Goldman Sachs say cooler-than-expected core CPI support Fed easing cycle still in progress

The CPI data from the US:

• Forexlive Americas FX news wrap 15 Jan: US CPI does not scare market.Yields down.Stocks up

Goldman Sachs analysts, in response, suggested that the cooler-than-anticipated core CPI figures may alleviate concerns about a resurgence in inflation.

• Although this report alone is unlikely to prompt the Federal Reserve to consider a rate cut in January, it supports the argument that the Fed’s current easing cycle is still in progress.
• However, with labor market conditions remaining strong, the Fed has room to wait. More positive inflation data will be necessary before the central bank moves forward with additional rate reductions.

Meanwhile, Goldman economists forecast an annual core CPI inflation rate of 2.7% by the end of 2025.

This article was written by Eamonn Sheridan at www.forexlive.com.