#TariffsPause Rapid Reversal of Goldman Sachs' Recession Forecast Amid Tariff Turbulence

On April 9, 2025, Goldman Sachs quickly revised its recession forecast for the U.S. in just 73 minutes, reflecting the volatile nature of current economic policies. Initially, the bank raised the probability of recession in 12 months from 45% to 65% in response to President Donald Trump's announcement of new stringent tariffs. However, shortly after, Trump introduced a 90-day pause on most of these tariffs, leading Goldman Sachs to revert to its original 45% probability of recession.

This rapid policy shift also triggered a significant stock market rally, with the S&P 500 rising 9.5%, marking its largest single-day gain since October 2008. While the tariff pause provided temporary relief to global markets, the increase in tariffs on Chinese imports to 125% indicates ongoing trade tensions.

Analysts warn that such abrupt policy changes contribute to economic uncertainty, potentially impacting business sentiment and consumption. The unpredictability underscores the challenges faced by financial institutions in forecasting economic trends amid fluctuating trade policies.#TariffsPause