Shoppers walk along 5th Avenue on Black Friday in New York City on November 25, 2022. Credit: Jeenah Moon/Bloomberg.

If President Donald Trump’s tariffs jack up U.S. consumer prices—as pretty much everyone thinks they will, at least for a while—then that’s already bad news for inflation fighters at the Federal Reserve. It could also open the door to something even worse.

What businesses and workers anticipate will happen to prices, economists say, can play a key role in determining what actually does happen. That’s why Fed officials always keep a close eye on estimates of future inflation—and the latest ones show cause for concern. The benchmark gauge of long-run expectations for inflation, which had already climbed to a 30-year high since Trump’s election, soared higher still on Friday after his sweeping global tariffs took effect.

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