Investors in financial derivatives called U.S. inflation swaps are betting that President Donald Trump's tariffs will have a hefty short-term impact on consumer prices that will recede in the next few years as recession concerns escalate.

Trump is expected to make an announcement on a sweeping tariff plan Tuesday, though some worry it may trigger an inflation-fueled recession.

Many economists say that tariffs ultimately cause prices to rise as importers are likely to pass on some of the additional cost to businesses and consumers. Tariffs on imported steel, for example, can make it more expensive for manufacturers of cars,

New York Federal Reserve President John Williams said on Monday that monetary policy is "well positioned" for what the economy might do this year, as he acknowledged there are risks that inflation could once again heat up.

Tariffs have a proven track record of leveling the playing field to support important industries while also ensuring that the U.S. can catch up to China in computer, energy and military manufacturing, Ferry said.

U.S. stocks saw a selloff accelerate on slightly hotter-than-expected inflation data and ongoing tariff worries that could keep Fed rates on hold.

"A simple regression analysis shows that over the period since early 2024, gold has turned into a momentum trade, which appears to be backed less by fundamentals and driven more by momentum," wrote Societe Generale researchers and strategists in a note last month.

As the U.S. president weighs increasing tariffs on imports, economists find that prices across many categories could rise as a result.