Exchanges Are Investors Complacent?
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Jul 22, 2025 
Jan Hatzius, Goldman Sachs' chief economist, and Dom Wilson, a senior advisor in the Global Markets Research Group, dive into the shifting tides of global trade policy. They explore how current tariffs are affecting inflation and growth forecasts, particularly looking ahead to 2025. The duo discusses the surprising market resilience amid these changes and the implications of U.S. dollar depreciation on investor confidence. With cautious global growth expectations, they highlight how evolving fiscal and monetary policies could shape the market landscape.
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Tariff Impact and Outlook
- Tariffs have increased US average effective tariff rate by 9 percentage points so far, expected to reach 14 by year-end.
- The impact stabilizes somewhat, including sector-specific tariffs, but full reciprocity delayed beyond midterms.
Gradual Tariff Inflation Effect
- Tariff effects on inflation are happening gradually with some pass-through in specific categories.
- Overall inflation impact expected to be a one-off price level rise, similar to a VAT hike, lasting about 12 months.
Tariffs Slow Growth Moderately
- Tariffs slow growth but not dramatically; uncertainties and real income hit are less visible.
- US growth in first half 2025 is soft at 1.2%, partly due to tariffs and other factors, with slower employment growth.