Cents and Sensibility: the Inflation Guy Podcast Ep. 142: This Month's CPI Report - The Sky is NOT Falling (at Least, Not Yet)
May 13, 2025
The latest Consumer Price Index report reveals that economic fears may be exaggerated. Discussions on tariffs reveal few immediate effects on prices despite historical comparisons. Delve into the controversies surrounding new pharmaceutical pricing policies and their perceived effectiveness. Analysis of inflation trends showcases surprising price stability in certain goods, while the Federal Reserve's cautious monetary approach emphasizes the importance of careful policy management amidst uncertainty. Tune in for an insightful look at what really matters in our economy!
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Tariff Impact is One-Time
- Tariff increases are expected to have a one-time price impact, not ongoing inflation.
- The effect depends on import reliance and demand elasticity for products.
Pharma Ingredients Are Price-Inelastic
- Products like active pharmaceutical ingredients sourced mainly from China are price-inelastic and vulnerable.
- These may see significant price impacts if tariffs remain and supply isn't replaced.
Drug Pricing Policy Challenges
- The "most favored nation" drug pricing policy will not cause immediate 30-70% price drops in the US.
- Drug companies might stop selling in some countries or gain exemptions to avoid heavy price cuts.