How tariffs will impact the US economy

This Goldman Sachs Exchanges podcast interviews David Mericle, Chief US Economist, about the macroeconomic implications of rising US tariffs. The discussion progresses from the current tariff situation and revised expectations for future increases (from a projected 4-5% to 10% increase in the effective tariff rate) to their impact on inflation and economic growth. Mericle revises Goldman Sachs' GDP forecast downward to 1.7% and raises the 12-month recession probability from 15% to 20%, attributing this to the higher inflation and lower growth resulting from tariffs. He also discusses the Federal Reserve's likely response, suggesting a shift towards "insurance cuts" rather than normalization cuts due to elevated inflation expectations. The interview concludes by highlighting key economic indicators Mericle is monitoring to assess the tariffs' impact, such as business confidence, capital spending, and hiring numbers.