US EditionRecession Odds Hit 35% Because Of Tariffs, Goldman Warns
- Goldman Sachs, led by economists under Ronnie Walker and strategists under David Kostin, issued a pessimistic forecast on Sunday, anticipating a downturn in the U.S. Economy and stock market due to President Donald Trump's upcoming reciprocal tariffs set to be announced on Wednesday.
- The shift was driven by the expectation of more aggressive reciprocal tariffs averaging 15% across all US trading partners, which are intended to address trade imbalances but risk higher prices and consumer strain.
- Goldman Sachs economists upped their forecasts for the average tariff rate to rise to 15 percentage points on all goods this year and increased their estimate of core inflation to 3.5% by year-end, while slashing their 2025 GDP growth forecast to 1% and bumping up their year-end unemployment rate outlook to 4.5%, the highest since October 2021.
- Trump, who called Wednesday tariff Liberation Day , dismissed reports of matching tariffs dollar-for-dollar on a select group of countries, stating, You'd start with all countries, so let's see what happens, while Peter Navarro, White House senior counselor for trade and manufacturing, estimated the tariffs could generate $600 billion annually.
- As a result of these changes, Goldman Sachs increased its probability of a recession in the next year from 20% to 35%, the highest since the regional banking crisis two years prior, also expecting the S&P 500 benchmark to decline 5% over the next three months, even as they continue to expect the US economy to avoid a downturn.
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Trump’s trade war threatens to trigger a recession in the United States
The U.S. economy was recently the envy of the world, with a low unemployment rate, strong growth, and inflation almost under control. In just over two months, the damage caused by Donald Trump’s economic policies threatens to plunge the world’s leading power into recession. The president is preparing to launch the most severe wave of the trade war he has declared against the world with what he calls “reciprocal” tariffs, which are anything but. …
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Total News Sources121
Leaning Left17Leaning Right10Center25Last UpdatedBias Distribution48% Center
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R 19%
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