In recent days, a report by economists at Goldman Sachs indicated that American consumers are expected to bear the brunt of price hikes resulting from higher tariffs. In response, former US President Donald Trump took to Truth Social, expressing his discontent with the insights provided by Goldman Sachs and its CEO, David Solomon. Trump insisted that tariffs have not contributed to inflation or any significant issues within the United States, attributing the situation instead to an influx of cash into the Treasury.
Trump suggested that Solomon should consider finding a different economist or possibly focus on his past career as a DJ, implying that Solomon’s economic forecasts were flawed. This statement comes after Solomon had previously scaled back his DJing due to pressures from Goldman Sachs’ board.
The Goldman Sachs report argues that by June, Americans had absorbed 22% of the costs associated with tariffs, a figure projected to rise significantly to 67% by October if trends continue. Notably, Trump did not reference this specific report in his comments. The bank has opted not to respond to Trump’s critiques publicly.
Goldman Sachs’ chief economist, Jan Hatzius, has garnered attention for accurately predicting that the US economy would not fall into recession this year. His team’s forecasts, which share similarities with predictions from other financial institutions, assert that consumers are likely to feel the impact of the increased tariffs. However, despite the rising tariffs enacted by Trump, inflation rates have shown a steady trajectory, with recent data indicating a modest 0.2% rise in consumer prices for July, keeping the annual inflation rate at 2.7%.
In summary, the ongoing discourse between Trump and Goldman Sachs highlights the tensions surrounding economic policy and the implications of tariff increases on the consumer market. This feud reflects deeper concerns over economic forecasting and the accuracy of interpretations coming from prominent financial institutions.