Timothy Gill, Vice President of Research and Chief Economist of the American Financial Services Association (AFSA), said that while March's inflation data showed positive signs with core indexes reaching multi-year lows, new and expanded tariffs could render this softening temporary. He made this statement in a press release.
"The news on inflation was again positive in March," said Gill, Vice President, Research & Chief Economist. "Both the headline and core indexes fell to multi-year y/y lows. It would be tempting to look at the recent run of inflation data from the CPI and other sources and conclude that they heralded a lasting return to disinflationary pressures."
According to Reuters, U.S. consumer prices experienced a slight decline in March 2025, marking the first decrease in nearly five years. This unexpected drop was primarily driven by lower gasoline and used vehicle costs, indicating weakened consumer demand amid recession fears linked to escalating tariffs on Chinese imports. President Trump's recent intensification of trade tensions, including a significant increase in tariffs on Chinese goods, has raised concerns about potential inflationary pressures and a looming recession. Despite the current dip in prices, analysts caution that the relief may be temporary as the effects of the tariffs begin to permeate the economy.
The U.S. Bureau of Labor Statistics reported that the Consumer Price Index (CPI) for all urban consumers decreased by 0.1% in March 2025, following a 0.2% increase in February. Over the 12 months ending in March, the all-items index rose by 2.4%, down from a 2.8% increase in the previous year. Notably, the index for all items less food and energy increased by 2.8% over the last 12 months, marking the smallest 12-month increase since March 2021. These figures suggest a moderation in inflation, although the full impact of recent tariff implementations has yet to be realized.
As per Reuters, the International Monetary Fund (IMF) revised its global economic forecast for 2025 due to adverse effects from U.S. tariffs that have reached century-high levels under President Donald Trump. Global growth expectations were cut by 0.5 percentage points to 2.8% for 2025, with U.S. growth forecast reduced to 1.8%. The IMF emphasized that escalating trade tensions and policy uncertainty are major drivers of economic slowdowns across all major economies, potentially leading to increased financial market volatility and tighter financial conditions.
Gill is noted as having over 25 years of experience in economic analysis across leading trade associations and holds advanced degrees in economics from Miami University and John Carroll University.
