Jan Hatzius

Goldman Slashes Q3 GDP By 30% Due To Hurricane Disaster

"Given potentially sizeable growth effects from Harvey—and with Irma risks now moving to center stage—we are lowering our Q3 GDP tracking estimate by 0.8pp to +2.0%. However, we expect this weakness to reverse over the subsequent three quarters, more than recouping the lost output"

Harvey Destruction Prompts Goldman To Cut Government Shutdown Odds

"Recent events have lowered the odds of a government shutdown or a delayed debt ceiling hike but have also increased the number of possible scenarios, complicating the legislative outlook over the next couple of months. At this point, we peg the probability of a shutdown in early October at 35%, down from our prior view of 50% over the last couple of weeks.""

"The Lost Generation": Goldman Unemployment Charts Explain Just How Spoiled Millennials Are

This morning, Goldman's Econ team set out to identify why wage growth has been elusive despite the fact that unemployment rates and other labor utilization measures signal an economy at full employment.  What they found potentially highlights the key social and behavioral gaps between generations and helps explain why millennials are having a much harder time finding jobs than previous generations.

Goldman Revises Its Fed Rate Hike Odds After Latest Disappointing Data

"We adjusted down our Fed odds accordingly. We now believe there is a 5% probability that the next rate hike will come in September, a 5% probability that it will come in November, and a 50% probability that it will come in December (a 60% cumulative probability of at least three hikes this year)."

Goldman: The Fed Will Hike But Here Are "The Two Most Interesting Questions"

While conceding that a hike is guaranteed, Goldman notes that two issues should make this week's FOMC meeting particularly interesting. First, will Fed officials alter their policy views in response to the increasingly different signals that both sides of the mandate are sending about the urgency of further tightening? Second, will the press conference provide some clarity on what the next tightening step following the June hike will be?

The Answer To El-Erian's Quandary: It's "A Perfect Storm" Melt Up

"There seems to be a perfect storm of so so growth and falling inflation, enough for the Fed to tighten modestly but being at risk of over doing it.... the easing in our financial conditions index is one of the most extremes on record, thanks to Fed tightening!" 

Goldman Pushes Back Rate Hike Forecast Citing Slowing Job Growth And Weak Inflation

"We now expect the third hike of 2017 to occur at the December meeting (we previously expected a hike in September and a balance sheet in announcement in December). This change reflects recent detailed discussion of the balance sheet among committee members, as well as our view that the committee will prefer to wait for clarity on the outlook before implementing a third hike this year – particularly given signs of slowing job growth and the recent drop in core inflation."

Wall Street's Take On The Fed Minutes: June, Sept. In Play; BS Unwind May Come Sooner

While the dollar and TSY yields both dropped to session lows shortly after the FOMC announcement hit as traders focused on the Fed disclosure that FOMC voters thought it prudent to await evidence an "economic slowdown is transitory" suggesting the committee still wanted to hike rates but was willing to wait for the certainty of data,  Goldman's disagreed and according to a just released assessment by Goldman's Jan Hatzius, the statement was more hawkish than perceived by the market.

Presenting Goldman's "Worst-Case Survival Guide To Uncertainty, Taxes And Trade"

The juxtaposition of rising policy uncertainty vis a vis declining fear in risk assets raises "cause for pause" according to Goldman, which in its latest Portfolio Manager's Toolkit lays out the following "worst-case survival guide to uncertainty, taxes and trade" to help investors navigate once volatility comes back with a bang.

Goldman Asks If Yellen Has Lost Control Of The Market, Warns Of Fed "Policy Shock"

"Despite two rate hikes and indications of impending balance sheet runoff, financial conditions have continued to ease over the past six months. Does this mean that 1) monetary policy has lost its ability to affect financial conditions or 2) Fed officials just need to deliver more rate hikes if they want to bring about an FCI tightening?"