11:16 - 1.04.2025
April 1, Fineko/abc.az. Analysts at American bank Goldman Sachs have changed the forecast of recession in the U.S. from 20% to 35%, ABC.AZ reports, referring to The Wall Street Journal.
According to the publication, increase in the forecast reflects a sharp drop in consumer and business confidence, as well as signs of White House's willingness to "tolerate economic weakness in the near future" in order to implement the policies of the current U.S. authorities.
The University of Michigan consumer confidence index fell to its lowest level since November 2022 in March, reaching 57 points. Goldman Sachs analysts note that despite the fact that sentiment has been a poor indicator of economic activity in recent years, the current situation is different due to the weakening of fundamental economic indicators.
The bank also expects that U.S. President Donald Trump will announce this week the introduction of mirror import duties on all US trading partners at an average level of 15%.
In addition, Goldman Sachs raised its forecast for core inflation in the U.S. by the end of 2025 to 3.5% and lowered its forecast for GDP growth this year to 1%. Due to the expected economic slowdown, the bank also raised its forecast for unemployment in the U.S. at the end of the year to 4.5%.
Goldman Sachs now expects 3 interest rate cuts by the Federal Reserve in 2025 (in July, September and November) and has cancelled previous forecasts for a rate cut in 2026.
