UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Pricing bananas'
Jun 12, 2025
Recent inflation data reveals interesting trends in consumer prices influenced by trade tariffs and weak demand. Airfares are falling due to fewer visitors to the US, while bananas and large appliances are experiencing price surges. The discussion also touches on stalled trade negotiations between the EU and the US and the potential impact on future prices. Anticipate clearer insights from upcoming producer price data, as it may highlight the effects of tariffs more visibly in the market.
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Tariffs Affect Prices Differently
- Tariffs impact consumer prices differently depending on inventory duration.
- Short inventory items like bananas see quicker price surges compared to autos.
Consumer Appliances Price Surge
- Large consumer appliances had their second-largest monthly price rise ever.
- This suggests tariffs' full pass-through to consumers is starting to take effect.
Producer Prices Show Tariff Impact
- Producer prices reveal more visible tariff effects than consumer prices.
- They are closer to import points, so tariffs weigh more on producer inflation.