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Consumers are paying the costs for Trump's tariffs: New York Fed

1. Higher tariffs raise input costs for 90% of manufacturers, impacting S&P 500. 2. Approximately 75% of service firms see price increases due to tariffs. 3. Expectations on future tariffs remain uncertain and volatile for businesses. 4. Businesses rapidly pass on costs to consumers, affecting inflation and margins. 5. Tariff-induced supply chain disruptions lead to strategic relocations by firms.

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FAQ

Why Bearish?

Higher prices from tariffs can dampen consumer spending and economic growth, similar to the 2018 tariff increases hurting the market.

How important is it?

The article highlights direct pressure on inflation and consumer prices, impacting corporate margins across the S&P 500, necessitating attention from investors.

Why Short Term?

Price adjustments and economic sentiment are likely to affect consumer behavior in upcoming quarters, evident in previous tariff impacts on spending.

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