According to Nick Timiraos, Goldman Sachs now anticipates core PCE inflation to rise to 3.5% in 2025, prompting potential Federal Reserve rate cuts despite inflationary pressures.
Goldman Sachs has increased its forecast for U.S. tariffs in 2025 from 10% to 15%, citing escalating trade tensions. The firm predicts core PCE inflation will rise to 3.5%, with GDP growth slowing to 1.0% and a 35% chance of a U.S. recession within a year. The Federal Reserve is expected to cut rates three times in the latter half of 2023 to mitigate economic impacts.