Goldman Sachs Predicts Rising U.S. Inflation Due to Tariffs

According to Odaily, Goldman Sachs economists have indicated that tariffs may lead to increased prices for U.S. goods and overall inflation in the coming months. They anticipate a moderate impact on the Consumer Price Index (CPI) data for May, which is set to be released on Wednesday. The rise in goods prices could elevate the core inflation rate by 0.05 percentage points, resulting in a 0.25% month-on-month increase in the overall core CPI inflation rate. However, Goldman Sachs forecasts that the core CPI inflation rate could reach 3.5% by the end of the year, up from 2.8% in April. This increase is expected despite reduced inflationary pressures in the labor market, housing rentals, and automotive sectors. The firm also predicts that hotel and airfare prices will remain stable in May, reflecting a slowdown in consumer spending. "Our forecast suggests a significant acceleration in inflation across most core goods categories, with limited impact on core services inflation, at least in the short term."