Tariffs Have a Surprising Effect on Unemployment and Inflation, Fed Analysis Reveals
Tariffs Have a Surprising Effect on Unemployment and Inflation, Fed Analysis Reveals You've probably heard the argument: tariffs protect domestic jobs and might cause some price increases. It seems straightforward. But what if I told you the exact opposite often happens first—that tariffs can actually lower inflation while increasing unemployment? It feels counterintuitive, doesn't it? Like discovering water flows uphill. Well, the Federal Reserve recently published research that turns conventional wisdom on its head. Based on analysis of 40 years of international data plus a separate study of 150 years of U.S. economic history , they've uncovered a surprising pattern that operates in two distinct phases . I've been reading economic analyses for years, and even this made me pause. Because when you understand this pattern, suddenly the current economic landscape —the whispers of rising unemployment, the stubborn inflation numbers—sta...