CNBC Daily Open: Trump says tariffs haven't caused inflation — economists think they will soon

CNBC

2 days ago

Don't mess with DJ D-Sol — Goldman Sachs CEO David Solomon's stage name when he's rocking the clubs in his other life as a DJ.
U.S. President Donald Trump criticized Goldman on Tuesday for predicting that tariffs would push up inflation, and said Solomon "should go out and get himself a new Economist or, maybe, he ought to just focus on being a DJ."
In response, Goldman defended the results of its study, according to a CNBC interview with the bank's economist David Mericle.
"If the most recent tariffs, like the April tariff, follow the same pattern that we've seen with those earliest February tariffs, then eventually, by the fall, we estimate that consumers would bear about two-thirds of the cost," Mericle said.
Goldman, in fact, is not the only Wall Street bank putting forth this view.
UBS senior economist Brian Rose wrote that "the downward trend in core inflation has been broken as tariffs start to feed through into retail prices," while Michael Feroli, chief U.S. economist at JPMorgan Chase, said in a note that tariffs could "add 1-1.5% to inflation, some of which has already occurred."
Of course, a consensus view does not mean predictions will come true. Recall how economists were all but certain a U.S. recession would happen in 2023 — only for the economy to grow 2.5% that year.
In any case, if Goldman — and economists from other banks —is proven wrong on tariff-driven inflation, and Trump, in a hypothetical scenario, manages to somehow push Solomon out of his position, at least DJ D-Sol will still be out there spinning records.Economists agree that higher tariff inflation is coming. Despite Trump on Tuesday slamming Goldman Sachs for predicting higher consumer prices, the bank is standing by its research. Other Wall Street economists agree with its call.
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