US Inflation Is Set to Give Hints of Trump Tariff Pain to Come

US households probably experienced slightly less overall inflation last month, a reprieve that economists view as temporary in the wake of President Donald Trump’s tariff tsunami.

Author of the article:

Bloomberg News

Vince Golle and Craig Stirling

Published Apr 05, 2025  •  7 minute read

6no1)h3a(s(zhhn)gaw3{r5i_media_dl_1.png Bloomberg Economics Global Trade

(Bloomberg) — US households probably experienced slightly less overall inflation last month, a reprieve that economists view as temporary in the wake of President Donald Trump’s tariff tsunami.

Article content

Article content

Bureau of Labor Statistics figures on Thursday are projected to show that the consumer price index edged up 0.1%, which would be the smallest rise since July, based on the median estimate of economists surveyed by Bloomberg.

Article content

The core CPI, a better measure of underlying inflation because it excludes often-volatile food and energy costs, is seen climbing 0.3% from February and 3% from a year ago. The annual pace would be the slowest since 2021.

Economists will likely pay close attention to goods inflation in March, as it will help show how quickly higher US tariffs on Chinese merchandise fed through to American consumers. Trump imposed 10% tariffs on China in February and again last month, as well as higher duties on global steel and aluminum imports that went into effect March 12. Canada and Mexico also have higher US tariffs in place for goods not covered by a free trade agreement.

There’s also a risk that goods inflation began percolating ahead of Trump’s April 2 announcement of sweeping tariffs if merchants began boosting prices preemptively. Over the first two months of the year, the CPI for commodities excluding food and energy has shown signs that the years-long trend of disinflation is stalling.

In the aftermath of Trump’s Rose Garden rollout of tariffs on almost all countries, economists ratcheted up provisional estimates for inflation this year and slashed growth forecasts as well. The outlook puts Federal Reserve policymakers in a tough spot as they seek to quell price pressures while guarding against a potential deterioration in the labor market.

Article content

The aim of the president’s policy is to pursue fairness in international commerce, encourage investment in the US, and stoke employment. However, American consumers have grown increasingly anxious that inflation will accelerate.

Investors will look to a preliminary April consumer sentiment survey from the University of Michigan for signs that inflation expectations continued to climb. The March report showed price expectations for the next five to 10 years at the highest since 1993.

Friday’s report on producer prices may also provide early clues on the impact of US tariffs, before the more sweeping measures take effect this month. The producer price index excluding food and energy is projected to show a 0.3% increase in March.

What Bloomberg Economics Says:

“March CPI and PPI data will offer a first look at pass-through from Trump’s February and March tariffs on Chinese goods, steel, and aluminum. We don’t expect consumer prices to reflect the increases just yet, but we do anticipate a rise in PPI, especially in commodity-linked producer prices.”

— Anna Wong, Stuart Paul, Eliza Winger, Estelle Ou and Chris G. Collins, economists. For full analysis, click here

Article content

Article content

Minutes of the Fed’s March policy meeting will be released on Wednesday. John Williams, Alberto Musalem, Thomas Barkin, Austan Goolsbee and Mary Daly are among US central bank officials with scheduled events. 

• For more, read Bloomberg Economics’ full Week Ahead for the US

Elsewhere, China’s inflation data, UK gross domestic product and rate decisions from New Zealand to India to Peru will be in focus.

Click here for what happened in the past week, and below is our wrap of what’s coming up in the global economy.

Asia

Asia may see as many as three rate cuts this week as central bankers keep their focus on sustaining growth after the Trump tariff broadside, now that inflation has moderated. 

The Reserve Bank of New Zealand, under acting Governor Christian Hawkesby following Adrian Orr’s unexpected departure, is seen slowing the pace of its easing cycle on Wednesday by lowering its official cash rate by 25 basis points, to 3.5%. 

On the same day, the Reserve Bank of India, in a move telegraphed by larger-than-expected debt purchases, is forecast to cut its repurchase rate by a quarter-point to 6%, while holding the cash reserve ratio steady. 

Article content

On Thursday, authorities in the Philippines may seize on February’s softer inflation data to resume easing with a 25 basis-point reduction of the overnight borrowing rate to 5.5%. 

By contrast, on Friday, Kazakhstan officials will decide whether to hike the benchmark rate for a second meeting. 

Key pricing updates are due from China, where consumer inflation is seen edging into positive territory, while the disinflationary slide by factory-gate prices exceeds 2% for a seventh straight month. 

Indonesia and Taiwan also report on price growth. Japan publishes wage data on Monday that will probably keep the Bank of Japan on track for a rate hike in the summer, and Australia gets gauges of consumer and business sentiment. 

