Goldman Sachs sees higher likelihood of recession in next year

Posted 2 days ago

From THEHILL.COM

Economists from Goldman Sachs said on Monday that the probability of a recession in the next year is higher than they last previously predicted, as other executives have warned of economic uncertainty ahead.

The economists said in a note they were raising the likelihood that there would be a recession over the next year from 15 percent the last time they weighed in to 30 percent now.

They also predicted lower gross domestic product (GDP) growth for both 2022 and 2023: 2.4 percent on an annual average basis compared to 2.5 percent for 2022, and 1.4 percent in 2023 compared to 1.6 percent.

“We now see recession risk as higher and more front-loaded,” the economists wrote. “The main reasons are that our baseline growth path is now lower and that we are increasingly concerned that the Fed will feel compelled to respond forcefully to high headline inflation and consumer inflation expectations if energy prices rise further, even if activity slows sharply.”

The development comes as Tesla CEO Elon Musk said in an interview on Tuesday that “a recession is inevitable at some point,” sayin... (Read more)