The Federal Reserve Board published research extending a real-time, public-data methodology to quantify how 2025 tariff changes have passed through to personal consumption expenditures (PCE) prices. The note finds statistically significant price increases in consumer goods more exposed to tariffs, estimating that tariffs implemented through November 2025 raised core goods PCE prices by 3.1 percent through February 2026 and boosted core PCE prices overall by 0.8 percent, with pass-through effectively complete in the data so far. The analysis models tariff effects as building over time and estimates cumulative pass-through consistent with full dollar-for-dollar pass-through about seven months after implementation, with a tentative range of 5 to 9 months. Relative to earlier work on the 2018–19 China tariffs, pass-through from the 2025 tariff waves appears slower and less strong. Methodological extensions include using the 2025 release of the Bureau of Economic Analysis Global Value Chain Input-Output tables to measure direct and indirect import prevalence at a more disaggregated commodity and origin level, incorporating tariff variation across both products and exporter countries, and estimating dynamics with a distributed-lag regression that allows multiple tariff waves to affect prices simultaneously. The estimates capture “first-round” relative price effects and do not cover tariff changes associated with the February 2026 Supreme Court ruling against the International Emergency Economic Powers Act tariffs. The note highlights that the 10 percentage point reduction in China tariffs in November 2025 materially limits estimated inflationary effects, and it flags ongoing uncertainty around long-run pass-through that the methodology is designed to reassess as additional monthly price data arrive.
Federal Reserve Board 2026-04-08
Federal Reserve Board research estimates 2025 US tariffs lifted core goods PCE prices 3.1% and added 0.8% to core PCE through February 2026
The Federal Reserve Board published research estimating that 2025 tariff changes raised core goods personal consumption expenditures (PCE) prices by 3.1 percent through February 2026 and increased overall core PCE prices by 0.8 percent, with pass-through effectively complete within about seven months. The analysis finds slower and weaker pass-through than for the 2018–19 China tariffs, notes that the November 2025 reduction in China tariffs materially limited inflationary effects, and highlights remaining uncertainty around long-run pass-through.