Bloomberg Talks
Goldman Sachs Chief Economist Jan Hatzius Talks Inflation
Jan 7, 2025
Jan Hatzius, the Chief Economist at Goldman Sachs, shares valuable insights into inflation trends and the Federal Reserve's actions. He discusses how the potential tariffs proposed by President-elect Trump could slow down the decrease in inflation. Hatzius also predicts three interest rate cuts this year, despite current market fluctuations. He dives into the economic implications of these tariffs and rising populism in Europe, shedding light on their potential impact on growth and monetary policy.
12:09
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Quick takeaways
- Goldman Sachs' Jan Hatzius suggests that inflation could decrease more rapidly if President-elect Trump's proposed import tariffs are not implemented.
- He anticipates the Federal Reserve will cut interest rates three times in 2025 to normalize them closer to an equilibrium rate.
Deep dives
Economic Growth and Optimism
The current economic climate shows signs of strength, with strong growth forecasts set at approximately 2.5% for the year. Despite inflation concerns, there are indications that it will continue to decrease, moving from 2.8% to about 2.4% by year-end. The rebalancing of the labor market also suggests a more constructive environment, with signs of lower job utilization compared to pre-pandemic levels. This positive economic outlook is partially offset by the need for rate adjustments as the Federal Reserve aims to normalize interest rates.
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