Businesses are not expecting tariffs to trigger higher inflation, a monthly survey by the Federal Reserve Bank of Atlanta showed Wednesday.
Expected inflation over the next year was relatively unchanged at 2.3 percent, up slightly from a month earlier and matching last February’s expectation.
Businesses in the Atlanta Fed’s district said they expect to raise prices this year by less than last year. Firms reported a median prices increase of 4.0 percent over the last 12 months and said they expect to raise prices 3.0 percent.
The results suggest that businesses do not anticipate that the tariffs proposed by President Trump will drive inflation higher. To the contrary, the expected 2.3 percent inflation is significantly lower than the inflation experienced at the start of this year or throughout last year. In January, the consumer price index rose at an annualized pace of 5.7 percent. Last year, prices were up three percent.
The Atlanta Fed’s Business Inflation Expectations (BIE) Survey goes to about 640 people in executive and managerial positions at companies in the Fed’s Sixth district, which includes Alabama, Florida, Georgia, Eastern Tennessee, Southern Mississippi, and Souther Louisiana.
