This week’s inflation report will provide insights into the effects of President Donald Trump’s “Liberation Day” tariff announcement on pricing in the United States. Trump’s tariff escalation, announced on April 2, raised concerns among economists and consumers about potential inflation due to price hikes by importers. However, government data expected to be released on Tuesday suggests that pricing has not yet been significantly affected. Economists anticipate a 2.3% increase in prices over the year ending in April, marking a slight slowdown from the previous month. Analysts predict a resurgence of inflation in the coming months as retailers restock with goods imported after the tariffs took effect. A rollback of some levies since “Liberation Day” may mitigate the impact on inflation. Trump paused many reciprocal tariffs shortly after the announcement and temporarily reduced tariffs on China from 145% to 30%. These reductions will remain in place for 90 days while the U.S. and China negotiate a broader trade agreement. The rollback is expected to decrease the average cost of tariffs per household from $4,900 to $2,800 this year, according to the Yale Budget Lab. Despite these measures, the U.S. continues to impose various tariffs implemented since Trump took office, including a 10% tariff on imports from nearly all countries and additional tariffs on auto parts, steel, and aluminum. Federal Reserve Chair Jerome Powell warned that sustained tariff increases could lead to higher inflation and an economic slowdown. Inflation levels remain below the 2022 peak of over 9% but are still slightly above the Federal Reserve’s target rate of 2%. The Fed recently decided to keep interest rates unchanged as policymakers monitor the impact of tariffs. — new from ABC News
