{"id":97262,"date":"2025-10-23T21:08:08","date_gmt":"2025-10-23T21:08:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/97262\/"},"modified":"2025-10-23T21:08:08","modified_gmt":"2025-10-23T21:08:08","slug":"trump-tariffs-may-fuel-margin-squeeze-but-not","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/97262\/","title":{"rendered":"Trump Tariffs May Fuel Margin Squeeze, But Not\u2026"},"content":{"rendered":"<p>Fears that President Donald Trump&#8217;s tariffs could reignite an inflation spike are fading, as a growing number of economists say U.S. companies are now more likely to absorb those costs rather than <a href=\"https:\/\/www.benzinga.com\/topic\/expert-ideas\" target=\"_blank\" rel=\"noopener nofollow\">risk losing market share. <\/a><\/p>\n<p>In an exclusive interview with Benzinga, LPL chief economist Jeffrey Roach highlighted signs of margin compression as businesses absorb the cost of tariffs rather than passing them to consumers \u2014 a shift that could reshape both corporate profits and Fed policy heading into 2026. <\/p>\n<p>Fed Could Cut Rates In October, December And January <\/p>\n<p>Roach expects the Federal Reserve to ease rates at its upcoming October meeting, followed by further cuts in December and possibly January as well.<\/p>\n<p>The expert sees three rate cuts in 2026, in line with market pricing reflected in the CME FedWatch tool.<\/p>\n<p>Roach indicated that recent private-sector data, including the Federal Reserve&#8217;s Beige Book, point to cooling inflation, especially in goods, even as headline numbers may remain elevated in the short term.<\/p>\n<p>Despite a possible uptick in September and October inflation reports, Roach said these would not derail the Fed&#8217;s broader path toward easing.<\/p>\n<p>&#8220;The Beige Book is telling us that the inflation picture is mixed.&#8221; Roach said.<\/p>\n<p>Roach stressed that companies are increasingly reluctant to pass higher import costs to consumers, opting instead to absorb them.<\/p>\n<p>\u201cIt\u2019s not clear that the consumer is going to bear a significant amount of tariffs,\u201d he added. <\/p>\n<p>The outcome, however, is clear: falling business margins, which Roach warned could \u201cweigh a little bit on profits and show up in a softening bull market.\u201d<\/p>\n<p>Banking Sector Bracing For More Credit Stress \u2014 But No 2008 Redux<\/p>\n<p>Roach said regional banks may see more cracks emerge as the economy cools, but he dismissed the idea of a financial crisis.<\/p>\n<p>\u201cThe banking sector doesn\u2019t have the same type of fragilities of a decade ago,\u201d Roach said. <\/p>\n<p>\u201cWe don&#8217;t think it&#8217;s a Great Financial Crisis type level,\u201d Roach added, citing post-2008 capital improvements in the banking system. <\/p>\n<p>Roach cautioned that labor demand is easing and that, in turn, will show up in softer consumer activity.<\/p>\n<p>Holiday Spending: Discretionary Up Top, Strain Below<\/p>\n<p>Despite economic headwinds, Roach expects a &#8220;decent&#8221; holiday shopping season, supported by high-income earners who continue to spend on travel and restaurants. <\/p>\n<p>However, he ruled out a repeat of the post-pandemic &#8220;revenge spending&#8221; boom.<\/p>\n<p>&#8220;We&#8217;re seeing a deceleration in growth, but it&#8217;s not a recession,&#8221; he said. The holiday period will reflect that measured slowdown \u2014 solid at the top, weak at the bottom.<\/p>\n<p>Read Next:<\/p>\n<p>Image created using artificial intelligence via Midjourney.<\/p>\n","protected":false},"excerpt":{"rendered":"Fears that President Donald Trump&#8217;s tariffs could reignite an inflation spike are fading, as a growing number of&hellip;\n","protected":false},"author":2,"featured_media":97263,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[251,138,784,219,788,782,111,43,785,783,786,139,69,787,255],"class_list":["post-97262","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-breaking-news","tag-business","tag-daily-news","tag-economy","tag-global-news","tag-inkl","tag-new-zealand","tag-news","tag-news-app","tag-news-headlines","tag-news-today","tag-newzealand","tag-nz","tag-today-news","tag-world-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/97262","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=97262"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/97262\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/97263"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=97262"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=97262"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=97262"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}