Where we're at with tariffs and inflation

What It Covers

Despite tariff concerns, inflation shows signs of staying controlled as services prices cool, labor market pressures ease, and housing costs stabilize. Corporate earnings remain strong while AI transforms real estate marketing practices.

Key Questions Answered

• •Inflation composition: Consumer spending concentrates on services rather than imported goods affected by tariffs. Services inflation cools as travel, medical care, and recreation prices decline, reducing overall price pressure despite tariff impacts on furniture and apparel categories.
• •Housing cost dynamics: Rent inflation moderates as young adults delay independent living, seek roommates longer, and high apartment vacancy rates persist across markets. Housing represents one-third of the consumer price index, making this decline significant for overall inflation trajectory.
• •Credit card fee settlement: Merchants gain relief through agreement reducing swipe fees by 0.1 percentage points and allowing rejection of high-fee rewards cards. Small restaurants face swipe fees as second-highest operating cost after labor, quadrupling since 2010 despite modest settlement relief.
• •Corporate earnings performance: Over 80% of S&P 500 companies beat earnings estimates with 75% exceeding revenue forecasts. AI and tech sectors lead with 26% earnings growth, while financials, communications, and utilities show double-digit gains driven by AI power demands.