Archive · 2 Jun 2025
Goldman Sachs Raises Inflation Forecast, Citing Dollar Weakness
Goldman Sachs, a big financial company, now thinks prices in the US will go up faster than they thought before.
This is because the US dollar isn't as strong as it used to be, partly due to new rules about tariffs.
These tariffs make things more expensive when they come into the US.
The experts at Goldman Sachs predict that inflation, not counting food and energy, will rise to almost 4% in a few years, then slow down a little.
They also expect prices to go up more quickly in the next few months.
The value of the dollar has dropped since the new rules, unlike what happened before.
This situation impacts the prices people pay for things.
Goldman Sachs economists raised their US inflation forecast.
The increase is partly due to a weaker dollar after tariff announcements.
Core PCE inflation is projected to reach 3.8% by the end of 2025.
Economists expect a deceleration to 2.7% by the end of 2026.
The Bloomberg Dollar Index has fallen about 4% since early April.
- Who
- Goldman Sachs economists Ronnie Walker and Elsie Peng
- What
- Goldman Sachs increased its US inflation forecast.
- When
- The forecast was published Wednesday.
- Where
- United States
- Why
- Due to a weaker dollar following tariff announcements.
Current Market Trends
Economic Projections
Inflation Expectations
Current Market Trends
The market previously estimated core PCE inflation at 3.5% by the end of 2025 and 2.3% by the end of 2026.
Economic Projections
Goldman Sachs expects core PCE inflation to reach 3.8% by the end of 2025 and 2.7% by the end of 2026.
- Economists
- Ronnie Walker and Elsie Peng
- Inflation Gauge Used
- Personal Consumption Expenditures Price Index (excluding food and energy)
- Inflation at Start
- 2.6% in March
- Dollar Index Drop
- 4%
- Tariff Impact
- Amplifying direct impact of tariffs on prices
- Expected Tariff Rate
- 54% on Chinese goods