New York Fed: Inflation in many everyday consumer goods is entirely triggered by tariffs

The Federal Reserve Bank of New York said that without the tariff policy introduced by U.S. President Trump, prices for a large number of everyday consumer goods would have fallen from last year through early this year. The research team at the New York Fed said in a paper that as of February, prices for 67 categories of goods were 2.9 percentage points higher because of tariffs. The team found that without those tariffs, prices for the goods studied would have fallen by nearly 1%. The team said that for every 1 percentage point increase in the average tariff rate, consumer goods prices rise by about 0.25 percentage points after one year. The report showed that among the dozens of categories of goods it tracked, annual price increases peaked in early 2026. But due to the lagged effects of the policy, consumers are still expected to face high prices in 2027. The New York Fed report said that about two-thirds of the price impact from tariffs comes directly from the tariffs themselves; the remaining upward pressure comes from knock-on effects, such as higher costs for U.S. companies that use imported components and raw materials in their products. The paper's three authors, Mary Amiti, Sebastian Heise, and David Weinstein, wrote: "The effect of tariffs on consumer goods prices is larger and longer-lasting than the direct effect suggests."