When it comes to judging the impact of tariffs on inflation, standard economic models are straightforward: this should be a one-time increase in prices.

But the uncertain and fluid rollout of the Trump administration’s tariffs is making the situation more complex and less clear-cut than textbooks might suggest, Atlanta Federal Reserve President Raphael Bostic said Tuesday.

Foreign investors have plenty of reasons to be wary of U.S. government debt at the moment. Now there is another: They can often receive better returns buying bonds in their own countries.

And the Bank of Canada is expected to keep its main interest rate unchanged this week as policymakers set aside signs of distress in the labor market and domestic demand to focus on accelerating core inflation.

Federal Reserve President Raphael Bostic told reporters that “the textbook notion about tariffs is that… the tariffs get applied once, and everybody understands what they are.” He added: “That’s not the environment we’ve had over the last several months, and so there’s a question about how people will respond—to take on board a rollout that extends over a protracted period of time.” Bostic said his main concern is how this prolonged, incremental rollout could influence business and consumer behavior. If firms and households start expecting continuous tariff adjustments, that could lead to more persistent inflationary pressures.

• Wall Street Is Sounding the Alarm on U.S. Debt. This Time, It’s Worth Listening.

• Trump Says China's Xi Is 'Very Tough'; 50% Steel Tariffs Take Effect

8:15 a.m.: ADP National Employment Report
9:45 a.m.: U.S. Services PMI
10 a.m.: ISM Report On Business Services PMI
2 p.m.: U.S. Federal Reserve Beige Book
7 p.m.: Fed Listens event with FRB Atlanta President Raphael Bostic and Federal Reserve Governor Lisa Cook
7 p.m.: U.S. doubles tariff on steel and aluminum imports from 25% to 50%

7:30 a.m.: Challenger Job-Cut Report
8:15 a.m.: ECB interest rate announcement
8:30 a.m.: Revised Productivity and Costs
8:30 a.m.: U.S. International Trade in Goods & Services
8:30 a.m.: Unemployment Insurance Weekly Claims Report - Initial Claims
11 a.m.: Global Services PMI
12 p.m.: Economic Club of New York event with Federal Reserve Governor Adriana Kugler
12:30 p.m.: FRB Philadelphia president speaks at Philadelphia Council for Business Economics event
7 p.m.: U.S. President Donald Trump meets German Chancellor Friedrich Merz at the White House

Uncertainty over U.S. policy and tariffs could discourage European companies from investing in the U.S. and instead encourage greater investment within Europe, says ING's Carsten Brzeski in a webinar. Erratic U.S. economic policies have meant that European companies aren't considering increasing investment in the U.S., he says. "They could keep some investment in Europe." This is one potential positive from U.S. tariffs. Overall, however, the current uncertain backdrop means Europe faces "another year of weak growth." — Jessica Fleetham

The yield curve of Chinese government bonds could steepen moderately over the next three months, BofA Global Research's Janice Xue says in a note. First, the supply of Chinese government bonds is expected to be elevated, the strategist says. Second, the likelihood that the PBOC will resume buying short-duration bonds in open-market operations is high, particularly if more deficit-funded fiscal stimulus is delivered, Xue says. BofA Global Research raises its end-2025 forecast for the two-year sovereign note yield to 1.3% from 1.15%. It cuts its end-2025 projection for the 10-year government bond yield to 1.6% from 1.85%. — Ronnie Harui

• Canada's manufacturing sector was in rough shape in May. S&P Global's PMI index for Canada rose to 46.1 in May from 45.3 the month before, still well below the 50 mark that separates expansion from contraction. National Bank of Canada's economists say the most troubling aspect of the data is it shows Canada ranked last among the countries covered by S&P Global. (Dow Jones Newswires)
• Four major automakers are racing to find workarounds to China’s stranglehold on rare-earth magnets, which they fear could force them to shut down some car production within weeks.
• Australia’s economy slowed sharply in the first three months of 2025, leaving it vulnerable to emerging weakness in world growth as the global trade war and a surge in geopolitical risk undermines the confidence of firms and consumers.
• A left-leaning politician who has warned against South Korea becoming overly dependent on the U.S. won the country’s presidential vote, an outcome that could shift Seoul’s relations with China and North Korea.
• South Korea’s headline inflation cooled to a five-month low in May and stayed below the central bank’s 2.0% annual target, justifying its resumed easing of policy to support economic growth.

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to vicky.huang@wsj.com.