Goldman's Hatzius and Snider on the Outlook for 2026

SPEAKER_2 (0:02)

Bloomberg Audio Studios, Podcasts, Radio, News.

Tracy Alloway (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:22)

And I'm Joe Weisenthal.

Tracy Alloway (0:23)

Joe, we always start these the same with someone saying, it's that time of year.

Joe Weisenthal (0:28)

And then I say, it's the most wonderful time of year.

Tracy Alloway (0:30)

That's right. Never change this intro.

Joe Weisenthal (0:32)

2026 forecast season.

Tracy Alloway (0:33)

It's the outlook season. It is the moment when every investment bank on Wall Street releases their forecasts for next year.

Joe Weisenthal (0:42)

Yeah, it is a great time. We make New Year's resolutions the time of year, we go back, we make our lists of top 10 things that happen, predictions, that's where you're supposed to... News gets a little quiet often around the holidays. So we make up for it by just looking back and looking forward.

Tracy Alloway (0:56)

And then a year later, we completely forget what everyone said about the current year and we just move on and do the next year.

Joe Weisenthal (1:03)

That's right.

Tracy Alloway (1:03)

Always forward-looking. Although I do think, you know, 2026 shaping up to be an interesting year for a variety of reasons. We just had a CPI number that came out surprisingly softer than a lot of people expected. Some people say unrealistically softer with 0% shelter costs increase. So that was interesting. We're going to have a new Fed Chairman.

Joe Weisenthal (1:27)

Yeah.

Tracy Alloway (1:27)

There's still a question mark over the impact of tariffs, whether we're waiting to see those show up, and what's going to happen with unemployment as well. That's been ticking up.

Joe Weisenthal (1:36)

And then it's been this really incredible year, obviously, in the stock market. The US stock market just continues year after year after year, with a few exceptions here and there, but not many, putting up massive numbers. And so the question is, how long is this realistic, especially given all the concerns about concentration and a handful of names, some of which haven't really been doing so well lately. And so, so many questions on both the real economy and the stock market.

Tracy Alloway (2:03)

Yeah. There's definitely been some dispersion creeping into some of the big AI names or the tech names. All right. Well, I'm happy to say we do, in fact, have the perfect guests, plural. We've got two. So we're going to be speaking with Jan Hatzius. He's the Chief Economist and Head of Research at Goldman Sachs. He's been on the show a number of times before. We like talking to him at least once a year. And Ben Snider, he is the Chief US. Equity Strategist, replacing David Costin. So thank you both for coming on Odd Lots.

Jan Hatzius (2:32)

Thanks so much for having us.

Ben Snider (2:33)

Great to be here.

Tracy Alloway (2:33)

Is research outlook time, is that actually a quiet time for you guys?

Jan Hatzius (2:38)

It's not a quiet time. Normally, we actually do it about six weeks earlier, because actually November tends to be a little bit better than December, but because of the shutdown and the dearth of data, we decided to push it back. It's completely under our control when we do it, and why do it at a time when you actually have much less information than normal. So we pushed out a number of reports yesterday, including the global economic and markets outlook.

Joe Weisenthal (3:07)

Can you talk, the two of you, maybe again, so obviously different roles, but on the same team. And obviously the stock market, US equity market, is different from the economy, and you can have years where the economy is fine, stocks are bad, and vice versa, all different permutations and combinations. But how do you think about being in alignment cross-team, and so that roughly you're sort of working under a similar set of assumptions?

Jan Hatzius (3:32)

Yeah, I can talk about that, and not just with respect to the US global economic outlook versus stock market outlook. But of course, there's currencies, there's EM economies, there's commodities. Certainly on the macro side, I would say we're on the coordinated side of the spectrum. Nobody is at one extreme or the other extreme. You can't have people that just work alongside one another without ever talking to one another, but you also shouldn't have just a machine where everything is exactly aligned and there's zero room for individual initiative. So, but we're towards the coordinated side for sure.

Joe Weisenthal (4:16)

Well, you mentioned yesterday, a good time to note to listeners, we are recording this December 19th, 2025 Ben, how do you think about sort of working with aligning your views of where markets are going or what the meaning of the rally has with the sort of, with the macro thinking?