New York Fed Study Links Trump Tariffs to 2.9-Point Rise in Goods Inflation
New York Fed economists estimate that tariffs introduced in 2025 and early 2026 raised 12-month inflation for 67 non-oil consumer goods categories by 2.9 percentage points through February 2026. In a counterfactual without those tariffs, prices in the sample would have dipped slightly. The analysis excludes services and does not measure tariffs' overall effect on the economy.
The October 6, 2026, Liberty Street Economics post drew on work by New York Fed researchers Mary Amiti and Sebastian Heise and Columbia University’s David E. Weinstein. Their sample covered 67 non-oil consumer-goods categories and omitted services, roughly two-thirds of the consumer basket.
They estimated that almost 90% of 2025 tariff increases reached U.S. import prices. Consumer prices moved gradually: about half of the direct effect showed within three months, while the complete effect took roughly a year. The tariff contribution peaked in February 2026 and was projected to approach zero by August, though earlier increases remain in price levels.
Households buying non-oil goods could face persistently higher price levels even after the tariff contribution to annual inflation fades, which may weigh more on budgets with less flexibility. Importers, domestic producers, and retailers may continue adjusting prices, input costs, and markups. Investors and policymakers may monitor whether slower annual inflation reflects base effects rather than lower prices. Because the study excludes services and broader economic effects, its implications for overall living costs and monetary policy remain uncertain.