SPAIN - 2022/03/23: In this photo illustration a Goldman Sachs Group logo seen displayed on a smartphone with a Goldman Sachs Group logo in the background. (Photo Illustration by Thiago Prudencio/SOPA Images/LightRocket via Getty Images)
Goldman Sachs Just Got a Lot More Pessimistic About the U.S. Economy
Goldman Sachs on Thursday (March 16) said it sees a higher probability of the U.S. facing a recession in the next 12 months, following the recent collapse of Silicon Valley Bank and concerns about its impact on the broader banking sector.
Goldman analysts are now forecasting a 35% chance of a U.S. recession in the next 12 months—up from their earlier prediction of 25%. In its research note, the investment bank said its revised estimate is in response to “increased near-term uncertainty around the economic effects of the stress on small banks.”
A day earlier, the investment bank’s chief economist, Jan Hatzius, cut his 2023 GDP forecast by 0.3 percentage points to 1.2% in a new note out Wednesday (March 15) afternoon.
The closely watched economist stands alone on Wall Street at the moment in revising forecasts down for GDP, while also raising the odds of a recession amid the banking turmoil.
Sources: Forbes
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