Investors are underestimating the inflation risk of President Trump’s tariffs , which will push up import costs, according to Deutsche Bank . One indicator forecasts U.S. inflation may exceed 4% soon. Consumers are also expecting higher prices. But the inflation swaps market has yet to reflect these risks, analyst Henry Allen says.

One of the central mysteries inside President Trump’s tariff plan is, where is the inflation?

Once all the new levies are in place—the latest is that all imports into the U.S. from India will be subject to a 50% tariff starting today—the effective average tariff rate will be somewhere near 15%. Estimates vary. Pantheon Macroeconomics puts it as high as 19%. Prior to Trump, it was 2.4% .

And yet inflation is currently running at only 2.7%. Although it is

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