bear case: Unilever is giving up 100% ownership of two dominant brands for a 55% stake in a sprawling food conglomerate.

Deal Overview

Eli Lilly (NYSE: LLY) announced on March 30 a definitive agreement to acquire Centessa Pharmaceuticals (NASDAQ: CNTA) for $38 per share in cash (roughly $6.3 billion), representing a 37% premium. Shareholders will also receive one non-transferable CVR worth up to $9 per share, bringing total potential deal value to approximately $7.8 billion. The CVR pays out in three tranches tied to FDA approvals of cleminorexton or ORX142 for narcolepsy type 2, idiopathic hypersomnia, and any indication before January 1, 2030. This is Lilly's third acquisition of 2026.

Why It Matters

The orexin thesis: Centessa's lead candidate cleminorexton is an orexin receptor 2 agonist for excessive daytime sleepiness. Positive Phase IIa results across narcolepsy type 1, type 2, and idiopathic hypersomnia. Lilly is buying the potential to own the wakefulness side of the sleep-wake equation.

The GLP-1 windfall at work: Mounjaro and Zepbound are throwing off so much cash that Lilly can spend $7.8B on a Phase II asset without blinking. Three acquisitions and a major licensing deal in three months signals a company deploying GLP-1 profits aggressively.

Deal Overview

Sysco Corporation (NYSE: SYY) announced on March 30 that it will acquire Jetro Restaurant Depot for approximately $29.1 billion. Restaurant Depot shareholders will receive $21.6 billion in cash and 91.5 million Sysco shares. The total consideration represents 14.6x operating income, or 13.0x including expected synergies. Restaurant Depot operates 166 large-format warehouse stores across 35 states, generating approximately $16 billion in revenue, $2.1 billion in EBITDA, and $1.9 billion in free cash flow in 2025.

Why It Matters

The omnichannel bet: Sysco is a logistics company that delivers food. Restaurant Depot is a retailer where operators load their own trucks. These are fundamentally different models. Sysco is betting that combining them creates an omnichannel operation. It is a bold thesis.

The FTC ghost: In 2015, a federal judge blocked Sysco's $3.5 billion acquisition of US Foods on antitrust grounds. This deal is structurally different, but the Independent Restaurant Coalition has already called on the FTC to block the sale.

Wall Street's verdict was instant: Sysco stock plunged 15% intraday, its worst decline since the COVID crash. $21 billion in new debt, 19% share dilution, and a family-run Brooklyn warehouse business that has never operated inside a public company.

What Happened

Allbirds (NASDAQ: BIRD), the once-buzzy maker of wool sneakers that peaked at a $4 billion valuation after its November 2021 IPO, announced on April 15 that it is pivoting entirely to AI compute infrastructure. The company sold its footwear brand and assets to American Exchange Group for $39 million (roughly 1% of its peak valuation) and will rebrand as "NewBird AI," describing itself as a "fully integrated GPU-as-a-Service and AI-native cloud solutions provider." The company has secured $50 million in convertible financing from an undisclosed institutional investor.

The stock surged 582% in a single session, closing at $14.50 from under $3 the day before. Allbirds had been valued at approximately $21 million at Tuesday's close. After the jump, its market cap reached roughly $150 million. The company plans to ask shareholders on May 18 to approve a charter amendment removing "references to the company being operated for the environmental conservation public benefit."

The Obvious Comparison

In December 2017, Long Island Iced Tea Corp., a struggling beverage company, rebranded as "Long Blockchain." The stock jumped 380%. Within months, the SEC charged three people with insider trading. The company never built anything meaningful in blockchain. Nasdaq delisted the shares in 2021. That playbook is now so well-known that it has its own name in market lore: the "pivot-to-hype trade." Allbirds is running it with AI instead of crypto, wool sneakers instead of iced tea, and a 582% single-day gain instead of 380%.

The differences are worth noting. Allbirds at least has a real public company shell with a Nasdaq listing, $50 million in committed financing, and a stated plan to acquire GPU hardware and lease it under long-term contracts. GPU-as-a-Service is a real business model; CoreWeave just signed $35 billion in contracts with Meta alone. The question is whether a company with zero experience in data centers, no engineering team, no existing hardware, and no customer relationships can build a viable business in a market dominated by players who have spent billions establishing their infrastructure. The answer is almost certainly no. But the stock moved 582% anyway, because the market in April 2026 will pay almost anything for anything with "AI" in the name.

What It Tells You About the Market

The Allbirds pivot is not a story about Allbirds. It is a story about the market. When a defunct shoe company can gain $130 million in market cap in one day by typing "AI compute infrastructure" into a press release, it tells you something about the temperature of the AI trade. The same week that Anthropic disclosed $30 billion in revenue and Meta committed $21 billion to CoreWeave, a company with no revenue, no technology, and $50 million in financing captured 582% of investor enthusiasm. The legitimate AI infrastructure companies are printing real numbers. The Allbirds-to-NewBird rename is what the froth on top looks like.

