Goldman Sachs has lowered its 12-month U.S. recession probability to 15% following the U.S.-Iran agreement. Chief economist Jan Hatzius said the revision reflects reduced downside risks and an improving labor market, bringing the estimate back to the firm's long-term norm from 20% before the conflict. Goldman also raised its second-half GDP growth forecast to 2%, citing lower gas prices and ongoing AI-driven investment, though it expects consumer spending growth to moderate to 1.5%. The firm sees a near-term decline in consumer prices and maintains its forecast of no Federal Reserve rate hikes, while cautioning that AI-related stock valuations are now high even relative to its optimistic long-term economic projections.
Goldman Sachs Group IncGoldman Sachs itself lowered recession probability and raised GDP forecast, reflecting its own economic analysis and potentially boosting its research credibility and client activity.