U.S. inflation picked up in June, aligning with market expectations and shifting investor focus toward the potential impact of the Trump administration’s proposed new tariffs. These policies could further drive up consumer prices and weigh on economic growth.

According to the latest data from the Bureau of Labor Statistics, the Consumer Price Index (CPI) rose 2.7% year-over-year in June 2025, slightly above May’s 2.4% and in line with forecasts. On a monthly basis, inflation came in at 0.3%—the largest increase since January—signaling a possible rebound in price pressures.

Core CPI, which excludes volatile food and energy prices, rose 2.9% annually, a bit below expectations. However, food prices climbed 3% from a year earlier, with notable spikes in the cost of everyday items: eggs surged 27.3%, coffee rose 12.7%, and beef increased 10.3%. Energy prices, after falling in May, also rebounded with a 0.9% month-over-month gain in June.

Major retailers like Walmart and Best Buy have warned that the newly proposed tariffs could raise import costs, which would likely filter through to higher retail prices. According to research from Goldman Sachs, about 70% of tariff-related costs historically end up being passed on to consumers. As a result, inflationary pressure on certain goods could become more pronounced in the coming months.

For now, the Federal Reserve is holding interest rates steady as it assesses the broader economic impact of these tariff measures. Fed Chair Jerome Powell has acknowledged that higher tariffs could lead to increased prices and slow economic growth, but emphasized that the actual impact depends on how extensively the tariffs are implemented.

Looking ahead, if tariffs remain in place, inflation is likely to continue climbing. Companies might find their profit margins squeezed by rising costs for raw materials and imports. With Q2 corporate earnings season approaching, investors will be watching closely to see how executives plan to navigate cost pressures and shifting consumer behavior—offering further clues on how tariffs might ripple through final pricing.