Tariffs drove 2025 goods inflation

A Federal Reserve study says the 2025 tariff wave pushed up U.S. core goods prices enough to erase what would have been a return to pre-pandemic inflation. (federalreserve.gov) Core goods means physical items such as appliances, clothing, and furniture, excluding food and energy. In a May 9, 2025 note, Federal Reserve economists Robbie Minton and Mariano Somale found the February and March 2025 tariffs had already lifted core goods personal consumption expenditures prices by 0.3% and core personal consumption expenditures overall by 0.1% through March. (federalreserve.gov) The same note said the 2018-19 tariffs passed through to consumer prices “fully and quickly” within two months. That earlier result gave economists a template for estimating what the 2025 tariffs were doing in near real time. (federalreserve.gov) That matters for the Federal Reserve because goods inflation had been cooling after the pandemic supply shock. The new tariff effect landed as policymakers were still trying to push inflation back to their 2% target after several years of above-target price growth. (federalreserve.gov 1) (federalreserve.gov 2) Chicago Federal Reserve President Austan Goolsbee said on April 7 in Detroit that he sees economic weakness but not a recession. Reuters reported that he also warned the Iran war could raise inflation while slowing growth, leaving the central bank without an obvious playbook. (freep.com) (money.usnews.com) The Board of Governors has also scheduled a closed meeting for Wednesday, April 15, 2026. The official notice says the agenda is a “Periodic Briefing and Discussion on Financial Markets, Institutions, and Infrastructure.” (federalreserve.gov) Investors are watching a separate inflation threat at the same time: energy. The Federal Reserve Bank of Cleveland’s daily nowcasting page says it publishes current estimates for both the Consumer Price Index and the personal consumption expenditures index, and The Motley Fool reported on April 13 that the model was pointing to a jump of more than 1 percentage point in inflation from February to April. (clevelandfed.org) (fool.com) The Federal Open Market Committee’s next scheduled rate meeting is April 28-29, 2026, according to the Board’s calendar. Between tariff-driven goods inflation and a fresh oil shock, the Fed is heading into that meeting with price pressure coming from more than one direction. (federalreserve.gov)