Global Views: Bending, Not Breaking

Goldman Sachs

Jan Hatzius

Research

10 Pages

Goldman Sachs argues that the 10 week Strait of Hormuz closure has hurt global growth only moderately so far. The note lowers its 12 month U.S. recession probability to 25%, while warning oil risks, inflation distortions, and labor market softening still matter.

Key Takeaways

Recession Risk Eased: Goldman cut its 12 month U.S. recession probability from 30% to 25% as activity and financial conditions improved.
Oil Shock Contained: Under its baseline, Goldman expects Brent to edge down to $90 per barrel by year end as the Strait gradually reopens.
Inflation Delays Cuts: Goldman delayed two 25 bp Fed cuts to December 2026 and March 2027 after upside PCE surprises and firmer labor data.
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