Goldman Sachs(US:GS) Hua Er Jie Jian Wen·2025-05-13 08:37Core Insights - The current market focus is on the narrative of tariff easing, with the upcoming CPI data expected to reflect the early effects of tariffs, although the majority of the impact may manifest in June and July [1][4] CPI Predictions - The U.S. April CPI is expected to rise by 0.3% month-on-month, compared to a decrease of -0.1% in March. The core CPI, excluding food and energy, is also projected to increase by 0.3% [1][3] - Year-on-year, the April CPI is anticipated to remain at 2.4%, consistent with March, while the core CPI is also expected to hold steady at 2.4% [1][3] Tariff Impact Analysis - Deutsche Bank suggests that it may be too early to see the tariff price increases reflected in the April CPI, recommending close monitoring of categories with high import volumes such as clothing and household goods [2][4] - Goldman Sachs estimates that a 10% universal tariff could raise inflation by approximately 0.3 percentage points in the short term, with core inflation potentially rising to above 3% [3][4] Key Components of CPI - Goldman Sachs predicts that tariffs will exert moderate upward pressure on sensitive categories, contributing an additional 0.06 percentage points to core inflation, particularly affecting clothing (+0.8%), furniture (+0.3%), education (+0.4%), and communication (+0.3%) prices [3][4] - The report will include a semi-annual update on health insurance, with expectations of negative inflation for health insurance in the coming months [3] Market Reactions and Federal Reserve Implications - The inflation rebound driven by tariffs poses a challenge to the Federal Reserve's policy path, with officials indicating they will not lower interest rates until they perceive that tariff-induced inflation has peaked [6] - Market sentiment may become insensitive to CPI surprises due to the prevailing optimism regarding tariff easing, with any unexpected CPI data potentially being interpreted in a non-symmetrical manner [6][7]