Evelyn Reynolds

German harmonized consumer inflation came in at 1.8% in July, according to preliminary data.
The reading is lower than the 1.9% expected by economists polled by Reuters.
Euro zone inflation is due out later in the week.

Rhineland-Palatinate, Mainz: Fruit is sold at the weekly market.
Andreas Arnold/dpa | Picture Alliance | Getty Images

German inflation fell more than expected to 1.8% in July, data from statistics agency Destatis showed Thursday.
Economists polled by Reuters had anticipated inflation to dip to 1.9%. July’s reading compares to the 2% print recorded in June, which brought the German inflation rate in line with the European Central Bank’s target.

The figures are harmonized across the euro zone to ensure comparability. Euro zone inflation data is due later this week, with the reading forecast to come in at 1.9%.
So-called core inflation, which strips out food and energy costs, came in at 2.7% in July, unchanged from the previous month, the data showed. Meanwhile the closely watched services inflation print eased further from 3.3% in June to 3.1% in July.
Carsten Brzeski, global head of macro at ING, said in a note on Thursday that the latest data suggested Germany was “currently experiencing a process of disinflation.” Headline inflation is now expected to remain below, but close to the 2% mark, he added.
Inflation figures are being watched closely by economists and analysts as they assess the impact of U.S. President Donald Trump’s tariff policy. Several sectoral tariffs, as well as temporarily reduced reciprocal duties have already been in effect in recent months.
Last week the European Union and U.S. came to an agreement that includes EU goods being hit with 15% tariffs. While the levies are widely expected to affect prices in the U.S., it is less clear if, and how, inflation elsewhere may be affected.

“It remains to be seen how European and US companies will react to US tariffs. While one scenario could see prices falling in the eurozone due to overcapacities and weaker sales in the US, globally operating companies might try to actually increase prices in Europe in order to offset profit squeezing in the US,” Brzeski said.
Thursday’s inflation figures come just after Destatis on Wednesday published a preliminary reading of Germany’s second-quarter gross domestic product. The economy shrank slightly by 0.1% in the period, marking a decline from the 0.3% growth recorded in the first quarter. More

Gross domestic product jumped 3% for the second quarter, better than the 2.3% estimate and reversing a 0.5% decline in the prior period.
Consumer spending rose 1.4% in the second quarter, better than the 0.5% in the prior period.
While exports declined 1.8% during the period, imports fell 30.3%, reversing a 37.9% surge in Q1.
President Donald Trump responded to the GDP report with a fresh demand for the Federal Reserve to lower interest rates.

The U.S. economy grew at a much stronger-than-expected pace in the second quarter, powered by a turnaround in the trade balance and renewed consumer strength, the Commerce Department reported Wednesday.
Gross domestic product, a sum of goods and services activity across the sprawling U.S. economy, jumped 3% for the April through June period, according to figures adjusted for seasonality and inflation.

That topped the Dow Jones estimate for 2.3% and helped reverse a decline of 0.5% for the first quarter that came largely due to a huge drop in imports, which subtract from the total, as well as weak consumer spending amid tariff concerns.
Financial markets reacted little to the report, with stock index futures mixed and Treasury yields higher.
“The word of the summer for the economy is ‘resilient,'” said Heather Long, chief economist at Navy Federal Credit Union. “The consumer is hanging in there, but still on edge until the trade deals are done.”
The period reported Wednesday includes President Donald Trump’s April 2 “liberation day” tariff announcement. Imports had jumped in the first quarter as companies sought to get ahead of the announcement.
Over the past three months, Trump has been engaged in multiple rounds of saber-rattling and often intense negotiations with U.S. trading partners that have jangled nerves but nonetheless coincided with a subdued but solid pace of economic growth.

