Goldman Sachs Alters Recession Outlook After Trump Tariff Announcement

Goldman Sachs has dramatically altered its recession forecasts following President Trump's announcement of a 90-day pause on certain tariffs, which has eased investor fears of an economic downturn. Initially, the bank raised the probability of a recession to 65% due to the implementation of reciprocal tariffs, but after Trump's announcement, it reverted to a 45% probability and a GDP growth forecast of 0.5%. The new tariff plan includes a universal 10% tariff on many trading partners, with an exception for China, which will see its tariff increase to 125%. This rapid shift reflects the volatile nature of the current trade environment and its impact on economic predictions. Analysts noted that while the immediate outlook has stabilized, ongoing sector-specific tariffs could still pose risks to the economy. The market responded positively to the news, reflecting a renewed sense of optimism among investors.