Inflation Cools Under Trump Tariffs Despite Legacy Media Doom Predictions [WATCH]

Inflation in the United States slowed more than expected in April, offering the first full economic snapshot since President Donald Trump’s newly implemented tariffs on foreign goods took effect.

According to data released Tuesday by the Bureau of Labor Statistics, the Consumer Price Index (CPI) rose 2.3% over the past 12 months, a decrease from the 2.4% annual increase recorded in March.

Consumer inflation hits a 4 YEAR LOW!

New CPI data shows the lowest annual increase since February 2021.

Will the media cover this or they’re still crying about Trump’s tarrif talks? pic.twitter.com/nfQWEEYzGo

— Libs of TikTok (@libsoftiktok) May 13, 2025

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🚨Even CNN couldn’t ignore that inflation just hit its LOWEST point since 2021.

“It’s an unexpected and very welcome development that’s defying economists’ expectations…” pic.twitter.com/ywW4WYXGME

— Townhall.com (@townhallcom) May 13, 2025

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On a month-to-month basis, prices increased by 0.2% in April, following a 0.1% decline in March.

Excluding the often-volatile categories of food and energy, the core CPI rose 2.8% from a year earlier and 0.2% from the previous month.

JUST IN: April’s inflation report came in below expectations for the third straight month.

Grocery prices saw their largest decline in nearly five years.

Gas prices fell for the third month in a row. pic.twitter.com/AgsyV6efkF

— Rapid Response 47 (@RapidResponse47) May 13, 2025

The figures arrive shortly after President Trump’s new tariff measures began impacting imports, particularly from China.

While the overall annual inflation cooled slightly, the increase in monthly prices has drawn attention from economists tracking potential economic consequences tied to trade policy shifts.

“Even though tariff fears have calmed, more time is needed to see how the existing tariffs take shape and affect inflation and the economy,” said Skyler Weinand, chief investment officer at Regan Capital.

“Unless we start to see unemployment rise significantly, the Fed is likely to keep rates unchanged for the next six months,” he added.

Just one day prior to the release of the inflation report, the United States and China announced a temporary reduction in tariff rates.

Under the agreement, U.S. tariffs on Chinese goods were reduced from 145% to 30%, while China lowered duties on American imports from 125% to 10%.

The reductions will be in place for 90 days while broader negotiations continue.

Jeffrey Roach, chief economist at LPL Financial, noted that the temporary nature of the agreement creates additional complications for monetary policymakers.

“The uncertainty about what might happen after these temporary trade deals makes things difficult for the Fed since stagflation remains a risk,” Roach said.

“If the fog does not clear, the Fed might not be able to adjust policy in June.”

Market responses to the inflation report were mixed.

The Dow Jones Industrial Average dropped 152 points, or 0.4%, while the S&P 500 and Nasdaq rose 0.6% and 1.1%, respectively, as of midmorning Tuesday.

Shelter costs contributed heavily to the monthly price rise, with a 0.3% increase in April accounting for over half of the month’s inflation.

Energy prices rose 0.7% after declining 2.4% in March, with increases in natural gas and electricity prices offsetting a drop in gasoline prices.

Food prices fell slightly in April by 0.1%. The price index for eggs dropped 1.6% but remains 49.3% higher than it was a year ago, largely due to earlier bird flu outbreaks.

The Justice Department is currently investigating whether egg producers conspired to limit supply in order to raise prices, according to reporting by the Wall Street Journal.

Used car and truck prices decreased by 0.5%, marking the second consecutive monthly drop.

Prices for new vehicles were flat.

Apparel prices declined 0.2%, while medical care costs rose 0.5%.

The Federal Reserve held interest rates steady last week, maintaining its target range at 4.25% to 4.5%, amid continued uncertainty surrounding the effect of Trump’s trade actions.

In a statement, Fed Chair Jerome Powell acknowledged potential risks, stating, “If the large increases in tariffs that have been announced are sustained, they are likely to generate a rise in inflation, a slowdown in economic growth and an increase in unemployment.”

The Federal Open Market Committee (FOMC) highlighted increased risks to both inflation and employment.

The committee also noted that some of the latest economic data has been distorted by shifts in net exports, referencing a recent GDP contraction driven in part by companies rushing to import goods ahead of the new tariffs.

The Fed’s next decision may be influenced by the upcoming producer price index report scheduled for Thursday, which will feed into the Personal Consumption Expenditures (PCE) index, the central bank’s preferred measure of inflation.

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