April Inflation Rises Less Than Expected Amid Tariff Uncertainty
US inflation showed unexpected moderation in April, with the Consumer Price Index rising just 0.2% monthly and 2.3% annually—the softest yearly reading in over four years. Core CPI, stripping out volatile food and energy components, mirrored the 0.2% monthly gain while annualizing at 2.8%.
The muted response to recent tariff hikes reflects historical patterns of delayed passthrough. When duties on $200B of Chinese goods jumped from 10% to 25% in May 2019, price pressures took months to materialize. Markets now watch for similar latency effects as new trade barriers take hold.