Inflation in April rose less than expected, but tariff impact remains to be seen

This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.

---

The consumer price index for April rose 0.2% over the month and 2.3% over the year — marking the lowest annual inflation rate in more than four years. Core CPI (excludes food and fuel prices) also increased 0.2% in April, coming in at 2.8% annually. 

If you’re wondering how April’s inflation figures could have been so tame in the wake of new tariff policies, there are a few reasons. 

First, there historically has been a lag between tariff implementation and inflation rising. In May 2019, tariffs on $200 billion of Chinese imports were raised from 10% to 25%. A quick note that the increase was supposed to start in January 2019, but was delayed five months. Something to keep in mind as we try to predict what will happen today. 

The May 2019 headline CPI report came in 0.1% higher month over month, compared with a 0.3% increase the month prior. Not too bad. The June 2019 core CPI, however, came in 0.3% higher on the month — the largest monthly increase since January 2018. Used car and truck prices — a decent proxy for tariff impact — increased 1.6% over the month in June 2019. 

The anticipation of higher tariffs also had businesses stocking up their inventories in recent months, which could help delay any price increases passed on to consumers. How long that delay may last, though, is anyone’s guess. 

Plus, a tariff-related decrease in consumer confidence and retail spending likely also contributed to lower prices. 

Markets are still anticipating that the Fed will hold interest rates at its next meeting in June. That indicates traders expect the other “tariff shoe,” if you will, to drop. 

---

Get the news in your inbox. Explore Blockworks newsletters:

• Blockworks Daily: Unpacking crypto and the markets.
• Empire: Crypto news and analysis to start your day.
• Forward Guidance: The intersection of crypto, macro and policy.
• 0xResearch: Alpha directly in your inbox.
• Lightspeed: All things Solana.
• The Drop: Apps, games, memes and more.
• Supply Shock: Bitcoin, bitcoin, bitcoin.

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]