TechFlow news — On December 10, according to Jinshi News, multiple Wall Street institutions have warned of rising risks of U.S. inflation rebounding in 2025. Jan Hatzius, Chief Economist at Goldman Sachs, estimates that if Trump's proposed tariffs are implemented, they could push up the core PCE index—closely watched by the Federal Reserve—by nearly 1%. Anders Persson, Global Head of Fixed Income and CIO at Nuveen, which manages $1.3 trillion in assets, said inflation may remain above the Fed’s 2% target over the next 12 months and possibly for several years. In a worst-case scenario, the Fed might be forced into a complete policy reversal and restart rate hikes, triggering more severe stagflation.
Market expectations suggest the CPI data to be released this Wednesday will continue to rise, with core CPI annual growth likely remaining above 2% until at least October next year. Derek Tang, economist at Monetary Policy Analytics, noted that if CPI data exceeds expectations and prior figures are revised upward, it could shift policymakers’ assessment of inflation and affect the pace of rate cuts in 2025. Under current conditions, Nuveen recommends focusing on fixed-income assets, expecting U.S. Treasury yields to deliver attractive returns over the next 12 months; in a stagflation scenario, cash could become the top-performing asset class.
