On February 14, Stephen Douglass of NISA Investment Advisors said that about one-third of the pressure from tariff-related inflation is likely to continue to gradually transmit to the economy in the coming months.
This puts the economy on track to perform well, while allowing the Federal Reserve to remain on hold for some time. "We are back on track for a soft landing," he said. "The labor market will stabilize, and the last ripples of tariff inflation will have finished spreading in the first half of this year."
He predicts that commodity inflation will fall below zero in the second half of the year, thus creating room for the Federal Reserve to resume interest rate cuts later than the market expects. "Our assessment for this year is one rate cut each in September and December." (Jinshi)
