US inflation jumps as Trump tariffs 'bite'
Consumer prices are climbing and the inflation rate rose to its highest level in four months
What happened
Consumer prices rose 0.3% in June, according to Labor Department data released Tuesday, pushing the annual inflation rate to 2.7%. That's the highest rate since February.
Imported items saw some of the steepest price hikes. The cost of appliances, for example, jumped 1.9%, the biggest monthly rise since the Covid-19 pandemic in 2020.
Who said what
While the inflation numbers aren't "as bad as expected," they suggest that President Donald Trump's import tariffs are "starting to bite," Heather Long, the chief economist at Navy Federal Credit Union, told CNN. "A long stretch when Trump's policies left little imprint on the hard data appears to be ending," said The Wall Street Journal.
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Shortly after the report was released, Trump posted on Truth Social that the Federal Reserve should cut interest rates "NOW!!!" But the new data will likely undermine Trump's "massive pressure campaign" on Fed Chair Jerome Powell, said Politico. The report deals a "knock-out punch to the tariff inflation deniers," Samuel Tombs of Pantheon Macroeconomics said in a note to clients.
What next?
Price pressures could "intensify over the coming months," said The New York Times, especially if Trump's threatened tariffs on the European Union and other countries come into effect on August 1. A decision about whether to cut interest rates will come after the next Fed meeting at the end of July.
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Jessica Hullinger is a writer and former deputy editor of The Week Digital. Originally from the American Midwest, she completed a degree in journalism at Indiana University Bloomington before relocating to New York City, where she pursued a career in media. After joining The Week as an intern in 2010, she served as the title’s audience development manager, senior editor and deputy editor, as well as a regular guest on “The Week Unwrapped” podcast. Her writing has featured in other publications including Popular Science, Fast Company, Fortune, and Self magazine, and she loves covering science and climate-related issues.
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