The looming deadline for President Donald Trump‘s tariffs has sparked a shift in Wall Street’s predictions. Analysts are now projecting a more moderate increase in inflation, a departure from earlier fears of a significant surge.
What Happened: Despite initial concerns that businesses would pass on tariff increases to consumers, leading to a rise in inflation, these fears have subsided in the months following Trump’s “Liberation Day” in April, reported Fortune. Treasury Secretary Scott Bessent’s description of tariffs as the “dog that didn’t bark” has gained traction, with analysts now anticipating a potential delay or a single inflation hike instead of a continuous increase.
Goldman Sachs, for instance, has adjusted its base-case trade policy assumptions. The bank’s chief economist, Jan Hatzius, stated that the “letter tariffs” scheduled for August 1 may not take effect, but a reciprocal tariff rate increase from 10% to 15% is now being factored in.
The …