The talks have largely resulted in tariffs well above where they were at the beginning of the year but not as severe as initially proposed.
Consumer spending rose 1.4% in the second quarter, better than the 0.5% in the prior period. While exports declined 1.8% during the period, imports fell 30.3%, reversing a 37.9% surge in Q1.
The GDP tally showed strength across key areas of the economy, as well as evidence that inflation is ebbing though not eradicated.
The personal consumption expenditures price index, the Federal Reserve’s key inflation metric, showed a gain of 2.1% for the quarter, just above the central bank’s 2% target. Core PCE inflation, which the Fed considers a better gauge for longer-run trends as it excludes volatile food and energy prices, increased 2.5%. The respective numbers for the first quarter were 3.7% and 3.5%.
The Fed meets later Wednesday and is expected to hold its key overnight borrowing rate steady in a 4.25%-4.5% range, where it has been since December.
Trump responded to the GDP report with a fresh demand for the Federal Reserve to lower interest rates.
“2Q GDP JUST OUT: 3%, WAY BETTER THAN EXPECTED!” Trump posted on Truth Social. Using his nickname for Fed Chair Jerome Powell, the president added “‘Too Late’ MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!”
There were some signs of a slowdown in the report.
Final sales to private domestic purchasers, a metric that Fed watches closely as a demand indicator, rose just 1.2%, down from the 1.9% increase in Q1 and the slowest gain since the fourth quarter of 2022.
Trump has been complaining about high mortgage rates, which have held back the housing market. Residential investment fell 4.6% in Q2.

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Private payrolls rose by a seasonally adjusted 104,000 for the month, reversing a loss of 23,000 in June and topping the Dow Jones forecast for an increase of 64,000.
Wages rose at a 4.4% annual pace for the month, about in line with recent trends.

Hiring at private companies rebounded at a stronger than expected pace in July, indicating the labor market is holding its ground, ADP reported Wednesday.
Payrolls rose by a seasonally adjusted 104,000 for the month, reversing a loss of 23,000 in June and topping the Dow Jones forecast from economists for an increase of 64,000. The June number was revised up from an initially reported loss of 33,000.

Though the pace of hiring is well off where it stood last year, the June total was the best since March and consistent with a slowing but still fairly vibrant jobs picture.
“Our hiring and pay data are broadly indicative of a healthy economy,” ADP chief economist Nela Richardson said. “Employers have grown more optimistic that consumers, the backbone of the economy, will remain resilient.”
The report follows months of concerns that President Donald Trump’s tariffs would hold back economic growth and stymie consumer spending. However, sentiment surveys show confidence returning even with some apprehension about consumer spending and the impact that the duties will have on U.S. businesses and inflation.
Leisure and hospitality, seen as a proxy for consumer demand, led sectors with 46,000 new hires. Other areas showing solid growth included financial activities (28,000), trade, transportation and utilities (18,000) and construction (15,000). Medium and large businesses added 46,000 each, while companies with fewer than 50 employees contributed just 12,000.
On the downside, education and health services showed a loss of 38,000.

Wages rose at a 4.4% annual pace for the month, about in line with recent trends.
The ADP report serves as a precursor to the nonfarm payrolls count that the Bureau of Labor Statistics will release Friday, but the two often differ, sometimes dramatically. The BLS report in June showed private payrolls growth of 74,000, and 147,000 including government jobs.
Economists surveyed by Dow Jones expect the economy added 100,000 jobs in July, with the unemployment rate expected to nudge higher to 4.2%. More

Companies ranging from Stanley Black & Decker to Conagra to Tesla have told analysts on earnings calls that higher tariffs will raise costs.
The management remarks come as economists doubt that importers will continue absorbing cost increases tied to tariffs, and say they’re likely to pass them on to consumers instead.

DeWalt power tools are displayed at a Home Depot on May 2, 2025 in New York City.
Michael M. Santiago | Getty Images

Companies behind some of America’s best-known brands are warning that tariffs will raise costs by hundreds of millions of dollars as Friday’s key deadline nears.
Firms are gearing up for the long-awaited Friday deadline, when the White House says it will start imposing higher import taxes on foreign countries. Now businesses in a range of industries are saying this shakeup in global trading practices will cost them.

Tool maker Stanley Black & Decker said Tuesday it expects an $800 million annualized hit from policy changes tied to tariffs. That doesn’t include costs in connection with steps the company is taking to mitigate the effects of the levies, according to finance chief Patrick Hallinan.
For Marie Callender’s and Slim Jim parent Conagra Brands, higher tariffs are expected to raise its costs of goods sold by 3%, equivalent to an annual increase of more than $200 million, CEO Sean Connolly said earlier this month.
Most of the Chicago-based company’s production is in the U.S., but management says it still has to contend with steel and aluminum tariffs that will raise the cost of packaging.
Tesla, led by President Trump’s erstwhile ally Elon Musk, said that costs tied to tariffs have increased by about $300 million. Roughly two-thirds of that is tied to the electric vehicle maker’s auto business, while the rest is from the energy arm.
“While we are doing our best to manage these impacts, we are in an unpredictable environment on the tariff front,” finance chief Vaibhav Taneja told analysts and investors on Tesla’s earnings call last week.

