In a report, Commerzbank's Michael Pfister said US companies could pass on the cost of tariffs to consumers, which would heighten concerns about the economy and lead to a weaker dollar. Higher inflationary pressures could force consumers to spend less, deepening concerns about the real economy. Commerzbank expects the euro to rise steadily against the dollar EUR/USD until the end of 2026.
The Fed may still have room to cut interest rates this year, Mr. Collins said. Interest rate policy is in good shape and stable for now appears to be the best option. Tariffs push up US goods prices and could cause the Fed to delay rate cuts.