Goldman Sachs Revises Down Its US Recession Prediction as Trade Tensions Diminish

Goldman Sachs has adjusted its forecast for the likelihood of a recession in the U.S. from 45% to 35%, becoming the first major financial institution to revise its expectations following the breakthrough in the U.S.-China trade war.

This adjustment came after the agreement between Washington and Beijing to significantly reduce tariffs on mutual imports for 90 days, which raised optimism in global markets. The agreement saw U.S. tariffs on Chinese goods drop from 145% to 30%, while China reduced tariffs on U.S. imports from 125% to 10%.

In a research note, Goldman Sachs highlighted that this agreement helped ease trade tensions between the two largest economies in the world, contributing to greater optimism about the global economic recovery. The bank also raised its forecast for U.S. GDP growth in 2025.

Regarding monetary policy, Goldman now expects the Federal Reserve to cut interest rates only once in December, rather than the previously anticipated three cuts this year. The bank also forecasts two additional rate cuts in March and June 2026, noting that the need for policy support has significantly diminished.