This is via a Wall Street Journal interview with Goldman Sachs Chief Economist Jan Hatzius. Hatzius has, so far, stuck to his forecast of 3 interest rate cuts from the Federal Reserve in 2025, citing:
- I think a lot of the underlying reasons for deflation are still intact
- to me, (it is) difficult to see how we are reversing this process of inflation
- if you listen to Powell at the press conference, it seems that's how it comes out as well. And I agree with that.
Summary of the Impact of Inflation:
- Hatzius expects a manageable inflation environment, with continued progress toward the Federal Reserve's 2% target.
- Although specific risks, such as tariffs, may cause a temporary increase in inflation, fundamental economic changes (wages, labor market) support a disinflationary trend.
- Sticky price components and seasonal effects gradually align with overall deflationary forces, reinforcing the downward trend in inflation
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More details on his inflation outlook:
As of Friday (December 20):
Main PCE yy