Those pressures extend throughout the auto industry. General Motors said earnings before interest and taxes in the latest quarter suffered a $1.1 billion hit that the Detroit-based automaker chalked up to the net effect of tariffs.

Whirlpool washing and drying machines for sale at a Howard’s Appliances store in Torrance, Calif.
Patrick T. Fallon | Bloomberg | Getty Images

Air conditioner maker Carrier Global said Tuesday that it now expects to spend about $200 million to offset the impact of tariffs. The same day, appliance maker Whirlpool said North American sales and earnings were hurt in the second quarter as Asian competitors rushed to export goods to the U.S. in advance of higher tariffs.
Also on Tuesday, Proctor & Gamble gave 2026 financial guidance showing $1 billion in higher pretax costs as a result of tariffs on goods from China, Canada and the rest of the world. The maker of Tide detergent and Gillette razor blades expects a headwind of 39 cents per share in fiscal 2026 ending next June — equal to 6% decline in core earnings per share growth — from tariffs and other factors.
Inflation focus
Still, U.S. consumers haven’t yet experienced meaningful bumps to inflation as a result of higher tariffs. That can be attributed to domestic companies currently absorbing cost hikes, although many economists warn that business may soon start passing the increases on to shoppers after this week’s trade talk deadline passes.
As a result, the “core” consumer price index, which excludes volatile food and energy prices, should rise at an annual rate of 3.2% in the third quarter, up from 2.1% in the second quarter, according to Nancy Lazar, Piper Sandler’s chief global economist.
Foreign exporters have been covering “very little” of the tariffs and have been “getting off easy,” Lazar said in a recent note to clients.
Still, not every American company is taking a hands-off approach and swallowing the higher costs.
Paul De Cock, operations chief at carpet manufacturer Mohawk Industries, said last week that it is implementing 8% price increases. There may be need for further price hikes in the sector if tariffs further raise costs, he said.
“We continue to work with customers and suppliers to manage the impact of tariff costs as the situation evolves,” De Cock said on the Georgia-based company’s earnings call.
Mohawk is encouraging consumers to look at domestically produced alternatives, he said. The company is also expanding capacity for quartz countertops made in Tennessee, which will increase the supply of goods not subject to tariffs, de Cock added.

For its part, the White House is aiming to soothe companies’ concerns about the looming deadline for tariffs, which were a core tenet of Trump’s campaign last year. Treasury Secretary Scott Bessent, for example, told CNBC on Tuesday that countries facing high tariff rates can lower them by negotiating a deal with the U.S.
“I would think that it’s not the end of the world if these snapback tariffs are on for anywhere from a few days to a few weeks, as long as the countries are moving forward and trying to negotiate in good faith,” he said.
— CNBC’s Ali McCadden and Kevin Breuninger conttibuted to this report. More

The euro zone economy expanded by 0.1% in the second quarter of 2025 compared to the first, flash data showed.
Economists polled by Reuters had forecast euro zone growth to flatline in the second quarter.
Output from the region’s largest economy, Germany, shrank by 0.1% in the second quarter of 2025 compared to the previous period.

18 July 2025, Bremen, Bremerhaven: Containers are handled at the overseas port.
Sina Schuldt/picture alliance via Getty Images)

The euro zone economy eked out a better-than-expected 0.1% growth in the second quarter, compared to the previous three-month stretch, flash data from Eurostat showed Wednesday.
Economists polled by Reuters had anticipated euro zone growth to flatline in the period, following a 0.6% expansion in the first quarter.

“The slowdown in euro-zone GDP growth in Q2 came as no surprise as the boost from tariff front-running waned,” Jack Allen-Reynolds, deputy chief euro zone economist at Capital Economics, said in a note.
“Overall, the data suggest that the euro-zone has been resilient to the shifts in US trade policy so far. Front-running of the tariffs gave the economy a boost in Q1, and the impact of trade policy uncertainty has seemingly been limited so far,” he added.
U.S. tariffs and their impact have been a top concern for European economies so far this year. U.S. President Donald Trump’s so-called reciprocal tariffs initially came into effect in April as the second quarter kicked off.
The duties were then however temporarily reduced, but the last few months have been plagued by much uncertainty as negotiations for trade agreement were underway. Some higher sectoral tariffs, including on autos and steel and aluminum, have also been in effect.
The European Union over the weekend agreed to a trade framework with the U.S., which includes 15% tariffs being imposed on the bloc. Some goods are set to be exempt, and levies on autos have been reduced to the baseline level.

