Goldman Sachs’s Chief Economist Has Nailed Big Calls. Here’s His Next One.
livemint.comGoldman Sachs is upbeat about the economy this year. Its economists see healthy growth of 2.3%, unemployment staying below 4%, and the probability of recession at just 15%—all more optimistic than the consensus. And they see inflation, excluding food and energy, continuing to fall, to a little over 2% (using the Federal Reserve’s preferred measure) by year-end.
Forecasts are a dime a dozen. Why care about Goldman’s? First, because its economists have been firmly in the soft-landing camp, which now looks prescient. Second, Jan Hatzius, the firm’s chief economist, made an equally out-of-consensus, and prescient, call in the opposite direction in 2008.
Back then, he correctly warned that mortgage defaults could cause a severe recession. Nailing one big call might be luck; nailing two gets you a following. Hatzius is one of the most closely followed economists on Wall Street and in Washington.
Jason Furman, an economic adviser to President Barack Obama from 2009 to 2017, said, “Everyone on the White House economic team read Goldman obsessively, more than any other analyst." On X, Jared Bernstein, economic adviser to President Biden, recently called Hatzius “ahead of the pack.’’ Fed Chair Jerome Powell has met with him several times, according to Powell’s publicly released calendars. It obviously helps that Hatzius’s forecasts have been pretty good. He’s one of a handful of economists to win the Lawrence R.
Klein Award for Blue Chip Forecast Accuracy twice (in 2009 and 2011). While like most economists he was too low on inflation in 2021 and 2022, The Wall Street Journal ranked his 2023 forecast fifth out of 68 economists for accuracy. Yet what really draws followers is the depth and volume of his team’s research.
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