Global Economics Wrap Up

Economics Research 14 August 2026 | 2:47PM EDT

Global Economics Wrap-Up: August 14, 2026

Global Economics Joseph Briggs | 8/14/26 1:49PM ET Goldman Sachs & Co. LLC

n Examining global central bank communication practices: Andrew Tilton | o Fed Chairman Kevin Warsh aims to revise the FOMC’s communication Goldman Sachs (Asia) L.L.C.

strategy, bringing central bank communication practices into focus. Katya Vashkinskaya | o DM central banks have increased communication and transparency over Goldman Sachs International the past 25 years, and nearly all now publish economic forecasts, hold Jessica Rindels | press conferences after meetings, and regularly use forward guidance. Goldman Sachs & Co. LLC § The Fed is an outlier in publishing individual forecasts but is also one Sarah Dong of the few that does not publish a quarterly monetary policy report. | Goldman Sachs & Co. LLC

o We find that reforms that increased communication lowered year-ahead rates volatility by about 10%, with larger effects from the introduction of meeting minutes, press conferences, and forward guidance. o We also find that better communication improves transmission of monetary policy via financial conditions: § A 100bp hawkish policy surprise leads to a 100bp FCI tightening if a central bank has not surprised recently, but only 70bp for central banks at the median of the historical surprise distribution. o There are two frequently cited drawbacks to increased communication, but neither seem like issues today: § Central banks may be slower to adjust policy to incoming information, but we find that guidance-providing central banks tend to react faster to forecast surprises. § Overcommunication could confuse markets and amplify volatility, but we find little evidence that major central banks have reached a point where more information is counterproductive. o Taken together, a modest pullback in FOMC communication and transparency could bring it back in line with its peers without imposing significant costs, but a more significant shift may make monetary policy less effective. n July inflation roundup: o US core CPI increased by 2.48%yoy and headline CPI rose by 3.4%yoy in July, roughly in line with expectations.

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Goldman Sachs Global Economics Wrap-Up

o India July headline CPI inflation rose to a 19-month high of 4.5%yoy from 4.4% in June, driven primarily by higher food inflation. o China’s headline CPI inflation fell to 0.5%yoy in July from 1.0% in June, mainly on lower prices for oil-related products and tourism-related services. o Next week, we expect UK July headline inflation to rise to 2.9%yoy (up from 2.6% in June) but core inflation to be unchanged at 2.6%.

US Economics 8/14/26 1:32PM ET

n Core CPI increased 0.22% in July and 2.48% over the last year: o On the firmer side: § The shelter categories rebounded to 0.26% month over month, boosting the core by 12bp. § Medical services prices increased by 0.6%, boosting the core by 5bp. § The communication categories increased by 0.6%, boosting the core by 2bp and likely reflecting recently announced prices hikes on consumer electronics. o On the softer side: § Hotel prices declined by 3.3%, weighing on the core by 5bp and reflecting the continued reversal of the boost from the World Cup. § Energy prices declined (-1.5%) for a second consecutive month. o Based on details in the PPI and CPI reports, we estimate that the core PCE price index rose 0.20% in July. § More than half of the core PCE prices comes from an increase in the portfolio management and investment advice component of PCE, however, an impulse that few if any consumers will view as an actual price increase. § We estimate that market-based core PCE increased 0.12% in July. n We lowered our Q3 GDP tracking estimate by 0.5pp to +2.2% this week: o Existing home sales declined by 1.7% to a seasonally adjusted annualized rate of 4.06 million units in July and June sales growth was revised up by 1.0pp to -1.4%. o Core retail sales fell 0.6% in July and the level of…