According to Jinshi Data, Blake Gwinn, head of U.S. interest rate strategy at Royal Bank of Canada, said that tariffs could lead to higher inflation in the United States, which in turn would affect economic growth and delay the Fed's interest rate cuts. He believes that inflation will have an impact first, and the economic drag will appear later.
Uncertainty about tariffs has made it harder for companies to make decisions about layoffs or production cuts, delaying expectations about the timing of a response from the Federal Reserve, which Royal Bank of Canada expects to cut interest rates three times this year, starting in September.