The U.S. inflation rate has eased significantly, with the latest Consumer Price Index (CPI) at 2.7%, below the 3.1% forecast, boosting market sentiment. This comes despite expectations that tariffs introduced by President Trump in April last year would increase inflation. Studies by the Federal Reserve Bank of San Francisco indicate that importers have mitigated tariff impacts by shifting supply chains and negotiating exemptions, reducing inflationary pressures. U.S. tariff revenue has also declined, with figures dropping from $34.2 billion in October to $3.02 billion in December. Analysts note that the average effective tariff rate is around 12%, contributing 0.9 percentage points to PCE inflation, with 0.4 points absorbed by the market. The decline in tariff revenue, which was expected to generate up to $1 trillion, poses challenges to fiscal plans, as the U.S. deficit reaches $439 billion and national debt exceeds $38.5 trillion.