CHART OF THE DAY: A Simple Visual of Tariff's Economic Impacts

08/09/19 08:25AM EDT

Editor's Note: Below is a brief excerpt from today's Early Look written by U.S. Macro analyst Christian Drake. Click here to learn more about the Early Look. 

As a quick visual reminder (Chart of the Day below), washing machines – where tariffs were implemented in January of 2018 - remain the poster-child analog for the prospective impact:

  1. Tariffs definitely (empirically) get passed through to consumer prices.  Washing machine (and dryers) prices were up +15% Y/Y following tariff implementation.
  2. The effects emerge on a short lag.  As can be seen,  the tariffs went into effect in January but you didn’t see the price effects really hit the reported data until ~April.

More broadly, inflation dynamics remain a primary factor shaping the contours of the global macro-scape and, by extension, the path for policy path, by extension – a reality embodied in the proliferation of the “Japanification” macro meme.

CHART OF THE DAY: A Simple Visual of Tariff's Economic Impacts - CoD Washing Machine CPI

CHART OF THE DAY: A Simple Visual of Tariff's Economic Impacts - early look

© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.