With additional reporting from Ari Hawkins

BACK IN BUSINESS — You probably missed it in the Category Five hurricane of news slamming U.S. shores regarding the criminal indictment of a certain rambunctious former president.

But some decidedly positive news about the U.S. economy arrived today in the form of a very welcome dip in the rate of consumer inflation that could make it easier for the Federal Reserve to slow or even stop its campaign of inflating-fighting interest rate hikes before it drives the U.S. economy into recession.

The Commerce Department today reported that the Personal Consumption Expenditure index (PCE) rose 0.3 percent in February, excluding the volatile food and energy components. That was lower than the 0.4 percent Wall Street consensus and down from 0.5 percent in January.

On an annualized basis, this so-called “core PCE” measure — the Holy Grail of inflation numbers for the Fed — rose 4.6 percent in February, down a touch from 4.7 percent in January.

The headline inflation number, which includes food and energy, looked even better, dipping to 5.0 percent in February from 5.3 percent in January and hitting its lowest level since September of 2021.

These numbers remain well above the Fed’s target of around 2 percent annual inflation. But they suggest that all the hikes — which arguably helped drive the collapse of Silicon Valley Bank and have wreaked havoc on the broader tech industry — are starting to really win the battle against a run of four-decade high inflation that followed the Covid pandemic.

That run, which created widespread economic misery and crushed President Joe Biden’s approval ratings, peaked last summer at over 7 percent as measured by core PCE and even higher as measured by the Consumer Price Index. It’s now pretty clearly receding, helping to drive solid rallies on Wall Street today. The Nasdaq closed out the first quarter up 16 percent and the S&P finished the first three months of the year up 7 percent, easing some of the pain for Americans now used to opening up dismal 401(k) updates.

The readings come after the Fed earlier this month declined to curtail its rate hiking campaign even in the wake of the dramatic collapse and federal rescue of SVB and Signature Bank. Those moves by the Fed implicitly guaranteed all deposits, even those over the insured limit of $250,000, at every FDIC-backed bank in the nation.

And it likely means the Fed could decide to hold off on another rate hike at its next meeting in May or at most issue one more quarter point hike. The central bank may then be able to start to cut rates late this year or early next assuming inflation continues to fall as the economy cools off.

That would once again put the fabled “soft-landing” back in play. In this best case scenario, the Fed defeats inflation without causing growth to turn negative for multiple quarters and unemployment to rise by a significant amount — the hallmarks of recession.

That is the chain of events that Biden and Democrats are fervently praying for to give the president a solid shot at winning a second term next November. His biggest selling points are a continued hot labor market and rising wages, especially among lower-income earners.

Should the Fed need to administer more beatings to the economy in the form of multiple additional rate hikes, recession would almost certainly ensue and Biden would be in deep trouble, even if he winds up running against an indicted (and perhaps convicted?) Donald Trump.

For the moment, the White House can roll into the weekend fairly confident the recent banking crisis is contained and the Fed is not likely to be wielding a sledge hammer to crush Biden’s hopes of becoming the oldest president to ever win a second term.

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— Trump plans to turn himself in: Trump is expected to turn himself over to local law enforcement on Tuesday. Plans are in motion for the unprecedented arraignment in New York, which is expected around 2:15 pm Tuesday according to a rough schedule shared by the campaign.

— Bragg defends Trump indictment against GOP attacks: Manhattan District Attorney Alvin Bragg issued his first public response to Hill Republicans since news of the former president’s indictment, defending his office’s decision in a letter to lawmakers today. He rejected GOP accusations of political persecution as “baseless and inflammatory,” and pleaded with Capitol Hill Republicans to encourage calm. But Bragg’s office also accused them of engaging in “unlawful political interference.”

— IRS rules for electric cars unveiled after months of attacks: The Biden administration announced rules today that will make it harder for many electric vehicles to qualify for federal tax breaks — but could, over the long term, foster the growth of entire new U.S.-based industries built around clean energy. The proposed guidance from Treasury and the Internal Revenue Service aims to thread the needle between two of the climate law’s main goals — getting people to buy electric vehicles by making them more affordable, while ensuring that the U.S. and its closest trading partners reap the economic and security benefits.

