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Economists and policymakers are bracing for inflation to re-accelerate as companies adapt to President Trump’s trade war.
May 13, 2025, 8:32 a.m. ET
U.S. inflation held steady in April in what economists warn could be a final lull before a likely surge in consumer prices because of President Trump’s trade war.
The Consumer Price Index rose 2.3 percent from a year earlier, slightly below the previous month’s annual increase, data released by the Bureau of Labor Statistics showed on Tuesday. Over the course of the month, prices rose 0.2 percent, an acceleration compared to March’s 0.1 percent decline.
A closely watched measure of underlying inflation, which strips out volatile food and energy items, climbed 2.8 percent compared with the same time last year, in line with March’s year-over-year rise. On a monthly basis, prices rose 0.2 percent, slightly outpacing the previous month’s 0.1 percent increase.
The data comes on the heels of a significant U-turn from the Trump administration on its tariffs with China. Following negotiations over the weekend, officials in Washington and Beijing agreed to temporarily reduce tariffs on each others products for 90 days.
The United States will now tariff Chinese imports at a 30 percent rate, substantially lower than the minimum 145 percent level that has been in place since last month. China reduced its tariff on American goods to 10 percent from 125 percent.
While the pause reduced the odds of a much more severe economic shock, economists and policymakers — including those at the Fed — have warned that the scope and scale of the tariffs that Mr. Trump is likely to keep in place will eventually stoke inflation while simultaneously denting growth.
English (US)