CPI inflation falls in March as annual core consumer prices rise at slowest rate in four years

Key Points

  • Inflation pressures eased in March with the slowest annual core price increase since March 2021.
  • President Trump's tariff spree could reverse recent trends in moderating price growth.
  • The CPI increased by 2.4% year-over-year in March, lower than expected.
  • Core prices rose by 2.8% annually, the slowest pace in four years.
  • Despite the pause on some tariffs, baseline duties remain, and new tariffs on China were announced.

Summary

The March Consumer Price Index (CPI) report indicated a significant easing of inflation, with annual core prices rising at the slowest pace since March 2021. However, this relief might be short-lived as President Trump's recent tariff actions could disrupt the trend. The CPI rose by 2.4% over the last year, a decrease from February's 2.8% and below economists' expectations. Month-over-month, prices fell by 0.1%, marking the first decline since May 2020. Core inflation, excluding volatile food and energy prices, increased by just 0.1% from the previous month, also underperforming expectations. Despite a temporary halt on some tariffs, the baseline duties remain in place, and new tariffs on Chinese imports were announced, potentially fueling future price increases. This situation has led to cautious optimism among investors and a "wait-and-see" approach from the Federal Reserve regarding interest rates.

yahoo
April 10, 2025
Stocks
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