According to a report from Jin10 on May 8, Deep Tide TechFlow news, Goldman Sachs warned that Trump’s global trade war could undo much of the progress made in the fight against inflation. In a report to clients on Wednesday, the Wall Street bank stated that key inflation indicators are expected to soar in the coming months due to the harmful combination of high tariffs and a weakening dollar.
Goldman Sachs currently expects that the 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 rise in prices is much greater than the Federal Reserve’s prediction in March, when the U.S. had not yet announced its largest tariffs. The Federal Reserve expects the core PCE inflation rate to be 2.8% in December. Worse still, Goldman Sachs expects the year-on-year core goods inflation rate 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/computers (+7.7%), jewelry/watches (+5.9%), and pharmaceuticals/medical (+7.8%) will rise significantly.
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