Inflation Remained Tame In April But Fed Rate Cuts Still Appear Months Away At The Earliest

2025-05-14 11:05:00 ET

Summary

• Rate cut expectations have been pushed out to no sooner than September.
• US consumer inflation in April showed few signs of tariff-related pricing pressure.
• Although current conditions still favor cutting rates, the Fed remains cautious due to uncertainty about tariff-induced inflation.

By James Picerno

Investors were bracing for a clear sign of tariff-related pricing pressure in the April consumer inflation report, but consumer prices remained tame in Tuesday’s release. The Consumer Price Index (CPI) ticked down to a 2.3% year-over-year rate, the softest annual increase in over four years. The core reading of CPI (a more reliable measure of the trend) held steady, but the 2.8% increase vs. the year-ago level marks a steady pace at a four-year low....

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