The Numbers

On April 15, the S&P 500 closed at 7,022.95, surpassing its previous all-time high of 7,002.28 set on January 28. The Nasdaq Composite rose 1.59% to 24,016.02, also a record, extending its winning streak to 11 consecutive days, the longest in the index's history. The S&P 500 has risen 10 of the past 11 trading sessions, gaining 9.8% across that stretch. For context: that is a faster rebound than the one following Liberation Day tariff shock in April 2025, and the fastest 10-session rally since the post-COVID bounce in April 2020.

The recovery has been concentrated at the top. Since the S&P's low of 6,316.91 on March 30, a fund tracking only the "Magnificent 7" mega-cap tech stocks is up nearly 18%. The equal-weight S&P 500 (excluding those seven companies) is up about 8%. Nvidia has risen for 11 consecutive sessions, its longest daily winning streak on record. Tesla surged 7% on April 15 after CEO Elon Musk provided an update on the company's AI5 chip.

How We Got Here

The V-shape, again: The S&P 500 fell 9.8% from its January peak to its March 30 low, driven by the U.S.-Iran war, $110+ oil, and fears of a global shipping disruption through the Strait of Hormuz. It then recovered every point of that decline in 10 trading days. "As far as the stock market is concerned, the war is over until further notice," wrote Ed Yardeni of Yardeni Research. The pattern is now familiar: shock, sell-off, V-shaped recovery powered by tech. It happened with tariffs in 2025. It happened with COVID in 2020. The market's muscle memory is to buy the dip and trust that the worst case does not materialize.

Peace talks, not peace: The rally is built on a ceasefire that has not produced a peace deal. Iran's Supreme Leader has publicly stated that aggressors will be punished. The Strait of Hormuz is technically open but requires coordination with Iran's armed forces. Oil is still near $95, well above its pre-war $70 level. VP Vance led talks in Islamabad over the weekend without a breakthrough. A second round may happen "in the next few days," according to the White House. The market is pricing in a positive outcome from negotiations that have not concluded.

Earnings are providing cover: Goldman Sachs posted record equities revenue. JPMorgan beat on every line. Morgan Stanley hit record revenue on April 15, rising 5%. Bank of America rose 2.5% on strong Q1 profits. The combination of strong bank earnings and ceasefire optimism has given bulls enough justification to push through the January highs. But the IMF raised its 2026 inflation forecast to 4.4% on the same day the S&P hit its record. The disconnect between market euphoria and underlying economic stress is as wide as it has been since early 2022.

The Numbers

Goldman Sachs (NYSE: GS) reported Q1 2026 earnings of $17.55 per share on April 13, beating the $16.49 consensus by 6.6%. Revenue came in at $17.23 billion, up 14% year-over-year and the firm's second-highest quarter ever. The standout was equities trading, which hit a record $5.33 billion in revenue (+27% YoY), driven by prime brokerage activity and elevated market volatility. Investment banking fees surged 48% to $2.84 billion on a wave of completed mergers. Advisory revenue nearly doubled, up 89% to $1.49 billion. Return on tangible common equity was 21.3%.

The miss was fixed income. FICC revenue fell 10% to $4.01 billion, roughly $910 million below estimates, with "significantly lower" revenues in interest rate products, mortgages, and credit. Provision for credit losses more than doubled to $315 million, the largest increase since 2020.

JPMorgan Chase (NYSE: JPM) reported Q1 results on April 14. Earnings per share came in at $5.94, beating the $5.45 estimate by 8.2%. Revenue rose 10% to $50.54 billion. Net income climbed 13% to $16.49 billion. Markets revenue hit $11.6 billion (+20%), with fixed income up 21% to $7.08 billion on strength in commodities, credit, and emerging markets. Investment banking fees jumped 28% to $2.88 billion. CEO Jamie Dimon pointed to low-single-digit growth in discretionary card spending, describing the consumer as "intact, but not accelerating." JPM lowered full-year net interest income guidance from $104.5 billion to approximately $103 billion.

What the Market Is Actually Saying

The beat-and-drop pattern is the story. Goldman fell 3% on its earnings day despite posting records. JPMorgan's stock barely moved despite a clean beat on every line. In normal markets, these results would have sent both stocks up 3 to 5%. Instead, the reaction tells you that institutional investors are not pricing bank fundamentals right now. They are pricing the probability that the Iran ceasefire holds, that oil stays below $100, and that the Fed does not hike. Bank earnings are noise against that signal.

M&A is back, but bifurcated. Goldman's 48% surge in IB fees and JPMorgan's 28% increase confirm that the dealmaking renaissance is real. But David Solomon warned on the earnings call that the Iran conflict could push corporate clients to the sidelines. Advisory revenue was strong because Q1 deals closed before the war intensified. The pipeline is there. The question is whether it converts in Q2 if the geopolitical backdrop deteriorates.

Credit deterioration is showing up. Goldman's loan loss provisions more than doubled. JPMorgan projects a Card Services net charge-off rate of 3.4%. Both banks are quietly building reserves for a consumer that the headline employment data says is fine but that the Michigan sentiment survey says is collapsing. The divergence between strong bank earnings and rising credit provisions is exactly the pattern you see before a turn.

