Goldman Sachs Group Inc.'s recent announcement of a 35% increase in its projections that the U.S. is approaching a recession within the next 12 months indicates a worsening economic situation that has been foreseen for some time now. While the general belief is that the likelihood of a recession in the coming year is approximately 65%, Goldman Sachs' internal economic analysis suggests a lower probability of 35%. This stands in stark contrast to their initial forecast of 25% made in February.
GOLDMAN SACHS: "We are raising our subjective probability that the US economy will enter a recession in the next 12 months by 10pp to 35%, reflecting increased near-term uncertainty around the economic effects of small bank stress."
— James Pethokoukis (@JimPethokoukis) March 16, 2023
In January, David Mericle, the Chief U.S. economist of the financial giant, mentioned that their more optimistic perspective concerning the necessity of a recession to control inflation is what sets Goldman apart from the general belief. Nevertheless, it is uncertain why Goldman continues to hold a positive outlook on their indicators of activity growth, given that numerous sectors have suffered job losses and several financial institutions have failed in March.
— Forbes (@Forbes) March 16, 2023
In early March, Goldman's team published an article proposing that oil prices may surge up to $107 per barrel by the end of 2023, which is significantly higher than the current price of $84. Should the prices increase, the additional cost would likely be transferred to consumers, leading to a rise in the prices of all goods and services that we rely on in our interconnected world. This could have a particularly detrimental impact on those who are already experiencing financial hardship as a result of the ongoing economic crisis.
Forbes has reported that, due to the abrupt collapse of Silicon Valley Bank and other disruptions in the stock market, Goldman Sachs predicts the Federal Reserve will not raise interest rates in March. This is another indication that the economic crisis has arrived and is expected to worsen before any signs of improvement.
The ongoing economic crisis, which is continuously deteriorating, confirms the accuracy of the predictions made by various financial experts. With the recent announcement by Goldman Sachs Group Inc. that the likelihood of a recession in the U.S. over the next 12 months has increased by 35%, it is evident that the situation is grave. Therefore, it is crucial for the government to take action to safeguard the American population from further financial struggles.
Unfortunately, it appears that many of our government officials are more concerned with their own political agendas than with helping those who are struggling financially due to this crisis. It is time for our leaders to put aside their differences and come together to provide relief for those affected by this recession. The Americans deserve better than this and it is time for our leaders to step up and do what is necessary to help us out of this crisis.