Core Insights - The current economic situation is at the modest end of the growth range, despite the impact of tariff shocks [2][4] - The effective tariff rate is slightly under 20%, down from a projected 25%, indicating a high but reduced tariff environment [3] - Growth projections for 2025 remain stable at 3.2%, with a slight expected slowdown to 3.1% next year [4] Trade Policy and Economic Impact - Trade policy uncertainty continues to pose risks, with potential flare-ups in trade relations that could harm the global economy [5][6] - A downside scenario suggests that escalating trade tensions could reduce global output by 0.3 percentage points this year and next [7] Tariff Effects on Prices - The burden of tariffs is currently being absorbed by US importers, who are reducing their margins rather than passing costs onto consumers [9][10] - Over time, it is anticipated that importers will rebuild their margins, leading to increased retail prices and price pressures in the market [10][11] - Inflation in the US is currently at 2.7%, with expectations that price pressures will continue into 2024 and 2025 [12]