The US government will increase the tariff rates for different categories of imported products. Some economists that track these trading proposals say that the higher tariffs could lead to higher consumer prices.
A model created by the Federal Reserve Bank of Boston suggests that in an “extreme” scenario, increased taxes on US imports could lead to an increase of 2.2 percentage points to core inflation by 2.2 percentage points. In this scenario, 60% tariff rates for Chinese imports and 10% tariff rates for imports from all other countries are eliminated.
The researchers find that many other tariffs have appeared since their publication in February 2025.
In addition to consumer services such as nursing, public transport and finance, the price increases could be due to many categories, including new living space and automobiles.
“People may think:” Oh, tariffs can only affect the goods I bought. It cannot affect the services, “said Hillary Stein, economist at Boston Fed.” These hospitals buy inputs, for example … medical devices from abroad. ”
Economists of the White House say that tariffs are not sensible to inflation. In a statement to CNBC, Stephen Miran, chairman of the municipal council of the economic advisor, said that “the United States, as the world's largest source of consumer demand, has the entire leverage, which means that foreign suppliers have to eat the economic stress or” incidence “of the tariffs.”
The assessment of the effects of the full economic agenda of the administration was a challenge for the central bank leaders. The Federal Open Market Committee decided to leave its goal for the Federal Funds interest rate at the meeting in March.
According to the New York FED, the FED is aimed at its loan set between 4.25% and 4.5% overnight, with the effective federal fund sentence on March 31 on March 31. According to the trade department, the inflation rate for personal consumption expenditure for the price index rose to 2.8%in February. Forecasts of the gross domestic product from US -Bretto -Inland suggest that the economy will continue to grow with 1.7% in 2025, although forecast more slowly than in January.
Consumers in the USA and companies around the world are prepared for the effect.
“There is a reason why companies went outside the United States,” said Gregor Hirt, Chief Investment Officer at Allianz Global Investors. “It was mostly because it was cheaper and more productive.”
Watch the video above to find out how much inflation tariffs can cause.
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