While investors, business leaders and some economic models continue to warn a recession is imminent, Wall Street’s most powerful investment bank remains cautiously optimistic.
Goldman Sachs told clients on Monday it still sees a 35% chance of a US recession in the next 12 months. While that is double the normal risk of a recession, it is far below the 63% average in a recent forecaster survey by The Wall Street Journal.
“We still see a very plausible non-recessionary four-step path from the high-inflation economy of the present to a low-inflation economy of the future,” Goldman Sachs chief economist Jan Hatzius wrote in a report.
In other words, a recession is not a slam dunk. The Federal Reserve can still pull off a soft landing for the US economy.
By contrast, a Bloomberg Economics model released in late October determined the risk of a…