Goldman Sachs has lowered its economic growth outlook for both the U.S. and Europe, citing the growing threat of a recession due to U.S. President Donald Trump's aggressive tariff policies.

Higher Recession Probability in the U.S.

• The firm raised the 12-month U.S. recession probability to 35% from 20%.

• It cut the 2025 GDP growth forecast to 1.5% from 2.0%.

• Goldman expects Trump's reciprocal tariffs, set to be announced on April 2, to increase the average U.S. tariff rate by 15 percentage points (pp).

Federal Reserve: More Rate Cuts Ahead

Goldman Sachs now predicts the Federal Reserve will cut rates in July, September, and November, compared to its previous forecast of two cuts in June and December.

Europe Faces a Higher Risk of Recession

Goldman sees Europe's economy underperforming compared to the U.S., forecasting a possible technical recession in 2025:

• Expected non-annualized growth:

  • Q2: 0.1%

  • Q3: 0.0%

  • Q4: 0.2%

Market Impact & Outlook

With the Economic Indicators API, investors can track key metrics like GDP, interest rates, and inflation to gauge market movements.

As trade tensions escalate and economic uncertainties rise, the trajectory of central bank policies will remain a key driver for global markets.