More drama on Wall Street as latest inflation figures shock experts

Inflation fell more than expected last month, a key report released Thursday morning revealed. 

The Consumer Price Index (CPI), which measures price increases across the most commonly purchased goods in the U.S., showed a 2.4 percent rise in overall prices in the economy compared to the same time last year. 

Economists had largely expected a rise of 2.6 percent, meaning inflation cooled quicker than expected. 

The core inflation figures, which strips out volatile food and energy categories, rose 2.8 percent year over year, the lowest rise since March 2021.  

It comes after prices slowed in February to 2.8 percent. 

A more-than-expected drop in inflation would normally pave the way for the Federal Reserve to make interest rate cuts.

However, the turmoil brought about by Trump's chaotic tariff policies have largely not yet fed through to prices data. 

'The Fed is still going to worry about tariff-induced increases to inflation expectations, but slowing core inflation measures are a necessary, but not sufficient, condition for the Fed to consider rate cuts,' BI rates strategist Ira Jersey told Bloomberg. 

'We still have tariffs in the pipeline, and what's left on the tariff front could still add as much as one percentage point to inflation over the next 12 months,' Apollo's chief economist Torsten Slok agreed. 

March saw a 5.3 percent drop in airfares, as consumers cut back on travel as market uncertainty increases concerns of a potential recession.