Goldman Sachs economists expect Trump’s tariff policy to drive prices higher but say it won’t trigger a new inflation surge due to a projected economic slowdown, according to MarketWatch. Economist David Mericle forecasts the core PCE inflation rate will rise from 2.6% in March to 3.6% by year-end, driven by pricier imports, costlier domestic production, and opportunistic pricing. Mericle expects the U.S. economy to grow 1% later this year and doubts high inflation will persist with weak growth. He says the inflation rebound will be milder than in 2021–2022, reducing the risk of it becoming entrenched in pricing and wage-setting behavior. Mericle warns the inflation rebound could worsen if tariff rates become prohibitive or escalate next year.
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00:00It's Benzinga bringing Wall Street to Main Street.
00:02Goldman Sachs, economists expect Trump's tariff policy to drive prices higher,
00:06but say it won't trigger a new inflation surge due to a projected economic slowdown,
00:10according to MarketWatch. Economist David Mersal forecast the core PCE inflation rate will rise
00:15from 2.6% in March to 3.6% by year end, driven by price or imports, cost of domestic production,
00:23and opportunistic pricing. Mersal expects the U.S. economy to grow by 1% later this year,
00:27and Dow's high inflation will persist with weak growth. He says the inflation rebound will be
00:32milder than in 2021-22, reducing the risk of it becoming entrenched in pricing and wage-setting
00:38behavior. Mersal warns the inflation rebound could worsen if tariff rates become prohibitive
00:42or escalate next year. For all things money, visit Benzinga.com slash GSTV.