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Detailed Macro Breakout

  • Detailed Macro Breakout

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  • Detailed Macro Breakout
GoldmanSachs/January 17, 2026/2 min read/youtube.com

Goldman Sachs Exchanges: Outlook 2026 | Episode 1: The Big Picture

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Jan Hatzius, head of Goldman Sachs Research and Chief Economist, and Dominic Wilson, Senior Adviser in the Global Markets Research Group discuss their "Sturdy Growth, Stagnant Jobs, Stable Prices" 2026 macro outlook report, forecasting global GDP growth of 2.8%, notably above the 2.5% consensus estimate [0:14]. Episode recorded on January 8th, 2026


Detailed Macro Breakout

Optimistic Growth Forecast [0:49] Goldman Sachs Research projects the US economy to grow by 2.6% on a full-year basis (and 2.5% Q4-over-Q4), outperforming the 2.0%-2.1% consensus [2:41]. Key drivers include:

  • Fading Tariff Headwinds: The 11 percentage point tariff increase from 2025 (which subtracted 0.6pp from growth) is now in the "rearview mirror" [1:39].
  • Fiscal Stimulus: US consumers are expected to receive an extra $100 billion in tax refunds (roughly of annual disposable income) from the "One Big Beautiful Bill Act" .

References

  1. Original source (youtube.com)

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Reading

Published
January 17, 2026
Read time
2 min read
Progress0%
0.4%
[2:06]
  • Front-Loaded Growth: US Q1 GDP is forecast at a strong 3.5% annualized rate, aided by a 0.2pp mechanical boost following the late-2025 government shutdown.
  • Euro Area Resilience: Growth is forecast at 1.3% (vs. 1.1% consensus), supported by a 1.4% expansion in Germany driven by defense and infrastructure spending.

  • China's Economic Imbalance [5:19] China’s GDP is forecast to expand by 4.8% (above the 4.5% consensus) as export strength masks domestic structural issues.

    • Property Drag: The property sector continues to be a major headwind, projected to subtract 1.5 percentage points from total GDP growth [5:48].
    • Export Dominance: China’s current account surplus is expected to hit nearly 1% of global GDP over the next 3-5 years, the largest in recorded history.

    Labor Market & Productivity [10:05](https://www.youtube.com/watch?v=COi28pfvOto&t=605s) The US unemployment rate is projected to stabilize at 4.5% [3:55].

    • Productivity Surge: US productivity has risen to a 2% trend (up from 1.5% pre-pandemic), which raises the "speed limit" for growth but limits job creation [11:12](https://www.youtube.com/watch?v=COi28pfvOto&t=672s).
    • Job Growth Gap: Current trend job growth is estimated at only 11,000 per month, well below the 70,000 needed to keep the unemployment rate steady.

    Inflation & Monetary Policy [14:17](https://www.youtube.com/watch?v=COi28pfvOto&t=857s)

    • Inflation Target: Core PCE inflation is forecast to drop to 2.1% by December 2026 [15:37](https://www.youtube.com/watch?v=COi28pfvOto&t=937s). Excluding tariff pass-throughs, inflation is already estimated at 2.3% [14:54](https://www.youtube.com/watch?v=COi28pfvOto&t=894s).
    • Rate Cuts: The Federal Reserve is predicted to deliver two 25-basis-point cuts (in June and September), bringing the fed funds rate to 3%-3.25% [15:47](https://www.youtube.com/watch?v=COi28pfvOto&t=947s). The UK is expected to cut more aggressively, reaching 3% by Q3 2026.

    Investment Strategy & Key Risks [16:50](https://www.youtube.com/watch?v=COi28pfvOto&t=1010s)

    • Equities: The S&P 500 is forecast to reach 7,600 by year-end, supported by 12% earnings growth [17:02](https://www.youtube.com/watch?v=COi28pfvOto&t=1022s). European STOXX 600 returns are forecast at 8% with 5% EPS growth.
    • Credit: Investors face a tighter profile with higher debt financing needs for the $100 billion+ AI and data center boom [19:22](https://www.youtube.com/watch?v=COi28pfvOto&t=1162s).
    • Recession Risk: The probability of a US recession has declined to 20% (down from 30%), though a breach of the "Sahm Rule" remains a primary downside risk [20:26](https://www.youtube.com/watch?v=COi28pfvOto&t=1226s).

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