Goldman Sachs: labour market "not that interesting" as inflation dominates Fed debate

Goldman Sachs said recent U.S. inflation data matters more than softer labor market readings for the Fed’s September decision. An in-line CPI report triggered a modest bond rally, while a cooler-than-expected PPI reading helped push the S&P 500 to a record close. Goldman argues that weak payrolls are unlikely to sway policymakers because inflation remains the Fed’s main focus. The bank also highlighted persistent upward pressure on long-term yields from heavy Treasury issuance, fiscal deficits, and record corporate debt supply linked to AI infrastructure spending. Goldman favors a yield-curve steepener, seeing front-end yields as fairly priced while the long end remains pressured by structural supply.