Alec Phillips (Goldman Sachs)

Two weeks before the 2020 U.S. election, Phillips said on a Goldman Sachs podcast that thematic equity baskets showed the market expecting a change in tax policy, and therefore a change in control, though without fully pricing in the tax changes in Biden’s campaign plans; concerns about a contested election result had also eased somewhat. He said the most important policy variable for investors was still fiscal stimulus. On November 9 that year, he and chief economist Jan HatziusJan HatziusJan Hatzius is the chief economist and head of Global Investment Research at Goldman Sachs and a member of its Management Committee. Known for his macroeconomic forecasting, he has won the Lawrence R. Klein Award for the accuracy of U.S. economic forecasts three times.Open the full entry discussed the outlook for economic recovery and the impact of the election on global growth in 2021 on a client call.⁠[1][1][1][1][1][2]

On January 19, 2021, the day before Biden’s inauguration, Phillips analyzed the new administration’s policy outlook on a podcast recorded in Washington. He said a new fiscal stimulus package could seek bipartisan support or move through the reconciliation process, which requires only Democratic votes; the odds of individual taxes rising in some way were very high, and rates on top incomes were likely to rise, though the revenue might be redirected to items such as restoring the state and local tax deduction limited in 2017.⁠[3][3][3][3][3][3][3]

The day after the 2022 U.S. midterm elections, Phillips and Joe Wall of Goldman Sachs’ Office of Government Affairs analyzed the results. He said a divided Congress would make a recession-fighting fiscal package less likely and that any such package would probably be smaller than those passed in the last three recessions; Congress’s must-do tasks included passing spending bills to keep the government open, and a divided Congress with very thin margins could make those harder.⁠[4][4][4][4][4]

In May 2023, Phillips explained on a podcast that the U.S. Treasury had technically hit its $31.381 trillion borrowing limit on January 19 and had since relied on extraordinary measures. He said that if the debt limit were not raised in time, equity volatility would rise substantially, a delay in payments of more than a few days could be really damaging, and a lasting delay could tip the economy into recession.⁠[5][5][5][5][5][5]

Later that month, he discussed the history and mechanics of the debt limit with Stephen Kaplan of George Washington University and David Beers, former head of sovereign credit ratings at Standard & Poor’s. Phillips said the United States is essentially the only country with a debt limit, which, all else equal, probably slightly reduces confidence in Treasuries and the dollar, but that the issue is mainly technical rather than one of credit and solvency; he also noted that neither party wants to take responsibility for raising the debt limit.⁠[6][6][6][6]

In January 2024, Phillips and Joe Wall discussed the policy and market implications of that year’s U.S. presidential election. He said that in election years the economy tends to show some weakness early in the year because of pre-election uncertainty and more strength at the end of the year after the election; in polls, the economy and especially inflation remained voters’ top issue, with crime and immigration also more prominent than usual.⁠[7][7][7][7]

Goldman Sachs: Official website: https://www.goldmansachs.com/ (opens in a new window).⁠[7]