New York Federal Reserve president John Williams said Tuesday that President Trump's tariffs have been overwhelmingly borne by US consumers and businesses — and that their full effect hasn't yet been felt.

Williams' comments come after the New York Fed released a study last month showing that 94% of the tariffs were borne by the US in the first eight months of 2025. Just 6% of those costs were absorbed by foreign exporters.

The Trump administration blasted the study, with National Economic Council Director Kevin Hassett calling it an "embarrassment" and the "worst paper I've ever seen in the history of the Federal Reserve System."

For his part, Williams estimated that tariffs have increased inflation between half and three-quarters of a percentage point to date. Based on the Fed's preferred inflation gauge, inflation was 3% as of December, a full percentage point above the central bank's 2% goal.

"Owing to the effects of tariffs, progress toward that goal has temporarily stalled," he said.

Despite the lack of headway, Williams said there are no signs of significant second-round effects from tariffs and no global supply-chain bottlenecks have emerged.

Read more: 5 ways to tariff-proof your finances

He also said underlying inflation, excluding imported goods, has been moving in the right direction, but he still expects some tariffs to be passed through to consumer prices during the first half of this year.

"I expect the tariffs largely to have one-off effects on prices," Williams said. "Therefore, I anticipate inflation to start coming back down later this year when the peak effect of tariffs on the inflation rate is behind us."

The Supreme Court recently struck down a large portion of President Trump’s tariffs issued under emergency economic powers, leaving lingering questions about whether businesses will receive refunds for tariffs they had to pay that were not legal. The president and his administration, meanwhile, have moved to replace those tariffs, starting with a new global 10% tariff, with more expected under different authorities.

Williams also said the job market appears to have stabilized and that he expects economic growth to pick up this year.

Jennifer Schonberger is a veteran financial journalist covering markets, the economy, and investing. At Yahoo Finance she covers the Federal Reserve, Congress, the White House, the Treasury, the SEC, the economy, cryptocurrencies, and the intersection of Washington policy with finance. Follow her on X @Jenniferisms and on Instagram.

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