Goldman Sachs Sends Warning in New U.S. Economic Report
Goldman Sachs released a report on Friday, May 8, with its new outlook for the U.S. consumer, and in it, they send a warning to Americans about the state of the economy.
That warning has to do with high inflation. According to the report, the U.S. PCE inflation is expected to stay near 3 percent through 2026 compared to the Fed's 2 percent goal, because of higher energy costs.
Notably, their economists state that Americans hoping to see an interest rate cut will have to wait, as Goldman Sachs has changed its outlook for U.S. interest rate cuts and moved it back by one quarter because of higher-than-expected inflation. Now, Goldman Sachs expects the Federal Reserve will announce the next two rate cuts in December 2026 and March 2027 instead of earlier.
"Higher energy and food costs, combined with SNAP and Medicaid cuts, are pressuring the bottom-income quintile," Bonnie Herzog stated in the report. "We are now expecting pre-savings discretionary cash inflow growth of only 0.8 percent for that cohort this year, well below the 3.7 percent aggregate growth rate for U.S. consumers."
Even with this projection, Goldman maintains its terminal Fed rate estimate at around 3 percent to 3.25 percent.
Founded in 1869, Goldman Sachs is a longtime financial institution that's known for its position as a leading global investment bank.
Ways to Save Amid High Inflation
So, how can you save this year and help offset the cost of high inflation? The experts at Wintrust suggest to reevaluate your budget.
"For instance, perhaps you've identified your travel category as a place where you have flexibility in terms of your spending," they state in the piece. "By reducing how much you’re budgeting for travel, you can free up money for savings. Performing this action for all categories that don’t have fixed costs can bring down your overall expenditures each month, helping you reach your savings goals."
They also suggest investing in long-term savings products and taking advantage of higher interest rates amid the inflation. Those options include high-yield savings accounts, money market accounts, certificates of deposit (CDs) and bonds.
Of course, some of these options come with less liquidity, such as CDs. So, plan accordingly. But, when inflation is on the rise, you certainly don't want you money sitting in an account with no interest.
Another option is downsizing your living arrangements. According to a report from Realtor.com, A Redfin survey published in fall 2025 found that 44.4 percent of American homeowners and renters were having trouble meeting their monthly payments.
Inflation has a way of making ordinary errands feel not so ordinary, but not in a good way. Coffee costs more. Insurance creeps up. Suddenly the grocery bill looks like it spent a weekend in Las Vegas. But, following those practical ways to soften the blow helps, even if it's just a bit. Small decisions can keep the lights on and stress manageable.