Goldman ups recession odds

Goldman Sachs is again telling clients the United States is closer to a recession, even after Washington paused some of its newest tariffs. (cbsnews.com) The bank’s economists raised their 12-month recession probability to 45% from 35% in an April 2025 note tied to President Donald Trump’s tariff rollout. They also cut their 2025 growth forecast and said tighter financial conditions, foreign consumer boycotts, and higher policy uncertainty were hitting business spending. (cbsnews.com) Goldman briefly moved to an outright recession baseline on April 9, 2025, then pulled that call back after Trump announced a 90-day pause on higher country-specific tariffs. In that revised view, Goldman returned to a non-recession baseline with 0.5% growth and a 45% recession probability. (bloomberg.com) The tariff fight started with Trump’s April 2, 2025 executive order creating a 10% baseline import tariff and higher “reciprocal” rates for specific trading partners. A week later, Trump paused many of those higher rates for 90 days, but kept the 10% baseline and raised tariffs on China. (whitehouse.gov; cnbc.com) That is why Goldman’s warning did not disappear with the pause. The bank’s economists said the pause bought time for negotiations, but the remaining tariffs and the threat of more changes still left the economy facing slower growth and elevated recession risk. (bloomberg.com; investing.com) A recession is not declared by Wall Street banks or by two quarters of falling output alone. In the United States, the National Bureau of Economic Research dates recessions by looking across the economy, including income, employment, production, and sales. (nber.org) The backdrop was already softer before the tariff shock. The Bureau of Economic Analysis said real gross domestic product grew at a 2.3% annual rate in the fourth quarter of 2024, down from 3.1% in the third quarter. (bea.gov) Other firms were also marking up the odds of a downturn as the trade fight widened. CBS News reported that JPMorgan economists put recession odds at 60% after the tariff announcements, showing Goldman was not alone in warning that trade policy could tip growth lower. (cbsnews.com) Goldman’s message now is narrower than a recession call but darker than a routine slowdown forecast: tariff relief changed the timing, not the underlying risk. The next test is whether the White House turns the 90-day pause into trade deals before the higher duties come back into play. (bloomberg.com; cnbc.com)