Analysts and economists agree that U.S. inflation will likely stay high. Goldman Sachs published a Sunday report that indicated that inflation is likely to be worse than originally thought. A professor of economics at American International College (AIC), stressed that there is a “perfect storm” brewing .” in the wake of the invasion by Ukraine.
Goldman Sachs: “Strong Jobs Market and Rising Iflation Could Incite a Moderate Wage Price Spiral”
According to the new inflation report from Goldman Sachs economists, inflation was very bad in 2022. It may get worse this year. The note from the financial institution stated that the inflation picture had worsened as expected and it is not clear how it will improve in the future. Goldman’s note to investors follows the Consumer Price Index report which showed that inflation in the U.S. rose at the fastest pace in 40 years, since February 1982.
Goldman’s Sunday report revealed that Goldman believes that inflation could rise more if supply chains are disrupted and energy producers are affected by the conflict in Ukraine with Russia.
Analysts at Goldman Sachs said that the initial inflation surge may have been long-lasting and reached a high enough level to raise inflation expectations and feed back into wage and price setting. Goldman Sachs reported that rising inflation and a strong job market could lead to a moderate wage-price spiral.
AIC Economics Professor Says “We Got a Perfect Storm Coming,” Atlanta Fed President Raphael Bostic Favors 25 BPS Moves in March
Analysts and economists are looking at the U.S. Federal Reserve to see what they will do in March. John Rogers, AIC’s professor in economics, said that the Fed’s decision on inflation will determine how things turn out. Rogers said that a “perfect storm” was brewing. He also spoke to the news desk of wwlp.com. “Inflation is fairly strong, at least through the end. “A lot of that is what Federal Reserve can do and what happens to this crisis,” the professor said.
It’s not the geopolitical instability. In the past few weeks, the stock market has been extremely volatile. Anybody with a 401k plan should be worried. Energy is another important area. It’s a global market, and if the price of oil rises around the globe, it will affect us all.
The Federal Reserve suggested that the benchmark rate might rise ” soon” and Fed chair Jerome Powell suggested it would be in March. Peter Schiff, a gold bug and economist, suggested last week that the Fed could keep the benchmark rate low because of the conflict in Ukraine. “Perhaps the Fed is relieved Russia invaded Ukraine, as now it has an excuse to not raise interest rates for March,” Schiff tweeted.
Raphael Bostic , president of Federal Reserve Bank of Atlanta, stated Monday that he supports a rise of approximately 25 basis points to the Harvard virtual event. Bostic stated that he was still in favor of a move of 25 basis points at the March meeting.