In an unexpected twist amid a global trade war and ‘Liberation Day’ tariffs that have rocked markets around the world, the U.S. Consumer Price Index (CPI) actually fell in March, though data is not likely to catch up to rapidly changing White House policies until April’s data release, and the sacrifice is U.S. oil prices, now losing nearly 4.5%.
Inflation risks remain dangerously high amid the unfolding tariff war despite the surprise CPI data, and America’s shale patch is reeling with West Texas Intermediate (WTI) prices down 4.47% at 10:07 a.m. ET on Thursday, dropping below the $60 mark at $59.56. Brent crude was not far behind, down 4.28% at $62.68 per barrel.
Data released by the U.S. Bureau of Labor Statistics on Thursday showed CPI for March 2025 was down 0.1% compared to an increase of 0.2% in February. The decline was largely due to a 6.3% drop in gasoline prices and a 5.3% fall in airline fares.
Year-over-year, the U.S. CPI rose 2.4% compared to March 2024, representing the slowest annual growth rate in four years and below expectations of a 2.6% increase. Core CPI, excluding food and energy, rose 2.8% year-over-year, also falling short of expectations and representing the smallest rise since this time in 2021.
While March’s CPI numbers suggest that inflation is decelerating, markets aren’t quite ready to celebrate just yet. Analysts remain concerned that ‘Liberation Day’ tariffs may spark a global recession and irreparably harm oil and gas demand in the coming months.
While it has been difficult to keep pace with changing tariff-related announcements coming out of the White House, as of Thursday at 10:03 a.m. ET, reciprocal tariffs on everyone except China were postponed for 90 days, allowing global markets to recoup billions in losses over the past week. However, that reprieve may prove to be fleeting.
