Inflation, tariffs
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Higher tariffs put in place by the Trump White House this year have started to increase inflation, and these effects are likely to increase in the coming months, New York Fed President John Williams said Wednesday.
The pause on many tariffs was supposed to end this week, but it didn't. Despite that, reports still indicate that tariffs have caused a notable recent spike in inflation.
Federal Reserve Bank of New York President John Williams said Wednesday that monetary policy is in the right place to allow central bankers to monitor the economy before taking their next steps, and he warned that the impact of trade tariffs is only just starting to hit the economy.
20hon MSN
Wholesale prices were unchanged in June and showed only a mild effect from U.S. tariffs, adding to the growing view that trade wars won’t lead to a big increase in inflation.
With the Federal Reserve watching inflation closely, Tuesday's June Consumer Price Index is expected to show some impact from tariffs, with more showing up later in the year. The consensus is for core CPI to rise 3.
While the direct effect of higher tariffs on inflation remained relatively moderate last month, there are signs that businesses are passing along the increased costs. Prices for household furnishings and operations,
Wholesale inflation in June, as measured by the producer-price index, surprised to the downside “as lower hotel rates and airfares offset tariff effects,” according to Comerica Bank’s chief economist,
U.S. producer prices were unexpectedly unchanged in June as a tariff-driven increase in the cost of goods such as communication and related equipment was offset by softening demand for travel services.