US inflation slows in March, but tariffs likely to raise prices

US consumer prices eased more than expected in March, with the 12-month inflation rate dropping to 2.4%, below the 2.6% predicted.

Excluding food and energy, the core rate rose 2.8%, its lowest increase in four years.

The report comes a day after US President Donald Trump paused some tariffs, while raising duties on China to 125%.

Analysts warned that the March reading will be the last that won’t account for the tariffs, which most economists believe will be to raise prices: “The real important one is going be the next reading. [March’s CPI is] a non event right now,” one analyst told Reuters.

Capital Economics has estimated that inflation will peak at around 4% this year, twice the Federal Reserve’s 2% target, as a result of the tariffs.