New York Fed study links Trump tariffs to 2.9 point rise in goods prices

A new study by New York Federal Reserve economists found that President Donald Trump's 2025 tariffs have added 2.9 percentage points to goods price inflation by February 2026. The researchers determined that for every one percentage point increase in average tariffs, consumer goods prices rise by a quarter of a percentage point within one year.

The report, published in Liberty Street Economics, indicates that goods prices would have modestly declined without the tariffs. Approximately two-thirds of the price increase stems from pricier imports, while the remaining third results from higher input costs for U.S. Producers, a shift that typically takes six to 12 months to fully materialize.

President Trump recently argued at a Montana rally that tariffs do not cause inflation but rather create wealth. However, the Federal Reserve has already raised interest rates to a target range of 3.75% to 4.00% in response to persistently elevated inflation, with policymakers likely to implement further hikes over the next year.

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