What does the dollar become under Trump? (Photo: Freepik, Roman-)
Washington-certainly nobody intends to ruin the US economy-but experts worldwide see this danger, even if Trump announced a 90-day customs break for many countries yesterday. The customs chaos since April 2 also have made the government’s inflation numbers expected today into yesterday’s snow. An early price boost seems certain.
But in March the US inflation has probably dropped-at least that’s how the forecasts. According to estimate, the inflation of surveyed economists went by 0.2 to 2.6 percent according to the fact set back. The core rate without energy and food is said to have fallen by 0.1 to 3 percent in the annual comparison.
US control in February-average increase in US tariffs
Important: In the USA there are 2 inflation values that differ slightly at the shopping cart. In addition to the Consumer Price Index (CPI) that is up today, the PCE index. During the CPI in the previous month of February by 0.2 to 2.8 percent, the stagnated PCE control at 2.5 percent.
But that was before Trump’s customs excess. If the import taxes would come as presented on April 2, there is consensus under economists that inflation attracts at least at least at short notice. The tax Foundation estimatesthat the average customs rate increases from 2.5 percent to 18.8 percent.
Swallow US importers the tariffs? Trump inflation forecast
However, consumers will not feel the full load of the increase, says Jeffrey RoachChief economist from the US broker LPL Financial. In view of the price-sensitive US consumers, he expects companies to shorten their margins to keep sales.
Nevertheless: the price effect should be massive if the tariffs are inserted at this level. So expects the Citi-Bank In the United States, an increase in inflation from previously expected 2 percent to 4 percent in 2025. The Swiss UBS-Bank even says a plus of up to 5 percent.
Federal Reserve in the Zwickmühle – Is Powell Trump’s scapegoat?
The central bank is now in a dilemma, because the tariffs endanger both price stability and the labor market. Higher interest rates press inflation, lower supports the economy – both are not possible. Based on the current interest margin (4.25 to 4.5 percent), the Fed has to prioritize.
Tips the US economy into the recession, it seems clear who Trump’s scapegoat is: the Fed and its President Jerome Powell. He noticed on Fridaythat tariffs increase inflation and reduce growth. The central bankers include observers among the remaining “adults” in the US institutions.
Cloudy inflation expectations-interest forecast of the Fedwatch Tools
The US consumers are pessimistic: 4.9 percent inflation at a 12-month perspective awaited them recently in the Household survey of the University of Michigan. Also the March dates of the Shopping manager index from S&P indicate stronger inflation pressure and dwindling trust in the economy.
However, the markets rely on the fact that the Fed gives the economy preferred before inflation, Prices 4 to 6 interest reductions 2025 a. The Fedwatch tool the chance of a interest rate reduction by 0.25 percent at the next meeting on May 7 to 81.1 percent. For 2 consecutive interest reductions by a total of 0.5 percent or more, the probability is 72.9 percent. (As of April 9, 9:05 p.m. CEST)