In 2024, then-presidential candidate Donald Trump made inflation the centerpiece of his campaign.

The “price of eggs” being too high became a rallying cry against the incumbent presidential administration as Trump seized on a very real pain point for many Americans.

U.S. inflation rate by month

  • January: 3%
  • February: 2.8%
  • March: 2.4%
  • April: 2.3% (Liberation day April 2)
  • May: 2.4%
  • June: 2.7%
  • July: 2.7%
  • August: 2.9%
  • September: 3%

“Starting on day one, we will end inflation and make America affordable again, to bring down the prices of all goods,” he said at a rally in Bozeman, Montana on August 9, 2024.

But while inflation had been a major element of President Joe Biden’s economy in the wake of the Covid pandemic, it had also fallen from its peak of 9.1% in 2022 to 3% in January when President Trump took over.

“We already solved inflation,” he said earlier this year when the number dropped to just 2.4% in March.

During his Sunday interview with “60 Minutes,” President Trump said, “We have no inflation. Our groceries are down.”

However, that notion isn’t entirely accurate, and one of his cornerstone economic policies is actually making things worse, according to a recent Bank of America note.

Donald Trump is the first U.S. president to use the IEEPA to impose tariffs.

Image source: McNamee/Getty Images

Tariffs are making inflation worse for consumers, BofA says

Firstly, inflation never went away.

While they aren’t at calamitous levels, inflation has actually increased during the Biden administration; in recent months, it has risen further.

Related: US car buyers feel tariff pain as one automaker raises prices

“You can say prices aren’t going up as much, but that doesn’t mean that people aren’t feeling those higher prices from the inflation we had two or three years ago,” Federal Reserve Chair Jerome Powell said last week.

The Consumer Price Index rose 0.3% in September, following a 0.4% increase in August. On average, consumer prices for all goods were 3% higher than they were the year prior.

Gasoline was 4.1% higher and energy was 1.5% more expensive.

While the CPI report doesn’t mention tariffs once, analysts at Bank of America see import duties as playing a significant role in inflationary prices.

To make matters worse, BofA says the core goods Personal Consumption Expenditures (PCE) price index will have risen by 1.3% over the past year and 2.2% annualized since March when the tariffs went into effect.

Last September, the PCE price index declined 0.3% year over year.

Related: Major automaker considers tariff move that customers will hate

“The increase has been mostly driven by supply-side factors, providing further evidence of tariffs being the culprit,” Bank of America’s note said.

To make matters worse, tariffs have not been fully passed through yet, so BofA expects tariff-related inflation to persist in the company months for two reason.

“First, companies will continue to shift more of the tariff burden to consumers to protect margins, especially if the economy continues to outperform expectations. Second, 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,” Bank of America says.

Supreme Court hears case challenging legality of president’s tariffs

On Wednesday, the U.S. Supreme Court heard arguments challenging President Donald Trump’s authority to issue emergency tariffs.

The government claims the International Emergency Economic Powers Act of 1977 grants the president the authority to issue the reciprocal tariffs, while the plaintiffs claim that his method for enacting the tariffs infringes on the authority of Congress to issue taxes.

Justice Sonia Sotomayor (appointed by a Democratic president) reportedly challenged the government’s assertion that tariffs aren’t taxes, saying, “That’s exactly what they are,” while also noting that no president other than Trump has ever used IEEPA to impose tariffs since it became law in 1977.

The U.S. Court of International Trade had ruled 3-0 that Trump lacked the legal authority to issue the reciprocal 25% “Liberation Day” tariffs that he did.

That ruling was prompted by two lawsuits, one filed by five small businesses and the other by 12 different states.

“Tariffs are taxes,” Neal Katyal, a lawyer for the plaintiffs, said in his opening statement. “Our founders gave that taxing power to Congress alone.”

Related: Federal Court delivers massive blow to Trump’s tariff plan