Goldman stands by call that consumers will bear the brunt of tariffs after Trump blasts bank’s economist
In the face of President Donald Trump’s fluffy criticism, Goldman Sachs economist David Mericle on Wednesday, with a controversial estimation that tariffs will begin to hit consumer wallets.
Trump was thrown into the bank on Tuesday in an article on Tuesday, claiming that his CEO David Solomon was “buying a new economist” or he was thinking of resigning.
However, in a CNBC interview, Mericle said he was sure that despite the firm’s research and the president’s objections.
“We are with the results of this study,” he said, “Squawk on the street.” “April tariff, such as the latest tariffs, the earliest February tariffs, if we see the model, in the autumn, consumers will carry about two -thirds of the cost.”
The source of the president’s fire is a Goldman During the weekend, written by Economist Elsie Peng, he claims that exporters and businesses will pass to consumers in the coming months, while sucking most of Trump’s tariffs so far.
In fact, Peng wrote that Goldman models show that consumers will undertake about two -thirds of all costs. If this is the case, the Federal Reserve’s main inflation estimation indicator will push the price index to 3.2% by the end of the year, except for food and energy. The core PCE inflation for June is 2.8%, while the FED inflation aims at 2%.
“If you are currently a company protected from foreign competition in the US, you can increase your prices and benefit.” He said. He continued: “So these are our estimates and I think, in fact, they are quite consistent with what many other economists find.”
Mericle said Trump would probably get at least some of the interest rates requested from the Fed.
“I think most of the effect is still ahead of us. I don’t worry about it. He said. “I do not think that this will be very important for the FED, because now there is a labor market to worry, and I think this raid will be concern.”
The weak July Farm payroll report, which includes modest gains for the consumer price index this week and sharp revisions up to the previous two months, is priced in deductions from the Fed in each of the three remaining meetings this year.
