Goldman says markets are optimistic on pace of US infltion drop

Bloomberg/Joanna Ossinger/6-17-2023

“Inflation in the US won’t come down as quickly as markets are currently pricing, according to strategists at Goldman Sachs Group Inc.”

USAGOLD note: What bothers the Fed about the current inflation numbers is that core prices excluding food and energy, as shown below in the Fed favored inflation indicator, the PCE Index, are actually increasing even as the headline inflation rate continues to drop. Most of that drop, in fact, has to do with the drop in the cost of energy. The price of energy can accelerate suddenly and along with it other volatile sectors, though, and  that is what is troubling the Fed. If it does, the rising cost will be tacked onto core prices

US Core PCE Index Annual Change
Chart courtesy of TradingEconomics.com