US Consumer Inflation Eases In March, Core CPI Hits Lowest Level Since March 2021

According to the Bureau of Labor Statistics, the consumer price index (CPI) decreased 0.1% on a seasonally adjusted basis in March, after rising 0.2% in February. On an annual basis, CPI increased 2.4% before the seasonal adjustment.

U.S. consumer prices dipped unexpectedly in March as President Donald Trump readied his administration’s tariff on trading partners worldwide.

According to the Bureau of Labor Statistics (BLS), the consumer price index (CPI) decreased 0.1% on a seasonally adjusted basis in March, after rising 0.2% in February. On an annual basis, CPI increased 2.4% before the seasonal adjustment.

Meanwhile, core CPI that excludes food and energy rose 0.1% in March, following a 0.2% increase in February. At the same time, core inflation rose 2.4% for the 12 months ending March, after rising 2.8% over the 12 months ending February, marking the lowest level since March 2021.

Notably, the index for energy fell 2.4% in March, as a 6.3% decline in the index for gasoline more than offset increases in the indexes for electricity and natural gas.

According to a CNBC report, analysts expected headline inflation to be at 2.6% and core CPI to be at 3%, according to the Dow Jones consensus.

BLS stated that the indexes for airline fares, motor vehicle insurance, used cars and trucks, and recreation were among the major indexes that decreased in March.

Following the release of the CPI report, futures edged lower as rate cut expectations appeared to have been tempered by the softer-than-expected inflation data. However, investors will keep an eye out for inflation figures in the coming months, as a lot will depend on how the Trump administration’s tariff policies take effect.

An ongoing poll on Stocktwits showed that 35% of the respondents believe the Fed’s first rate cut will occur in May.

A quarter of the 1,100 respondents believe the central bank will announce a rate reduction in July. Interestingly, 21% of the participants have expressed hopes there would be an emergency rate cut, which was last seen in 2020.

Only 19% believe the June FOMC meet will yield a rate revision on the downside.

The SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500, declined over 2.5% on Thursday morning, while the Invesco QQQ Trust, Series 1 (QQQ) dropped nearly 3%.

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