As markets digest news of a temporary truce in the U.S.–China trade dispute, all eyes now turn to April’s inflation report, set to be released Tuesday. While headline inflation is expected to remain stable, analysts caution that the full impact of earlier tariffs may still be in the pipeline.

Forecasts suggest consumer prices rose 2.4% year-over-year in April, unchanged from March. Core inflation—which strips out food and energy—is also expected to hold steady at 2.8%. On a monthly basis, both headline and core figures are projected to show a 0.3% increase, suggesting a mild rebound after March’s softer readings.

The report comes just days after Washington and Beijing announced they would suspend their escalating tariff measures. The U.S. plans to reduce its trade levies significantly, with China following suit. Though this eased investor anxiety and sparked a rally in equities, some market watchers are urging restraint, pointing out that past attempts at trade peace have quickly unraveled.

For now, however, this weekend’s trade announcement won’t influence Tuesday’s data. Economists expect the inflation figures to reflect conditions before the tariff suspension—possibly showing early signs of pressure from the duties implemented earlier in the year.

Some categories, such as apparel, may see modest price bumps as seasonal discounts thin out, potentially due to limited inventory. However, other areas like shelter costs may continue to cool, helping to keep broader price growth in check.

Further clues about how trade tensions might feed into inflation will likely come from Thursday’s Producer Price Index release. Any significant uptick in wholesale prices could signal brewing inflationary pressure, especially if supply chains begin passing costs down to consumers.

While the April inflation report is expected to show minimal change, it may mark the beginning of a more volatile period. With trade policy still in flux, markets and policymakers will be watching closely to see whether inflation remains anchored—or starts to drift upward in the months ahead.