Import vehicle tariffs include parts

[6speedS54]

On yields, not that simple:

Yields have dropped across the curve, there is a bull-flattening move. 2yr yields dropped 16bps to 3.50%, and have outpaced the 13.5bps decline in the 10 year yield to 3.27, this signals: (1) an increased probability of fed easing acceleration (I don't necessarily agree w/ the market and I'm kind of too lazy to explain why the fed won't cut rates and "ease" as soon and as much as the markets are pricing in) and (2) a deteriorating growth expectation (risk-off sentiment), so what does this mean? The market is interpreting that growth risks are gaining prominence in the Fed's policy calculus.

FedWatch shows markets are pricing in a 69.4% probability of of a 325-350 bps rate by May 2025, implying approximately 50-75 bps of cuts from current levels, followed by another 50 bps of cumulative easing by June 2025 (66.1%) — which contradicts Powell's statement that "it is too soon to say what will be the appropriate path for monetary policy." Powell specifically warned that tariff effects "will include higher inflation and slower growth," while also mentioning the uncertainty around tariff impacts, ergo the market is overly confident in its easing expectations

On ICS (Interest Rate Futures Inter-Commodity Spreads, 1st image):
- The TYT spread (2yr-3yr) has moved from -0.8 to +0.9, indicating a shift in the front-end slope
- Steepening is evident across multiple points (TUT, NOB, BOB spreads), suggesting markets are pricing a transition from restrictive to accommodative policy
- The yield spread between 2yr and Ultra T-Bond (TUL) is particularly wide at 88.2 intraday, reflecting maximum curve steepening expectations

Front-End to Belly Dynamics (TUF: 2yr-5yr):
Yield spread widened intraday by 2.6bps to 7.6bps.
This steepening suggests market pricing increasingly aggressive near-term Fed cuts while maintaining longer-term rate expectations
The shift in TYT from negative to positive territory represents a fundamental reassessment of near-term policy trajectory.

Belly to Back-End Dynamics (FYT: 5yr-10yr):
Marginal narrowing of yield spread to 15.0bps (-0.3bps).
This flattening indicates concerns about long-term growth prospects
_____
Now, onto metals and commodities!!
To put it simply, there is no deflation in metals, if we are talking macro. If we are not, and we are talking about near term, or like one week ... if there is, I don't really care.

Bessent's agenda is something called the three arrows:
(1) 3% real economic growth through deregulation and forward guidance of confidence.
(2) 3% federal deficits by the end of 2028 through the freezing of non-defense spending.
(3) 3 million more oil barrels or equivalents a day of energy production and lower oil prices.

Under Trump's Three Arrows strategy, metals would experience inflationary rather than deflationary pressures despite lower oil prices. This apparent contradiction emerges because a deliberately weakened dollar would make metal imports more expensive while simultaneously supporting domestic metal prices. The strategy's reindustrialization focus, a "strategic decoupling," creates significant metal demand for manufacturing revival. The Three Arrows create this divergence by targeting energy independence through increased hydrocarbon production (3 million more barrels equivalent daily, pushing oil toward $50 ~ 40/barrel) while enabling monetary easing through fiscal discipline (3% federal deficits by 2028) and deregulation-driven growth (3% real economic growth). This policy combination creates the conditions for what Bessent calls "a proper easing cycle" to deliberately weaken the dollar, making U.S. exports more competitive globally (or so he surmises). The outcome is mercantilism on steroids through three channels: energy exports, industrial attraction via cheap energy, and currency manipulation—all supporting higher metal prices despite cheaper oil.


Anyhow, I don't care for the administration, but it's how I make my money, so I have to understand it.
___
The graphs below are for context on the yields bit.

From what I understand about oil production, given they are pumping record oil already, $40-$50 will destroy US producers just like they got killed last trump presidency, their breakeven is around $60-$70, there are already layoffs in the oil industry. There is no drill-baby-drill, so I am not sure where they think 3 million additional barrels will come from. Oil producers are not going to drill to put themselves out of business. On top of it OPEC+ is ramping up production which is putting pressure on the oil prices.

[Nate047]

Well shit. Guess I’ll be paying $150k for one soon 😔

Buy one in Germany for $100k, spend the other $50k on garage storage at the Ring, lap tickets, fuel and expendables for like 10 years.

[Stilt]

From what I understand about oil production, given they are pumping record oil already, $40-$50 will destroy US producers just like they got killed last trump presidency, their breakeven is around $60-$70, there are already layoffs in the oil industry.

