Trump tariff costs now reaching consumers, AI factors equally driving up inflation: What Fed analysis reveals

A new research last week found that by mid-2026, tariffs and artificial intelligence (AI) factors were "contributing similarly to elevated core inflation across the United States (US).Researchers at the Minneapolis Federal Reserve revealed that massive AI demand on memory and computer hardware drove up core inflation as much as the tariffs President Donald Trump imposed early last year."As the AI investment boom drives demand for memory and other computer hardware, the spillovers to goods prices appear to be at least as large as tariffs in keeping core inflation high," according to a Minneapolis Fed analysis published Friday, August 28.The article detailing the findings of the study was titled, "Initially delayed, the pass-through of tariffs to consumer prices has arrived."Key highlights of the research:1. As of July 2026, tariffs contributed 0.2 to 0.4 percentage points to core inflation, which remains above Fed target levels2.