U.S. consumer prices rose 2.3% YoY in April, marking the lowest growth rate since February 2021 yet remaining above the Federal Reserve’s 2% inflation target. This data coincides with market evaluations regarding recent tariff adjustments and anticipations of guidance from the Fed.

Key Insights from CPI Data

• Headline CPI: +2.3% YoY (compared to 2.4% in March; expectations had been 2.4%)

• Monthly Change: +0.2% (against –0.1% in March; forecast was +0.3%)

• Core CPI (excluding food & energy): +2.8% YoY; +0.2% MoM (aligns with expectations)

Shelter costs contributed significantly to the monthly growth, with increases in energy, medical care, and furniture prices also emerging. The data spans the period of increased “reciprocal” tariffs introduced in early April along with a 90-day pause on most duties.

Interactions of Trade Policy and Inflation

The recent agreement to lower U.S. and Chinese tariffs—from 145% to 30% and from 125% to 10%, respectively—delivered additional market optimism. Stocks rallied on expectations that reducing trade tensions might curb cost pressures.

Federal Reserve Chair Jerome Powell noted a “wait-and-see” approach, stressing economic resilience despite tariff challenges. With inflation above target, investors will be keenly observing future signals regarding monetary policy and economic trends.

Upcoming Data Releases and Fed Rate Direction

The trajectory of interest rates will heavily depend on whether inflation continues to decline. Key upcoming indicators include:

• U.S. Producer Price Index (PPI)

• Retail Sales & Consumer Sentiment Reports

• Comments from Federal Reserve Representatives

Stay updated with these releases and their timing via trusted economic analysis platforms, which provide real-time schedules for CPI, PPI, and other macroeconomic events.