Summary
- Goldman sees CPI having limited Fed impact
- December data more important for January meeting
- Core PCE disinflation remains intact
The latest U.S. consumer price index (CPI) data released on 18 December is unlikely to materially alter the Federal Reserve’s near-term policy outlook, according to Goldman Sachs, which argues policymakers will instead focus on inflation data still to come ahead of the January FOMC meeting.
In a note following the CPI release, Goldman said today’s reading is “unlikely to move the needle” for the Fed, despite headline and core measures continuing to show progress on disinflation. The bank emphasised that December inflation data, which will be released just before the Fed’s January meeting, will carry greater significance for policymakers assessing whether price pressures are cooling in a sustained manner.
Goldman’s analysis suggests that recent downside surprises in core CPI have been driven largely by technical and timing-related factors rather than a broad-based easing in underlying inflation. Specifically, the firm points to a sizeable drag from shelter components, stemming from methodological issues related to missing October data, as well as softer core goods prices due to later-than-usual price collection in November.
Looking beyond CPI, Goldman estimates that the core Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, rose by an average of 0.12% month-on-month across October and November. The bank estimates a 0.10% increase in October and 0.14% in November, which would lower the year-on-year core PCE rate to 2.66% in November, down from 2.83% in September.
(As an aside, there is no official release date yet set for the November PCE and core PCE data).
While this trajectory supports the broader disinflation narrative, Goldman cautions against over-interpreting recent CPI softness. The firm notes that the Bureau of Labor Statistics has not yet clarified how it will address the identified distortions, raising the possibility that some of the recent drag could reverse in coming months.
Goldman expects part of the shelter weakness to unwind in future releases, while goods inflation could re-accelerate modestly in December. As a result, the bank sees the Fed remaining patient, with policymakers likely to rely on a broader run of data rather than a single CPI print when shaping policy decisions in early 2026.
