Traders are paring bets on near-term rate cuts, and Treasury bond yields are edging higher, amid stubborn underlying inflation pressures tied to the president’s myriad tariffs. Trump himself said through his social media account that borrowing costs should be “3 points” lower. “One Trillion Dollars a year would be saved,” he declared.

Federal Reserve governor Adriana Kugler said the Fed should hold interest rates steady for a while to come, because new trade barriers are likely to spark more inflation in the months ahead. Speaking at a housing conference in Washington,

Monetary policymakers have held off on lower interest rates for months, citing the risk of tariff-induced inflation. Several now say this week's CPI and PPI reports confirmed their suspicions.

A number of factors, including a lack of significant gains in auto prices, are masking the extent of the shift.

Current tariff collections equate to 0.1% monthly inflation, aligning with recent CPI data. See why I’m skeptical that tariffs will lead to widespread inflation.

While Tuesday's focus was on the tariff-related inflation hit to Treasuries, it's been a rough week for government bonds everywhere - especially in Japan as long-term yields there hit new highs this week ahead of the July 20 upper house election and related fiscal policy worries.

A whiff of tariff inflation showed up in economic data this week, providing the first clues of how tariff policy might impact prices and the economy.

Consumer prices rose faster than​ in May, a potential sign that companies are starting to pass tariff costs on to consumers.