Politics
JUST IN: Prices, Inflation Fall Further Than Expected In Major Win For Trump
Consumer prices and inflation data cooled considerably in March, offering a much-needed shot in the arm to the Trump administration amid a reckoning over the president’s aggressive tariff strategy and pullback on Wednesday.
Data by the U.S. Bureau of Labor Statistics show that the overall Consumer Price Index dropped while energy prices nosedived, while the core measure that excludes food and energy rose slightly month-over-month.
Economists are in a wait-and-see mode after President Donald Trump left more than 70 countries bearing the burden of double-digit tariff hikes for a week before reducing them to 10% across the board. China remains under the gun, however, as President Trump on Thursday ratcheted overall tariffs on the country up to 125%.
The CPI fell 0.1% in March, the coolest monthly reading since July of 2022, according to Axios.
- In the 12 months through March, CPI rose 2.4%, a big pullback from February’s 2.8% increase.
- Core CPI — which policymakers see as a better representation of underlying inflation — rose just 0.1% last month, while the measure rose 2.8% in the year ending in March, compared to the 3.1% in February.
With global trade wars still underway, investors remain cautious about the repercussions of Trump’s temporary tariff spikes and are continuing to watch for fallout from the record-high rate placed on China. The Asian nation supplies more than 13% of all imports to the U.S.
Cable news panelists shrieking about economic malaise are contradicted by several significant trade wins by Trump, however. He can point to a promise by Swedish carmaker Volvo to ramp up production at its South Carolina factory and Honda’s decision to manufacture its 2025 Civic model at its Indiana plant rather than Mexico.
The company’s announcement followed similar ones by Hyundai, which promised a $20 billion domestic investment, as well as Stellantis’s commitment to reopening a plant in Belvidere, Illinois to produce its midsize trucks.
American companies heavily reliant on China for manufacturing are also managing to find ways around the tariffs. On Monday, the Wall Street Journal reported that Apple is preparing to move a significant portion of its iPhone production to India, leaving China reeling after enjoying two decades of business with the world’s most popular cell phone.
The CPI data is sure to be welcomed by the Federal Reserve where chairman Jerome Powell has remained skeptical about lowering rates. At a conference last week, he said the central bank won’t act with haste, but rather will wait to see how the picture clears up before making a rate decision, according to Reuters.
“It is too soon to say what will be the appropriate path for monetary policy,” Powell said Friday.
Trump, meanwhile, is feeling bolstered by the positive economic data, including last month’s surprisingly healthy jobs report.
“The slow moving Fed should cut rates,” he wrote on Truth Social this week.
