It's premature to believe inflation is going to peak and cool down soon, Goldman's global stock chief says

• It's premature to say inflation is near a peak and pressure will ease on the Federal Reserve, Peter Oppenheimer said.
• The Goldman Sachs strategist contrasted the inflation rate with the "lived reality" of rising prices.

It's too early to decide that red-hot US inflation is close to a peak that could prompt the Federal Reserve to pivot away from tightening, according to Goldman Sachs' chief global equity strategist.

Speaking to Bloomberg TV on Monday, Peter Oppenheimer said: "It's premature to believe inflation is going to come down quickly, or the pressure has eased for the Federal Reserve and other central banks to continue to tighten."

The Fed is aggressively hiking interest rates, which it kicked off with a 75-basis point rate increase in June, to try to combat inflation running at 40-year highs.

Uncertainty over whether high levels of inflation will become entrenched in the US and how far the central bank will go to tame it has helped drive losses for stocks in recent weeks. Energy and food costs are soaring thanks to Russian sanctions and other impacts of the Ukraine war, among other factors.

Oppenheimer said that while the US inflation rate — which stood at 9.1% in June — may peak and start to come down, the "lived reality" of most people is that prices are still rising, maybe at a slower rate.

"There's two issues here. There's the inflation rate which most people and economists look at, but the data we got last week suggests that core inflation is still rising well ahead of most people's expectations," he added.

Core inflation — which excludes volatile energy and food prices — climbed 5.9% year-over-year through June, just shy of May's 6.0% rate and above analyst expectations for 5.7%.

Investors have become increasingly fearful that the Fed's monetary tightening will tip the US economy into a recession. According to Deutsche Bank, the market is pricing in a 100% risk of a recession by the end of the year.

But Oppenheimer told Bloomberg that view might also be premature. "I don't think a deep recession is being priced in yet."

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