US inflation stable despite tariffs, but effects starting to show, potential impacts on Fed policy

From Financial Modeling Prep: 2025-06-30 14:24:00

Despite trade wars, U.S. inflation remains stable, but effects of tariffs are just starting to show. Mixed signals in recent data may understate actual cost pressures, with delayed impacts expected. Energy and metal prices have stayed soft, while global demand weakness tempers inflation. The Fed’s response hinges on upcoming inflation prints and tariff impact clarity.

Federal Reserve Chair Powell maintains a cautious stance, despite market expectations of a rate cut. Tariff effects on inflation could influence Fed policy direction. Investors should monitor macroeconomic data releases and Fed decisions closely to anticipate market shifts. Inflation risk is currently underpriced, potentially impacting monetary policy and market positioning.

Investors should consider inflation hedges like TIPS and reassess sector exposure in light of potential cost pressures. Monitoring macroeconomic data and reacting to actual data rather than consensus is crucial. As tariff impacts on pricing become clearer, investors should prepare for renewed inflation discussions and potential shifts in Fed policy.



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