"00:01:15As we go into 2026, I think the story is a little bit clearer because the tariff issue is now in the rearview mirror. The increases in tariffs are behind us." - Jan Hatzius (Discussing the shift from the volatile trade environment of 2025 to a more stable growth path in 2026)
"00:04:30Basically the unemployment rate goes sideways at about 4.5% because we’ve seen this pickup in productivity growth... which serves to just raise the speed limit for US growth." - (Explaining why the US can grow faster than expected without overheating the labor market)
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"00:08:45The current account surplus [in China] we think is going to grow to about 1% of global GDP, which would be the biggest number for any economy in recorded history." - Jan Hatzius (Discussing global imbalances and the resilience of China’s export sector)
"00:15:20As AI exerts a bigger impact on productivity growth, that 2% [trend] could become 2.5%, and that’s going to drive a bigger wedge between the performance of GDP and the performance of the labor market." - Jan Hatzius (Providing a long-term outlook on how technology decouples output from headcount)
"00:00:45Sturdy Growth, Stagnant Jobs, Stable Prices." - Jan Hatzius & Dominic Wilson (The defining theme for the 2026 global macroeconomic outlook)
Executive Summary
00:00:10 The core thesis of the 2026 outlook is that the global economy has entered a phase of "sturdy growth" supported by the resolution of major 2025 headwinds, specifically the peaking of the tariff cycle and the cooling of inflation. While GDP growth remains resilient, particularly in the United States, the labor market is expected to remain "stagnant" as businesses focus on efficiency and productivity gains rather than aggressive hiring. This environment creates a favorable "Goldilocks" backdrop for markets, defined by steady expansion and continued, albeit cautious, central bank easing.
Key Takeaways
00:02:30US Economic Preeminence: The US is expected to outperform its peers with a 2.6% growth rate, driven by tax cuts, easier financial conditions, and a transition past the peak of tariff uncertainty.
00:05:15Productivity Over Headcount: A significant shift is occurring where GDP growth is being driven by a higher "speed limit" (productivity trend rising from 1.5% to 2.0%+), meaning the economy can grow without a corresponding surge in employment.
00:10:40Monetary Policy Divergence: The Federal Reserve is projected to cut rates by 50 basis points to a 3-3.25% range, while the ECB is likely to hold rates steady amidst structural drags in Europe.
00:09:10China's Export Shield: Despite domestic property sector weakness, China is maintaining 4.8% growth by pivoting toward a massive export-led strategy, creating a record-breaking global current account imbalance.
00:17:55AI Realism: While AI is a massive long-term catalyst, its significant impact on broad productivity is likely still a few years away, though it is already influencing business investment and "picks and shovels" sectors.
Detailed Summary by Topic
1. The Global Macro Environment: "Sturdy Growth"
00:01:00 The primary argument is that 2026 will be a "clearer story" than 2025. The massive uncertainty surrounding US tariffs that dominated the previous year has largely settled, moving from a "negative drag" to a "sideways" or even slightly positive influence as businesses adapt. Global growth is forecast at 2.8%, outperforming the consensus of 2.5%.
2. US Exceptionalism & The "Speed Limit"
00:04:00 The US economy is the focal point of optimism. Factors supporting this include:
Fiscal Support: Tax cuts (specifically the One Big Beautiful Bill Act) and strong tax refunds are expected to boost consumer and business spending.
Productivity Surge: The "speed limit" for growth has moved from a pre-pandemic 1.5% to 2.0%, with potential to reach 2.5% as AI adoption matures. This explains why growth is high while job creation remains flat.
Financial Conditions: Rate cuts already delivered by the Fed are trickling through the economy, supporting a "mid-cycle acceleration."
Europe: A mixed picture with a 1.3% growth forecast. Germany is seeing a cyclical boost from fiscal easing and defense spending, and Spain remains a bright spot due to high-value services. However, structural headwinds like aging demographics and energy costs remain.
China: Facing a "split story." The property sector remains a 1.5 percentage point drag on growth, but the export sector is "remarkably resilient," leading to a massive current account surplus.
4. Central Bank Outlook for 2026
00:12:15 The Fed is expected to resolve the "inflation issue" and settle into a neutral rate.
Fed Target: Projected 3.00% - 3.25% by year-end.
UK (Bank of England): Quarterly cuts are expected to reach a terminal rate of 3% by Q3 2026.
ECB: Expected to remain on hold, navigating the balance between falling inflation and structural growth weakness.
00:01:45The "Rearview Mirror" Metaphor: Jan Hatzius uses this to describe the transition of tariffs from a constant source of market anxiety in 2025 to a settled variable that businesses have now priced in and mitigated.
00:19:20The Childcare AI Debate: Referenced as a cautionary tale about AI hype; an article suggested AI could improve childcare productivity by 21%, which the speakers use to illustrate how some productivity models are currently overestimating short-term human-centric impacts.
00:07:55German Defense Orders: Mentioned as a tangible example of how fiscal policy (the easing of the debt brake) is finally hitting the "real economy" in Europe, visible in increasing industrial orders.
References & Recommendations
Books & Reports:
Macro Outlook 2026: Sturdy Growth, Stagnant Jobs, Stable Prices, Goldman Sachs Research - The primary source for the data and themes discussed.
Global Equity Strategy 2026: Tech Tonic, Goldman Sachs Research - Referenced for the "broadening bull market" thesis 00:23:05.
People Referenced:
Allison Nathan, Goldman Sachs - Host/Moderator of the "Top of Mind" and "Exchanges" segments.
Sharmin Mossavar-Rahmani, CIO of Wealth Management - Quoted on the theme of "US Preeminence" and "Stay Invested" 00:24:15.
Tools & Indicators:
Core PCE Inflation - The Fed's preferred metric, noted as standing at 2.3% when excluding tariff effects 00:13:10.
The One Big Beautiful Bill Act - A reference to legislative tax cuts expected to fuel 2026 US growth.
Speakers & Credentials
00:00:25Jan Hatzius: Chief Economist and Head of Global Investment Research at Goldman Sachs. He is widely recognized for his accuracy in forecasting US economic trends and leading the firm's macro-research efforts.
00:00:35Dominic Wilson: Senior Advisor in Global Macro Research at Goldman Sachs. He specializes in the intersection of economics and market pricing (the "join" between bonds and equities).
Actionable Next Steps
Portfolio Positioning: Lean into US Equities (overweight) as the US is projected to lead in earnings and growth 00:24:30.
Monitor Productivity: Watch for earnings reports that show GDP growth without headcount increases, as these firms will benefit most from the "speed limit" expansion 00:16:00.
Active Management: Given the divergence in regional growth and central bank policies, "active security selection" is recommended over passive indexing to capture "alpha" in a multipolar world.
AI Transition: Rotate AI exposure from "Infrastructure" (chips/data centers) to "Adoption" (companies successfully using AI to boost margins) 00:18:45.
Jul 16, 2026
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