Goldman Sachs' Hatzius: US Inflation, Trade Tariffs, and Chinese Equities in 2025

As we look ahead to 2025, the global economic landscape is filled with uncertainty, but one thing is clear: the US economy is expected to outperform expectations, according to Goldman Sachs' chief economist, Jan Hatzius. In a recent interview, Hatzius shared his insights on US inflation, trade tariffs, and the potential for Chinese equities to climb again. Let's dive into his predictions and what they mean for investors.

US Inflation: A Manageable Environment

Hatzius foresees a manageable inflation environment in the US, with continued progress toward the Federal Reserve's 2% target. While specific risks, such as tariffs, could cause temporary upticks in inflation, underlying economic adjustments (wages, labor market) support a disinflationary trend. Sticky price components and seasonal effects will gradually align with overall disinflationary forces, reinforcing the downward trend in inflation.