The Consumer Price Index in March rose 2.4% on an annual basis, showing progress in the Federal Reserve’s battle to bring down inflation to a 2% rate.
The CPI was forecast to rise 2.6% last month, according to economists polled by financial data firm FactSet. The CPI, a basket of goods and services typically bought by consumers, tracks the change in those prices over time.
March’s report comes after inflation rose 2.8% on an annual basis in February.
Easing inflation combined with President Trump’s announcement yesterday of a 90-day pause in his reciprocal tariffs should help alleviate some concerns for the Federal Reserve when it meets on May 7 to make its next interest rate decision, said Julien Lafargue, chief market strategist at Barclays Private Bank.
But because other tariffs orchestrated by Mr. Trump have recently gone into effect — such as auto tariffs – inflation nevertheless could pick up later this year, experts say.
“Unfortunately for the Fed, the risk of inflationary pressure hasn’t disappeared. It has simply been delayed,” Lafargue said. “As a result, the Fed lacks the visibility it needs and remains stuck between a rock (weakening economic momentum) and a hard place (risk of inflation).”
He added, “In this context, a wait-and-see approach may be preferable.”
