February inflation numbers not yet reflective of Trump’s tariffs: CEI analysis

Inflation rose 0.2 percent across all sectors in February, down from 0.5 percent in January. CEI senior economist Ryan Young says Trump’s tariffs did not play a significant role in February’s slight increase, but inflation reports in the coming months may tell a different story.

“Tariff chaos hasn’t yet caused inflation indicators to spike. Part of this is because President Trump doesn’t go through with all of his tariff threats, and part of it is because relatively few tariffs phased in during February. It is too early to hazard a guess on what March and April’s data will look like.

“The Fed’s job is a lot harder than it was two months ago. It will likely hold interest rates steady at next week’s interest rate meeting. Trump has been vocal about wanting the Fed to cut rates in order to stimulate the economy. But if the Fed has to raise rates to counter rising inflation indicators from Trump’s tariffs, this may cause Trump to increase political pressure on the Fed, threatening its independence. We are looking at a potential no-win scenario for both the Fed and for inflation.”