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

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.