Rolling US Tariffs Would Be ‘Problematic’ for Fed, UBS Says
Published On Jan 13, 2025, 7:37 PM
UBS economist Arend Kapteyn warns that rolling US tariffs, if implemented by the next administration, pose challenges for the Federal Reserve in managing inflation. Continuous tariff increases could lead to repeated supply shocks, creating greater inflationary pressures than expected. This comes amidst speculation that the upcoming economic team is considering gradual tariff increases to improve negotiating leverage without causing immediate inflation spikes. Market expectations suggest limited immediate impacts on inflation and economic growth from these potential tariffs.
Stock Forecasts
SPY
Negative
Increased tariffs could lead to inflationary pressures that influence the Federal Reserve's monetary policy decisions, potentially delaying rate cuts. This complicates the economic outlook for various sectors dependent on consumer spending and input costs. Tariff impacts could be sector-specific, affecting import-dependent companies more significantly.
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