March's Consumer Price Index (CPI) report showed inflation pressures eased considerably last month, with annual core prices rising at their slowest pace since March 2021. But it could be the last time investors see moderating price growth as President Trump's tariff spree threatens to upend recent easing trends.

The latest data from the Bureau of Labor Statistics showed that the Consumer Price Index (CPI) increased 2.4% over the prior year in March, a slowdown from February's 2.8% annual gain and a beat compared to economists' expectations of a 2.5% annual increase.

On a month-over-month basis, prices declined 0.1% — the first time monthly CPI prices have fallen since May 2020. This was also below the 0.2% increase seen in February and a beat compared to economists' estimates of a 0.1% monthly uptick.

On a "core" basis, which strips out the more volatile costs of food and gas, prices in March climbed 0.1% over the prior month, cooler than February's 0.2% monthly gain and ahead of economist expectations of a 0.3% increase.

Read more: $6 eggs and other inflation pain points: Here's where prices are rising

Over the last year, core prices rose 2.8%, a deceleration from the 3.1% annual core price increases seen in the prior-month period and the slowest annual rise in four years.

Overall, March delivered the second straight monthly decline in headline and core CPI inflation.

The report greets investors less than 24 hours after markets rallied on the latest trade development: a 90-day pause on reciprocal tariffs for most countries and a simultaneous increase of US levies on Chinese imports.

Although Trump has paused reciprocal tariffs (for now), the 10% baseline duties that went into effect last weekend for most countries remain. Mexico and Canada still face a separate set of duties related to fentanyl, while separate industry-specific tariffs on steel, aluminum, and autos remain unchanged.

Read more: What Trump's tariffs mean for the economy and your wallet

The president also announced he would unilaterally raise the tariff rate on China to 125%, citing "the lack of respect that China has shown."

In a post on Truth Social, Trump reacted to the inflation news, writing simply: "INFLATION IS DOWN!!!"

But economists continue to caution that current tariffs will likely lead to faster price growth. That, coupled with rising fears of a self-inflicted recession, has kept the Fed in "wait-and-see" mode when it comes to interest rates.

"This could easily be the last really good CPI day for a while," Claudia Sahm, former Federal Reserve Board economist and current chief economist at Century Advisors, told Yahoo Finance following the data's release. "The tariffs that have gone into effect [but] it's going to take time for it to show up in the data."

To that point, Powell made it clear during remarks delivered last week that the Fed is in no hurry to adjust its interest rate stance: "It is too soon to say what will be the appropriate path for monetary policy."

Shelter moderates as energy falls, food still sticky

Core inflation has remained stubbornly elevated due to sticky costs for shelter and services like insurance and medical care. But shelter did show further signs of easing in March, rising 4% on an annual basis, the smallest 12-month increase since November 2021.

On a month-over-month basis, the shelter index increased 0.2% compared to a 0.3% uptick in February. The index for rent and owners’ equivalent rent (OER) rose 0.3% and 0.4%, respectively, over the prior month. Owners' equivalent rent is the hypothetical rent a homeowner would pay for the same property.

Lodging away from home also reflected easing price pressures, dropping 3.5% on a monthly basis.

Outside of shelter, the downside surprise in core inflation was also aided by other categories, including a 0.7% monthly drop for used cars & trucks, a 1.1% fall for medical care commodities, a 0.8% fall for motor vehicle insurance, and a significant 5.3% decline in airline fares.

Meanwhile, the energy index dropped 2.4% month over month after rising 0.2% in February and 1.1% in January. On a yearly basis, the energy index was down 3.3%, aided by plummeting gas prices, which fell 9.8% after a 1% drop the previous month.

Notably, food prices reversed last month's easing, with the index rising 0.4% last month after a 0.2% uptick in February. Egg prices also continued to surge — up another 5.6% month-over-month to reach an all-time high, largely due to the bird flu impacting supply . On a yearly basis, egg prices have climbed 60.4%.

Other indexes with notable increases over the last year include motor vehicle insurance (+7.5%), medical care (+2.6%), recreation (+1.9%), and education (+3.9%), according to the BLS.

Alexandra Canal @allie_canal , LinkedIn,