US inflation data April 2025: CPI Expected to Fall to 6-Month Low – What It Means for Markets?

Today, Thursday, April 10, 2025, the United States is set to release its consolidated economic / US inflation data amid heightened interest from markets and analysts. This comes alongside an announcement regarding new tariffs aimed at enhancing communication with trade partners. While the tariff news may influence broader economic sentiment, it is important to note that these measures have not yet taken effect and, therefore, will not have a direct or immediate impact on the data being released today.

Figure 1: US CPI Data, Bureau of Labor Statistics (latest release)

Market Rebound and Fed Outlook Ahead of Key US Inflation Data April 2025

It’s also important to note that today’s inflation data is especially significant after the recent strong rebound in the markets. This rebound came following the U.S. administration’s decision to delay the planned tariffs by 90 days. Investors will be watching closely to see if today’s data supports further gains, or if a weaker reading causes markets to fall again.

In addition, the Federal Reserve’s meeting minutes, released yesterday, showed confidence in the strength of the U.S. economy. The Fed made it clear that it will continue working to bring inflation down to its 2% target. Future interest rate decisions will depend on how upcoming economic data unfolds.

US Inflation Forecasts and Market Expectations Ahead of Fed Decisions

As a result, markets will be closely watching how today’s actual inflation reading compares to both expectations and the previous figure. Forecasts suggest that annual inflation will slow to 2.5%, down from 2.8% in the previous reading. If accurate, this would mark the second consecutive month of slowing inflation and the lowest level since October 2024.

As per analysts’ expectations such a result would offer strong support for the U.S. economy’s current path, especially as inflation remains below the key 3% level a threshold highlighted in the attached chart for its economic significance

It’s worth noting that the Fed Chairman has repeatedly stressed that monetary policy is not fixed and will depend on the data released at each meeting. analysts expect significant price movements around key data releases, especially since Fed officials continue to highlight the importance of bringing inflation back to the 2% target.

Market Scenarios and Volatility Risks Following US Inflation Data

In conclusion, if inflation slows to 2.5% as expected, this would boost market optimism and support the case for upcoming interest rate cuts positively impacting both stock markets and gold. On the other hand, if inflation comes in higher than expected, it could be negative for stocks and gold, as it would suggest inflation remains persistent and the Fed may delay any rate cuts as per analysts expectations.

Overall, analysts expect today’s data release will trigger market volatility. It's also important to note that the initial reaction regardless of the actual reading may be sharp and unpredictable before markets find direction and stabilize.