Inflation will be worse than feared this year, Goldman Sachs predicts
By Matt Egan, CNN Business
Updated 9:28 AM ET, Mon February 28, 2022
New York (CNN Business)Red-hot inflation in the United States may not cool off this year as much as many hoped, Goldman Sachs cautioned in a new report.
"The inflation picture has worsened this winter as we expected, and how much it will improve later this year is now in question," Goldman Sachs economists wrote in a client report Sunday night.
Given that uncertainty, Goldman Sachs is raising its inflation outlook. It expects that core PCE inflation, the Federal Reserve's preferred price metric, will decelerate to 3.7% at the end of this year.
That's a jump from Goldman's previous forecast of 3.1% — and almost double the Fed's goal of 2%.
Goldman also now expects consumer prices, which rose by a near-40-year high of 7.5% on an annualized basis in January, to cool off to 4.6% by the end of this year and 2.9% by the end of next year.
The Wall Street bank said it is "increasingly concerned" about two main inflation risks: inflation expectations and the very strong jobs market.
more
https://www.cnn.com/2022/02/28/economy/inflation-economy-goldman-sachs/index.html
