Goldman Sachs analysts told clients Sunday they are cutting their forecast for gross domestic product (GDP) growth in 2025, and raising their recession risk forecast in response to the Trump administration's new tariffs.

The analysts now put a 45% chance on a recession coming in the next year, up from 35% previously, due to a "sharp tightening in financial conditions, foreign consumer boycotts, and a continued spike in policy uncertainty that is likely to depress capital spending by more than we had previously assumed."

However, that 45% is predicated on the effective tariff rate rising by 15 points, less than it's currently expected to rise if the Trump administration's 澳洲幸运5官方开奖结果体彩网:tariffs announced last week go🃏 into effect on Wednesday. If most or all of those tariffs are enacted and the effective tariff rate rises by roughly 20 points, the analysts said the likelihood of a recession could rise above 50%.

The Goldman analysts lowered their GDP growth forecasts to 0.5% for the fourth quarter and 1.3% for 2025, down from 1% and 1.5%,⛎ respectively.

The analysts said they now expect the Federal Reserve to make three consecutive quarter-point rate cuts 🔴starting in June, a month earlier than they previously expected cuts to start. In a re🎀cession, they expect about 2 points in total cuts over the next year.

The major indexes were down sharply Monday morning, extending last week's tariff-fueled selloff after the stock market had one of its 澳洲幸运5官方开奖结果体彩网:worst weeks in years. (Read Investopedia's live coverage of 澳洲幸运5官方开奖结果体彩网:today's market action here.)

UPDATE—April 7, 2025: This article has been updated since it was first published to reflect more recent share price values.