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Goldman Sachs has revised its forecast for U.S. Federal Reserve interest rate cuts, now predicting three quarter-point reductions in July, September, and November, amid increased recession risks linked to tariff uncertainties. The firm raised the 12-month recession probability to 35% and lowered its fourth-quarter GDP growth forecast to 1.0%, while also anticipating a rise in the unemployment rate to 4.5%.
Goldman Sachs has revised its forecast for U.S. Federal Reserve interest rate cuts, now expecting three quarter-point reductions this year amid increased recession risks linked to tariff uncertainties. The firm anticipates cuts in July, September, and November, raising the 12-month recession probability to 35% from 20%. Additionally, it has lowered its fourth-quarter GDP growth forecast to 1.0% and increased the year-end unemployment rate estimate to 4.5%.
Goldman Sachs warns that the S&P 500 is at risk of further declines due to a deteriorating macroeconomic environment and investor sentiment not signaling a market reversal. However, a significant policy shift from President Trump or the Federal Reserve could spur a recovery. The firm has raised its U.S. recession probability from 20% to 35%.
The FRN Variable Rate is set to fix on March 31, 2025, at 2:00 AM Eastern Daylight Time. This adjustment will impact financial markets and investment strategies as stakeholders prepare for the change in interest rates.
In the wake of the collapses of Credit Suisse and Silicon Valley Bank, the focus on capital ratios as a measure of bank resilience is being challenged. While UBS faces calls for higher capital requirements, the real lesson is that liquidity, not capital, is crucial for survival in modern banking, especially amid rapid digital transactions and shifting market sentiments. The failures of both banks highlight that a strong capital position does not guarantee stability when trust erodes and liquidity dries up.
UBS has firmly stated it has no plans to relocate its headquarters from Switzerland, despite speculation fueled by potential regulatory changes. Compliance chief Markus Ronner emphasized the bank's commitment to the country, highlighting its focus on wealth management for affluent clients. As the government prepares stricter regulations following the Credit Suisse takeover, UBS is determined to maintain its competitive edge and resist demands for increased capital.
Goldman Sachs has revised its forecast for U.S. Federal Reserve interest rate cuts, now predicting three quarter-point reductions this year amid increased recession risks linked to tariff uncertainties. The firm anticipates a 35% probability of recession within 12 months, up from 20%, and has adjusted its GDP growth forecast for the fourth quarter to 1.0% while raising the year-end unemployment rate estimate to 4.5%.
Goldman Sachs anticipates the Federal Reserve will implement three rate cuts this year, adjusting their forecast to July, September, and November, rather than June and December. This shift aligns with their outlook of a heightened recession risk due to impending tariffs from Trump on April 2.
Goldman Sachs anticipates the U.S. Federal Reserve will implement three quarter-point interest rate cuts in 2025, adjusting its forecast due to tariff uncertainties. The brokerage now expects these cuts to occur consecutively in July, September, and November, revising its earlier prediction of two cuts in June and December.
Goldman Sachs has raised the probability of a U.S. recession to 35% and forecasts three interest rate cuts by the Federal Reserve, citing President Trump's tariffs as a significant factor impacting the global economy. The firm has also lowered its GDP growth forecast for the U.S. in 2025 to 1.5% and cut its year-end target for the S&P 500 index to 5,700. Additionally, Europe is expected to face a more severe economic downturn, potentially entering a technical recession, with the European Central Bank anticipated to implement further rate cuts.
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Goldman Sachs predicts Fed rate cuts amid rising recession concerns
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