The consumer price index fell to a seasonally adjusted 0.1% in March, with inflation rates of 12 months at 2.4%, down from 2.8% in February. Excluding food and energy, so-called core inflation ran at 2.8% per year, up 0.1% for the month. This was the lowest core inflation rate since March 2021.
Consumer price inflation was eased more than expected in March as President Donald Trump prepared to launch tariffs on U.S. trading partners, the Bureau of Labor Statistics reported Thursday.
The consumer price index, a wide range of goods and services costs across the US economy, fell to a seasonally adjusted 0.1% in March, reducing the 12-month inflation rate to 2.4% from 2.8% in February.
Excluding food and energy, so-called core inflation ran at 2.8% per year, up 0.1% for the month. This was the lowest core inflation rate since March 2021.
According to Dow Jones’ consensus, Wall Street was looking for a headline inflation of 2.6% and a core of 3%.
The slump in energy prices helped to maintain the tame thing of inflation, as a 6.3% drop in gasoline prices helps to cause a wider drop in energy index of 2.4%. Food prices rose 0.4% that month. Egg prices rose another 5.9%, up 60.4% from a year ago.
Furthermore, shelter prices rose just 0.2% in March and 4% in 12 months, among the most stubborn components of inflation. It was the smallest profit since November 2021.
Airline fares fell 5.3% in March, car insurance fell 0.8%, and prescription drugs fell 2%.
Stock market futures showed a significantly lower open on Wall Street after release, but the Treasury yield was also negative.
The report is because the day after Trump surprisingly reversed some of his tariff plans, he announced some of the most offensive obligations to dozens of countries. Instead, Trump stopped 10% blanket collection on all imports announced last week, setting a 90-day window for the White House to negotiate higher tariffs.
Trump campaigned to defeat inflation, but progressed slowly began in 2025.
Nevertheless, the president is calling on the Federal Reserve to cut interest rates. Central bank officials have expressed their reluctance to move due to so many policy uncertainties in the air, and market prices indicate that the Fed will again lower the rates before waiting until June.
The nature of the tariffs has led most economists to expect a major clash in inflation, but it’s not so clear now that Trump has opened the negotiation window.
“We are committed to providing a range of services to our customers,” said Kay Haigh, global co-head of bonds and liquidity solutions at Goldman Sachs Asset Management. “Now, the Fed may face difficult trade-offs as tariff-driven price increases begin to gain feeds towards inflation data and activity remains soft.”
The futures market prices after the CPI report show that there is little change in market expectations for interest rates, with traders being priced at three or four reductions by the end of the year.
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