Goldman Sachs: Tariffs could push up U.S. inflation

Odaily News Goldman Sachs economists wrote that tariffs are likely to push up U.S. commodity prices and overall inflation in the coming months. They expect tariffs to have a modest impact on May CPI data released on Wednesday. Higher commodity prices could raise core inflation by 0.05 percentage points, bringing the overall core CPI inflation rate up 0.25% month-on-month. But Goldman Sachs predicts that core CPI inflation could reach 3.5% by the end of the year, up from 2.8% in April. Goldman Sachs expects this increase to occur despite reduced inflationary pressures in the labor market, housing rentals and the auto sector. Goldman Sachs expects hotel and airfare prices to be flat in May, reflecting a slowing consumer economy. "Our forecasts reflect that inflation in most core commodity categories will accelerate significantly, but the impact on core service inflation will be limited, at least in the short term." (Jinshi)