Hunting for big game: Trump tariff inflation

[Pelican Press 0]

This is the hidden content, please

• Sign In
• or
• Sign Up

Hunting for big game: Trump tariff inflation

This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:

My safari hat has been on for a month in search of big-game inflation.

I blame Walmart (WMT) CFO John David Rainey for making me get into this wardrobe.

“And so we’ll work hard to try to keep prices low. But it’s unavoidable that you’re going to see some prices go up on certain items,” Rainey told me in mid-May after Walmart reported first quarter earnings.

Rainey — responding to my question on the impact of new Trump tariffs — said increases would be noticeable in a few short weeks.

“Well, if you’ve got a 30% tariff on something, you’re likely going to see double digits [in price increases],” Rainey warned.

I’ve been on high alert ever since for signs of eye-popping inflation that brings back the discussion of a potential Fed rate hike this year (which has gone dormant). Or, at the bare minimum, renewed market volatility due to a more uncertain

This is the hidden content, please

• Sign In
• or
• Sign Up

.

By and large, my hunting expeditions have come up short.

The Consumer Price Index (CPI) for April rose by a seasonally adjusted 0.2%. The tame jump put the 12-month inflation rate at 2.3%, its lowest since February 2021. This report hit the wires on May 13, before an inflation-indicator company like Walmart warned about the looming effects of tariffs.

Still, a data point is a data point.

Also surprisingly docile was the inflation expectations reading in the University of Michigan’s May sentiment report.

Year-ahead inflation expectations were little changed at 6.6% versus April’s 6.5%. The uptick marked the smallest increase since the election and ended a four-month streak of “extremely large” jumps in near-term inflation expectations.

Long-term inflation expectations dropped to 4.2% in May from 4.4% in April. This was the first decline since December 2024.

Again, a data point is a data point.

While I hate to be the bearer of bad news, I have started to scope inflation charging out on the prairie. What I’m seeing seems to validate what Rainey told me and could set the stage for negative surprises for the bulls on inflation report days.

New research from Morgan Stanley analyst Alex Straton shows that major retailers still reliant on China and other markets for production have begun to jack up prices a good bit.

The average footwear year-over-year price increase tallied 13% in May, according to Straton’s research. The prior six-month average was 1%. Under Armour (UA) and ON Holdings (ONON) were cited as being aggressive on recent price hikes.

Story Continues

Some apparel pricing looked even worse, per Straton.

Gap (GAP), for instance, hiked its average apparel pricing by 20% in May. Macy’s (M) clocked in with a 12% apparel price increase, Levi’s (LEVI) with 9%, and Nike (NKE) by 10%.

Meanwhile, those aforementioned price increases at Walmart appear to be happening as Rainey promised.

Customers are

This is the hidden content, please

• Sign In
• or
• Sign Up

of large price increases on toys and apparel.

“We also put in place some selective price actions,” HP (HPQ) CEO Enrique Lores explained to me about how he is offsetting tariffs on parts that make up PCs and printers.

“We think that the industry-wide price increases that we see, and especially the increased economic uncertainty, will have an impact on demand,” he said, “and therefore we continue to expect that the market will grow, but we feel it will grow at a lower pace than we were expecting.”

Bottom line: If you’ve been complacent on tracking inflation, don’t be. It’s beginning to rear its ugly head and could devour your portfolio this summer if not careful.

The Yahoo Finance team is heads down on our annual fall Invest conference. It’s shaping up to be our most impactful one yet!

At this invitation-only event, our guests will delve into the most critical issues powering global markets with our newsroom. Key themes include artificial intelligence, cryptocurrencies, and prosperity.

Engage in Q&As following thought-provoking conversations with renowned investors, policymakers, economists, and other leading experts. For the first time, we will host two investor education rooms: one led by yours truly and one by the dynamic duo of data master Jared Blikre and veteran trader Kenny Polcari.

I strongly encourage you to

This is the hidden content, please

• Sign In
• or
• Sign Up

before we are out of tickets. I will continue to remind you about Invest each Sunday in this newsletter.

This is the hidden content, please

• Sign In
• or
• Sign Up

is Yahoo Finance’s Executive Editor. Follow Sozzi on X

This is the hidden content, please

• Sign In
• or
• Sign Up

,

This is the hidden content, please

• Sign In
• or
• Sign Up

, and

This is the hidden content, please

• Sign In
• or
• Sign Up

. Tips on stories? Email *****@*****.tld.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance

This is the hidden content, please

• Sign In
• or
• Sign Up

#Hunting #big #game #Trump #tariff #inflation

This is the hidden content, please

• Sign In
• or
• Sign Up

This is the hidden content, please

• Sign In
• or
• Sign Up