Prices Rise in the US as Federal Reserve Warns of Greater Impact from Tariffs

• Federal Reserve reports a moderate rise in prices in the US.
• Trade war with Mexico, Canada, and China could drive further increases.
• Businesses across various sectors express concerns over tariffs.

In its latest economic report, the Federal Reserve of the United States confirmed that prices have risen moderately in recent months.

However, it warned that the impact of new tariffs could lead to additional price hikes in the short term.

Ongoing trade tensions with Mexico, Canada, and China have raised concerns among businesses and consumers alike.

Uncertainty surrounding the tariffs imposed by the Trump administration has put key economic sectors on alert.

Trump’s Tariffs Increase Market Tension

The Beige Book, a periodic report published by the Federal Reserve, indicates that the country’s economic activity has seen slight growth.

Despite this modest improvement, the report cautions that Trump’s trade policies could jeopardize this stability.

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Several regional Federal Reserve districts reported that many businesses are already considering raising prices as a direct response to tariffs.

The widespread anxiety among business leaders reflects the lack of clarity regarding the real impact and duration of these protectionist measures.

On Tuesday, Trump imposed a 25% tariff on imports from Mexico and Canada, along with an additional 10% increase on Chinese imports.

These new duties add to the 10% tariff already applied to China since February 4, bringing the total tariff rate on Chinese goods to 20%.

In retaliation, Canada and China have announced similar countermeasures against U.S. products.

Mexican President Claudia Sheinbaum stated that her government will announce response measures on March 9.

Despite escalating trade tensions, the White House confirmed that it will delay tariffs on the Mexican and Canadian auto sectors by one month.

Additionally, Commerce Secretary Howard Lutnick said the administration is open to negotiating certain aspects of the tariffs.

This temporary reprieve provides a small window for the three countries to seek an agreement and prevent a further escalation.

Meanwhile, the Federal Reserve will continue to monitor price behavior and its impact on U.S. consumers’ purchasing power.

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