AART Inflation Quarterly Q2 2025
Goods inflation resurfaces with tariff hikes adding more pressure.
- U.S. tariff hikes are likely to have a stagflationary impact on the U.S. economy (slower growth, higher inflation), and if all tariffs announced on April 2 are implemented, the direct impact may result in a 1% hit to gross domestic product growth and a 2% increase to inflation.
- Our forecasts for the next year continue to anticipate sticky inflation of around 3%, with upside risk from tariff hikes.
- Consumer inflation expectations have spiked to multidecade highs, which could make it easier for businesses to pass along higher costs and keep inflationary pressures percolating.

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