(Bloomberg) -- Goldman Sachs Group Inc. economists who are tracking weaker global growth this quarter say there’s no reason to fret that a deeper slowdown is coming.
While there has been some ebbing in the first three months of the year, world gross domestic product is still expanding slightly above Goldman Sachs’ full-year forecast of 4.1 percent, according to their research note published Monday.
The outlook is holding up despite tighter financial conditions and U.S. President Donald Trump’s moves to impose tariffs on $50 billion worth of Chinese goods and imported steel and aluminum, Goldman Sachs chief economist Jan Hatzius co-wrote with colleagues. Also, weaker first-quarter growth estimates for the U.S. and euro area reflect “seasonal and weather-related distortions,” they said.
“Assuming proportionate retaliation, the tariffs will boost inflation and weigh on growth both in the U.S. and abroad, but our global economic model suggests that these effects will be too small to be distinguishable from the normal noise in the data,” the note stated.
Goldman’s economists indicated they’re sticking with their forecast for four Federal Reserve interest-rate hikes in 2018 and four more in 2019, a view that “remains clearly hawkish relative to market pricing, although the difference relative to the Fed’s view is now just one of timing.”
A tool Goldman Sachs uses to gauge global growth momentum has “slowed only marginally” since the end of 2017.
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