Goldman Sachs lowers recession risk following US-China agreement

The decision by the US and China to implement temporary tariff reductions has resonated positively in the global economy. Following this development, Goldman Sachs has lowered the probability of the US economy entering a recession from 45 percent to 35 percent and raised its growth forecast.

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Goldman Sachs lowers recession risk following US-China agreement

Goldman Sachs has lowered the recession risk for the US economy from 45 percent to 35 percent following the decision to reduce customs tariffs as a result of trade negotiations between the US and China. This step has led the bank to develop a more optimistic outlook for the US economy.

During the talks held in Switzerland, the two countries decided to mutually reduce customs duties for a temporary period.

Under this agreement, which will be effective starting May 14, the tariffs imposed by the US on Chinese goods will be reduced from 145 percent to 30 percent, while the tariffs imposed by China on US goods will be reduced from 125 percent to 10 percent.

In light of these developments, Goldman Sachs has doubled its 2025 growth forecast for the US economy, setting it at 1 percent. This positive economic outlook has led the bank to expect the US Federal Reserve (Fed) to make only one interest rate cut this year, in December. Previously, it was projected that the Fed would make three interest rate cuts starting in July.

These changes have created a positive atmosphere in global markets as trade tensions between the US and China ease.

News Source: AA