Goldman Sachs: Tariffs will have a moderate impact on May CPI, with core CPI inflation potentially reaching 3.5% by the end of the year.

On June 10, Goldman Sachs economists said tariffs are likely to push up U.S. commodity prices and headline inflation in the coming months, with tariffs expected to have a modest impact on May CPI data released on Wednesday. Higher commodity prices could raise core inflation by 0.05 percentage points and headline core CPI inflation by 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. 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." ( gold ten )