April’s Consumer Price Index (CPI) is expected to show the first clear signs of inflationary impacts from President Trump’s tariffs.
The report, set for release at 8:30 a.m. ET on Tuesday, will greet investors less than 24 hours after markets soared on news the US and China have placed a 90-day pause on a wide swath of tariffs between the two countries.
“We expect the first signs of tariff related inflation to show up in the April CPI released on Tuesday,” UBS chief economist Jonathan Pingle wrote in a note to clients on Monday.
Inflation is expected to have picked up for the month in which President Trump’s “Liberation Day” tariff announcement prompted concern among investors, businesses, and consumers over higher prices for goods. Trump quickly pivoted a week after the initial move, announcing a 90-day pause on the tariffs for all countries except for China. He kept 10% baseline duties in place for all countries.
In the CPI report, headline annual inflation is forecast to come in at 2.4% in April, flat from March’s increase. On a month-over-month basis, prices are estimated to rise 0.3%, above the 0.1% decline seen in March.
Read more: What is inflation, and how does it affect you?
On a “core” basis, which strips out the more volatile food and energy costs, CPI is expected to have risen 2.8% over the past year in April, unchanged from the month prior when core inflation hit its lowest level in four years. Meanwhile, monthly core price increases are anticipated to rise 0.3%, ahead of March’s 0.1% rise.
While there will be signs of tariff-related inflation in Tuesday’s report, economists argue the full brunt of the new policies’ impact on inflation likely won’t be seen for several months.
“It’s probably the first month where we get a little bit of signs that we’re seeing the impact of tariffs, and it’s not going to be broad-based,” Bank of America senior US economist Stephen Juneau told Yahoo Finance. “It’s probably more concentrated in autos.”
Juneau added that the recent delay of reciprocal tariffs on China should limit some potential increases to inflation in the coming months, but the trend is still expected to be higher.
“There’s less risk of recession, maybe less upside risk to inflation, but inflation still moves higher,” Juneau said.
In a press conference on May 7, Federal Reserve Chair Jerome Powell stressed that the central bank would want to see potential tariff impacts appear in economic data before letting them shape the path of monetary policy.
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