Inflation Is Now a Bigger Concern Than COVID-19 – Says Goldman Sachs

Inflation Is Now a Bigger Concern Than COVID-19 - Says Goldman Sachs

( – For the past two years, COVID-19 dominated headlines, as the pandemic played a part in nearly every story. However, as the world continues to fight the virus, it’s turning its focus to other issues. Even the leading global investment banking firm Goldman Sachs echoed this change of heart, highlighting their focus that inflation is now a bigger concern than the coronavirus.

Goldman Sachs Publishes Its “Macro Outlook” for 2022

It is the job of investment firms to understand and predict the economy, interest rates, and stocks to the best of their ability. So, when they publish in-depth analyses on these topics, Americans listen. On Monday, November 8, Goldman Sachs released its latest analysis, which highlighted its hope for “strong global growth” due to “continued medical improvements, a consumption boost from pent-up saving, and inventory rebuilding.”

However, the firm noted the inflation surge was an enormous surprise this year. Thus they predicted a funds rate hike every six months as prices on goods hopefully normalize. Additionally, Goldman Sachs believes inflation will settle, on average, half a percentage point above the pre-pandemic level because monetary institutions “tweaked their goals accordingly.” But, Americans also have a higher tolerance for bigger government spending and budget deficits, which tend to cause higher inflation in the long run.

Inflation May Be Here For a While

As inflation from the supply chain delays and wage pressure continue, higher prices and interest rates are likely to stay. On Wednesday, November 10, the Department of Labor (DOL) announced inflation prices hit 6.2% compared to last year, the highest America has seen in 30 years.

Goldman Sachs predicts these major pressures will abate over the next year, but even small changes like a COVID outbreak in China or an extra-cold spell in the winter could set off a small crisis with “sizeable economic effects.”

Making the Right Financial Choices in a Time of Uncertainty

With this, many citizens are trying to figure out how to navigate this new and unpredictable economy. Some are financing large purchases with low-interest rate loans and buying long-lasting goods while their money goes a bit further. However, it is still key to have a savings account for emergencies should another worldwide crisis occur.

Finding the balance between inflation and the current goods shortage is tricky, but many Americans are figuring it out to make the most budget-conscious decisions for their family.

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