Goldman Sachs: Inflation will come ‘soft’, but warns about housing

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Investment bank Goldman Sachs (NYSE: GS ) also estimates that tomorrow’s August inflation report will reflect a cooling in the accelerating pace of rising prices, improving market expectations. and strengthens the optimism that has resurfaced on Wall Street. 

“We think it will be another soft -report-. Gas prices are down a lot and that’s really going to keep the number down. But I think we’re also seeing some signs of improvement beyond energy and commodity prices,” Jan Hatzius, chief economist at Goldman Sachs, told YahooFinance in an interview.  

“I think that the great blow of the great weakness of the income, of the inflation and the fiscal recovery, is already behind us. And I think now we will see a gradual improvement. at least anecdotally. Consumer spending has improved a bit, real spending has been recovering,” the expert said. 

Most affected sector

However, the director of Goldman Sachs reiterates that the increase that the Federal Reserve of the United States has applied until now to placate inflation has an impact on the economy, and now the housing sector will be reflected even more. 

“The way that interest rates affect the economy is through financial conditions. This has a negative impact, especially on sensitive parts of the economy that are sensitive to interest rates. That’s why I think housing still has significant weakness ahead,” Hatzius said. 

“While the consumer might be a bit better off from lower inflation, housing is likely to be quite weak,” he added.

And this impact on housing affects the performance of the economy in general. So the director of Goldman Sachs indicates that although he does not have a recession in his forecasts, he does estimate that there will be a long period of growth below the trend. 

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“Nuestra mejor suposición es que seguiremos viendo un crecimiento positivo, pero muy moderado. Mucho dependerá de lo que suceda con la inflación, qué tan rápido baje, de cuánto más tenga que hacer la Fed. Si bien estamos viendo algunos signos de mejora, es demasiado pronto para confiar en eso”, puntualizó. 

Por ahora, los mercados se inclinan por la probabilidad de que la inflación esté cediendo, lo que permitiría que la política restrictiva para recoger liquidez de la Fed sea un poco menos agresiva. Aunque se recortaron levemente las ganancias del día, siguen las compras en el mercado, con el  subiendo 187 puntos, o 0.58%, el  ganando 34 puntos o 0.86% y el Nasdaq impulsado para subir 122 puntos o 1%.

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