Why does Goldman Sachs now see a 45 % chance of the recession and the Federal Reserve comes to the rescue

The recession models in Goldman Sachs work to additional work after editing the introductory surprises.

With the markets under severe pressure because it digests a punishing effect President Trump’s new tariffGoldman Sachs returned to The second time a week With an increase in the possibility of recession.

Economists at the Investment Bank, led by Jean Hatzius, sees a 45 % chance of the American recession in the next twelve months, an increase of 35 % last week. Before that call, Goldman was at the risk of recession by 20 %.

Hatzius sees three factors that lead the possibility of upgrade:

• The financial conditions stressed “more strongly” than Hatzius expected after the tariff news.

• Foreign tourism of the United States has already started weak, amid a possible boycott.

• The measures of uncertainty in politics increased to “much higher” levels that were seen during the last trade war.

The federal reserve will have to respond to the recession, Hatzius says, even if that means high inflation.

“In our current non-head foundation, we expect the Federal Reserve Bank to deliver a three-cut package of 25 basis points in June (former July), which reduces the money rate to 3.5-3.75 %. In the recession scenario, we instead expect that the Federal Reserve reduces about 200 basis points during the next year,” Hatzius adds.

The markets threw 5.4 trillion dollars per day since President Trump revealed A big tariff in major countries last Wednesday. The S& P 500 is now in its 11 -month low, as the positives said that the massacre may not end yet.

Heavy sale continued on the markets around the world on Monday.

The Nikkei 225 index in Tokyo decreased 7.8 %. Hong Kong stock market is about 12 %, which is the worst day in more than 16 years. The Chinese Chinese compound index lost 8.4 %.

Futures decreased on Dow Jones Industrial Maldery by more than 1,100 points.

“At this moment, you need to play defense and focus on stability. Transforming into stable and profitable sectors with signs of good financial position,” Korea Cox, chief market strategies in wealth management in Ritolz.

Brian Suzy It is the executive of Yahoo Finance. Follow Sozzi on X briansozziand InstagramAnd LinkedIn. Tips about stories? Send an email to [email protected].

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