Group 1: Tariff Impact on Inflation - Tariffs have been significantly increased in the U.S. since the beginning of the year, but their impact on inflation has not yet been fully realized due to delays in implementation, trade restructuring, and weak demand[1] - It is expected that tariffs will start to push up U.S. inflation in the third quarter, with the impact likely being less than previously anticipated, but the persistence of this impact may exceed expectations[2] - The current estimated transmission rate of tariffs to inflation is expected to be around 50-60%, compared to over 100% during the 2018-2019 trade tensions[2][36] Group 2: Factors Affecting Tariff Transmission - The weighted average import tariff rate increased by 6.5 percentage points to 8.7% as of May 2025, which is significantly lower than predicted levels[7] - Many companies are currently prioritizing the consumption of existing inventory to temporarily avoid passing tariff costs onto consumers, especially amid high uncertainty regarding tariffs[8] - Compared to 2018-2019, companies are more pessimistic about demand, making them more cautious in passing on tariff-related costs[8] Group 3: Federal Reserve's Response - Concerns about tariffs pushing inflation higher have led the Federal Reserve to delay interest rate cuts, although they still view the inflation caused by tariffs as temporary[3][59] - If the job market weakens significantly before the September meeting, the Fed may still initiate rate cuts[59] - The uncertainty surrounding tariffs and their potential long-term effects on inflation may lead to increased uncertainty in monetary policy in 2026[60]