NY Fed study: tariffs added 2.9 percentage points to consumer goods inflation by February 2026 (Staff Report No. 1201)

What happened

A new staff study from the Federal Reserve Bank of New York (Staff Report No. 1201, published October 6 on the Liberty Street Economics blog by Mary Amiti, Sebastian Heise, and Columbia's David E. Weinstein) concludes that Trump-era tariffs added 2.9 percentage points to consumer goods inflation by February 2026 - and that without the levies, prices for the 67 non-oil goods categories studied would have fallen slightly rather than risen. Researchers found that each percentage point increase in tariffs lifts consumer goods prices by about 0.25% after one year, with roughly two-thirds of the impact coming directly from the levies and the rest from indirect knock-on costs to U.S. businesses (higher input costs, domestic producers raising prices as foreign competition got pricier, and distribution-channel pass-through).

Who’s affected

• {'exposure': "Tariff-driven goods inflation is the central justification for the Fed's renewed hiking cycle; more evidence of persistent inflation pressure supports higher-for-longer rates, which de-rates duration-sensitive equities and rate-sensitive sectors.", 'name': 'Broad market (S&P 500, rate-sensitive sectors: housing, autos, small caps)'}
• {'exposure': 'Import-dependent retailers and consumer-goods makers face the margin squeeze the study documents; also a tariff-policy read-through for names like Nike, Levi Strauss, and appliance makers.', 'name': 'Consumer discretionary / retail importers'}
• {'exposure': "The study's finding that domestic producers raised prices as foreign competition got more expensive - via imported inputs and strategic complementarity - hits U.S. manufacturers' cost bases.", 'name': 'U.S. manufacturers (CAT, DE, industrials)'}

Sources

libertystreeteconomics.newyorkfed.orgtmj4.compolitical.org