Jan Hatzius: Recession Risk Higher, But Still Relatively Low

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Jan Hatzius, chief economist at Goldman Sachs, discusses Janet Yellen's upcoming testimony to Congress and sees the risk of recession as still relatively low.

JAN HATZIUS: I think she has to walk a fairly fine line between not appearing like she's completely ignoring the turmoil in the markets, but at the same time, also, to indicate that she still expects expansion and that the scenario that the Fed has laid out is still the basic view. I don't think the basic view has changed by all that much.

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I mean to us it seems that the risk of recession is ..I do think it's higher that it was a year ago, but I think it's still relatively low. When I look at the factors that have historically predicted recessions, the two biggest ones are economic overheating, you know output and employment above potential, and a big increase in leverage in the economy, a big increase in debt. I don't really see either of those two things.

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