Goldman Sachs economists have sounded the alarm on the U.S. economy, launching what they termed a “countdown to recession” as Donald Trump‘s aggressive tariff policy derails economic forecasts.
In a note shared Monday, the Goldman Sachs economic team led by Jan Hatzius downgraded its U.S. gross domestic product forecast for year-end 2025 to just 0.5% year-over-year, down from 1.7% previously.
The downgrade follows a combination of shocks, including higher tariffs announced by the Trump administration, tightening financial conditions and rising geopolitical friction, that the bank says are disproportionately affecting lower-income Americans and threatening to derail the U.S. economy.
Traders on CFTC-regulated betting platform Kalshi currently price in a 66% chance of a U.S. recession this year, up from 40% last week.
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Goldman Sachs said its baseline scenario still assumes some moderation in tariff implementation. Still, if most of the April 9 tariffs are enacted as planned, the effective U.S. tariff rate could surge by 20 percentage points.
“Our forecast had already assumed forceful retaliation by foreign governments, …