Goldman Sachs Raises US Recession Odds Amid Tariffs

The likelihood of a U.S. recession has increased significantly due to recent broad tariffs announced by President Donald Trump, with Goldman Sachs raising its recession probability to 45% from 35%. Economists cite tightening financial conditions, consumer boycotts, and heightened policy uncertainty as factors contributing to the recession risk, arguing that these tariffs could hinder economic growth and elevate inflation. While Goldman Sachs and other firms, like JP Morgan and Morgan Stanley, emphasize the potential for a recession, they also note that a worst-case scenario may be avoidable if tariffs are renegotiated. Some economists predict the Federal Reserve might cut interest rates to mitigate the economic shock. The global impact is also noted, with potential repercussions for Canada and other trading partners, as financial markets react negatively to the uncertainty. Overall, the economic outlook remains precarious as policymakers and analysts monitor developments closely.