Consumer price inflation in the United States eased more than anticipated in March, marking a significant downturn as President Donald Trump prepared to impose tariffs on U.S. trading partners. According to the latest report from the Bureau of Labor Statistics, the consumer price index (CPI) declined by 0.1% on a seasonally adjusted basis, lowering the 12-month inflation rate to 2.4% from February's 2.8%.

Core inflation, which excludes volatile food and energy prices, registered an annual rate of 2.8%, with a modest 0.1% increase for the month. This marks the lowest core inflation rate since March 2021, contrasting with Wall Street's expectations of 2.6% headline inflation and 3% core inflation.

Energy prices saw a notable decline, with gasoline prices dropping by 6.3%, contributing to a broader 2.4% decrease in the energy index. Meanwhile, food prices edged up by 0.4%, driven by a 5.9% increase in egg prices, which soared by 60.4% from the previous year.

Shelter prices, typically resistant to change, rose by just 0.2% in March, marking a 4% increase over the past year, the smallest rise since November 2021. Used vehicle prices fell by 0.7%, while new vehicle costs saw a slight 0.1% rise ahead of anticipated tariffs impacting the auto industry.

In other sectors, airline fares dropped by 5.3%, motor vehicle insurance by 0.8%, and prescription drug costs by 2%.

Following the CPI release, stock market futures pointed to a significant decline on Wall Street, accompanied by negative Treasury yields. This follows President Trump's recent decision to partially reverse tariffs, opting for a 90-day negotiation period rather than immediate escalation.

Despite campaigning on reducing inflation, progress has been slow in early 2025. President Trump has called for lower interest rates, but the Federal Reserve remains cautious amid ongoing policy uncertainties, likely delaying further rate cuts until June.

Economists had anticipated higher inflation due to tariff impacts, but the situation has become less certain with Trump's policy adjustments. Looking ahead, market expectations suggest little change in interest rate forecasts, with traders anticipating three to four rate cuts by year-end.