President Donald Trump’s weekend announcement of tariffs on Mexico, Canada and China translated into a shock for market-based inflation expectations, prompting traders to now expect an annual headline rate from the consumer-price index that’s closer to 3% for much of 2025.

Are tariffs inflationary? Who will shoulder the increased cost? Will tariffs cause a recession? How do tariffs affect different products?

The Trump administration's plans for trade tariffs come with inflation risks, three Federal Reserve officials warned on Monday, with one arguing that uncertainty over the outlook for prices calls for slower interest-rate cuts than otherwise.