Walmart offers a major warning on prices

The takeaway from the earnings call today comes from these remarks by Doug McMillon. He warned that Walmart is planning to raise prices on some items as Trump’s tariffs are weighing on the firm’s costing. And that these price hikes will begin later this month, despite the recent temporary reprieve between the US and China.

“We will do our best to keep our prices as low as possible but given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins.”

If even Walmart has to be one to raise prices, you can surely expect smaller firms to also do so. That especially as it is going to be a messy logistical summer in sorting out supply chains. From before: Tariffs policy can change overnight but supply chains cannot

Adding to McMillon’s remarks, Walmart finance chief, John David Rainey, also said that:

“I’m concerned that consumer is going to start seeing higher prices. You’ll begin to see that, likely towards the tail end of this month, and then certainly much more in June.”

We’ll see how this all plays out in the months ahead. But if you’re in the Fed’s position, it continues to reaffirm that the wait-and-see approach remains the most prudent stance at the moment.

This article was written by Justin Low at www.forexlive.com.