Goldman Sachs cuts US recession odds

Goldman Sachs has lowered its recession forecast for the US to 35 per cent from 45 per cent, citing improved trade prospects following a temporary tariff truce with China.

The US and China agreed on Monday to reduce tariffs on each other’s imports for 90 days, with US duties on Chinese goods falling to 30 per cent from 145 per cent, and China cutting tariffs on US products to 10 per cent from 125 per cent.

The bank also raised its 2025 US GDP growth forecast by 0.5 percentage points to 1 per cent and now expects the Federal Reserve to cut interest rates only once in December, down from three earlier predicted cuts this year. Two further cuts are projected for March and June 2026, with the focus shifting from economic insurance to policy normalisation.

Attribution: Reuters

Subediting: M. S. Salama