Goldman Sachs increases 12-month US recession probability by 10%, now at 35%
Per WSJ
Goldman Sachs has reportedly increased its estimations of whether a recession would hit the United States in the next 12 months. Previously, the firm estimated that the probability sat at just 25%, but now, it estimates that the probability of a recession in the next 12 months is at 35%.
Just a month ago, the opposite was done, with Goldman Sachs decreasing the likelihood of a US recession in the next 12 months from 35% to 25%. Per Bloomberg, the estimation by Goldman Sachs is way lower compared to the 60% median forecast by other economists that they surveyed.
Per Forbes, the new estimations by Goldman Sachs were due to the recent collapse of Silicon Valley Bank and the widespread concerns of how it could potentially impact the larger banking sector. The firm maintained that a recession was still unlikely due to the labor market strength as well as signs of improvement per business surveys.
Despite firms, banks, businesses, and analysts having different takes on the likelihood of a recession, US President Biden said that the risk of a recession was very low. This was a shift in previous statements made in November where he said that the country was nowhere near a recession.
Biden previously said that his economic plan was showing results and that Americans could see that the country was in a position of strength when facing global economic challenges. Before his November statements, in October, the US President said that if a recession happened, it would be "very slight."
One of the banks that strongly believe that a recession could happen is the Bank of Montreal, saying that the likelihood was at 99.9% of it happening in 2024, according to Earl Davis, the firm's Managing Director. Davis noted that the playbook suggests that "a recession could be next."
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Other News:
- Biden has said that the risk of a recession in the US is very low
- Bank of Montreal Says 'Likelihood of a Recession is 99.9%' in 2024
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