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NY Fed says firms in its district aren't done passing on tariff costs 
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NY Fed says firms in its district aren't done passing on tariff costs 
Jul 8, 2026 9:03 AM

July 8 (Reuters) - Many Mid-Atlantic U.S. businesses aren't done raising prices due to President Donald Trump's slate of import tax increases, new research from the Federal Reserve Bank of New York, released on Wednesday, said.

"Our latest regional business surveys reveal that nearly half of firms that have paid tariffs still plan additional price increases to offset these costs, with some expecting to raise prices six months or more in the future," bank economists wrote on a blog on the bank's website. This outlook means "inflationary pressures due to tariffs may well last for some time to come." 

Based on surveys of businesses in the district, just under a third plan to raise prices over the next half year, while another set of firms plan longer-ranging increases.

The New York Fed researchers said an immediate lack of passthrough of higher costs likely owes to a few factors. For some, contracts have prevented sharing higher costs to date, and those adjustments can now take place when new contracts are set.

Other firms "trickle up" price increases due to tariffs because "this pricing strategy allows firms to avoid shocking their customers," the researchers wrote.

The latest findings from the bank on tariffs and inflation are centered on firms that operate in New York, parts of Connecticut and New Jersey, along with Puerto Rico and the U.S. Virgin Islands, and the report does not map this experience to broader national trends.

In a Tuesday television interview, John Williams, leader of the New York Fed, said that broadly speaking when it comes to the impact of tariffs driving up prices "we're near the peak effect of that." 

Earlier this year the New York Fed found itself in the crosshairs of the Trump White House after research said that most of tariff increases were being passed through to consumers and not eaten by foreign producers, as the president has long contended.

That finding unleashed a pointed attack on the central bank even as the conclusion was no surprise to most economists. Trump's tariff regime since then has been complicated by the fact that the Supreme Court said key parts of it were done illegally.

High inflation has vexed Fed officials for some time. Price pressures, distorted by COVID-19 factors, had been on a path back to the central bank's 2% target until Trump returned to office and imposed the trade levies.

Inflation has been further pressured higher by the Middle East war, which returned to a hot phase on Tuesday. The fresh combat may mean that energy prices again begin to rise. Sustained high inflation could give Fed hawks fresh reasons to argue for central bank rate hikes later this year.

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