The bank views July’s inflation data as supportive of a September rate hold but warns of potential PCE volatility from fee distortions and methodology changes.
Goldman Sachs described July’s CPI report as encouraging for a Federal Reserve pause in September, reinforcing market expectations of steady rates. The firm highlighted contained core inflation as a key factor in the Fed’s decision-making process.
While the CPI print aligned with expectations, Goldman cautioned that upcoming PCE data could face distortions from portfolio management fees and pending methodology adjustments. These factors may introduce volatility but are unlikely to derail the broader disinflation trend.
US equities reacted unevenly to the CPI release, with the Dow lower and NASDAQ indices leading gains. One more inflation report is due before the Fed’s September meeting, leaving room for reassessment.