Price Pressures Ease Temporarily… Is the U.S. Economy Catching Its Breath?

Global markets are closely watching the release of U.S. inflation data for March, with growing signs of a potential slowdown in price pressures. The expected dip comes on the back of declining energy costs, used car prices, and hotel services — raising hopes for a temporary breather in the inflationary wave that’s gripped the economy in recent months.

According to analysts surveyed by FactSet, the U.S. Consumer Price Index (CPI) is expected to rise 2.6% year-over-year in March, compared to 2.8% in February. Meanwhile, the core inflation rate — which excludes volatile food and energy prices — is projected to ease slightly to 3%, down from 3.1% in the previous month.

If these figures are confirmed, they would suggest that inflation may be beginning to cool off, following a prolonged period of elevated readings throughout fall and winter. Notably, the core inflation rate had remained stubbornly high at 3.3% for five consecutive months before easing in February.

On a monthly basis, core prices are expected to increase by 0.3%, a pace that, if sustained, could still exceed the Federal Reserve’s 2% inflation target. In contrast, headline inflation is expected to see only a 0.1% rise in March, providing a more subdued outlook for general consumer price trends.

Economists tend to focus more on core inflation figures, as they offer a clearer view of long-term inflation trends, beyond short-term volatility in food and energy prices.

This cooling in inflation comes just days after President Donald Trump announced broad-based tariffs on over 60 countries — a move that initially sparked fears of renewed inflation. However, the White House has temporarily suspended some of these tariffs for 90 days. Still, significant duties remain in place, including 10% general tariffs and 25% on steel, aluminum, automobiles, and various imports from Canada and Mexico.

As the dust settles, investors and policymakers alike will be watching closely to see whether this softening in price pressures signals a genuine turning point — or just a brief pause in a longer inflationary trend. With inflation still above target and trade tensions simmering, the Federal Reserve may face tough choices in the months ahead.