Goldman Sachs warns that US inflation rate may reach nearly 4% before Christmas
According to CNN, Goldman Sachs has warned that Trump's global trade war could undo much of the progress made in the fight against inflation. This Wall Street bank told clients in a report on Wednesday that key inflation indicators are expected to soar in the coming months due to a harmful combination of high tariffs and a weakening US dollar. Goldman Sachs currently predicts that the annual core inflation rate (excluding food and energy) will accelerate from 2.6% in March to 3.8% in December. This is based on the PCE price index favored by the Federal Reserve. Goldman Sachs believes that the upward trend in prices is much greater than the Federal Reserve's forecast in March, when the United States had not yet announced the largest tariffs. The Federal Reserve expects the core PCE inflation rate to be 2.8% in December. Even worse, Goldman Sachs expects the annual rate of core commodity inflation to soar from 0.4% in March to 6.3% in December. By December, prices for used cars (+8.3%), household appliances (+7.8%), video/audio/computer (+7.7%), jewelry/watches (+5.9%), and pharmaceuticals/medical (+7.8%) will significantly increase.