Live updates: Trump announces the announcement of the trade agreement with the United Kingdom
President Donald Trump’s World Trade War will probably cancel a large part of the war on inflation, warns Goldman Sachs.
Wall Street's bank has told customers in a Wednesday report that a key inflation measure should increase in the coming months due to a toxic combination of exorbitant prices and the weakening of the US dollar.
Goldman Sachs now sees annual basic inflation (excluding food and energy) accelerate 2.6% in March at 3.8% in December. This is based on the price of personal consumer expenses (PCE), the reference inflation gauge of the federal reserve.
Goldman Sachs requires a much greater increase in prices than What the Fed has planned in MarchBefore the announcement of the biggest prices. At the time, the Fed expected the basic PCE inflation of 2.8% in December.
Worse, Goldman Sachs expects the annual inflation of basic goods soaring only 0.4% in March at 6.3% in December as “prohibitive” prices on China's demand in countries with higher production costs but lower American tariffs.
In December, Goldman Sachs expected significant price increases for used vehicles (+ 8.3%), household appliances (+ 7.8%), video / audio / computers (+ 7.7%). Jewelry / watches (+ 5.9%) and pharmaceutical / medical (+ 7.8%).
Even if the White House minimizes the risk of sticker focused on prices, Goldman Sachs calculates that the American prices will increase the basic PCE by a significant amount: 2.25%.
“On the eve of the implementation of major prices, the problem of inflation in the United States has reached resolved,” wrote economists from Goldman Sachs led by Jan Hatzius in the report. “However, in upcoming inflation readings, the impact of prices will reverse these progress.”
