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US Annual inflation fell to 2.4% in March, from 2.8% in February and MoM inflation was negative in March falling -0.1%, from 0.2% in February.
Annual core inflation (excl. energy and food) fell to 2.8% in March from 3.1% in February and US MoM core inflation fell to 0.1% in March, down from the 0.2% in February.
Isaac Stell, Investment Manager at Wealth Club said, “US inflation surprised to the downside in March as energy prices declined by 2.4% month-on-month, led by a fall in gasoline which fell 6.3%.
With a surprise to the downside, the bar for lowering interest rates does seem to have come down slightly. However, the FED will be keeping a keen eye on the impact of tariffs as they work their way through the US economy and policy makers attempt to keep prices in check.
“When the figures for April arrive, inflation is likely to have headed north once again following the introduction of tariffs on China at over 100%.
“As a huge importer of Chinese goods, the US consumer may shortly start to feel the pinch with additional tariffs on cars and metals also likely to start to dripping through. However, amidst the economic turmoil, good news is welcome even if only temporary.”
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