Citi: Suspension of tariffs is difficult to solve, the United States still faces economic slowdown and inflation

Andrew Hollenhorst, an economist at Citi, argues that the suspension of so-called reciprocal tariffs on most trading partners does not mean that the US economy has avoided a slowdown and rising inflation. The 10 per cent benchmark tariffs that remain in effect for 90 days of the reciprocal suspension, as well as industry-specific tariffs, still raise the effective US tariff rate by about 21 percentage points from where it was at the start of the year. Uncertainty about trade will persist. Citi still expects the Federal Reserve to cut interest rates in May or June.