What Not to Watch: Data Reliability and Market Sensitivity to Economic Surprises (Walker)

Goldman Sachs

Jan Hatzius

Research

15 Pages

Goldman Sachs explores a world of rising macro uncertainty, where traditional economic relationships are weakening and policy ambiguity has surged. The authors argue this new regime demands humility in forecasts, scenario thinking in strategy, and flexibility in portfolios—because even “on the one hand…” now requires a second one.

Key Takeaways

Forecasting humility: Recession models have swung wildly—2023 odds ranged from 15% to 98% depending on inputs.
Broken correlations: Traditional macro linkages (e.g. yield curve, ISM vs. GDP) have become statistically unreliable post-2020.
Flexible positioning: Investors should pair core views with hedges, avoid overconfidence, and prepare for multiple macro paths.
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