Williams says average effective tariff rate estimates range between 15 and 20 percent.
“Combining enacted and announced tariffs, estimates of the resulting average effective tariff rate range somewhere between 15 and 20 percent.”
Williams says tariffs have been overwhelmingly borne domestically by U.S. firms and consumers per New York Fed analysis.
“First, the tariffs have overwhelmingly been borne domestically—a New York Fed analysis estimates that most of the burden has fallen on U.S. firms and consumers.”
Williams expects tariffs to boost overall prices by 1 to 1.5 percent through first half of next year.
“All in all, I expect tariffs will boost overall prices by a total of between 1 and 1-1/2 percent, with these effects continuing through the first half of next year.”
Williams notes three-quarters of businesses passed tariff costs to customers, half of service firms fully.
“The survey’s key finding is that about three-quarters of respondents in both sectors passed along at least some of these higher costs to their customers by raising prices.”
Williams says tariff effects on inflation should begin to dissipate later this year.
“Inflation remains somewhat elevated due to the effects of tariffs, but those effects should begin to dissipate later this year.”
Williams reports tariff receipts as share of imports rose from 2.25 percent early year to 8 percent in May.
“Net tariff receipts as a share of imports rose from about 2-1/4 percent in the first three months of the year to about 8 percent in May.”
Williams forecasts tariffs will add roughly 1 percentage point to inflation through early 2026.
“Overall, I expect tariffs to boost inflation by about 1 percentage point over the second half of this year and the first part of next year.”
Williams expects tariff effects on aggregate data to increase in coming months despite modest impacts so far.
“All in all, although we are only seeing relatively modest effects of tariffs in the hard aggregate data so far, I expect those effects to increase in coming months.”
Williams estimates tariffs have added 0.5 to 0.75 percentage points to the current 3 percent inflation rate.
“My current estimate is that, to date, the increase in tariffs has contributed around one half to three quarters of a percentage point to the current inflation rate of about 3 percent.”
Williams estimates tariffs have added roughly half a percentage point to current inflation running at about 2.75 percent.
“My current estimate is that the increase in tariffs to date has contributed around one half of a percentage point to the current inflation rate of about 2-3/4 percent.”
Williams estimates effective tariff rates at 15-20 percent, with receipts rising from 2.25 percent to 10 percent by July.
“By comparison, net tariff receipts as a share of imports rose from about 2-1/4 percent in the first three months of the year to around 10 percent in July.”
Williams expects tariffs to have one-off price effects and inflation to decline later this year after peak tariff impact.
“Given the lack of second-round effects and well-anchored inflation expectations, I expect the tariffs largely to have one-off effects on prices.”
Williams concludes tariffs have been overwhelmingly borne by domestic businesses and consumers, not foreign producers.
“First, the tariffs have been overwhelmingly borne by domestic businesses and consumers, rather than by foreign producers.”
Williams concludes tariffs have been overwhelmingly borne by domestic businesses and consumers, not foreign producers.
“Based on granular analysis of the data in hand, we can draw a few conclusions. First, the tariffs have been overwhelmingly borne by domestic businesses and consumers, rather than by foreign producers.”
Williams reports manufacturers saw 20 percent cost increases from tariffs, service firms 15 percent.
“Manufacturers indicated that over the past six months, the cost of their tariffed goods had risen by about 20 percent, on average. For service firms, the increase was about 15 percent.”
Williams sees no significant second-round effects from tariffs spilling over to broader economy yet.
“In addition, underlying inflation outside of imported goods and energy has so far remained stable, and there are still no signs of significant second-round effects from tariffs spilling over to the rest of the economy.”
Williams expects uncertainty, tariffs, and reduced immigration to restrain spending and labor force growth.
“But based on what the data tell us today, I expect uncertainty and tariffs to restrain spending and reduced immigration to slow labor force growth.”
Williams says there are no signs of significant second-round effects from tariffs.
“There are no signs of significant second-round effects from tariffs spilling over to the rest of the economy,”
Williams reports three-quarters of businesses passed along tariff costs, with a third to half fully passing them through.
“Indeed, almost a third of manufacturers and nearly half of service firms reported fully passing along all tariff-related cost increases.”
Williams sees no significant second-round tariff effects or labor market inflation pressures.
“There are no signs of significant second-round effects from tariffs spilling over to the rest of the economy, and the labor market is not adding to inflation pressures.”
Williams attributes about one percentage point of March inflation to tariffs and energy prices.
“The combination of higher tariffs and energy prices has contributed about a percentage point to that figure.”
Williams states inflation is around 3 percent with tariffs adding 0.5 to 0.75 percentage points.
“inflation is currently hovering around 3 percent, with tariffs contributing between one half and three quarters of a percentage point to this figure.”
Williams estimates tariffs have added 0.5 to 0.75 percentage points to current inflation without second-round effects.
“My estimate is that increased tariffs have contributed about one half to three quarters of a percentage point to the current inflation rate.”
Williams notes actual tariffs in effect recently were much smaller than announced rates.
“But actual tariffs in effect in recent months were much smaller than that, as seen by the amount of tariff revenue collected each month.”
Williams says short- and medium-term inflation expectations returned to pre-pandemic levels after April tariff pullback.
“And with the pullback in tariffs since early April, short- and medium-term inflation expectations have receded back close to their pre-pandemic averages.”
Williams anticipates tariff pass-through to prices will mostly complete in the next few months.
“I anticipate the pass-through of current tariffs to prices to be mostly completed in the next few months and therefore their effects on the inflation rate to fade.”
Williams sees no second-round effects from tariffs, citing anchored expectations and no supply chain bottlenecks.
“In particular, inflation expectations are very well anchored, no broad-based supply chain bottlenecks have emerged, labor markets are not creating inflationary pressures, and wage growth has moderated.”
Williams identifies tariffs, Middle East conflict, and AI-driven demand as the three drivers of elevated inflation.
“The first is the effect of higher tariffs on imported goods. The second is supply chain disruptions and higher energy and commodity prices owing to the conflict in the Middle East.”
Williams says first-half GDP growth was about 1.5 percent, well below last year's 2.5 percent pace.
“Looking through the downs and ups in the data, growth in the first half of the year was about 1-1/2 percent, well below last year’s 2-1/2 percent pace.”
Williams expects new tariffs to replace expiring ones without adding significant additional price pressure.
“My expectation is that any new tariffs will primarily replace those that were curtailed or will soon expire, so we shouldn’t see a significant additional impulse on prices from this source going forward.”
Williams says inflation is at 4 percent, driven first by higher tariffs on imported goods.
“This elevation primarily reflects three drivers. The first is the effect of higher tariffs on imported goods.”
Williams expects tariff effects to fade by mid-2026, with inflation reaching 2% in 2027.
“As a result, I expect the effects of tariffs on inflation will play out over the rest of this year and the first half of next year.”
Williams notes inflation expectations have receded to pre-pandemic averages after April tariff pullback.
“Longer-run inflation expectations have remained stable. And with the pullback in tariffs since early April, short- and medium-term inflation expectations have receded back close to their pre-pandemic averages.”