US inflation: not enough to prevent a rate cut

Over the past six months, trade tariffs have risen sharply (X4) and inflation has accelerated slightly (+0.4 points). What will happen over the next six months? The ability of businesses to smooth out the tariff shock by adjusting their inventories or profit margins will be exhausted. As a result, inflation should continue to rise. There are two possibilities here. Either a modest, staggered adjustment in retail prices, or a cumulative inflation process with second-round effects. Unlike the two post-pandemic years, there are no tensions in global supply chains, which tips the balance towards a rebound in inflation that would only be...transitory. The Fed could therefore live with this.