Greetings,

The New York Federal Reserve has released a report that draws the clearest line yet between today's stubborn consumer inflation and President Donald Trump's tariffs. The report finds that the costs on many everyday items would have actually declined about 1% last year and early this year, but instead have risen nearly 3% purely because of tariffs. More on that below.

Also in this edition:

• AI-enabled fraud a top concern for finance leaders
• CFOs brace for higher freight costs amid diesel volatility
• 5 strategies for managing token costs in AI projects
• Executives use AI more than employees, survey shows

Investment teams are being asked to do more with limited resources. Explore how OCIO providers can add scale, specialized expertise and implementation capabilities.

A New York Federal Reserve study found that tariffs imposed under President Trump directly caused consumer prices for 67 categories of everyday goods to rise by 2.9 percentage points as of February 2026. The report notes that, absent these tariffs, prices for these goods would have declined by nearly 1%. The researchers determined that about two-thirds of the total price increase was a direct result of the tariffs themselves, while the remaining third came from indirect effects, such as higher costs for U.S. companies using imported materials.

A survey by Early Warning Services' Certos reveals that 81% of senior finance leaders have encountered attempted fraud involving AI-generated content in the past year. The biggest concern is payment diversion, followed by executive deepfake impersonation and detection gaps. Most respondents are concerned about the impact of AI-enabled fraud on organizational trust, and while many feel prepared to handle such fraud, only half are confident in identifying it before financial losses occur.

Diesel prices in the US have decreased slightly, but shipping costs remain high, posing challenges for finance teams. The average price for on-highway diesel is $6.20 per gallon, down from $6.38, but freight rates are above their long-term seasonal averages. Chevron CFO Eimear Bonner expects energy prices to stay elevated, and some states have responded by allowing the use of red-dyed diesel on public roads.

The Securities and Exchange Commission warned asset managers against collaborating to influence corporate policy, following an inquiry into BlackRock, Vanguard and State Street's involvement in the 2021 ousting of ExxonMobil directors. The SEC refrained from enforcement action but expressed "serious concerns" about some fund managers' participation in the Climate Action 100+ coalition. The move is part of the Trump administration's efforts to reduce shareholder influence over public companies.

Managing costs associated with large language model APIs can be challenging due to the opaque nature of token consumption. To address this issue, organizations should consider model routing to use the least powerful model necessary, semantic caching to reduce inference costs, prompt caching to minimize input costs, reranking to optimize prompt structure, and response constraints to limit unnecessary output. These strategies can help organizations control AI spending without compromising performance.

The Commodity Futures Trading Commission saw a 21% decrease in staff by year-end 2025 compared with the previous 10-year average, while the agency's purview is expanding. This was accompanied by an 80% drop in enforcement actions amid a boom in prediction and cryptocurrency markets. The Government Accountability Office is investigating the CFTC's workforce cuts, and some lawmakers have expressed concerns about the agency's ability to regulate the market.

The Public Company Accounting Oversight Board has won a case against two auditors who challenged the constitutionality of the board's disciplinary proceedings. The US District Court for the District of Columbia ruled that the board did not violate the auditors' rights under the Seve