US CPI Report and Tariff Impact: June Inflation Stable, but Watch Ahead

On July 16, 2025, Japan’s Nikkei reported the US June CPI (Consumer Price Index).

This blog analyzes the CPI data, market reactions, and the contrasting views between the Trump camp and the Federal Reserve.

June CPI and Limited Tariff Impact

The overall CPI rose by 0.2% from the previous month, below the forecast of 0.3%.

Core CPI (excluding food and energy) also recorded a 0.2% increase.

New car prices fell 0.3%, and used cars declined by 0.7%, showing no significant impact from tariffs.

Furniture and appliances saw modest increases of +0.4% and +1.9% respectively, but these were viewed as within statistical error margins.

Year-over-year, CPI rose 2.7% and Core CPI 2.9%, reflecting mild inflationary pressure.

Diverging Views Between Trump and the Fed

Atlanta Fed President Bostic commented that price pass-through from tariffs may take over a year.

St. Louis Fed gave a similar view, expecting effects later in 2025.

Meanwhile, Trump argued that inflation is not a concern and urged the Fed to lower rates.

Fed Chair Powell remains cautious and does not support immediate rate adjustments.

Trade Negotiations and Inflation Concerns

Indonesia reduced tariffs on US goods from 32% to 19%, with mutual tariff exemptions also discussed.

Brazil, by contrast, raised tariffs to 50%, showing how tariff impacts vary by country.

Currently, companies are absorbing costs, but gradual price increases may emerge in the second half of 2025.

If companies can no longer absorb costs, inflationary risks may intensify.

Conclusion: Monitor Inflation and Policy Trends

As of June, tariff-driven inflation in the US remains limited.

But future CPI trends and the Fed’s response will be key for businesses and consumers.

Economic policy decisions in the coming months will shape inflation risk.