Jan Hatzius, chief U.S. economist at Goldman Sachs, was pleased with the final Q4 2010 GDP number that came out today affirming his assessment that the economy is healthy despite weak durable goods, housing, and consumption numbers.
However, Hatzius is worried surging oil prices could force him to downgrade his Q1 2011 GDP projections.
He sided with Paul Krugman on budget cuts hurting the economy in the short term. However, he added these cuts were definitely coming. “I would say it’s a matter of when, not if.”
As for interest rates he expects a modest increase in long-term interest rates as the economy grows, recovery matures and unemployment decreases.