Claim:
In fall 2025, Bank of America reported “overwhelming evidence” showed tariffs imposed by U.S. President Donald Trump raised consumer prices.
Rating:
In early November 2025, a rumor circulated that Bank of America said “overwhelming evidence” showed U.S. President Donald Trump’s tariffs had fueled the increase in consumer prices in the United States.
For example a post on X made the claim, adding a “shocked expression” emoji (archived):
The same claim appeared on Reddit as well as on Facebook, where the account Occupy Democrats said tariffs had “skyrocketed prices” (archived).
The rumor stemmed from a Nov. 3, 2025, Business Insider report that said analysts at Bank of America had written in an Oct. 31 note there was “no uncertainty about” the fact that tariffs had pushed up inflation.
The claim about Bank of America was true. In an Oct. 31, 2025, research note titled “Tariffs: passing the buck to the consumer,” economists Stephen Juneau and Aditya Bhave from the bank’s research unit said there was “overwhelming evidence that tariffs have pushed inflation higher for consumers.”
Juneau and Bhave said consumers in the U.S. bore the brunt of the tariffs and may soon pay even more of their cost:
We estimate consumers are bearing 50-70% of the tariff cost to date. That suggests a couple possibilities: 1) pass-through still has more room to run, or 2) businesses will absorb more of the cost. We believe the former is more likely than the latter and further inflation pressures are in the pipeline.
“Pass-through” refers to the proportion of the tariffs filtering down to consumers.
“The data show that prices of goods have risen since October 1, 2024, especially for imported goods,” Juneau and Bhave wrote, outlining the evidence that tariffs caused higher inflation.
In addition, the tariffs contributed “30 to 50 bp,” or basis points, which corresponds to 0.3 to 0.5 percentage points of the increase in “core PCE,” one measure of inflation. The U.S. Bureau of Economic Analysis defines core PCE as “personal consumption expenditures prices excluding food and energy prices.”
In other words, Bank of America economists said that, as economists predicted and as Snopes reported during the 2024 presidential campaign, consumers are paying for most of Trump’s tariffs. Further, Juneau and Bhave believe consumers are likely to continue to pay for them, and pay more. “The effective tariff rate is likely to rise further, as the full effect of the measures announced by the administration in recent months sets in,” their note read.
Economists at Yale University’s Budget Lab and Harvard University’s Pricing Lab also were tracking the effects of tariffs on consumer prices, and both found they caused inflation.
The Budget Lab found in September 2025 that core goods prices were almost 2% higher in June 2025 than they would have been if they’d followed the pre-tariffs inflation trend.
The Pricing Lab published a working paper updated on Oct. 27, 2025, saying the annual inflation rate for the all-items consumer price index was 2.9% in August 2025, but without tariffs it would have been 2.2%. In other words, the paper said tariffs contributed 0.7 percentage points to the inflation measure.
