U.S. inflation slowed to 2.3% in April, the lowest level in more than three years, according to data released Tuesday by the Bureau of Labor Statistics. The number came in slightly below what economists had expected.
Consumer prices rose just 0.2% on a monthly basis, a mild increase after March’s 0.1% decline. Analysts had projected a 0.3% rise for April. The year-over-year increase was also cooler than the 2.4% expected by economists polled by LSEG.
While the report showed continued progress in the fight against inflation, President Donald Trump seized on the numbers to call for aggressive interest rate cuts from Federal Reserve Chair Jerome Powell.
“No Inflation, and Prices of Gasoline, Energy, Groceries, and practically everything else, are DOWN!!!” Trump posted on Truth Social. “THE FED must lower the RATE, like Europe and China have done. What is wrong with Too Late Powell?”
He added, “Just let it all happen, it will be a beautiful thing!”
Core inflation, which excludes volatile food and energy prices, also rose 0.2% month-to-month and 2.8% compared to April 2024. Shelter prices—accounting for a large portion of the monthly increase—were up 0.3%, while energy prices rose 0.7% due to increases in natural gas and electricity.
Food prices overall declined by 0.1%, driven by lower grocery costs. Notably, egg prices dropped 12.7% in April, continuing a downward trend after soaring due to last year’s avian flu outbreaks.
Used car and truck prices fell for the second month in a row, while new vehicle prices were flat. Airline fares declined 2.8%, though motor vehicle insurance and medical care costs climbed.
Despite Trump’s call for immediate action, Federal Reserve officials appear hesitant. The central bank kept interest rates unchanged last week in the 4.25% to 4.5% range, citing ongoing uncertainty around trade policy and its delayed impact on prices.
“Even though tariff fears have calmed, more time is needed to see how the existing tariffs take shape and affect inflation and the economy,” said Skyler Weinand, chief investment officer at Regan Capital.
The latest inflation data comes just one day after the U.S. and China agreed to a temporary reduction in tariffs, slashing levies on goods from both countries for a 90-day window. The U.S. rate on Chinese imports was lowered from 145% to 30%, while China cut its tariffs on American goods from 125% to 10%.
Still, economists caution that the full impact of these tariffs has yet to filter through to consumer prices.
“There isn’t a lot of evidence of tariffs boosting the CPI in April, but this shouldn’t be surprising,” said Ryan Sweet, chief U.S. economist at Oxford Economics. “It takes time.”
Fed Chair Powell acknowledged last week that if the newly announced tariffs remain in place, they could lead to rising inflation, economic slowdown, and higher unemployment—conditions often associated with stagflation.
As investors digested Tuesday’s inflation report, markets responded with mixed signals: the Dow Jones Industrial Average dipped 152 points, while the S&P 500 and Nasdaq saw gains of 0.6% and 1.1%, respectively.
With uncertainty still looming over the long-term effects of tariffs and inflation trends, the Federal Reserve is expected to keep its cautious stance in the weeks ahead.