Economists at Goldman Sachs hiked their inflation projections this weekend and warned clients that recent strong price spikes seem similar to those that preceded record inflation decades ago, joining other experts in forecasting inflation will last longer than previously expected.
In a note to clients Sunday night, Goldman economists said they expect consumer prices to rise more quickly later this summer as transportation and health insurance costs continue to surge, pushing core inflation, which excludes volatile food and energy prices, from 6% in May to 6.3% in September.
Goldman expects health insurance and automobile prices—two of the largest contributors to inflation during the pandemic—should start “outright” falling by the end of this year as Covid-era growth begins to subside, pushing core inflation down to 5.5% at year-end and 2.4% in December 2023.
However, the economists also acknowledge core inflation has vastly outperformed expert projections this year, consistently rising more than expected over the last six months.
They note the surprise readings are beginning to rival those seen in the 1960s and 1970s—when long-lasting price spikes of more than 10% (solidly higher than the latest reading of 8.6% in May) contributed to prolonged periods of weak economic growth and sparked a decade of lackluster stock-market returns.
In a weekend note to clients, LPL Financial chief economist Jeffrey Roach was more bearish, saying the surge in travel-related demand is a “major concern” for inflation as housing, restaurant and accommodation prices reach new highs.
“Consumers may have to live in a world where inflation consistently runs hotter than the previous decade,” Roach said, citing concerns from central bankers like European Union’s Christine Lagarde, who last week warned there are “growing signs”—including the ongoing war in Ukraine—that suggest “supply shocks hitting the economy could linger for longer.”
“Policymakers must come to grips with a real possibility that inflation rates will not come down to their preferred targets for many years,” says Roach, adding the tight labor market is another uncertainty that could keep inflation above the Fed’s long-standing 2% target.
Inflation ran rampant in the 1970s as multiple energy crises pushed oil prices up as much as 400%, all while central bankers prioritized efforts to improve the labor market—even if it meant risking further price spikes. It wasn’t until Paul Volcker took office as Federal Reserve chairman in 1979 that the Fed pivoted to fight inflation, and though the efforts were ultimately successful, they also yielded a recession in 1982..
To help ease inflation, government is expected to possibly announce lower tariffs on certain Chinese goods, including clothing and school supplies, as soon as this week. However, some experts worry the move does nothing to address domestic supply chain issues driving up costs. The decision “probably won’t move the needle dramatically on inflation,” analyst Adam Crisafulli of Vital Knowledge Media said in a Monday email, though he says “aggressive” discounts set to start this month at major retailers like Walmart and Target could prove “far more important.”
The Fed’s inflation-fighting interest rate hikes this year have tanked stocks and sparked growing fears of a recession. Major stock indexes plunged into bear market territory last month ahead of the central bank’’s largest interest rate hike in 28 years, and the gloomy sentiment has ushered in waves of layoffs among recently booming technology and real estate companies.
“We don’t believe the Fed can stop the issues that are causing inflation on the supply side without absolutely wrecking the economy, but at this point, it looks like they are resigned to the fact that it must be done,” says Brett Ewing, chief market strategist of First Franklin Financial Services.
More Remote Working Apps:
https://quintexcapital.com/?ref=arminham Quintex Capital
https://www.genesis-mining.com/a/2535466 Genesis Mining
https://jvz8.com/c/202927/369164 prime stocks
https://jvz3.com/c/202927/361015 content gorilla
https://jvz8.com/c/202927/366443 stock rush
https://jvz4.com/c/202927/296191 gluten free
https://jvz1.com/c/202927/286851 diet fitness diabetes
https://jvz8.com/c/202927/213027 writing job
https://jvz4.com/c/202927/358049 profile mate
https://jvz8.com/c/202927/376524 super backdrop
https://jvz2.com/c/202927/184902 gaming jobs
https://jvz4.com/c/202927/343405 PR Rage
https://jvz6.com/c/202927/371547 design beast
https://jvz3.com/c/202927/376879 commission smasher
https://jvz2.com/c/202927/376925 MT4Code System
https://jvz6.com/c/202927/375959 viral dash
https://jvz1.com/c/202927/376877 forex expert
https://jvz8.com/c/202927/376381 ada leadz
https://jvz2.com/c/202927/337292 DFY Suite 3.0 Agency+ information
https://jvz8.com/c/202927/291061 VideoRobot Enterprise
https://jvz8.com/c/202927/327447 Klippyo Kreators
https://jvz8.com/c/202927/324615 ChatterPal Commercial
https://jvz8.com/c/202927/299907 WP GDPR Fix Elite Unltd Sites
https://jvz3.com/c/202927/342585 VidSnatcher Commercial
https://jvz3.com/c/202927/320972 Storymate Luxury Edition
https://jvz2.com/c/202927/320466 iTraffic X – Platinum Edition
https://jvz2.com/c/202927/330783 Content Gorilla One-time
https://jvz2.com/c/202927/301402 Push Button Traffic 3.0 – Brand New
https://jvz2.com/c/202927/297271 Designa Suite License
https://jvz2.com/c/202927/310335 XFUNNELS FE Commercial
https://jvz2.com/c/202927/343635 MediaCloudPro 2.0 – Agency
https://jvz2.com/c/202927/353558 MyTrafficJacker 2.0 Pro+
https://jvz2.com/c/202927/365061 AIWA Commercial
https://jvz2.com/c/202927/357201 Toon Video Maker Premium
https://jvz2.com/c/202927/351754 Steven Alvey’s Signature Series
https://jvz2.com/c/202927/344541 Fade To Black
https://jvz2.com/c/202927/290487 Adsense Machine
https://jvz2.com/c/202927/315596 Diddly Pay’s DLCM DFY Club
https://jvz2.com/c/202927/355249 CourseReel Professional
https://jvz2.com/c/202927/309649 SociJam System
https://jvz2.com/c/202927/263380 360Apps Certification
https://jvz2.com/c/202927/377557 Instant Website Bundle
https://jvz2.com/c/202927/377194 GMB Magic Content
https://jvz2.com/c/202927/376962 PlayerNeos VR
https://jvz8.com/c/202927/381812/ BrandElevate Bundle information
https://jvz4.com/c/202927/381807/ BrandElevate Ultimate
https://jvz2.com/c/202927/381556/ WowBackgraounds Plus
https://jvz4.com/c/202927/381689/ Your3DPal Ultimate
https://jvz2.com/c/202927/380877/ BigAudio Club Fast Pass
https://jvz3.com/c/202927/379998/ Podcast Masterclass
https://jvz3.com/c/202927/366537/ VideoGameSuite Exclusive
https://jvzoo.com/c/202927/381179 YTSuite Advanced
https://jvz1.com/c/202927/381749/ Xinemax 2.0 Commercial
https://jvzoo.com/c/202927/382455 Living An Intentional Life
https://jvzoo.com/c/202927/381812 BrandElevate Bundle
https://jvzoo.com/c/202927/381935 Ezy MultiStores
https://jvz2.com/c/202927/381194/ DFY Suite 4.0 Agency
https://jvz4.com/c/202927/381976/ AppOwls Bundle
https://jvz3.com/c/202927/381615/ WOW Backgrounds 2.0
https://jvz4.com/c/202927/ALL-in-One HD Stock Bundle
https://jvz6.com/c/202927/382326/ Viddeyo Bundle
https://jvz8.com/c/202927/381617/ The Forex Joustar