European bond yields were little changed after the data release, with both the French and German 10-year bonds last up by less than one basis point.

German economy contracts

Earlier on Wednesday, preliminary data from statistics agency Destatis showed that output from the European Union’s largest economy, Germany, shrank slightly by 0.1% in the second quarter of 2025 from the previous three months.
The figure, which is adjusted for price, calendar and seasonal variations, aligned with the expectations of analysts polled by Reuters and marked a sharp slowdown compared to a revised 0.3% expansion in the first quarter.
Investment in machinery and equipment, as well as construction, were lower in the second quarter than in the previous three-month period, while private and government consumption expenditures increased, Destatis data signaled. More

When the Fed releases its interest rate decision Wednesday, the narrative is almost certain to look a lot like June, with little changed in the statement and officials again holding off on any cuts.
However, several fascinating subplots will be in play.
Ultimately, though, the committee is likely to stand pat, putting the distractions on the side and the decision over a cut off to September.

U.S. Federal Reserve Chair Jerome Powell attends the Federal Reserve’s Integrated Review of the Capital Framework for Large Banks Conference, in Washington, D.C., U.S., July 22, 2025.
Ken Cedeno | Reuters

Considering nothing is likely to happen when it comes to major policy decisions, this week’s Federal Reserve meeting is packed with intrigue.
When the Federal Open Market Committee releases its interest rate decision Wednesday afternoon, the narrative is almost certain to look a lot like the June meeting, with little changed in the statement and officials again holding off on any cuts.

However, several fascinating subplots will be in play. Consider:

Two Fed governors — Christopher Waller and Michelle Bowman — are potential “no” votes on keeping the federal funds rate locked at 4.25%-4.5%. If so, it will be the first time multiple governors have dissented since late 1993. Both have advocated for a rate cut. Waller’s standing as a long-shot replacement for Chair Jerome Powell next year makes his vote even more significant.
This will be the first meeting since President Donald Trump’s historic visit to the Fed’s construction site and the kerfuffle that has erupted over cost overruns there. Central bank officials have been using an aggressive public relations campaign to counter White House criticism, and the issue is sure to come up during Powell’s post-meeting news conference.
The Fed has plenty to ruminate over when it comes to the economy, including the possibility that Trump’s tariffs may not be having the inflationary impact that many economists feared. That makes delaying a rate cut harder to justify, with Trump’s demands for dramatic policy easing complicating the backdrop even more.

Ultimately, though, the committee is likely to stand pat, putting the distractions on the side and the decision over a cut off to September.
“They’re not going to get anything if they ease, other than they’ll look like they’re knuckling under to the president,” said Bill English, the Fed’s former head of monetary affairs and now a professor at the Yale School of Management. “So I think their best policy for sure is just to look at the data, make their best judgment, make their policy decision and explain it as well as they can.”

Arguments for a cut

Powell will have his hands full outlining the committee’s position considering the likely opposition coming from Waller and Bowman.
In the run-up to the meeting, both have argued for cutting, saying essentially that with the tariff pass-through to inflation not yet apparent and a labor market “on the edge” as Waller described it in a speech less than two weeks ago, it’s time for the Fed to ease.

“With inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates before we cut the policy rate,” Waller said in the speech titled “The Case for Cutting Now.”
Those comments likely will resonate with Trump, though a CNBC poll of market experts and economists showed just 14% believe Waller will get the nomination to replace Powell, whose term expires in May 2026. Leading contenders above Waller include Treasury Secretary Scott Bessent, former Governor Kevin Warsh and Kevin Hassett, the National Economic Council director.
Trump has called on Powell to resign, even threatening to fire him before backing off, and blamed the central bank leader for the FOMC’s refusal to cut rates. The president has said the Fed should ease to help lower financing costs on the national debt and to unlock the housing market with its high mortgage rates.

