This is an excerpt from our most recent Economic Outlook report. To access the full PDF, please click here.
As of March 10th, 2026, Jan Hatzius, the Chief Economist at Goldman Sachs, has maintained a cautiously optimistic outlook on the U.S. economy, recently characterized by the theme "Sturdy Growth, Stagnant Jobs, Stable Prices."
His latest extensive comments, including a research brief released on March 5th, 2026, specifically address the impact of the ongoing conflict in the Middle East on the domestic and global economy.
Key Economic Commentary (March 2026)
On the Middle East Conflict and Energy:
Hatzius noted that the recent rise in oil prices to approximately $80/barrel (a +14% increase since late February) will likely act as a modest headwind.
Goldman Sachs estimates this will result in a 0.2 percentage point boost to global inflation and a 0.1 percentage point drag on growth.
However, he warned of a much more "provocative" scenario if the Strait of Hormuz remains closed for an extended period; if oil prices spike to $100/barrel, global headline inflation could rise by 0.7 percentage points, significantly complicating the Federal Reserve's path to 2.0% inflation.
On Growth and Interest Rates:
In an interview earlier this month, Hatzius emphasized that the U.S. economy is "not crying out for interest rate cuts" right now.
Despite the geopolitical noise, he revised the Q4 2025 growth view slightly but noted that, when accounting for the government shutdown effects, real growth remains in the +2.5% to +3.0% range.
He continues to forecast that the Federal Reserve will reach a "neutral" rate of about 3.25% by the end of the year, likely delivering two 25-basis-point cuts in June and September.
On the Labor Market and AI:
A central part of Hatzius's current narrative is the "AI Cavalry." He argues that while productivity is accelerating (projected at +2.6% real GDP growth for 2026), the labor market is "shaky" and stagnant.
He expects the unemployment rate to stabilize around 4.5%, noting that the disconnect between high GDP growth and low job creation is due to productivity gains that have not yet fully accounted for the impact of Artificial Intelligence.
He cautioned that if AI-enabling applications arrive faster than expected, we could see further unemployment increases even as the economy grows.
This is an excerpt from our most recent Economic Outlook report. To access the full PDF, please click here.
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This is an excerpt from our most recent Economic Outlook report. To access the full PDF, please click here.
As of March 10th, 2026, Jan Hatzius, the Chief Economist at Goldman Sachs, has maintained a cautiously optimistic outlook on the U.S. economy, recently characterized by the theme "Sturdy Growth, Stagnant Jobs, Stable Prices."
His latest extensive comments, including a research brief released on March 5th, 2026, specifically address the impact of the ongoing conflict in the Middle East on the domestic and global economy.
Key Economic Commentary (March 2026)
On the Middle East Conflict and Energy:
Hatzius noted that the recent rise in oil prices to approximately $80/barrel (a +14% increase since late February) will likely act as a modest headwind.
Goldman Sachs estimates this will result in a 0.2 percentage point boost to global inflation and a 0.1 percentage point drag on growth.
However, he warned of a much more "provocative" scenario if the Strait of Hormuz remains closed for an extended period; if oil prices spike to $100/barrel, global headline inflation could rise by 0.7 percentage points, significantly complicating the Federal Reserve's path to 2.0% inflation.
On Growth and Interest Rates:
In an interview earlier this month, Hatzius emphasized that the U.S. economy is "not crying out for interest rate cuts" right now.
Despite the geopolitical noise, he revised the Q4 2025 growth view slightly but noted that, when accounting for the government shutdown effects, real growth remains in the +2.5% to +3.0% range.
He continues to forecast that the Federal Reserve will reach a "neutral" rate of about 3.25% by the end of the year, likely delivering two 25-basis-point cuts in June and September.
On the Labor Market and AI:
A central part of Hatzius's current narrative is the "AI Cavalry." He argues that while productivity is accelerating (projected at +2.6% real GDP growth for 2026), the labor market is "shaky" and stagnant.
He expects the unemployment rate to stabilize around 4.5%, noting that the disconnect between high GDP growth and low job creation is due to productivity gains that have not yet fully accounted for the impact of Artificial Intelligence.
He cautioned that if AI-enabling applications arrive faster than expected, we could see further unemployment increases even as the economy grows.
This is an excerpt from our most recent Economic Outlook report. To access the full PDF, please click here.