Exchanges Are Investors Complacent?
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Jul 22, 2025 
Jan Hatzius, Goldman Sachs' chief economist, and Dom Wilson, a senior advisor in the Global Markets Research Group, dive into the shifting tides of global trade policy. They explore how current tariffs are affecting inflation and growth forecasts, particularly looking ahead to 2025. The duo discusses the surprising market resilience amid these changes and the implications of U.S. dollar depreciation on investor confidence. With cautious global growth expectations, they highlight how evolving fiscal and monetary policies could shape the market landscape.
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Markets Look Through Tariffs
- Markets accept a stable, high-level tariff regime as a one-off adjustment, focusing on medium-term growth.
- Inflation markets price near-term tariff inflation, but growth concerns remain limited barring recession signals.
Fiscal Package's Mixed Growth Effects
- Trump's fiscal package boosts near-term growth by a few tenths to half a percent in early 2026.
- However, tariff impacts offset this, and deficits remain around 6% of GDP, sustaining fiscal concerns.
Fed Rate Cuts Scheduled
- Inflation expected to rise slightly due to tariffs but mostly a one-off effect.
- Fed expected to start cutting rates around September 2025 to adjust from current high short-term interest rates.