Without tariffs, inflation on goods would have fallen: New York Fed
CNBC • • business
Key Points:
- A New York Federal Reserve study found that President Donald Trump's tariffs increased the cost of 67 categories of goods by 2.9 percentage points as of February, preventing prices from declining by nearly 1%.
- The research showed that for each 1% increase in tariffs, consumer goods prices rose by about 0.25% a year later, with the highest price growth peaking in early 2026 and elevated prices expected to persist into 2027.
- Approximately two-thirds of the price increases were directly due to tariffs, while the rest resulted from indirect effects such as higher costs for U.S. companies using imported parts.
- The study contradicted Trump's claim that companies would absorb tariff costs, finding that about 26% of tariff increases were passed on to consumers through higher prices.
- Following a Supreme Court ruling that struck down many tariffs, resulting in retailer refunds, the White House plans to maintain levies through alternative means, with current tariffs generally around 10%, lower than previous levels.
