Why Markets Remain Murky on Tariff Fallout

This podcast episode discusses the ongoing effects of tariffs on the U.S. economy. Two economists, Michael Zezas and Michael Gapen, analyze recent trade agreements with Japan and Europe, concluding that while near-term tariff rate uncertainty has decreased, long-term uncertainty remains. They anticipate that the effects of tariffs will become more evident in upcoming inflation reports (July, August, September), particularly impacting goods prices and potentially slowing consumer spending, especially among lower and middle-income households. The discussion also touches upon the impact of tariffs on business spending and trade flows, noting volatility in the first and second quarters of the year. The economists suggest that future economic data will be crucial in assessing the actual impact of tariffs and informing the Federal Reserve's decisions.