Goldman Sachs says U.S. CPI unlikely to move Fed policy outlook

Limited Impact of CPI Data

Goldman Sachs predicts that the latest U.S. CPI data will not significantly affect the Federal Reserve's policy outlook. Policymakers are likely to focus on upcoming inflation data leading to the January FOMC meeting.

Outlook for CPI and Core PCE

The firm notes that recent surprises in CPI downside are attributed to technical and timing factors rather than a broad easing in inflation. They point to a significant decline in shelter components due to methodological issues and delayed price collection for core goods in November.

Importance of Future Data

Goldman emphasizes that the upcoming December inflation data will play a crucial role in assessing whether inflation pressures are cooling sustainably. They anticipate part of the shelter weakness will reverse while goods inflation may slightly accelerate in December, suggesting that the Fed will remain patient and rely on broader data trends rather than isolated CPI readings.