Goldman Reduces U.S. Recession Probability by 5 Points

Goldman Sachs has reduced its 12-month U.S. recession probability forecast to 30%, down from 35%, citing decreased uncertainty around President Trump’s tariff policies.

The adjustment follows a new trade framework between the U.S. and China that helped calm investor concerns after April’s “Liberation Day” tariffs had disrupted global markets.

Key aspects of the deal include the removal of Chinese export restrictions on rare earth minerals and restored access for Chinese students to American universities.

While inflation data shows limited impact from tariffs so far, prices are expected to rise in coming months. The improved outlook has led Goldman Sachs to also increase its 2025 U.S. GDP growth prediction from 1% to 1.25% on a quarterly basis.