Goldman Sachs: Tariffs will drive up inflation in the US, expecting the core CPI to rise to 3.5% by the end of the year.

On June 10, economists from Goldman Sachs stated that tariffs may push up the prices of U.S. goods and overall inflation in the coming months, expecting that tariffs will have a moderate impact on the CPI data for May, which will be released on Wednesday. The rise in commodity prices could lead to a 0.05 percentage point increase in the core inflation rate, resulting in a month-on-month increase of 0.25% in the overall core CPI inflation rate.

But Goldman Sachs predicts that core CPI inflation could reach 3.5% by the end of the year, up from 2.8% in April. This increase will continue to occur despite reductions in inflationary pressures in the labor market, housing rentals, and the automotive sector. Hotel prices and airfare prices will be flat in May, reflecting a slowdown in the consumer economy. “Our projections reflect a significant acceleration in inflation in most core goods categories, but the impact on core services inflation will be limited, at least in the short term.”