Recession was the big fear heading into the new year, but the global growth outlook seems to be, if anything, improving.

A dramatic reversal of China's COVID policies is leading to a sharp recovery in activity there.

The boost from China and a warm winter in Europe

is setting the stage for better growth in that region,

and in the US, inflation continues to decline

even as the labor market remains robust, and that's easing worries that the Fed will

have to induce a recession to tame inflation.

But could this better growth outlook in itself reignite inflation concerns. I'm Allison Nathan and this is

exchanges at Goldman Sachs. On this special episode we're breaking down a topic we hit on in our most recent

top of mind report now available on GS.com. We dig into the risks around an

inflation resurgence. We first speak with Jan Hatzius, our head of Global Investment Research and Chief

Economist.

He expects the U.S. to avoid recession this year and growth to pick up in the second half.

But he's not concerned that will reunite inflation.

That's mainly because many sources of disinflation that he expects this year

don't require substantial economic weakness to play out.

We have the weakest you.S. growth momentum

in the near charm, a little bit below 1% in the foreign staff

and then we're a little above 1% in the second half.

And then approaching trend growth as we close out

2023 that's our baseline.

If we do expect a re-acceleration in growth in the second half,

...