Nigeria to Hold Rates Again on Hazy Inflation Outlook
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Policymakers at Nigeria's central bank are set to keep the key interest rate on hold for a second straight meeting to get a better grasp of the inflation trajectory.
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Yahoo
2 hours ago
- Yahoo
Hunting for big game: Trump tariff inflation
My safari hat has been on for a month in search of big-game inflation. I blame Walmart (WMT) CFO John David Rainey for making me get into this wardrobe. "And so we'll work hard to try to keep prices low. But it's unavoidable that you're going to see some prices go up on certain items," Rainey told me in mid-May after Walmart reported first quarter earnings. Rainey — responding to my question on the impact of new Trump tariffs — said increases would be noticeable in a few short weeks. "Well, if you've got a 30% tariff on something, you're likely going to see double digits [in price increases]," Rainey warned. I've been on high alert ever since for signs of eye-popping inflation that brings back the discussion of a potential Fed rate hike this year (which has gone dormant). Or, at the bare minimum, renewed market volatility due to a more uncertain outlook. By and large, my hunting expeditions have come up short. The Consumer Price Index (CPI) for April rose by a seasonally adjusted 0.2%. The tame jump put the 12-month inflation rate at 2.3%, its lowest since February 2021. This report hit the wires on May 13, before an inflation-indicator company like Walmart warned about the looming effects of tariffs. Still, a data point is a data point. Also surprisingly docile was the inflation expectations reading in the University of Michigan's May sentiment report. Year-ahead inflation expectations were little changed at 6.6% versus April's 6.5%. The uptick marked the smallest increase since the election and ended a four-month streak of "extremely large" jumps in near-term inflation expectations. Long-term inflation expectations dropped to 4.2% in May from 4.4% in April. This was the first decline since December 2024. Again, a data point is a data point. While I hate to be the bearer of bad news, I have started to scope inflation charging out on the prairie. What I'm seeing seems to validate what Rainey told me and could set the stage for negative surprises for the bulls on inflation report days. New research from Morgan Stanley analyst Alex Straton shows that major retailers still reliant on China and other markets for production have begun to jack up prices a good bit. The average footwear year-over-year price increase tallied 13% in May, according to Straton's research. The prior six-month average was 1%. Under Armour (UA) and ON Holdings (ONON) were cited as being aggressive on recent price hikes. Some apparel pricing looked even worse, per Straton. Gap (GAP), for instance, hiked its average apparel pricing by 20% in May. Macy's (M) clocked in with a 12% apparel price increase, Levi's (LEVI) with 9%, and Nike (NKE) by 10%. Meanwhile, those aforementioned price increases at Walmart appear to be happening as Rainey promised. Customers are posting pics on the Walmart subreddit of large price increases on toys and apparel. "We also put in place some selective price actions," HP (HPQ) CEO Enrique Lores explained to me about how he is offsetting tariffs on parts that make up PCs and printers. "We think that the industry-wide price increases that we see, and especially the increased economic uncertainty, will have an impact on demand," he said, "and therefore we continue to expect that the market will grow, but we feel it will grow at a lower pace than we were expecting." Bottom line: If you've been complacent on tracking inflation, don't be. It's beginning to rear its ugly head and could devour your portfolio this summer if not careful. The Yahoo Finance team is heads down on our annual fall Invest conference. It's shaping up to be our most impactful one yet! At this invitation-only event, our guests will delve into the most critical issues powering global markets with our newsroom. Key themes include artificial intelligence, cryptocurrencies, and prosperity. Engage in Q&As following thought-provoking conversations with renowned investors, policymakers, economists, and other leading experts. For the first time, we will host two investor education rooms: one led by yours truly and one by the dynamic duo of data master Jared Blikre and veteran trader Kenny Polcari. I strongly encourage you to register now here before we are out of tickets. I will continue to remind you about Invest each Sunday in this newsletter. Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email
Yahoo
3 hours ago
- Yahoo
I'm an Economist: My Predictions for Inflation Under President Trump
