Cnn
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The American economy is faced with an increasing risk of recession, as growing prices threaten to break growth, relaunch inflation and raise unemployment, according to Goldman Sachs.
The Wall Street Bank warned customers on Sunday evening that it now sees 35% of recession in the next 12 months, against 20% before.
Goldman Sachs has also increased his estimate of inflation, reduces his GDP forecasts from 2025 to only 1% and increased his prospects for end -of -year unemployment rate from 0.3 percentage points to 4.5%.
While Goldman Sachs always expects the American economy to avoid a slowdown, other forecastists think that it is more a 50/50 call. This is the highest probability of Goldman recession since the regional banking crisis two years ago. The catalyst is now the shock of the trade war of President Donald Trump, who is expected to intensify this week.
Goldman Sachs blamed the “recent deterioration of the confidence of households and businesses, and the declarations of the managers of the White House indicating a greater desire to tolerate a short -term economic weakness in the pursuit of these policies,” the bank economists wrote in the report.
Consumer confidence has plunged in recent months. The survey of consumer feelings of the University of Michigan, published on Friday, showed the highest percentage of Americans expecting unemployment to increase since the great recession, the expectations of inflation have reached a 32 -year -old summit.
“Although feeling has been a bad predictor on activity in recent years, we are less disdainful of the recent decline because the economic fundamentals are not as strong as in previous years,” said Goldman Sachs.
During the campaign, Trump promised to use the prices aggressively. However, investors, CEOs and economists have been caught by the way he held this promise aggressively.
Trump on Air Force One Sunday rejected last week from Bloomberg and the Wall Street Journal that his administration would correspond to dollar prices for a dollar on a handful of countries to start-perhaps the “dirty” countries with the biggest commercial imbalances with the United States as the Treasury Secretary Scott Bessent had suggested a week ago.
“You would start with all countries, so let’s see what’s going on,” Trump said on Sunday. “I have not heard a rumor over fifteen countries, 10 or 15 years old.”
Stressing this point, Goldman Sachs increased his pricing hypotheses on Sunday for the second time in less than a month. The bank now expects the American average rate rate to increase 15 percentage points in 2025, against 10 points earlier this month and a level which was previously its “risk case”.
The change was almost entirely motivated by the probability of more aggressive reciprocal prices which on average 15% for all American trade partners. Goldman Sachs expects the impact of the reciprocal rate to be lowered to 9 percentage points after taking into account the exclusions of certain countries and products.
“Higher prices are likely to stimulate the consumer crisis,” said Goldman Sachs economists, noting that higher prices will eat in income adjusted by inflation.
Trump said last week that his reciprocal prices, which should be announced on Wednesday, would be “indulgent”. But Peter Navarro, main advisor to the White House for Commerce and Manufacturing, told Fox News on Sunday that he expected Trump prices up to $ 600 billion a year – an increase in historic tax that could increase the costs of millions of Americans.
Goldman Sachs now sees basic inflation at 3.5% at the end of the year, against its previous estimate of 3%. Central inflation accelerated at 2.8% in February, depending on the inflation of the Fed.
Goldman Sachs now expects the Fed to facilitate the economy by reducing the rates three times this year, against two reductions in its previous call.