Notes on the Week Ahead Tariffs and Inflation
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Jun 23, 2025 This week highlights the geopolitical fallout from the U.S. attack on Iranian nuclear facilities. The discussion centers on Iran's potential closure of the Strait of Hormuz and how that would impact global oil markets. With 20% of the world’s oil passing through this crucial channel, the stakes are incredibly high. Additionally, the conversation navigates the connections between tariffs and inflation, exploring how such policies can have delayed economic effects while shaping market predictions.
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Market Impact Depends on Iran's Response
- The U.S. attack on Iranian nuclear facilities is geopolitically significant but less impactful on markets.
- Iran's response, especially around the Strait of Hormuz, is the key uncertainty for energy markets.
Tariffs' Inflation Impact Is Delayed
- Tariffs have not yet significantly impacted consumer inflation but are expected to soon.
- Delayed reactions mean tariffs' inflation effects will emerge over the coming months.
Current Tariff Rates and Timing
- The current average U.S. tariff rate is about 14.6%, poised to increase import costs substantially.
- Full tariff cost impacts on consumers and businesses are expected by Q4 2025.