Tariff Pass-Through: Inflation Threat or Delayed Reaction?

Janus Henderson’s Jenna Barnard examines the evolving impact of US tariffs on inflation, questioning the timing and scale of consumer price effects amid shifting corporate behaviours.

• Muted inflation so far: Early US CPI data has undershot forecasts, suggesting slower-than-expected tariff pass-through, particularly in apparel and durable goods.

• Corporate response matters: Firms may be absorbing costs or delaying price hikes due to inventory buffers, political risk, or competitive pressures.

• Consensus revising timeline: Economists now anticipate a later inflation peak, but underlying assumptions on the magnitude of the impact remain broadly intact.

Is market pricing underestimating the eventual inflation impulse? The full report explores the nuanced dynamics behind pass-through and policy risk.