Goldman Sachs Downgrades US Growth: What's Next?
Is the U.S. economy facing a significant slowdown, and if so, what are the primary factors at play? Recent projections from Goldman Sachs paint a picture of diminished growth, largely attributed to the impact of escalating trade policies.
On Tuesday, Goldman Sachs, through Chief Economist Jan Hatzius, delivered a stark forecast: U.S. GDP growth is expected to fall below Wall Street's consensus for the first time in two and a half years. This shift underscores a growing unease among financial institutions regarding the trajectory of the American economy, particularly in light of the trade policies enacted during the Trump administration.
| Key Event | Details |
|---|---|
| Date of Announcement | Tuesday (Specific date not mentioned in original content) |
| Source | Goldman Sachs (Chief Economist: Jan Hatzius) |
| Original Forecast (Previous) | U.S. GDP growth of 2.4% in 2025 |
| Revised Forecast (Current) | U.S. GDP growth of 1.7% in 2025 |
| Primary Reason for Revision | Increased risks associated with trade policies, particularly tariffs. |
| Tariff Impact Anticipation | Average U.S. tariff rate expected to rise by 10 basis points. Potential for a rise of up to 15 percentage points if tariff exemptions are less widespread than anticipated. |
| Recession Probability (Next 12 Months) | Raised to 35% from a prior 20%. |
| Impact on Financial Markets | Policy uncertainty is weighing on stock prices. |
| Other Considerations | Factors include potential impacts on the labor market, wage growth, and overall price stability. |
| Impact on US growth (2024) | Goldman Sachs research now expects U.S. Economic growth of 2.4% this year on an annual basis (versus 2.6% previously). |
| Impact on US growth (2023) | Goldman Sachs research now expects U.S. Economic growth of 1.6% in 2023 (versus 2.2%). |
| Reference Link | Goldman Sachs Official Website |
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