BlockBeats news, on May 8, Goldman Sachs warned that Trump's global trade war could undo much of the progress made in the battle against inflation. In a report to clients on Wednesday, Goldman Sachs stated that key inflation indicators are expected to surge in the coming months due to the harmful combination of high tariffs and a weakening dollar. The core inflation annual rate (excluding food and energy) is now expected to accelerate from 2.6% in March to 3.8% in December, according to the Fed's favored PCE price index.
Goldman Sachs believes that the upward pressure on prices is much greater than the Fed's prediction in March when the U.S. had not yet announced the largest tariffs. The Fed expects the core PCE inflation rate to be 2.8% in December. Worse still, Goldman Sachs anticipates that the annual rate of core goods inflation will surge 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 see significant increases. (Jin Shi)