In April, the pace of inflation in the US slowed following Donald Trump’s announcement of sweeping tariffs on the country’s major trading partners. The Bureau of Labor Statistics reported a decrease in the annual inflation rate to 2.3% from 2.4% in March. Core inflation, excluding volatile energy and food prices, rose to an annual rate of 2.8% in April.

Businesses are still grappling with the repercussions of the tariffs, despite Trump rolling back most of them and striking trade deals with the UK and China. However, imports from China face a 30% levy, leading consumers to anticipate higher prices. Consumer sentiment declined sharply in April, with inflation expectations reaching 6.5%, the highest since 1981.

A recent poll revealed that six out of 10 Americans have postponed major financial goals due to economic concerns, indicating widespread anxiety. While Wall Street responded positively to a 90-day pause in the tariff dispute with China, economists predict further price hikes this year. Even though tariffs have been reduced, the US effective tariff rate for China remains high, potentially fueling inflation.

Despite the Federal Reserve expecting tariffs to impact prices temporarily, Fed Chair Jerome Powell warned of risks to higher inflation and unemployment. Trump, however, attributes any inflation to the previous administration and claims prices will decrease. The contrasting views on tariffs and their effects highlight the uncertainty surrounding economic trends and policies in the current landscape.