Analysts Reveal When Effects of Trump’s Tariffs Will Hit U.S. Economy — Say Lag in Full Economic Fallout Deceptive

The chief economist of Apollo Global Management, Torsten Sløk, warned that the most harmful effects of President Donald Trump’s pricing policies will begin to grasp the American economy towards the end of the year, potentially triggering a dreaded stagflation shock which could cause 2025.

Addressing Bloomberg, Sløk said that inflation was starting to “take off” and will probably accelerate in November and December, largely driven by the pricing increases earlier this year. These functions, which are part of the broader strategy of Trump’s trade war to reaffirm the American economic lever, have so far had not the dramatic economic benefits that many feared. This fueled a growing belief among some Americans that prices may not harm the American economy after all.

But Sløk warned against such optimism. “They must wait to see the peak,” he said, referring to the patience of the federal reserve in adjustment rates. “We have really only had the take-off scene,” he added, warning that the inflationary pressures are just starting to filter in the system.

Until now, the inflation of the titles remains within the manageable limits, increased to 2.7% in June, compared to 2.4% in May. Meanwhile, prices of sustainable products – including cars, household appliances and electronics – increased by 0.7% in annual sliding, marking a second consecutive month of growth after two years of regular decreases. These figures, said Sløk, are early signs of broader inflation, which expects to intensify as the supply chains adjust and that importers transmit tariff costs on consumers.

More importantly, Sløk stressed that inflation of services – which represents almost 60% of the consumer price index – should then increase. This, he warned, will be aggravated by the motivation for mass deportation of Trump, who tightens the labor market and pushes higher wages, increasing costs for employers and ultimately for consumers.

The relatively discreet impact of prices to date has led a lot to reject the warnings issued by economists earlier this year. When Trump announced for the first time the samples – targeting the goods of China, the European Union and Mexico – several economic analysts and commercial experts predicted a hard blow: one to the American economy, through contribution costs and higher inflation, and another with global supply chains, in particular in Asia and Europe. It is feared that global commercial volumes will decrease, that the confidence of investors would erode and that central banks would be forced in a political corner.

However, these disastrous predictions have not fully materialized, at least not yet. Retail sales remain stable, unemployment is still low and GDP growth has not experienced strong contractions. This delay in the consequences has created the feeling that the American economy could resist the better than expected rates.

But Sløk maintains that the gap is misleading. In a recent white paper, he planned that GDP growth in 2025 could more than half of its peak in 2024 as inflation ends and that consumer demand is weakening. He estimates that inflation will remain high by around 3% throughout next year, while the unemployment rate could gradually increase over the next two years while businesses have trouble absorbing the increase in labor and input costs.

“This is the beginning of a stagflation shock,” warned Sløk – a toxic mixture of persistent inflation and slowdown in growth, which limits the capacity of the federal reserve to reduce interest rates. “If the Fed loosens too early, it may make a moving inflation. If it is stable, it can block growth. ”

Essentially, early resilience of the American economy can hide a deeper and slower threat – a threat that could relax in the coming quarters while prices have more force in the pricing system, world supply chains adjust and wage pressures rise due to labor shortages caused in part by deportations.

For the moment, the economy seems to be holding. But according to Apollo’s analysis, the real test is in advance, when the delayed consequences of Trump’s trade war could finally go home to perch, causing the country in one of the most precarious economic scenarios in modern history.