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    Fed board contenders Miran, Bullard say Trump’s tariffs are not causing inflation

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    Two economists who are figuring in prominently for vacancies at the Federal Reserve said Tuesday they don’t believe tariffs cause inflation.
    In separate CNBC interviews, Stephen Miran and James Bullard rejected the idea espoused by many non-White House economists that the duties will lead to longer-term higher prices.

    Marlo Ramirez carries slabs of beef to be prepared for a customer in a grocery store on July 22, 2025 in Miami, Florida.
    Joe Raedle | Getty Images

    Two economists who are figuring in prominently for vacancies at the Federal Reserve said Tuesday they don’t believe tariffs cause inflation, a view that would be in line with President Donald Trump’s desire for the central bank to cut interest rates.
    In separate CNBC interviews, Stephen Miran and James Bullard rejected the idea espoused by many non-White House economists that the duties will lead to longer-term higher prices.

    Trump has tapped Miran to fill out the remaining few months of the term of former Governor Adriana Kugler, who left the position Friday. Bullard’s name has surfaced in reports this week as being one of at least a half dozen contenders to fill Chair Jerome Powell’s seat when his term expires next May. Bullard also is a former St. Louis Fed president.

    Both did not commit to how they would vote on interest rates. However, they praised Trump’s pro-growth agenda and also made comments in line with the president’s stand that inflation is not a problem.
    “There just still continues to be no evidence whatsoever of any tariff-induced inflation,” said Miran, chair of the White House Council of Economic Advisers. “Lots of folks who were expecting … doom and gloom, it just hasn’t panned out, and it continues to not pan out for them.”
    The comments came after the Bureau of Labor Statistics reported that inflation as measured by the consumer price index was at 2.7% for July, still above the Fed’s 2% target but a shade below Wall Street expectations.
    Bullard said data continues to show that Trump’s aggressive tariffs have not led to inflation. He predicted the rate-setting Federal Open Market Committee would begin cutting in September and likely lop off a full percentage point from its benchmark interest rate over the next 12 months, which he said would get the rate “close to” neutral.

    “The committee put their rate-cut program on pause when the tariff situation arose six months ago, and now you have six months of evidence,” he said. “I don’t really think tariffs cause inflation. Taxes don’t cause inflation. So what you’re seeing in the data is very muted effects that are one-time increases in the price level.”
    Both Miran and Bullard also stressed the importance of Fed independence, an issue that has been tested during both Trump terms as he has publicly and aggressively berated policymakers for not lowering. After the CPI data, Trump again took to Truth Social to repeat his attacks on Powell and his demand for easing. The president has said the Fed should cut by 3 percentage points.
    “The damage [Powell] has done by always being Too Late is incalculable,” Trump wrote. “Fortunately, the economy is sooo good that we’ve blown through Powell and the complacent Board.”
    Bullard said Trump “is entitled to his views.”
    “He’s got long experience in real estate markets. It’s all about borrowing money at the lowest rate possible,” Bullard said. “Good for him. He’s got views, but a lot of people have views, and you know, if you don’t want to hear that, this is probably the wrong job.”

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    Tariffs are generating inflation

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    Consumer prices rise 2.7% annually in July, less than expected amid tariff worries

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    Lisa Lungaro shops at the butcher’s counter in a grocery store on July 22, 2025 in Miami, Florida.
    Joe Raedle | Getty Images

    A widely followed measure of inflation accelerated slightly less than expected in July on an annual basis as President Donald Trump’s tariffs showed mostly modest impacts.
    The consumer price index increased a seasonally adjusted 0.2% for the month and 2.7% on a 12-month basis, the Bureau of Labor Statistics reported Tuesday. That compared to the respective Dow Jones estimates for 0.2% and 2.8%.

    Excluding food and energy, core CPI increased 0.3% for the month and 3.1% from a year ago, compared to the forecasts for 0.3% and 3%. Federal Reserve officials generally consider core inflation to be a better reading for longer-term trends.

    A 0.2% increase in shelter costs drove much of the rise in the index, while food prices were flat and energy fell 1.1%, the BLS said. Tariff-sensitive New vehicle prices also were unchanged though used cars and trucks saw a 0.5% jump. Transportation and medical care services both posted 0.8% moves higher.
    Stock market futures posted gains after the report while Treasury yields were mostly lower.
    Tariffs did appear to show up in several categories.
    For instance, household furnishings and supplies showed a 0.7% increase after rising 1% in June. However, apparel prices were up just 0.1% and core commodity prices increased just 0.2%. Canned fruits and vegetables, which generally are imported and also sensitive to tariffs, were flat.

    “The tariffs are in the numbers, but they’re certainly not jumping out hair on fire at this point,” former White House economist Jared Bernstein said on CNBC. Bernstein served under former President Joe Biden.
    The report comes at both a critical time for the economy and the BLS itself, which has come under Trump’s criticism for what he has charged is political bias against him. Trump fired the prior BLS commissioner after a surprisingly weak July nonfarm payrolls report earlier this month, and on Monday said he would nominate E.J. Antoni, a critic of the bureau, as the new chief.
    While the political jockeying has occurred, Fed officials have been watching inflation measures closely as they weigh their next interest rate decision in September.
    At issue is whether the tariffs will cause a one-time price increase or will lead to a lasting upturn for inflation. Economists generally view tariff impacts as the former though the broad swath of items covered under Trump’s edicts have sparked worries that the effect could be longer lasting.

    Futures market pricing is pointing strongly to a Fed rate cut in September. However, a raft of data between now and then could influence both the decision for that meeting and the central bank’s future course. Fed officials of late have been expressing increasing levels of concern about the labor market, which would bode for rate reductions.
    Traders increased the implied odds for a September move following the release, and also put the chances of another reduction in October at about 67%, up from 55% the day before, according to the CME Group’s FedWatch.
    The CPI is not the Fed’s primary inflation forecast tool. The central bank uses the Commerce Department’s personal consumption expenditures price index, but the CPI, as well as the producer price index that will be released Thursday, feeds into that calculation.
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