NY Fed says tariffs added 2.9 points to consumer goods prices since early 2025
Researchers at the Federal Reserve Bank of New York said Trump administration tariffs raised consumer goods prices by 2.9 percentage points from early 2025 through February this year, and noted that prices would have fallen without the import taxes. They estimated that after a year, consumer goods prices increase about 0.25% for each percentage point rise in average tariffs.
The researchers noted that a full year passed before consumers felt the complete effect of tariffs imposed early last year. University of Michigan data showed consumer inflation expectations for the next 12 months rose to 4.7% this month, up from 4.6% in September. A Reuters/Ipsos poll found 78% of Americans blame President Donald Trump’s policies for price gains that outpace their wages. Long‑run inflation expectations edged up 0.1 percentage point to 3.5%, staying above the 2.8%‑3.2% range seen in 2024. The NY Fed’s estimate drew on price changes across 67 consumer‑goods categories that feed into the CPI.
“Tariffs pass through to import prices nearly completely in the first month,” Federal Reserve Bank of New York researchers said.
“Inflation expectations over both time horizons increased for the second straight month to their highest readings since May,” Joanne Hsu, director of the University of Michigan’s surveys of consumers said.
Ongoing price pressures, driven by the highest U.S. tariffs since the 1930s and a war‑related jump in fuel costs, have weakened consumer views on affordability and lifted expectations that inflation will rise. Joanne Hsu said the current figure far tops the 3.4% recorded in February before the Iran conflict and surpasses every 2024 reading.
What we know
Trump administration tariffs pushed up consumer goods prices by 2.9 percentage points from early 2025 through February this year, Federal Reserve Bank of New York researchers said, noting that prices would have fallen without the import taxes.
After a year, consumer goods prices rise by about 0.25% for every percentage point increase in average tariffs, the researchers said, citing price gains among 67 groups of consumer goods included in calculations of the Consumer Price Index.
A year elapsed before consumers felt the full impact from import taxes imposed early last year, the researchers said.
Expectations among consumers for inflation 12 months from now rose to 4.7% this month from 4.6% in September, the University of Michigan said Friday, citing a survey.
Most Republicans and Democrats rank the cost of living as their No. 1 concern, and 78% of Americans blame President Donald Trump’s policies for price gains that are outpacing their wages, according to results of a Reuters/Ipsos poll released Friday.