Fed’s Inflation Victory May Be Short-Lived as Tariff Effects Loom
The Federal Reserve’s preferred inflation measure, the PCE index, is expected to show minimal growth of just 0.1% in April, potentially bringing the annual inflation rate down to 2.2% – close to pre-pandemic levels.
While this appears to be good news as the Fed aims to return inflation to 2% or less, concerns remain about the impact of new tariffs and whether inflation expectations have become “unanchored.”
A recent court ruling against Trump’s tariff authority offers some hope, but economists warn that rising import prices could reignite inflation, similar to the persistent inflation cycles of the 1970s.
Post Comment