Over the last trading week, SPY, the ETF tracking the S&P 500, advanced by approximately 0.23%, reflecting a cautious investor response to evolving inflation dynamics and Fed policy expectations. The gain came as Nobel laureate Paul Krugman quantified the tariff-driven increase in U.S. inflation at exactly 0.8 percentage points, aligning with the jump in customs duties from 0.3% to 1.1% of GDP. This insight reinforced market projections for 2025 core PCE inflation at roughly 3%, up 0.8 points from pre-tariff forecasts. Simultaneously, signals of a steady-as-you-go Fed under a potential Kevin Warsh chairmanship sent precious metals tumbling, freeing capital flows back into equities. Against that backdrop, SPY’s modest advance highlights investor focus on corporate earnings and a renewed tolerance for risk, even as discussions over effective tariff rates and Fed leadership choices continue to shape market sentiment.