The Consumer Price Index report for February was expected to show a slight cooling of price growth, with analysts forecasting a decrease in the inflation rate. However, President Trump’s tariff policies, including threats to increase steel and aluminum duties to 50%, are causing uncertainty in the economy. While Trump’s goal is to reduce prices, economists believe tariffs will lead to higher inflation. The National Federation of Independent Businesses reported an increase in the percentage of owners raising average selling prices, indicating inflation remains a major concern for small businesses. Despite this, there is disagreement over whether inflation expectations are “anchored” and how the Federal Reserve will respond. Some analysts predict a decrease in interest rates this year due to slowing inflation, while others expect continued inflation due to tariffs and other factors. Overall, the economy faces challenges in maintaining price stability, with the potential for inflation to rise further.
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