Would Prices Have Fallen Without Tariffs? NY Fed Says Yes

TL;DR: New York Fed researchers estimate that tariffs introduced in April 2025 added 2.9 percentage points to annual inflation across 67 categories of consumer goods by February 2026. Without them, those prices would have fallen by almost 1%. For investors, the finding matters because the price pressure is expected to linger into 2027.

Researchers at the Federal Reserve Bank of New York estimate that tariffs first introduced in April 2025 added 2.9 percentage points to annual inflation for a group of consumer goods by February 2026, as Chase summarized on November 2, 2026. CNBC reports that the sample covers 67 types of goods and that prices for those products would have pulled back by almost 1% without the levies.

This is an estimate from a model, not a count of receipts, and it covers only a slice of what people buy. Why should a private-fund holder care? If goods prices stay elevated, rate cuts get harder to justify, and the rate path sets what a lockup has to pay you. That link is our inference, not something the study says.

What did the New York Fed actually find?

The researchers measured how much tariffs moved prices on a basket of everyday goods. Business Insider reports that the economists weighted the 67 goods using 2022 consumer spending data.

A separate New York Fed staff report looks at pass-through, meaning how much of a tariff reaches the shelf. According to the New York Fed, about 26 percent of the tariff increase passes through to consumer prices. Think of it as a leaky pipe: of each dollar of added tariff, roughly 26 cents shows up in what shoppers pay. Some of that comes directly, because tariffs raise the price of foreign varieties of a good. The rest comes indirectly, through costlier imported inputs and higher markups by domestic producers who face less competition from pricier imports.

Figure	Result	What it measures	Source
Tariff contribution to annual inflation, February 2026	2.9 percentage points	67 goods categories	Chase, CNBC
Price change without tariffs	Decline of almost 1%	Same 67 categories	CNBC
Share of tariff increase passed to consumers	About 26%	Staff report on pass-through	New York Fed

Notice that the first two rows describe one basket, while the third comes from a different paper. Don't stack them into a single story.

Why will prices stay high into 2027?

The indirect channel is slow. The New York Fed says the indirect effect takes nine to twelve months to move through supply chains. A tariff that's struck down or paused doesn't erase costs already built into inventory, contracts and supplier pricing.

That fits CNBC's account that consumers are still expected to pay elevated prices into 2027. Chase notes that the Supreme Court invalidated the tariff policy, which rested on the International Emergency Economic Powers Act (IEEPA), on February 20, 2026, after more than 10 months of tariffs had already affected inflation.

What does the study not tell you?

It doesn't cover all prices. CNBC notes the researchers didn't say which 67 types of goods they evaluated, so outsiders can't check the basket. The New York Fed also states that its pass-through estimates are measured relative to less-exposed goods and hold aggregate conditions fixed, which means they describe a controlled comparison and not the whole economy at once.

What does this mean for accredited investors?

Sticky goods prices keep the rate debate alive. Higher short-term rates raise the return a lockup has to earn, so a private credit fund or a syndication has to pay you more to justify tying up your money. Our earlier look at what a Fed hold means for private credit allocations walks through that math, and the piece on CPI-linked infrastructure funds covers one way funds try to pass inflation through.

Downside first. If a sponsor's projected yield assumes stable input costs, the tariff lag is how it gets hurt. A projected yield is a target, not a result, so ask how much of it survives fees and a year of higher costs. Sponsors with thin margins feel pass-through first, and the pressure on them shows up in fundraising too, as in our look at middle-market private equity fundraising at a six-year low. Pricing power is the question to put to any consumer-facing sponsor.

Common mistakes

The first is treating 2.9 points as the whole inflation rate. It's the tariff contribution to a sample of goods, not to the consumer price index. The second is reading "26 percent pass-through" as proof the tariffs were cheap, when the figure only measures what reached consumer prices. The third is assuming the Supreme Court ruling resets prices overnight. The New York Fed's work says the effects move through supply chains over months.

FAQ

How much did tariffs add to inflation, according to the New York Fed? An estimated 2.9 percentage points to annual inflation across 67 categories of goods by February 2026, according to Chase. That covers a sample of goods, not the full consumer price index.

Would prices really have fallen without tariffs? For the goods studied, yes. CNBC reports the team found prices would have pulled back by almost 1%. The estimate depends on the researchers' model and on a basket they didn't publicly list.

How much of a tariff reaches consumers? The New York Fed's staff report finds that about 26 percent of the tariff increase passes through to consumer prices. That's a separate paper from the 2.9-point estimate.

Will tariff-driven prices keep rising? Consumers are still expected to pay elevated prices into 2027, CNBC reports. Price growth on the goods studied peaked at the start of 2026, so elevated is not the same as rising.

What to do today

Pick one private fund or property you hold with consumer-facing exposure, and ask the sponsor in writing how much of its input cost increase it has passed on to customers and how much it has absorbed. If you'd like this kind of read on the numbers behind the headlines each week, the free AIN briefing is the place to start.

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