Connect with us

Hi, what are you looking for?


Goldman Sachs economists forecast ‘sharp decline’ in inflation next year

Goldman Sachs says U.S. inflation will ease “significantly” next year as three key factors contributing to higher consumer prices continue to disappear.

Goldman economists see core PCE back to 2.9%

Last week, consumer prices were reported up for the month but not as much as expected. And that’s likely to continue moving forward as far as the Goldman Sachs economists are concerned.

Led by Jan Hatzius, the team now forecasts the Fed’s preferred inflation gauge to return to 2.9% by December of 2023. In comparison, the Core PCE Price Index currently sits a 5.1%.

Reasons cited for the positive view include easing in supply constraints, a potential decline in cost of housing, and slower wage growth.

S&P 500, though, is not celebrating the research note and is down about 1.0% at writing.

What does that mean for the stock market?

Theoretically, what Goldman Sachs’ economists are suggesting would be a positive for the equities market. Because if true, that could make the central bank change its stance on the monetary policy.

On CNBC’s “Squawk Box”, Linda Duessel of Federated Hermes agreed with the view that inflation could come down hard next year but said investors should also focus on another key factor – “earnings”.

Inflation has one-year lag with money supply. M2 is crashing down hard, so inflation will come down hard next year. What I think we have to focus on is earnings next year. Right now, you’re 17 times forward earnings, that’s too high.

For the year, the benchmark index is still down roughly 18%.  

The post Goldman Sachs economists forecast ‘sharp decline’ in inflation next year appeared first on Invezz.

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like


    Solana (SOL/USD) is enormously underrated as a cryptocurrency project, even with its hiccups – including the latest exploit on one of the ecosystem apps....

    Editor's Pick

    The new eSIM infrastructure will help modernise the IoT connectivity market with fast, secure connections and reduced vendor lock-in. 1oT, a tech startup from...


    The latest Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics shows the total number of job openings in the economy...


    U.S. District Court Judge Reed O’Connor recently ruled to uphold the rights of employers granted in the Religious Freedom Restoration Act, rather than uphold...

    Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2023