Tariffs are expected to start showing up more in consumer prices as holiday shopping season starts

Core Insights - The impact of tariffs on consumer prices is expected to become more pronounced as the holiday shopping season approaches, despite a muted effect so far this year [1] - Economists believe that tariffs have contributed to elevated inflation measures, with Bank of America stating that tariffs have pushed consumer prices higher [2] - Bank of America estimates that tariffs will add approximately 0.5 percentage points to the core PCE inflation measure, raising the expected inflation rate to 2.9% in September [3] Tariff Impact on Inflation - Tariffs are expected to keep inflation measures elevated, preventing them from declining as they otherwise would [2] - The core PCE inflation rate has been above the Federal Reserve's target of 2% since March 2021, with recent estimates indicating a rate of 2.9% in August [3][4] - Two Federal Reserve officials expressed disagreement with the decision to lower the central bank's key interest rate, highlighting the importance of inflation metrics [4] Consumer Burden - Consumers are estimated to bear approximately 50%-70% of the total costs associated with tariffs, with businesses absorbing the remainder [5]