YouSaid · the spoken record

Dominic Trevisani

lines on the record: 31
first: 2025-07-22
most recent: 2025-07-22
sittings or episodes: 1
sources: podcast

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“So I would say echoing the things that we've said, probably four things. The first is there are some structural things that we think trends that are going on now that we think are going to continue, dollar weakness being one of the key ones, that pressure towards a sort of steepening of the yield curve, perhaps somewhat lower yields at the front end of the yield curve and this periodic testing of yields higher at the back end. And one of the things which we haven't talked about here, but our commodities team has been very consistent about is over the medium term move lower in oil prices over time and the skew of risks lying in that direction. So those are longer term structural stories that we think are going to, that'll be ups and downs, but we have reasonably high confidence will continue to be things that play out over the coming months. The second thing I would say is that”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, look, I think there are a lot of things that could provide local challenges. We're pricing inflation growth in a pretty friendly way, as we discussed before. We're looking through the tariff threats and treating those as manageable. Lots of things that could cause some local wobbles. I think in terms of more serious challenges, the primary one, and not to be too reductive, I think the list narrows. If you look back over the last 12 months and you think we've had two big equity drawdowns and sort of volatility events, one in August 2024 and one in April 2025, and what they both have in common is that they were heavily focused around real fear that a recession was coming. And I think what we're learning is that's the biggest source of risk for deeper vulnerability and equity is if the market thinks the unemployment rate is set to rise properly in a way that we really haven't seen for a while, that is the sort of thing we, I think we've seen visibly creates a lot of risk aversion and creates a lot of worry, particularly.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Is of course a big tariff deadline. There potentially are going to be more tariff deadlines. We're focused on August 1st. There is the 30% Europe threat. There is a 30-35% Canada-Mexico ex-USMCA threat. There is a number of other threats out there. We're building that into our forecast to a much more limited extent. We have a 15% baseline tariff up from 10. But of course it's possible that these things actually take effect the way that the reciprocal tariffs, the full reciprocal tariffs took effect, albeit only for a few hours on April 9th. So that's risk number one. The Fed share discussion is going to continue. We're going to learn more in the next several months. Probably there's going to be an candidate that will have been identified. Even if the removing Chair Powell concerns come and go, even if that isn't where we go.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Been quite weak, so it's a very bimodal economy. Our overall forecast for GDP growth in China continues to be basically four and a half or a little bit more than four and a half percent, which is effectively where we've been all year with a short period where we thought it was going to be four or less when you had these sky high US tariffs. But what we found is that the Chinese industrial sector has been remarkably able to deal with the ups and downs of US tariffs even during the highest US tariff levels, the overall exports from China didn't really decline. The exports to the US declined, exports to the US are still down somewhere in the mid-20% range. But nevertheless, overall exports in the goods producing sector in general continues to be pretty resilient.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“So we think one and a half, maybe close to 2% growth for a period of time. The challenges for the German economy from industrial structure competition with China, energy costs, all of those structural challenges are definitely still there. But with the much more expansionary fiscal policy that's providing a lift and that's also visible to a lesser degree in the euro area as a whole. Similarly, I'd say China continues to be an economy with a very strong industrial sector that continues to upgrade and a still challenge domestic sector, demographics are bad. The hope that housing would end its long slide that I heard quite a lot about a couple of months ago. Those have again given way to disappointment. The latest house price numbers have”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Not too much change, so a reasonably fairly subdued growth pace. For example, in Europe, we don't expect a lot of growth sequentially in the second half of the year, although I would say that in general, European growth has come in a little bit ahead of expectations for several quarters now. And there are some reasons to think that some of this borrowed growth, there was a front-loading boost. I mean, I think a real front-loading boost in some US partner economies because there was a desire to import and that benefited the European industrial sector. But so second half of the year, I think could be pretty soft in terms of sequential GDP growth. But we still think we're in a kind of 1% environment for the euro area. We're probably seeing a pretty sizable fiscal boost in Germany over the next couple of years.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, the answer is I think it makes it more complicated. It means you're more likely to have these sort of moments of challenge. And as I said, then what becomes distinctive is continuing to hold your view or add to your view or retain that commitment as other people become more nervous about it. But it definitely increases the chance that there's a bit more back and forth.