Three years after the initial economic disruptions of 2021 and 2022, the lingering effects of those events are still significantly influencing inflation rates in 2024. The primary driver of the current inflation, particularly in the shelter sector where rents and homeowners' equivalent rent have increased by 6.1% annually, stems from these past disruptions. According to Goldman Sachs economist Ronnie Walker, this persistent high inflation is more about "lagged catch-up" rather than a new wave of increases, suggesting that once these residual effects dissipate, inflation is expected to stabilize without further severe economic consequences. This pattern is also evident in other sectors, such as motor vehicle insurance, which has seen a 22.2% rise over the last year.

During the pandemic, Americans saved an impressive $2.1 trillion, fueling sustained consumer spending and economic resilience amidst rising interest rates and persistent inflation. However, recent reports from San Francisco Federal Reserve economists Hamza Abdelrahman and Luiz Edgard Oliveira indicate that these pandemic-era savings are now depleted, with many Americans having more debt than savings as of March 2024. This shift from savings to debt raises concerns about the future of consumer spending, which is a key driver of the U.S. economy. With the depletion of excess savings and an increase in consumer debt and delinquencies, there are growing worries about potential economic downturns.

In the wake of the Silicon Valley Bank collapse, the Federal Reserve introduced the Bank Term Funding Program (BTFP) to stabilize the financial sector, but this program has recently expired. Simultaneously, the anticipation of a Federal Reserve rate cut has been delayed indefinitely due to ongoing high inflation. This delay means that banks continue to face tough competition from higher-yielding money market funds for depositors. This dual pressure of the expired assistance program and the deferral of rate cuts poses significant challenges for banks, suggesting that now might be an opportune time to bet against them.

In April, gold prices rose by 4%, closing at $2,307 per ounce, despite a pullback from intra-month highs due to reduced buyer interest and profit-taking, evidenced by lower Chinese premiums, decreased Indian imports, and stable COMEX positions. Conversely, North American gold ETF flows saw a modest increase, aligning with continued strong demand in Asian ETFs.