Inflation holds steady as Donald Trump ramps up new tariffs

Prices rose 0.2% in July in a sign that tariffs haven’t had a major impact on inflation so far, the government said Tuesday.

The Consumer Price Index rose 2.7% on a yearly basis, matching the level for the 12 months ending in June, according to the Bureau of Labor Statistics.

The trendline will weigh on Federal Reserve officials meeting in September to consider interest rates. President Trump wants the central bank to cut rates, but Chairman Jerome Powell and others at the Fed have resisted those calls.

“The damage he has done by always being Too Late is incalculable. Fortunately, the economy is sooo good that we’ve blown through Powell and the complacent Board,” Mr. Trump said on Truth Social.

Rising shelter prices were the main factor in the July increase, while the food index remained unchanged and gasoline prices fell. Things like medical care, airline fares, recreation and home furnishings saw a slight increase.

Core inflation, which excludes volatile food and energy prices, rose 0.3% for the month and 3.1% on a year-over-year basis. It is the first time since February that it grew more than 3% on a yearly basis, so some economists and congressional critics saw it as a sign that companies are starting to pass along tariff costs to consumers.

“President Trump promised to lower costs on ‘day one.’ Instead, his failed economic policies continue to drive up prices for Americans,” said Sen. Elizabeth Warren, Massachusetts Democrat and ranking member on the Senate Banking, Housing and Urban Affairs Committee.

The July CPI summary was the first major BLS report since Mr. Trump fired its leader, Erika McEntarfer, over disappointing job numbers he called rigged. Critics of the move said it would undermine trust in a bureau that is supposed to be independent and guided by facts.

Mr. Trump said he is nominating E.J. Antoni, an economist at the conservative Heritage Foundation who’s criticized BLS methodology, to lead the bureau.

“Our Economy is booming, and E.J. will ensure that the Numbers released are HONEST and ACCURATE. I know E.J. Antoni will do an incredible job in this new role,” Mr. Trump wrote on Truth Social.

Inflation remains mild compared to doomsday predictions earlier in the year, emboldening Mr. Trump to pursue an aggressive trade agenda that includes a blanket 10% tariff on all imports and heftier levies on dozens of trading partners.

However, Mr. Trump only recently implemented his most ambitious plans.

Last week, the president imposed tariffs ranging between 15% and 41% on more than 67 countries, raising levies to their highest levels in over a century. He’s solidified the 10% blanket tariff on all imports and is implementing the 15% rate he negotiated with places such as the European Union, Japan and South Korea.

Major price increases from the tariffs, if they occur, could take several weeks to appear. The National Retail Federation and footwear industry lobbies have urged the Trump administration to moderate tariff amounts, saying it would be difficult for companies to absorb the cost.

Mr. Trump says his approach will force companies to make products in America and bring in billions in revenue for the U.S. government.

In the meantime, he is pressuring the Fed to cut interest rates so U.S. borrowers have more favorable terms. While the president stopped short of trying to fire Mr. Powell, he’s making life miserable for the chairman.

Most recently, Mr. Trump highlighted the cost of a renovation project at the Fed’s building in Washington.

The president said Tuesday he is “considering allowing a major lawsuit against Powell to proceed because of the horrible, and grossly incompetent, job he has done in managing the construction of the Fed Buildings.”

“Three Billion Dollars for a job that should have been a $50 Million Dollar fix up. Not good!” Mr. Trump wrote.