US Inflation Cools in April, Boosting Fed Pause Hopes.

US inflation eased slightly in April, offering fresh evidence that price pressures may be slowly receding. According to the Labor Department’s report released Tuesday, the Consumer Price Index (CPI) rose 2.3% in April compared to a year earlier. That’s down from March’s 2.4% annual gain and slightly lower than economists’ expectations of a 2.4% increase, as polled by The Wall Street Journal.

The monthly CPI rose 0.3% in April, slowing from March’s 0.4% gain, as energy prices moderated and used car prices continued to slide. More importantly, the core inflation measure—which excludes food and energy—rose 2.8% year-over-year. This figure, closely watched by the Federal Reserve, aligned with analyst forecasts and marked the second straight month of steady core readings.

Economists view this latest data as a positive sign that inflation is gradually returning toward the Fed’s 2% target, though the path remains uneven. The modest slowdown in consumer prices could reinforce the central bank’s recent decisions to hold interest rates steady. The Fed has kept its benchmark rate in the 4.25%–4.50% range since early this year, citing mixed signals in inflation and employment.

Wall Street reacted positively to the report, with stock futures extending early gains. Traders are increasingly betting that the Fed may stay on hold through the summer or even consider rate cuts later in the year if inflation continues to trend lower. Treasury yields also ticked lower, reflecting shifting expectations around monetary policy.

Still, policymakers remain cautious. Federal Reserve Chair Jerome Powell emphasized last week that while inflation has cooled, it remains too high. “We need more confidence that inflation is on a sustainable path downward before adjusting policy,” he said. With the next CPI report and job data expected in mid-June, markets will be closely watching for further signs of progress.

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