If President Donald Trump’s tariffs jack up US consumer prices — as pretty much everyone thinks they will, at least for a while — then that’s already bad news for inflation-fighters at the Federal Reserve. It could also open the door to something even worse.
What businesses and workers anticipate will happen to prices, economists say, can play a key role in determining what actually does happen. That’s why Fed officials always keep a close eye on estimates of future inflation — and the latest ones show cause for concern. The benchmark long-run expectations gauge, which had already climbed to a 30-year high since Trump’s election, soared higher still on Friday after his sweeping global tariffs.