In Donald Trump's second term, some experts believe the inflation trajectory could continuously point upward and go higher, especially when tariffs, deficits and other policies that would increase inflation are factored in. While forecasting economic conditions isn't an exact science, experts can speculate using knowledge about the past and some clues about the future. Find Out: For You: A report from Allianz Research provides insights into how inflation could unfold under Trump and his administration during round number two. The report shows that while some policies could increase inflation in the short term, the overall inflation path would be shaped by factors like the Federal Reserve's actions and broader economic conditions. GOBankingRates spoke to Maxime Darmet, senior U.S. economist at Allianz Trade, who co-authored a report by Allianz Trade research, titled 'Trumponomics: the Sequel' on this very subject. Here are some key insights. No matter the politics, President Trump has his work cut out for him when it comes to dealing with inflation. The U.S. economy was pretty sturdy before he took office for the second time, but it now shows interest rates climbing and general economic unrest. 'While the U.S. has remained remarkably resilient despite rising interest rates and global uncertainty, it has become more prone to inflation volatility, given a larger exposure to frequent supply shocks and structural labor shortages,' Darmet said. 'Against this backdrop, demand-boosting policies — such as tax cuts — or supply-hurting policies — such as tariff hikes — could re-ignite inflation faster and push up interest rates.' The White House administration should tread carefully with its economic plans. Big tax cuts might sound great at first — they put more cash in your wallet. However, if there are limited goods to spend that money on, it easily overheats the economy and spirals inflation even higher. Read Next: Trump never seems to miss the chance to double down on protectionist policies to boost U.S. manufacturing. He has proposed tariff increases, including 10% on all imports and 60% on Chinese goods. The Allianz report discusses two potential scenarios — one in which the U.S. tariff rate rises from 2.5% up to 4.3%. However, another scenario, in which Trump implements all the tariffs he has threatened, could push the rate to around 12%. 'However, in both cases, we would expect Trump to target goods that are not critical for the U.S. economy, equivalent to 55% of imported Chinese goods and 70% of EU goods,' Darmet wrote. 'China's textiles sector and the U.S. transportation equipment sector would be the hardest hit.' Despite some whiplash court decisions, Trump has successfully enacted a series of steep protective tariffs affecting nearly all goods imported into the United States. Between January and April 2025, the average effective U.S. tariff rate rose from 2.5% to an estimated 27% — the highest level in over a century. Of course, Trump isn't exactly working with a fresh economic slate in the White House, as he inherited the budget situation from Biden's term. Trump's bold promises of slashing taxes and ramping up spending quickly ran into some harsh fiscal realities. He'll have to perform some nifty accounting tricks to pull off his economic vision without sending bond market investors into a total panic over the stability of America's finances. One potential gambit would be to hike all those tariffs and trade taxes to fund the tax cut promises while scaling back Biden's pricier policy initiatives. So, unless the Trump 2.0 economy is some world-beater of growth, most forecasters see the new administration ultimately having to pump the brakes on fiscal loosening after maybe a year of smaller tax cuts or spending bumps. Otherwise, the whole economic agenda could wind up crumbling under the weight of unsustainable budgets and debt — something that fiscal conservatives in Trump's party would likely refuse to accept. That deficit dynamic keeps economic advisors up at night as they game-plan Trump's potential second term. Trump has said a goal is to ramp up U.S. manufacturing and reduce foreign manufacturing relationships. However, the report suggests that such policies need to be carefully designed. 'To yield benefits, industrial policy must avoid the risk of targeting too many objectives. In that respect, Trump's ambitious Strategic National Manufacturing Initiative (SNMI) may disappoint when set against its numerous goals and the reality that the U.S. does not have a competitive advantage in many sectors,' Darmet wrote. The Fed's response would shape inflation under the second Trump term. 'Against this backdrop, we would expect the Federal Reserve to be forced to pause its easing cycle in 2025 and the U.S. 10-year yield to stay above 4%,' Darmet wrote. This could control inflation but weigh on growth and markets initially. The report highlights the delicate balance the Fed would face between inflation and economic impacts. Caitlyn Moorhead contributed to the reporting for this article. Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses 8 Common Mistakes Retirees Make With Their Social Security Checks This article originally appeared on I'm an Economist: My Predictions for Inflation Under President Trump
