1m agoOne of the crucial ingredients in all of this will be how today’s US tariff barrage — plus the pushback from China, Canada and others — will translate into consumers’ long-term inflation expectations.

The last print we had showed that consumers expected that prices would climb at an annual rate of 3.5% over the next five to 10 years. That’s the highest since 1995, based on data compiled by Bloomberg, and it’s a trend that could make life a good deal harder for the folk at the Federal Reserve as they frame policy in a more turbulent environment.

The linkages here are both obvious and profound, both in terms of economic policy as well as on-the-ground politics. If a host of goods from gasoline to avocados start to cost a whole bunch more at the checkout, long-term inflation expectations can be expected to ratchet higher.

Jake Lloyd-SmithEnergy and Commodities Editor