A member of the Federal Reserve anticipated the moment in which price increases resulting from President Donald Trump’s tariffs, saying it will likely be a few months before consumers feel the full impact of the measures.
Speaking to Axios, Richmond Fed president Tom Barkin said “for the most part, there is enough inventory that we’re talking about June prices more than we’re talking about April prices,” as “companies typically have 30 to 60 days’ worth of pre-tariff inventory to work through.”
Barkin went on to say that business leaders he has talked to are “still struggling to have confidence in where this lands.” “The direction is clear … it’s just the destination that people are challenged with,” he added.
The forecast about prices were echoed last week by Fed Chair Jerome Powell, who said the impact of the tariffs are “highly likely” to result in an “at least temporary rise in inflation,” and warned that it is possible that their effects “could be more persistent,” rather than a one-time shock.
Despite the assessments, U.S. Trade Representative Jamieson Greer said on Tuesday that “it’s hard to project” whether the tariffs will will lead to a spike in inflation. “It’s hard to project what’s going to happen with prices,” Greer said during a Senate hearing. He added that inflation went down during Trump’s first term when he imposed tariffs on China.
Tariffs are “not really a one-to-one on tariffs and price effects,” Greer added, claiming that “so many things go into price.” “I think the challenges, frankly, are going to be more for companies that are largely dependent on imports from China and Asia, where they have to adjust their supply chains in a quick set of time,” the official said.
In another passage of the interview, Barkin said it is unclear what consumption will look like if the administration stays its course, with companies determined to pass along tariffs to consumers and them already tired of price increases. He described it as a “cage match between exhausted consumer and emboldened manufacturer, that might all play out in one big swoop, but it wouldn’t stun me at all if it played out over time.”
AFP reported on Wednesday that consumers are bracing for pain, with some rushing to buy the latest smartphones ahead of price increases, and others saying they will watch their spending more than before.
Originally published on Latin Times
