Goldman: Inflation Broadens, Still Below 2022 Peak — SkimNews
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- Goldman Sachs economist Jessica Rindels scored the breadth of above-3% PCE inflation at 6 on a 0-10 weighted scale (where the 1990-2019 average is 0 and the 2022 peak is 10), but only 2 on an unweighted category-by-category basis
- The fastest-rising PCE categories are video/audio, financial services, medical services, and airfares/transportation, with Rindels forecasting that house rentals will fade as a driver and dip below 3% by Q4 2026
- Fed Chair Kevin Warsh told the House Financial Services Committee on July 14, 2026 that preventing individual price spikes from "broadening out" is a primary responsibility, in testimony generally read as hawkish
- Since Warsh's testimony, the U.S. 2-year Treasury yield has ticked down from nearly 4.3% to 4.18%, while CME FedWatch implies an 85% probability of no rate change at the July meeting and a 52% chance of a 25 bps hike in September
- Rindels built the index using the Fed's preferred PCE measure aggregated over the six-month annualized change, sorted either by category weight or treated each category individually
- Pre-market S&P 500 futures were up 22 bps Monday even as the broadening-inflation signal complicates the rate-cut narrative traders had been building toward
Why it matters: The split between weighted (6) and unweighted (2) breadth readings tells two stories at once: the heavy-weight categories consumers actually feel are pulling the signal up, while most individual sectors remain calm. That gap gives Warsh rhetorical ammunition to stay hawkish, and traders are already half-pricing a September hike at 52% — meaning the bar for soft CPI prints just got higher if the Fed wants to validate the other half of the market.
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