Goldman Sachs Raises US Recession Odds to 35% Amid Economic Turmoil

Goldman Sachs' chief economist, Jan Hatzius, has raised the odds of a US recession in the next 12 months to 35%, up from 25% previously, due to "increased near-term uncertainty" around the economic effects of small bank stress. Hatzius also cut his 2023 GDP forecast by 0.3 percentage points to 1.2%. While the banking crisis is a concern, Hatzius thinks it will not trigger a rate cut from the Federal Reserve, but a recession may unfold as lending standards are tightened and consumers pull back while becoming more jittery about the economy.