Goldman Sachs Raises Recession Odds to 30%

0:00Goldman Sachs has raised its odds of a US recession in 2026 to 30%, up from 25% just weeks ago. The bank sites have a mix of rising oil prices from Middle East tensions, slowing growth, and weakening labor markets as the main drivers. Even before the latest oil spike, the economy was showing signs of strain, with fiscal supports from past spending now fading away. Oil prices have jumped sharply, with Brent Crude climbing from $71 at the start of the Iran conflict, to nearly $101. Recently, this shock is fueling inflation, which hit 2.4% in February consumer prices, and 2.8% in the Fed's preferred. Measure. Meanwhile, fourth-quarter gross domestic product grew at a sluggish 0.7% annualized rate. Economists elsewhere are echoing the concerns, with JP Morgan at 35% recession odds, Moody's analytics nearing 50%. Others like Bank of America, warning of underpriced risks from prolonged conflict.

1:03The policy response is tricky, as higher energy costs limit the Fed's ability to cut rates aggressively without reigniting inflation and high. National debt curbs more government spending. Goldman still forecasts growth cooling to between 1.25 and 1.75% in the second half of next year, with unemployment rising to 4.6% in hiring stalling. They expect rate cuts later this year to help, keeping a 70% chance of dodging a downturn. This shift highlights how fragile the recovery has become, with multiple pressures converging at once. I'm Corey with the story, and you've been listening to Durham News today, AI-powered