The Federal Reserve’s preferred inflation gauge stalled in March for the first time in nearly a year and consumer spending was strong, a welcome reprieve before tariffs are expected to broadly drive up prices.

The personal consumption expenditures price index stagnated from February, according to Bureau of Economic Analysis data out Wednesday. Excluding food and energy, the so-called core PCE was also unchanged, the tamest in almost five years.

Inflation-adjusted consumer spending climbed 0.7% last month after an upward revision to the prior month, suggesting households spent aggressively to get ahead of new tariffs.

The data round out a quarter in which the US economy contracted for the first time since 2022 on a monumental pre-tariffs import surge and more moderate consumer spending. The report earlier Wednesday also showed core PCE inflation accelerated to a 3.5% pace in the first quarter — the most in a year.

The S&P 500 remained lower while Treasuries and the dollar fluctuated.

The combination of slowing inflation and healthy spending suggest the economy was in a good place before the brunt of President Donald Trump’s tariffs took effect. Economists widely expect the trade policies to reinvigorate price pressures and in turn discourage spending.