Goldman Sachs has cut its odds of the U.S. going into a recession in the next 12 months, putting it at 15%, down from 20%. In an interview with Yahoo Finance Live from the Goldman Sachs Communacopia conference, Goldman Sachs Chief Economist Jan Hatzius explains the call saying “the economy has continued to be pretty resilient,” adding there has been “supportive” income growth and a balanced labor market. “I think there is increased evidence that we can see rebalancing of the economy, inflation coming under control and it’s not going to require a recession. So we have progressively reduced our recession probability,” Hatzius says. Hatzius takes it a step further by saying a soft landing is in the cards. When it comes to the Federal Reserve, Hatzius think it’s “highly unlikely” the Fed will hike at it’s next meeting. Beyond that, Hatzius says it’s “possible” the Fed hikes again, though it’s not his expectation. He also says that “the biggest impact of these rate increases now is behind us.” Click here for more of Yahoo Finance’s coverage from the Goldman Sachs Communacopia tech conference.

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Goldman Sachs, one of the leading financial institutions in the world, recently made an encouraging announcement regarding the US economy. According to the company’s economists, the United States is headed for a soft landing and the odds of a recession have significantly decreased.

Goldman Sachs’ economists have been closely observing several economic indicators and factors that affect the country’s performance. Their analysis takes into account various areas such as GDP growth, job market conditions, inflation rates, and consumer spending patterns. Based on their observations, they have concluded that the US is most likely to avoid a recession in the near future.

The economists highlighted that there are several reasons for their optimism. First and foremost, the domestic economy continues to exhibit resilience despite global economic uncertainties. Consumer spending, a significant driving force behind the US economy, remains robust. Despite some fluctuations, the job market has shown stability with low unemployment rates and steady job creation.

Furthermore, the recent trade developments – such as the signing of the Phase 1 trade deal between the US and China – have provided a renewed sense of confidence in the market. The resolution of the trade conflicts has eased some concerns among businesses and investors, leading to increased investment and economic activity.

Goldman Sachs’ positive outlook is also supported by the Federal Reserve’s monetary policy. The central bank has taken a proactive approach in adjusting interest rates, which has helped stabilize the economy and maintain a growth trajectory. Additionally, low inflationary pressures and the absence of any immediate bubbles in the financial markets provide further assurance to the economists.

However, it is important to note that “soft landing” does not mean an absence of challenges. While the recession odds have decreased, the economists warn of potential headwinds that the US economy still faces. Uncertainties surrounding global trade, geopolitical tensions, and the upcoming presidential election can impact market sentiment and business decisions.

Goldman Sachs’ assessment is a positive sign for the US economy, and it brings some relief to investors, business leaders, and consumers. However, it is essential to remain cautious and closely monitor developments as the economic landscape can rapidly change.

In conclusion, Goldman Sachs’ economists have expressed confidence in a soft landing for the US economy, reducing the odds of a recession. Their analysis considers various factors including consumer spending, job market conditions, trade developments, and monetary policy. While the outlook is positive, potential challenges remain. Therefore, it is crucial to stay vigilant and adaptive to the ever-changing economic circumstances.