Who you gonna believe? Trump or your lying checkbook?
Companies stockpiled inventory before tariffs took effect and have been reluctant to raise prices given the possible loss of market share from inflation-fatigued consumers. But some economists warn that as businesses with thinner margins deplete their pre-tariff stock and face higher costs due to tariff increases,
they will increasingly be forced to pass these expenses on to consumers.
The U.S. central bank’s key rate has been frozen since January, as officials have been paralyzed by rising economic uncertainty.
www.bankrate.com
Economists warn that those tariffs could result in higher prices across store shelves, but they may also weaken economic growth and make production more expensive.
So far, inflation has shown up first. After coming within an earshot of the Fed’s 2 percent target earlier this year, price pressures are now picking up again. Inflation rose 2.7 percent from a year ago, according to the
latest data from the Bureau of Labor Statistics, and many prices on items that are typically imported popped.
Homeowners and homebuyers
The Fed has greater control over shorter-term interest rates —
not rates on long-term debt like a 30-year fixed-rate mortgage. That helps explain why
mortgage rates have actually increased since the Fed began cutting borrowing costs in September, which have been stuck above 6.5 percent since October 2024.
The 30-year fixed-rate mortgage more closely tracks the 10-year Treasury yield, which has risen as investors process fears of hotter inflation from tariffs and ballooning government debt.
Even once the Fed cuts interest rates, it might not offer much help. The current consensus among housing economists is that 30-year mortgage rates could remain
above 6.5 percent for the rest of this year, according to Bankrate research.
Lower rates could help heal some of the affordability challenges plaguing borrowers. The median home sale price for June 2025 surged to $435,300, the highest median price on record, according to the latest data from the
National Association of Realtors.
It could also, however, bring a wave of borrowers onto the market, further pushing up prices. Those prices continued to climb last month, even as sales of existing homes dropped 2.7 percent from the previous month, as shortages continue to strain housing supply.