Much Of Last Year's Excess Inflation Was From Tariffs, Fed Finds
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A Federal Reserve analysis found that tariffs were responsible for a 3.1% year-over-year increase in core goods prices in February. The study suggests that inflation would have met the Fed's 2% target by 2025 if not for the tariffs.
The Federal Reserve found that tariffs imposed by the US significantly contributed to inflation. Core goods prices rose 3.1% in the 12 months through February, compared to a pre-pandemic average annual decline of 1%. The tariffs pushed up the core PCE index by 0.8%, resulting in a 3% annual increase. The study indicates that inflation would have met the Fed's 2% target without the tariffs. The costs of tariffs were largely passed on to consumers, increasing household expenses. The US Treasury Secretary announced plans to implement new tariffs under different legal authority by July.
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