Bracing for Sticker Shock

Andrew Sheets, Head of Corporate Credit Research at Morgan Stanley, interviews Jenna Giannelli, Head of U.S. Consumer and Retail Credit Research, about the delayed impact of tariffs on prices and margins. Giannelli explains that retailers initially mitigated the impact through existing inventory, stockpiling, and various cost-cutting measures. She predicts that price increases will become necessary in the third and fourth quarters, particularly affecting less discretionary categories. The conversation also touches upon the discrepancy between overall market performance and the underperformance of retail equities and credit, and the potential for further negative impacts from recently announced tariffs exceeding initial expectations.