Goldman Sachs Warns of Economic Risks Amid Trump Tariffs and Fed Rate Cuts
Goldman Sachs has issued a stark warning about the potential economic impacts of new tariffs proposed by former President Donald Trump. The financial giant predicts that these tariffs could significantly increase inflation, hinder economic growth, and elevate the risk of a recession in the U.S. According to a report by CNBC, the proposed tariffs are expected to disrupt the economic stability that has been a focus of the current administration's policies.
In a separate analysis, Reuters reported that Goldman Sachs anticipates the U.S. Federal Reserve to implement three rate cuts in 2025. These cuts are seen as a response to the economic pressures that could arise from the proposed tariffs. The bank's economists have raised the probability of a U.S. recession to 35%, a significant increase from previous estimates, as highlighted by Financial Express.
The potential for a recession has been further emphasized by Quartz, which noted that the increased tariffs could lead to a more volatile economic environment. This series of reports from Goldman Sachs underscores the interconnectedness of trade policies, monetary policy, and overall economic health, prompting concerns among investors and policymakers alike.
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