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Matthew Klein points out that core goods inflation has been accelerating even though the effective tariff rate has been falling.
This observation suggests that factors beyond tariffs may be contributing to higher prices for core goods.
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Klein has previously observed that the U.S. labor market is performing above Federal Reserve expectations, with wage deceleration limited to a single sector, according to his report on labor market trends. In a separate note, he suggested that the Treasury might consider purchases of yen and possibly Korean won, pointing to possible currency interventions as outlined in his analysis of Treasury activity. These earlier comments reflect Klein’s ongoing focus on links between monetary policy, labor conditions, and international markets.