U.S. consumer price inflation eased again last month, suggesting little impact from President Donald Trump's tariff regime heading into the second quarter.
The Commerce Department pegged its headline Consumer Price Index for April at an annual rate of 2.3%, down from the 2.4% pace recorded in March and the consensus forecast from analysts on Wall Street.
On a monthly basis, price pressures rose 0.2%, quickening from the 0.1% decline recorded in March, as domestic gasoline prices rose 2.36% to an average of $3.30 per gallon, according to Energy Department data.
So-called core inflation, which strips out volatile components like food and energy, held at an annual rate of 2.8%, matching both the Wall Street forecast and March's 2.8% pace.
The monthly core reading of 0.2% was also inside Wall Street's 0.3% forecast and the final March reading of 0.1%.
"It's still early to fully gauge the impact of tariffs on both inflation and growth," said Steve Wyett, chief investment strategist at BOK Financial. "However, this morning's report indicated a smaller-than-expected 0.2% increase in both headline and core inflation."
This data is unlikely to change the Fed's outlook but suggests that inflation trends were declining before tariffs were implemented," he added. "More trade agreements and reduced tariffs could benefit both inflation and growth, easing the pressure on the Fed to act.”
U.S. stocks pared declines following the data release, with futures contracts tied to the S&P 500 indicating an opening-bell gain of around 10 points and the Nasdaq priced for a 90-point gain.
The Dow was called 90 points lower, thanks in part to the 9% slump for index heavyweight UnitedHealth Group (UNH) .
Benchmark 10-year Treasury note yields were modestly lower at 4.445% following the data release, while 2-year notes were pegged 2 basis points lower at 3.977%.
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The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 1.2% lower at 101.674.
Tariff impact still to come: Navellier
Earlier this month, the Federal Reserve's preferred inflation gauge, the PCE Price Index, showed a modest tick higher in March price pressures. That benchmark followed a weaker-than-expected first-quarter GDP reading that could stoke stagflation concerns in the world's biggest economy.
The Bureau of Economic Analysis's PCE Price Index report for March, which the Federal Reserve closely tracks for a clearer indication of inflation pressures, on Wednesday showed core prices rising at an annual rate of 2.6%, with the headline figure easing to 2.3%.