Goldman Sachs, one of the world’s largest investment banks, is grappling with the critical question of whether a recession is on the horizon in the United States. The bank's latest analysis has resulted in a lower probability of a US recession. Currently, the likelihood of such a scenario in the coming year stands at 20%.
At the same time, Goldman Sachs acknowledges that this estimate could be revised. The updated outlook is based on stronger-than-expected US economic data, including a notable increase in the services sector activity index. According to Goldman Sachs Chief Economist Jan Hatzius, if the US labor market report due on September 6 is sufficiently positive, the bank could cut its probability of a US recession to 15%.
Hatzius also reckons that the Federal Reserve's decision on its key interest rate in the upcoming meeting is less important than choosing a medium-term strategy. The regulator has the flexibility to deliver either a one-time cut of 50 basis points or a gradual reduction of 25 basis points.
Previously, American investor Jim Rogers speculated that a recession might be looming over the US economy, potentially starting in 2024. According to Rogers, the country has experienced such downturns every few years, almost since its inception. He predicts that the US could face a recession by the end of this year or in the first half of next year.