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“The kind of cyclical reasons that come up from time to time that you should not give up your confidence that the story is going to extend. And I think we're having a little bit of that at the moment. As Jan said, the big picture story is that despite a lot of relief about the US economy in the second quarter, the dollar continued depreciating even after the reversal in a lot of other asset markets. But just over the last couple of weeks, as we've got better growth news in the US, as we've dial back some of that kind of Fed expectation with people already fairly heavily positioned, we're getting a little bit more dollar support again. And you can see people's confidence in the theme, even though it's something people are quite heavily subscribed to. You can see that confidence waning. We're getting a lot more kind of incoming questions about whether the shifts are done. And I think, you know.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, the general view is that it does. And for exactly the reasons that Jan mentioned that structurally there are a lot of these forces in place that traditionally have led to fairly extended periods of dollar realignment. And if you look at where we started from in terms of valuation, if you look at where people are in that reallocation and those hedging decisions, we think we're probably in the middle of that process rather than at the end. It gets more complicated as time goes on, I think partly because dollar weakness is now a pretty well accepted story. It's always better when you feel like something that believe something that other people don't yet believe. I think the nature of the dollar weakening trend has changed. We're deeper into that cycle. We've talked in other contexts across markets about keeping the faith. And I think the story now more is that confidence that this is a process that still has room to go and that when it gets challenged temporarily for some of”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“On a broad trade weight basis and that historically sets up for depreciation in coming years, the US still runs a very large current account deficit that needs to be financed by equal sized capital inflows. And then I think there are some of these more tail risk concerns around things like Fed independence that probably also have an impact on how foreign investors perceive the investments in the US. All of these things are happening at the margin. This is something that our team, Dom, Treveti, and team have really emphasized that this is not about a fire sale. It's about making it a little bit more difficult to obtain the capital inflows that are needed to cover the current account deficit. And all of these prices are ultimately set at the margin. And I think what we're seeing in price action. Is that these effects are coming through”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Meant that concerns about the US economy have receded. Expectations of relative U.S. economic performance are not as negative as they were in April when we thought that it was basically a knife edge case whether we were going to have a recession. And in fact, for a very brief period of two hours on April 9th, we had a recession forecast, but it seemed very touch and go. Things have stabilized for a variety of reasons that we've discussed, but nevertheless, on net, the dollar has continued to depreciate. And I think that drives home that the dollar depreciation is driven not just by the cyclical ups and downs of the near-term growth outlook, but really also driven by several longer-term factors, some of which we've discussed, but the dollar is still very highly valued.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Structure and a broader set of people. So I don't think it's going to be a dramatic shift in terms of actual policy setting that we're going to see over the next year. I think it's still going to be driven by the economic data and the Fed, the collective wisdom that Fed officials bring or the collective views and analysis of the data. I don't think it's going to be a massive shift. And independence of monetary policy is very important. We've written some things about it this year. And I would say there was more concern around the possibility that the president gets the ability to remove Fed officials without cause before the Supreme Court decision that basically carved out the Fed from the President's ability to make those kinds of changes. But I think I”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Think over time, I do think that the administration is going to be able to make, of course, several fed appointments. And my expectation is that they will be an orderly transition. And that's the latest, I think, turn that the president, what he said. But yeah, my expectation is there will be a new Fed chair. I don't know who it's going to be, but I think it's going to be in May 2026. There are three appointments to the Board of Governors that President Trump is probably going to make. There are 19 people around the table. There are 12 voters at any one time. So there's a lot of institutional stability. And the Fed chair, of course, has a very important role in shaping the discussion and setting the agenda and working with the staff. But there's still a broader”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“You mentioned the Fed chair that is coming. I would say, at least in the market discussions, people have moved on from the fiscal debate. Now the bill has become an act and the Fed chair discussion is more prominently in focus. And we've seen obviously sort of market movement around some of the kind of rumors and announcements around that. I do think that's something where the risk of someone who might push more actively for easier monetary policy is something that would probably reinforce that steepening dynamic in yield curves and probably also contribute to some further pressure on the dollar, which is the pattern that we've seen when those issues of temporarily entered the market.