US tariffs will create persistent inflationary pressures – study
Dallas Fed paper say trade costs raise price levels sustainably above US central bank’s target
Tariffs lead to increases in inflation that are both large and short-lived as well as small and persistent, according to research from the Federal Reserve Bank of Dallas.
The paper, published earlier this month, says that higher trade costs for final goods create large, transitory increases in prices. It adds that higher trade costs for intermediate goods create long-lasting but smaller inflationary pressures.
The study says the increase in trade costs associated with the recently announced US
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