CPI shows the 2% inflation target nearing, hinting at possible Fed rate cuts. Explore key market reactions and what this means for your investments.

Broken down by category, some of the sectors most impacted by tariffs saw a price decline from last month, including apparel and used cars and trucks.

U.S. consumer prices rebounded moderately in April as declining food costs partially offset rising rents, leading to the smallest annual increase in four years, but the inflation outlook remains unclear against the backdrop of tariffs.

Consumer prices were up 2.3% in April from a year earlier, the Labor Department reported Tuesday.

Inflation retreated again in April on the back of lower prices for consumer staples like groceries and gasoline, and other items such as used cars and clothing. The consumer price index, a key inflation gauge, rose 2.3% in April from 12 months earlier, down from 2.4% in March, the Bureau of Labor Statistics reported Tuesday.

The ex-shelter version of the CPI has increased by 2.3% or less for the past 24 months (since May 2023), and it has averaged a mere 1.7% per year for almost two years.

Eggs saw their sharpest monthly price drop in 40 years, while wages and personal finance conditions improve in Trump’s economy.

The U.S. Federal Reserve in May warned that America is facing an increased risk of stagflation. Inflation data for April somewhat assuages that fear.