Deal Overview

Amazon (NASDAQ: AMZN) announced on April 14 a definitive agreement to acquire Globalstar (NYSE: GSAT) for approximately $11.57 billion, or $90 per share. Shareholders can elect cash or 0.3210 Amazon shares per Globalstar share, with cash elections capped at 40% of total shares. The deal is intended as a tax-free reorganization and is expected to close in 2027. No separate shareholder vote is required: holders of a majority of voting power have already approved via written consent.

The acquisition gives Amazon's satellite division, recently rebranded from Project Kuiper to Amazon Leo, Globalstar's roughly two dozen operational low-earth-orbit satellites, ground station network, and globally harmonized spectrum licenses across L-band, S-band, and Band 53/n53. Critically, Amazon also announced a parallel agreement with Apple: Amazon Leo will continue powering satellite connectivity for current and future iPhones and Apple Watches, including emergency SOS, roadside assistance, and messaging features.

Amazon shares rose 5% on the news. Globalstar jumped 10%.

Why It Matters

Amazon bought time and spectrum. Project Kuiper has been in development since 2019 and has roughly 200 satellites in orbit against a target of 3,200 by 2029. SpaceX's Starlink operates approximately 10,000 satellites and serves over 9 million subscribers. Amazon was losing the satellite race by every measurable metric. Globalstar gives Amazon something it cannot build: operational satellite infrastructure today and, more importantly, Band 53 spectrum that is licensed globally and optimized for direct-to-device connectivity. Industry sources suggest Amazon paid the premium specifically because SpaceX was also interested in Globalstar's spectrum. Securing Band 53 before a competitor could was the strategic imperative.

The Apple angle is the real prize. Apple invested $1.5 billion in Globalstar in 2024, taking a 20% stake and securing 85% of network capacity. The new Amazon-Apple agreement means every iPhone and Apple Watch with satellite features becomes an Amazon Leo customer. Apple gets a well-capitalized infrastructure partner that can scale the network far beyond what Globalstar could alone. Amazon gets a built-in customer relationship with the world's most valuable consumer hardware company. SpaceX has its own direct-to-device partnerships (notably with T-Mobile), but none with Apple's install base.

This fits Amazon's $200B capex plan. Amazon has already signaled $200 billion in 2026 capital expenditure, primarily for AI infrastructure. Adding satellite connectivity extends the same infrastructure thesis: Amazon wants to own the physical layer that its cloud, logistics, and consumer businesses run on. AWS's $15 billion AI revenue run rate, the $21B CoreWeave/Meta deal flowing through Amazon's cloud, and now a global satellite network all point to a company that is vertically integrating at planetary scale.

The Numbers

The Bureau of Labor Statistics reported on April 10 that the Consumer Price Index rose 0.9% in March on a seasonally adjusted basis, the largest monthly increase in nearly four years, putting the annual rate at 3.3%. Energy prices surged 10.9% for the month, led by a 21.2% spike in gasoline: the single largest monthly gas price jump since the BLS began tracking it in 1967. Gasoline alone accounted for nearly three-quarters of the entire monthly CPI increase.

The more encouraging number was underneath the headline. Core CPI, stripping out food and energy, rose just 0.2% monthly and 2.6% year-over-year, both a tenth of a point below consensus. Shelter costs increased 0.3% (3.0% annually, tied for the lowest since August 2021). Food prices were flat. Medical care, personal care, and used car prices all declined. Eggs fell another 3.4%, now down 44.7% from their peak.

The University of Michigan Consumer Sentiment Index, also released April 10, dropped to a new all-time low, below anything recorded during the Great Recession or the COVID pandemic.

Why It Matters

Two inflations in one report: The March CPI is really two stories stapled together. The headline number (0.9%, 3.3% annual) is a war-driven energy shock that will reverse if the ceasefire holds and oil continues falling from its $110+ peak. The core number (0.2%, 2.6% annual) shows underlying price pressures are actually moderating. The Fed's challenge is deciding which number to believe. If they focus on the headline, rate hikes are on the table. If they focus on core, they can hold steady and wait for energy to normalize. The FOMC minutes already showed members leaning hawkish, and this report gives both camps ammunition.

The second-order problem: Even if oil prices normalize quickly, the 40 days of $100+ crude have already fed into transportation costs, airline fares (+2.7% in March), apparel (+1.0%), and shipping rates across rail, road, and sea. These second-order effects arrive with a lag and persist after the initial shock fades. Kiplinger's inflation forecast now projects headline CPI reaching 3.6% in April or May before moderating, with core inflation creeping toward 2.9% by mid-year because of tariff effects and rising healthcare costs. Rate cuts are effectively off the table for 2026.

Consumer sentiment says it all: The all-time low in the Michigan survey is not just about gas prices. It reflects a consumer who spent 2025 watching inflation finally cool, only to see it rip back up because of a war they didn't ask for, with real wages declining 0.6% in a single month. The spending data has not cracked yet, but sentiment at these levels has historically preceded pullbacks in discretionary consumption within two to three quarters.