WSJ's Take On the Week Goldman Sachs Economist Jan Hatzius on His 2025 Economic Outlook
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Dec 22, 2024 
Jan Hatzius, the chief economist at Goldman Sachs, shares his insights on the future economy. He predicts how tariffs, especially on Chinese imports, will shape growth and inflation in 2025. Jan unpacks the impact of changing inflation on consumer confidence and spending power. The chat delves into the evolving ties between the stock market and economic performance, highlighting shifts in consumer behavior post-pandemic. They even touch on the holiday spirit with a light-hearted discussion about gift-giving in the face of economic trends.
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Tariff Impact on Economy
- Tariffs' impact depends on their size, with a couple of percentage points increase being manageable.
- A larger increase, like 10 percentage points, could significantly hurt growth and reignite inflation.
Immigration and Economic Impact
- Trump's immigration policies could further reduce net immigration, impacting labor supply.
- While a modest negative on growth, other policies like tax cuts and deregulation could offer positive effects.
Interest Rate Projections
- The Federal Reserve raised interest rate projections due to higher inflation and anticipated tariffs.
- Hatzius maintains his prediction of three rate cuts, citing underlying disinflationary factors like wage growth deceleration.