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“So, if you combine that with relatively good growth pricing, it's easy to see how there's a little bit more softness in the data on the growth or labor market side and certainly if the inflation news continues to track well that the Fed's going to, as they've been signaling, step off from talking about easing to actually doing it. So our general view has been as the market winds back its sort of expectations of easing with a view like Jan and the teams, you should start to put”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“As I said, we've seen some swinging backwards and forwards coming off the tariff fairs initially April into May. We had one of those rounds of worries that Jan mentioned about bond markets and yields went up a lot at the back end of the yield curve. Then we got some meaningful relaxation after that, helped by some of the better inflation news. We had FMC members starting to talk about maybe cutting rates more quickly and some sort of excitement about the possibility of an earlier easing. And I think the resilience of the job market in particular and just general data since then has blunted those hopes a bit. So now we're shifting back towards dialing back some of that optimism, as Jan saying, so we're pricing September a little bit over a 50% chance. As Jan said, there's still lots of ways I think it's easy to see how the case for cuts opens up and opens up more quickly again. In particular, as I said, the market is pricing a higher inflation track now than the forecasts that we have.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“That this really is a one off inflation effect. And I think sometime, September is a reasonable time frame. I think there's very little chance that anything happens in July. So almost by definition, that means the risks to September are on the later side. It could be a little bit later, but this is our current baseline.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Look, we're at a level of short term interest rates that is above basically anybody's estimate of where the funds rate will be in the long term, the natural rate of interest or however you want to call it. Most people have that somewhere in the low threes, maybe low to mid threes. We're now in the low to mid fours. So it's a question of when that adjustment comes in a broadly neutral economic environment. Our expectation is that they're going to start moving down in September. We have a 25 basis point cut in September. We've got two more cuts at the subsequent two meetings. And then another 50 basis points in total in 2026 to get you down to the low threes. And the timing of this is driven by really news on when they're going to be sufficiently confident.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“We still think that we're on track for 6% of GDP federal deficits pretty much as far as the eye can see or at least until there's a more sustained effort to consolidate the budget outlook. 6% of GDP is, that's a big number. It means a large primary deficit, X-interest deficit of maybe 3% of GDP. And that probably means ongoing increases in the debt to GDP ratio again pretty much as far as the eye can see. And that's a reason, and we may come back to this also for longer-term premium, the amount of compensation that investors demand for holding long-term treasuries for those term premiere to probably agile over time. So the fiscal outlook remains concerning. We're certainly not in the camp that there's a fiscal crisis coming.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Going to have a positive impact on near term growth taken by itself because it is fiscally expansionary. The tax cuts are bigger than the spending cuts and the tax cuts also arrive more quickly than the spending cuts. And so that's fiscally stimulative in early 2026, probably to the tune of a few tenths of a percentage point, maybe as much as half a percentage point, but it doesn't include the tariff impact. And if you look at it from a revenue perspective, it is actually a bit more neutral once the tariff impact is included. And I think the growth effects ultimately are going to be offset by the tariff effect. So we haven't really made major changes on the back of this. We also haven't made major changes to our deficit projections.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“They just need to believe that it's not going to be a sustained impact if we have some quarters of weakness as we adjust to this new regime, but life goes on on the other side of that and growth returns, which is more or less the flavor of our forecast. That's something I think where the market can get broadly comfortable. It does point, you know, you asked about complacency. I think that's probably too strong, but it points to where the vulnerability lies in terms of those assumptions. Those assumptions are not that different from our central case, but anything that shakes that idea that you can plausibly look through the weakness, anything that raises the fear again that something recessionary is on the horizon or that we might have to worry about a kind of more dramatic shift in the economic outlook, you know, cracks in the labor market, things we haven't really seen yet, but are still an ongoing risk. That's where I think the market will find itself from this current position vulnerable. But if we don't touch that, then I think we're going to continue to look forward to the medium-term picture and anchor on that.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Much less worried about the kind of growth and risk consequences of that. And I think, again, there are sort of three basic assumptions that the market's making around that. The first is there's this sort of modest expectation that things will get dialed back and resolved. I think the fact that you're seeing inflation pricing rise suggests it's not mostly about that. The market does think more tariffs are probably coming. But I do think there's been the greater sense that adjustments will be made if problems arise. The second, which is what Jan referenced, is that I do think the worst of the economic impacts just look less visible. We're clearly seeing weakness, but we're not seeing all of the weakness that perhaps people worried we might see initially financial conditions tightening has reversed. The uncertainty impacts, as Jan said, a smaller. So I think there's just a general sense that the kind of deeper tail risks and economic tail risks are not as troubling. And I would say the third is just this general notion that the market doesn't really need to believe that there won't be an impact from tariffs.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“It is striking if you look across different markets and you mentioned that equity is in particular have been relaxed. If you look at inflation markets, we have priced over the last few weeks. I think a recognition that tariffs are going to go up. The market's pricing more near-term inflation. So it's not that the market is discounting that component.