Goldman Sachs Chief Economist Defends the Federal Reserve: Will Stick to Data-Driven Decisions Despite Political Pressure

Goldman Sachs Chief Economist Jan Hatzius expressed his views at the 2026 Goldman Sachs Global Strategy Conference, defending the Federal Reserve’s independence under political pressure. He stated that although the criminal investigation into Chairman Powell has heightened market concerns about the central bank’s independence, he believes the Fed will continue to make policy decisions strictly based on economic data and will not change course due to external pressures. This statement is crucial for understanding current market expectations and liquidity prospects.

The Realistic Background of Independence Concerns

Political Pressure Escalation

Hatzius clearly pointed out that concerns about the potential impact on the Federal Reserve’s independence are increasing. The latest news about the criminal investigation into Chairman Powell has further intensified this market anxiety. This reflects a real issue: when facing political pressure, the central bank’s independence and policy space may be questioned.

Core Market Concerns

Key issues investors care about include:

• Whether political pressure will influence the Fed’s rate hike or cut decisions
• Whether the central bank can adhere to a data-driven policy framework
• Whether damage to independence will weaken market confidence in the Fed’s policy credibility

Hatzius’s Core Viewpoints

Confidence in Data-Driven Decision-Making

Hatzius stated that he is “not in doubt” that Powell will continue to make decisions based on economic data throughout the remainder of his term. The significance of this statement lies in it coming from the chief economist of a top global financial institution, representing market confidence in the Fed’s professionalism.

Commitment to Policy Neutrality

According to Hatzius, whether it is rate hikes or cuts, the Fed will follow data guidance and will not tilt in any direction due to pressure. This emphasizes a key principle: the central bank’s policy orientation should be determined by economic fundamentals, not political considerations.

Why This Matters

Impact on Market Liquidity

The Fed’s policy decisions directly influence the global liquidity environment, which in turn affects the performance of various assets, including cryptocurrencies. If the market believes the Fed will continue to base decisions on data, it can reduce policy uncertainty and stabilize investor expectations.

Maintaining Central Bank Credibility

Independence of the central bank is the cornerstone of the modern financial system. Once the market begins to doubt the central bank’s independence, the long-term effectiveness of policies can be undermined. Hatzius’s statement essentially serves to uphold this institutional foundation.

Summary

The views of Goldman Sachs’s chief economist are particularly significant in the current context. Although political pressure indeed exists, his statement indicates that market professionals still have confidence in the Fed’s independence and its ability to make data-driven decisions. This has positive implications for stabilizing market expectations and maintaining liquidity. The key question is whether the central bank can uphold its professional bottom line under political pressure, which will directly influence future monetary policy directions and market performance.