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New tariffs imposed by the Trump administration are projected to raise U.S. consumer prices, with an expected increase in the effective tariff rate from 2% in 2024 to 8% in 2025. However, Wells Fargo economists suggest that factors like exchange rates, foreign price adjustments, and high profit margins in goods-related industries may cushion the inflationary impact. Despite these mitigating factors, a 0.6 percentage point rise in year-over-year consumer price inflation is anticipated, with core PCE inflation expected to remain above the Federal Reserve's target through 2026.
New tariffs imposed by the Trump administration are expected to raise U.S. consumer prices, with forecasts indicating an increase in the effective tariff rate from 2% in 2024 to 8% in 2025. Wells Fargo economists suggest that factors such as exchange rates, foreign price adjustments, and high profit margins in goods-related industries may cushion the inflationary impact. However, they project a 0.6 percentage point rise in year-over-year consumer price inflation due to these tariffs, with effects likely to unfold over the next couple of years rather than all at once.
Sarah House
People
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new tariffs may raise consumer prices but inflation impact could be cushioned
12:30 30.03.2025
new tariffs may raise consumer prices but mitigating factors could soften impact
15:05 28.03.2025
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