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“It's pretty striking. I think it's getting less surprising over time. I feel like really this is a theme we're reinforcing it, but it's a theme that's been going on since mid-April, which is that the markets essentially move to a position where they feel like they know some weaknesses coming in the economy. I think people expect the tariffs to have impact. But as Jan said, as the kind of parameters have become clearer, we've had this sort of high but fairly stable expected tariff outcome for a while. I think people have just got more comfortable that this is going to be a meaningful one-off adjustment, but that you're not going to have a kind of extended period of weakness. And then people essentially, particularly I think in the equity market, feel comfortable extending their horizon looking through that weakness and anchoring more on the medium term growth picture. I think it is striking again, this latest sort of escalation and the renewed kind of tariff letters coming around definitely haven't shaken that confidence at all on the growth side.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“A substantial amount, in part because of tariffs, maybe in part because of other things that are harder to identify. We've also seen a slowdown in employment growth, private sector employment growth has come down meaningfully. It was well below 100,000 in the June numbers. In fact, the ADP numbers, which I think deserve some weight. That's a private payroll processor figure was even weaker than that. So it does seem that we're on a slower growth pace. We're still expecting one to one and a half percent growth in 2025 as a whole. I would say that some of the forward-looking soft indicators, survey indicators, have looked a little bit better, so consistent with maybe some stabilization, but it's a slower growth here without much doubt.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Some of the ways in which tariffs affect growth have proven to be, I think, definitely less dramatic. We're seeing less of an uncertainty impact that's clearly visible in the data. And in fact, some of the uncertainty measures have come down. Of course, so far we haven't seen a huge real income hit either because we're still in the early stages of the pass-through. So you could say that what we're learning here is that this is not such a big deal. On the other hand, actual growth in the first half of 2025 actually has been pretty soft. Right now we're estimating first half GDP growth only 1.2% on average. You have to take Q1 and Q2 together because of the massive front-loading distortions in the quarterly numbers. But I think the half year as a whole is a more reasonable perspective. So it does seem that growth actually has slowed.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Offset in part by still ongoing improvement outside the tariff affected categories, in particular in services and rents. So our expectation is still that we will see increases in year over year core PCE inflation from the sort of mid to high twos where we've been for quite a while now to the low threes. That's still our view. However, I also think that most likely this is a price level effect, a little bit like a value added tax increase that we've seen in Europe many times that boosts inflation meaningfully for a period of time, 12 months, and then it drops out. And I think what we've seen on inflation expectations, especially longer-term inflation expectations, supports that over the past several months.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so I'd say on the latest inflation data on balance, I think they were in line where if I look at where our estimate is for core PCE in June, which is what all of these CPI PPI import price numbers feed into, we're at 25 basis points. That's basically what we had coming into this set of reports. I do think that there's actually more evidence of pass-through into consumer prices in specific categories that you could reasonably expect to already have been affected by tariff increases on China the first rounds of China tariffs that have been in place for a while now, the steel and aluminum tariffs. So I actually think that is happening, but it's happening gradually, partly because there was a lot of inventory building ahead of the tariffs. And it's also”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“So, the key question remains what will this all mean for inflation? We got another round of US inflation data this week, and it was yet again somewhat cooler than expected, and that's been the case for several months now. So will we see a tariff impact on inflation? And if so, when will we see it?”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“An increase in the sort of general baseline rate of from 10 to 15, and then we'll also get some additional sector-specific tariffs on things like semiconductors. However, in our baseline, we pushed back our expectation of pharma tariffs into late next year or early the year after the midterm elections. So the latest changes have been sort of awash. So it is a very sizable increase in tariffs, much bigger than what we expected coming into the year, but somewhat below where we were expecting it in early April and very stable actually in terms of the average rate over the last several months.”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT
“So far, we've seen about a 9 percentage point increase in the average effective tariff rate on all U.S. imports, which is composed of 30% China tariffs, 25% Canada, Mexico, ex-USMCA, 10% on a broad range of countries, and then some sector-specific tariffs, especially on autos and on steel and aluminum. We're expecting that 9% increase to go to something like 14 by the end of the year. And we've been in that general vicinity for several months at this point. It really hasn't changed very much, although the details keep changing and are probably going to continue to change. Our current expectation is that the 5% point increment from here is going to be”
2025-07-22 · Goldman Sachs Exchanges · Are Investors Complacent? · IDENTIFIED FROM THE TRANSCRIPT