- Bloomberg.com – Goldman Sachs says chance of a recession is now just 10%
* The Federal Reserve’s abrupt policy pivot has eased financial conditions and reduced the odds of a recession to just 10% over the next four quarters, from 20% at the end of the fourth quarter, Goldman Sachs economists said.
* The economists studied the reasons for the easier financial conditions and said the Fed was largely responsible.
* The Fed’s dovish shift was seen as an intentional effort to reduce downside risks and it appears to have worked as planned, they said.
“The Fed’s dovish shift was likely designed to decrease downside risks, and our findings suggest that this has largely worked as planned. As the lingering effects of the Q4 tightening gradually fade away, the Fed may eventually be willing to revisit the need for patience, as indicated in the January minutes,” they wrote.
What Does The Bond Market See?
What Does The Stock Market See?
Economists versus Markets
How Does This Get Resolved?