In this episode of Goldman Sachs Exchanges, Allison Nathan hosts Jan Hatzius and Dominic Wilson to discuss the implications of President Trump's tariffs on the market, inflation, and economic growth. They explore why markets appear complacent despite these tariffs, the potential impact on inflation and growth, and the Federal Reserve's expected response. The conversation covers the effects of Trump's fiscal package, expectations for Fed policy and potential leadership changes, and the outlook for the dollar. They also discuss global growth expectations, focusing on Europe and China, and the key risks that could derail their views, including further tariff escalations and recessionary fears. The episode concludes with key messages for investors, emphasizing structural trends like dollar weakness and the importance of diversifying U.S. equity holdings while remaining aware of tail risks such as recession and institutional concerns.
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