After JPMorgan, Goldman Sachs raises US recession risk to 45% amid trade war concerns

Financial services firm Goldman Sachs has raised the probability of a recession in the United States to 45% in the next 12 months, joining other major investment banks in warning of rising risks after new tariffs announced by President Donald Trump, reported Reuters on Monday.

Goldman Sachs had earlier pegged the risk of a US recession at 35%. In its latest report, it said there was now an increased chance of a downturn due to a “sharp tightening in financial conditions and a rise in policy uncertainty that is likely to depress capital spending by more than what Goldman had previously assumed.”

Last month, Goldman Sachs had increased its recession risk to 35% from 20%, citing weakening economic fundamentals.

Financial services firm JPMorgan on Thursday also revised its odds of a global recession by the end of the year from 40% to 60%, following Trump’s announcement of sweeping new trade measures.

“Disruptive US policies has been recognised as the biggest risk to the global outlook all year,” said Bruce Kasman, JPMorgan’s chief global economist, in a research note to clients. “The latest news reinforces our fears as US trade policy has turned decisively less business-friendly than we had anticipated.”

Trump on Wednesday announced a minimum 10% tariff on most imported goods, which took effect...

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