Chief Economist at Goldman Sachs Group Inc. Jan Hatzius on Tuesday, January 23, during a conversation with media representatives in Hong Kong, said that the Federal Reserve System is currently on track to achieve a soft landing of the United States economy.
Mr. Hatzius noted that there are nowadays no guarantees that the mentioned dynamic will be continued and fully implemented, but said that he likes the ongoing processes.
The expert stated that for Goldman, the start of the implementation of the Fed’s policy easing strategy in March of the current year is the baseline forecast. According to him, this strategy of the financial regulator, if implemented, will correspond to the trajectory of consumer prices. In this context, Jan Hatzius mentioned that last month, Fed Chairman Jerome Powell announced that the organization he heads is seeking to lower the rate until the inflation figure returns to the target level of 2%.
Mr. Hatzius says that there is no critical need for an early reduction in rates, but notes that such actions correspond to the logic of the specified hint from the financial regulator.
The expert drew special attention to the fact that a positive state of affairs is currently being recorded in the United States labor market. He noted that the number of layoffs continues to be very low.
It is worth noting that in recent days, the degree of probability that the Fed will begin implementing a policy of lowering interest rates in March has decreased. The mentioned organization officials have pushed back against market expectations. Currently, the probability level that the Fed will decide to lower interest rates in March is about 35%.
Commenting on the state of affairs in the Chinese economy, Jan Hatzius said that, in his opinion, the headwinds it’s facing have a way to run. Separately, he noted that the property adjustment is not yet close to done. The expert said that Chinese politicians are taking measures aimed at stabilizing the situation in the economic system and preventing growth from slowing down too much in this sphere. At the same time, in his opinion, Beijing is not ready to use more significant mechanisms of influence to provide a very large amount of incentives.
As we have reported earlier, Bank of America CEO Expects Soft Landing for Economy.