T. Rowe Price noted that as of the end of June, the market generally believed that economic prospects had completely shaken off concerns that tariffs might drag the US economy into recession, so it shifted its focus to whether the economy could achieve a soft landing.

However, this view was overly optimistic and overlooked the negative impact of unprecedentedly high tariffs on the economy, with small businesses bearing the brunt and upward pressure on inflation as a result.

Related NewsCore Inflation Rate YoY for Jun in United States is 2.9%, higher than the previous value of 2.8%. The forecast was 3%.
Multiple factors, including tariffs, a weaker USD (adding upward pressure on inflation), and potentially slowing demand (taming inflationary pressure), are also impacting the inflation outlook. In T. Rowe Price's estimate, the effects of tariffs will continue to push inflation higher in 2H25 despite some easing in service sector inflation, making them the dominant force in the market.