Even if one ignores the bigger picture debate about whether tariffs spark inflation or deflation, and we have long said that contrary to conventional wisdom tariffs result in demand destruction - unless accompanied by a massive fiscal stimulus as was the case in 2020 - which is ultimately disinflationary or outright deflationary as increasingly more economists now admit including St Louis Fed's own researcher Javier Bianchi...
Wait, you mean tariffs are a negative demand shock... just as Minneapolis Fed researcher Javier Bianchi wrote and not a person at the Fed read?https://t.co/XQjc30RCQP pic.twitter.com/4ckGBZnkXP
— zerohedge (@zerohedge) May 13, 2025
... or HBS professor Alberto Carvallo who noticed that prices at major retailers are now falling...
