Goldman Sachs raises US economic recession probability to 30%, expects unemployment rate to rise to 4.6% by year-end

Gate News reports that on March 24th, Goldman Sachs stated that due to soaring oil and natural gas prices, the probability of a U.S. recession in the next 12 months has increased to 30%, up 5 percentage points from previous expectations. The energy price shock, combined with tightening financial conditions caused by Middle East conflicts, and the gradual fading of the significant tax law effects passed by President Trump last summer, prompted Goldman Sachs Chief Economist Hazos to raise their baseline forecast for the unemployment rate at the end of the year to 4.6%. Goldman Sachs still expects the Federal Reserve to cut interest rates in September and December. The firm also forecasts that U.S. GDP growth in the second half of this year will be below trend, with an annualized growth rate of between 1.25% and 1.75%. Due to ongoing disruptions in energy transportation through the Strait of Hormuz, Goldman Sachs earlier on Monday raised its oil price forecast for this year. The firm stated that this conflict will push up global inflation and reduce global GDP growth by 0.4 percentage points, but in the worst case, the impact on GDP could double or even triple.