Consumer Prices Expected to Rise Amid Tariff Impacts

HOUSTON, Texas — The upcoming consumer price index (CPI) report is generating significant attention as analysts anticipate an uptick in inflation tied to recently implemented tariffs. Scheduled for release on Tuesday at 8:30 a.m. ET, this monthly report may provide insight into how increased tariffs are influencing consumer prices.

Chris Hodge, head U.S. economist at Natixis CIB Americas, noted, “June is the first reading when these tariffs are really going to start to bite in a very noticeable way.” The CPI is expected to show a 0.3% monthly increase for both headline and core rates, with annual readings suggesting a rise of 2.7% and 3%, respectively, for headline and core inflation.

According to economists, these inflation numbers remain above the Federal Reserve‘s 2% target, which complicates the central bank’s decision-making. Though the Fed utilizes a separate measure for forecasting, the CPI will help gauge the impact of tariffs on consumer spending. Hodge emphasized that he will scrutinize categories such as autos and apparel, which are particularly sensitive to tariffs.

The previous month’s CPI indicated limited price pressure, with both headline and core numbers rising just 0.1%. Prices for new and used vehicles, as well as apparel, had decreased. However, Goldman Sachs estimates that changes are on the horizon, predicting a core inflation gain of 0.2% for June.

Economists are particularly cautious about how tariffs could reshape price dynamics in sectors including furniture and electronics, anticipating a significant upward push from these tariffs in the following months. However, shelter prices—which have historically remained high—could offset some inflation.

The upcoming CPI report holds critical implications for the White House and Fed officials alike, as unexpected inflation could hinder the possibility of interest rate cuts, a policy change some believe is needed amid recent economic uncertainty. Hodge expressed concerns that the Fed needs to be vigilant of inflation trends before it can confidently adjust rates.