U.S. Tariffs Expected to Impact Consumer Prices and Federal Reserve Policy

According to PANews, a report from UBS highlights that the tariffs announced by the new U.S. administration are anticipated to increase consumer prices by approximately 2% by the end of the year, assuming only partial pass-through to end consumers. The report suggests that while higher inflation poses a challenge for the Federal Reserve, a significant slowdown in economic growth and potential weakness in the labor market may lead the Fed to reduce interest rates by 75 to 100 basis points for the remainder of 2025.