Goldman Sachs has adjusted its inflation outlook following the latest Consumer Price Index (CPI) report, now estimating that the core Personal Consumption Expenditures (PCE) price index rose 0.35% in January, slightly above its previous 0.32% forecast. This would place the year-over-year core PCE inflation rate at 2.64%.

The investment bank also expects headline PCE inflation to have increased 0.38% month-over-month, translating to an annual rise of 2.51%. Additionally, they note that residual seasonality effects in core PCE components will likely shift from a 5 basis point drag in December to a 4 basis point boost in January.

Meanwhile, Goldman estimates that market-based core PCE, a measure that excludes imputed and volatile components, rose 0.26% in January.

As for the Federal Open Market Committee (FOMC), Goldman Sachs says the Fed will be on hold at its next meeting. Which seems obvious.

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The Personal Consumption Expenditures (PCE) price index data for January 2025 is scheduled for release on February 28, 2025.

The PCE price index is the Federal Reserve's preferred measure of inflation, as it reflects changes in the prices of goods and services purchased by consumers in the United States. The upcoming release will provide insights into consumer spending and inflation trends for January 2025.

As of December 2024, the PCE price index increased by 2.6% year-over-year, while the core PCE price index, which excludes food and energy prices, rose by 2.8%.

Analysts and policymakers will closely monitor the January 2025 data to assess the trajectory of inflation and its implications for monetary policy decisions.

Source: Forex Live