June Sees Inflation Spike as Trump’s Tariffs Impact Prices: What You Need to Know

Inflation has been on the rise lately, and it’s closely tied to the tariffs introduced during Donald Trump’s presidency. Business leaders have warned for a while that high tariffs would lead to higher prices for consumers. While things seemed stable in the spring, prices started to climb in May and have continued to do so through June.

By June, annual inflation reached 2.7%, up from 2.4% in May, according to the Consumer Price Index (CPI), which tracks prices for a range of goods and services. Core CPI, which excludes food and energy prices, ticked up to 2.9%.

Specific items have seen notable price increases. For instance, prices for appliances, furniture, and toys—which are often imported—have risen. Food prices jumped as well. Beef, coffee, and citrus fruits each rose by over 2%. Even though egg prices have been falling for a bit, they’re still 27% higher than last year.

Inflation is still much lower than the highs of three years ago when it peaked at around 9%. However, recent tariffs appear to be halting inflation’s downward trend. According to the Yale Budget Lab, the average U.S. tariff rate now stands at 18.7%, the highest since 1933. This includes hefty tariffs like 30% on imports from China and 50% on steel and aluminum.

There are also talks about new tariffs. Trump has threatened 30% tariffs on the EU and Mexico and 35% on Canada, while Brazil could face 50% tariffs. If these go through, prices could increase even further, though the timing remains unclear. Negotiations have been pushed back multiple times, with hopes to wrap things up by Labor Day in September.

In response to the inflation news, Trump has called on the Federal Reserve to lower interest rates, tweeting, “Consumer Prices LOW. Bring down the Fed Rate, NOW!!!”

Despite this, the Fed might not make any changes soon. Three cuts were made last fall, but with prices rising, officials, including Jerome Powell, have suggested that inflation will continue during the summer, making it challenging to meet their 2% target.

Experts emphasize that consumers should stay informed, as shifts in tariffs and trade negotiations can have widespread effects on everyday prices. Understanding these changes can help individuals navigate their budgets more effectively. The landscape is constantly changing—keeping an eye on these trends is crucial.

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