Goldman Sachs Group Inc.’s economists cautioned that the possibility of a recession in the next year might be nearly 35% as they downgrade their growth outlook due to rising oil prices.
- In the note, economists led by Jan Hatzius cut their forecast for expansion this year to $1.75 from 2.0%, on a fourth quarter-to-quarter bass.
- The downgrade comes as the US consumer price gains expanded in February to a new 40-year high on surging gasoline, food, and housing costs, with inflation expected to increase even further after Russia’s invasion of Ukraine.
- Earlier this week, Fed Chair Jerome Powell affirmed that the US Central Bank was on pace to raise interest rates this month and start a series of rate hikes to control the highest inflation in decades.
The economists noted that the new Goldman outlook signals below potential growth in Q1 and Q2 of 2022, further noting that higher oil and agricultural prices will hurt disposable incomes.
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