<p>Goldman Sachs has raised the odds of a US recession to 45 per cent from 35 per cent, the second time it has increased its forecast in a week amid a growing chorus of such predictions by investment banks due to an escalating trade war. </p><p>Goldman has raised its estimate from 20 per cent early last week on fears that US President Donald Trump's planned tariffs would roil the global economy. Days later, Trump announced steeper-than-expected duties, which have ignited a sell-off in global markets. Since then at least seven top investment banks have raised their recession risk forecasts, with J.P.Morgan putting the odds of a US and global recession at 60 per cent, on fears that the tariffs will not only ignite US inflation but also spark retaliatory measures from other countries, as China has already announced. </p>.South Korean shares plunge to 17-month low as US tariff worries dominate.<p>Goldman, on Sunday, lowered its US economic growth outlook for 2025 to 1.3 per cent from 1.5%. That, though, is higher than Wells Fargo Investment Institute's (WFII) 1% growth forecast, while J.P.Morgan estimates a 0.3% contraction, on a quarterly basis. </p><p><strong>Sooner rate cuts</strong> </p><p>Goldman still expects the Federal Reserve to cut interest rates by 25 basis points each in three consecutive meetings. However, it now expects the first of them to come in June, not July.</p><p>J.P.Morgan expects a rate cut in each of the five Fed meetings left in 2025, with another cut in January taking the benchmark policy rate to 3%. It had previously expected the Fed to lower rates twice this year from its current policy rate of 4.25%-4.50%. WFII now expects three rate cuts this year, instead of one. Traders, on average, expect 116 basis points of rate cuts this year, implying a rate cut in at least four of the remaining five meetings, according to data compiled by LSEG. </p><p>Brokerage US recession odds after tariffs US recession odds before tariffs J.P.Morgan 60% 40% Goldman Sachs 45% 35% S&P Global 30-35% 25% HSBC 40% - </p>
<p>Goldman Sachs has raised the odds of a US recession to 45 per cent from 35 per cent, the second time it has increased its forecast in a week amid a growing chorus of such predictions by investment banks due to an escalating trade war. </p><p>Goldman has raised its estimate from 20 per cent early last week on fears that US President Donald Trump's planned tariffs would roil the global economy. Days later, Trump announced steeper-than-expected duties, which have ignited a sell-off in global markets. Since then at least seven top investment banks have raised their recession risk forecasts, with J.P.Morgan putting the odds of a US and global recession at 60 per cent, on fears that the tariffs will not only ignite US inflation but also spark retaliatory measures from other countries, as China has already announced. </p>.South Korean shares plunge to 17-month low as US tariff worries dominate.<p>Goldman, on Sunday, lowered its US economic growth outlook for 2025 to 1.3 per cent from 1.5%. That, though, is higher than Wells Fargo Investment Institute's (WFII) 1% growth forecast, while J.P.Morgan estimates a 0.3% contraction, on a quarterly basis. </p><p><strong>Sooner rate cuts</strong> </p><p>Goldman still expects the Federal Reserve to cut interest rates by 25 basis points each in three consecutive meetings. However, it now expects the first of them to come in June, not July.</p><p>J.P.Morgan expects a rate cut in each of the five Fed meetings left in 2025, with another cut in January taking the benchmark policy rate to 3%. It had previously expected the Fed to lower rates twice this year from its current policy rate of 4.25%-4.50%. WFII now expects three rate cuts this year, instead of one. Traders, on average, expect 116 basis points of rate cuts this year, implying a rate cut in at least four of the remaining five meetings, according to data compiled by LSEG. </p><p>Brokerage US recession odds after tariffs US recession odds before tariffs J.P.Morgan 60% 40% Goldman Sachs 45% 35% S&P Global 30-35% 25% HSBC 40% - </p>