Goldman Sachs suggests that the latest U.S. Consumer Price Index (CPI) data released on December 18 is unlikely to materially alter the Federal Reserve's near-term policy outlook. The bank believes policymakers will instead focus on subsequent inflation reports due before the January Federal Open Market Committee (FOMC) meeting.
In a post-CPI report, Goldman Sachs noted that while both headline and core measures showed continued progress in slowing inflation, the latest figures "are unlikely to influence the Fed’s decision-making." The bank emphasized that December inflation data, due just before the Fed’s January meeting, will carry greater significance in assessing whether price pressures are sustainably easing.
Goldman’s analysis indicates that recent below-expectation core CPI readings were primarily driven by technical and timing-related factors rather than broad-based disinflation. Specifically, the bank highlighted significant downward pressure from the housing component, stemming from statistical methodology issues tied to missing October data. Additionally, core goods prices softened due to later-than-usual November price collection.
Beyond CPI, Goldman estimates the Fed’s preferred inflation gauge—the core Personal Consumption Expenditures (PCE) price index—averaged a 0.12% monthly increase in October and November. The bank projects October at 0.10% and November at 0.14%, which would lower the year-over-year core PCE rate to 2.66% in November from 2.83% in September.
While this trajectory supports the broader disinflation narrative, Goldman cautioned against overinterpreting recent CPI weakness. The bank noted that the Bureau of Labor Statistics (BLS) has yet to clarify how it will address identified data distortions, raising the possibility of partial reversals in coming months.
Goldman expects housing-related softness to partially rebound in future releases, while goods inflation may reaccelerate modestly in December. Consequently, the bank anticipates the Fed will remain patient, relying on a broader dataset rather than a single CPI print when shaping early-2026 policy decisions.
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