Federal Reserve study: a 10% global tariff could raise U.S. consumer inflation by about 1 percentage point

Federal Reserve researchers and regional Fed economists have published a set of papers that give shape to a claim circulating on social media: broad tariffs can feed through to U.S. consumer prices, and the effect can reach about 1 percentage point under some scenarios. The papers do not all study the same tariff package, inflation measure or time horizon. But several of them point in the same direction — a 10 percentage-point tariff increase or a broad tariff regime can produce a price effect that is measured in tenths of a point at first and around a percentage point over time. The most direct Federal Reserve Board evidence came in a May 9, 2025 FEDS Note by Robbie Minton and Mariano Somale. That paper said the February and March 2025 tariffs on China had already led to a 0.3% increase in core goods PCE prices and a 0.1% increase in core PCE prices as a whole, based on data through March. An April 8, 2026 follow-up from Board researchers Robert Minton, Madeleine Ray and Mariano Somale said tariffs implemented through November 2025 had raised core goods PCE prices by 3.1% through February 2026 and contributed a 0.8% boost in core PCE overall. (federalreserve.gov) ### Which Fed paper is closest to the “10% tariff raises inflation about 1 point” claim? A March 30, 2026 Economic Letter from the Federal Reserve Bank of San Francisco is the closest match in the Fed system’s published research. (federalreserve.gov) The letter said goods prices “peak at year 2, increasing 1.2 percentage point on average” for each 10% increase in tariffs, while services inflation rises more slowly and by less. (federalreserve.gov) That estimate is not a one-line statement that headline U.S. inflation would jump exactly 1 percentage point immediately after a global 10% tariff. It is a category-level estimate from international evidence on how tariff increases affect different components of inflation over time. The same letter said inflation initially declines after tariffs are imposed, reflecting weaker demand, before goods and then services prices move higher relative to a no-tariff scenario. (frbsf.org) ### What did other Fed economists estimate for broad tariff plans? Boston Fed economists Omar Barbiero and Hillary Stein wrote on February 6, 2025 that an additional 25% tariff on goods from Canada and Mexico, combined with an additional 10% tariff on goods from China, could add as much as 0.8 percentage point to core inflation. They also estimated that a much broader campaign proposal — an additional 60% tariff on China and an additional 10% tariff on the rest of the world — could add as much as 2.2 percentage points to core inflation. (frbsf.org) Atlanta Fed researchers wrote in a February 2025 Policy Hub paper that an additional 10% tariff on Chinese imports, 25% tariffs on Canadian and Mexican imports, and a 10% tariff on other countries could raise prices on everyday retail purchases by 0.81% to 1.63%, assuming half to full pass-through. That paper covered food and beverage items and general merchandise, which the authors said represented about a quarter of the consumption basket. (bostonfed.org) ### Does that mean grocery bills would rise 3.8%? The Fed papers reviewed here do not support a simple “grocery bills rise 3.8%” figure as a direct Board estimate. The Atlanta Fed paper estimated price increases for a basket of everyday retail purchases, including food and beverage items and general merchandise, at 0.81% to 1.63% under a mixed tariff scenario. Any larger grocery-specific number posted on X would require separate assumptions about which countries supply which products, how much of the tariff is passed through, retailer markups and substitution by consumers. (atlantafed.org) The Boston Fed paper said its own estimates were “first-round” effects and did not account for how consumers and competitors might adjust. ### How broad was the “global tariff” idea in Fed-related analysis? (atlantafed.org) Richmond Fed economists wrote in an April 2025 brief that the April 2 tariff plan included a minimum 10% tariff on all imports from countries outside Canada and Mexico, with higher rates for about 60 countries. They estimated that, once those measures were included with earlier 2025 actions, the average effective tariff rate would reach 22.2%, up from a 2024 baseline of 2.3%. (bostonfed.org) That Richmond Fed brief tracked trade-policy scope, not consumer inflation directly. But it helps explain why later Fed-system papers treated 2025 as a much larger tariff shock than the 2018-19 round. ### Where should readers look for the underlying numbers? The Federal Reserve Board’s FEDS Notes pages for May 9, 2025 and April 8, 2026 contain the Board researchers’ pass-through estimates and methodology. The San Francisco Fed’s March 30, 2026 Economic Letter, the Boston Fed’s February 6, 2025 policy paper and the Atlanta Fed’s February 2025 Policy Hub paper contain the closest published Fed-system estimates to the claim that a broad 10% tariff could lift prices by about 1 percentage point. (richmondfed.org) (federalreserve.gov)