TechFlow news, May 8 — According to Jinshi Data, Goldman Sachs has warned that Trump's global trade war could erase much of the progress achieved in the fight against inflation. In a report on Wednesday, the Wall Street bank told clients that key inflation indicators are expected to surge over the coming months due to the harmful combination of high tariffs and a weakening dollar.
Goldman Sachs now expects core inflation (excluding food and energy) to accelerate from 2.6% in March to 3.8% by December, based on the PCE price index favored by the Federal Reserve.
The firm sees inflationary pressures significantly stronger than the Fed's March projections, which were made before the U.S. announced its largest tariff measures. The Fed projected core PCE inflation at 2.8% for December. Worse still, Goldman Sachs forecasts core goods inflation to soar from 0.4% in March to 6.3% by December. By December, prices for used cars (+8.3%), home appliances (+7.8%), video/audio/computers (+7.7%), jewelry/watches (+5.9%), and pharmaceuticals/medical products (+7.8%) are expected to rise sharply.
