Goldman Sachs lowers US fourth quarter GDP forecast

Omkar Godbole FXStreet Contributor

With new tariffs set to take effect from Sept. 1, Goldman Sachs Group Inc. no longer expects a trade deal before the 2020 presidential election and has revised lower its forecast for the US fourth-quarter gross domestic product by 0.2 percentage points to 1.8%.

Two weeks ago, the US President Trump abruptly ended the trade truce by saying that additional 10% tariffs will be imposed on $300 billion worth of Chinese goods.

Beijing retaliated on Aug. 5 by halting purchases of US agricultural goods and allowing the Yuan to fall beyond 7 per US Dollar for the first time since 2008. Trump’s administration fired back within hours by labeling China a currency manipulator.

Key points (source: Bloomberg)

“Fears that the trade war will trigger a recession are growing.”

“We have increased our estimate of the growth impact of the trade war.”

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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