Goldman Sachs Reverses Recession Forecast After Trump Announces Tariff Pause

Goldman Sachs has reversed its recession forecast after President Donald Trump announced a 90-day pause on most of the administration's new tariffs, calming markets rattled by trade war fears.

Goldman Sachs has reversed its recession forecast for the US economy, citing President Donald Trump’s announcement of a 90-day pause on most of the administration’s new tariffs.

Earlier Wednesday, Goldman analysts shifted to a recession baseline following the unveiling of new country-specific tariffs, which sparked volatility in the markets.

However, after Trump announced a pause on new tariffs and opened direct talks with several countries to resolve trade issues, Goldman updated its outlook to a “non-recession baseline.” This predicts modest GDP growth of 0.5% by Q4 2025 and three expected Fed rate cuts starting in June, according to CNBC reporting.

Markets responded quickly to Trump’s announcement. Bitcoin surged past $82,000, and the Nasdaq approached a 10% gain, recovering from its worst multi-day performance since the 2008 financial crisis. The 10-year Treasury yield also eased from 4.5% to 4.4%.

Goldman Sachs’ research department publishing these two headlines 73 minutes apart lmao pic.twitter.com/45TJplzU9I

Trump, posting on Truth Social, said multiple countries had initiated talks over trade and currency, prompting the tariff pause and a temporary reduction of the reciprocal tariff rate to 10%. However, tariffs on Chinese imports were raised to 125%, effective immediately.

Goldman now estimates a 45% chance of recession and expects core inflation to peak at 3.5%, according to its latest client note.

The surprise move came after four days of intense market volatility and mounting fears of a global recession. Treasury Secretary Scott Bessent will now lead upcoming trade negotiations, a shift Wall Street views positively due to his moderate stance.