Another Federal Reserve Tarifflation Study Falls Apart Under Scrutiny
The St. Louis Federal Reserve released a study last week claiming that President Trump’s 2025 tariffs have added roughly 0.5 percentage points to consumer inflation. The analysis, published on the bank’s “On the Economy” blog, uses sophisticated econometric modeling to trace how tariff costs flow through to consumer prices.
There’s just one problem: the study does not actually show that tariffs are adding to inflation. In fact, the data the study depends on can be just as easily deployed to show that tariffs are decreasing inflation by holding down prices on non-tariffed items.
The Fed researchers ran a statistical comparison of how prices moved across categories with different tariff exposure, a form of what economists like to call a regression. They measured how much prices rose across various categories and compared that to each category’s exposure to tariff
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