CNBC reports that Goldman Sachs Chief Economist Jan Hatzius said that U.S. stocks and bond markets could possibly “take more of a breather” in the near term, after hitting record highs last week. 

U.S. stock markets have had a bumper start to 2021, despite ongoing concerns about the coronavirus pandemic.

Hatzius shared his outlook for U.S. stocks looking ahead, and explained why market valuations might stop moving “relentlessly higher.” 

A pause could come as result of a renewed focus on the Federal Reserve potentially tapering its stimulus program, and the back-up in long-term interest rates that’s currently underway, he told CNBC.

Despite a possible pullback in markets in the short term, Hatzius said Goldman Sachs was positive on U.S. stocks in the long term and believed they would continue to move higher.

“We still think it’s a friendly environment for risk assets, for equities and credit,” he said.

“We’re early in the business cycle, there’s still plenty of slack in the economy in the U.S. and even more so in other economies.”

He explained that inflation remained below target, and central banks and fiscal policy were still pretty focused on bringing economic activity back, which was “generally pretty positive for markets.”