Will core goods CPI 3-month annualized exceed 3% by September 2026?
The Condition
US blanket tariffs (Section 122 or successor authority) of at least 10% remain in effect on July 24, 2026
Our Ensemble Estimates
Given tariffs persist: Will core goods CPI 3-month annualized exceed 3% by September 2026?
Given tariffs expire: Will core goods CPI 3-month annualized exceed 3% by September 2026?
Causal Effect
Persistent blanket tariffs substantially increase the probability of core goods CPI exceeding 3% annualized (+27pp). The mechanism is inventory buffer exhaustion forcing firms to reprice off tariff-inclusive replacement costs, with the measurement window aligning with expected buffer depletion. Without blanket tariffs, the remaining channels (dollar weakness, sector-specific tariffs) are insufficient to produce broad-based goods inflation acceleration.
Why This Matters
Tests whether tariff-driven cost-push inflation accelerates into consumer goods prices once absorption buffers are exhausted. The inflation regime analysis found inflation is primarily cost-push with FOMC staff directly attributing core goods inflation pickup to tariff effects. Currently, core goods CPI remains relatively contained because firms have absorbed tariff costs through margin compression, but Beige Book contacts report this absorption phase is ending. If blanket tariffs persist through the full 150 days and beyond, the combined pressure of 15% uniform tariffs, 50% steel/aluminum tariffs, and dollar weakness should accelerate goods price inflation as inventories turn over.
Resolution Criteria
BLS CPI report for August 2026 data (released mid-September 2026) shows the 3-month annualized change in core goods CPI (CPI-U less food, energy, and services) at or above 3.0%
Source Analysis
Inflation primarily driven by cost-push from layered tariff regime; FOMC staff directly attributes core goods inflation pickup to tariff effects while demand remains tepid