Goldman Sachs raises odds of US recession to 45pc

Goldman Sachs has raised the odds of a US recession to 45 percent in the next 12 months, joining other investment banks in revising their forecast as fears of a trade war grip markets after sweeping tariffs from US President Donald Trump.

Goldman raised the probably of a recession in the next 12 months from a previous estimate of 35 percent following a sharp tightening in financial conditions and a rise in policy uncertainty that is likely to depress capital spending by more than what Goldman had previously assumed.

Several investment banks raised their recession risk forecasts last week, with JP Morgan putting the odds of a US and global recession at 60 percent.

Goldman had raised the probability of a US recession to 35 percent from 20 percent just last month, noting economic fundamentals were not as strong as in the previous years.

REUTERS