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US import prices rose 1.9 percent in April, nearly double the consensus estimate of 1.0 percent. Export prices surged 3.3 percent, triple the estimate of 1.1 percent. Both readings came from the Bureau of Labor Statistics on Thursday, May 14. The dollar gained against every major currency on the day. The Fed is going nowhere. And the market is just starting to price that in.
Read the Data, Not the Narrative
There is a version of the tariff story in which the United States absorbs the cost, the consumer pays more, and the dollar weakens as growth slows. That version has been popular in certain corners of the macro commentary space since January 2025. The April import and export price data is not that version.
The Bureau of Labor Statistics reported on May 14, 2026, that US import prices advanced 1.9 percent in April, following a 0.9 percent rise in March and a 1.0 percent rise in February. The April figure was the consensus estimate’s double. Over the past twelve months, US import prices are now up 4.2 percent, the largest over-the-year advance since October 2022, per the BLS release. Export prices advanced 3.3 percent in April, after rising 1.5 percent in March, against a consensus estimate of 1.1 percent. Over the past twelve months, US export prices are up 8.8 percent. The BLS attributed the April import price advance to higher prices for both fuel imports and nonfuel imports, meaning this is not purely an energy story.
If you want to understand why the dollar gained against every major currency on Thursday, start there. Import prices rising faster than expected tells you that tariffs are feeding through into prices at the point of entry, not being absorbed by foreign exporters as some analysts predicted. Export prices rising at triple the estimate tells you that US goods are commanding higher prices globally at the same time. That combination is not structurally bearish for the dollar.
The Tariff Arithmetic Is Now Undeniable
Penn Wharton Budget Model published its most recent effective tariff rate analysis on April 15, 2026. The numbers are worth quoting directly because they contextualise the BLS data in a way that consensus commentary often misses. In January 2025, the US effective tariff rate was 2.3 percent. By February 2026, it had climbed to 8.9 percent, nearly a fourfold increase in thirteen months. New tariffs raised $224.8 billion in customs revenue between January 2025 and February 2026, before accounting for income and payroll tax offsets. Among major trading partners, China faces the highest effective tariff rate at 31.6 percent in February 2026. Steel and aluminium products are the most heavily tariffed category at 40.1 percent, reflecting both existing Section 232 tariffs and rate increases implemented on June 4 from 25 percent to 50 percent. Automotive vehicles face an effective rate of 13.5 percent.
These are not marginal adjustments. An effective tariff rate moving from 2.3 percent to 8.9 percent in a little over a year is a structural shift in the cost base of US imports. The April BLS data is simply that shift appearing in the price indices. China’s position as the largest source of US tariff exposure is particularly significant given the simultaneous dynamics of Chinese goods deflation and commodity inflation, which create a compressed margin environment for any importer trying to manage the 31.6 percent effective rate on Chinese products while also absorbing higher input costs. The April import price number is what those margins look like when they move.
On Thursday, the Financial Times reported that Trump is now pushing for a 15 to 20 percent minimum tariff on all EU goods. If that materialises, the import price series has further to run. EURUSD moved lower on the headline, per investingLive’s Americas FX wrap from May 14. The dollar’s gain was broad-based across G10.
The Fed Is Not Going to Rescue Anyone From This
The Federal Reserve is the variable that determines whether the dollar’s tariff-driven strength is a temporary squeeze or a sustained regime. On Thursday, Kansas City Fed President Schmid said publicly that inflation remains too high. That is not a nuanced statement. It is a direct signal that the Fed’s reaction function has not changed despite months of market pressure to cut rates.
The CME FedWatch tool, as of this week, is not pricing any rate cuts as likely before 2028, per DailyForex’s weekly analysis published May 11. Goldman Sachs and Bank of America have both recently pushed back their assessments of the timing of US rate cuts. The same day the BLS import price data landed, it was confirmed that Fed Governor Miran is submitting his resignation, with Kevin Warsh set to replace him. Analysts quoted by investingLive were direct: a Warsh appointment is unlikely to deliver rate cuts. Warsh is known as a monetary hawk with a history of scepticism toward aggressive easing.
