While the conflict in Ukraine is a hot topic, fears of rising inflation continue to haunt Americans residing in the country, as economists and analysts note U.S. inflation will likely remain high. Inflation is likely going to be worse than initially feared this year, Goldman Sachs explained in a report published on Sunday. Moreover, in terms of inflation coupled with the Ukraine invasion, an economics professor at American International College (AIC) stressed there’s “a perfect storm brewing.”

Goldman Sachs: ‘Strong Jobs Market and Rising Inflation Could Ignite a Moderate Wage-Price Spiral’

Inflation has been ghastly in 2022 and it may not get better this year, according to a new inflation report stemming from Goldman Sachs economists on Sunday. “The inflation picture has worsened this winter as we expected, and how much it will improve later this year is now in question,” the note from the financial institution explained. Goldman’s note to investors, follows the Consumer Price Index (CPI) report that showed inflation in the U.S. climbed at its fastest rate in 40 years since February 1982.

Goldman’s report on Sunday further disclosed that the financial institution thinks that inflation could rise higher if there’s a disruption to supply chains and energy producers over Ukraine’s conflict with Russia.

“The initial inflation surge might have lasted long enough and reached a high enough peak to raise inflation expectations in a way that feeds back to wage and price setting,” Goldman Sachs analysts said. The Goldman Sachs report further stressed that a strong jobs market coupled with rising inflation could “threaten to ignite a moderate wage-price spiral.”

AIC Economics Professor Says ‘We Got a Perfect Storm Brewing,’ Atlanta Fed President Raphael Bostic Favors a 25 BPS Move in March

Economists and analysts are looking at the U.S. Federal Reserve and are trying to guess what the central bank will do in March. AIC’s professor of economics John Rogers said things will depend on what the Fed decides to do in terms of inflation. “We got a perfect storm brewing,” Rogers told the news desk at wwlp.com. “Inflation is pretty strong at least through the end of the year. A lot of that is what the Federal Reserve is able to do and what happens with this crisis.” The professor continued:

It’s just the geopolitical instability. You’ve seen the stock market highly volatile in the last couple of weeks. Anyone with a 401k plan is probably nervous about. The other big area is energy, it’s a worldwide market and the price of oil goes up around the world, it’s going to affect us as well.

Meanwhile, the Federal Reserve hinted that the benchmark interest rate may increase “soon,” and Fed chair Jerome Powell hinted it would likely be in March. Gold bug and economist Peter Schiff said last week that it’s possible Ukraine’s conflict could make the Fed keep the benchmark interest rate down. “Perhaps, the Fed is relieved that Russia invaded Ukraine as now it has an excuse not to raise interest rates in March,” Schiff tweeted.

Speaking at a Harvard virtual event on Monday, Federal Reserve Bank of Atlanta president Raphael Bostic told the attendees he favors a hike of around 25 basis points. “I am still in favor of a 25 basis-point move at the March meeting,” Bostic told the group of Harvard University students that attended the virtual discussion.

Tags in this story
AIC professor of economics, Consumer Inflation, CPI, CPI report, economics, Economics Report, Economy, Equities markets, Fed Bank of Atlanta, Fed Chair, goldman, Goldman Sachs, Goldman Sachs Inflation, Goldman Sachs’ analysts, inflation, Inflation Report, jerome powell, John Rogers, Peter Schiff, Purchasing Power, raphael bostic, report, US economy, US Inflation

What do you think about inflation worsening in the U.S.? Let us know what you think about the statements from Goldman Sachs, AIC’s professor of economics, and Raphael Bostic in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Source link


Please enter your comment!
Please enter your name here