Goldman Sachs reversed its prediction that the United States will enter a recession following President Donald Trump‘s decision to pause reciprocal tariffs on dozens of countries for 90 days.
“Earlier today, before President Trump’s announcement, we had shifted to a recession baseline in response to the additional country-specific tariffs that went into effect this morning,” the Goldman Sachs team, led by Jan Hatzius, said Wednesday. “We are now reverting to our previous non-recession baseline forecast.”
Recommended Stories
- Why is everybody worried about the bond markets?
- JP Morgan CEO Jamie Dimon calls on Trump to negotiate trade deals to reassure markets
- Bessent warns countries not to realign US trade to China
Goldman Sachs issued the note at 2:10 p.m., less than an hour after Trump announced his pause as the administration engages in negotiations with foreign trading partners.
After Trump announced the 90-day pause, the stock market soared. The Dow Jones Industrial Average rose over 2,600 points or nearly 7%, the S&P rose more than 8%, and the Nasdaq jumped by more than 10%. The cryptocurrency market experienced similar gains.
The stock market rebound follows nearly a week of a downturn since Trump first announced his “Liberation Day” tariffs on April 2.
WHAT TO KNOW ABOUT TRUMP’S TARIFF THREAT AGAINST MEXICO AND CANADA
Shortly before 1 p.m. on Wednesday, Goldman Sachs issued a note predicting that the likelihood of a recession in the next 12 months was 65%.
On Monday, the financial firm put the odds of a recession at 45%, up by 10% compared to the previous week.