CPI inflation falls in March as annual core shopper costs rise at slowest charge in 4 years

March’s Client Worth Index (CPI) report confirmed inflation pressures eased significantly final month, with annual core costs rising at their slowest tempo since March 2021. However it may very well be the final time traders see moderating worth progress as President Trump’s tariff spree threatens to upend current easing traits.

The newest knowledge from the Bureau of Labor Statistics confirmed that the Client Worth Index (CPI) elevated 2.4% over the prior yr in March, a slowdown from February’s 2.8% annual acquire and a beat in comparison with economists’ expectations of a 2.5% annual enhance.

On a month-over-month foundation, costs declined 0.1% — the primary time month-to-month CPI costs have fallen since Could 2020. This was additionally under the 0.2% enhance seen in February and a beat in comparison with economists’ estimates of a 0.1% month-to-month uptick.

On a “core” foundation, which strips out the extra unstable prices of meals and gasoline, costs in March climbed 0.1% over the prior month, cooler than February’s 0.2% month-to-month acquire and forward of economist expectations of a 0.3% enhance.

Learn extra: $6 eggs and different inflation ache factors: Here is the place costs are rising

Over the past yr, core costs rose 2.8%, a deceleration from the three.1% annual core worth will increase seen within the prior-month interval and the slowest annual rise in 4 years.

Total, March delivered the second straight month-to-month decline in headline and core CPI inflation.

The report greets traders lower than 24 hours after markets rallied on the newest commerce growth: a 90-day pause on reciprocal tariffs for many international locations and a simultaneous enhance of US levies on Chinese language imports.

Though Trump has paused reciprocal tariffs (for now), the ten% baseline duties that went into impact final weekend for many international locations stay. Mexico and Canada nonetheless face a separate set of duties associated to fentanyl, whereas separate industry-specific tariffs on metal, aluminum, and autos stay unchanged.

Learn extra: What Trump’s tariffs imply for the economic system and your pockets

The president additionally introduced he would unilaterally increase the tariff charge on China to 125%, citing “the shortage of respect that China has proven.”

In a submit on Fact Social, Trump reacted to the inflation information, writing merely: “INFLATION IS DOWN!!!”

However economists proceed to warning that present tariffs will possible result in sooner worth progress. That, coupled with rising fears of a self-inflicted recession, has saved the Fed in “wait-and-see” mode relating to rates of interest.

“This might simply be the final actually good CPI day for some time,” Claudia Sahm, former Federal Reserve Board economist and present chief economist at Century Advisors, advised Yahoo Finance following the info’s launch. “The tariffs which have gone into impact [but] it is going to take time for it to indicate up within the knowledge.”