Goldman Sachs Reduces Recession Probability Following Economic Data

Goldman Sachs has reduced its forecast for a US recession in the next year to 20%, down from 25%, based on recent economic data.

If the August jobs report, due September 6, is favorable, this prediction might drop further to 15%. The firm also expects a likely 0.25% rate cut by the Federal Reserve in September, though a poor jobs report could prompt a larger 0.5% cut.

Recent positive economic indicators, including strong retail sales and a drop in new unemployment claims, have boosted US stocks. However, IG Markets analyst Tony Sycamore believes that Goldman Sachs’ updated recession odds are unlikely to significantly impact cryptocurrency markets.

Markus Thielen from 10x Research noted that while a rate cut could initially benefit Bitcoin, it might also indicate a forthcoming recession, potentially leading to a decline in Bitcoin’s value, similar to trends observed in 2019.

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Conversely, JPMorgan’s Bruce Kasman remains cautious, citing signs of weakening labor demand and a slowdown in global manufacturing, although the service sector continues to show growth. JPMorgan’s recession risk forecast for 2025 remains at 45%, reflecting ongoing political uncertainties.

Alexander Stefanov