Fed's Musalem: forecast is for inflation to increase on tariffs

Fed's Musalem: forecast is for inflation to increase on tariffs

Title: Fed's Musalem Forecasts Inflation Increase Due to Tariffs

Next week, the U.S. economy will be closely watched for signs of inflation, with several key economic indicators set to be released. Among the notable events is the forecast by St. Louis Fed President Alberto Musalem that inflation is expected to rise due to the impact of tariffs. Musalem's comments come amid ongoing concerns about the potential long-term effects of President Trump's trade policies on consumer prices.

The upcoming week's economic calendar includes a series of reports that could provide insights into the state of the economy. On July 10, the initial jobless claims data for July will be released, along with the St. Louis Fed President Alberto Musalem's speech. Musalem's forecast for inflation to increase due to tariffs is a significant development, as it highlights the growing concern among economists about the impact of trade policies on consumer prices [1].

Tariffs, which have been implemented in a staggered manner, are expected to have a delayed but significant impact on prices. The earliest tariffs were imposed in February and March, but the bulk of them were announced or implemented in April or later. This staggered implementation, combined with the time it takes for goods to be shipped and processed through supply chains, means that the full impact of tariffs on prices may not be immediately apparent in economic data [2].

Economists have warned that while overall inflation has remained fairly tame in recent months, the long-term effects of tariffs could be more significant. The May Consumer Price Index (CPI) data showed that several tariff-sensitive categories, such as appliances and toys, experienced price increases. This suggests that the impact of tariffs on prices is already starting to be felt, although it may take more time for the full effects to become evident in broader economic indicators [2].

The upcoming economic calendar also includes the release of the Consumer Price Index (CPI) data for June, which will provide more insights into the current state of inflation. Additionally, the Producer Price Index (PPI) data for June will be released, which could offer further evidence of the impact of tariffs on producer prices.

In conclusion, the upcoming week's economic data and speeches, particularly Musalem's forecast, will provide important insights into the potential impact of tariffs on inflation. Investors and financial professionals should closely monitor these developments as they could have significant implications for monetary policy and the broader economy.

References:
[1] https://www.marketwatch.com/economy-politics/calendar
[2] https://www.cnn.com/2025/07/10/economy/tariffs-higher-prices-inflation