Tariffs may have 'slammed shut' the window for interest rate cuts in 2025, economist says
Tariffs set to take effect Tuesday may mean consumers won’t get a reprieve from high borrowing costs this year, according to economists.
Tariffs set to take effect Tuesday may mean consumers won’t get a reprieve from high borrowing costs this year, according to economists.
President Donald Trump signed orders on Saturday to impose tariffs on the three largest trading partners with the U.S.: 25% tariffs on imports from Canada and Mexico, and a 10% tariff on China.
Economists expect such tariffs — if implemented and kept in place — to raise prices for U.S. consumers.
That upward pressure on inflation — at a time when it hasn’t yet fallen back to target — may push the Federal Reserve to pause its campaign to lower interest rates for the foreseeable future, economists said.
The Fed’s benchmark interest rate affects consumer borrowing costs on credit cards and other types of debt.
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