Part 8/12:
Risks to Inflation and the Path Forward
The key concern for policymakers revolves around whether these price increases signal a more persistent inflationary problem or represent a transitory adjustment. The prevailing expectation is that tariffs will exert a short-term, one-time impact on prices. However, the adjustment process is complex—supply chains and distribution networks will require time to absorb the effects. Additionally, tariff rates may continue to evolve, potentially prolonging inflationary pressures.