Reading the latest US inflation report is like flicking through old vacation photos: it looks nice, but the experience was only temporary. Consumer prices in February broke a recent hot streak, coming in below economists' expectations. Problem is, President Donald Trump's haphazard trade policies risk raising costs, choking off this progress and pinching households and already-flagging growth. That raises the grim possibility of true stagflation.

Annual growth in consumer prices of 2.8 percent is still above the US Federal Reserve's 2 percent target. Still, aided by a 1 percent monthly decline in gasoline costs, the increase from January fell to 0.2 percent, the lowest reading since October. That might ordinarily be an encouraging sign that the trend is coming back under control. Yet the imposition of new 25 percent steel and aluminum tariffs, and resulting European and Canadian retaliation, just ahead of the inflation report's release on Wednesday scrambles the picture.

The Fed's Beige Book business survey, published last week, warned that firms around the country expected to pass along tariff costs, with some doing so preemptively. A National Federation of Independent Business survey found a 10 percentage point jump in the proportion of companies raising prices. The NFIB report raised concerns that core inflation, which strips out volatile food and energy categories, could reaccelerate from its February rate of 3.1 percent towards 4 percent.

There remains some narrow hope that the tariff blitz may yet force trading partners to agree to collective disarmament, resulting in a negotiated outcome that actually reduces levies around the world. A glimmer of encouragement appeared on Tuesday, as the Canadian province of Ontario backed down from threats to cut off electricity supplies to the northeastern US power grid in return for Trump nixing 50 percent tariffs on metals. But the seemingly arbitrary application of trade policy has spooked markets and driven up the risk of recession, with JPMorgan now penciling in a 40 percent chance of one in 2025, up from 30 percent.

A bit of froth coming off richly valued stock markets can be a sensible readjustment. As investors rush to safer assets, 10-year treasury yields have fallen to 4.22 percent from a recent high of 4.79 percent in January. That could have a stimulatory effect by lowering financing costs and mortgage rates. But the rest of Trump's agenda, like hard-to-unwind lumber and steel tariffs and immigration restrictions, risks the worst of both worlds: higher costs, lower growth. The vacation is over, and the re-entry is rough.

The US consumer-price index rose 2.8 percent over the prior year in February, lower than economists' consensus prediction of 2.9 percent. Core prices, which exclude volatile food and energy categories, advanced at a 3.1 percent pace in February, above the Federal Reserve's target pace of 2 percent.

The White House increased US tariffs on steel and aluminum imports on March 12 to 25 percent, prompting swift retaliation from Canada and Europe. President Donald Trump has promised to impose reciprocal tariffs on a wider range of trading partners starting in early April, when the latest reprieve for tariffs on many Mexican and Canadian goods is set to expire.