US inflation beats expectations, but tariff impact yet to surface: The US Core Consumer Price Index (CPI) — which excludes food and energy — rose 2.8% y-o-y, marking its lowest annual increase since March 2021, according to the US Bureau of Labor Statistics. While the figures outperformed Wall Street’s 3% forecast, economists caution that impending tariffs could soon reverse the trend.

Fed’s target still distant: Headline inflation has come down significantly to 2.4% from its 9.1% peak in June 2022. However, it remains above the Federal Reserve’s 2% long-term target.

Not out of the woods yet: “The good news of an inflation soft print in March needs to be taken with a grain of salt,” Fwdbonds’ chief economist Christopher Rupkey told Reuters, pointing to the intensifying trade war with China. Mark Zandi of Moody’s seconded the notion, telling CNBC that the CPI data “means nothing” because it does not yet reflect recent tariff activity.

Why the delay? The full impact of tariffs hasn’t yet filtered through, as firms had stockpiled imports in early 2025 to get ahead of tariff hikes, Fitch Ratings’ Brian Coulton told CNN.

What are we looking at? Tariffs could push inflation up to 4% — double the Fed’s target — by year-end, CNBC reports, citing projections from Capital Economics and Vanguard. Analysts remain divided on whether this will be a temporary spike or a more persistent trend.

Uncertainty is the key word: Analysts are changing their projections continuously, as the tariff situation remains fluid, with little indicators on where things will stand once the dust settles. Trump recently postponed some country-specific tariffs for 90 days pending trade negotiations, but still maintained a 10% blanket levy on all imports as well as the steep 145% tariff (so far) on Chinese imports. The US administration also spared smartphones, laptops, chips, and other electronics from the sweeping new tariff regime in a bid to ease impact on consumer prices, covering USD 390 bn worth of US imports in 2024 — including some USD 101 bn from China.

Trump is not backing down on cuts: Despite policy volatility, Trump continues to wage his campaign on the Federal Reserve to lower interest rates. While central bankers remain cautious, markets anticipate three to four rate cuts by year-end, with the first expected in June. “Going forward the Fed is likely to face a difficult trade-off as tariff driven price increases start to feed through to the inflation data and activity remains soft,” CNBC quotes Goldman Sachs Asset Management’s Kay Haigh as saying.

TASI

11,503

+3.7% (YTD: -4.4%)

MSCI Tadawul 30

1,463

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NomuC

29,925

+2.0% (YTD: -8.1%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

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BTC

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THE CLOSING BELL: TADAWUL-

The TASI rose 3.7% on Thursday, on turnover of SAR 8.3 bn. The index is down 4.4% YTD.

In the green: SPM (+10.0%), Chemical (+10.0%) and Ataa (+10.0%).

In the red: NCLE (-0.9%), Sedco Capital Reit (-0.6%) and Aljouf (-0.2%).

THE CLOSING BELL: NOMU-

The NomuC rose 2.0% on Thursday, on turnover of SAR 38.8 mn. The index is down 8.1% YTD.

In the green: Apico (+16.4%), AlWaha Reit (+11.7%) and Almodawat (+10.5%).

In the red: Balady (-10.6%), iOud (-7.1%) and Balsm Medical (-5.0%).

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