Yahoo
4 hours ago
- Yahoo
Hunting for big game: Trump tariff inflation
My safari hat has been on for a month in search of big-game inflation. I blame Walmart (WMT) CFO John David Rainey for making me get into this wardrobe. "And so we'll work hard to try to keep prices low. But it's unavoidable that you're going to see some prices go up on certain items," Rainey told me in mid-May after Walmart reported first quarter earnings. Rainey — responding to my question on the impact of new Trump tariffs — said increases would be noticeable in a few short weeks. "Well, if you've got a 30% tariff on something, you're likely going to see double digits [in price increases]," Rainey warned. I've been on high alert ever since for signs of eye-popping inflation that brings back the discussion of a potential Fed rate hike this year (which has gone dormant). Or, at the bare minimum, renewed market volatility due to a more uncertain outlook. By and large, my hunting expeditions have come up short. The Consumer Price Index (CPI) for April rose by a seasonally adjusted 0.2%. The tame jump put the 12-month inflation rate at 2.3%, its lowest since February 2021. This report hit the wires on May 13, before an inflation-indicator company like Walmart warned about the looming effects of tariffs. Still, a data point is a data point. Also surprisingly docile was the inflation expectations reading in the University of Michigan's May sentiment report. Year-ahead inflation expectations were little changed at 6.6% versus April's 6.5%. The uptick marked the smallest increase since the election and ended a four-month streak of "extremely large" jumps in near-term inflation expectations. Long-term inflation expectations dropped to 4.2% in May from 4.4% in April. This was the first decline since December 2024. Again, a data point is a data point. While I hate to be the bearer of bad news, I have started to scope inflation charging out on the prairie. What I'm seeing seems to validate what Rainey told me and could set the stage for negative surprises for the bulls on inflation report days. New research from Morgan Stanley analyst Alex Straton shows that major retailers still reliant on China and other markets for production have begun to jack up prices a good bit. The average footwear year-over-year price increase tallied 13% in May, according to Straton's research. The prior six-month average was 1%. Under Armour (UA) and ON Holdings (ONON) were cited as being aggressive on recent price hikes. Some apparel pricing looked even worse, per Straton. Gap (GAP), for instance, hiked its average apparel pricing by 20% in May. Macy's (M) clocked in with a 12% apparel price increase, Levi's (LEVI) with 9%, and Nike (NKE) by 10%. Meanwhile, those aforementioned price increases at Walmart appear to be happening as Rainey promised. Customers are posting pics on the Walmart subreddit of large price increases on toys and apparel. "We also put in place some selective price actions," HP (HPQ) CEO Enrique Lores explained to me about how he is offsetting tariffs on parts that make up PCs and printers. "We think that the industry-wide price increases that we see, and especially the increased economic uncertainty, will have an impact on demand," he said, "and therefore we continue to expect that the market will grow, but we feel it will grow at a lower pace than we were expecting." Bottom line: If you've been complacent on tracking inflation, don't be. It's beginning to rear its ugly head and could devour your portfolio this summer if not careful. The Yahoo Finance team is heads down on our annual fall Invest conference. It's shaping up to be our most impactful one yet! At this invitation-only event, our guests will delve into the most critical issues powering global markets with our newsroom. Key themes include artificial intelligence, cryptocurrencies, and prosperity. Engage in Q&As following thought-provoking conversations with renowned investors, policymakers, economists, and other leading experts. For the first time, we will host two investor education rooms: one led by yours truly and one by the dynamic duo of data master Jared Blikre and veteran trader Kenny Polcari. I strongly encourage you to register now here before we are out of tickets. I will continue to remind you about Invest each Sunday in this newsletter. Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