No consensus for easing

However, Powell is just one vote on the FOMC, and no other members besides Waller and Bowman have shown an inclination to cut at this meeting. Some officials even have advocated for no cuts this year, according to minutes from the June meeting. Governor Adriana Kugler will not be present, lowering the committee vote to 11.
“The reason the Fed isn’t cutting is not because of Jay Powell,” former Dallas Fed President Robert Kaplan said on CNBC, using the chair’s nickname. “The reason the Fed isn’t [cutting] is … there’s not a consensus around the table that it’s time to cut, and there are 12 votes and he doesn’t get to decide on his own.”
“If there was a different Fed chair right now, I think they also would not cut in July,” he added. “So I think there’s more nuance here than maybe is being reflected in the public comments.”
With no update on the Summary of Economic Projections or the accompanying “dot plot” of individual members’ outlooks, investors will be left to pore through the statement and Powell’s remarks to the press for clues on what happens next.
There’s still “a strong base case” for a cut in September, but that could change depending on the data, said Julien Lafargue, chief market strategist at Barclays Private Bank and Wealth Management. The June dot plot still pointed to two cuts this year, but it also showed a strong division among officials.
“Although the Fed’s decision is unlikely to surprise, this meeting should still be very interesting,” Lafargue said.

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The European Union-U.S. trade agreement has been met with scepticism as concerns over what it means for the bloc have emerged.
Some experts however argue that it could benefit the U.K.
While the EU is facing 15% tariffs, the U.K.’s baseline duties have been set at 10%.

Keir Starmer, UK prime minister, left, and US President Donald Trump, ahead of their meeting at the Trump Turnberry golf course in Turnberry, Scotland, on Monday, July 28, 2025.
Tolga Akmen/EPA/Bloomberg via Getty Images

As world leaders and economists across Europe digest the news of the EU-U.S. trade agreement, some experts told CNBC that while it may be bad news for the bloc, the deal could serve as an unexpected boost to the U.K.
The European Union is facing a higher 15% tariff rate on its goods imported to the U.S. compared to the 10% levy the U.K. has agreed to.

“In theory, the UK benefits,” Philip Shaw, chief economist at Investec, told CNBC.
“The new EU tariff of 15% means that UK exports to the US have become relatively cheaper, which could boost British trade with the US as American firms buy goods from Britain rather than the EU,” he explained.
U.K. goods would also be cheaper for U.S. consumers due to the lower tariff rate, meaning they may favor British products over those manufactured in the EU, Alex Altmann, partner and head of Lubbock Fine LLP’s German desk, suggested in a note published shortly after the EU-U.S. deal was announced.

Europe balks at ‘unbalanced’ U.S. trade deal

“The UK’s lower US tariffs do offer a major incentive for EU companies to shift some of their manufacturing bases to the UK or to expand their existing UK facilities,” he added.
EU-based manufacturers with low profit margins in particular could find the idea of moving to the U.K. attractive to avoid a further squeeze on those margins, Altmann explained, noting that the U.K. has spare manufacturing capacity due to Brexit.

“The UK could be a big indirect winner of this agreement,” Altmann added.
But the benefits to the U.K. are not only linked to the country’s lower tariff rate. Indeed, the EU managing to secure a 15% levy, which is far lower compared to the 30% the bloc was threatened with by U.S. President Donald Trump, could also be a positive for the U.K. according to Investec’s Shaw.
“The EU has escaped from a possible major downturn from a more onerous (i.e. 30%) tariff regime and possibly a series of retaliatory measures between the two trading blocs. Here the UK benefits from its major trading partner averting a recession which could have resulted in a decline in UK exports to the EU,” he said in written comments.

How likely is the boost to the U.K. to materialize?

The EU-U.S. reaching an agreement has also hampered the potential impact, Beth McCall, an international trade lawyer at Dentons told CNBC.
“If the US had proceeded with 30% tariffs against most EU goods, UK goods with a 10% tariff, which is paid by the US importer in most circumstances, could have appeared significantly more attractive,” she said.
McCall noted that the expected difference in the baseline tariff rate, which amounts to just 5%, may still make some U.K. goods more attractive. However, she noted, “this will take time to be seen as existing contracts come to an end and US importers search for imports from countries carrying a lower tariff.”

