Impact of Trump's Tariffs on US Consumer Prices

US inflation rose to its highest level in four months in June, with consumer prices increasing by 0.3%, pushing the annual inflation rate to 2.7%, the highest since February. The rise was driven by factors including tariffs, as businesses passed along higher import costs to consumers. Economists had anticipated the increase, with gas prices playing a significant role in lifting the overall index. Excluding gas and food, core CPI rose by 0.2% from May and 2.9% for the 12 months ended in June.

Stocks showed mixed reactions to the data, with the Dow down 0.5%, the S&P 500 mostly flat, and the Nasdaq up by 0.65%. The recent trade policy of imposing tariffs on goods by President Trump has caused uncertainty among businesses and consumers, leading to fluctuations in markets. Despite the tariff-related price hikes, inflation had remained relatively low due to various factors such as falling gas prices and businesses stocking up on inventories before the tariffs took effect.

Some goods with high exposure to tariffs have seen price increases, with categories like computers, appliances, and sporting goods experiencing notable jumps. The impact of tariffs on prices is expected to become more pronounced as businesses exhaust their pre-tariff inventories. The story is still developing, and more updates are expected.