The inflation situation in the US is not optimistic! The Federal Reserve Bank of New York says prices of goods not affected by tariffs are also rising

The US is expected to release inflation data for May next week, but some economists say the outlook is not optimistic.

According to a survey released by the Federal Reserve Bank of New York on Wednesday, US companies have not only raised the prices of imported products to offset tariff costs, but also increased the prices of goods not affected by tariffs. Economists warn that this pricing strategy will exacerbate inflation risks.

The survey was conducted between May 2 and May 9, involving approximately 110 manufacturers and over 200 service companies in New York and New Jersey. At that time, the Trump administration imposed tariffs of up to 145% on China, as well as an additional 25% tariff on imported steel and aluminum.

However, the situation changed after the survey period. On May 12, China and the US issued a joint statement in Geneva, agreeing to mutually reduce tariffs within 90 days. In early June, Trump announced an increase in steel and aluminum import tariffs to 50%.

A significant proportion of companies surveyed revealed that they had raised the prices of products not affected by tariffs as part of a broader strategy to cope with the impact of tariffs.

Out of necessity,

a heavy construction equipment supplier stated in the report that they had increased the prices of goods not affected by tariffs to create additional profit margins before the tariff-induced cost increases.

The Federal Reserve Bank of New York pointed out in the report that most companies had passed on at least some of the tariff costs in the form of price increases, while one-third of manufacturers and 45% of service companies had fully passed on the tariff costs.

Economists believe that the price increases for products not affected by tariffs are due to the pressure companies feel in managing economic uncertainty. Susan Ariel Aaronson, a professor at the Elliott School of International Affairs at George Washington University, told the media that no one knows what policies Trump will introduce tomorrow, as his trade policies lack both consistency and predictability.

She warned that when companies feel the need to raise the prices of more products to cope with tariffs, this is definitely not good for inflation.

Rebecca Homkes, a lecturer at London Business School and a faculty member at Duke University's Fuqua School of Business Executive Education, further pointed out that some companies will do more, such as laying off employees, removing certain products from the market, or raising the prices of products they originally did not want to increase.

She also warned that price increases are harmful to consumers but are a necessary measure for companies. This only happens when companies have exhausted other options and can no longer continue to absorb the costs.