Trump’s Scotland visit opens door for UK to settle some unfinished business

Questions have been raised about the timeframe for the impact of tariffs being felt around the world has been a frequently debated question. Companies have already flagged that tariffs are expected to weigh on their earnings, and there have been widespread warnings of how the duties could impact economic growth.
But as many details of the trade agreements have yet to be ironed out, their precise exact impact is still unclear. Some of the effects may also take time to be felt, for example rising costs for consumers may only materialize after some time.
Ultimately, both the U.K. and EU are now facing a more difficult environment, McCall said.
“Whether the new rate is 10% or 15%, UK and EU businesses will still face far higher tariffs when exporting to the US than they did three months ago,” she said. More

Tariffs appear to be settling only slightly less than what President Donald Trump had threatened in April, but the difference has been enough to ease some of Wall Street’s worst recession fears.
Economists cite a strong global growth backdrop, a less-than-expected inflationary impact of the tariffs and a general easing in financial conditions as reasons for why the landscape looks less dire.

U.S. President Donald Trump talks to the media as he meets with British Prime Minister Keir Starmer (not pictured) at Trump Turnberry golf club on July 28, 2025 in Turnberry, Scotland.
Christopher Furlong | Getty Images

U.S. tariffs on incoming goods look to be settling in only slightly less than what President Donald Trump had threatened in April, but the difference has been enough to ease some of Wall Street’s worst recession fears.
With the U.S.-European Union trade deal over the weekend, it now appears that the effective tariff rate, or the net impact aside from the nominal level, will end up in the 15%-20% range. That’s well above the low single-digit rate in place at the beginning of the year, but well off the feared 25% rate or worse that could have happened as a result of the April 2 announcement.

Economists had feared that aggressive tariffs Trump proposed in his April 2 “liberation day” announcement would spike inflation and lead to a pronounced slowdown or recession.
But doomsday pronouncements around the tariffs have abated since then. Economists cite a strong global growth backdrop, a less-than-expected, long-term inflationary impact of the tariffs and a general easing in financial conditions as reasons for why the landscape looks less dire.
JPMorgan Chase, for instance, has lowered its recession risk from a liberation-day level of 60% down to 40% — still higher than normal, but at least less pessimistic.
“Tariffs are a tax hike on U.S. purchases of foreign goods, but this tax drag is not likely to be large enough to derail the U.S. expansion,” JPMorgan chief economist Bruce Kasman said in a note.
Like others, the bank had expected the Trump tariffs to result in a damaging round of retaliation globally. “But an expected rise in global trade restrictions has turned into a modest step toward opening markets for the U.S.,” Kasman said.

Tariffs still a danger
Commentary around Wall Street following the U.S-EU deal for 15% tariffs echoed the belief that the recession risk had dimmed, even if tariffs still have the strong potential to exert a stifling impact on growth.
“We still believe the most likely outcome is slow growth and firm inflation: Not a recession, but a backdrop where the adverse effects of trade and immigration controls on growth outweigh the boost from deregulation and fiscal largesse,” Morgan Stanley strategist Michael Zezas wrote.
To be sure, the final outcome of the trade negotiations is far from clear.
There are still a slew of other issues that need to be settled before Trump’s imposed Aug. 1 deadline, which could still result in significant levies affecting major U.S. trading partners, including Japan and others.
Further aggression in the trade skirmishes “could easily tip the scales toward a mild recession,” Zezas added. “In sum, we see outcomes for the U.S. economy skewing toward a slowdown, but with more clarity on the fiscal situation and deficits now front-loaded, the risk of a substantial recession is easing.”
The U.S.-Europe deal will give the Federal Reserve more to chew on this week when it discusses the impact that tariffs will have on inflation. Since Trump has taken office, the Fed has held its benchmark short-term interest rate steady, in large part because policymakers are cautious over the impact tariffs will have on inflation.
Markets don’t expect any action at the meeting, which concludes Wednesday. But they will be watching for clues on the Fed’s further intentions, which will be influenced by where the final effective tariff rate lands.
The Fed is expected to approve a rate cut in September, and the chances of that happening seemingly would increase if the economy weakens while inflation is held in check.
“Effective tariff rates are significantly higher than they were at the start of the year,” Citigroup economist Andrew Hollenhorst wrote. “But with major trading partner tariffs stabilizing closer to 15% than the much higher rates proposed on April 2, markets and Fed officials will be increasingly confident that the drag on growth and upside risk to inflation will be modest.” More