Inflation Cools, But 'Too Soon To Blow The All Clear,' Economist Says

The annual inflation rate eased more than expected in March, coming in at 2.4% on Thursday's Consumer Price Index report. Multiple economists emphasized that March's cooling may be temporary, as President Donald Trump's reinforced tariffs and trade measures could reverse progress by raising consumer prices. 

Expert Ideas: Joseph Brusuelas, chief economist for RSM, said that this will be the last cool CPI print for some time as tariff-induced inflation is on the way. The economist sees topline and core inflation to hit 4% to 4.5% by mid-summer of 2025. 

"Look at the 0.1% decline in core goods prices because it is the last one that investors are going to observe for a good period," Brusuelas wrote in a post on social media. 

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Chris Zaccarelli, chief investment officer for Northlight Asset Management, noted March's cool inflation data is welcome news to the Federal Reserve who may choose to cut rates if tariffs cause significant damage to the economy. 

"It's much too soon to blow the all clear – both on tariffs or on inflation – since the tariff damage has only been postponed as of now, and will only be relieved if tariff deals can be struck across the board," Zaccarelli said. 

He also pointed to Friday's Producer Price Index data as an indicator of whether or not future inflation is already "in the pipeline."

Charlie Bilello, chief market strategist for Creative Planning, took a more optimistic view of the CPI data and said inflation below 3% should be enough for the Fed "to resume cutting rat[e]s in June." 

Financial news outlet ZeroHedge went even further, claiming that the U.S. economy is in deflation. 

"Economists gonna be begging Trump for more tariffs: Supercore inflation CRASHES at fastest pace since covid lockdown. US is in DEFLATION," ZeroHedge posted on X. 

Markets React: Markets shrugged off the cool inflation data Thursday as ongoing uncertainty around trade policies triggered another broad sell off. 

The SPDR S&P 500 ETF Trust (NYSE:SPY), tracking the S&P 500, was down 3.88% at $527.33 and the Invesco QQQ Trust (NASDAQ:QQQ), tracking the Nasdaq 100 index, was down 3.53% at $449.56 at the time of publication. 

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