Source: Organization of Economic Cooperation and Development (OECD), “OECD Economic Outlook Interim Report: Finding the Right Balance in Uncertain Times,” (Paris: OECD, 2025).
Commentary: Since the COVID-19 pandemic, inflation has been a persistent problem for policymakers and economists, as the cost of living has ballooned while wages have failed to keep pace. Yet, after hitting its peak in 2022 of 9 percent, inflation in the United States has made a steady and controlled descent toward the Federal Reserve’s target rate of 2 percent. However, President Trump’s tariffs may stand in the way of that goal. Since the trade disruptions set off by his tariffs began, economists and international organizations have warned of the returning threat of inflation, considering at least a fraction of the cost of tariffs will be passed down to consumers. Though inflation has remained relatively stable thus far in 2025, projections still estimate that inflation in the United States will increase in 2026 from 2.7 percent to 3 percent. Inflation in the Euro Area and G20, in contrast, is projected to decrease.
