We still don’t know what’s going on with prices and inflation – or what will happen next

Although the consumer price index has checked above, it is also still below forecasts, although the last reading on producers’ prices is surprised for the increase.

Certain sectors strongly exposed to prices have experienced peaks, but the data in July showed prices on certain prices on certain prices of goods and more pressure on certain services.

“Despite this firmness, the consumer price effect has undoubtedly been less bad than expected so far,” JPMorgan economists said on Friday led by Michael Feroli in a note.

According to the bank, a potential explanation of the figures of inflation in mourned is that companies eat the price cost to the detriment of their beneficiary margins, which are currently wide according to historical standards and can accommodate additional costs without harming capital or operating budgets.

Other explanations include the delayed effects of prices, because companies reduce pre-tail inventories, price seasonality as inflation during the summer tends to be softer than in winter, and the price costs that have passed through services rather than on products, added Jpmorgan.

However, another explanation could be that the prices that importers really pay are much lower than the titles. A recent Barclays report revealed that the average weighted withdrawal in May was only 9% against the bank’s estimate for 12%.

Indeed, demand has moved away from countries with higher prices while more than half of the American imports this month were in the franchise of rights. Despite higher rates on Canada, for example, they do not apply to goods covered by the American-mexico-Canadian trade agreement.

“The true surprise of the resilience of the American economy does not reside in its reaction to the prices, but that the increase in the effective rate rate was more modest than it commonly thought,” said the report.

Admittedly, Barclays said that the weighted average rate had outstripped up to 10% today and predicted that it would end up setting up at around 15%, because new products and pharmaceutical products should be affected by samples and as loopholes are closed.

Consumer companies

Citi Research still does not see a lot of evidence of the pressure price pressure at the wide basis of prices and has awarded the recent increase in services to occasional anomalies, such as the leap of 5.8% of portfolio management fees due to the price of asset prices.

Citi does not expect consumers either to be affected by large price increases in the future, even if more and more samples should be deployed.

“Sweeting demand means that companies will find it difficult to transmit tariff costs to consumers,” said the United States economist Andrew Hollenhorst in a note. “While some companies could still try to slowly increase prices in the coming months, the experience so far suggests that these increases will be of modest size.

On the other hand, Goldman Sachs predicted that consumers will pay most price costs. In June, they had absorbed 22%, but this figure should increase to 67% by October if the model observed in the first rounds of Trump’s commercial shares continues.

For companies, the burden will drop from 64% to 8%, while foreign suppliers will see a 14% to 25% increase in the price impact.

Receiving the mystery on what the prices do – or not doing – inflation has major implications for the federal reserve, which tries to balance the two sides of its double mandate.

The prices have maintained inflation stubbornly above the 2% target target, forcing decision-makers to hold the rate reductions. But the weakness of the data on jobs has been the subject of alarms on employment, fueling relaxation requests.

“So far, the proof is that almost all costs of prices have been born by national companies,” wrote Hollenhorst de Citi. “The lack of transfer should reduce official inflation problems persistent and allow a series of rate reductions from September. If something of the markets underestimate the potential for faster and / or deeper reductions. ”