Inflation takes it easy

Business & Economy

The Big Story

Inflation cools in Trump’s first month

After a week of rising economic fears, the February consumer price index (CPI) report was a welcome reprieve.

Consumer prices rose slightly during President Trump’s first full month in office, according to data released Wednesday by the Labor Department.

The CPI rose 0.2 percent in February from January and is up 2.8 percent on the year.

Economists expected the CPI to rise by 0.3 percent on the month and hit an annual inflation rate of 2.9 percent, according to consensus estimates.

But the numbers broke following four consecutive months of rising annual inflation in the CPI, which increased steadily from 2.4 percent in September to 3 percent in January.

The new CPI report also comes amid weeks of rising economic pressure on President Trump, who is facing economic disapproval ratings unprecedented across his two terms.

Trump imposed a 25 percent tariff on Canadian and Mexican goods earlier this month before exempting carmakers and then pausing it for goods covered under a North American trade agreement.

The president threatened tariffs on Canadian metal imports up to 50 percent after Canada imposed an electricity surcharge on its U.S. exports to New York, Minnesota and Michigan on Monday.

The White House declined to rule out a recession this week, fueling even greater anxiety in markets.

“We are in a period of economic transition,” White House press secretary Karoline Leavitt said Tuesday.

Read the full report at TheHill.com.

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Essential Reads

Key business and economic news with implications this week and beyond:

Goldman Sachs CEO: Business community ‘understands’ what Trump is trying to do with tariffs

Goldman Sachs CEO David Solomon said that the business community “understands” what President Trump is trying to do with levies on various goods, even though they want “lower tariffs everywhere.”

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Former Treasury secretary on Trump’s tariffs: ‘People are overreacting a bit’

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Tax Watch

Welcome to Tax Watch, a new feature focused on the fight over tax reform and the push to extend the 2017 Trump tax cuts this year.

Ways and Means Committee Republicans start working on tax plan particulars

Republicans on the House Ways and Means Committee are working long hours this week to start hammering out the details of their tax plan.

Tax writers aren’t saying much at this early stage, but a committee aide told The Hill that Democrats filed a resolution of inquiry to try to get more information about the process, something that Republicans have tried when they have been in the minority on the tax panel in the past.

Republicans are trying to extend the 2017 Trump tax cuts, some of which have already expired and the remainder of which will expire at the end of this year. They also want to include President Trump’s campaign promises on tax cuts, which include canceling taxes on tips, overtime, and Social Security.

Trump mentioned all of those in his address to Congress earlier this month, as well as cuts for manufacturing and shipbuilding.

Big tax provisions that he did not mention were the contentious state and local tax (SALT) deduction cap and the child tax credit (CTC) – omissions that some in the tax world saw as significant.

“Notably missing was any mention of the child tax credit or changes to the SALT deduction,” Adam Michel, director of tax policy studies at the Cato Institute, wrote in a commentary this week.

— Tobias Burns

COMING UP

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The Ticker

Upcoming news themes and events we're watching:

Congress is staring down a Friday midnight deadline to pass legislation to avert a government shutdown. Republicans are seeking to approve a Trump-backed plan that would fund programs through September, while Democrats are pushing for a shorter-term stopgap to allow both sides to continue talks toward bipartisan funding bills.

In Other News

Branch out with more stories from the day:

Wall Street rises after encouraging inflation data, but the trade war keeps knocking stocks around

NEW YORK (AP) — U.S. stock indexes rose Wednesday after Wall Street got some relief from an encouraging …

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Good to Know

Business and economic news we've flagged from other outlets:

S&P 500 closes higher on soft inflation report, Nasdaq jumps 1% as traders snap up tech shares (CNBC)
Egg prices are finally falling. But they’re about to spike again (CNN)
The $5 Trillion Stock Wipeout Is Rattling America's Big Spenders (Bloomberg)

What Others are Reading

Top stories on The Hill right now:

Senate Democrats insist on voting on 30-day government funding bill

Senate Democrats say they will not vote for the House-passed six-month government funding package, which would boost defense spending and cut nondefense programs, unless they first get a vote on a 30-day funding stopgap to give bipartisan negotiators more time to reach a deal on the annual appropriations … Read more

Judge temporarily blocks parts of Trump order targeting Perkins Coie

A federal judge on Wednesday temporarily froze parts of President Trump’s executive order targeting the law firm Perkins Coie, which claims its past work for Democrats made it a subject of retaliation by the administration. Read more

What People Think

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