Goldman Sachs assesses a 1/4 chance of US recession over the next two years

Dhwani Mehta FXStreet

Goldman Sachs’ economists out with a latest note on Monday, assessing the risk of a recession for the US.

Key Points:

We find that many pre-WW2 recessions originated in the financial sector, many post-WW2 recessions were caused by oil shocks and monetary policy tightening, and sentiment-driven swings in borrowing and investment led to recessions in both eras.

Some common contributors to past recessions look less worrisome today.

The dominant cause of post-war US recessions-rapid rate hikes in response to high inflation, often boosted by oil shocks-is less threatening today due to the anchoring of inflation expectations and the rise of shale

GS assesses a 1/4 chance of recession over the next two years

Somewhat below the unconditional probability over two years of 1/3 since 1980

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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