Totally agree. The administration believes they can lower breakevens through new tax policy—specifically one that would allow producers to subtract certain expenses against their minimum tax, effectively reducing their tax burden (My description is admittedly vague; I'll need to refresh my memory on the specific policy name). Even with these measures, breakeven prices would likely only drop to around $50 per barrel.

There is no drill-baby-drill, so I am not sure where they think 3 million additional barrels will come from. Oil producers are not going to drill to put themselves out of business. On top of it OPEC+ is ramping up production which is putting pressure on the oil prices.

I can only speculate, but I believe the increased production will come from Shale gas (not oil), NGL, and LNG production, domestically. On the international front, Trump called for OPEC to increase production at his Davos speech, and the movements toward peace with Russia (which I consider a total blunder on so many fronts) also mean more supply.

[SQ13]

Buy one in Germany for $100k, spend the other $50k on garage storage at the Ring, lap tickets, fuel and expendables for like 10 years.

Absolutely not. I have like seven years of medical training left, and I ain’t got time to travel to Europe (and potentially get denied reentry into the U.S. and deported to El Salvador). I NEED a GT3 to daily drive NOW!!

My Cayman is listed on BaT right now. You should buy it so I can get into said GT3 lol.

[ATB88]

price on my $900 cart at FCP (rod bearings and related items) just went up to $950 😍

[maw1124]

price on my $900 cart at FCP (rod bearings and related items) just went up to $950 😍

Fun times

maw

[Nate047]

I NEED a GT3 to daily drive NOW!!

What you NEED is some chapstick and a pair of trousers

[6speedS54]

price on my $900 cart at FCP (rod bearings and related items) just went up to $950 😍

check eEuroparts.com, I found they were the cheapest for a LUK DMF and clutch kit, was roughly $200 less than FCP. Its not cheaper for everything though.

[davidinnyc]

This made me chuckle.

[PSUEng]

price on my $900 cart at FCP (rod bearings and related items) just went up to $950 😍

FCP prices (used to, at least) fluctuate all the time so it may not necessarily be anticipation of tariffs. As David posted above, I'm personally more concerned with retailers hiking prices on inventory that was never subject to the tariffs either to cover for potential loss of future sales, or just straight up to be predatory using fear to drive sales.

And, I don't know what amazes me more about all of this: [1] the amount of people losing their minds over these tariffs that equate quality of life to cheap stuff with no regard to infrastructure or national security, or [2] the number of folks that have no idea about the very long history--not just in the US, but the world (especially China)--of tariffs and their benefits, or [3] the number of people that think the end purchaser is just going to (have to) "pay extra" to cover the tariff on everything. If [3] were true in a free market that is predicated on price discovery where the max price is ulitmately received, then they weren't charging enough to begin with. I personally think in many cases, there is no more pricing power because the credit is drying up and Wall Street and "Corp America" know that. So they are selling off, running negative press (Woke Street Journal especially) and fueling panic. So many asset classes are overbought on credit and I cannot fathom how a correction is avoided in auto loans, real estate, stocks, real property, credit...

[maw1124]

They're freaking out because stocks are overvalued and they know it and were hoping to retire before the markets corrected. Stocks have been priced for "perfection" since the Fed was at 0%, and now a bunch of people will retire significantly less rich than they were a year ago because "elections have consequences". Musical chairs, people got stuck without chairs.

Stay calm, "hire" Warren Buffet to allocate your money, and go on with life. Too many people get paid to talk about political and market events so we have too much talk about political and market events.

$.02

maw

[0-60motorsports]

check eEuroparts.com, I found they were the cheapest for a LUK DMF and clutch kit, was roughly $200 less than FCP. Its not cheaper for everything though.

No way! Thank you. That'll complete my SMG clutch parts project.

[Rokoz]

price on my $900 cart at FCP (rod bearings and related items) just went up to $950 😍

Yeah I noticed that the interior pillars are hiked up again - they were 90ish and I just paid 105 per for some new C Pillars. Still beats 2024 but man I wish I pulled the trigger on more parts a few weeks ago

[nextelbuddy]

Damn tarrifs hit hard

ECS website
Yesterday Euro M3 bumper was 674...

Today 775

Ouch

Raising prices on current inventory they paid lower taxes on already.....

[PSUEng]

Damn tarrifs hit hard

ECS website
Yesterday Euro M3 bumper was 674...

Today 775

Ouch

Raising prices on current inventory they paid lower taxes on already.....

I've been watching that bumper, I think it was more than that at one point. It's not on "clearance" anymore. But, why have the USA Made Turner adjustable RCA's I bought in November gone up $100? I really despise the "ECS/Pelican/Turner" group and go local dealer or Bimmerworld nowadays...fewer pricing games and real people on the other side of the transaction that actually know what they are selling.