Companies adapt to tariffs, but uncertainty shadows trade policy and inflation impacts.

Companies have managed to handle tariffs due to early warnings, but trade policy clarity remains elusive. The full impact of tariffs on the economy and inflation is uncertain and will unfold gradually. With a solid job market, the Federal Reserve can be patient about monetary policy, expecting one rate cut this year and three next year. Businesses are likely to pass on tariff-related price increases to consumers to avoid continuous price hikes.