Goldman Sachs Global Outlook: Bullish on U.S. PCE Spending, Bearish on Japanese Industrial Production

Overview

This report is a weekly forward-looking briefing issued by Goldman Sachs’ Global Economics team, covering May 25–31, 2026. It outlines scheduled central bank policy meetings globally during the week and highlights Goldman Sachs’ forecasts for key economic indicators across major economies, comparing them against Bloomberg consensus estimates. Notably, the report selectively identifies forecasts that deviate from consensus by more than one standard deviation—termed 'out-of-consensus' views—to help investors identify potential expectations gaps.

Core views

Regarding central bank decisions, five countries hold policy meetings this week. Goldman Sachs’ most distinctive call is for the Bank of Israel to raise its benchmark policy rate to 4.0%, significantly above the market’s prevailing expectation of 3.75% (the prior decision was also at 4.0%). For the Reserve Bank of New Zealand (expected to hold at 2.25%), South African Reserve Bank (expected to hold at 7.0%), Magyar Nemzeti Bank (expected to hold at 6.25%), and Bank of Korea (expected to hold at 2.5%), Goldman Sachs’ forecasts align fully with mainstream market expectations. On economic data outlooks, Goldman Sachs focuses on several indicators for the U.S. and emerging markets. On the 'stronger-than-consensus' side, Goldman Sachs forecasts U.S. April PCE to rise 0.7% month-on-month—well above consensus of 0.5% (prior: 0.9%); it also expects Brazil’s current account balance to improve sharply to USD 700 million (consensus: USD -900 million), and Chile’s unemployment rate to decline to 8.8%. On the 'weaker-than-consensus' side, Goldman Sachs forecasts U.S. April core PCE inflation to slow to 3.78% year-on-year—below consensus of 3.9%; it also expects weaker-than-expected performance in Japan’s industrial production (forecast: -1.2% month-on-month vs. consensus: -0.5%) and Poland’s inflation (forecast: 3.4% year-on-year vs. consensus: 3.7%).

Analysis framework

Goldman Sachs employs an 'Out-of-Consensus Score' as its core analytical tool to quantify the distinctiveness of its forecasts. The methodology proceeds as follows: First, it calculates the historical 'surprise'—i.e., the difference between Bloomberg consensus forecasts and actual published data—for each indicator since 2000, then computes the historical standard deviation of those surprises. Next, it normalizes the gap between Goldman Sachs’ own forecast and consensus by dividing it by that standard deviation. This standardization enables apples-to-apples cross-indicator comparison—regardless of scale or volatility—and objectively identifies which forecasts represent truly significant, non-consensus views.

Methodology notes

• Event-Driven Game Theory & Behavioral FinanceExpectations Gap / Expectations Management

  Expectations Gap Analysis (Out-of-Consensus Analysis)

  By quantifying the degree of divergence between institutional forecasts and market consensus, this approach seeks opportunities for market mispricing arising from information asymmetry or modeling differences. When actual data releases align with strongly non-consensus forecasts, they may trigger sharp asset price revaluations.

Key data

• Bank of Israel Policy Rate Forecast4.0%Goldman Sachs forecast exceeds consensus (3.75%), representing a stronger-than-consensus view
• U.S. PCE Month-on-Month Forecast0.7%Goldman Sachs forecast exceeds consensus (0.5%), representing a stronger-than-consensus view
• U.S. PCE Year-on-Year Forecast3.78%Goldman Sachs forecast falls short of consensus (3.9%), representing a weaker-than-consensus view
• Japan Industrial Production Month-on-Month Forecast-1.2%Goldman Sachs forecast implies a larger decline than consensus (-0.5%), representing a weaker-than-consensus view
• Brazil Current Account ForecastUSD 700 millionGoldman Sachs forecast shifts from negative to positive, substantially stronger than consensus (USD -900 million)

Impact & implications

The report identifies U.S. inflation and consumption data as the week’s central themes. If U.S. PCE spending proves robust while inflation cools as Goldman Sachs anticipates, it would reinforce the 'soft landing' narrative; conversely, if inflation proves stickier than expected, it could alter the Federal Reserve’s future policy path. Additionally, should the Bank of Israel raise rates as Goldman Sachs forecasts, it would likely influence regional currencies and capital flows across the Middle East.