The bank reduced its 12-month recession odds citing easing financial conditions and contained oil price impact from the Hormuz closure.
Goldman Sachs lowered its 12-month US recession probability to 25% from 30%, citing resilient economic activity and easing financial conditions despite geopolitical tensions. The adjustment reflects contained fallout from the Strait of Hormuz closure, with oil prices rising less than feared.
Prior estimates had set recession odds at 30%, but recent data showed demand destruction absorbing supply shortages and supportive fiscal policy offsetting risks. High pre-war inventories and market confidence in policy responses helped cap oil price spikes, with Brent expected to stabilize near $90 by year-end.
The bank noted risks remain skewed toward worse outcomes, including potential oil price surges and greater economic damage. However, current trends suggest the global economy has absorbed the shock with limited disruption.