The rate structure matters for the dollar because it determines the carry dynamics. The Australian dollar, sitting at 4.35 percent following the Reserve Bank of Australia’s recent hawkish meeting, is now the highest-yielding major currency in the world, which has made it the long leg in carry trades where the dollar is sometimes the short. But that dynamic only holds if markets believe the Fed is on an easing path. If the Fed is on hold through 2027 or beyond, the dollar’s rate support does not erode, and the tariff-driven inflation keeps upward pressure on import prices, sustaining the conditions that produced Thursday’s BLS numbers.
What the Other Data From Thursday Says
The import and export price releases were the most market-moving data points from Thursday, but they were not the only ones. US retail sales for April came in at 0.5 percent, precisely in line with estimates. That reading is important because it tells you that the tariff-driven import price increases are not yet cratering consumer spending. The US consumer absorbed higher prices in April and kept spending at the expected pace. That is not a recession signal.
Initial jobless claims for the week came in at 211,000 against an expectation of 205,000, a modest miss that does not suggest deterioration in the labour market but equally does not show the kind of tightening that would force the Fed’s hand on rates in either direction. US business inventories for March came in at 0.9 percent against an estimate of 0.8 percent, a minor beat. Canada March wholesale trade printed 1.9 percent against 1.4 percent expected. The data picture from Thursday is one of an economy absorbing tariff costs, maintaining consumer spending, and running a labour market that gives the Fed no urgency to move in either direction.
The Monex May 2026 FX forecast, published via TreasuryXL on May 8, framed the month ahead precisely: the baseline foresees a framework agreement on Iran emerging in the coming weeks, allowing trade flows through the Strait of Hormuz to finally resume. If that happens, energy import prices moderate, and the 1.9 percent April import price figure becomes a peak reading rather than the start of a new trend. The Monex analysis noted that markets are likely to remain wary of any peace deal collapsing at least initially, and that energy supply disruptions have not fully filtered through, keeping oil prices supported in the near term.
Cerebras, NASDAQ Records and the AI Backdrop
Thursday’s FX session did not exist in isolation from equity markets. Cerebras, the AI chip designer backed by G42 and others, debuted its IPO on Thursday at an opening price of $350, nearly double the IPO price of $185, before surging to an intraday high of $386. The stock was halted for volatility, pulled back, and closed at $311.07, raising $5.55 billion in what was the largest US tech IPO since Snowflake’s 2020 debut, per CNBC’s May 14 coverage. NVIDIA hit its $350 analyst target on H200 news the same day. Cisco jumped 10 percent on an earnings beat. The NASDAQ and S&P 500 both closed at record levels on Thursday. The Dow closed above 50,000 for the fourth time in its history.
The AI infrastructure rally has been the defining equity market theme across both Asia and the Americas this week, with record closes in the US and all-time highs in South Korean memory stocks creating a cross-regional narrative that has supported risk appetite broadly. When equity markets are at records and the dollar is gaining simultaneously, the FX market is telling you that US rate expectations and tariff dynamics are the dominant drivers, not risk-off positioning. Thursday was a risk-on day with a strong dollar. That combination is unusual enough to note.
Where This Leaves EUR/USD
EURUSD moved lower on Thursday as the FT’s EU tariff headline hit the wires alongside the stronger-than-expected US import and export price data. The pair is already under pressure from the European macro backdrop. Eurozone GDP grew just 0.1 percent in Q1 2026 while inflation hit 3 percent, leaving the ECB holding rates at 2 percent with no clear path to cut or hike. A 15 to 20 percent US tariff on all EU goods would hit German industrial exports, French luxury goods and European automotive manufacturers at the precise moment when the continent is most economically vulnerable to an external demand shock.
The rate differential is also moving against the euro. With the Fed on hold potentially through 2028 and the ECB constrained by simultaneous weak growth and elevated inflation, the rate spread provides no offsetting support for EURUSD. Monex’s May forecast placed the pair in a range-bound trading environment driven by Iran and energy dynamics rather than fundamental repricing, but if the Trump EU tariff push advances from FT report to policy reality, the range trades lower.
The import price data from Thursday is not a one-month data point. It is the fourth consecutive monthly increase in US import prices, running at 0.6 percent in January, 1.3 percent in February, 0.9 percent in March and 1.9 percent in April, per BLS. The sequence is accelerating. The tariff transmission is not fading. The Fed is not cutting. The dollar won Thursday. Whether it keeps winning depends on whether Hormuz reopens before the next BLS release on June 16.
