FX.co ★ US Inflation Rate to Slow Again, But Tariff Wave Looms

The United States' annual inflation rate is anticipated to have eased for the second month in a row, reaching 2.6% in March 2025—the lowest it has been since October, and down from 2.8% in February. This decrease is partly attributed to a drop in energy prices. Nonetheless, underlying inflationary pressures likely remained present in sectors such as food and core goods. On a month-to-month basis, the Consumer Price Index (CPI) is expected to climb by just 0.1%, marking the smallest increase in eight months, following a 0.2% rise in February. Meanwhile, the annual core inflation rate, which excludes the more volatile categories of food and energy, is projected to slow to 3.0%—the lowest level since April 2021—from 3.1% the previous month. However, the monthly core CPI is predicted to increase slightly to 0.3% from 0.2%. Observers in the market will be keenly observing for any initial indications of the inflationary effects stemming from tariffs that have been in effect since February, such as a 10% duty on Chinese imports and elevated tariffs on global steel and aluminum.