Goldman Sachs now sees U.S. recession risk as ‘higher and more front-loaded’

Goldman Sachs strategists are beginning to get a clearer look at the potential for a U.S. recession, seeing the risk now as “higher and more front-loaded.”

Goldman Sachs now sees U.S. recession risk as 'higher and more front-loaded'

Brian Sozzi for Yahoo Finance:

“We now see recession risk as higher and more front-loaded,” Goldman Sachs Chief Economist Jan Hatzius wrote in a new note to clients. “The main reasons are that our baseline growth path is now lower and that we are increasingly concerned that the Fed will feel compelled to respond forcefully to high headline inflation and consumer inflation expectations if energy prices rise further, even if activity slows sharply.”

And while Goldman stopped short of saying a recession will occur, maintaining its preview stance, the bank made changes to modeling that speaks volumes on its concerns.

First, Hatzius lifted his recession probability to 30% from 15%. Second, the closely watched economist lowered his GDP outlooks for the balance of this year and 2023

“With no major imbalances to unwind, a recession caused by moderate over-tightening would most likely be shallow, though even shallower recessions have seen the unemployment rate rise by about 2½pp on average,” Hatzius added. “One additional concern this time is that the fiscal and monetary policy response might be more limited than usual.”

The investment bank’s more cautious tone coincides with rival Deutsche Bank moving forward its call that a recession will happen in 2023. Deutsche Bank is the only Wall Street firm to actually predict a recession for next year. Tesla CEO Elon Musk, meanwhile, warned on Monday in a Bloomberg interview that a recession in the near term was more than likely than not.

MacDailyNews Note: “A recession is inevitable at some point. As to whether there is a recession in the near term, that is more likely than not,” Musk said in an interview on Tuesday with Bloomberg News Editor-in-Chief John Micklethwait at the Qatar Economic Forum in Doha. “It is not a certainty, but it appears more likely than not.”

CEO of Roubini Macro Associates, Nouriel Roubini, said on Bloomberg Television Tuesday that he expects a US recession by the end of the year as measures of consumer confidence, retail sales, manufacturing activity, and housing are all slowing sharply while inflation is high. “We’re getting very close,” he said.

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27 Comments

      1. Effing dementia-laden Biden needs to be recalled or otherwise demoted to nursing-home resident. Trump or DeSantis or both, where are you? Dems, unless they cheat again, are about to be WIPED OUT in the midterms. They’ll be the Dud-terms for the Demonic Dems.

        1. Have a better one.

          Ron DeSantis (R) and Tulsi Gabbard (D). Ron for eight years and Tulsi the FIRST female president in history for eight years.

          The political landscape would SHATTER and experience an earthquake draining the swamp, the traditional party structure changed FOREVER and the liberal Democrat cheerleading Big Media will be tied in knots questioning their own BIAS and ALLEGIANCE.

          Yeah, I would vote that HISTORIC ticket in a heartbeat…

      2. Not sure what planet you live on, but right wing employers have spent decades outsourcing jobs and importing guest workers to hold down wages.

        Left wingers advocate for corporate assholes to start paying the same tax rates as their employees, stop creating loopholes to hide their profits overseas, and offer the same benefits to employees as the princes, er managers, at the top.

        The GOP has fought against the working class since the 1920’s, and you are too stupid to see through their propaganda campaigns. You literally wouldn’t have a weekend if it wasn’t for the people you attempt to denigrate here daily.

    1. In a supply constrained moment, how exactly do you determine that high consumption aligns with your imaginary political enemy? Perhaps you should look again at what political trolls oppose conservation of natural resources, sustainability, lowering of emissions, better fuel economy, etc. It is very clear who supports greed and waste for short-term profits of the few, and who supports the long term health and well-being of the most people. If you’re so shortsighted that over-hyped fears of recession ruins you, then you’re obviously not smart enough to judge others.

    1. Building used to be something all Americans believed in. Now the obstructing republitards would rather that US infrastructure fall apart than support any investment proposed by the other team.

      How’s that “Infrastructure Week” working for y’all? Did Donny’s photo op accomplish anything?

  1. What type of Master’s degree do you need to forecast inflation at this point? Against all odds, very talented and highly educated risk takers predict future recession.

