{"id":39115,"date":"2022-06-06T17:11:01","date_gmt":"2022-06-06T17:11:01","guid":{"rendered":"https:\/\/harchi90.com\/us-economy-will-slow-sharply-but-avoid-recession-as-fed-hikes-goldman\/"},"modified":"2022-06-06T17:11:01","modified_gmt":"2022-06-06T17:11:01","slug":"us-economy-will-slow-sharply-but-avoid-recession-as-fed-hikes-goldman","status":"publish","type":"post","link":"https:\/\/harchi90.com\/us-economy-will-slow-sharply-but-avoid-recession-as-fed-hikes-goldman\/","title":{"rendered":"US Economy Will Slow Sharply but Avoid Recession As Fed Hikes: Goldman"},"content":{"rendered":"<div>\n<ul class=\"summary-list\">\n<li>The US economy will have to slow sharply to bring down inflation but will avoid a recession, Goldman Sachs has said.<\/li>\n<li>Pandemic-era drivers of inflation are likely to ease, making the Federal Reserve&#8217;s job in taming prices easier, according to the bank&#8217;s economists.<\/li>\n<li>Fears have grown in recent months that the Fed will have to hike so hard it will trigger a recession in the US.<\/li>\n<\/ul>\n<div class=\"inline-newsletter-signup &#10;                        headline-regular loading\" id=\"formContainer\" data-component-type=\"inline-newsletter-module\" data-event-label=\"10_things_markets\" data-list=\"10 Things Before the Opening Bell\" data-acq-source=\"marketsverticalinline\">\n<section class=\"inline-newsletter-content\">\n<div class=\"js-loader hidden\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"svg-icon \" version=\"1.1\" role=\"img\" width=\"50\" height=\"50\" viewbox=\"0 0 50 50\" style=\"enable-background:new 0 0 50 50;\" xml:space=\"preserve\">\n                        <title>Loading<\/title>\n                        <desc>Something is loading.<\/desc>\n                        <path fill=\"#111\" d=\"M43.935,25.145c0-10.318-8.364-18.683-18.683-18.683c-10.318,0-18.683,8.365-18.683,18.683h4.068c0-8.071,6.543-14.615,14.615-14.615c8.072,0,14.615,6.543,14.615,14.615H43.935z\">\n                          <animatetransform attributetype=\"xml\" attributename=\"transform\" type=\"rotate\" from=\"0 25 25\" to=\"360 25 25\" dur=\"0.6s\" repeatcount=\"indefinite\"\/>\n                        <\/path>\n                      <\/svg><\/div>\n<\/section><\/div>\n<p>Goldman Sachs has said the <\/p>\n<p>                        <span class=\"component rich-tooltip reference-autolinker no-help\" data-component-type=\"reference-autolinker\"><br \/>\n                          Federal Reserve<br \/>\n                          <span style=\"font-size: 0px;\"\/><br \/>\n                        <\/span>  will have to sharply slow the US economy to bring down inflation, but said the central bank should be able to pull off a &#8220;soft landing&#8221; and avoid a dreaded <\/p>\n<p>                        <span class=\"component rich-tooltip reference-autolinker no-help\" data-component-type=\"reference-autolinker\"><br \/>\n                          recession<br \/>\n                          <span style=\"font-size: 0px;\"\/><br \/>\n                        <\/span>.<\/p>\n<p>Fears have been growing in recent months that the Fed will have to hike rates so hard to tame inflation &#8211; which is running at 40-year highs &#8211; that it will trigger a recession.<\/p>\n<p>But Goldman analysts, led by top economist Jan Hatzius, said in a note Monday that pandemic-linked drivers of inflation should soon fade, helping the Fed in its task of cooling prices.<\/p>\n<p>The analysts said pandemic-era stimulus measures are running out;  supply-chain bottlenecks are likely to ease;  and workers are likely to re-enter the labor force.  Each of these should ease some of the pressure in the economy, they said.<\/p>\n<p>Nonetheless, the Fed will still have to take strong action to ensure that wage growth does not surge and keep pushing up inflation.<\/p>\n<p>Fed hikes will likely push growth in the US economy to &#8220;below potential to about 1% to 1.5% in order to further reduce labor demand and rebalance the labor market,&#8221; Hatzius and colleagues wrote.<\/p>\n<p>&#8220;Decline in labor demand does not require a recession, but does require over a year of below-potential growth. This implies that there is a coherent but narrow path for a soft landing.&#8221;<\/p>\n<p>However, Goldman&#8217;s team said a recession was still possible, especially if the pandemic-era inflation drivers do not ease as much as expected.<\/p>\n<p>&#8220;If wage growth and job openings do not normalize on their own at all, the reduction in labor demand required to restore balance to the labor market would likely entail a recession.&#8221;<\/p>\n<p>The analysts said they still expect the Fed to hike interest rates to between 3% and 3.25% by 2023, from the current 0.75% to 1% level.<\/p>\n<p><em><strong>Read more: <\/strong>UBS analysts are most bullish on these 43 stocks as recession fears and wild market swings create investing opportunities<\/em><strong><br \/><\/strong><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The US economy will have to slow sharply to bring down inflation but will avoid a recession, Goldman Sachs has said. Pandemic-era drivers of inflation are likely to ease, making the Federal Reserve&#8217;s job in taming prices easier, according to the bank&#8217;s economists. Fears have grown in recent months that the Fed will have to &hellip;<\/p>\n<p class=\"read-more\"> <a class=\"\" href=\"https:\/\/harchi90.com\/us-economy-will-slow-sharply-but-avoid-recession-as-fed-hikes-goldman\/\"> <span class=\"screen-reader-text\">US Economy Will Slow Sharply but Avoid Recession As Fed Hikes: Goldman<\/span> Read More &raquo;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","spay_email":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[8],"tags":[],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"fifu_image_url":"https:\/\/i.insider.com\/6292239fff955c0019c5e171?width=1200&format=jpeg","_links":{"self":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts\/39115"}],"collection":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/comments?post=39115"}],"version-history":[{"count":0,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts\/39115\/revisions"}],"wp:attachment":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/media?parent=39115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/categories?post=39115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/tags?post=39115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}