Goldman Sachs says CPI met forecasts, adds to uncertainty over next Fed rate decision

Goldman Sachs economist Alexandra Wilson-Elizondo said today’s CPI largely matched expectations, a surface-level outcome investors had wanted, but added that uncertainty around the Federal Reserve’s rate decision next week has increased. Wilson-Elizondo said the latest data does not fully capture some recent price pressures and offers little evidence that inflation is moving back toward target in the near term. The survey period for the report came before the recent rise in energy prices and before commodity pressures spread from energy to metals and agricultural products, Wilson-Elizondo said. The economist added that today’s inflation data does not rule out the possibility of stronger price pressures ahead and suggests the Fed can keep a rate hike on the table without needing to act immediately. Market attention is likely to shift from today’s release to Fed communication, energy prices, labor-market data and subsequent developments, Wilson-Elizondo added.