Inflation fell in April

As the weather ever-so-slightly heats up, inflation cools.

Inflation came in lower than expected in April, rising 2.3% on an annual basis, according to the Bureau of Labor Statistics. FactSet economists anticipated CPI would climb slightly before settling at 2.4% for April, CNN reported. Instead, the annual inflation rate of 2.3% marks the lowest rate since February 2021.

The unexpectedly bright reading is good news for the Federal Reserve as it continues its fight to rein in inflation to its goal of 2%.

Don’t get too excited, though. Economists think this inflation reading, which is the first to capture uncertainty caused by tariff announcements, is likely the last of its kind for some time.

“This may be the low point (for CPI) in 2025,” Ben Ayers, a Nationwide senior economist, said in a note to investors, per CNN. “As tariff costs increasingly flow into consumer prices, we expect a jump in the CPI this summer, pushing the annual reading back above 3%. Correspondingly, economic growth should be soft over the rest of the year as higher prices and economic concerns weigh on spending activity.”

As Trump flip-flopped on tariff policies, most recently with a 90-day pause on tariffs between the US and China, many companies front-loaded inventory in an attempt to get ahead of potential price increases, meaning consumers haven’t necessarily had to carry the burden of tariffs just yet.

With that in mind, Julien Lafargue, chief market strategist at Barclays Private Bank, told CBS News that “both the Fed and global investors will still need to be a bit more patient before they can properly assess the impact of the trade uncertainty on consumer prices.”

“It’s like opening up a time capsule,” Steven Blitz, chief US economist at GlobalData TS Lombard, said of the inflation reading to the New York Times. “You’re seeing this wonderful, detailed picture of what was that tells you nothing about what’s going to be.”