April 1, 2025
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Goldman Sachs raises US recession probability
(20 second reading) Goldman Sachs has raised its 12-month recession probability to 35%, up from its earlier estimate of 20%, citing weaker economic conditions and escalating trade tensions. In a recent research report, the global investment bank lowered its growth forecast for 2025, led by an increase in US tariff rates and weaker-than-expected economic performance.
Consequently, Goldman Sachs has raised its year-end 2025 core PCE inflation forecast by 0.5pp to 3.5%.
The weaker growth forecast has led to a 0.3pp increase in the unemployment rate projection for the end of 2025, now expected to be 4.5%.
Consequently, S&P 500 earnings growth estimates for 2025 have also been reduced from +7% to +3%, with a weaker outlook for the coming years.
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