Tariffs, Not Normal Inflation, Raised Everyday Prices, NY Fed Finds

Ever wondered why your grocery bill or household goods keep getting more expensive? A new study from the New York Federal Reserve (a branch of the U.S. central bank that manages the economy and money supply) points to one main culprit: tariffs.

A tariff is a tax a government puts on products brought in from other countries. The idea is often to make imported goods pricier so people buy local instead — but someone has to pay that extra cost, and it often ends up being shoppers.

The researchers looked at 67 categories of everyday goods and found that, without the tariffs, prices would have fallen by nearly 1%. Instead, thanks to the tariffs, prices were 2.9 percentage points higher by February.

Here are the key numbers:

• For every 1 percentage point rise in the average tariff, consumer prices went up about 0.25% a year later
• Price growth peaked at the start of 2026, but higher prices are expected to continue into 2027
• About two-thirds of the price increase came directly from tariffs; the rest came from knock-on effects (for example, U.S. companies paying more for imported parts)
• Around 26% of last year's tariff costs were passed on to shoppers

President Trump had argued that companies could absorb the tariff costs (pay them out of their own profits) instead of raising prices. But the study shows a good chunk of those costs still reached consumers.

There's some relief ahead: in February, the Supreme Court struck down many of Trump's tariffs, leading to billions in refunds to retailers. The White House still plans to push tariffs through other legal routes, but current rates — often around 10% — are much lower than before.

The bottom line: This study is the clearest proof yet that tariffs made daily life more expensive for ordinary Americans, and the effects may linger for a while.

This is an AI-generated summary. Read the original article at: https://www.cnbc.com/2026/10/08/inflation-tariffs-trump-fed-consumer-goods.html