Goldman Sachs is out with a chart that says the US inflation problem is almost entirely two things: tariffs and the Iran energy shock. Take those out and inflation is basically at target.The latest hard data is ugly. September PCE was 3.6% y/y on headline and 3.1% on core, with gasoline and other energy goods up 9.2% in the month alone. Goldman sees headline peaking just shy of 3.9% right about now and core topping out near 3.3%.Strip out the two shocks and the picture changes:Headline PCE ex-temporary drivers: roughly 2.2%Core PCE ex-temporary drivers: roughly 2.4%Energy/Iran is worth about 1.5 pp on headline at the peakTariffs are worth another 0.3-0.4 pp on headline and were closer to a full point on core earlier this yearTariff effects are largely gone by mid-2027; the energy effect fades through late 2027Headline is back near 2.1% and core near 2.4% by the end of 2027That’s the case for looking through it. Tariffs are a one-time level shift and oil doesn’t rise 30% every year. Hiking rates doesn’t reopen Hormuz.Here’s the catch: Goldman’s own economists don’t think the Fed will look through it. After Tuesday’s hot October CPI, the third straight upside surprise, they added a hike to their forecast. They now see 25 bps in December and another 25 bps in March, and they pushed the first cut back to December 2027. A month ago they were arguing the Fed might be one-and-done after September.The rest of the Street is moving faster. Bank of America is just out with a call for hikes in December, January and March, adding January to its forecast. Deutsche Bank has the same three. The market is pricing 86 bps of tightening over the year ahead, which is more than three hikes and more than any of them.So Goldman is in an odd spot. It says the overshoot is temporary, and it’s still the dove on the Street with two more hikes.There are a few holes in the temporary story too. First, look at the red line on the core chart. It bottomed near 2.0% in mid-2026 and has climbed to about 2.4% since. That’s the underlying trend moving the wrong way, even after Goldman takes out everything it can. Second, core services ex-housing hit 3.6% y/y in September, tied for the hottest since 2024. Neither tariffs nor crude explains that directly.Third, “temporary” is carrying a heavy load. Tariff passthrough is in its second year and the energy wedge doesn’t fully close until late 2027. That’s nearly three years of above-target inflation on the heels of 2021-23. Expectations don’t care what the decomposition says, and neither does a Fed that had two dissenters asking for a hike in October.Goldman is probably right on the math. But the Fed is hiking anyway, and the only debate left is how many.Also, keep an eye on rates, the long end of the Treasury curve is starting to fret again, with US 10-year yields up another 6 bps to 5.16% today. This article was written by Adam Button at investinglive.com.