Odaily Planet Daily reports that Goldman Sachs economists wrote that tariffs may push up U.S. goods prices and overall inflation in the coming months. They expect tariffs to have a mild impact on the May CPI data released on Wednesday. Rising goods prices could increase the core inflation rate by 0.05 percentage points, causing the overall core CPI inflation rate to rise by 0.25% month-over-month.
However, Goldman Sachs forecasts that by the end of this year, the core CPI inflation rate may reach 3.5%, higher than April's 2.8%. Goldman Sachs expects this increase despite reduced inflation pressures in the labor market, housing rentals, and the automotive industry. They also anticipate that hotel prices and airfares will remain flat in May, reflecting a slowdown in the consumer economy.
“Our forecast reflects that inflation in most core goods categories will accelerate significantly, but the impact on core services inflation will be limited, at least in the short term.” (Jin10)