Trade reports are due from Vietnam and Taiwan, while Singapore may report first-quarter GDP statistics late in the week. 

• For more, read Bloomberg Economics’ full Week Ahead for Asia

Europe, Middle East, Africa

Reverberations from Trump’s global tariff war will continue across the region, with European Union trade ministers set to meet on Monday. Finance ministers will gather on Friday. 

Article content

Data in the euro region will focus on the manufacturing backdrop before the White House unleashed its onslaught. German industrial production and trade numbers for February will be released on Monday, followed by Italian factory output on Thursday.  

The European Central Bank will enter a blackout period on Thursday in advance of its April 17 decision, whose outcome — despite market bets — still hangs in the balance. 

Before then, policymakers scheduled to speak include the normally hawkish governors from Austria and the Netherlands, and Executive Board member Piero Cipollone, who recently stood out for his dovish remarks.

The data highlight in the UK will be GDP numbers for February, revealing the health of the economy before tariffs hit. It’s expected to show a small increase after January’s decline. 

Bank of England Deputy Governors Clare Lombardelli and Sarah Breeden are both on the calendar to make remarks, while on Wednesday, the central bank will release the record of its Financial Policy Committee meeting in March.

Turning to the Nordics, Riksbank Governor Erik Thedeen is scheduled to speak on Tuesday, and a couple of deputy governors will also deliver comments during the week. 

Article content

Sweden’s GDP indicator will be published on Thursday, as will inflation numbers in Norway and Denmark.

Further afield, consumer price data will also draw attention. In Egypt on Thursday, inflation probably steadied in March following a big drop in February to 12.8%, as the effects faded of a foreign-currency crunch from a year earlier. That left the country with one of the world’s highest real interest rates — about 15% — which may prompt easing by the central bank on April 17.

On Friday, the Bank of Russia will watch for evidence that inflationary pressures are easing when March data are published, after it held its key rate at a record high 21% for the third straight meeting last month. Consumer prices hovered around 10% in February.

• For more, read Bloomberg Economics’ full Week Ahead for EMEA

Other monetary decisions on the calendar:  

• Israel’s central bank will probably keep its rate on hold at 4.5% for a 10th straight meeting on Monday. The war-strained economy, which now faces US tariffs of 17% on Israeli goods, would benefit from lower rates. But inflation is at 3.4%, above the target of 1%-3%. Moreover, the shekel and other assets are under pressure amid the resumption of conflict in Gaza and growing tensions between the government and key civil servants.
• Also on Monday, Romania’s central bank is expected to keep borrowing costs unchanged as the country heads into a presidential election campaign that will likely extend a political crisis and uncertainties.
• Kenyan policymakers on Tuesday may cut borrowing costs for a fifth straight meeting, viewing inflation rate as likely to remain below the 5% midpoint of the their target range in the near term.
• And on Thursday, the National Bank of Serbia could extend its pause for a seventh month. While the trajectory of inflation has been uneven, the economy slowed in the first quarter amid political tensions, possibly tempting officials to lower borrowing costs.

Article content

Latin America

Inflation and the minutes of Banxico’s March meeting are on tap in Mexico, but all eyes will be on President Claudia Sheinbaum’s efforts to address US tariffs on autos, steel and aluminum.

Inflation data for March are expected to show a rise past 4%, more than 100 basis points above Banxico’s target of 3%, plus or minus 1 percentage point.

The minutes of the March 27 meeting should underscore that Banxico is less concerned about inflation now that tariffs and trade uncertainty are threatening to tip Latin America’s second-largest economy into recession.

Peru’s central bank is nearing the end of its easing cycle with the key rate now at 4.75%. Inflation slowed to 1.28% in March, but expect Governor Julio Velarde to keep his options open.

Chile’s central bank posts the minutes of its March 21 gathering, where it held at 5% for a second meeting. March inflation data may see a rise to 4.9% from 4.7%.

In Colombia, analysts expect only mild moves lower in the March headline and core inflation readings, from February’s 5.28% and 5.44% respectively.

Friday features Brazil’s March inflation report, with the early consensus for a rise to about 5.5% from 5.06%, while Argentina’s year-on-year print slows for an 11th month to about 55% from 66.9% in February.

Uruguay’s central bank isn’t expected to hike its key rate — currently 9% — at this month’s meeting although inflation has been above 5% since June.

• For more, read Bloomberg Economics’ full Week Ahead for Latin America

—With assistance from Brian Fowler, Robert Jameson, Vince Golle, Monique Vanek, Laura Dhillon Kane, Mark Evans, Paul Wallace and Tony Halpin.

Article content