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Goldman Sachs Downgrades US Growth: What's Next?

By  Domenic Heaney DDS   May 01, 2025
Goldman Sachs Downgrades US Growth: What's Next?

Is the U.S. economy facing a significant slowdown, and if so, what are the primary factors at play? Recent projections from Goldman Sachs paint a picture of diminished growth, largely attributed to the impact of escalating trade policies.

On Tuesday, Goldman Sachs, through Chief Economist Jan Hatzius, delivered a stark forecast: U.S. GDP growth is expected to fall below Wall Street's consensus for the first time in two and a half years. This shift underscores a growing unease among financial institutions regarding the trajectory of the American economy, particularly in light of the trade policies enacted during the Trump administration.

Key Event Details
Date of Announcement Tuesday (Specific date not mentioned in original content)
Source Goldman Sachs (Chief Economist: Jan Hatzius)
Original Forecast (Previous) U.S. GDP growth of 2.4% in 2025
Revised Forecast (Current) U.S. GDP growth of 1.7% in 2025
Primary Reason for Revision Increased risks associated with trade policies, particularly tariffs.
Tariff Impact Anticipation Average U.S. tariff rate expected to rise by 10 basis points. Potential for a rise of up to 15 percentage points if tariff exemptions are less widespread than anticipated.
Recession Probability (Next 12 Months) Raised to 35% from a prior 20%.
Impact on Financial Markets Policy uncertainty is weighing on stock prices.
Other Considerations Factors include potential impacts on the labor market, wage growth, and overall price stability.
Impact on US growth (2024) Goldman Sachs research now expects U.S. Economic growth of 2.4% this year on an annual basis (versus 2.6% previously).
Impact on US growth (2023) Goldman Sachs research now expects U.S. Economic growth of 1.6% in 2023 (versus 2.2%).
Reference Link Goldman Sachs Official Website

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