Fed paper on tariffs
- The Federal Reserve published a FEDS Note on April 8, 2026 (authors Robert Minton, Madeleine Ray and Mariano Somale) finding 2025 U.S. tariffs raised prices on tariff‑exposed consumer goods. - The Fed estimated tariffs implemented through November 2025 raised core‑goods PCE by 3.1% through February 2026 and added 0.8 percentage points to core PCE; HBS Pricing Lab finds ~24% retail pass‑through. - Pass‑through estimates differ because realized duties, sourcing shifts, exemptions and measurement choices change incidence, so models must use realized‑tariff measures and supply‑chain detail. (federalreserve.gov)
The Federal Reserve's FEDS Note on April 8, 2026 found 2025 tariffs raised inflation in tariff‑exposed goods and showed substantial pass‑through to consumer prices. (federalreserve.gov) The note estimates tariffs implemented through November 2025 increased core goods personal consumption expenditures (PCE) prices by 3.1% through February 2026 and boosted core PCE by about 0.8 percentage point. (federalreserve.gov) The Harvard Business School Pricing Lab (NBER working paper) measured daily retail prices and found imported goods rose roughly twice as much as domestic goods, with retail tariff pass‑through about 24%, contributing roughly 0.76 percentage points to CPI by October 2025. (pricinglab.org) Federal Reserve Bank of Richmond researchers, using realized duty collections, report pass‑through into import prices close to 100% and stress that statutory schedules diverged materially from realized tariffs because of exemptions, timing and sourcing changes. (richmondfed.org) Regional Fed analysis and the St. Louis Fed show PCE subcategories matter: durable and core goods with higher import prevalence saw larger price rises, and the Fed used BEA global value‑chain tables to map exposure by PCE category. (stlouisfed.org) (federalreserve.gov) Those differences—import vs. retail measures, statutory vs. realized rates, and fast sourcing shifts—mean macro forecasts that assume uniform pass‑through can misstate near‑term inflation and the distributional effects across sectors. (pricinglab.org) (richmondfed.org) The Fed authors note their note does not cover tariff changes tied to the February 2026 Supreme Court decision on IEEPA tariffs and say their real‑time methodology remains useful for assessing future tariff moves and updating inflation projections. (federalreserve.gov)
