The Potential for Higher Tariffs Stirs Concerns About Economy and Inflation
The potential for higher tariffs from the incoming Donald Trump administration has raised concerns about the economy and inflation, according to the Federal Reserve’s Beige Book released Wednesday. The report, which collects anecdotal information from the Fed’s 12 reserve banks through January 6, found that many contacts expect prices to continue rising in 2025, with some citing the potential for higher tariffs as a contributing factor.
Several districts also expressed concerns that changes in immigration and tariff policy could negatively impact the economy. The report comes just days before President-elect Trump’s inauguration on January 20, with many expecting him to impose tariffs sooner rather than later.
Despite the growing uncertainty surrounding labor demand, the outlook on the economy remains more optimistic than pessimistic. The report noted that contacts in some districts expressed greater uncertainty about their future staffing needs.
