quote:
Prices
Prices grew at a moderate rate across a large majority of Districts, with only two Districts reporting slight price growth. Cost pressures due to tariffs were a consistent theme across all Districts. Several contacts that initially absorbed tariff-related costs were beginning to pass them on to customers as pre-tariff inventories became depleted or as pressures to preserve margins grew more acute. But contacts in a few industries—like retail and restaurants—were reluctant to pass costs along to price-sensitive customers. Energy and insurance costs continued to be a significant strain on margins. Looking ahead, firms expect some moderation in price growth, but anticipated prices to remain elevated as they work through increased costs.

FederalReserve

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Posted by Sterling Archer

Member since Aug 2012

8297 posts

Posted on 1/14/26 at 2:49 pm to bigjoe1

quote:
some tariff costs being passed to consumers

Anyone who ever thought this wouldn't happen wasn't thinking logically.

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Posted by cadillacattack

the ATL

Member since May 2020

10090 posts

Posted on 1/14/26 at 4:32 pm to bigjoe1

quote:
Overall, the topline inflation number is moderate at 2.7% much lower than economists projected. However, that’s not the only important element.

To get an understanding of the impact from tariffs to imported consumer goods, you can look at TABLE-2 [DATA HERE]. As you skim the categories we import the most, electronics, television, sporting goods, apparel, shoes, tools, furniture, etc. what you will note is that the prices are stable with negligible inflation impact noted.

What this means is that tariffs are not creating any upward price pressure on the imported good. The December ’25 imported good prices are stable despite massive tariffs applied in the second and third quarter of 2025.

As expected, based on history from 2018/2019, the exporting nation (and company) are absorbing most of the wholesale price increased due to tariffs. The imported goods are reaching the consumer with no substantively changed price.

Some domestically generated goods (food and housing) are still driving the overall inflation number, particularly in the year-over-year calculation, but no substantive price pressure is coming from the import sector.

Export dependent nations are squeezing their own productivity, their governments are subsidizing the critical industries, and the tariffs are being absorbed before the products leave the docks.

This is the USA “rust belt” in reverse. The same scenario played out in the USA for decades as domestic manufacturers tried to retain U.S. industry. Now the foreign countries are experiencing their own economic squeeze.