Trump Gets Reprieve On Inflation As Markets Brace For More Tariff Chaos

Consumer prices eased in February, offering welcome news for President Donald Trump as markets reckon with new tariffs that economists warn could stoke inflation.

The Consumer Price Index rose at an annual rate of 2.8 percent for the month, a slower climb than many forecasters had anticipated. Core inflation — which strips out volatile food and energy prices — rose 3.1 percent, the Labor Department said Wednesday. That was slightly below the 3.2 percent anticipated by most economists.

While there were painful spikes for grocery staples like meat and eggs — which have been affected by avian flu outbreaks — the 2.6 annual increase in food prices trailed the overall rate of inflation. Gasoline prices also fell last month.

The Trump War Room, an organ for the president’s political operation, responded to the favorable report by posting “PROMISES MADE, PROMISES KEPT!” on the social media website X.

But this may be the last monthly inflation report that reflects a pretariff economy. A new 25 percent levy on global steel and aluminum imports to the U.S. took effect overnight, which has prompted reprisals from key European trading partners that will affect exports of everything from meat and poultry to women’s négligées.

“It’s worth remembering that this may be the calm CPI report before the storm,” Seema Shah, the chief global strategist at Principal Asset Management, said in a research note shortly after the report was released. “Not only does the Fed need to wait for tariff policy clarity, but once tariff implementation arrives it is likely to bring at least some price increases, with the inflation picture potentially getting uglier as the months go on. The Fed — and markets — are not yet in the clear.”

Markets have been roiled over the last two weeks by a series of tariff announcements and reversals that have created challenges for businesses looking to hire or invest in new projects. Wall Street banks have raised the odds of a recession, but Trump administration officials have repeatedly said the president will not back down from his plans to upend global trade.

“The president wants the American people to have so much money in their pockets they don’t know what to do with it,” Press Secretary Karoline Leavitt told reporters during a briefing on Tuesday.