CPI shows the 2% inflation target nearing, hinting at possible Fed rate cuts. Explore key market reactions and what this means for your investments.

Broken down by category, some of the sectors most impacted by tariffs saw a price decline from last month, including apparel and used cars and trucks.

Consumer prices were up 2.3% in April from a year earlier, the Labor Department reported Tuesday.

U.S. consumer prices rebounded moderately in April as declining food costs partially offset rising rents, leading to the smallest annual increase in four years, but the inflation outlook remains unclear against the backdrop of tariffs.

Inflation continues to ease on trend. The Consumer Price Index rose 0.2% in April, a touch softer than expected but still a rebound from March's unexpected decline. The temperate gain reduced the year-over-year rate by a tenth to 2.3%, which is the slowest pace since early 2021).

Prices for other foods declined in April. Inflation in the fresh fruits and vegetables group dropped by 0.7%, with lettuce and tomato prices both down by over 6%. Dried beans, peas and lentils, however, were up by nearly 6%, underscoring the volatile nature of food prices.

Eggs saw their sharpest monthly price drop in 40 years, while wages and personal finance conditions improve in Trump’s economy.

The U.S. Federal Reserve in May warned that America is facing an increased risk of stagflation. Inflation data for April somewhat assuages that fear.