Hatzius on US growth, rates and economists

By Prieur du Plessis, on September 14th, 2009 posted in: Investment, Markets, Money

This post features a three-part video interview with Jan Hatzius, chief US economist for Goldman Sachs, by Aline van Duyn, FT’s US Markets Editor. Whether you like Goldman or not, Hatzius is worthwhile viewing material.

Part 1: Hatzius on US growth
Hatzius expects “the second half of 2009 … to be quite strong” but “in 2010 we’ll probably see some renewed deceleration in growth”. He sees temporary measures including the inventory cycle and the fiscal stimulus as being responsible for “growth in the second half of 2009, but … by late 2010 that number is going to be somewhere around zero”.

Click here or on the image below to view Part 1 of the video clip.

Part 2: Hatzius on US rates
Hatzius sees “no rate hikes … through the end of 2010″. He points to high unemployment and low core inflation as “a strong statement … from the Fed’s perspective that low interest rates are going to be warranted”.

Click here or on the image below to view Part 2.

Part 3: Hatzius on economists
Hatzuis points to humility and being “realistic in one’s ability to predict the future … as an important part” of his job. He says “the biggest problems have been seen by people who rely on more mechanical models” including “large scale econometric models of the business cycle, because it’s harder to adjust those types of forecasting models for judgment”. “More electric forecasters have had perhaps a somewhat easier time …. Using a judicious mix of estimating models, looking at numbers and relying, at least to some extent, on more anecdotal indicators that are a little harder to… download in a time series form.”

Click here or on the image below to view Part 3.

Source: Financial Times, September 11, 2009.

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