Goldman Sachs Raises U.S. Recession Probability to 30%, Expects Below-Trend GDP Growth in Second Half

Gate News reports that on March 23, 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. Goldman Sachs Chief Economist Huzus noted that the energy price shocks, the tightening of financial conditions caused by Middle East conflicts, and the fading effects of major tax legislation passed by President Trump last summer have led to an upward revision of the baseline unemployment rate forecast to 4.6% by the end of the year. Goldman Sachs expects the Federal Reserve to cut interest rates in September and December, with GDP growth in the second half of this year projected to be below trend, with an annualized growth rate between 1.25% and 1.75%. Due to the ongoing disruption of energy transportation through the Strait of Hormuz, Goldman Sachs earlier on Monday raised its oil price forecast for this year. The bank stated that this conflict will push up global inflation and reduce global GDP growth by 0.4 percentage points, but in the worst-case scenario, the impact on GDP could double or even triple.