Some economists think U.S. inflation is likely to rise in 2025

The Trump administration's barrage of tariffs on key U.S. trading partners and ongoing crackdown on immigration is likely to result in higher prices for American consumers and businesses, according to Wall Street analysts.

Economists with Morgan Stanley Research said in a report on Friday that they expect inflation in 2025 to rise 2.5%, up from their previous forecast in December of 2.3%. Another key gauge that strips out volatile food and energy costs is now projected to reach 2.7%, up from 2.5% in the bank's earlier forecast. 

"We now see higher inflation in 2025 with a more pronounced and sooner re-acceleration in goods prices," the analysts wrote.