AART Inflation Quarterly Q2 2025
Goods inflation resurfaces with tariff hikes adding more pressure.
- U.S. tariff hikes are likely to have a stagflationary impact on the U.S. economy (slower growth, higher inflation), and if all tariffs announced on April 2 are implemented, the direct impact may result in a 1% hit to gross domestic product growth and a 2% increase to inflation.
- Our forecasts for the next year continue to anticipate sticky inflation of around 3%, with upside risk from tariff hikes.
- Consumer inflation expectations have spiked to multidecade highs, which could make it easier for businesses to pass along higher costs and keep inflationary pressures percolating.

Next steps to consider
Asset Allocation Research Team (AART)
Access economic, fundamental, and quantitative analysis from our Asset Allocation Research Team.
Learn more
Asset Allocation Strategies
Draw on unmatched resources, scale, and experience with our broad range of asset allocation strategies.
Learn more
Custom Investment Solutions
Discover how our investment solutions can be tailored to meet your unique goals and objectives.
Learn more
For important information, see the full linked content.