Goldman Sachs CPI PREVIEW
FICC and Equities
11 August 2025 | 2:43 PM UTC
From GS Research:
We anticipate a 0.33% increase in July core CPI (vs. +0.3% consensus), corresponding to a year-over-year rate of 3.08% (vs. +3.0% consensus).
- Headline CPI: Expected to rise 0.27% (vs. +0.2% consensus), driven by higher food prices (+0.3%) but offset by lower energy prices (-0.6%). This equates to a year-over-year rate of 2.80% (vs. +2.8% consensus).
Key Component-Level Trends:
1. Used Car Prices: Forecasted to rebound by 0.75%, reflecting higher auction prices, while new car prices are expected to decline by 0.2% due to increased dealer incentives.
2. Car Insurance: Anticipated to drop by 0.1%, based on premiums tracked in our online dataset.
3. Airfares: Projected to rise by 2%, though risks remain two-sided due to seasonal distortions and stronger underlying airfare increases from online price data tracked by equity analysts.
4. Tariffs Impact: Categories like household furnishings and recreation/communication goods are expected to face upward pressure, contributing +0.12pp to core inflation, alongside a +0.02pp boost from auto inflation.
Outlook:
- Over the next few months, tariffs are likely to continue driving monthly inflation upward, with monthly core CPI inflation forecasted between 0.3%-0.4%.
- Excluding tariff effects, underlying trend inflation is expected to decline this year due to reduced contributions from housing rental and labor markets.
- By December 2025, we forecast year-over-year core CPI inflation at +3.3% and core PCE inflation at +3.3% (or +2.5% for both measures excluding tariff impacts).
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!