‘INFLATION IS DOWN’: Trump hails surprise dip amid tariffs impact; JP Morgan warns of ‘calm before storm’

The United States inflation data sprung a surprise as America awaits a trade tariff impact with President Donald Trump exclaiming, ‘INFLATION IS DOWN!!!’ on Truth Social. The US consumer prices unexpectedly fell in March amid cheaper gasoline and used motor vehicles – first monthly decline in prices in nearly five years – in a sign of softening demand amid heightened recession fears due to tariffs.

The consumer price index (CPI) cooled to 2.4 percent in March from a year ago, the Labor Department said in a statement. On a monthly basis, inflation actually contracted 0.1 percent from a month earlier, helped by a 6.3 percent drop in gasoline prices, which aided a 2.4 percent contraction in the energy index. The food index rose 0.4 percent in March.

David Kelly, chief global strategist at JP Morgan Asset Management, has warned of a ‘calm before the storm’ as Donald Trump has waged a war on the world economies by announcing hefty tariffs.

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“It is the calm before the inflation storm. We’re going to get some higher inflation out of the tariffs,” David Kelly said, adding, “What we’re seeing is a lot of softness in the travel industry, which I think is going to get worse over the course of this year.”

Meanwhile, Federal Reserve official Jeff Schmid has also warned of a “marked increase” in the risks of higher inflation and slower economic growth.

While Donald Trump announced 90-day pause on higher reciprocal tariffs on Wednesday — less than 24 hours after they came into effect — imports from most countries are now subject to 10 per cent duties.

Meanwhile, S&P 500 has dropped 2 per cent despite the encouraging inflation data

(With agency inputs)