Goldman Sachs now sees much higher odds of economy shrinking, hiking probability of a U.S. recession to 35%

US President Donald Trump during a swearing-in ceremony for Alina Habba, interim US attorney for New Jersey, not pictured, in the Oval Office of the White House in Washington, DC, US, on Friday, March 28. (Credit: Bonnie Cash—UPI/Bloomberg via Getty Images)

• Economists for investment bank Goldman Sachs no longer see just a 20% risk of a recession, warning the probability is now 35%, given the tax-like impact on real disposable income and consumer spending from higher tariffs and their tendency to unnerve financial markets.

Goldman Sachs is warning that the odds of the U.S. economy shrinking over the coming months are rising dramatically.