. . .Simply put, tariff and immigration policies threaten to both increase inflation and slow growth, a combination thatcomplicates the challenge facing the Federal Reserve. It will take several months to see how this plays out, but the tariff shock will soon be in the rear-view mirror and its inflation impact will fade towards the end of the year.
That should enable the Fed to focus more on the risks to growth and the job market, setting the stage for a series of rate cuts. The economy as well as the financial markets have been remarkably resilient so far despite policy induced heightened uncertainty. Once the tumult over tariffs is removed, the economic landscape should look much brighter.
Source: August 20-25 Economic and Fancial Digest from Louisiana Corporate.