US Inflation Rises to 2.7 Percent in June Amid Tariff Impact

US inflation rose to 2.7% in June 2025, marking the second consecutive monthly increase and the highest annual rate since February, as President Trump's tariffs begin to impact consumer prices. The Consumer Price Index (CPI) increased 0.3% month-to-month, while core inflation, which excludes volatile food and energy prices, climbed to 2.9% to 3.0%, its highest level since 2021. The tariffs have started to raise costs for categories like furniture, toys, recreational goods, and automobiles, though some sectors like used cars and trucks saw unexpected price declines. Economists note that companies had initially absorbed some tariff costs by stocking inventories and finding alternative suppliers, but the full inflationary effects are now emerging as businesses pass on higher import costs to consumers. The Federal Reserve is closely monitoring these inflation trends amid ongoing tension with President Trump, who has pressured Fed Chairman Jerome Powell to lower interest rates despite inflation concerns. The outlook remains uncertain, with potential further tariff increases threatening to sustain inflationary pressures and influence Fed policy decisions.