PULSE POINTS:
❓What Happened: The Consumer Price Index (CPI) for March showed a decrease of 0.1 percent month-over-month, leading to a year-over-year increase of 2.4 percent, below expectations. Core CPI also reported lower than anticipated figures, rising only 0.1 percent month-over-month.
👥 Who’s Involved: The report, used by economic policymakers, notably involves Federal Reserve Chairman Jerome Powell as part of their assessment for monetary policy adjustments.
📍 Where & When: The data pertains to the United States, specifically for March, as reported today.
💬 Key Quote: “Just out: ‘INFLATION IS DOWN!!!'” — President Donald J. Trump on Truth Social.
⚠️ Impact: These figures are crucial for understanding inflation trends, potentially influencing Federal Reserve policy, the financial markets, and economic decisions.
IN FULL:
The Consumer Price Index (CPI) for March showed a decline, indicating that inflation continues to subside. Notably, this suggests that the tariffs imposed by President Donald J. Trump in February and March, ahead of his “Liberation Day” tariffs imposed on April 2, caused little, if any, inflationary pressure.
According to the data, the headline CPI fell by 0.1 percent month-over-month, diverging from the anticipated 0.1 percent increase. Over the past year, the CPI rose by 2.4 percent, slightly below the predicted 2.5 percent gain and the lowest year-over-year increase since September.
The White is celebrating the positive economic news, with President Donald J. Trump posting on Truth Social: “Just out: ‘INFLATION IS DOWN!!!'”
Falling energy prices had a notable impact, easing inflationary pressure as the energy CPI dropped by 2.4 percent in March. This decrease was driven to a significant extent by a 6.3 percent reduction in gasoline prices, offsetting hikes in electricity and natural gas costs.
The core CPI, which excludes volatile food and energy prices, increased just 0.1 percent in March, also below expectations of a 0.3 percent rise. On a yearly basis, the core CPI saw a 2.8 percent increase, the lowest since March 2021. Within the core CPI, sectors such as personal care, medical care, education, and apparel experienced price rises, while airline fares and used car prices declined.
The subdued inflation figures come amid economic discussions around tariff impacts and potential recession risks tied to energy prices. These CPI results are significant for the Federal Reserve, which closely monitors inflation to inform interest rate decisions. Lower-than-expected inflation may move the central bank to begin reducing interest rates.