Goldman Sachs has raised the probability of a US economic recession in the next year to 45%. This prediction shows increasing economic uncertainty amid escalating global tensions, tightening financial conditions, and approaching tariff impacts.
This is the highest recession probability the investment bank has predicted since post-pandemic inflation and interest rate increases began.
Goldman Sachs Forecasts 45% Chance of US Economic Recession
Goldman Sachs' latest note, "Countdown to Recession," highlights a significant decline in economic conditions. This includes the expected impact of tariffs set to take effect on 04/09.
Steven Rattner, former Obama Auto Task Force head and current Wall Street financier, shared this news on social media, emphasizing the significance of Goldman's new forecast.
"Goldman Sachs now predicts a 45% chance of recession in the next year," Rattner wrote.
Goldman Sachs' US economic recession probability. Source: Rattner on XAccording to Rattner, recent increases in policy uncertainty and concerns about capital expenditure further destabilize financial markets.
Meanwhile, Nick Timiraos, The Wall Street Journal's chief economics correspondent, also reported this news, noting that the bank has adjusted its Q4 2025 GDP growth forecast to just 0.5%.
"We are lowering our Q4/2025 GDP growth forecast to 0.5% and raising the 12-month recession probability from 35% to 45% after significant financial condition tightening, foreign consumption boycotts, and increased policy uncertainty are likely to further reduce capital expenditure," Timiraos reported, citing Goldman Sachs.
Although this reflects expected impact, the bank's current forecast assumes that many new tariffs expected on 04/09 will not occur.
However, Goldman Sachs has clearly stated that if Trump implements these tariffs, the bank will adjust its prediction and officially forecast a recession. This could increase simmering inflation and create additional pressure on US economic growth.
Amid escalating trade tensions, Polymarket investors see nearly 70% probability of a US economic recession following Liberation Day tariffs.
US Recession Probability. Source: PolymarketGoldman Sachs Increases Bitcoin ETF Holdings
Despite gloomy economic prospects, Goldman Sachs continues to invest heavily in cryptocurrency, especially Bitcoin (BTC). As of 02/12, the bank holds a substantial $1.5 billion in Bitcoin. This exposure comes from investments in Bitcoin ETFs from BlackRock and Fidelity.
Moreover, recent filings reveal that Goldman Sachs has significantly increased its Bitcoin ETF holdings. Compared to previous filings, they have increased their position in iShares Bitcoin Trust (IBIT) by 88% and Franklin Bitcoin Trust (FBTC) by 105%.
This position reflects Goldman Sachs' growing interest in digital assets as an alternative value storage in an unstable traditional market.
This increase occurs as Bitcoin has demonstrated resilience in recent months, outperforming many other assets. Recently, the bank's CEO, David Solomon, emphasized blockchain technology's potential in optimizing traditional finance (TradFi). BeInCrypto reported Solomon saying that Bitcoin is not a threat to the US dollar.
Besides Goldman Sachs, JPMorgan also predicts a US recession. BeInCrypto reported this as the first major Wall Street bank forecasting a US economic recession following former President Trump's tariffs.
Their forecast warns of broader economic consequences of trade wars, predicting the Federal Reserve (Fed) might need to cut rates earlier than expected.
The potential for rate cuts, which many see as a response to a weak economy, further increases concerns about stagflation - the simultaneous increase of inflation and economic growth stagnation.
This economic instability also increases the likelihood of quantitative easing (QE) in the US financial system. This result could have profound impacts on the cryptocurrency market.
If the Fed chooses stealth quantitative easing, they could inject liquidity into the market and provide a temporary solution for risky assets like Bitcoin.
However, such actions could also increase inflationary pressure, creating a challenging problem for policymakers.
