A new Goldman Sachs analysis says that inflation will eclipse new COVID-19 outbreaks as the primary threat to global economic growth.
The investment bank <a href="https://www.goldmansachs.com/insights/pages/gs-research/gs-macro-outlook-2022/gs-macro-outlook-2022-the-long-road-to-higher-rates.pdf">explained</a> on November 8 that the Federal Reserve will likely begin hiking interest rates as inflation in the United States continues:
<blockquote>Higher-than-expected US inflation recently prompted us to pull forward our forecast for Fed liftoff by a full year to July 2022. We now expect core PCE inflation to remain above 3% — and core CPI inflation above 4% — when the QE taper concludes, which would make a seamless move from tapering to rate hikes the path of least resistance. After liftoff, we see a second hike in November 2022 and two hikes per year after that.
The key to this gradual pace is a partial moderation in goods prices and in overall inflation, driven by a combination of slowing demand and rising supply. On the demand side, we expect spending on goods to moderate as US government income support normalizes and service activity rebounds. Although US real goods consumption remains nearly 10% above trend, this already represents a decline of 5% since the peak in March when households received stimulus checks, and the adjustment likely has further to go.</blockquote>
Since medical advancements will continue to slow COVID-19 spread, Goldman Sachs expects a reduction in consumer fear over the virus. Rising price levels may therefore replace COVID-19 as a primary bottleneck to economic recovery:
<blockquote>This means that the biggest risk to the global economy may no longer be a renewed downturn because of fresh virus outbreaks, but may now be higher inflation because of tight goods supplies and excessive wage pressure. Although we expect a significant part of the goods supply squeeze to abate over the next year, at present the stress on supply chains is substantial and inventories in semiconductors, durable goods, and energy markets are very low. In such an environment, even a moderate production outage resulting from covid outbreaks in China, an energy demand spike related to a cold winter, or other short-term disruptions could have sizable economic effects.</blockquote>
On Wednesday, the Department of Labor <a href="https://www.dailywire.com/news/breaking-bidenflation-price-increases-soar-to-30-year-high-outpace-economist-predictions">announced</a> that year-over-year inflation for consumer prices reached 6.2% last month — the highest rate of increase in thirty years. 
“I do think we’re moving into a new phase where inflation is broader and where things are going to get a little more intense,” MacroPolicy Perspectives economist Laura Rosner-Warburton told The Wall Street Journal. “Part of that reflects that [supply-chain] bottlenecks are not resolved going into the holiday season, when a lot of purchases get made, and that the economy is doing really well, so you have strong demand.”
“Inflation is clearly getting worse before it gets better, while the significant rise in shelter prices is adding to concerning evidence of a broadening in inflation pressures,” Principal Global Investors chief strategist Seema Shah told CNBC.
Last week, the Federal Reserve announced that it will begin <a href="https://www.dailywire.com/news/as-high-inflation-persists-federal-reserve-unveils-first-official-plan-to-roll-back-stimulus">tapering</a> its monthly asset purchases — marking the first reduction in aggressive monetary stimulus since the onset of COVID-19 and the lockdown-induced recession. Though interest-rate targets will remain untouched, the central bank will slash bond purchases by $15 billion in November and December. 

<script async src="https://www.instagram.com/embed.js"></script>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<script async src="https://www.tiktok.com/embed.js"></script><div data-widget-host="revcontent" data-pub-id="165152" data-widget-id="290588"></div><script src="https://delivery.revcontent.com/165152/290588/widget.js"></script>

Goldman Sachs Says Inflation Is Bigger Threat To Global Economy Than COVID-19

Bud Light Sales Continue To Plummet, May Soon Lose Status As Number-One Beer

‘Profoundly Christian’: Former Head Of Anglican Church Presses British Government To Endorse Assisted Suicide

Ben Shapiro Reacts To Debt Limit Deal, Hits Both Democrats And Republicans Over Spending Habits

‘The Chosen’ Defends Pride Flag Spotted On Set: ‘Let The Show Speak For Itself’

Chick-Fil-A Faces Backlash As Their Diversity Efforts Resurface, Other Woke Brands Take Beating

North Korea Sentenced Two-Year-Old To Life In Prison After Family Caught With Bible: State Department

News and Analysis

COVID

Economy

Inflation

A video goes viral showing a baby being refused his mother by two gay "dads". This is just the tip of the iceberg, which is why we will have an important discussion today about surrogacy. 

Hour 1

The Matt Walsh Show

Ep. 1765 - This Video Is One Of The Worst Things I've Seen In A Long Time 

The Strait of Hormuz officially opens for business (kind of), the Pope makes “shocking” comments on immigration, and President Trump promises UFO disclosure at TPUSA. 


The Michael Knowles Show

Ep. 1956 -  Pope Leo's "SHOCKING" Immigration Comments EXPLAINED

A false miscreed has corrupted our leadership class.


The Andrew Klavan Show

Ep. 1275 - Dumb, Dumber and Progressive

President Trump announces a 10-day ceasefire between Lebanon and Israel, a murder-suicide involving former Democratic Lieutenant Governor Justin Fairfax shakes Virginia, and France and Britain hold a conference to secure the Strait of Hormuz – after the Iranian conflict ends. Get the facts first with Morning Wire.

- - -

Ep. 2738

- - -

Wake up with new Morning Wire merch: https://bit.ly/4lIubt3

- - -

Today's Sponsors:

Alliance Defending Freedom - Visit https://JoinADF.com/WIRE or text 'WIRE' to 83848 to learn more.

Pocket Hose - Text MORNING to 64000 to get a FREE pocket pivot and their 10-pattern sprayer with the purchase of ANY size Copper Head hose. Message and data rates may apply.

Morning Wire

U.S. Expands Hormuz Blockade & VA Fairfax Deaths Investigated | 4.17.26

U.S. Expands Hormuz Blockade & VA Fairfax Deaths Investigated | 4.17.26 [Member Exclusive]

A ceasefire goes into effect between Israel and Lebanon, a tragic murder-suicide rocks Virginia, and Dairy Queen deploys AI in the drive-thru. Get the facts first with Evening Wire.
- - -
Ep. 2737
- - -
Wake up with new Morning Wire merch: https://bit.ly/4lIubt3 
- - -
Today’s Sponsor:

Alliance Defending Freedom - Visit https://JoinADF.com/WIRE or text “WIRE” to 83848 to learn more.


Menu

— News and Analysis —

Goldman Sachs Says Inflation Is Bigger Threat To Global Economy Than COVID-19