Source: Fortune
Summary
Goldman Sachs has raised its 12-month recession probability to 25% due to a weak February jobs report and rising oil prices. The bank’s economists point to a softening labor market, with job openings falling and the unemployment rate ticking up to 4.44%. The war in Iran has added a new level of uncertainty, with oil prices expected to rise and inflation forecast to reach 2.9% by December. The Federal Reserve is unlikely to cut interest rates soon, given the conflicting signals of a soft labor market and rising inflation.
Our Reading
The numbers tell one story.
Goldman Sachs’ recession warning is not just about the economy, but also about the impact of the Trump administration’s policies, including tariffs and military engagement in the Middle East. The bank’s forecast is based on a complex interplay of factors, including oil prices, inflation, and labor market trends. The Federal Reserve is stuck between a soft labor market and rising inflation, making it difficult to cut interest rates. Despite some positive signs, such as solid productivity growth and cooling shelter inflation, the overall picture is one of increasing uncertainty.
The economy is playing a game of chicken with the Fed.
Author: Evan Null
