In 2025, the U.S. economy shows initial strength, but inflation persists, complicating growth. The core Personal Consumption Expenditures Price Index remains elevated at 2.8%, exceeding the Federal Reserve's target. Consumer spending has increased, but personal savings have decreased to the lowest level in two years. Fed Chair Jerome Powell cautioned about the lasting effects of previous inflation and tariffs on consumer prices, suggesting that while companies may prefer to raise prices, consumers are increasingly resistant to such hikes.
We've just come through a high inflation period, and you can argue that both ways: you can say that companies have figured out that they do like to raise prices - but we also hear a lot from companies these days that consumers have really had it with price increases.
There are lots of places where that price increase from the tariff can show up between the manufacturer and the consumer.
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