Bessent Blasts Warren's Trumpflation Tracker as Misleading
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What happened
Researchers at the Federal Reserve Bank of New York — Mary Amiti, Sebastian Heise, and David Weinstein — published a paper estimating that tariffs imposed during President Donald Trump's second term left prices for 67 unspecified categories of consumer goods 2.9 percentage points higher as of February 2026 than in a no-tariff counterfactual. They reported that prices for those products would have fallen by almost 1 percent without the levies, that each percentage-point increase in the average tariff was associated with consumer-goods prices roughly a quarter of a percent higher a year later, and that about two-thirds of the measured impact came from the tariffs themselves, with the rest from knock-on effects such as U.S. firms using imported inputs; they also estimated that around 26 percent of the prior year's tariff increases passed through into consumer prices. The paper said annual price growth in the tracked goods peaked at the start of 2026 and that elevated prices were expected to persist into 2027. In February 2026, the U.S. Supreme Court struck down many of those tariffs, producing billions of dollars in refunds to retailers; the White House said it would continue levies through other legal authorities, and imports from many countries often then faced tariffs of about 10 percent.
Sourcing check · Fully on the record · 2 articles
1 of 1 article cites a named source for the story. It was on the record from the first report.
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Omitted — what each side leaves out
Unpacked
A reader of left-leaning coverage never learns that the New York Fed paper did not identify an economy-wide price effect from tariffs. Right-leaning coverage cites the authors' warning that the no-tariff path "should be read with care" because it treats relative price gaps as overall inflation. That caveat is absent from CNBC, which reports the counterfactual as prices that would have fallen without the levies.
Left-leaning coverage leads with tariffs as the reason everyday items cost more. Right-leaning coverage leads with a chart it says reveals a sudden deflation in the paper's imagined world without those tariffs.
Did overall consumer inflation rise, fall, or hold still in the months the paper assigns a large tariff effect to those goods?
Bottom line
CNBC's account of the New York Fed paper never mentions the missing-intercept problem the authors said limits treating their price gap as overall inflation.
The receipts — 5 facts one side's coverage lacks
- The paper states that its no-tariff counterfactual should be read with care because it treats relative price effects as absolute ones.
- The paper's no-tariff scenario implies goods deflation reaching roughly minus 1.5 percent.
- Around 26 percent of last year's tariff increases ended up trickling into higher prices.
- Roughly two-thirds of the tariff-related price impact came directly from the levies themselves.
- Prices treated as independent of tariffs fell when tariffs arrived and rose when the estimated tariff effect faded.
The Left View
CNBC presents the New York Fed paper as "the clearest evidence yet" of the tariffs' impact "on consumers' wallets," arguing that the cost of many everyday items "would have declined last year and early this year" without the levies. It highlights the authors' line that tariffs have "a larger and more drawn-out impact on consumer prices than the direct effect alone would suggest," attributing the remaining share of the measured effect to knock-on costs for domestic firms that use imported parts and materials. The coverage sets that finding against Trump's argument that companies could absorb the extra cost rather than raise prices, citing the researchers' estimate that the prior year's tariff increases "ended up trickling into higher prices," and notes that consumers are still expected to face elevated prices into 2027.
The Right View
Breitbart argues the paper "doesn't really show that tariffs pushed inflation higher," because it measures faster price growth for more-exposed goods and then treats that relative gap as an absolute rise in the price level — what the authors themselves, on page 20, call the "familiar missing-intercept problem," warning that the counterfactual "treats these relative price effects as absolute ones, and should be read as illustrative." Breitbart says the Fed chart's no-tariff line implies goods deflation that "suddenly tripled" just as tariffs arrived, an unexplained reversal that PNC chief economist Brian LeBlanc, extending the series past the paper's February 2026 cutoff, finds mirrored by a sharp rebound when the estimated tariff contribution fades. The site's account is that higher prices on tariffed goods squeezed spending on other items, so non-tariffed prices fell in lockstep and later recovered; in that reading, the paper "treats non-tariff prices as exogenous when they are endogenous," and the dotted counterfactual "suggests … that tariffs did not have a large effect on goods inflation at all" but instead "pushed down some prices as well as pushed up others."
Our Take (balanced)
The left's strongest argument is incidence: tariff-exposed goods rose relative to less-exposed ones by the magnitude the New York Fed team reported, with a substantial share of levy increases showing up in consumer prices and further delayed effects through imported inputs — evidence that import taxes were not fully absorbed by firms. The right's strongest argument is identification: because date fixed effects absorb the economy-wide component, the study cannot convert a relative-price gap into a finding about the overall goods price level, and the counterfactual's deflation timed exactly to the arrival of tariffs (and rebound as the estimated effect faded) is difficult to treat as an independent baseline. The central unresolved tension is whether those relative increases should be read as adding to goods inflation, or as one side of an offsetting shift in which other prices fell.
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