A Federal Reserve Board staff note published April 8, 2026 found that Trump's tariffs explain all of the excess inflation in core consumer goods since January 2025. The economists estimated that tariffs implemented through November 2025 raised core goods prices by 3.1% through February 2026 and boosted core PCE prices as a whole by 0.8%.
The economists wrote: “Our estimates indicate that tariff effects on prices gradually build over time, with cumulative effects seven months after implementation consistent with our theoretical measures of full dollar-for-dollar pass-through.” They concluded that the tariffs “can explain the entirety of the excess inflation in the core goods category since January 2025.”
Core goods prices rose 2.3% in the year to February 2026, while they typically fell about 0.7% a year in 2015-2019. Stripping out the estimated 3.1% tariff effect leaves core goods inflation at or slightly below that pre-pandemic pace. Separately, Federal Reserve Bank of New York and Columbia University economists found in February that nearly 90% of the tariffs' economic burden fell on U.S. firms and consumers; the share was 94% in the first eight months of 2025 and 86% by November.
This contradicts Trump's repeated claims that foreign countries “eat” the tariffs. In a January 2026 Wall Street Journal op-ed, Trump wrote that the “burden, or 'incidence,' of the tariffs has fallen overwhelmingly on foreign producers and middlemen.”
The note is a FEDS Note, a format in which Board staff offer their own views; it is not an official position of the Board. Its findings were reported by Reason, a libertarian magazine, and by the financial news site Benzinga.
Correction (October 2, 2026): This entry previously said a Fed and Columbia paper found Americans pay 94% of tariff costs; the New York Fed analysis found nearly 90% overall, falling on U.S. firms and consumers together, with 94% in the first eight months of 2025 and 86% by November. It said that without tariffs consumer goods prices would have fallen below pre-pandemic levels; the note is about inflation rates, not price levels. It described the data as the Federal Reserve's own and said Fed data proves Trump's claim false; the price data is the BEA's PCE index, and the note represents the views of Board staff.