Despite mounting trade tensions and widespread expectations that tariffs would drive U.S. inflation higher in 2025, the impact has so far been muted, according to BlackRock CIO Rick Rieder.
In a series of comments posted following the June CPI release, Rieder noted that while inflation picked up slightly—core CPI rose 0.23% m/m and 2.93% y/y, with headline at 0.29% m/m and 2.67% y/y—the overall trend remains one of moderation. He credited this in part to proactive corporate behaviour, with many firms managing inventories and adjusting supply chains early in the year in anticipation of tariff-related disruptions.
“Companies are holding the line on inflation,” Rieder said, highlighting that many are absorbing increased costs rather than passing them through to consumers.
He also pointed to softening wage pressures and labour market conditions as reinforcing the disinflationary trend. As a result, Rieder believes the Federal Reserve could begin cutting rates later this year, potentially as early as September, although a July move appears less likely given the Fed’s stated preference to assess near-term tariff developments.
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The next meeting is at the end of this month, September is firming as the more likely rate cut meeting though.
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