There’s a 35% chance of a recession in the United States within the next two years, Goldman Sachs said.
Over the last few weeks, there have been multiple warnings from Wall Street about a potential recession in the future, especially as “the Federal Reserve embarks on what could be up to eight interest rate hikes this year,” according to Yahoo Finance.
Goldman Sachs has joined the fray, saying a recession isn’t off the table for the United States.
“Our analysis of historical G10 episodes suggests that although strong economic momentum limits the risk in the near-term, the policy tightening we expect raises the odds of a recession,” said Jan Hatzius, Goldman Sachs chief economist, in a new note to clients, per Yahoo Finance. “As a result, we now see the odds of a recession as roughly 15% in the next 12 months and 35% within the next 24 months.”
Multiple banks have been warning about the U.S. economy heading toward a recession, seeing potential “storm clouds” ahead for the country’s economy, according to Fortune.
These worries stem from quick inflation, soaring gas prices and the global economy’s instability, per The New York Times.
Though job numbers have climbed, there’s still a fear that the recent inflation will continue to rise and “that the only way for the Fed to get control is to slam on the brakes and cause a recession,” The New York Times reported.
“I don’t think we’re going to go into a recession in the next 12 months,” Megan Greene, a senior fellow at Harvard’s Kennedy School, told The New York Times. “I think it’s possible in the 12 months after that.”