Mint Quick Edit | Recession talk greets America’s ‘Liberation Day’
Just ahead of US President Donald Trump’s reciprocal tariffs coming into force, Goldman Sachs has made gloomy forecasts for the US economy. It now sees a 35% chance of the world’s largest economy sliding into a recession in the next 12 months, up from 20% earlier.
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This is a result of inflation seen spiking to 3.5% in 2025, up 50 basis points from its last forecast and much above the US Federal Reserve’s 2% target, even as unemployment is projected to hit 4.5%.
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While a haze over the contours of Trump’s tariffs has widened the range of possible outcomes, some analysts worry that his agenda may be less sensitive to America’s short or even medium term economic performance in search of the dubious benefits of a protected or autarkic economy under more centralized control.
At its worst, this path could repeat policy errors of the long-failed Soviet model. Given the US role so far as a beacon of economic policy and its influence on other nations via trade ties, such a reversal could result in shifts elsewhere too that go against free-market efficiency.
Also Read: Why is the US Fed about to slow its bond offloading down?
Alas, Trump seems convinced he can restore US greatness with tariffs. Let’s see what his so-called “Liberation Day” will deliver.
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