Economic Forecast and Federal Reserve Policy

SOURCE www.foxbusiness.com
Goldman Sachs economists raised the likelihood of a U.S. recession within 12 months to 25% but still view the risk as limited. They foresee job growth improving, prompting the Federal Reserve to cut interest rates.

Key Points

  • Goldman Sachs raised U.S. recession likelihood to 25%
  • Federal Reserve may cut interest rates in response to job growth
  • Market data suggests a 100% chance of a rate cut next month

Pros

  • Goldman Sachs economists see limited recession risk
  • Potential improvement in job growth
  • Federal Reserve may cut interest rates

Cons

  • Increased likelihood of a recession
  • Job growth was slower than expected in July