Goldman's Hatzius: Look for a March taper

Baseline for Fed taper is March: Hatzius

Despite a better-than-expected jobs report last week, the Federal Reserve would mostly wait until March to begin to scale back its $85-billion-a-month bond-purchasing program, Jan Hatzius, the chief economist of Goldman Sachs, told CNBC on Monday.

Hatzius said Fed officials want to wait for the possible transition of Janet Yellen to the chair position from Ben Bernanke. Yellen's nomination faces its first confirmation hearing Thursday. when he steps down this January.

Hatzius also said Fed officials would evaluate the expected budget showdown between President Barack Obama and House Republicans this January before deciding when to taper, and that lawmakers would most likely reach a "small fiscal deal" that averts the next stage of the sequester.

"It's going to be a tough transition," Hatzius told CNBC on "Squawk on the Street" on Monday. "It probably always is a tough transition but particularly in an environment where policy is somewhat in flux, where there is a sense that they do want to scale back the QE program at some point, but of course there has been many twists and turns in this saga, and it's going to be hard for her."

Jan Hatzius, chief economist of Goldman Sachs.
Jonathan Fickles | Bloomberg | Getty Images

(Read more: Goldman's Hatzius: Fed will taper, but it will 'lean' dovish)

Hatzius said lawmakers in Washington will maybe reach a deal more easily in the next budget fight because upcoming sequester cuts involve defense spending, an area that might make a deal more "palatable" for Republican politicians.

(Read more: Jobs shocker may force Fed's hand)

"It was an important issue in September, and they have gotten pretty worried about political dynamics in Washington," Hatzius told CNBC. "I think they wanted to get through at least the particular stage of that. If you have another nasty fight, it will probably be easier the next time around."

Hatzius said it was most likely worries over quantitative easing effects on asset prices that kept the Fed from introducing the taper in September.

—Reuters contributed to this report.

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street."