According to Goldman Sachs economists in a new inflation report released on Sunday, inflation has been atrocious in 2022 and is unlikely to improve this year.
“As expected, the inflation picture has worsened this winter, and how much it will recover later this year is now in question,” the financial institution explained in a note. Goldman’s note to investors follows the recent Consumer Price Index (CPI) data, which showed inflation in the United States rising at its fastest rate in 40 years, since February 1982.”
The financial institution believes that if supply chains and energy producers are disrupted as a result of Ukraine’s war with Russia, inflation might soar even higher.
Goldman Sachs analysts said that the initial inflation rise may have lasted long enough and reached a high enough peak to raise inflation expectations in a manner that feeds back into wage and price setting. According to the Goldman Sachs report, a healthy job market and rising prices could “threaten to start a moderate wage-price spiral.”