WSJ's Take On the Week
Goldman Sachs Economist Jan Hatzius on His 2025 Economic Outlook
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.
22:35
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Quick takeaways
- The anticipated renewal of tariffs in 2025 is expected to impact economic growth, yet Jan Hatzius remains cautiously optimistic with a 2.5% growth forecast.
- Changes in immigration policy under the Trump administration may slightly hinder economic growth, but favorable tax cuts and regulations will help mitigate these effects.
Deep dives
Impact of Tariffs on Economic Outlook
A significant concern regarding the economic outlook revolves around the potential impact of tariffs, particularly those enacted during the Trump administration. The economist discussed how previous tariffs led to a modest increase in the average U.S. tariff rate and were overshadowed by other positive economic factors, such as the 2017 tax cuts. However, he anticipates renewed tariffs in 2025, specifically a 20 percentage point increase on imports from China and additional targeted tariffs. Despite these expectations, he maintains a cautiously optimistic forecast, predicting that the economy will still grow by approximately 2.5% and experience gradual disinflation.
