Inflation cooled slightly in March, capturing a period before President Donald Trump’s tariffs rocked Wall Street.
Prices rose 2.4 percent last month compared to a year earlier. In February, prices climbed 2.8 percent compared to a year ago, the latest Consumer Price Index report shows.
The slowdown may not chalk up to much, seeing as Trump’s sweeping tariff plan went into effect in April.
On April 2, the president revealed his “Liberation Day” plan, which consisted of an across-the-board tax on imported goods bought by Americans. He declared the day will “forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again.”
The stock market suffered a bloodbath last week as investors braced for the impact of the tariffs and world leaders threatened retaliatory measures.
On Wednesday, the day that the tariffs went into effect, the president announced a 90-day pause of his so-called “reciprocal” tariffs. He also raised China’s tariffs to 125 percent “effective immediately” due to the country’s “lack of respect” for the world’s markets.
“I thought that people were jumping a little bit out of line. They were getting yippy, you know, they were getting a little bit yippy, a little bit afraid,” the president said Thursday. “I’ve reversed it. It’s for a short period of time.”
Analysts warned that the latest report may not serve as the best indicator of what’s to come, especially with some tariffs still in place.
“Given how much more the president has increased tariffs on China, the effective [tariff] rate is not that different in totality,” Andy Schneider, senior U.S. economist at BNP Paribas, told NBC News after Trump’s Thursday announcement.
Last week, Federal Reserve Chair Jerome Powell said the new levies contributed to rising prices.
“While tariffs are highly likely to generate at least a temporary rise in inflation, it’s also possible the effects will be more persistent,” Powell said at a conference in Washington, D.C.