      1. The total content of all comments here is sky screaming from frustrated losers looking for a scapegoat. This is a theme in which you proud boys specialize.

        Imagine how successful you could be if you collaborated with others. The infighting that you and mdn initiate daily is precisely what will sink the USA as a leader. Intolerance, ignorance, and vitriol mark a nation in decline. You think labeling and denigrating make you feel superior, but instead it breeds new resentment of you and everything you stand for.

        So let’s talk about your love of the slur “libturd”. Can you define this? No, it’s actually a signal to everyone that you’re a nonsensical irrational blowhard. Keep using it to show your irrelevance, losers.

        Most people in America aren’t interested in the extremes. They split their ballots often. They don’t spread hate. They discuss ideas instead of relying on one strongman to issue them their marching orders. They know that the world’s problems aren’t related to liberals. Liberals exist in all successful nations. It’s not that liberals are always correct, often they are not. But they overwhelmingly believe in the rule of law and equal justice for everyone. They overwhelmingly prompt rational debate and seek answers from science, not theology or idols. Here you paste twitter opinions and labels, no data offered to explain your narrow worldview.

        Jobs was highly liberal, and the Crazy Ones are still active pushing of boundaries. The resentful opposite side tries bitterly to impose barriers anytime they think they can profit by it. Cook is very conservative in this regard. You hate him, and ignore his extreme conservative anti-consumer, anti-democracy moves. Hypocrisy? Or is it that you can’t assess actions and effects without someone providing you elementary labels?

        The people holding back the USA are, and long have been, the uneducated extreme right wing thugs who, in DC or behind a keyboard, think personal attacks, violent escalation, and radical disinformation is the way to manage society. You cannot be more wrong. You will be replaced. Whether it is with smarter Americans or some other nation (China) replacing the aging, bitter, paranoid people of the American Empire is the only question.

        1. Finally something worth reading in this thread. Thank you. I almost concluded that all MDN commenters has sunken to political partisan name calling and puerile insults.

        2. “So let’s talk about your love of the slur “libturd”. Can you define this? No”

          Liberal + shit for brains = libturd? Really can’t figure that out? Really? Really??????

          No, liberals are not the cause of the world’s problems, but sure the fuck are the cause of the US’s problems. Every problem this country has can traced to liberals

          Open borders
          Violence
          Economy
          Education
          Just to name a few

          Ever notice every major US city is a cesspool? Every one is run by liberals. Coincidence?

        3. Sigh…

          “sky screaming from frustrated losers looking for a scapegoat.”
          You assume and project a lot. Don’t need a scapegoat the REAL LOSERS are the corrupted WOKE Democrat Party and particularly the worst president to occupy the White House, achieving the lowest poll numbers that just made HISTORY this week. Deny that. It took George Bush (Dubya) 7 years to drop into the thirty percent approval range, Biden broke that record and more, in a mere 1 year and 5 months.

          “The infighting that you and mdn initiate daily is precisely what will sink the USA as a leader.”
          Right, the woke EXTREME LEFT Democrats around here never initiate a fight or tell anyone what to do or how to live. Get a grip, it’s called REALITY.

          “intolerance, ignorance, and vitriol mark a nation in decline. You think labeling and denigrating make you feel superior.”
          The majority you describe obviously the extreme left in this country and constitutional defenders will not allow it to happen.

          Tell us genius, in 2020 the “INTOLERANT” leftists set 594 fires in over a dozen cities for six months, dozens of people killed, police officers assaulted, looting, citizens beaten and assaulted with property damage totaling in the billions. Suspect you call those peaceful protests as laughable CNN reported standing in front of a city block burning to the ground.

          I don’t see Congressional hearings, Biden FBI knocking down doors, or Justice Dept. pursuing or jailing the perpetrators. Big LIBERAL Media is SILENT on the issue, same as you. Instead, Pelosi is going after Trump, over a mile away when a few hundred angry protesters, BLM and Antifa mixed in, broke a few windows for four hours… big deal blown totally out of proportion by Hollywood productions.

