Goldman Sachs: hopes for peak inflation are premature

According to Goldman Sach’s Peter Oppenheimer, the market's optimistic forecast of peak inflation is unreliable.

Oppenheimer said that increased demand from China and supply-side pressures could cause energy and other commodity prices to rise. This prospect undermines the hope that inflation must fall soon. In this regard, the expert would not recommend jumping to conclusions, as a rapid peak in inflation does not guarantee a decline in interest rates in the near future.

Nevertheless, it is predicted that inflation could decline, while oil prices may hit the lows of January that have given hope for the market stabilization. Futures projections suggest that the Fed might start cutting rates in the second half of 2023.

However, for Oppenheimer, the energy shortage of the last decade means that any increase in demand will only result in higher prices. In addition, the speed at which inflation and interest rates can fall will be contained.

The financier concludes that a sustained recovery in risky assets is unlikely until interest rates peak.