Recession odds are rising as Trump’s trade war escalates, Goldman Sachs says

Goldman Sachs has raised concerns about a 35% chance of a US recession in the next 12 months, citing surging tariffs as a significant threat to economic growth. The bank increased its inflation estimate and lowered its 2025 GDP forecast to just 1%, alongside revising its unemployment rate outlook to 4.5%. This warning comes amid President Donald Trump’s intensifying trade war, which Goldman Sachs blames for deteriorating household and business confidence. The University of Michigan’s consumer sentiment survey echoes this sentiment, showing heightened expectations for rising unemployment as inflation expectations reach a 32-year high.
The potential implications of these developments are profound, with higher tariffs predicted to boost consumer crises and affect inflation-adjusted income. While Trump dismissed specific reports about targeting certain countries with tariffs, he suggested a broad application, prompting Goldman Sachs to predict an increase in the average US tariff rate by 15 percentage points by 2025. The impact of these tariffs could lead to historic tax increases, raising costs significantly for Americans. In response, Goldman Sachs anticipates the Federal Reserve will cut rates three times this year to mitigate economic strain.
RATING
The article provides a comprehensive overview of Goldman Sachs' economic forecasts and their implications, particularly in the context of U.S. trade policies. It excels in accuracy by presenting specific data points and predictions, though it could benefit from additional source verification and broader perspectives to enhance balance and source quality. The article's timeliness and relevance to public interest are strong, addressing pressing economic issues that affect a wide audience.
While the article is clear and accessible, further transparency regarding the methodologies behind the forecasts and more background information on trade policies would improve reader comprehension. The potential for the article to influence public opinion and policy discussions is significant, though engagement could be heightened with more interactive elements or diverse viewpoints.
Overall, the article effectively informs readers about important economic trends and risks, though there are opportunities to enhance its depth and engagement by incorporating additional sources and perspectives.
RATING DETAILS
The article provides a detailed account of Goldman Sachs' economic forecasts, including specific figures for recession probability, GDP growth, unemployment, and inflation. These figures align with Goldman Sachs' reported data, enhancing the story's factual accuracy. However, the article would benefit from independent verification of these claims to ensure their reliability. The mention of President Trump's trade policies and their potential impact on the economy is a factual assertion that aligns with known economic theories, though it would require further context to fully understand its implications. Overall, the article is precise in its presentation of data but could improve by incorporating corroborating sources.
The article predominantly presents Goldman Sachs' perspective on the economic outlook, with some mention of other forecasters who see a 50/50 chance of recession. This inclusion provides a basic level of balance, though the article could benefit from a broader range of economic viewpoints to offer a more comprehensive analysis. The focus on Goldman Sachs may inadvertently bias the narrative towards their assessment, potentially overlooking alternative economic analyses or dissenting opinions on the impact of trade policies. Including more voices, such as those from different economic schools or other financial institutions, would enhance the balance.
The article is generally well-structured, with a clear presentation of Goldman Sachs' economic forecasts and the potential impact of trade policies. The language used is straightforward, making complex economic concepts accessible to a general audience. However, the article could improve its clarity by providing more background on the context of the trade policies and their historical impact on the economy. Simplifying or explaining technical terms and economic jargon would further aid comprehension for readers unfamiliar with economic analysis.
The primary source of information in the article is Goldman Sachs, a reputable financial institution known for its economic analysis and forecasts. This lends credibility to the data and predictions presented. However, the article relies heavily on this single source, which could limit the depth of analysis. Incorporating insights from other reputable sources, such as independent economists or competing financial institutions, could provide a more rounded perspective and mitigate any potential bias arising from reliance on a single source.
The article does a fair job of disclosing the basis of its claims, primarily attributing them to Goldman Sachs' reports. However, it lacks detailed explanation of the methodologies behind Goldman Sachs' forecasts, such as the specific models or assumptions used. Greater transparency regarding the data sources, analysis methods, and potential conflicts of interest would enhance reader understanding and trust. Additionally, clarifying why certain forecasts have changed, such as the increase in recession probability, would provide valuable context.
Sources
- https://www.cnbctv18.com/world/goldman-sachs-raises-us-recession-probability-amid-trump-tariff-increase-and-weaker-growth-outlook-19581990.htm
- https://sicsoftsa.com/multi-demo-themes/
- https://www.morningstar.com/news/dow-jones/202503301307/goldman-sachs-lifts-us-recession-probability-to-35
- https://www.ggdorm.or.kr/home/main_kr/main.php?mc=1%257C3%257C1&ctt=..%2Fcontents_kr%2Fm_5_3&mode=view&no=1726&start=0&search_str=
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