Tariffs may lift prices for US households

Goldman Sachs economists warn tariffs will increasingly push costs onto U.S. consumers as price pressures rise and markets reassess rate-cut bets.

US Consumers to Bear Brunt of Tariff Hit Goldman Economists Say

Tariffs announced by the Trump administration are likely to lift prices for U.S. households, according to Goldman Sachs economists. They note that US companies have borne the initial burden but the pass-through to consumers could intensify as new levies take effect. Through June, consumers absorbed about 22% of tariff costs; if recent tariffs follow patterns seen in past years, that share could rise to roughly 67%. The note also highlights how the price impact adds another layer of uncertainty for a Treasury market already reacting to shifts in expectations for the pace of rate cuts.

The analysis signals that the economic effect will vary by sector and by how quickly policy responses unfold. It also raises questions about inflation dynamics and household budgets if tariffs persist or widen.

Tariffs are not just a policy tool they reshape everyday living costs and consumer sentiment. The forecasted pass-through to households implies a longer inflation friction that could complicate the stance of the Federal Reserve. At the same time the market is left balancing tariff timing with policy signals which can heighten volatility for investors and businesses.

For policymakers the challenge is to manage trade goals without triggering a political backlash or eroding public trust. The risk is that sustained price pressures widen the gap between policy intentions and household experiences, fueling public criticism and market uncertainty.

Highlights

Policy signals in the coming weeks will determine the real impact on households.