Goldman Sachs Raises U.S. Recession Odds to 45% as Tariff Impact Deepens
Goldman Sachs Raises Recession Odds
Goldman Sachs has hiked the recession probability to 45 percent, reflecting heightened economic concerns due to President Trump's tariff measures. This shift comes as market turmoil escalates, following significant drops in major indices.
Market Reactions and Economic Outlook
Stocks fell dramatically at the week's onset with the Dow Jones Industrial Average plummeting 1,400 points, equating to a 3.5 percent decrease. Similarly, the S&P 500 and Nasdaq composite experienced declines of 3.7 percent upon market reopening.
- President Trump's tariffs have drawn significant backlash, contributing to market declines.
- World markets are reeling from the current economic climate influenced by U.S. trade policies.
In Trump's defense of the tariffs, he remarked on the nation's ongoing trade deficit, emphasizing that a failure to address these issues is unsustainable. This sentiment reflects a growing concern that might lead to a slowdown in economic growth this year.
Implications for Economic Growth
- Goldman Sachs projects slower economic growth.
- J.P. Morgan has cautioned that GDP might contract under the weight of these tariffs.
Analysts predict that the pinch from increasing prices could prove more severe in the current environment compared to previous inflation spikes, given recent trends in nominal income growth.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.