According to BlockBeats, on January 2, Goldman Sachs released a report revising its forecast for the Federal Reserve's interest rate cuts this year from 100 basis points to 75 basis points. The report suggests that the recent reports of a rebound in core inflation have been significantly exaggerated. The annualized increase in core PCE inflation from September to November last year was 2.5%, slightly higher than the previous three months' 2.3%, but lower than the annual increase of 2.8%, indicating a continued downward trend.
The report also highlights that the Dallas Fed's trimmed mean PCE inflation for the same period was 2.4%, with November's figure at 1.8%. As the labor market tightness returns to 2017 levels, wage growth has slowed to an annual rate of 3.9%, within the 3.5% to 4% range. If productivity growth reaches 1.5% to 2% in the coming years, it would align with a 2% inflation rate.