— Biden-backed California rule pushes clean trucks: California will require more zero emission trucks on the roads after a key Biden administration approval, a move that is bound to transform the country’s truck market. The nation-leading Advanced Clean Trucks rule, first passed in 2020 and backed by the EPA today, sets a timeline for manufacturers to phase out most gas-powered heavy-duty vehicles by 2035. At least six states — Massachusetts, Vermont, New York, New Jersey, Washington and Oregon — have already moved to adopt the rule, meaning it will cover almost a quarter of the nation’s auto market.

INDICTMENT EFFECT — The indictment of Trump is likely to deliver a temporary boost to him in the GOP primary —but at the expense of his standing among the broader electorate that will ultimately decide whether he returns to the White House, reports POLITICO’s Steven Shepard. Over the past month, as the prospect of criminal charges hung over Trump, the former president was actually increasing his national advantage over DeSantis, who hasn’t officially entered the race yet, among GOP voters. The indictment does little to threaten that lead, at least in the short term — as evidenced by DeSantis and the other declared or likely candidates decrying the charges on Thursday.

HOW IT’S PLAYING IN PA — Trump has divided Pennsylvania for years. The leaked news of his indictment was no different, reports the Philadelphia Inquirer. Pennsylvania Republican allies rallied behind him. Democrats applauded the prosecution as a sign of justice in motion. And both sides speculated what it could mean for his 2024 presidential campaign.

THREE QUESTIONS WITH… Jon McHenry, a Republican campaign pollster who is vice president of the North Star Opinion Research firm.

What’s the most important state to watch in this early stage of the GOP primary?

Obviously I’m going to say New Hampshire. South Carolina is most like the Republican primary electorate now, but New Hampshire will be the first place that someone can really pop Trump, it will be a test of whether DeSantis can do well with an emphasis on retail politics, and the inclusion of undeclared voters in the GOP primary will be a test of some appeal in the general election, especially if Biden doesn’t receive a serious challenge.

What effect might the Trump/DeSantis relationship have on the primary?

A lot of this race could come down to how DeSantis deals with Trump. Trump seems to be obsessed with DeSantis, in a way that, honestly, should be beneath a former president of the United States. Does DeSantis deal with Trump in a way that makes him seem like the person with real credibility? Does DeSantis get in the sandbox with Trump and look like a baby? Can DeSantis pull off the moment in a debate like when Al Gore was pacing too close to W. and W. gives him a dismissive look?

Which Republican candidate would be most difficult — and easiest — for Biden to run against in the 2024 race?

The easiest candidate for Biden is obviously Trump. He’s beaten him before, and will beat him again. The hardest candidate for Biden, I think, is Nikki Haley. She’s a better candidate than Biden, 30 years younger, and Biden will screw up talking to a woman every day of the week. He’s a mortal lock to say something sexist in one debate and irredeemably condescending in the next.

AI CRACKDOWN — The Italian privacy regulator ordered a ban on ChatGPT today over alleged privacy violations, writes Clothilde Goujard.

The national data protection authority said it will immediately block and investigate OpenAI, the U.S. company behind the popular artificial intelligence tool, from processing the data of Italian users. The order is temporary until the company respects the EU’s landmark privacy law, the General Data Protection Regulation (GDPR).

Calls to suspend new ChatGPT releases and investigate its maker OpenAI over a range of risks for privacy, cybersecurity and disinformation are growing on both sides of the Atlantic. Elon Musk and dozens of AI experts this week called for a pause to updates of ChatGPT.

Consumer advocacy group BEUC also called on March 30 for EU and national authorities including data protection watchdogs to investigate ChatGPT.

INFLATION EASES — Eurozone inflation dropped at a record rate to 6.9 percent in March, driven by a sharp decline in energy prices compared to the same month last year, data released by the European statistics agencies showed today, writes Johanna Treeck.

While welcome news, the numbers will not have the European Central Bank in Frankfurt popping Champagne corks as they also showed so-called core inflation continued to rise. Core inflation measures filter out volatile food and energy components and are seen as a bellwether for future inflation trends.

POWER PLAYERS — Who shaped the intersection of race, culture, politics and policy in America in 2022? It’s a diverse group — from Florida Gov. Ron DeSantis to the labor organizer Chris Smalls. POLITICO’s The Recast is back with profiles of the 40 power players who had an outsized impact on everything from passing laws to working to defeat health crises last year. None of them show any signs of slowing down. Check out the full list here.