Goldman said it has revised its estimates in response to increased uncertainty around “the economic effects of the stress on small banks.”
Topline
Goldman Sachs on Thursday said it sees a higher probability of the U.S. facing a recession in the next 12 months, following the recent collapse of Silicon Valley Bank and concerns about its impact on the broader banking sector.Key Facts
Goldman analysts are now forecasting a 35% chance of a U.S. recession in the next 12 months—up from their earlier prediction of 25%.
In its research note, the investment bank said its revised estimate is in response to “increased near-term uncertainty around the economic effects of the stress on small banks.”
Thursday’s move is a reversal from last month, when Goldman had lowered its forecast from 35% to 25% and said that a recession in the U.S. was unlikely due to “persistent strength in the labor market and early signs of improvement in business surveys.
