Key Points

  • Data released by the U.S. Bureau of Labor Statistics on Thursday showed that price increases moderated in March after inflation picked up in February. The core price index, excluding food and energy, rose 2.8% year over year, marking the lowest 12-month increase in four years.
  • Amid growing concerns that the trade war could intensify price pressures,the Consumer Price Index (CPI) fell 0.1 percentage point month over month in March, with a year-over-year increase of 2.4%. A 6.3% drop in gasoline prices offset increases in electricity and natural gas prices. Prices for medical care, used cars and trucks, and transportation also declined.
  • Jason Furman, a professor of economics at Harvard University and former chairman of the White House Council of Economic Advisers under the Obama administration, said on platform X: "Inflation is expected to pick up in the coming months." He noted that the impact of the tariffs imposed by the Trump administration this month on inflationwill take time to show up in the data。

In-Depth Analysis

Multiple economists from the public and private sectors have recently warned that the Trump administration's tariffs on imports from nearly all U.S. trading partners could push up inflation and weigh on economic growth.

A monthly survey by Wolters Kluwer showed that 63% of business economists expect the U.S. economy to enter a "stagflation" phase over the next 12 months.

"The prevailing view is that tariffs will push up inflation and slow economic growth, not just in the United States but globally," said Sandy Batten, senior economist at Haver Analytics, in a statement.

Wolters Kluwer said Thursday that business economists from Wells Fargo to Ford Motor Company, from Goldman Sachs to Eaton Corporation, on average cut their forecast for U.S. economic growth this year to 1.4% from 2% previously.

These economists on average expect CPI to rise 3.3% this year, well above the Federal Reserve's 2% target, Wolters Kluwer said.

Dallas Federal Reserve Bank President Lorie Logan, after the CPI data release,said Thursday: "Higher-than-expected tariffs are likely to push up both unemployment and inflation."

"A sustained burst of inflation could lead households and businesses to expect further price increases, especially after years of persistently high inflation," she said in a speech.

Pantheon Macroeconomics believes that tariffs as currently implemented could push inflation up by about 1 percentage point.

"In a world without tariffs, inflation would clearly decline this year," Pantheon Chief Economist Samuel Tombs said in a webcast Thursday.

"There is no longer a fundamental underlying inflation problem in the United States," he added. "We do not expect extremely high inflation rates over the next year or so."

Chicago Federal Reserve Bank President Austan Goolsbee said Thursday that most recent data on economic growth, inflation, and unemploymenthave been good. "The hard data remains solid," he said.

At the same time, he noted that among business executives in his district, which covers much of the U.S. Midwest, there is "a lot of anxiety" about import tariffs.

"There is a fundamental worry that we might be on the brink of returning to the situation of 2021 or 2022—where inflation spirals out of control and costs become a concern for everyone," Goolsbee said in a speech at the Economic Club of New York.

Goolsbee noted that imported goods account for only 11% of U.S. gross domestic product (GDP), which limits the measurable damage of the new tariff policy, absent retaliatory measures.

Nevertheless, he said: "If people start to panic, the panic transmission channel is one of the recognized negative effects of any policy."