Trump Calls on Goldman to Replace Economist Over Tariff Stance
Bank’s economists had predicted tariffs could cause inflation and slow economic growth
Wall Street analysts are concerned about being targeted by Trump for economic research he dislikes.
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- President Trump appeared to call for Goldman Sachs to replace its top economist over past predictions regarding markets and tariffs.View more
President Trump on Tuesday appeared to call for Goldman Sachs GS 3.60%increase; green up pointing triangle
Chief Executive David Solomon to replace the bank’s top economist over his past predictions, in his latest broadside against executives he believes are undermining his goals.
Trump said on his Truth Social social-media platform that Solomon should “go out and get himself a new Economist” because the bank made a “bad prediction a long time ago” on the market and tariffs. The president asserted that tariffs haven’t caused inflation or other issues for the U.S. economy.
He also questioned whether Solomon himself should focus on just being a DJ, a reference to the bank chief’s former side gig.
Trump appears to be referring to Jan Hatzius, the bank’s longtime chief economist, though he didn’t call him out by name or title. Hatzius is well-known on Wall Street for forecasting in 2008 that mortgage defaults could lead to a severe recession.
Hatzius and his team have been among the many economists who have predicted tariff policies would dent labor markets, cause higher inflation and slow U.S. economic growth.
A report by Hatzius and his team Sunday included an analysis that found U.S. consumers had absorbed 22% of tariff costs through June, but will eventually absorb 67% if recent tariffs follow the same pattern as earlier tariffs. This assessment is similar to those of other economists.
U.S. businesses have shouldered much of the tariff burden so far. In the latest round of earnings reports, companies such as Ford and General Motors reported big hits to the bottom line because of the effects of tariffs. But economists widely expect the burden to shift to U.S. consumers and, to a lesser extent, foreign governments, over time.
Trump said in his post that consumers, for the most part, aren’t paying the tariffs but rather it is “mostly Companies and Governments, many of them Foreign, picking up the tabs.”
Inflation data released Tuesday showed steady consumer prices, but a higher-than-expected uptick in a key measure of underlying price growth.
Goldman Sachs declined to comment on Trump’s post. The White House didn’t immediately respond to a request for comment.
Trump has frequently butted heads with executives and has no qualms about telling them how to run their companies. Last week, he called on Intel’s CEO to resign. He has told Detroit carmakers not to raise prices and demanded Walmart “eat the tariffs.” Trump wants Coca-Cola to use cane sugar instead of corn syrup and has signed executive orders targeting elite law firms with Democratic ties, stripping them of government contracts and security clearances.
Trump’s attack on Goldman is the second time in as many weeks that the president has bashed prominent figures in economics, seeking to cast doubt on apolitical data and predictions when he disagrees with their implications.
President
Trump fired the head of the BLS, claiming manipulated jobs numbers
after a report of slowed hiring. While revisions were more dramatic than
usual, these numbers are always revised. WSJ explains.
Earlier this month, he abruptly fired the head of the Bureau of Labor Statistics, a nonpartisan agency, over lackluster job numbers, claiming statistics had been manipulated. He said this week he would nominate as her replacement E.J. Antoni, the chief economist of the right-wing Heritage Foundation and a longtime critic of the agency.
Trump’s camp previously targeted Goldman’s economists in September, after the team said they expected Democrats winning the presidency and Congress would lead to a slight boost to economic growth, while a Trump win could dent growth by as much as 0.5 percentage points.
“I don’t know why Goldman hasn’t tried to hire a more balanced economic team,” Trump’s then-economic adviser Kevin Hassett said at the time. Hassett is now director of the White House’s National Economic Council.
Trump handily defeated Democratic candidate Kamala Harris two months later.
Analysts at Wall Street banks have been on edge, wondering if they could find themselves in Trump’s crosshairs over economic research he doesn’t like.
Complicating the issue for six of the biggest banks is the fact that they are in the running to work on the Trump administration’s potential initial public offering of mortgage giants Fannie Mae and Freddie Mac. If it happens at the valuations being discussed, the offering could be among the largest of all time, which means missing out could lead to many millions in lost fees.
Write to Ben Glickman at ben.glickman@wsj.com
President Trump appeared to call for Goldman Sachs to replace its top economist over past predictions regarding markets and tariffs.
Trump questioned if CEO David Solomon should focus on being a DJ, referencing his former side gig, instead of the bank’s economics.