Goldman Sachs Lowers U.S. Recession Odds Amid Trade Optimism

Published 1 hours agoIBM

Goldman Sachs Lowers U.S. Recession Odds Amid Trade Optimism

Goldman Sachs has adjusted its forecast for a U.S. recession in 2025, reducing the probability to 35% from a previous 45%. This change comes in the wake of a temporary trade truce between the United States and China, intended to ease economic tensions. The truce involves a significant reduction in tariffs, with the U.S. lowering duties on Chinese imports to 30% from 145%, while China cut tariffs on American goods to 10% from 125%, Reuters reported.

Alongside this development, Goldman Sachs has revised several key economic forecasts. The firm now projects an increase in U.S. GDP growth for 2025 by 0.5 percentage points, bringing it to 1%. Furthermore, the investment bank anticipates three interest rate cuts by the Federal Reserve between December 2025 and June 2026. The year-end target for the S&P 500 index has also been raised to 6,100 points, up from 5,900, reflecting the optimism arising from reduced recession risks and tariff reductions.

These strategic adjustments by Goldman Sachs suggest an improved economic outlook as a result of the trade agreement, providing a renewed sense of optimism for the U.S. economy as tensions between the U.S. and China temporarily ease.

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