Organization: Trump's tariffs could potentially increase the core PCE index by 2.0%

According to a report by Golden Finance, Saira Malik, the head of Nuveen Equities and Fixed Income, stated that the tariffs announced so far this year could have an overall negative impact of around 1.7% on actual US GDP growth. She said in a report that tariffs will also cause core PCE to rise by 2.0% this year, which is the inflation barometer favored by the Federal Reserve. The latest data for February was 2.8%.

As the tariffs announced so far are higher than expected, Nuveen believes there is a risk leaning towards further interest rate cuts by the Federal Reserve. She said: "Our probability-weighted guidance has increased from four rate cuts in 2025 and 2026 by the Fed to 6.6 times, while our fair value assessment of yields on ten-year U.S Treasury bonds has dropped from 4.5% to 4.0%."