Goldman Sachs warns of spreading inflationary pressures in the United States Federal Reserve Chairman Walsh faces pressure to raise interest rates

Goldman Sachs 'latest research report shows that inflationary pressures in the United States are spreading from a few industries to a wider range of areas. Although the current inflation level has not yet reached its peak in 2022, the coverage of price increases is expanding, making the Federal Reserve's policies face greater challenges. Goldman Sachs economist Jessica Rindels uses a six-month annualized rate of change to analyze the spread of inflation based on the personal consumption expenditure (PCE) price index, which the Federal Reserve focuses on. Data shows that compared with the average inflation level from 1990 to 2019, the current inflation category pressure index of more than 3% has reached a level of about "6", compared with "10" when inflation peaked in 2022. The report pointed out that areas such as audio-visual equipment, financial services, medical care and transportation have become important sources of current price increases. At the same time, housing rental inflation, which accounts for a higher weight in PCE, is expected to fall below 3% in the fourth quarter of this year, which may become an important factor easing inflationary pressure. Goldman's analysis echoes recent concerns by new Federal Reserve Chairman Kevin Warsh about "spreading" inflation. Warsh said preventing price increases from spreading to more areas of the economy is an important task for the Fed. However, unlike former Chairman Powell's clearer policy communication approach, Warsh currently refuses to provide guidance on specific interest rate paths. Jeremy Schwartz, senior U.S. economist at Nomura Securities, said the Fed is reducing its forward-looking guidance to markets, and this policy uncertainty has increased Wall Street concerns. At the same time, hawkish voices within the Fed are heating up. Dallas Fed Chairman Logan has expressed support for a moderate interest rate hike, believing that current economic resilience does not match inflation risks.