Bloomberg Talks
Goldman Sachs Chief Economist Jan Hatzius Talks Tariff Hikes
Jan 14, 2025
Jan Hatzius, Chief Global Economist at Goldman Sachs, shares insights on U.S. tariff hikes and their effects on inflation and economic growth. He analyzes the current inflation landscape and discusses the Federal Reserve's potential rate cut pauses. Hatzius also projects a 20% increase for the CSI 300 index amid challenging circumstances in China, and offers an optimistic perspective on India's shift to sustainable growth despite recent economic slowdown. Tune in for a deep dive into global economic trends!
08:45
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Quick takeaways
- Goldman Sachs anticipates the Federal Reserve will execute rate cuts later in the year due to declining core inflation driven by temporary factors.
- Gradual tariff hikes on imports are projected to influence inflation and growth but are not expected to significantly disrupt the overall positive economic outlook.
Deep dives
Fed's Potential Rate Cuts
The Federal Reserve is expected to implement two rate cuts in the current year due to a projected decrease in core inflation. Currently, the core PCE inflation measure sits at 2.8%, but it is anticipated to decline to around 2.4% by year-end, with a significant portion of the decrease attributed to temporary factors such as tariffs. This suggests that the underlying inflation rate could stabilize closer to the Fed's target of 2%. The timing for these cuts is likely set for later in the second quarter, as the Fed approaches its decision-making with caution.
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