Goldman Sachs Raises U.S. Recession Probability to 35% Due to Tariff Policies

Goldman Sachs has increased the probability of a U.S. economic recession within the next 12 months to 35%, up from the previous estimate of 20%. This adjustment is attributed to the aggressive tariff policies implemented by the U.S. government, which are expected to drive up inflation and unemployment rates, thereby hindering economic growth.

The financial institution's report highlights the significant impact of these trade policies on global economic stability. The heightened probability of a recession reflects broader economic risks posed by ongoing trade disputes. The report suggests that the U.S. government's tariff measures are not only affecting domestic economic conditions but also having ripple effects on global markets.

The revision in the recession probability indicates growing concerns within the financial community about the economic outlook. The report emphasizes that aggressive tariff policies are likely to create a challenging environment for businesses, leading to increased costs and reduced investment. This, in turn, could lead to a slowdown in economic activity and potentially trigger a recession.

The report also notes that escalating trade tensions are likely to continue, further exacerbating economic risks. The U.S. government's tariff policies are seen as a major factor contributing to the increased probability of a recession. The report suggests that these policies are likely to have a lasting impact on the economy, making it more vulnerable to external shocks.

In summary, Goldman Sachs' revision of the recession probability underscores the significant economic risks posed by the U.S. government's tariff policies. The report highlights the need for a more balanced approach to trade policies to mitigate the risks of a recession and promote economic stability. The financial community will be closely monitoring the developments in the trade disputes and their impact on the global economy.