"Fed Whisperer": April CPI Data Dampens Optimism on 'Tariff Inflation' Theory

Odaily News "Fed Whisperer" Nick Timiraos commented on the US CPI data, stating that the optimistic narrative on inflation has been that recent price increases were caused by tariffs (which would be reflected in goods), and therefore such increases would not persist as tariffs do not escalate year after year. Looking solely at April's CPI data, this narrative does not hold up.

Housing costs rose by 0.6% (a rebound was previously expected to compensate for lower data during the government shutdown). However, core services prices excluding housing increased by 0.45%, marking the third-highest month-over-month rise since January 2025. On a 12-month basis, the 3.3% year-over-year increase was the highest since February 2025. Core goods prices rose by 0.03% in the month (a 1.13% year-over-year increase). (Jin Shi)