How have Trump's tariffs impacted inflation?

Economists say that President Trump's tariffs have raised prices as merchants pass the higher costs of imported goods on to their customers, contributing to the surge in inflation.

What is the Federal Reserve's role in addressing inflation?

The Federal Reserve is tasked with keeping inflation low and employment high. With inflation remaining above the central bank's 2% target, the Fed is expected to cut interest rates in September to stimulate the economy and prevent a slowdown in hiring.

How will the latest inflation data affect the Fed's monetary policy decisions?

The inflation report will be closely watched by Fed officials as they determine the appropriate interest rate adjustments to support the economy while keeping price pressures in check.

Home / Business and Economy / Tariffs Fuel Inflation Surge, Squeeze Household Budgets

Tariffs Fuel Inflation Surge, Squeeze Household Budgets

8 Sep

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Summary

Inflation expected to hit 2.9% in August, highest since January
"Core" inflation, excluding food and energy, to reach 3.1%
Trump's tariffs have raised prices as merchants pass on costs

Tariffs Fuel Inflation Surge, Squeeze Household Budgets

According to the latest economic forecasts, inflation is set to accelerate in August, reaching its highest level in nearly a year. Data from the Bureau of Labor Statistics, due to be released this week, is expected to show that consumer prices rose 2.9% over the past 12 months, up from 2.7% in July. This would mark the steepest annual inflation rate since January.

The report is also anticipated to reveal that "core" inflation, which excludes volatile food and energy prices, climbed 3.1% over the same period, matching the July figure and tying the highest rate since February. This persistent inflationary pressure is a concern for the Federal Reserve, which aims to keep annual inflation at around 2%.

Economists point to the impact of President Trump's tariffs as a key driver behind the price increases. As merchants pass on the higher costs of imported goods to their customers, the tariffs have pushed up the prices of a wide range of consumer products. This trend is particularly evident in the "core goods" category, which measures the prices of items people buy, excluding food and energy.

In the coming months, the trajectory of inflation will be closely watched by the Fed as it determines the appropriate monetary policy to support the economy. With the central bank widely expected to cut interest rates in September, policymakers will need to balance the need to stimulate growth with the risk of fueling further price pressures.

Disclaimer: This story has been auto-aggregated and auto-summarised by a computer program. This story has not been edited or created by the Feedzop team.