Hidden Threat? BlackRock Warns Tariffs Are Silently Fueling US Inflation – And It's Just Beginning!

Think inflation is cooling off? Think again! While the U.S. core CPI for June rose less than expected, a leading expert from BlackRock Investment Institute is sounding the alarm: tariffs are increasingly driving up prices behind the scenes, and the worst could be yet to come for your wallet.

Glenn Purves, BlackRock's Global Macro Director, highlights a disturbing trend. The May CPI report already showed tariff-driven price increases in household appliances, and this pressure is not only continuing but expanding. Early signs are now appearing in entertainment products like video and audio equipment, signaling a broader impact across consumer goods.

The real concern? Purves believes most of the inflationary impact from tariffs is still on the horizon. Companies have been drawing down existing inventories, built up to avoid initial tariff costs. Once these stockpiles are depleted, new, higher-priced imports will hit the shelves, and that's when consumers are likely to feel the full squeeze.

With pressures mounting from both goods (due to tariffs) and services, inflation is now likely to remain stubbornly above the Federal Reserve's 2% target. This presents a complex challenge for economic policymakers and consumers alike.

The million-dollar question remains: Who will ultimately bear the brunt of these rising costs? Will it be American consumers paying more for everyday items, businesses absorbing narrower margins, or foreign exporters cutting their prices? The answer will define the economic landscape in the months ahead.

Are you already noticing higher prices on imported goods? What do you think the Fed should do about this hidden inflation threat? Share your thoughts in the comments!