Analyst: Tariff inflation may continue to transmit to the economy in the coming months, and the Federal Reserve is expected to cut interest rates twice this year.

Stephen Douglass of NISA Investment Advisors stated that about one third of the inflation related to tariffs may still gradually transmit to the economy in the coming months. This makes it likely for the economy to continue to perform well, while keeping the Federal Reserve on hold for some time. "We are returning to the path of achieving a soft landing," he said. "The labor market will stabilize, and the final effects of tariff inflation will be completed in the first half of this year." He expects that commodity inflation will fall below zero in the second half of the year, creating room for the Federal Reserve to cut rates later than the market expects. "Our forecast for this year is to cut rates in September and December."