"Fed Whisperer": April CPI Data Deals a Blow to the Optimistic View of "Tariff Inflation Theory"

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

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