Goldman Sachs (GS) analysts expect U.S. core CPI inflation for January to come in higher than consensus estimates, driven by housing and automobile prices. Additionally, the investment bank warns that rising trade tariffs could offset disinflationary trends in the coming months.
\ud83d\udccc January Core CPI
\ud83d\udd39 Expected to rise 0.34% month-over-month (m-o-m) (vs. consensus 0.3%).
\ud83d\udd39 Year-over-year (y-o-y) core CPI projected at 3.19% (vs. consensus 3.1%).
\ud83d\udccc January Headline CPI
\ud83d\udd39 Expected 0.36% m-o-m (vs. consensus 0.3%).
\ud83d\udd39 Driven by higher food and energy prices.
\ud83d\udccc Inflation Projections for 2025
\ud83d\udd39 Core CPI: 2.8% by year-end 2025.
\ud83d\udd39 PCE Inflation (Fed's preferred measure): 2.6% by end-2025.
Goldman Sachs highlighted that tariffs could become a key inflation driver, warning that:
\ud83d\udd3a New 25% tariffs on steel & aluminum imports could increase producer costs.
\ud83d\udd3a 10% tariffs on Chinese goods could impact consumer prices.
\ud83d\udd3a Trump hinted at additional tariffs, raising concerns about inflationary pressures.
The bank noted that tariffs are ultimately paid by U.S. importers, which could slow disinflation and keep inflation elevated longer than expected.
\ud83d\udca1 For Investors & Traders
\u2705 Higher-than-expected inflation could lead to delayed Fed rate cuts → Potential market volatility.
\u2705 Rising tariffs could impact corporate earnings, especially in industries reliant on imports.
\u2705 Gold prices may stay elevated as investors hedge against inflation risks.
\ud83d\udca1 For Policymakers & Businesses
\u2705 Housing & auto sectors remain key inflation drivers → Fed may need to maintain a hawkish stance.
\u2705 Tariffs could disrupt supply chains, affecting manufacturing & consumer goods sectors.
\u2705 Energy & food prices remain crucial watchpoints for broader inflation trends.
\ud83d\udccc Inflation API – Get real-time inflation data & CPI trends.
\ud83d\udccc Commodities API – Track gold, oil, and food price movements.
With inflation expected to remain sticky, tariffs adding to price pressures, and Fed policy hanging in the balance, markets are gearing up for a volatile ride. All eyes now turn to the official CPI report on Wednesday, which could provide crucial direction for rate expectations and asset prices.
