Tariffs Don’t Kill Inflation—They Kill Growth: What the Fed Study Actually Says

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A viral White House tweet and a Breitbart headline claim a San Francisco Fed study proves tariffs lower inflation—but only if you ignore the part where they also choke economic growth, raise unemployment, and suppress wages. In this breakdown, we unpack what the 150-year tariff study actually shows, why inflation is driven far more by monetary policy and federal spending, and how tariffs function as nothing more than taxes on consumers. With grocery costs now hitting $1,030 a month for a family of four, youth unemployment creeping up, and economic momentum fading, the administration’s quiet retreat from its own tariff strategy speaks volumes. Kitchen-table issues—not political spin—are driving voter frustration, sagging poll numbers, and the urgency for a real economic course correction.

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
Tariffs make inflation go down? Yeah.

Speaker 3 (00:19):
I got a few messages this past weekend and they
were basically citing some story on Breitbart and also a
tweet put out by the White House, basic like.

Speaker 2 (00:30):
Victory is our.

Speaker 3 (00:32):
Fed and study from San Francisco say tariff's actually lower inflation.

Speaker 2 (00:39):
And I asked these people, I said, did you read
the report? Did you look at it? Or did you
just look at the headline and the tweet?

Speaker 3 (00:51):
Yeah, if you look at the report, which studies studies
one hundred and fifty years of tariffs and what they
did to the economy and the financial markets. Yeah, had
they made inflation go down?

Speaker 2 (01:13):
Yeah? Eventually? Yeah?

Speaker 3 (01:15):
Why, well, guess what what happens with higher tariffs. What
happens eventually you get reduced economic activity, higher unemployment, and
with that comes eventually lower inflation. So okay, that's what

(01:40):
that s you'd like that you're telling me that that's
what you want in the long run is we want
to have lower economic work. When a lower economic growth,
we want to have higher unemployment and lower wages.

Speaker 2 (01:55):
That that's the outcome you're looking for.

Speaker 3 (01:58):
Yeah, and again, inflation is all about monetary policy, understand.
It's all about the government spending too much. Yeah, you
can put tariffs on something.

Speaker 2 (02:11):
That's tax anyway.

Speaker 3 (02:14):
While we're on the subject us, grocery prices have never
been more expensive. The average cost of groceries for a
family of four is now up to one thousand, thirty
dollars a month. That's a two hundred eighty dollars increase
since January two thousand and seventeen. That was seven hundred

(02:35):
and fifty a month back Then in twenty one, twenty
twenty two, grocery costs surge by one hundred and fifty bucks.

Speaker 2 (02:41):
Again, play with a calculator.

Speaker 3 (02:43):
Twelve three hundred and sixty dollars a year on groceries
in twenty twenty five compared to nine thousand and twenty
seven teen.

Speaker 2 (02:54):
So yes, do we have higher prices, Yes, we do.

Speaker 1 (03:00):
Yes.

Speaker 3 (03:00):
Are we seeing weakening economic growth, yes, sir. Unemployment yeah,
definitely coming up. Youth unemployment recent college grads is a
little under ten percent at this point in time. The president,
it's starting to sink in. Okay, starting to sink in.

(03:23):
He again eliminating tariffs on certain countries. I think we're
going to probably see more of that. If the Supreme
Court rules up no tariffs on this, he can probably
you know, he can do his best Abe Simpson, like
old man yelling at cloud, which he'll do and he'll
get all bent out of shape over it, and he'll say,

(03:45):
we'll adjust to it, and that might save him.

Speaker 2 (03:50):
That might save him.

Speaker 3 (03:53):
This is what should have been tackled first. Yeah, obviously
along with the boor. But that's something, Okay, you send
Homeland Security, you let them go to work on that.
It's always about the economy. It's always about kitchen table issues.
It will always come down to that. And he got

(04:15):
away from that. And that's why elections didn't go well
a couple of weeks ago. That's why poll numbers are
not good, and that's why people are none too happy.
Watchdog on Wall Street dot com