Core inflation has gone sideways year-over-year in 2025, says Goldman Sachs' Hatzius

December 18, 2025 • 3m 30s
Scott Wapner (Anchor) 00:00.150
today CPI print lighter than expected though muddied a bit by the government shutdown goldman 's chief economist jan hatzius is here at post nine with what it means for the economy and of course for the feds nice to see you again welcome back great
Jan Hatzius (Chief Economist) 00:11.790
to see you scott do you believe
Scott Wapner (Anchor) 00:12.990
the two seven is real because there seems some some question because of the shutdown
Jan Hatzius (Chief Economist) 00:17.630
there are some questions around the shelter numbers in particular and there is more uncertainty of course so i would discount some of this i mean we had eight basis points on average for core CPI in october and november that's probably a downside outlier the more important
Jan Hatzius (Chief Economist) 00:38.110
aspect though is that we've now seen core inflation go basically sideways maybe even sideways to down a bit on a year on year basis in two thousand and twenty five with a significant amount of tariff pass through that means underneath that the underlying trends are still
Jan Hatzius (Chief Economist) 00:55.190
improving that's important OK
Scott Wapner (Anchor) 00:56.750
so the the most important number between two seven inflation four six unemployment how do you see those
Jan Hatzius (Chief Economist) 01:06.120
that's a really hard one to answer i think they're both very important the the important point from a fed policy perspective is that they're pointing in the same direction because the two seven is a little bit better than than expected it is consistent with this inflation
Jan Hatzius (Chief Economist) 01:21.910
underneath the surface and the four point six is a little worse so at this point at least if you look at the recent changes the two sides of the fed 's mandate are pointing towards some additional we have a couple more cuts we
Scott Wapner (Anchor) 01:37.120
do have a couple more cuts you you think in in twenty six we have a couple
Jan Hatzius (Chief Economist) 01:41.270
we have two more we don't have a cut in january at the moment but i think i want to look very closely at the next employment report if that confirms upward pressure on the unemployment rate then i think january is a possibility right now i would say they wait until march why
Scott Wapner (Anchor) 01:59.150
shouldn't they cut in january if if this number two seven on CPI is believable enough and four six is concerning enough why why why can't they go it makes
Jan Hatzius (Chief Economist) 02:10.150
sense to me i think there's a good case for going in january but we just had a meeting and they set a higher bar and in terms of what they're likely to do right now i would say they probably waited a little bit longer but it's becoming close becoming a closer
Scott Wapner (Anchor) 02:24.630
call well as part of the problem that the fed itself is so divided that getting to the end game of the actual decision is harder to come by
Jan Hatzius (Chief Economist) 02:32.870
that's definitely part of it although in the end it's still the leadership that ultimately drives the decisions so if jay powell and the and the leadership got to the point where they said we really want to go we think it's the right thing to do in january then it would happen
Scott Wapner (Anchor) 02:50.870
if we were to say well the fed is cutting into what looks to be a strengthening economy in twenty six is that work for you are you worried about are you worried about the prospects of that
Jan Hatzius (Chief Economist) 03:02.550
i'm i'm not really worried about it because the labor market looks like it's going to be a bit on the soft side even with a pickup and GDP growth and we're on the optimistic side with GDP growth in in twenty twenty six we have two point six percent annual average growth but
Jan Hatzius (Chief Economist) 03:21.270
nevertheless think that the unemployment rate probably goes sideways here and that means inflation risk i think is diminishing