Goldman Sachs Rules Out Recession in the U.S.: Goldman Sachs has ruled out the likelihood
of an economic recession in the United States soon,
Following the agreement reached between Washington and Beijing to ease trade tensions through a three-month negotiation period,
During this time, significant mutual tariff reductions were implemented.

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Goldman Sachs

Bank of Japan

Goldman Sachs Rules Out U.S. Recession After Trade Deal with China, Revises Growth and Rate Forecasts

Goldman Sachs ruled out a U.S. recession soon after Washington and Beijing
agreed to ease trade tensions through a three-month negotiation window that included substantial reciprocal tariff cuts.

The bank lowered the recession probability to 35% from 45%,
citing the recent trade understandings as a positive step toward economic stability.
It also raised its forecast for U.S. GDP growth in 2025 by approximately 0.5 percentage points,
with new estimates ranging between 1% and 1.5%.

On the monetary policy front, Goldman Sachs expects
the Federal Reserve to implement three interest rate cuts this year and next.
The first cut is anticipated in December instead of July,
followed by two additional reductions in March and June 2026.
Previously, the bank had projected three rate cuts in 2025.

Bank of Japan: U.S. Tariffs Pose “Dual Risks” to Economy and Prices

Shinichi Uchida, Deputy Governor of the Bank of Japan,
warned that U.S. tariffs present “dual risks” to Japan’s economy,
noting that they exert downward pressure on growth while potentially pushing prices unexpectedly higher.

In remarks made on Tuesday, Uchida stated that the Japanese economy
is heading toward a moderate slowdown approaching its natural levels.
Still, it is expected to recover gradually alongside global economic improvement.
He pointed out that Japan’s output gap will remain stable for now but is projected to improve
as the fiscal year 2027 approaches.
This may prompt the Bank of Japan to raise interest rates gradually if economic performance aligns with forecasts.

Uchida also noted that core inflation and medium-to-long-term expectations might
temporarily slow down despite wage increases driven by intense labor market competition,
enabling companies to pass wage costs on to consumers through higher prices.

On the currency front, he emphasized that a strong yen is a double-edged sword.
It reduces profits for exporters and major manufacturers but boosts household
purchasing power and supports retailers by lowering import costs.
However, he cautioned that rapid exchange rate movements heighten uncertainty and complicate corporate investment plans.

Uchida stressed that the Bank of Japan will closely monitor economic data
without any preconceptions, especially in light of high domestic and global uncertainty,
particularly regarding the potential impact of trade tensions on inflation and growth.

Goldman Sachs Rules Out Recession in the U.S

Goldman Sachs Rules Out Recession in the U.S.

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