As many Americans remain in limbo, housing markets still reeling from President Trump’s massive tariff initiatives, Goldman Sachs experts are once again increasing the likelihood of a recession. In a new report, Goldman Sachs experts revealed their economic forecast for 2025.
So, what does this mean for America? For consumers? For the economy?
A week after forecasting probabilities at 35%, the bank cautioned in a fresh research on Sunday that it had raised the likelihood of a U.S. recession to 45% due to growing concerns about an imminent trade war.
As a result of backlash against Trump’s recent decision to impose hundreds of billions of dollars in additional taxes on foreign goods, stocks plummeted once more at the beginning of the week. The Dow Jones Industrial Average dropped 3.5%, or 1,400 points. When the market reopened, the S&P 500 index and the Nasdaq composite both plummeted 3.7%.
Global markets have also suffered as a result. Per a recent NPR report, following President Trump’s announcement of massive tariffs, stock markets throughout the world have lost trillions of dollars.
As investors processed the possibility of a brutal trade war between the two largest economies in the world, Asian stock markets concluded Monday’s trading session well below their peak.
President Trump threatened to levy an additional 50% duty on the Asian economic giant on Monday unless Beijing officials backed down after China unveiled plans for a full-scale response against the U.S. tariffs after markets had closed on Friday.
Trump said that other nations have been abusing the U.S. in trade for years in order to justify his most recent tariffs over the weekend.
“When you look at the trade deficit we have with certain countries, with China it’s a trillion dollars,” said President Donald Trump.
He continued, “We have to solve our trade deficit with China. … Hundreds of billions of dollars a year we lose with China. And unless we solve that problem, I’m not going to make a deal,” Trump also said, adding, “This is not sustainable.”
However, given that other banks are now warning of a higher likelihood of a recession, Goldman likewise expects weaker economic growth this year in its most recent projection.
J.P. Morgan cautioned last week in a note to investors that the GDP would probably decline “under the weight of the tariffs.”
“The pinch from higher prices that we expect in coming months may hit harder than in the post-pandemic inflation spike,” said Michael Feroli, J.P. Morgan’s Chief U.S. Economist, “as nominal income growth has been moderating recently, as opposed to accelerating in the earlier episode.”
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