Goldman sachs Adjusts Recession Forecast Amid Tariff Pause
Goldman Sachs has revised its economic outlook following President Donald Trump’s announcement of a 90-day tariff pause. This move has calmed markets that were previously worried about a trade war.
Initially, Goldman analysts predicted a recession due to new country-specific tariffs. However,after Trump’s statement,they changed their forecast to a “non-recession baseline.” They now expect modest GDP growth of 0.5% by Q4 2025 and anticipate three Fed rate cuts starting in June, as reported by CNBC.
Markets reacted positively. Bitcoin’s price climbed above $82,000,and teh Nasdaq neared a 10% gain,recovering from its worst performance sence 2008. The 10-year Treasury yield also dropped from 4.5% to 4.4%.
Trump, in a post on Truth Social, mentioned that several countries have started trade and currency talks. This led to the tariff pause and a temporary reduction of the reciprocal tariff rate to 10%. However, tariffs on Chinese imports increased to 125% immediately.
Goldman now sees a 45% chance of a recession and expects core inflation to peak at 3.5%. The surprise decision comes after four days of market volatility and recession fears. Treasury Secretary Scott Bessent will now lead trade negotiations,a move Wall Street welcomes due to his moderate approach.
