Economists contend that the evidence indicating that sweeping U.S. tariffs have contributed to rising inflation for consumers is “overwhelming,” suggesting that these levies could further exacerbate price increases. Since commencing his second term in January, U.S. President Donald Trump has implemented a robust trade policy that has elevated the nation’s effective tariff to its highest point in almost a century.

Numerous economists and analysts have consistently forecasted that the increased import tariffs may ultimately contribute to inflationary pressures, as firms seek to counterbalance rising input costs by elevating prices. In a note on Friday, researchers at the brokerage, including Aditya Bhave and Stephen Juneau, estimated that the duties currently contribute approximately 50 basis points to the underlying inflation in the personal consumption expenditures price index, a key measure of inflation closely monitored by the Federal Reserve.

It was noted that consumers are “bearing 50%-70% of the tariff cost to date,” with the “clearest” indication of the impact of the levies manifesting in heightened prices for goods. “That suggests a couple of possibilities: […] pass-through still has more room to run, or […] businesses will absorb more of the cost.” economists stated, “We believe the former is more likely than the latter and further inflation pressures are in the pipeline.”

Last week, data revealed that U.S. consumer price growth accelerated in the 12 months through September to 3.0%, although the pace was slower than widely anticipated by economists. The reading, delayed by an ongoing federal government shutdown, did not suffice to impede a highly anticipated Fed interest rate cut this week, as policymakers seemed to prioritize strengthening a weakening labor market over indications of persistent inflation. Concerns regarding price stability persist, as Kansas City Fed President Jeffrey Schmid, who advocated for maintaining the current interest rates, indicated that his dissent was partially driven by apprehensions surrounding enduring inflationary pressures.