Inflation in the United States isn’t cooling down as much as people hoped, and that’s got folks nervous as new numbers came out over the weekend. On Saturday, March 29, 2025, reports showed prices climbed again in February—higher than expected—and it’s happening even before President Donald Trump’s latest tariffs hit hard. With Americans already careful about spending, and big trade taxes starting to bite, the economy’s feeling the squeeze.
The big number everyone watches—the Personal Consumption Expenditures (PCE) price index—showed inflation at 2.5% for the year through February, right where experts guessed it’d land. But strip out food and gas, which bounce around a lot, and the “core PCE” jumped to 2.8%, hotter than the 2.7% folks like Dow Jones thought it’d be. That’s the highest in a year, and it’s above the Federal Reserve’s 2% goal they’ve been chasing since prices went wild during the pandemic.
Why’s it up? Everyday stuff costs more—clothes, car parts, even services like haircuts—and Trump’s tariffs are starting to play a part. He’s slapped 20% taxes on Chinese imports, 25% on steel and aluminum, and just last Wednesday, March 26, added 25% on foreign cars. Economists say these make imported goods pricier, and companies pass that cost to shoppers. “It’s like pouring gas on a fire,” one expert told Bloomberg Sunday. The Fed’s worried too—an inflation gauge they track stayed high last month, and that was before most of these tariffs kicked in, per Business Standard.
Spending’s another story. People bought more in February—up 0.4% from January’s big drop,—but it’s not as strong as the 0.5% Wall Street hoped for. A lot of that extra cash just went to higher prices, not more stuff. After you figure in inflation, spending barely moved, says Reuters. “Folks are holding back,” a Pew survey from last month found—63% still call inflation a “very big problem.” Companies like Lululemon felt it too—their stock tanked Thursday after they warned people aren’t buying as much.
Trump’s trade moves are making waves. He calls April 2 “Liberation Day in America” for more tariffs, but it’s got the Fed stuck. They cut rates a full point in 2024 to help growth, down to 4.25%-4.5%, but held steady this month as prices stayed sticky. Now, with tariffs pushing costs up, rate cuts might wait—some think not till summer or later. “It’s a balancing act,” Fed Chair Jerome Powell said last week, admitting they don’t know how bad it’ll get. Markets flipped Friday—stocks dipped, then bounced a bit, but everyone’s jittery.
People are feeling it too. A University of Michigan survey Friday showed folks think inflation’s heading to 4.9% next year—way up from 4.3% last month, the biggest jump since 1993. That’s scary—if people expect prices to soar, they act like it, and it snowballs. “We’re bracing for pain,” one shopper told ABC News last week.
For now, inflation’s not budging much—2.5% overall, 2.8% at its core—and tariffs could make it worse. The Fed’s watching, shoppers are tightening belts, and Trump’s trade war’s just heating up. It’s a wait-and-see game, but the heat’s already on.