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.

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.

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.

News that the U.S. and China have drastically reduced reciprocal tariffs for 90 days as they continue trade talks has already put a dent in rate-cut expectations.

US inflation slowed to its lowest rate in more than four years, an unexpected and welcome development at a time when President Donald Trump’s dramatically escalated tariffs are expected to cause prices to rise.

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

President Trump repeated his call for the Federal Reserve to cut interest rates after April's inflation report was cooler than expected.

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

CPI rose by 0.2% for the month, lowering the 12-month trend rate to 2.3% – the lowest trend rate since February 2021.