Interview
"Catch-Up With David": with Chief Economist Jan Hatzius
- Global economic growth is forecast to moderate to approximately 3.5% in 2019 and 2020, representing a decline from the nearly 4% growth rates observed in prior years.
- The U.S. economy is assessed to be at or slightly beyond full employment, creating a necessity for reduced growth rates to prevent labor market overheating.
- Federal Reserve interest rate hikes are intended to deliberately slow the U.S. economy, generating negative growth impacts domestically and spillover effects on emerging economies, particularly noticeable in 2019.
- The probability of a recession within the next 12 to 24 months remains low provided the economy experiences a gentle slowdown from current levels.
- Recession risk is projected to increase over time if economic expansion continues significantly above trend rates.
- The pace of economic slowdown in emerging markets and Europe has exceeded the firm's initial expectations.
- The firm acknowledges it may have previously underestimated the spillover impacts of Federal Reserve tightening on specific emerging economies.
- The outlook contrasts current economic forecasting with historical precedents of failed predictions, citing the widely held but incorrect confidence in 1987 that the Berlin Wall would remain for 50 to 100 years and that Soviet dissolution would occur only through war.
- The firm recognizes that wild spaces and animal populations cannot be restored if they are lost permanently through inaction.
- Strategic initiatives are being directed toward organizations such as Save the Elephants to prevent the permanent loss of specific ecological assets.