Goldman Sachs expects inflation to remain noticeably above the Fed’s target next year, while former Fed official Frederic Mishkin cautioned markets against anticipating early rate cuts. Goldman’s forecast sees headline inflation at 2.9% by the end of this year and 2.6% by the end of next year, with core inflation (excluding energy and food) at the same levels.

Mishkin noted that recent PPI figures pointed to accelerating inflation but said he 'wouldn’t put much weight on the recent producer‑price numbers,' calling the index typically volatile. He added that 'core inflation doesn’t look that good' and that unemployment remains close to a full‑employment level, which lowers the likelihood of near‑term rate cuts.

Mishkin also highlighted the Fed’s past forecasting errors, concerns about rising inflation expectations, and what he described as 'the threat to Fed independence' from political pressure to ease policy. He warned cuts will come only when 'there is a clear reason.' Tariff pass‑through may be more persistent because many firms pre‑stocked inventories before tariffs took effect. #GoldmanSachs #Fed #inflation #Mishkin #FiatNews