These two charts illustrate the key tension that tariffs will create more inflation risk alongside greater downside risk to consumer spending (which is the engine for the U.S. economy). If you are worried more about inflation, you would look at the rise in durable goods prices since the start of the year and see that excluding the 2021-23 post-pandemic period, it is the largest rise in goods prices since the "great moderation" of the 1990s, at +2.8%. (h/t @ernietedeschi) This data is through May, and retailers have Walmart have suggested they weren't going to begin to raise prices until June. If you are worried more about growth, you would look at the decline in spending on these same items since the start of the year (especially over the last two months) and say that there is going to be less scope for businesses to push along even greater price increases because they will destroy demand, which means businesses have to take it out of their margins. (h/t @RenMacLLC) The charts show why rate cuts to preempt a slowdown are unlikely and the conversation is largely around whether tariff impacts are muted enough to resume a "normalization" type of cutting cycle that slowly moves back to a more neutral rate to avoid passive tightening. (If you move faster and succeed in preempting the slowdown in spending by providing lower-cost credit, do you create greater scope for cost increases to get absorbed by consumers instead of elsewhere in the supply chain?)