In this note, we build on Minton and Somale (2025) to assess consumer price effects of additional tariffs implemented in 2025. We confirm the authors' preliminary findings that 2025's tariffs have led to statistically significant increases in prices of consumer goods more exposed to tariffs. Our estimates indicate that tariff effects on prices gradually build over time, with cumulative effects seven months after implementation consistent with our theoretical measures of full dollar-for-dollar pass-through. We estimate that the tariffs implemented through November of 2025 have raised core goods PCE prices by 3.1 percent through February 2026, explaining the entirety of excess inflation in the core goods category relative to pre-pandemic inflation rates and contributing to a 0.8 percent boost in core PCE prices as a whole. Moreover, the data so far suggest that pass-through of these tariffs is effectively complete.

We propose a methodology to detect tariffs' effects on personal consumption expenditure (PCE) prices in real time. We first construct theoretical predictions of tariffs' effects on individual PCE categories based on implemented tariff changes, the prevalence of imports in each category, and specific assumptions about pass-through from tariffs to consumer prices. We then assess whether our predicted tariff effects are able to explain observed changes in incoming PCE prices. We use an event-study approach to analyze consumer price pass-through from a particular tariff event and a local-projections approach to jointly analyze pass-through from multiple tariff events. We apply our methodology to evaluate the impact of US import tariffs implemented in 2018-19, and then we turn to the impact of tariffs implemented in February and March of 2025. For the February and March 2025 tariffs implemented on imports from China, we find that tariffs have already passed through partially to the consumer goods prices that we can observe through March. Our results indicate that the 2025 tariffs have so far contributed to a 0.1 percent increase in core PCE prices (goods and services prices, excluding food and energy).

Firms' forecasts of their own future costs are central to the propagation of shocks into inflation. We document five facts about corporate cost forecasts: they reflect firm-specific cost changes; they are excessively sensitive to own-firm costs, violating rational expectations; they over-react across horizons and sectors; they incorporate cost movements gradually; and they under-react to aggregate shocks until costs actually move. We embed an estimated belief model into a New Keynesian framework. The Phillips curve becomes less forward-looking and steeper. Supply disruptions are more inflationary because they immediately affect firm beliefs about costs, while demand shocks are less inflationary because firms fail to anticipate resulting wage pressures. Optimal monetary policy relies less on forward guidance and commitment, and immediate interest rate responses are more potent for controlling inflation.

When interest rates rise, fixed-rate mortgages generate a financial incentive for owners to keep their homes, creating "rate lock." We use unexpected changes in family size that cause households to move at different points in the mortgage rate cycle as instrumental variables to identify the causal effect of rate lock on house prices. A one standard deviation increase in the rate lock incentive (0.3pp lower average outstanding mortgage rate) caused 2.6pp higher nominal house price growth during the 2021–23 rate increases. A one percentage point lower outstanding mortgage rate reduced owner-to-renter transitions by 33% and overall moves by 42%. Simulations of a dynamic model indicate the 2021–23 tightening would have reduced price-to-rent ratios by 9.1% under adjustable-rate mortgages versus 3.5% under fixed-rate mortgages, showing that rate lock partially offsets but does not eliminate the negative price effects of higher capital costs.

Markets, like an invisible hand, often appear to contradict econometric assumptions that rule out spillovers from individual treatment onto others' outcomes. We provide a framework showing how controls experience indirect treatment effects through market mechanisms, so that treatment effects on the treated reveal only partial consequences of market-wide interventions. By incorporating economic theory — specifically Marshall's Laws of Derived Demand — we connect econometric estimates to substitution and scale effects from demand theory. Treatment-effect estimators may diverge substantially, in magnitude and direction, from actual causal effects on treated parties or from counterfactual policies affecting all market participants. We illustrate with applications in labor markets, public finance, economic geography, development, and macroeconomics.

How fully and quickly do supply chains pass commodity price movements through to inflation? In production networks with sticky prices, commodity price shocks are only gradually passed through to downstream firms. This delay — increasing in downstreamness — persists even with forward-looking firm behavior, and myopia amplifies it. Using shift-share methods that exploit differential commodity exposures through production networks, we find forward-looking responses to petroleum prices but myopic responses for other commodities. A calibrated model shows that delayed network propagation of petroleum price movements predicts subsequent core inflation dynamics.

Wage rigidity induced by the minimum wage is an important channel for the transmission of monetary policy. When monetary expansion occurs, flexible prices rise while the legislated minimum wage remains fixed, falling in real terms. We show that monetary policy's employment effects are substantially larger in regions with high minimum-wage worker cost shares, robust to state-specific effects, Bartik controls for industry composition, and instrumental variables using legislated minimum wage levels. In our preferred specifications, this channel accounts for approximately 39% of total monetary policy effects when minimum-wage cost shares are elevated. We verify the mechanism by showing larger effects on near-minimum-wage than higher-wage employment. The declining minimum-wage employment share has reduced the effectiveness of monetary policy.

We examine whether minimum wage increases affect state-to-state migration — a revealed-preference test of whether low-wage workers view minimum wage increases favorably. Our theoretical model predicts that minimum wage increases reduce net migration under competitive firm behavior but increase net migration under monopsony. Using the American Community Survey and Current Population Survey with machine-learning wage predictions, we apply four research designs (state and federal difference-in-differences and triple-differences). Each $1 minimum wage increase raises net migration by 1.5 percentage points among workers earning no more than $3 above the minimum wage, supporting the monopsonistic prediction. Effects derive primarily from reduced outmigration from states that raise their minimum wages, consistent with moving costs deterring relocation.