Goldman: QE2 Only Adds 0.5% To GDP And That's Not Enough To Fight Unemployment

Jan Hatzius of Goldman Sachs just spoke to CNBC about the impact of QE2 on U.S. growth.

He sees QE2 boosting U.S. GDP by 0.5%, and doubts it will create a long-term inflation problem. Instead, inflation is going to be below the Fed’s target of 2.0% for sometime, according to Hatzius.

Hatzius still sees housing as the big problem in the economy. Until supplies decline, and values increase, we won’t see GDP growth of higher than 3% (the next few quarters should be much smaller than that, more like 1.50-2.0%, he said).

Without growth higher than this, Hatzius doesn’t really see employment picking up. He projects that may take until 2012.

Democrats will be hoping it’s in time for the next election.

Here’s the video:

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