          ” So let’s talk about your love of the slur “libturd”.
          FALSE. Show me where I used the term, doesn’t exist. But in the past have used the term “LibTARD” preferable over potty, more accurate description of the woke leftists and Democrat Party STUPIDITY.

          “They discuss ideas instead of relying on one strongman to issue them their marching orders.”
          Biden is NOT a “strongman” certainly feeble and weak yet still bellowing out orders on every issue. Claims to do everything, know everything, but nothing solved mister 32% approval.

          “It’s not that liberals are always correct, often they are not.”
          Not is about 90%+ of the time.

          “But they overwhelmingly believe in the rule of law and equal justice for everyone.” See ABOVE liberal organized riots burning and looting a dozen cities in 2020 and getting away with it.
          Z
          “ You [Cook] hate him, and ignore his extreme conservative anti-consumer, anti-democracy moves. Hypocrisy? Or is it that you can’t assess actions and effects without someone providing you elementary labels?”
          Talk about elementary labels, you’re an expert. NO, Mr. Assumption I do not hate ANYONE. Hate these days comes overwhelmingly from Leftist Extremists. Examples: murder a Supreme Court Justice and newly minted “Jane’s Revenge” threatening violence everywhere, just to name two. Tell us again how peaceful liberals “overwhelmingly believe in the rule of law and equal justice.”

          “Cook extreme conservative, “
          Need a minute, have to get up off the floor from laughing.

          The people holding back the USA are, and long have been, the uneducated extreme right wing thugs”
          Holding back the USA from what? The United Nations and Libtards running the planet forever telling everyone how to live? You continue to selectively comment on one side only, lying by omission makes you a hypocrite, not a deep thinker.

          What about the poor minorities LEFT BEHIND in dozens of Democrat run big cities since Johnson’s “Great Society” after spending TRILLIONS. Citizens not receiving a proper education or opportunities for advancement in poor neighborhoods like Chicago, for example. Dozens shot to death every weekend in gang wars over drugs and turf. The uneducated thugs responsible are not from the right.

          “who, in DC or behind a keyboard, think personal attacks, violent escalation, and radical disinformation is the way to manage society.”
          Hypocrite #2: Just what do you call the woke extreme leftists who use social media profusely to organize protests lately Supreme Court justice’s homes and very latest Jane’s Revenge when Roe vs. Wade is overturned, hmmm?

          “think personal attacks, violent escalation, and radical disinformation is the way to manage society”
          Again, you FAIL to see the root of the problem. You need to tell that to the RADICAL Leftists.

          “You will be replaced.”
          Retiring soon, so someone needs to step up.

          “Whether it is with smarter Americans or some other nation (China) replacing the aging, bitter, paranoid people of the American Empire is the only question.”
          Well, well, well, the elitist SMUG snob from Australia Road Warrior is spewing his HATRED for the USA again. Just can’t help yourself and BTW, patriots of our GREAT country don’t give a rat’s ass what foreign or domestic extreme leftists believe.

          Stay tuned for November, major REPLACEMENTS coming…

        4. ” You cannot be more wrong. You will be replaced.”

          Just in the last 24 hours, LIBERALISM HAS BEEN REPLACED TWICE.

          Roe V. Wade OVERTURNED by the Supreme Court.

          New York for over a hundreds years OUTLAWED Second Amendment gun rights to citizens, particularly carrying handguns in NYC. OVERTURNED!!

          Yes, EXTREME LIBERALISM is being replaced.

          Stay tuned for November, many more REPLACEMENTS coming…

  2. A corrupt, lying, racist dementia patient and a whore installed in the white house

    An obese, mentally Ill trans it/that as health secretary

    A Supreme Court Justice that can’t define “woman”

    Have to be pretty fucking stupid not to see that libturds are the problem

  3. “ The people holding back the USA are, and long have been, the uneducated extreme right wing thugs who, in DC or behind a keyboard, think personal attacks, violent escalation, and radical disinformation is the way to manage society. “

    You just perfectly described libturds, not conservatives , yet you are too stupid to know it.

    Who’s burning down the cities?
    Who elects a proven racist then calls the party that freed the slaves racists?

    You are too fucking stupid to know you are stupid.

    My comments can not be considered insults nor slurs as they are factual

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