Becker Private Equity & Business Podcast
Despite the Turbulence, Is This a Goldilocks Economy? 3-20-25
20 Mar 2025
In this episode, Scott Becker explores whether the U.S. economy is in a “Goldilocks” state—not too hot, not too cold—amid job market shifts, moderate layoffs in major banks, and economic signals that may influence the Fed’s rate decisions.
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Chapter 1: What is a Goldilocks economy?
This is Scott Becker with the Becker Private Equity in Business podcast. Today's discussion is as follows. Despite the turbulence, is it a Goldilocks economy? So here's the concept on this. People talk about Goldilocks economy as not being too hot or not being too cold. If it's too hot, the Fed has to raise rates and that causes the economy to go in the wrong direction.
Chapter 2: What happens if the economy is too hot?
If it's too cold, you have a recession, lots of people lose their jobs, very bad, no good, etc. The concept of the Goldilocks economy is somewhere in between. hot enough, warm enough that rates could stay at a normal rate or a lower rate, but not so cold that people are losing jobs when we've got a recession or a depression.
Chapter 3: What are the consequences of a cold economy?
What I did happen the last couple of days is new jobless claim reports came out. There were about 223,000, which is enough job losses in new unemployment claims to cause concern, but to also signal to the Fed at some point they may have to lower rates. but not so much as to cause a panic. Similar, we're seeing something similar with the big banks.
Chapter 4: What do recent jobless claims indicate?
The big banks, Morgan Stanley, JP Morgan, Bank of America, Goldman Sachs, and Goldman, of course, is more of an investment bank. are all doing small reductions in force, laying off 1,000 to 3,000 people, a couple percent in certain areas. The biggest thing I saw was one bank laying off 175 junior investment bankers. But by and large, not doing huge layoffs, more normal trimming.
And that is, again, a sign that it's not a disaster, more of this Goldilocks things versus a total disaster. Now, some companies are very much a turnaround phase. So Intel is getting rid of lots of people and trying to get themselves to be a leaner company and so forth. But overall, the general take is, are we in a Goldilocks economy? And that was hitting all the noise about Dogecoin.
and about tariffs and so forth, that things are okay enough. We'll see how this plays out. Thank you for listening to the Becker Private Equity and Business Podcast. Love your comments on this, 773-766-5322. Thank you very, very much.