Goldman Sachs cancelled their recession forecast after Trump’s tariff cave in

Goldman Sachs cranked out a 65% recession probability forecast prior to Trump’s latest flip flop:

• “We think the White House is unlikely to quickly reverse most of the new tariffs, but our probability of recession would decline if it does,”
• “This would be less severe than most past US recessions, in part because we do not see major financial imbalances that need to unwind, private sector balance sheets remain strong, and we see some room for trade deals to eventually lower tariff rates somewhat,”

Then, with Trump’s cave in, GS popped out a fresh update:

• “Prior to President Trump’s announcement, we had shifted to a recession baseline due to the newly enacted tariffs,”
• “We are now reverting to our previous non-recession baseline forecast.”

Economists, and traders, were quickly forced to re-evaluate in the wake of Trump’s back-down. It’s the world we live in right now.

I can’t help but think its not so easy for main street businesses. Imagine mulling an 8, 9, 10 figure business investment in this chaos. Its not so easy to flip capex investment plans.

Lasting damage is being done to the economy. This is not over.

This article was written by Eamonn Sheridan at www.forexlive.com.