April’s US CPI report expected to reflect tariffs’ inflationary impact

April’s US consumer price index (CPI) is expected to provide first clear signs of inflationary impact from President Donald Trump’s import duties. 

The CPI report, due on May 13, is projected to show headline annual inflation at 2.4% in April. The rate is estimated to rise 0.3% month-on-month, following the 0.1% decline in March. 

The core consumer price index, which excludes volatile food and energy prices, is forecast to grow by 2.8% on an annual basis in April. The monthly increase in core prices is anticipated to be 0.3%, exceeding the March’s rise of 0.1%.

Tuesday’s CPI report is likely to show signs of tariff-related inflation. Yet, UBS economists believe the full impact of the new policies on inflation will take several months to be seen.

On May 7, Federal Reserve Chair Jerome Powell stated the central bank would like to see the potential impact of tariffs in economic data before determining the direction of monetary policy. 

Given that Tuesday's release will not include data reflecting the recent 90-day tariff pause with China, some market strategists do not believe this event will derail the recent stock market rally.