Why Tariff Inflation Won't Be Just A Blip

2025-03-07 04:40:00 ET

Summary

• When faced with supply-driven inflation, whether caused by factory closings and shipping bottlenecks or by tariffs, it is not enough just to hold the line on monetary and fiscal policy.
• According to data from the Atlanta Fed, the most flexible prices are those of goods like oil and wheat that are traded on commodity exchanges where they can change by the minute.
• Will we actually run the tariff-inflation experiment in real life?

I am a Tariff Man , declares Donald Trump. But what about inflation? In his 2025 State of the Union, he admits, "There might be a little disturbance, but we are okay with that. It won't be much"....

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