Goldman Sachs lowers U.S. GDP forecast due to banking stress.

Goldman Sachs has lowered its 2023 economic growth forecast by 0.3 percentage points to 1.2% due to a pullback in lending from small- and medium-sized banks amid turmoil in the broader financial system. The firm expects smaller banks to preserve liquidity in case they need to meet depositor withdrawals, leading to a substantial tightening in bank lending standards. Small and medium-sized banks play an important role in the US economy, and any lending impact is likely to be concentrated in a subset of small and medium-sized banks.