Bloomberg Surveillance Bloomberg Surveillance TV: August 12th, 2025
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Aug 12, 2025 Tiffany Wilding, Economist at PIMCO, shares insights on the current Consumer Price Index and what it means for inflation and potential rate cuts in the U.S. Jon Lieber, Head of Research at Eurasia Group, dives into the economic and political implications of President Trump's tariffs as he outlines priorities for a potential second Trump administration. They discuss how inflation dynamics might shape fiscal policies, the balance businesses need to strike amid tariffs, and future consumer spending trends.
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Tariff Pass-Through Is Slow And Concentrated
- Tariff pass-through to consumer prices is occurring but more slowly and unevenly than expected, concentrated in goods.
- Moderating inflation expectations and limited second-round wage effects give the Fed room to normalize policy toward neutral.
Watch Corporate Margins Before Prices Rise
- Expect companies to absorb tariff costs for a time because elevated post-pandemic margins and recent tax provisions give them flexibility.
- Monitor corporate margin data and tax credit flows to gauge how quickly higher costs will be passed to consumers.
Most Tariff Impact Still Ahead
- Tariff effects are largely ahead and will push goods inflation higher over coming months as retailers and importers pass costs along.
- David Kelly expects CPI near 3.5% by year-end as pass-through and stronger spending materialize.
