Goldman Sachs sees a 30% chance the US economy will slip into recession next year, up from its previous forecast of 15%, amid record inflation and a weak macroeconomic backdrop fueled by Russia’s invasion of Ukraine.
The latest forecast comes about a week after the Federal Reserve made its biggest rate hike since 1994 to contain rising inflation, and at a time when several other central banks are also taking aggressive steps to tighten monetary policy.
Goldman Sachs also lowered its estimates of US GDP below consensus for the next two years.
“The Fed has been more aggressively anticipating rate hikes, terminal rate expectations have increased, and financial conditions have tightened and now indicate a substantially greater burden on growth — a little more than we think is necessary.” , Goldman economists said in a note on Monday.
Goldman Sachs predicts a 25% conditional probability that the United States will enter a recession in 2024 if it avoids it in 2023, adding that this means there is a 48% cumulative probability of a recession in the next two years compared to its previous forecast of 35. %.
“We are increasingly concerned that the Fed will feel obligated to respond vigorously to high inflation and consumer inflation expectations if energy prices rise further, even if activity slows sharply,” he added.
Source: CNN Brasil
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