Atlanta Fed President Raphael Bostic says the Fed still doesn't have much certainty on the ultimate level of tariff rates and the inflation-pass-through process has gotten murkier: "The diffusion of this through the economy, I think, is going to take a bit longer, and I think longer could be up to a couple quarters, even." wsj.com/livecoverage/stock-mar...…

Bostic says he's seeing more tariff-cost-sharing through the supply chain than might have been expected: "At the beginning of this year, almost everyone thought that they would fully pass through any kind of cost increase. Today we hear a much wider range of strategies. Some are taking it in their margin, some are to—the extent possible—passing some of that elevated cost into the suppliers and intermediate goods producers. And then some are trying to do the full pass through—the point being that the burden is now being distributed more broadly than I think folks anticipated earlier on." From a risk management perspective, Bostic said the cumulative price increases of the past few years have him more nervous about looking through the rolling cost increases from tariffs than would be the case in an environment akin to 2018-19: "The one thing that I worry about ... is really about the psyche of the American consumer and American business person. Inflation has been something that we've talked about in the news; it's been in the headlines since it spiked in '21 and '22. And it has been something that people have continuously said, 'Well, if policymakers do what they're supposed to do, then we'll go back to a place where you don't have to think about inflation anymore and you don't have to talk about it anymore.' But here we are—we're, what, seven months into this year? And I think that the discussions of inflation, from what I can tell, haven't really dissipated at all. And we could conceivably have another eight, 14 months of this moving forward. And at some point I worry that just the constant drumbeat that inflation, inflation, inflation, higher, higher than you might have expected, just turns the psychology in a way such that strategy starts to become precautionary and that consumers engage in a different way and that businesses engage in a different way."